On Friday Governor Newsom vetoed a bill that would have restored the right for schools to directly use the solar energy they generate using their own solar arrays.
A controversial November 2023 ruling by the California Public Utilities Commission took away this right, ruling that properties with more than one meter must first sell the power they generate to the utility at a wholesale rate, then buy it back from the utility at a rate many times higher, before it can be used.
Senator Josh Becker’s SB 1374 would have rolled back this change for schools and apartment buildings. The Senate Utility and Energy Committee passed the bill on Apr 10, 2024 and it was passed by the full Senate and Assembly on August 30. This was one of the only renewable energy bills passed this year.
In a statement Saturday to Canary Media, Senator Becker responded to the news that his bill was vetoed. “California needs to be incentivizing solar and not discouraging it,” Becker said. “Schools, apartments, and other multiple-metered customers should not be punished for consuming the energy they generate on their properties.”
Cailey Underhill, Advocacy and Development Director at Solar Rights Alliance agrees. “Becker stepped in to try and right the wrong. The bill went all the way through the Senate and Assembly with large margins of support. Then Newsom vetoed it. This sends the chilling message that under his watch consumers are expected to buy all of their energy from the utility, even if they invested in their own solar panels.”
School districts and many elected officials have opposed the rule. In a press conference Oakland Unified School District officials discussed how the change would make installing solar fiscally irresponsible.
Yet because of electrification mandates, many districts will have to continue adding solar regardless of whether it impacts funding they would otherwise spend on education.
Nancy Chaires Espinoza, a legislative advocate for the School Energy Coalition, said in a statement to Canary Media that, “We are disappointed that we’ll be forced to divert hard-fought education funding from classrooms to ever-increasing utility profits.”
“To have a hit like this to our budget means those dollars are going to have to come from someplace else,” OUSD board President Mike Hutchinson said. “If they are coming from the general fund, that means those dollars are directly going to hurt our ability to provide the education that we need to provide.”
Newsom’s veto takes place against a backdrop of recent rule changes and legislation that take the benefits of solar away from consumers, businesses, schools and community groups, and instead gives them to already profitable utilities as more profit.
Changes to net metering, in April of 2023, cut the payments that single family homes received for solar by 75%. Since that ruling California’s solar industry has nosedived, with 17,000 solar jobs lost, 80% fewer new solar installs, and many companies shut down. Community Solar and solar on farms have also seen rulings that make solar less attractive for consumers.
In his letter notifying the legislature of his veto, Newsom referred to the same talking points used by California’s three large electrical utilities PG&E, SCE, and SDG&E.
Newsom, echoing the CPUC commissioners he has appointed, claimed that, given the growth of solar under California’s previous solar metering system, “it is appropriate and prudent to realign the subsidies provided to customers who choose to install these systems at the expense of customers without solar PV systems.”
Rather than solar, Underhill points to the utilities’ own excessive spending as the driver of rate hikes.
“The utility lie about rooftop solar was invented by a PR firm, based on cooked math from a utility consulting group, and supercharged with millions of dollars in political donations from the monopoly utilities. The lie was designed to obscure the fact that in reality 92% of the utilities’ rate increases are the direct result of their spending increases. Utility spending on poles and wires has gone up by 300% since 2002, even while peak demand has stayed flat. Utilities overspend on transmission and distribution because it is key to their profit model: they get guaranteed 8-10% profit from every dollar they spend building new poles and wires. And in 2023, PG&E made a record $2.54 billion in profit. They are incentivized to overspend and to distract from that they are pointing the finger at consumer solar.”
Besides disputed math underlying the claim, another problem with this utility company narrative is that it ignores the many environmental benefits of solar. But if California is going to rise to the occasion of climate change – and meet its own mandated climate commitments – the state needs far more rooftop solar than it has now-not less.
While this cost shift argument is far from settled when it comes to residential solar, it is spurious to apply the same argument to schools and multimeter properties. SB 1374 backers say that the CPUC’s own report, which Newsom and CPUC commissioners have cited, does not even make this claim. Moreover this bill would not have changed the rates that schools are paid for solar, it simply would have allowed them to use the solar energy that their own solar arrays allow them to generate.
It is hard to see this veto as anything but utilities successfully lobbying Governor Newsom, whose election campaigns they have generously contributed to, in order to cynically protect their profits.
“When you look at the picture overall, the utilities are really powerful actors. Since 2000, Newsom has taken $2.5million in utility contributions. Statewide, utilities have donated a total of $190 million to California politicians since 2000. 600 organizations and thousands of consumers stood up for rooftop solar, yet the CPUC commissioners appointed by Newsom still voted in favor of utilities.” Underhill said.
Climate advocacy group Environment California responded to Newsome’s veto in a statement Saturday.
“We’re disappointed in Gov. Newsom’s decision to slam the brakes on this popular, proven clean energy resource, especially as cuts to solar incentive programs in the last two years have made rooftop solar’s future so uncertain in California.”
“It just makes no sense.” Senator Becker told the L.A. Times.
