DATE: July 11, 2016
TO: Council Sustainability Committee
FROM: Director of Utilities & Environmental Services
SUBJECT
Title
Net Energy Metering 2.0 Regulations
End
RECOMMENDATION
Recommendation
That the Committee reviews this report and provides comments.
Body
BACKGROUND
This report is informational only. The purpose is to inform the Committee about the state of distributed solar in Hayward and recent Net Energy Metering (NEM) proceedings by the California Public Utilities Commission (CPUC).
What is Net Energy Metering?
NEM is a utility billing structure (tariff) that is intended to encourage the adoption of solar and other distributed generation systems. These systems have high up-front costs and NEM rate structures are intended to make the investment more cost-effective for property owners.
Energy customers rely on the electrical grid to provide consistent, around-the clock service. Because solar systems do not generate electricity at all times, customers with solar systems purchase electricity from the grid at night and on cloudy days.
NEM allows consumers with solar systems or other renewable energy systems to "sell" electricity back to the grid when they are overproducing (during the middle of the day) and use this as a credit to offset the electricity that they purchase from the grid when they are under-producing or inactive (at night). Any surplus credit is rolled over to the following billing period.
In some states, such as California, if a NEM customer has produced surplus power at the end of a twelve month billing period, then the utility company gives the customer a Net Surplus Compensation check. The CPUC has set the Net Surplus Compensation rate based on current market prices, which is between $0.03 and $0.04 per kilowatt-hour (kWh).
Virtual Net Metering, which is a variation to NEM for multifamily and multi-tenant buildings, allows certain customers that generate their own electricity to credit that electricity...
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