NEM 3 Decision Issued : What You Need To Know

The NEM 3 final decision has now been issued, and we know you are eager to understand the implications of this new ruling. While it will take time to comprehensively review the entire Tariff and be able to provide specific modeling scenarios, we do want to provide a preliminary overview of what has been decided. Further details to come your way as we learn more!

NEM 3 Implementation Timeline

  • Preliminary Decision was released November 10th.  Comments due back to CPUC November 30th and December 5th.  Final decision occurred December 15th.
  • NEM 2 Enrollment will end 120 days after the decision is final.  If this schedule holds this means NEM 3 starts April 14th.  After the 120-day period, customers be billed according to NEM-2 on an interim basis until the utilities’ NEM-3 billing capabilities are built.
  • NEM 3 will be in place for at least 5 years before a “NEM 4” is even considered.
  • CalCom Energy will aim to have all customer interconnection applications formally Deemed Complete by April 13th in order to secure NEM 2.

Major Outcomes

  • Net Energy Metering Becomes Net Billing
    • Moving forward Net Energy Metering will now be called Net Billing.
    • Energy from the PV system that you use behind the meter to instantaneously offset your load, without exporting energy to the grid, is still valued at full retail rate
    • The value of solar energy put back on the grid will no longer be valued at retail rates.  The value of exported solar energy will be based on the Avoided Cost Calculator (ACC).  The terminology will now be centered on “Export Compensation Rates”.
  • Load Justification
    • Customers may submit for load justification of solar systems for up to 50% above current annual usage. Following the SCE current practice, customers who oversize their systems shall attest that they expect to increase their usage accordingly in the next year. This will prevent oversizing that is not designed to meet a future increase in onsite annual load.
  • True Up
    • The decision maintains monthly billing and annual true-ups.

Net Metering Aggregation (NEMA) Partially Protected 

  • NEMA and VNEM will remain in NEM 2 with full retail rate credits until further CPUC review.  Grandfathering for NEMA projects under NEM 3 starting April 14th will now be for a term of 9 years.  In order to qualify for NEMA under NEM 3 a customer must already have two or more meters in place as part of the aggregation from April 13th onwards.  It is assumed that a “no-load” meter does not count towards the two meter requirement.
  • There will be hearings throughout 2023 to make final determinations on the future of NEMA.  Ultimately there will be a NEM 3 specific version of NEMA that will be published.  CalCom will participate actively in all of these proceedings to represent our customers interests.

*If you are ready to move forward on your solar project and take maximum advantage of NEM 2.0 benefits such as 20-year grandfathering and full retail rate NEM credit value, please reach out to us so we can get your interconnection application submitted and deemed complete ahead of the April 14th deadline. This same deadline will apply to system expansions.*

 CCA’S

  • Community Choice Aggregators (CCA’s) will have the ability to provide richer export credits than the utilities on the generation portion if they so choose. Final export credit value determination within CCA’s will be at the discretion of each CCA.

Battery Additions

  • A NEM 2 customer can add battery storage after April 13th and not lose their NEM 2 status.  Customers will need a certified PCS (Power Control System) in place in order to export from the battery for ACC rate arbitrage.

Billing Delay

  • The reality is that most customers that submit interconnection applications after April 13th will still be billed under NEM 2 for approximately a year due to delays in the utility launching a new NEM 3 billing system based on the ACC.

We are here to answer any questions you may have about this transition, and have experts in house that can talk you through the above points in further detail and as applies to your specific situation.

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