Commission Issued Proposed Decision Revising NEM Tariff and Subtariffs

The following is a brief summary of the Proposed Decision ("PD"):

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• The proposal aims for a 10-year payback for paired storage.
• Compensation is based on actual avoided cost instead of retail electricity rate. Market values will be locked in for the first 5 years following a customer’s interconnection based on the most recent ACC values. After the first 5 years, export compensation is based on averaged monthly avoided cost values based on the most recently adopted ACC. NOTE: customers may oversize their loads by 50% as long as they attest that their load will increase to that amount the following year.
• The PD adopts a $8/kW grid participation charge. A home with a six-kilowatt system would be charged $48 per month, or $576 per year. Low-income and tribal homes would be exempt. The PD exempts non-residential customers from the Grid Participation Charge but specifies that they will be responsible for nonbypassable charges.

• The PD adopts a Market Transition Credit ("MTC") as a Path to Solar Paired with Storage. The MTC is calculated by solving for a 10-year solar +storage payback period.
• MTC up to $5.25 helps to ensure a more reasonable payback period. The credit would be available for four years, with homes that install solar panels locking in the savings for a decade. The credit would be available for four years, with homes that install solar panels locking in the savings for a decade. In Southern California Edison territory, the credit would start at $5.25 per kilowatt o solar for low-income customers and $3.59 per kilowatt for everyone else, before decreasing each of the next three years. For Pacific Gas & Electric customers, the credits would start at $4.36/kW and $1.62/kW, respectively. San Diego Gas & Electric customers wouldn’t receive any credits, because the Commission believes solar is already cost-effective enough for them due to the utility’s especially high electricity rates.

• The PD alters the legacy periods for NEM 1.0 and NEM 2.0 as well as sets the legacy period for NEM 3.0 customers. Participating customers have a 5-year legacy TOU period from interconnection. Except for the import rate, NEM 3.0 rates are available for 10 years from interconnection. Legacy period for future NEM 2.0 customers is now 15 years instead of 20 years. Existing NEM 1.0 and 2.0 customers must transition to NEM 3.0 no more than 15 years after interconnection, except for CARE and FERA customers. NEM 2.0 tariff customers who voluntarily transfer to NEM 3.0 receive a $0.20/Wh storage rebate that will be “available for a total of four years but decrease by 25 percent a year over the subsequent four years.”
• VNEM will be updated with major provisions of NEM 3.0 with the following exceptions: 1) VNEM customers not required to adopt the electrification TOU rates and may choose TOU rate; 2) NEM 2.0 maintained for low-income subtariffs of VNEM for MASH and SOMAH; and 3) VNEM tariff is revised to allow multiple solar arrays on one property to be treated as one generator, with credits allocated across the property.

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The following details the implementation of NEM 3.0 after the PD is formally issued by the Commission:

1. Decision issuance date ("D") + 5 days – Utilities file Tier 1 advice letter with changes to legacy period.
2. D + 30 days – Utilities file Tier 1 advice letter with NEM 3.0 tariff.
3. D + 45 days – Utilities file supplemental advice letter with rate elements and tariff sheets. 
4. D + 100 days – Energy Division or Commission determination on advice letters.
5. D + 120 days – NEM 2.0 tariff sunsets. No additional customers permitted to take service.
6. D + 12 months – Utilities finish billing system changes and complete implementation.