Full Title: California Net Energy Metering Ratepayer Impacts Evaluation
Author(s): Ehren Seybert, Gabe Petlin, Katie Wu
Publisher(s): California Public Utilities Commission
Publication Date: 10/2013

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The California Public Utilities Commission (CPUC) has contracted with Energy and Environmental Economics, Inc. (E3) to provide an evaluation of the costs and benefits of the net energy metering (NEM) program in California. This study fulfills the requirements of Assembly Bill (AB) 2514 (Bradford, 2012) and Commission Decision (D.) 12-05-036, to study “who benefits, and who bears the economic burden, if any, of the net energy metering program.” This study also serves as an update to the CPUC’s 2010 NEM Cost-Effectiveness Evaluation.

NEM is an electricity tariff billing mechanism designed to facilitate the installation of renewable customer distributed generation (DG). Under NEM tariffs, customers receive a bill credit for generation that is exported to the electric grid during times when it is not serving onsite load. Bill credits for the excess generation are applied to a customer’s bill at the same retail rate (including generation, distribution, and transmission components) that the customer would have paid for energy consumption, according to their otherwise applicable rate schedule. This study also provides a separate evaluation of the NEM fuel cell program, which credits the generation only component of the rate for participating fuel cells that achieve targeted reductions in greenhouse gas emissions.