The California Public Utilities Commission failed to comply with state law when it significantly reduced the financial incentives for residential rooftop solar panels in 2022, the Environment Group argued Wednesday in the California Supreme Court.
The committee’s policy, which came into effect in April 2023, reduced the value of credits panel owners receive to transmit electricity by up to 80% to the electric grid.
In a discussion before the court, environmental groups said the decision was hindering efforts by homeowners and businesses to install climate-friendly panels.
The committee violated state law, the group argued by not taking into account all the benefits of solar panels in its decision and not allowing rooftop solar systems to continue to expand in underprivileged communities.
There are over 2 million solar systems on the roofs of California homes, businesses and schools. Environmentalists say the numbers must increase to reach the target set by the 2018 law that by 2045, states must achieve the target set by the 2018 law that only uses carbon-free energy.
On the other side of the court was an attorney from Attorney General Rob Bonta’s office, but five members of the committee allegedly followed the laws that Governor Gavin Newsom pointed out, but made their decisions.
In a brief filed before oral argument Wednesday, government lawyers sided with people from the state’s three major for-profit utilities, Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric.
Assistant Bishop’s Secretary Mika Moore said at a hearing in downtown Los Angle that the credit given to owners of rooftop panels for electricity bills has become so valuable that it has led to a multi-billion dollar “cost shift” for those who do not own the panel. This was raising electricity bills, she said, especially hurting low-income electricity customers.
Energy credits sent from the rooftop system to the grid are valued at electricity retail fees. This has risen rapidly in recent years as commissioners voted in recent years to approve the rate increases that the utility requested.
Environmental groups and other critics on the committee’s decision argue that there is no “cost shift.” They say the committee did not consider many of the benefits of rooftop solar panels in its calculations. This includes how to reduce the amount of other infrastructure the utility needs to build.
“The cost-shift story is Red Herring,” plaintiff’s lawyer, Malinda Dickenson, represents the conservation of the Center for Biodiversity, the Environmental Working Group and our Community Foundation.
Moore retorted, saying that the committee does not need to consider all possible social or private interests of the rooftop panel.
For example, despite the possibility that rooftop panels could protect the land needed for industrial-scale solar farms, government lawyers argued in the overview, but the committee was not obliged to consider its value in calculating the cost of rooftop panels being transferred to other clients.
Government lawyers also said the committee has created other programs beyond electricity bill credits to help underprivileged communities provide solar systems.
The utility has complained that electricity bills are rising as rooftop solar panel owners don’t pay a significant percentage of the fixed costs needed to maintain the electric grid.
During the verbal discussion, seven judges focused on the legal question of whether the state court of appeals had made a mistake when awarding an environmental group in January 2024, and said that because they have more expertise on utility issues, they must postpone how the court interpreted the law.
“The review criteria for this review criteria leave no basis for preventing obstacles to the work of the committee,” the Court of Appeal concluded in its opinion.
Environmental groups argue that the Court of Appeal ignored the 1998 law. It states that the committee’s decision should be kept in court review of the same standards as that of other state agencies.
Moore told seven judges that the Court of Appeals had made the right decision to postpone it to the committee.
Not all justice agreed to that.
“But we’re pretty good at understanding what the law is saying,” Assistant Judge Carol Corrigan told Moore during the lawsuit. “Why should I postpone that to the committee?”
The judiciary will weigh the arguments made by both sides and make decisions over the next 90 days.
The large utility has sought to cut energy credits for decades, aimed at encouraging Californians to invest in solar panel systems that could cost tens of thousands of dollars. The rooftop system has been reduced to utility power sales.
On another side, the state’s three large utilities are lobbying in Sacramento to cut credits for Californians who installed the panel by April 15, 2023.
Earlier this year, former California executive Rep. Lisa Calderon (D-Whittier), Edison, introduced a bill that would end programs for all solar owners who installed the system by April 2023 10 years later. Faced with opposition and protest by solar owners, Calderon amended the bill, so it ends the program – credits are valued on retail electricity bills – they are only for those selling their homes.
Calderon said the bill would save the state’s electricity customers $2.5 billion over the next 18 years.
On Monday, Edison lobbyist Roderick Brewer urged him to vote for the bill known as AB942.
Congress voted between 46 and 14 votes on Tuesday night to approve the bill and sent it to the state Senate for consideration.
The timing of the vote surprised opponents of the bill. They were hoping to vote later this week because of rules that would allow for more time to be reviewed after the bill is amended. Calderon revised the bill late Monday.
Nick Miller, a spokesman for assembly speaker Robert Ribas, said he requested a rule exemption so Calderon could vote Tuesday night.
Such an exemption is “not unusual,” Miller said.
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