California Utilities Still Freeloading on Independent Solar Power Producers

The state government is still being controlled by the big utilities, preventing full reimbursement for small power producers with Net Energy Metering contracts.

In 2001 I installed Mono County's first solar photovoltaic grid intertie on my Lee Vining home. The electricity was accounted for through "net metering," which means that during a one-year period, you subtract the energy you produce from what you use and pay for what is left--what you used that you did not generate. Typically the net use is positive, meaning you use more than you produce and have to pay a bill at the end of the year. State incentives are designed to create systems that aren't oversized, and prior to this year if you generated more than you produced--a negative net use--your bill would be zeroed out and you would start the next year without a credit.

One remarkable year that happened to me. I really
conserved electricity, even shutting my water heater off during the day as an experiment (that really turned out to save a lot). I had a $25 credit at the end of the year, and on my next bill, I started at zero, and started owing money again. That was incredibly annoying--what other business anywhere pockets the money that you generated instead of refunding it? It seemed so wrong.

So I was very happy to hear that the law changed, and starting in January 2011, customers would be credited for extra energy generated above their net use over the previous year--a negative net use. I didn't pay attention to the details, however it appears that the electric utilities and their lobbyists did.

So at the end of August, I sold the house and had a credit of $154.52 on my final bill, which didn't come until early October. This means the house generated $154.52 more electricity value than it used. This is because we moved in May and the house was vacant all summer, generating electricity but not using much. Since we were two years short of the cost of the system breaking even, this credit seemed even more right to collect. SCE informed me that it would send me a check.

I called SCE later in October to find out when the check would be mailed, since I hadn't gotten it yet. Plus, the $1.65 in connection/meter-reading fees from the last month that I hadn't paid was still showing up on the bill--shouldn't my credit eliminate that part of the balance? They said to ignore the balance, and that it might be a week or two before I received a final statement because something was before the CPUC and they needed to figure out how to send refunds. I didn't really understand this last part, but I figured I'd just wait a couple of weeks to see what happened. I didn't think too much about the "Compensation Total" wording in the bill (see image at right)--it didn't make any sense that they would pay me anything other than my cumulative total--although it slightly worried me.

In December, after hearing nothing other than getting repeated late payment notices about the $1.65, I called SCE again on a Friday. The recording said they were only taking power outage-related calls. I called again on Monday--the recording was ominous, warning that due to power outages service might be very slow. But I got a customer service representative right away.

I asked how to stop the late payment notices. The Net Energy Metering (NEM) rep told me I should pay the $1.65 to zero out my bill, since that part of the bill was taxes and fees and wasn't able to be paid with the "compensation total" credit I had. She also told me that the compensation total only applies during the NEM period, and now the period was over and the CPUC had made rules saying I should be paid four cents per kWh that I was owed. This works out to $18.52.

I could not believe what I heard. I had generated $154 more worth of electricity than I used, during peak hours when the price of electricity averaged 33 cents per kWh, and SCE was getting it for $19? This is outrageous!

The balance is pure profit, and probably doesn't even have to go into funds promoting efficiency or green energy. The system hadn't even paid for itself yet, and I and the State of California (which had invested in it and had more right to the money than SCE) were forfeiting 88% of the balance due!

I maintained my composure and was very polite, even after she told me that in December 2011 they were only processing February's applications! It felt like she was almost bragging about them being so slow--no apology, just informing me to be ready to wait because that is how it is. Why would they process it any faster--it is money in the bank as long as they can hold onto it. When I first signed up for NEM, in 2001 during the electricity crisis, rotating blackouts were plaguing SCE's service area while my newly installed solar panels sat idle waiting for them to process my application and give me permission to turn the system on. They finally gave me permission right after I threatened to write a letter to the LA Times. SCE's participation in the whole program seemed to be coerced, and they were kicking and screaming and being obstructionist any way they could.

They would send a letter asking if I wanted the $18.52 as a credit on my account or a check, and after I replied, it might take another three months to get my check to me. Insult to injury.

SCE's lobbyists sure are earning their keep. Four cents per kWh. Where else can you buy electricity in California for four cents per kWh? This is the most lucrative source of energy for these utilities, which would be a good thing if it gives them incentive to promote green energy, however since generation systems legally can't be sized in order to generate a surplus (it only happens in unusual situations like mine), it doesn't even do that.

One small bright spot on the horizon: "If the CEC authorizes retroactive RPS certification of net surplus generators, the utilities may retroactively pay the renewable attribute adder to its eligible customers." Which means that I may get some additional compensation someday--maybe.

Click here to read part II (2 years later).