Rooftop solar is not the culprit behind high California electric bills, advocates say

That billion cost shift that regulators say falls on non-solar customers and is partly responsible for our outrageous electric bills It doesn t exist No rooftop solar advocates recounted the good-government Little Hoover Commission at a fresh hearing rooftop solar doesn t cost other customers money it truly saves them money The real force behind our crazy soaring electricity rates is rapacious utility companies and the regulators who allow them to collect way too much money they declared So rather than being the big bad wolf rooftop solar is more Goldilocks saving non-solar customers chosen billion per year in avoided costs they argued How Because the big investor-owned utilities haven t had to build as much expensive infrastructure to meet demand RELATED What s happened since California cut home solar payments Demand has plunged Solar they commented has been scapegoated Why does California have such high rates requested Richard McCann who authored a document for the California Solar and Storage Association refuting the existence of a cost shift It s really the utility spending driving rate increases The key question really is how do we control utility spending not how do we make everyone pay for uncontrolled spending Arguments refuting the solar cost shift have been presented to and largely rejected by the California Community Utilities Commission the Populace Advocate s Office and a great number of ability experts but they got their day in the sun at the Little Hoover Commission s second hearing on the woes of California s capacity system and we might fix them on March The infuriating backdrop Our electric bills in California are the highest in the nation save for poor Hawaii Rates have doubled over the past decade They re about twice the national average and continue to rise outpacing inflation The investor-owned utilities IOUs Southern California Edison San Diego Gas Electric and Pacific Gas Electric rake in big profits even as they seek rate hikes In the present day for-profit utility rates in California are higher than those of citizens utilities Consumer Watchdog has revealed Experts at Little Hoover s first hearing laid blame on the CPUC for allowing all that to happen as well as on the expense of hardening the grid to withstand wildfires on the cost of programs that lower monthly bills for low-income customers and on the hotly contested solar cost shift Investor-owned utilities like SDG E PG E and Edison tend to have higher rates than municipal systems UC Berkeley Strength Institute at Haas It s fundamental to understand here that the investor-owned utilities don t profits selling electricity That s essentially a pass-through cost Rather they re granted a too -generous return on their capital investments such as the aforementioned grid-hardening The CPUC allows Edison SDG E and PG E a -plus return on these capital investments which provides a perverse incentive for them to pursue the the greater part expensive options rather than the least expensive options critics charge And ratepayers foot the bills for it In contrast publicly owned utilities like Los Angeles Department of Water and Power and Sacramento Municipal Utility District issue debt for their infrastructure projects The interest rate on that debt is specific - right now McCann reported the Commission substantially lower than the -plus percent return the utilities are allowed And that is after taxes the before-tax return is particular he declared At the highest levels the discourse over our electric bills has revolved around cost-shifts and fixed-use charges and How do we change who pays for what disclosed Dave Rosenfeld executive director of the Solar Rights Alliance There s various merit to asking that question he advised the Commission But if that s all we re talking about all we re doing is rearranging the deck chairs on the Titanic Related Articles Plug and Play AI startup incubator launches downtown San Jose tech hub Gov Newsom issues order for undergrounding power lines in fire zones After concessions from PG E San Jose pauses plan to create municipal utility PG E eyes higher monthly bills in effort to increase payments to shareholders Housing and facts center combo may sprout this year in downtown San Jose The biggest driver of costs he stated has been long-distance poles and wires In the last years there s been a mismatch between spending and peak demand How do we reduce that spending on poles and wires The solar customer is your friend your ally in the overall fight Good day sunshine The Commission s staff would agree With restraint Beyond advancing clean strength goals California s robust rooftop solar adoption has helped prevent blackouts by easing grid strain during peak summer demand the Commission review revealed Solar plus battery storage enhances grid resilience allowing homeowners to maintain power during wildfire-related shutoffs Additionally by supplying vigor to both solar-equipped households and the broader grid rooftop solar has reduced the need for new thermal power plants California generates an impressive proportion of its resource from non-fossil fuels of total generation in came from solar wind geothermal biomass hydroelectric and nuclear power it commented That breaks down this way Utility-scale solar small-scale solar hydroelectric nuclear and wind This makes California the nation s No state when it comes to using renewable capacity sources Texas gasp outshone us at No with its heavy use of wind power according to the U S Vigor Information Administration While lauding rooftop solar s contribution the Commission s staff review trod scrupulously on the burning question of whether a solar cost shift exists A nalysts disagree about whether those programs increase or decrease costs for residents who do not install solar panels it announced Spectators at the first hearing generally argued that the installation of rooftop solar increases rates for other customers while eyewitnesses at this hearing argued exactly the opposite In its even-handed way Commission staff explained the history of California s capital in rooftop solar which began in Then to encourage its adoption the state introduced Net Capacity Metering NEM allowing homeowners with rooftop solar panels to earn credits for sending electricity they generate but don t use to the grid for their neighbors to use Those credits are applied to their bills at the retail rate offsetting not only the cost of electricity generation but also transmission distribution and other communal expenses like the cost of reducing bills for low-income people NEM was revised in with slightly different terms and dubbed NEM Both versions are guaranteed for years from the time of installation and solar owners can bank their credits for exporting strength during the day to offset the cost of pulling power from the grid at night and on cloudy days The utilities pay rooftop solar owners three to four times as much for their power as they pay for renewables sourced from elsewhere regulators and specific experts say resulting in a huge cost that s borne by non-solar households between billion and billion depending on who you ask About a quarter of a non-solar customer s electric bill to covers the costs their solar neighbors aren t paying the Inhabitants Advocates Office estimates Despite the solar industry s arguments that the cost shift concept is based on faulty assumptions and isn t real regulators disagreed In the CPUC revamped how rooftop solar credits works yet again but only for owners of new systems leaving the multi-billion dollar cost shift in place Now new systems get far less generous credits a few lower than the older systems This led to a precipitous decline in new solar installations between and of as well as the loss of at least the solar industry says Others argue that this decline is a temporary sector correction after the surge in installations that came as customers rushed to lock in higher NEM benefits before the initiative disappeared These analysts believe that solar adoption especially when paired with battery storage will stabilize over time as the sphere adjusts to the new tariff structure the Commission statement reported California isn t done reallocating how electricity customers pay for fixed costs There may be another attempt to lower credits for the NEM owners who were grandfathered in in And a monthly income-graduated fixed charge for greater part customers for low-income folks kicks in later this year for solar and non-solar customers alike Solar reps argued that rooftop solar customers still buy electricity from the big utilities paying a month on average and so do contribute to the system s fixed costs A commissioner responded that because they get to roll back their rates they re not paying those fixed costs at the same rate other customers are A commissioner also noted that various of solar panels are made in China Fix Multiple ideas are being floated to address the mess we find ourselves in Strengthen the CPUC s review process for approving utility spending Boost staff to enhance oversight require stricter cost evaluations before approval improve financial accountability reduce its focus exclusively to strength Make the Constituents Advocates Office independent It s the branch of the CPUC that represents the little guy Outside the CPUC it could serve as a more impartial watchdog in rate-setting decisions Decrease utility profits particularly the high return guaranteed by the CPUC for infrastructure investments In addition to lowering the rate of return use external funding sources to reduce rates authorize residents ownership of new transmission projects and pay for it using lower-cost bonds Consider performance-based profit models that reward utilities for efficiency rather than infrastructure expansion Address the cost of existing NEM contracts the last of which will sunset in by shortening thelength of legacy benefits ending them when a home is sold implementing a Grid Benefits Charge for solar users aligning compensation rates with system installation dates The Little Hoover Commission s next hearing on the ability issue will feature testimony from those who ve taken the brunt of the beatings so far the CPUC and the investor-owned utilities as well as the California Potential Commission the state s primary strength strategy and planning agency Should be a hoot We ll keep you posted