The California State Assembly has passed a bill that could raise energy costs for some homeowners who have installed solar panels. AB 942 will now be considered by the California Senate.
Assemblymember Chris Rogers, who represents Mendocino County, was absent for the June 2 vote. Rogers had previously voted in favor of the bill in committee, despite telling attendees at a town hall in Caspar that he would oppose it. The vote was 46 yeas and 14 nays, with 19 abstentions.
Dave Rosenfeld, executive director of the Solar Rights Alliance, said Assembly Bill 942 unfairly targets solar customers while obscuring the underlying causes of rising energy costs.
“Electricity rates in the state of California are high because of increased monopoly utility spending,” Rosenfeld said. “Monopoly utilities get a guaranteed rate of return on all those poles and wires that they love to build, and then they pass that through to us in the rates — and our rates rise.”
The California Public Utilities Commission (CPUC), whose members are appointed by the governor, allows utilities to earn a return on their "rate base" — the value of assets such as poles, wires, transformers, etc. Utilities can grow revenues by expanding their rate base and raising customer rates.
In a February earnings presentation, PG&E highlighted its “sector-leading rate base growth.” More recently the utility announced it is on track to spend $62 billion between 2024 and 2028.
Meanwhile, advocates argue that investments in solar by homeowners and businesses reduce the need for such utility spending. They note that California’s peak electricity demand has remained largely flat for the past 25 years — fluctuating between a low of 41,419 megawatts in 2001 and a high of 52,061 megawatts in 2022. Last year, peak demand reached 48,323 megawatts.
“Behind-the-meter” solar generation has also curbed overall demand growth. Between 2000 and 2023, solar capacity in California grew from 9 megawatts to 46,874 megawatts, with about 20% of single-family homes installing solar and utilities also expanding green energy. During that same period, consumption of utility-generated energy rose just 5%.
Assemblymember Lisa Calderon, a former lobbyist for Edison International and author of AB 942, argues that decreased utility demand has created a “cost shift” from solar customers to traditional utility ratepayers.
“We need to address this ratepayer inequity,” she said in a press release.
Under AB 942, buyers of homes with existing solar panels will no longer be able to fully offset their electricity use with the energy they generate annually. Instead, they will receive a smaller credit for energy sent to the grid under an interconnection agreement known as Net Metering 3. Meanwhile, utilities will be able to sell the solar-generated energy to other customers at full rates, reducing their own generation costs.
Under the earlier Net Metering 2 program, which ended in April 2023, homeowners received full credit for energy sent to the grid over the course of the year. They could draw on that credit when their usage exceeded production — for example, using credits earned from surplus summer generation to offset higher winter demand.
Former CPUC President Loretta Lynch told ABC10 that the new policy will benefit utilities at the expense of consumers.
“The utilities are going to be making profit hand over fist — and extra money that, quite frankly, they are not entitled to,” Lynch said.
