When Ramon Torres was considering buying a $23,000 solar system for his Madera home in 2017, he calculated the cost of the system and the projected utility costs savings he’d get under the net energy metering contract, or NEM 2.0, over its 20-year lifespan.

But now Torres and other California solar customers who bought or leased systems under NEM 1.0 or NEM 2.0 contracts could lose those financial benefits after 10 years instead of 20 under an Assembly bill proposed by Lisa Calderon, a Southern California Democrat who previously worked for Southern California Edison’s parent company.

Assembly Bill 942 would shorten the contract times for homeowners and eliminate the carryover of NEM contracts when homes with solar systems are sold. It also would impact government agencies such as school districts that have invested in solar systems.

Fresno Unified’s solar provider, Forefront, estimates that the district’s energy savings could be slashed by as much as 75% under AB 942, district spokeswoman AJ Kato said.

Although AB 942 would trim the net metering contract from 20 years to 10, the district’s agreement with Forefront would remain fixed for the entire 20 years, Kato said. If PG&E pays the district less for energy generated by Forefront’s solar panels, “utility bills will increase creating a scenario where having solar may cost FUSD more in energy costs than not having solar,” she said.

Violating a Guarantee

Before customers either lease or buy solar systems, they are provided a guide prepared by the California Public Utilities Commission that says the 20-year NEM contracts are guaranteed, said Brad Heavner, executive director of the California Solar and Storage Association.

“They actually have to sign a piece of paper saying we’ve given them this solar consumer guide before they sign the contract,” he said. “It’s a PUC document, and it says that NEM is guaranteed for 20 years. It uses that word, guaranteed. And so customers are seeing that before they make the final decision to invest in solar or to sign a long-term lease. And for the state government to go back on its guarantee would be immensely unfair.”

Violating that guarantee would be “unprecedented,” Heavner said. “I’m getting calls from all around the country asking if this is real because other states are scratching their heads about California making this change.”

Opponents Plan Protest, Council Considers Resolution

Opposition to the bill has been gearing up statewide. Opponents are planning a “noisy” protest at Calderon’s City of Industry office on Wednesday.

The Fresno City Council will consider a resolution at Thursday’s meeting in opposition to AB 942, noting that it would force residents who “in good faith” signed up for solar system installation under a more favorable compensation arrangement to have to shift to a less favorable arrangement.

AB 942 would impact school districts that have used facilities money to install or lease solar systems, basing their calculations on the NEM 1.0 or NEM 2.0 compensations, said Nancy Chaires Espinoza, executive director of the School Energy Coalition.

If AB 942 becomes law, school districts would need to redirect revenues to cover energy costs instead of devoting dollars into classrooms, which would directly impact students, she said.

Changing the rules also could lead to a loss of public faith in government and in the ability of school districts to invest public funds, Chaires Espinoza said.

Other Energy Bills Pending

AB 942 appears to be the outlier of a number of bills introduced in the current legislative session. The majority appear to be aimed at reining in the skyrocketing cost of electricity for customers of investor-owned utilities like Pacific Gas & Electric and Southern Cal Edison.

Senate Bill 322 would link and limit rate increases to the consumer price index and would put restrictions on power shut-offs for customers unable to pay their bills. Assembly Bill 1167 would prevent utility companies from including lobbying, promotional advertising, and similar expenses from being passed along to ratepayers.

Lawmakers are finally recognizing their responsibility to control utility costs, Heavner said.

“I think something meaningful is going to pass to reform utilities and to check their runaway spending,” he said. “Finally, the Legislature is fed up enough about the regulators failing to contain utility spending that they are likely to act on something meaningful this year.”

Bill Would ‘Penalize’ Homeowners

Ramon Torres said he hopes legislators will realize how harmful AB 942 would be to Californians such as himself and reject it.

Torres, 57, lost his job as a finance director at a dealership in December. He’s a veteran and is working on a medical retirement, so his income will be fixed and limited moving forward. And he still has to keep the lights and air-conditioning on at his home, where he lives with his wife and their two teenage sons.

“I don’t think it’s fair for people that have already purchased (solar panels). You’re penalizing them for trying to help protect the environment. Instead of being rewarded, now we’re going to get added charges. … So basically, it’s a punishment for going solar, instead of rewarding us consumers,” he said.