CPUC Votes to Adopt Calculator that Drastically Undervalues Local Clean Energy

Late last week, the California Public Utilities Commission unanimously voted to undervalue rooftop solar and storage, in a move that indicates the agency may be ignoring the importance of local clean energy in decarbonizing California’s economy. The five CPUC Commissioners approved changes to the tool they use to calculate the value of rooftop solar and other distributed energy resources (DERs), called the Avoided Cost Calculator (ACC).

The CPUC uses the ACC to assess cost-effectiveness for different types of DERs, and updates it yearly. In 2020, CPUC did a major update of the calculator and this year was supposed to be a minor update.  The ACC update was delayed this year, and CPUC staff did not give parties adequate information on the changes they included. Staff were in violation of the CPUC’s own due process rules for how proposed changes were supposed to be noticed to parties. Vote Solar and other clean energy advocacy groups filed comments calling out the lack of due process and the major changes that were improperly included, urging the Commission to wait to adopt major changes until next year, when those proposed changes could be fully debated. The state’s three large investor-owned utilities supported the proposed changes.

Shortly before the Commission voted last week, they heard from over 30 concerned Californians who called in to the voting meeting to urge the agency to properly value local clean energy, with no callers supporting the proposed changes to the ACC. Over 7,000 Californians also sent in written public comments opposing major changes to the ACC. Nonetheless, the CPUC Commissioners approved major changes to the ACC — including a new “No New DERs” run of the RESOLVE model that has not been vetted by stakeholders or through the integrated resource planning process, as well as a new scarcity pricing method and new SERVM modeling – that result in a two-thirds reduction to the calculated grid benefits from distributed solar, compared with the ACC approved in 2020.

The fact that the model’s results could fluctuate so wildly between the 2020 and 2021 versions shows that the ACC is not a reliable tool for assessing the grid costs and benefits of DERs. The model is clearly flawed; a landmark interagency report shows that to achieve 100% clean energy, the state must continue to facilitate rooftop solar growth at roughly the same pace as in recent years, while at the same time building large-scale clean energy at a record pace. Vote Solar and our allies will mount a legal challenge to the Commission’s approval of the 2021 ACC, but as that challenge moves forward, the 2021 ACC will continue to play a large role in the Commission’s update to net metering.

The ACC does not by itself determine what rules the CPUC will adopt for how local clean energy in California is compensated in the future. As Commissioner Guzman Aceves said before the vote last week, the Commission will take into account that local clean energy creates additional benefits for Californians that the ACC does not even attempt to measure — including societal benefits like public health impacts, avoided methane pollution, preservation of wild lands and local jobs. And as another intense fire season descends on California, local solar + storage’s ability to provide emissions-free resilience, allowing Californians to keep the lights on during blackouts, is another enormous benefit. But after last week’s vote, we at Vote Solar are very concerned that the Commission is ignoring how vital local clean energy is for achieving a just transition to decarbonization, how many benefits it brings, and how much Californians want to keep investing their own dollars to install rooftop solar.

The CPUC is set to issue a proposed decision on the net metering update in December 2021, a decision that will rely in part on the new ACC. When the CPUC updates net metering, it must adopt a policy that keeps rooftop solar affordable for everyday Californians. Vote Solar and our allies have proposed a sensible policy that will balance the key goals of promoting equity in solar access, incenting solar customers to install batteries, keeping rooftop solar growing, and reducing net cost impacts to non-participants. We are redoubling our efforts to win approval for that sensible policy, and at the same time we need the voices of hundreds of thousands of local clean energy supporters from all walks of life, and everywhere in our beautiful state, to urge Governor Newsom and the CPUC to enact a net metering update that keeps us moving forward with rooftop solar and storage as a vital part of our clean energy future.

Californians: Take action! Speak up for the future of rooftop solar. This is a critical moment for clean energy progress and energy justice.

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