Picture this: You sign a contract with your cell phone provider or cable company locking in a price for two years. Then, just a few months into the deal, the company informs you that it is unilaterally shortening your contract by six months.
You’d be angry. And you’d have a right to be — you trusted them, and they reneged on the deal. You’d probably vow never to do business with them again. You might even call someone in state government to help make matters right.
So, it’s nothing short of bizarre that an agency of state government — the California Public Utilities Commission — is proposing to pull a similar stunt on Californians who have invested in rooftop solar power.
Last month, the Public Utilities Commission proposed a new set of utility-backed rules that would pull the legs out from under California’s tops-in-the-nation market for rooftop solar. The rules would slap a big new “solar tax” on rooftop solar consumers and slash compensation for the power that solar owners supply to the grid.
Given the importance of a clean energy transition for our health and welfare, it’s bad enough that the Public Utilities Commission wants to impose those charges on consumers who are considering “going solar.” But the commission also wants to apply them to many owners of existing solar panels — after explicitly promising those customers that it wouldn’t.
When the Public Utilities Commission last updated its solar compensation rules in 2016, the commission stated that it would compensate solar customers in the same way for the first 20 years they owned their panels. Guaranteeing consistent rate treatment, the commission wrote in its decision, would provide past and future solar customers a “uniform and reliable expectation of stability of the … structure under which they decided to invest in their … systems.”
Now, six years after that decision, the Public Utilities Commission is proposing to go back on its promise. With the exception of low-income consumers, for whom the 20-year guarantee will remain in place, existing California solar customers will have their rate treatment locked into place for only 15 years after their interconnection date.
For Californians who installed solar panels in the 2000s, that means waking up some morning soon to find that they owe their utility as much as $57/month in solar fees and will receive roughly 80% less in compensation for the solar power they supply to the grid.
What a shock. And what a way to treat Californians who invested their own money to help clean up the massive social problems of climate pollution and dirty air.
The Public Utilities Commission argues that its reversal of policy is justified because solar customers will still receive what it judges to be a “reasonable payback on their investment.” But that is beside the point, for two reasons.
First, Californians who bought solar panels for their homes and businesses took a risk — one that was not guaranteed to pan out. Can you imagine utilities pressuring the Public Utilities Commission to increase payments to solar consumers if the benefits had been less than expected? If your answer is “yes,” I have a Golden Gate Bridge I’d like to sell you.
When it comes to the utilities, the Public Utilities Commission seems to be telling consumers, “tails they win, heads you lose.”
Second, if the state wants Californians to continue to be enthusiastic partners in the clean energy transition, the least it must do is ensure that when it makes a promise, it will follow through. Failing to do so in this case will show that the state is not good on its word — a message that will make Californians less likely to take part in future clean energy programs, and further erode our already fragile trust in government.
Fortunately, there is someone you can call in state government if you’re upset about the commission’s proposed solar switcheroo. Gov. Gavin Newsom has the power to push the Public Utilities Commission to undo the worst parts of its solar proposal, including the rollback of the guarantee to existing solar customers.
It’s time he used that power. After all, a deal is a deal.
Jenn Engstrom is the state director at California Public Interest Research Group, CALPIRG. She wrote this for CalMatters, a public interest journalism venture committed to explaining how California’s Capitol works and why it matters.