California PUC issues proposed decision on Virtual Net Metering

On June 14, the California PUC issued a proposed decision on the California Solar Initiative (CSI) phase one modification, which includes expanding virtual net metering to all customers and a bill credit transfer option.

Under this proposed decision, all multi-tenant buildings may be eligible for Virtual Net Metering (VNM), which was first established as part of the Multifamily Affordable Solar Housing (MASH) Program. VNM currently allows customers to allocate electricity generated from a single solar energy system as kilowatt hour credits to other accounts on the affordable housing property.  These housing complexes are often served by multiple utility “service delivery points” (SDPs). The SDP is defined in utility practice as the demarcation between the customer-owned electrical system and the utility distribution system. Typically, each multitenant building has one SDP that then serves multiple tenants or utility accounts. Some developers of MASH/VNM projects argue that this tariff provision has limited the viability of VNM for many potential affordable housing sites that have multiple SDPs. They have questioned whether “affordable housing property” should more properly be defined as “all units in a single affordable housing development” so that tenants served by different SDPs within a single development can benefit from VNM bill credits. The Staff Proposal recommended that the SDP should not be considered the proper boundary for VNM tariffs for affordable housing projects. Instead, the Staff Proposal recommends the Commission clarify that VNM should be available to the entire affordable housing development, not just the units behind a single SDP. The commission agreed with this assessment in their proposed decision.

Furthermore, the PUC staff recommended that the Commission expand VNM to all multitenant customers, not just those that qualify for the MASH program, as long as the customers who receive the credits are all behind the same utility SDP. Staff suggests that as long as VNM credits are transferred between the accounts served by a single SDP, there should be no significant cost-shifting between customer classes.  The Commission agreed with staff’s suggestion and clarified that VNM should not be limited to those who receive CSI incentives. The Commission also added that VNM should not be limited to photovoltaic (PV) systems. The expanded VNM concept can apply to any DG technology that is allowed under net energy metering. The PUC also noted that utilities may propose a one-time account set up fee and a monthly administrative fee for VNM service. In addition, the utilities may seek recovery of implementation and set up costs for VNM in their future general rate cases.

Staff also recommended that solar energy system owners can transfer bill credits across multiple service delivery points, similar to the “Renewable Energy Self-Generation Bill Credit Transfer” (RES-BCT) option currently available only to local governments. However, the commission decided to adopt an expanded RES-BCT tariff on a pilot basis only. The commission applied a statewide 250 MW cap to the expanded program, in addition to the 250 MW cap that applies to the current local government RESBCT tariff.  The PUC further specified in their proposed decision that the generation credit should be the same generation rate now credited under the current RESBCT tariff.

For more information see CPUC Proceeding R1005004.


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