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CPUC Nukes Anti-Solar Network Usage Charge


  08:56:00 am, by Jim Jenal - Founder & CEO   , 550 words  
Categories: Solar Economics, Residential Solar, SDG&E

CPUC Nukes Anti-Solar NUC

The California Public Utilities Commission (CPUC) has just rejected the anti-solar Network Usage Charge (NUC) proposed by San Diego Gas & Electric (SDG&E).  We first wrote about this cynical attempt by SDG&E to penalize solar customers back in November.  At that time we reported that SDG&E was claiming that solar customers “do not pay their fare share of costs incurred on their behalf by SDG&E to provide service, including use of the distribution system."  SDG&E made this claim despite being unable to identify what those costs actually were, and while ignoring the clear subsidy that solar customers provide to SDG&E by reducing their distribution costs by producing energy at the point of consumption.

SDG&E’s scheme to address this so-called unfairness was to impose a Network Usage Charge that would be applied to all residential customers.  SDG&E’s fig-leaf claim of ratepayer fairness could not hold up to scrutiny.  Since only solar system owners actually export energy back onto the grid, they would be singled out for the additional charge.  We doubted then that the CPUC would manage to do the right thing, given their dismal performance in setting up the compensation structure required by AB 920, and predicted that this fight would have to be won in the state legislature.

We are pleased to report that (at least this time) our skepticism was unfounded.

Commissioner Mark J. Ferron rejected SDG&E’s proposal, using language directly from the arguments of the solar community.  Ruled Ferron:

My concerns about the legality of the current proposal are based on the following analysis: The last sentence of subdivision (g) of Section 2827 [of the California Public Utilities Code] in essence provides that a utility may not create a “new charge” that would increase an eligible customer generator’s costs beyond those of other customers in the same rate class who are not eligible customer-generators. SDG&E’s proposed NUC is a new charge. While the NUC rate would apply to both customer-generators and those who are not customer-generators, it would apply differently to customer-generators, who would pay the charge on both incoming and outgoing power under SDG&E’s proposal. By contrast, the non-generator customer would pay a NUC only on incoming power. Thus, as proposed, the NUC might be viewed as imposing costs on customer-generators beyond those imposed on other customers in the same rate class. Further, the immediately preceding sentence of subdivision (g) states that “The charges for all retail rate components for eligible customer-generators shall be based exclusively on the customer-generator’s net kilowatthour consumption over a 12-month period, without regard to the eligible customer-generator’s choice as to from whom it purchases electricity that is not self-generated.” SDG&E’s NUC proposal raises concerns under this provision was [sic] well, because the NUC would base the generator customer’s charges on network usage that is unrelated to net kWh consumption.

Noting that the NUC proposal could have impacts in other IOU areas (both PG&E and SCE intervened on behalf of SDG&E’s proposal), Ferron ordered SDG&E to go back to the drawing board on their proposed rate structure filing and to produce one without the NUC by February 17, 2012.

This is an important victory for the existing Net Metering law in California and it means that - for now - utilities will not be able to tack on discriminatory charges onto their solar customers.  Nicely done, Commissioner Ferron.


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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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