NEM-3.0 Process Has Started

[Redhill_qik]

California has kicked off the process to set the tariffs for NEM-3.0 and it is expected to take 15 months. So we're looking at January 2022.
The net metering successor tariff ‘NEM-3’ proceeding in California has officially kicked off

 

[SMAlset]

Will be waiting for PTO soon. Having an EV that we charge at home we did already switch to EV2A back in 2018 so have adjusted to the TOU plan however.

Thanks for the article. It referenced a one-time fee to the utility. I assume this is being paid by us through our pricing with Tesla or other installer. Curious what is that fee currently for residential customers? Having it paid indirectly on our behalf makes it kind of hidden to understanding these rate changes.

Is there a typical grandfathering in period before NEM2.0 users would be forced into NEM3.0 rate structure?

When they consider changing rate structure, is the self-generating customer given some credit for supplying the infrastructure (like in our case with a medium solar system and 3 PWs cost around $40K) instead of the utility providing it? Really not like the vast majority of people have a choice to hook up to them or not for their energy distribution. And even more so now with many cities banning the installation of natural gas in new construction. Doubt there are many who want to install oil tanks as a source.

I get that the utilities would rather own all the generating plants (solar, gas, hydro etc), not deal with individual renewable generating customers, and thereby control all the energy production and only because of residential and commercial growth and other reasons haven’t been able to increase their infrastructure to meet demand.

With mention of Hawaii, not seeing how that would be an applicable comparison to let’s say California. We have a vastly larger installed base of users and other nearby potential sources of power to draw from so would think always cheaper than a location that’s an island state.

 

[SoCal Dave]

Is there a typical grandfathering in period before NEM2.0 users would be forced into NEM3.0 rate structure?

For NEM1.0, there is a 20 year grandfathered period. Hopefully, something similar will be done for NEM2.0.

Net Energy Metering

 

[holeydonut]

What sucks is that it seems like the actual TOU hours and rates aren't grandfathered. There doesn't seem to be protection for existing NEM 1.0 and 2.0 customers being pushed by the utilities into more expensive TOU structures.

I incorrectly thought NEM 2.0 had some protections on overall generation credit value during the life of the program. The utilities have said numerous times that NEM households are not paying their fair share compared to "regular households" And it seems as we move to NEM 3.0 the utilities can still get their fair share back from NEM 1.0 and 2.0 customers by creating a wider disparity between the energy pushed to the utility during daylight versus the energy consumed after sunset.

So while NEM 1.0 and 2.0 will enjoy slightly cheaper tariffs and fewer "non by-passable charges" compared to NEM 3.0 households, the TOU rates and costs seem to be fluid, and these TOU will drive a significant portion of the annual cost of a solar-only system under NEM. I suspect NEM 2.0 households would greatly benefit from an energy storage solution in advance of NEM 3.0.

 

[zanary]

If you look at the CAL ISO web site (URL = California ISO - Supply), what is interesting is that you can see how much PV is being generated as a percentage of all the renewables and as a percentage of total supply...

As of right now it's showing that there is 7.3GW coming from PV... I'm curious what happens when NEM 3 kicks in, and more people decide to self storage vs.. NEM back

 

[jjrandorin]

What sucks is that it seems like the actual TOU hours and rates aren't grandfathered. There doesn't seem to be protection for existing NEM 1.0 and 2.0 customers being pushed by the utilities into more expensive TOU structures.

I incorrectly thought NEM 2.0 had some protections on overall generation credit value during the life of the program. The utilities have said numerous times that NEM households are not paying their fair share compared to "regular households" And it seems as we move to NEM 3.0 the utilities can still get their fair share back from NEM 1.0 and 2.0 customers by creating a wider disparity between the energy pushed to the utility during daylight versus the energy consumed after sunset.

So while NEM 1.0 and 2.0 will enjoy slightly cheaper tariffs and fewer "non by-passable charges" compared to NEM 3.0 households, the TOU rates and costs seem to be fluid, and these TOU will drive a significant portion of the annual cost of a solar-only system under NEM. I suspect NEM 2.0 households would greatly benefit from an energy storage solution in advance of NEM 3.0.

Correct, the rates are not protected, just the "structure". I am grandfathered into NEM 1.0, and on a regular old school "tiered" rate where the more you use, the more they bill you, no TOU. This provides an incentive for me to use as little power from the grid as possible, vs WHEN i use it. I dont have any NBCs and I get 1:1 net metering from tier 1 rates. They pay me the tier 1 rates for every kW I put into the grid, vs paying me off peak rates, etc.

So, that structure has not changed, and wont change for me for 15 more years. However, the rates themselves have changed. My tier 1 rate was 13c a kWh when I signed up, and its up to 21 cents a kWh now. I am billed 21 cents for every tier 1 kWh I use.... but I am credited 21c for every kWh I send to the grid. The only time I pay more than 21c a kWh is if my electricity usage pushes into tier 2 or 3 rates, and I usually only have 1 month a year where that even comes close to happening (August). The tier 1 kW credit is VERY low (for my home its something like 400 ish kWh for the month, and I am in a 3300 SQ foot home in a place that has hot summers but in general cool nights.

Normally, without solar, that 400 kWh baseline / tier 1 would not even be enough to run my lights and refridgerators for the month, let alone actually use any power. With solar, my PV generates enough that I almost never go into tier 2 rates, so still enjoy the true 1:1 net metering.

I expect the rates to keep increasing, but since the structure is the same for me, it doesnt really effect me much.

 

[miimura]

If you look at the CAL ISO web site (URL = California ISO - Supply), what is interesting is that you can see how much PV is being generated as a percentage of all the renewables and as a percentage of total supply...

As of right now it's showing that there is 7.3GW coming from PV... I'm curious what happens when NEM 3 kicks in, and more people decide to self storage vs.. NEM back

The CA-ISO data does not include any "behind the meter" distributed generation. In other words, it only shows utility scale renewables. Your own solar will only show up as reduced demand during solar generating hours.

 

[Redhill_qik]

California PUC meetings on NEM 3.0 starting up and PG&E, SCE and SDG&E are looking for changes that would essentially kill residential solar. There is a proposal to charge $11/kw per month as a Residential Grid Benefits Charge ($66/month for a 6kw PV array) plus a $24/month "Distributed Generation Successor Tariff', so $90/month up from the current minimum daily charges of $0.3275 that's $10/month. The least onerous of the proposal is a monthly true-up.

Solar proponents are proposing allowing sending power back to the grid at peak rates from battery storage.

It is just the start and I hope the PUC sticks up for the customer over the monopolies.

Debate begins over updating California’s rooftop solar rules

Later this year, the California Public Utilities Commission expects to update the rules over how owners of rooftop solar systems are compensated and if the past is any indication, the debate will b…

www.sandiegouniontribune.com

Edit: To be clear NEM 3.0 will impact new solar installations first, then NEM 1.0 and 2.0 customers after their agreements expire 20 years after PTO.

Does make me wonder about selling a home with a system, does the original PTO NEM rules apply to the new owner or does it switch to the NEM rules in place when the account switches over?

 

[Zorg]

Tou-c is a bit of a joke in the winter with almost no difference in cost between peak and non peak

 

[Redhill_qik]

Tou-c is a bit of a joke in the winter with almost no difference in cost between peak and non peak

E-TOU-C, E-TOU-D and EV2A aren't tied to NEM rules and are general tariffs for all customers that are on time of use plans regardless of having solar. However, if you have solar you are required to be on one of these plans.

I would expect that these tariffs will change as grid load profiles change over time as new gas heating is phased out and replaced with electric.

 

[holeydonut]

Tou-c is a bit of a joke in the winter with almost no difference in cost between peak and non peak

What's not a joke is starting June 1, 2021... your TOU-C will be on Summer months and PG&E is introducing partial-peak (aka shoulder) rates. Due to the typical demand curve of people with air conditioning and families, this will likely add about 10%-15% in the Summertime to the monthly bill. The only way to offset this is to modify daily behavior to shift energy consumption out of the noon to 10pm window.

Then in 2022; they'll further mess with the TOU-C time slots to shift peak deeper into the day when solar production wanes. This will likely add yet another ~10%+ effective increase to owed rates without behavior modification.

You've probably seen those "energy upgrade California" TV advertisements telling you that effectively using California's renewable energy sources requires intelligent daily planning. Then they show they show people storing energy in bottles, pots, pans, and balloons with some bullcrap jingle song going in the background.

So when someone's Summertime TOU-C bill goes up net-net 20%+ in the span of 18 months, they'll blame the homeowner for not effectively managing their daily consumption.

Yes, I know this TOU stuff has nothing to do with NEM. But I still think the utilities have buried hidden burdens and stupidity by forcing Solar customers to undergo gamesmanship with their daily usage/TOU in addition to the NEM tariffs.

Time-of-Use Rate Plans

 

[Redhill_qik]

What's not a joke is starting June 1, 2021... your TOU-C will be on Summer months and PG&E is introducing partial-peak (aka shoulder) rates. Due to the typical demand curve of people with air conditioning and families, this will likely add about 10%-15% in the Summertime to the monthly bill. The only way to offset this is to modify daily behavior to shift energy consumption out of the noon to 10pm window.

Then in 2022; they'll further mess with the TOU-C time slots to shift peak deeper into the day when solar production wanes. This will likely add yet another ~10%+ effective increase to owed rates without behavior modification.

You've probably seen those "energy upgrade California" TV advertisements telling you that effectively using California's renewable energy sources requires intelligent daily planning. Then they show they show people storing energy in bottles, pots, pans, and balloons with some bullcrap jingle song going in the background.

So when someone's Summertime TOU-C bill goes up net-net 20%+ in the span of 18 months, they'll blame the homeowner for not effectively managing their daily consumption.

Yes, I know this TOU stuff has nothing to do with NEM. But I still think the utilities have buried hidden burdens and stupidity by forcing Solar customers to undergo gamesmanship with their daily usage/TOU in addition to the NEM tariffs.

View attachment 644916

Time-of-Use Rate Plans

That table of changes appears to be for a transition of existing time-of-use plans E-6 and EM-TOU as they move E-TOU-C there is no mention of changing the existing E-TOU-C, E-TOU-D or EV2A hours. This is the text immediately preceding the table:

Over the next two years, Time-of-Use Plans (E-6) and (EM-TOU) will be undergoing several changes. The California Public Utilities Commission (CPUC) adopted these changes to more closely align peak periods with times of day when net electricity demand is highest and generation is most expensive as well as to encourage greater use of clean, renewable energy.

Edit: It looks like E-1 non-tou-of-use plans will be transitioned directly to E-TOU-C between June 2021 to March 2022 depending on your county.

 

[jjrandorin]

I consider "partial peak" to be, basically, peak (i find the term "partial peak" to be an oxymoron), so really, peak time under those plans in the summer in 2021 is 12 Noon to 10pm in 2021, and 2pm to 10pm in 2022, is what it looks like to me.

Basically, "peak" is from noon to when most working people start to get ready for bed, and ecompasses all evening things like cooking dinner, air conditioning your home etc.

That $11 per kw charge sounds horrific, and appears on the surface to just be a "you have solar" tax. The big problem (for the utilities) is, the people who have the highest electric bills are the ones most likely to get solar, thus their most lucrative customers turn into customers who pay almost nothing, overnight... especially in places where electricity usage is high.

 

[holeydonut]

That table of changes appears to be for a transition of existing time-of-use plans E-6 and EM-TOU as they move E-TOU-C there is no mention of changing the existing E-TOU-C, E-TOU-D or EV2A hours. This is the text immediately preceding the table:

Sorry you're right... I meant to say that the current EM-TOU and E6 TOU folks will see a ~20% increase to their Summertime rates in the next 18 months due to the differences between what they experience today and the future TOU.

You're right existing TOU-C folks will probably just get impacted by the natural rate increase such as the 8% that just kicked in this month.

Edit: Wow you're also right... anyone on E-1 (no-solar or self-generation) with air conditioning is going to get absolutely murdered once they get pushed to TOU. They'll be paying peak rates all day and have no energy production to offset it.

Is this for real? E1 becoming TOU is going to straight up crush people who aren't ready for it. I haven't seen anything in the news or received any correspondence on this?

 

[holeydonut]

I consider "partial peak" to be, basically, peak (i find the term "partial peak" to be an oxymoron), so really, peak time under those plans in the summer in 2021 is 12 Noon to 10pm in 2021, and 2pm to 10pm in 2022, is what it looks like to me.

Basically, "peak" is from noon to when most working people start to get ready for bed, and ecompasses all evening things like cooking dinner, air conditioning your home etc.

That $11 per kw charge sounds horrific, and appears on the surface to just be a "you have solar" tax. The big problem (for the utilities) is, the people who have the highest electric bills are the ones most likely to get solar, thus their most lucrative customers turn into customers who pay almost nothing, overnight... especially in places where electricity usage is high.

Yeah a few months ago, many of the documents being pushed around the CPUC's portal discussing NEM 3.0 were around how a homeowner down the road could effectively calculate their expected costs without solar and with solar. The companies selling solar want the utilities to provide a real mechanism to identify how going solar would at least break even (but ideally benefit) the homeowner. This would be an important aspect to hit California's target of 50% renewables.

It'll be interesting to see how the Utilities react to the requirement that a real, useful calculation has to be available to show expected costs. Even today, under NEM 2.0 and today's TOU-C and EV-2A rates, there are many homeowners who actually see their net annual energy bills go up once all the NBCs and TOU shenannigans are factored in.

NEM 3.0 (potentially) ... with even higher NBC's, fees, tariffs... coupled with more crappy TOU rates... is going to be a significant deterrent for homeowners to get solar.

This means the utilities will "volunteer" to invest in their own solar farms in order to reach California's combined goal. And we've witnessed countless times in the past that when the utilities put forth their own construction projects; a lot of that $ goes to waste and poor management. This is what the Utilities want. They are guaranteed a profit margin for their investment; so the more they're allowed to invest (since private homeowners aren't getting solar), the more money PG&E makes for paying juicy dividends to their billionaire shareholders.

 

[h2ofun]

Yeah a few months ago, many of the documents being pushed around the CPUC's portal discussing NEM 3.0 were around how a homeowner down the road could effectively calculate their expected costs without solar and with solar. The companies selling solar want the utilities to provide a real mechanism to identify how going solar would at least break even (but ideally benefit) the homeowner. This would be an important aspect to hit California's target of 50% renewables.

It'll be interesting to see how the Utilities react to the requirement that a real, useful calculation has to be available to show expected costs. Even today, under NEM 2.0 and today's TOU-C and EV-2A rates, there are many homeowners who actually see their net annual energy bills go up once all the NBCs and TOU shenannigans are factored in.

NEM 3.0 (potentially) ... with even higher NBC's, fees, tariffs... coupled with more crappy TOU rates... going to be a significant deterrent for homeowners to get solar.

This means the utilities will "volunteer" to invest in their own solar farms in order to reach California's combined goal. And we've witnessed countless times in the past that when the utilities put forth their own construction projects; a lot of that $ goes to waste and poor management. This is what the Utilities want. They are guaranteed a profit margin for their investment; so the more they're allowed to invest (since private homeowners aren't getting solar), the more money PG&E makes for paying juicy dividends to their billionaire shareholders.

It would seem that these kind of changes would entice folks to get solar AND batteries to try and get off grid as much as possible? Then some of these rates become more of a non issue?

 

[holeydonut]

It would seem that these kind of changes would entice folks to get solar AND batteries to try and get off grid as much as possible? Then some of these rates become more of a non issue?

Technically yes I agree with you... when I started this process in April 2020 (sigh), my intention from the get-go was to put PV+ESS in my home to try and live "off grid" as much as possible. The less daily energy goes or comes from PG&E, the less likely a customer will be exposed to BS TOU rates. And for now, the NEM 2.0 tariffs (and NEM2-MT) aren't draconian/stupid yet like what was teased in the recent NEM 3.0 updates.

But the Sunrun sales rep who has been doing this for about 8 years couldn't understand my motive. He was legitimately confused with my desired #1 outcome was not to be exposed to PG&E's TOU. Assuming Sunrun actually wants to make money and train their sales staff to identify a value proposition, this was surprising. I think it's because so far, I don't see solar or ESS companies being able to effectively market or message to homeowners about TOU. For example, my Boomer neighbor (the one with the big stash of propane tanks) is very ROI-focused. Assuming he lived long enough to experience a positive ROI, he could not get the math to work that the ESS was a benefit to him.

I believe the benefit of the ESS isn't purely monetary (and I work in finance doing finance things all day when not posting on TMC). The ESS allows a homeowner to consume energy when they want to consume it. Instead of cooking dinner at 2pm, pre-cooling a house to 60 degrees, and running the laundry at midnight. Or get a whole house fan (not happening for my house due to allergy/respiratory risk) and air dry all your clothes.

The way PG&E tries to brainwash people, they basically say it's "free" to modify behavior. So if it's "free" to act like the people in this advertisement, then it's the homeowner's fault for paying more due to TOU. I've seen this ad playing on TV every day for the last 4 months. And this mentality kills any sort of business case a residential solar+ESS company can put together about why batteries are a smart investment beyond resiliency.

I know this type of brainwashing bullcrap advertisement is just the typical gaslighting PG&E has been doing for years. It gets the homeowner to blame their their own energy usage instead of blaming the utilities from charging $0.35 / kWh.

The ESS companies can boast resiliency as a ROI factor, but that's a really tough sell to push people over the hump (as you noticed in that thread about whether backing up a fridge and some lights is really worth it). But one day, I think people will realize there is an implied cost benefit of not acting like a moron and using your own energy when you want to use it.

 

[Redhill_qik]

That $11 per kw charge sounds horrific, and appears on the surface to just be a "you have solar" tax. The big problem (for the utilities) is, the people who have the highest electric bills are the ones most likely to get solar, thus their most lucrative customers turn into customers who pay almost nothing, overnight... especially in places where electricity usage is high.

Exactly, this is probably a ploy of setting an anchoring point at the start of negotiating so that all future discussions are based on this absurd number and when they come off of this peak and down to say $5.50 per kw the messaging will be we reduced our ask by 50% so "we should be all good now". When in reality this is a monopoly that wants to maintain their revenue level while doing nothing.

Everyone of these utilities is constantly messaging how they want households to reduce their energy usage and shift that usage away from the peak periods as this reduces their need to build new generation facilities and new distribution networks, so they save on costs. Now that we are doing this with solar and battery storage they are crying foul.

I do believe that there needs to be appropriate consideration for maintaining the grid and for our use of that grid as a giant battery. We currently do this through the minimum daily charge and there probably needs to be additional charges added to the non-bypassable charge to account for grid usage, but this must take into account the benefits of having distributed solar throughout the grid that eases the demand and need for building and maintaining more high voltage transmission lines up and down the state as our electric exports go to our neighbors first which reduces the need to move energy from distant generation facilities to residential loads.

 

[jjrandorin]

@holeydonut

That commercial has got to be one of the silliest things I have seen in quite some time. I had not seen it before.. maybe I am not somewhere they broadcast it? I use my TV a lot, but dont watch hardly any broadcast shows.

Putting on the moderator hat for just a second..

==========================================

(moderator note: While this discussion is not "Tesla energy" specific, NEM rates directly impact energy products, both tesla and otherwise. Lots of people interested in Tesla energy are interested because of rising electric rates, and these NEM structures impact that.

For this reason, I believe this discussion is fine for this section, and does not need to be moved to the "Energy" section on TMC, as long as the discussion stays more around NEM rate structructures, their impact on energy products and ROI, etc, and doesnt stray toward things like shutdown of power plants, global warming, etc.)

 

[Redhill_qik]

Edit: Wow you're also right... anyone on E-1 (no-solar or self-generation) with air conditioning is going to get absolutely murdered once they get pushed to TOU. They'll be paying peak rates all day and have no energy production to offset it.

Is this for real? E1 becoming TOU is going to straight up crush people who aren't ready for it. I haven't seen anything in the news or received any correspondence on this?

There is a note on that slide that says that customers "have the ability to elect to remain on their current plan". I thought the TOU plan conversion was a PUC rule, but maybe there is a grandfather rule for E-1 customers. The default will be to switch, so unless you read the notifications that PG&E will send out on the switch a lot of people will be moved. There was also wording of "bill protection" so that the first year on TOU wouldn't be higher than what you would pay on the non-TOU plan.

But if you start up new service then you are going to be on E-TOU-C.