Court of Appeal, First Appellate District Court of Appeal, First Appellate District

Charles D. Johnson, Clerk/Executive Officer Charles D. Johnson, Clerk/Executive Officer

Electronically RECEIVED on 6/21/2023 at 6:40:21 PM Electronically FILED on 6/21/2023 by G. King, Deputy Clerk

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT, DIVISON THREE

CENTER FOR BIOLOGICAL

DIVERSITY, ENVIRONMENTAL
WORKING GROUP, and THE
PROTECT OUR COMMUNITIES
FOUNDATION,
Petitioners
v. Case No. A167721
PUBLIC UTILITIES COMMISSION OF Commission Decision
THE STATE OF CALIFORNIA, No. D.22-12-056

Respondent.

PACIFIC GAS AND ELECTRIC

COMPANY, SAN DIEGO GAS &
ELECTRIC COMPANY, and
SOUTHERN CALIFORNIA EDISON
COMPANY,
Real Parties in Interest.

ANSWER OF RESPONDENT TO
PETITION FOR WRIT OF REVIEW

CHRISTINE JUN HAMMOND, SBN 206768

Attorney for Respondent

California Public Utilities Commission

505 Van Ness Avenue

San Francisco, CA 94102
Telephone: (415) 703-2682
Facsimile: (415) 703-4592
June 21, 2023 Email: [email protected]

512061919
 TABLE OF CONTENTS
Page

TABLE OF AUTHORITIES .......................................................................3

I. STATEMENT OF FACTS AND PROCEDURAL
HISTORY ............................................................................................9
II. STANDARD OF REVIEW ............................................................... 13
III. ARGUMENT .................................................................................... 16
A. The Commission properly accounted for the benefits
of customer-sited renewable distributed generation. ............. 18
B. The Commission’s declining to include an out-of-
state methane leakage value was Properly
considered and properly explained. ......................................... 22
1. The Commission’s decision to reject Protect Our
Communities Foundation’s resiliency benefits
proposal was proper. ............................................................ 23
2. The Commission’s analysis of land use benefits
was reasonable. .................................................................... 24
3. The Decision properly addressed Petitioner’s
misconception regarding avoided transmission
costs. ..................................................................................... 25
4. The Commission’s decision to reject Petitioners’
Societal Cost Test proposal was reasonable
because it is not yet finalized. ............................................. 26
C. The Decision properly accounts for the costs of
customer-sited renewable distributed generation. ................. 27
D. The Decision ensures that customer-sited
renewable distributed generation continues to grow
sustainably as required by Pub. Util. Code section
2827.1, subdivision (b)(1). ......................................................... 30
1. The Decision’s nine-year payback period will not
hinder the continued sustainable growth of
customer-generators. ........................................................... 31
E. The Decision properly addressed alternatives
designed for growth among residential customers in

2
 disadvantaged communities as required by Public
Utilities Code Section 2827.1, subdivision (b)(1). ................... 38
F. The Decision’s changes to the tariff for commercial,
agricultural, and industrial sectors are appropriate. ............. 45
IV. CONCLUSION ................................................................................. 46

3
 TABLE OF AUTHORITIES

Page(s)
Court Cases
Center for Biological Diversity v. National Highway
Traffic Safety Administration (9th Cir. 2008)
538 F.3d 1172 ........................................................................... 17

Citizens for Clean Air v. EPA,

(9th Cir. 1992) 959 F.2d 839...................................................... 21

Clean Energy Fuels Corp. v. Public Utilities Com.

(2014) 227 Cal.App.4th 641 ...................................................... 16

Greyhound Lines, Inc. v. Public Utilities Com.

(1968) 68 Cal.2d 406 ............................................................. 9, 16

Pacific Gas & Electric v. Public Utilities Com.

(2015) 237 Cal.App.4th 812 ...................................................... 17

Pacific Telephone and Telegraph Co. v. Public Utilities Com.

(1965) 62 Cal. 2d 634 ................................................................ 42

San Pablo Bay Pipeline Co., LLC v. Public Utilities Com.

(2015) 243 Cal.App.4th 295 ...................................................... 42

Southern California Edison Co. v. Peevey

(2003) 31 Cal.4th 781 ............................................................ 9, 16

Toward Utility Rate Normalization v. Public Utilities Com.

(1978) 22 Cal.3d 529 ................................................................. 16

Utility Consumers’ Action Network v. Public Utilities Com.

(2010) 187 Cal.App.4th 688, 692 (UCAN).) ............................. 14

4
Commission Decisions
D.99-09-033 .................................................................................... 14
D.16-09-036 .............................................................................. 31, 32
D.18-06-027 .............................................................................. 38, 39
D.19-05-019 .............................................................................. 27, 30
D.20-04-010 ........................................................................ 19, 26, 30
D.21-02-007 .................................................................................... 31
D.22-05-002 .................................................................................... 22
D.22-12-056 ...................................................................... 8, 9, 12, 13

California Statues
Public Utilities Code
Section 701 ..................................................................................... 43
Section 1709 ................................................................................... 26
Section 1733, subd. (b) ................................................................... 13
Section 1756, subd. (a) ............................................................. 13, 14
Section 1757 ................................................................................... 15
Section 1757, subd. (a) ................................................................... 15
Section 1757 (a)(4) ......................................................................... 15
Section 1757, subd. (b) ................................................................... 16
Section 1757.1 ................................................................................ 15
Section 2827.1 ......................................................................... passim
Section 2827.1 subd. (b)(1) ............................................................ 38
Section 2827.1 subd. (b)(3) and (4) ................................................ 36
Section 2827.1 subd. (b)(4) ...................................................... 18, 28

Federal Statues
49 U.S.C. § 32902(a) ...................................................................... 21
42 U.S.C. § 4332(2)(C)(i) ................................................................ 21

5
California Constitution
Cal. Const., art. XII, § 2 ................................................................. 42

Rules of the Court

Rule 8.724 ..........................................................................................7

6
 IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT, DIVISION THREE

CENTER FOR BIOLOGICAL

DIVERSITY, ENVIRONMENTAL
WORKING GROUP, and THE
PROTECT OUR COMMUNITIES
FOUNDATION,
Petitioners
v. Case No. A167721
PUBLIC UTILITIES COMMISSION OF Commission Decision
THE STATE OF CALIFORNIA, No. D.22-12-056.

Respondent.
PACIFIC GAS AND ELECTRIC
COMPANY, SAN DIEGO GAS &
ELECTRIC COMPANY, and
SOUTHERN CALIFORNIA EDISON
COMPANY,
Real Parties in Interest.

ANSWER OF RESPONDENT TO
PETITION FOR WRIT OF REVIEW

Pursuant to Rule 8.724 of the California Rules of Court,

Respondent, the California Public Utilities Commission (Commission or
Respondent), respectfully submits its answer to the petition for writ of
review (Petition) filed by the Center for Biological Diversity,
Environmental Working Group, and The Protect Our Communities
Foundation (collectively, Petitioners) and denies that said writ should be
issued.
The Commission respectfully requests that the Petition be
summarily denied.

7
 This case is about California’s Net Energy Metering tariff, or
NEM: the rules that govern electricity bills for customers who install
customer-sited renewable energy generation and remain connected to
the electricity grid. In enacting Public Utilities Code section 2827.1, the
Legislature directed the Commission to enact a standard contract or
tariff for large electric utilities to offer for customer generation using
renewable energy and authorized the Commission to revise it as
appropriate. The Legislature also set principles to guide the
Commission’s establishment of the standard contract or tariff. The
Commission first developed a net energy metering tariff as directed by
the Legislature in 1995 and has since revised it twice, as the statute
allows it to. Petitioners challenge the Commission’s second revision of
the tariff, referred to as the “successor tariff” or “net billing tariff,”
adopted in Commission Decision D.22-12-056 (the Decision).
The generous subsidies embedded in NEM contributed to the rapid
expansion of the rooftop solar industry and the transformation of a
nascent technology into a mature industry. (APP03529.) Petitioners
themselves state that under the Commission’s guidance, “California’s
NEM program has been a staggering success.” (Petition at p. 21
[emphasis added].) After a period of proliferation of sales and leases of
rooftop solar systems, however, “California’s NEM [Net Energy
Metering] Success Means It Needs an Update,” in part because NEM
customers in 2019 were “paid six times what electricity generated by
solar panels is worth to the grid and to reduce carbon.” (APP07351-
APP07352.) Parties in the underlying proceeding estimated the non-
NEM-participating utility ratepayers (customers who do not have
rooftop solar systems) have subsidized NEM-participating customers’

8
benefits by as much as $31,402 per NEM customer. (Decision at pp. 44-
45 [APP18288-APP18289].) The Legislature recognized that the net
energy metering tariff might require occasional updates or changes
when it added Section 2827.1 to the Public Utilities Code. Thus, with
the adoption of D.22-12-056, the Commission revised the NEM program
to better align with the State’s current grid conditions and updated
findings regarding costs and benefits of the program. (Decision at
pp. 2-3 [APP18246-APP18247].)
Petitioners assert the Commission did not comply with Public
Utilities Code section 2827.1 when it revised the NEM tariff. Contrary
to Petitioners’ assertion, the Commission—whose interpretation of the
Public Utilities Code is given great weight1—met all legal requirements
in its recent tariff revision. And, as explained below, the Commission’s
decision in this proceeding is supported by substantial evidence in the
record. Therefore, Petitioners’ have not shown legal error and their
Petition should be denied.
I. STATEMENT OF FACTS AND PROCEDURAL HISTORY
On December 19, 2022, the Commission issued D.22-12-056,
Decision Revising Net Energy Metering Tariff and Subtariffs, a successor
tariff to net energy metering that addresses the requirements of the
Public Utilities Code. In the successor tariff, the structure of the net
energy metering 2.0 (NEM 2.0) tariff was revised to align the tariff with
the value that behind-the-meter renewable energy generation systems
provide to the grid and to create more accurate price signals that

1 Southern California Edison Co. v. Peevey (2003) 31 Cal.4th 781, 796;

Greyhound Lines, Inc. v. Public Utilities Com. (1968) 68 Cal.2d 406, 410
[“the commission’s interpretation of the Public Utilities Code should not
be disturbed unless it fails to bear a reasonable relation to statutory
purposes and language….”].

9
encourage electrification and the adoption of battery storage to promote
electric grid reliability. (Decision at p. 3 [APP18247].)
Importantly, the successor tariff does not change the primary
benefit of the NEM tariff: customers who self-generate electricity avoid
paying their electricity bill during the times their systems are
generating, even though they remain connected to the electricity grid
and use it actively. (See generally Decision at Appendix A, pp. A1-A3
[APP18491- APP18493].) As electricity bills increase over time due to
inflation and other rate pressures, this incentive for customers to choose
distributed generation will become even more powerful. (See Decision at
pp. 74-76 [APP18318- APP18320].)
The successor tariff does change the rules for both electricity
imported from the grid (the energy used by the customer when their own
resource is not producing electricity) and electricity exported to the grid
(the excess electricity produced by the customer’s generation resource at
a time when production exceeds the customer’s own demand). (Decision
at p. 3 [APP18247].) In addition to avoided electricity bill costs,
electricity rates charged for imports and electricity rates paid for exports
affect NEM customers. (Decision at pp. 132-133 [APP18376-18377].)
For solar systems, for example, electricity production varies throughout
the day and demand varies as the customer uses different amounts of
electricity throughout the day and night. The grid acts to balance a
rooftop solar customer’s system during the day and powers the
customer’s entire electricity use after the sun sets.
For imports, the successor tariff changes the NEM’s rate plan that
applies to new successor tariff customers’ imported electricity. (Decision
at pp. 108, 111-112 [APP18352, APP18355-18356].) Successor tariff

10
customers take service under a specialized rate plan that provides highly
differentiated price signals depending on the time of day to encourage
customers to shift their electricity use to support the varying needs of
the electric grid. (Id. at p. 224, Finding of Fact 176 [APP18468].)
For exports, the successor tariff calculates payment amounts using
the Commission’s “Avoided Cost Calculator,” which determines the costs
the customer’s retail electricity provider avoided due to the electricity
produced by the customer-sited system. (Decision at pp. 138, 141, 143
[APP18382, APP18385, APP18387].) This component of the successor
tariff replaces the NEM 2.0 export rate, which compensated for excess
generation based on the retail rate used to bill customers for full utility
services. (Decision at p. 165 [APP18409].) Successor tariff customers
will be compensated based on Avoided Cost Calculator rates that are
more precisely calibrated to the value of self-generated electricity to the
modern electric grid. [Findings of Fact 95 and 104, Decision at pp. 216-
217 [APP18460-APP18461].) The new valuation will reduce the amount
of costs that are paid by nonparticipating ratepayers to new rooftop solar
customers, compared to the previous, NEM 2.0 tariff’s valuation based
on retail rates. (Decision at p. 4 [APP 18248].)
To provide a transition period between the expiration of NEM 2.0
to the successor tariff, the Decision provides for extra bill credits that
customers receive on top of the compensation for their exported
electricity based on the Avoided Cost Calculator. (Decision at pp. 4,
88-89 [APP18248, APP18332-18333].) This glide path allows for a five-
year transition period for the solar industry and prospective customers
to adapt to a solar-paired-with-storage marketplace. (Decision at pp. 4,
127-128 [APP18248, APP18371-APP18372].) The successor tariff also

11
includes revisions that offer low-income customers and those in
disadvantaged communities an additional benefit. (Decision at pp. 171-
177 [APP18415-APP18421].) It provides a larger amount of extra bill
credits to these customers as part of the glide path. (Decision at p. 177
[APP18421].)
Finally, to ensure the successor tariff is working as designed and
thus achieving statutory requirements, the Decision directs an
evaluation of these elements preceded by a three-year data collection
period. (Decision at pp. 200-202 [APP18444-APP18446].)
Petitioners filed a timely application for rehearing on January 18,
2023. Another party to the proceeding, CAlifornians for Renewable
Energy, Inc., filed a timely application for rehearing on January 17,
2023. CAlifornians for Renewable Energy, Inc. has not as of this date
appealed the Decision and is awaiting the Commission’s resolution of its
application for rehearing. Neither party filed a motion requesting a stay
of the Decision pending resolution of their individual applications for
rehearing.
On February 1, 2023, and February 2, 2023, Clean Coalition, 350
Bay Area, and Pacific Gas and Electric Company, San Diego Gas &
Electric Company, and Southern California Edison Company (the latter
collectively, the Joint Utilities) filed responses to the applications for
rehearing. (Clean Coalition Response in Support of Application for
Rehearing of D.22-12-056, February 2, 2023 [APP19266-APP19272]; 350
Bay Area Response in Support of Application for Rehearing of Decision
22-12-056, February 1, 2023 [APP19246-APP19252]; Response of Pacific
Gas and Electric Company (U 39-E), San Diego Gas & Electric Company

12
(U 902-E), and Southern California Edison Company, February 2, 2023.)
[APP19273-APP19289].
On May 3, 2023, Petitioners filed their petition for writ of review
of D.22-12-056 (Petition), which is the subject of this answer.

II. STANDARD OF REVIEW

The statutory provisions for court review of Commission decisions
are unique among agency review procedures. Public Utilities Code
section 1756, subdivision (a) provides that “any aggrieved party may
petition for a writ of review in the court of appeal….” (§ 1756, subd. (a).)
Parties generally are required to file petitions for writ of review “within
30 days after the commission issues its decision denying the application
for rehearing…” where the Commission does not grant rehearing.
(§ 1756, subd. (a).) However, in cases where an application for rehearing
has been pending before the Commission for 60 days or more, such as the
current case, the rehearing application may “be taken [deemed] by a
party making the application to be denied.” (Pub. Util. Code, § 1733,
subd. (b).) By deeming the application for rehearing denied, a party
perfects its ability to pursue its claim in Court, notwithstanding the fact
that the Commission has not yet resolved its petition.
In this case, Petitioners have deemed their application for
rehearing to be denied pursuant to section 1733, subdivision (b), and
pursued their claim in Court. This Answer is filed pursuant to the
Court’s May 19, 2023 grant of the parties’ consensus schedule, filed on
May 19, 2023.
The Court should be aware, however, that Petitioners’ application
for rehearing of the Decision is still pending before the Commission, as is
a separate application for rehearing challenging the same decision.

13
(Application of the Center for Biological Diversity, the Protect Our
Communities Foundation, and the Environmental Working Group for
Rehearing of Decision 22-12-056, January 18, 2023 (Petitioners’ Rehg.
App.) [APP18557-APP18609]; CAlifornians for Renewable Energy, Inc.
(CARE) and Michael E. Boyd Application for Rehearing, January 17,
2023.) While the Commission is bound by this Court’s determinations
and directions, the Commission retains jurisdiction over the proceeding
and the subject matter in controversy during the pendency of court
review. It is likely that the Commission will issue a further decision
resolving the applications for rehearing (one of which is not currently the
subject of review in any Court) during the pendency of this Court review.
However, this answer does not prejudge what the Commission may hold
in a future decision resolving the applications for rehearing and only
defends the Decision as originally issued. The Commission will notify the
Court in the event it issues any orders concerning the Decision currently
being reviewed.2
Public Utilities Code section 1756, subdivision (a), instructs that
“any aggrieved party may petition for a writ of review in the court of
appeal….” However, a court is not “compelled to issue the writ if the
[Commission] did not err….” (Utility Consumers’ Action Network v.
Public Utilities Com. (2010) 187 Cal.App.4th 688, 692 (UCAN).)

2The Commission is often unable to dispose of applications for rehearing

within the 60-day period for practical reasons. However, when a party
has initiated Court review before a Commission rehearing decision has
been issued, the Commission has generally been allowed to issue an
order on the rehearing application prior to Court review. Although the
Commission has not handled the current situation (Court proceeding on
writ of review prior to Commission issuance of a rehearing order) in
recent history, it is not unusual for the Commission to modify orders or
otherwise change Commission decisions during the pendency of Court
review. (See, e.g., D.99-09-033, 199 Cal. PUC LEXIS 600 [changing a
holding while review pending].)

14
 Petitioners assert that Public Utilities Code section 1757 defines
the scope of the Court’s review for the Decision.3 Pursuant to section
1757, subdivision (a), the review:
. . . shall not extend further than to determine, on the basis of the
entire record . . . whether any of the following occurred:

(1)The commission acted without, or in excess of, its powers

or jurisdiction.
(2)The commission has not proceeded in the manner
required by law.
(3)The decision of the commission is not supported by the
findings.
(4)The findings of the commission are not supported by
substantial evidence in light of the whole record.
(5)The order or decision of the commission was procured by
fraud or was an abuse of discretion.
(6)The order or decision of the commission violates any
right of the petitioner under the Constitution of the
United States or the California Constitution.
(§ 1757, subd. (a).)
Under this standard, the Commission’s findings of fact:
…are not open to attack for insufficiency if they are
supported by any reasonable construction of the evidence.
When conflicting evidence is presented from which
conflicting inferences can be drawn, the PUC’s findings are
final.

3In the event that a writ issues, it would be more appropriate to apply
Public Utilities Code section 1757.1 in this matter, as it concerns a
rulemaking decision. Public Utilities Code section 1757.1 is a similar
standard of review that does not use the “substantial evidence” language
of Public Utilities Code section 1757(a)(4). Because the Decision meets
both standards, and the Petition uses Public Utilities Code section 1757,
this Answer responds accordingly.

15
(Clean Energy Fuels Corp. v. Public Utilities Com. (2014) 227
Cal.App.4th 641, 649 (Clean Energy); see also Toward Utility Rate
Normalization v. Public Utilities Com. (1978) 22 Cal.3d 529, 537-538.)
Thus, in reviewing a Commission decision, a Court may not hold a trial
de novo. (Pub. Util. Code, § 1757, subd. (b).)
The Commission is not an “ordinary administrative agency,” but a
constitutional body with far-reaching powers, duties, and functions.
(Clean Energy, supra, 227 Cal.App.4th at pp. 648-49.) There is a strong
presumption of validity of the Commission’s decisions. (Id. at p. 649.) In
the Court’s review, the Commission’s interpretation of the Public
Utilities Code, as the agency constitutionally authorized to administer
its provisions, should be given great weight. (Southern California
Edison Co. v. Peevey (2003) 31 Cal.4th 781, 796; Greyhound Lines, Inc. v.
Public Utilities Com. (1968) 68 Cal.2d 406, 410 [“the commission’s
interpretation of the Public Utilities Code should not be disturbed unless
it fails to bear a reasonable relation to statutory purposes and
language….”].)
Here, the Commission has complied with the law in all respects
and Petitioners’ arguments are without merit.
III. ARGUMENT
Pursuant to Public Utilities Code section 2827.1, the Commission
may revise its tariff for customer-sited renewable generation facilities
“as appropriate to achieve the objectives” of that section. (§ 2827.1.)
Here, Petitioners challenge the recent Decision in Commission
Rulemaking (R.) 20-08-020 where the Commission acted within its
authority to revise this tariff. In the proceeding, the Commission
considered the filed comments and exhibits of over four dozen parties, in

16
addition to those of the three Petitioners. The Commission’s Decision is
supported by substantial evidence in the record.
Petitioners frame many of their arguments in the context of
whether the Decision met the statutory requirements of Public Utilities
Code section 2827.1 and assert that the Commission should have
reached different findings.
In reviewing the Commission’s factual findings, review is limited
to whether those findings are “supported by substantial evidence in light
of the whole record.” (Clean Energy, 227 Cal.App.4th at 649.)
Accordingly:
[i]t is for the agency to weigh the preponderance of
conflicting evidence [citation]. Courts may reverse an
agency’s decision only if, based on the evidence before the
agency, a reasonable person could not reach the conclusion
reached by the agency. [Citations.] (Id.)

“‘When conflicting evidence is presented from which conflicting

inferences can be drawn, the [PUC's] findings are final.’ [Citation.]”
Therefore, “the Commission’s findings are almost always treated as
‘conclusive’” [citation]….” (Pacific Gas & Electric v. Public Utilities Com.
(2015) 237 Cal.App.4th 812, 839.)
Although Petitioners may disagree with the determinations made
by the Commission, they have failed to establish that the Commission’s
determinations lack substantial evidence. To the contrary, as discussed
below, the Commission met all statutory obligations and its findings are
supported by substantial evidence in the record.
Each of Petitioners’ arguments is addressed below.

17
 A. The Commission properly accounted for the
benefits of customer-sited renewable
distributed generation.
Section 2827.1(b)(4) must be supplied in its entirety. It requires
the Commission, in developing the NEM tariff, to:
(4) Ensure that the total benefits of the standard
contract or tariff to all customers and the
electrical system are approximately equal to the
total costs.

Petitioners allege that the Commission did not take into account
all benefits of customer-sited renewable generation. Yet Petitioners fail
to account for Section 2827.1(b)(4)’s additional requirements that the
total benefits to all customers and the electrical system must be
approximately equal to the total costs. The Section cannot be read so
narrowly as Petitioners attempt. Moreover, Petitioners fail to give
“approximately equal” weight to the total costs; indeed, the record
demonstrates that some parties believe that the Commission actually
overvalued customer-sited solar power in the Decision. The alleged
shortcomings of the Avoided Cost Calculator are simply not supported by
the record. The record supports the Commission’s balanced
consideration of all reasonable benefits captured in the Avoided Cost
Calculator and complete implementation of the statute.
The Commission explains its reasons for utilizing the Avoided Cost
Calculator to value NEM customers’ compensation for exported energy
to achieve the mandates contained in Section 2827.1. As the Verdant
White Paper, “Alternative Ratemaking Mechanisms for Distributed
Energy Resources in California” demonstrates, “the hours when [NEM
customers] are producing maximum output do not coincide with the
hours when customer demand on the electric system as a whole is

18
peaking." (APP01121.) By setting higher compensation rates during the
evening hours, the Avoided Cost Calculator will send rational price
signals to NEM customers to pair solar with storage and achieve exports
of energy during those evening hours when demand far outstrips supply.
The Commission utilized the 2020 Avoided Cost Calculator for the
successor NEM tariff. (Decision at p. 15 [APP18259].) The Avoided Cost
Calculator calculates the costs that the interconnected utility incurs to
buy clean energy elsewhere. It is based on the primary benefits of
distributed energy resources: generation capacity, electrical energy
generated, transmission and distribution capacity, ancillary services,
renewable portfolio standard, and greenhouse gas emissions.
(D.20-04-010.) The Commission determined that the Avoided Cost
Calculator would properly value exported energy according to the time of
day and system needs, as well as provide a disincentive to take power
from the grid when the interconnecting utility must procure the most
expensive power. This was intended to “significantly reduce the cost
shift [from NEM customers to non-NEM customers] and improve
affordability for nonparticipating ratepayers, particularly low-income
ratepayers.” (Decision at p. 4 [APP18248].)
Petitioners allege that the Avoided Cost Calculator is faulty
because it omitted benefits of avoided out-of-state methane leakage,
increased resiliency, avoided land use impacts, and avoided transmission
costs. (Petition at p. 45.) However, Petitioners fail to show that the
Commission did not rely on substantial evidence in the record to support
the Decision. And, more importantly, they have not shown that the
Commission’s determinations were unexplained or unsupported by the
record.

19
 Petitioners rely foremost on a federal case, Center for Biological
Diversity v. National Highway Traffic Safety Administration, for the
proposition that an agency must incorporate a benefit into its cost-
benefit analysis because it is proffered. (Petition at 44, citing (Center for
Biological Diversity v. National Highway Traffic Safety Administration
(9th Cir. 2008) 538 F.3d 1172, 1198 (hereafter, NHTSA).) Petitioners’
reliance on NHTSA, however, is misplaced. Set aside the fact that this
is a federal case construing a federal law not at issue here: even taken
on its own terms, NHTSA will not carry the weight Petitioners put on it.
NHTSA is a challenge under the Energy Policy and Conservation
Act of 1975 and the National Environmental Policy Act of 1969 (NEPA)
to the National Highway Traffic Safety Administration’s Final Rule for
the Corporate Average Fuel Economy (CAFE) standards for light trucks.
(NHTSA, supra, 538 F.3d at p. 1181) NHTSA refused to include the
benefits of reduced carbon emissions in the CAFE analysis despite
evidence of quantified benefits provided from numerous, peer-reviewed
sources. (Id. at p. 1199.) The Ninth Circuit was particularly struck that
NHTSA “assigned no value to the most significant benefit of more
stringent CAFE standards: reduction in carbon emissions.” (Id.) Such
an omission would be problematic where NEPA applies, which requires
a “hard look” at the “significant aspects of the probable environmental
consequences.” (Id. at 1194.)
Public Utilities Code section 2827.1, however, does not require, nor
does the Decision identify, resiliency as one of the “most significant
benefits” of the NEM program. (See Decision at pp. 5-9, 13-14
[APP18249-APP18253, APP18257-APP18258].) NHTSA is simply not
applicable here.

20
 The Ninth Circuit did distinguish circumstances when the
applicable law holds agencies to a qualified standard. (NHTSA, 538
F.3d at 1101, citing Citizens for Clean Air v. EPA (9th Cir. 1992) 959
F.2d 839, 848, and the Clean Air Act’s required “best available control
technology” [emphasis in original].) In the case of NHTSA, the Ninth
Circuit quoted the operative statutory language to inform its review of
NHTSA’s actions, and the language speaks to maximal standards: the
Secretary of Transportation must set fuel economy standards at the
“maximum feasible average fuel economy level that the Secretary
decides the manufacturers can achieve in that model year” (538 F.3d at
p. 1182, quoting the Energy Policy and Conservation Act of 1975, 49
U.S.C. § 32902(a)); and “NEPA requires a federal agency ‘to the fullest
extent possible,’ to prepare ‘a detailed statement on … the
environmental impact’ of ‘major Federal actions significantly affecting
the quality of the human environment’” (id. at 1185, quoting the
National Environmental Policy Act, 42 U.S.C. § 4332(2)(C)(i)).
The operative language in Section 2827.1, in contrast, enumerates
seven different considerations, which would necessitate a fair balancing
of them. Moreover, Section 2827.1 does not contain the maximal
language at issue in NHTSA. Quite the contrary: it speaks of ensuring
that customer-sited generation “continues to grow sustainably,” that
total benefits to all customers and the electric system “are approximately
equal” to the total costs, and that the Commission consider a
“reasonable” payback period. (Emphasis added.) NHTSA and the
instant case are therefore clearly distinguishable.
Even if the NHTSA case were apposite here—and, to be clear, it is
not—the Petitioners have not shown that the Commission committed

21
legal error by not including all of the factors that the Petitioners urged.
Their primary argument thus fails.

B. The Commission’s declining to include an out-

of-state methane leakage value was Properly
considered and properly explained.
Petitioners allege that the Decision improperly omitted
consideration of avoided out-of-state methane leakage when determining
the new successor retail export compensation rate. As explained in
Section III.A above, however, the Avoided Cost Calculator is intended to
value the power that behind-the-meter generation customers fail to
generate themselves and that must be procured for their consumption.
And if, in fact, such power imported by net energy metering customers is
procured from in-state resources, the incorporation of a value for
avoiding out-of-state leakage would be an unmerited windfall and would
result in double counting of the benefit, because in-state methane
leakage is already accounted for in the Avoided Cost Calculator.
(Decision at p. 70 [APP18314].)
The Commission has pointedly declined to incorporate avoided
methane leakage into the Avoided Cost Calculator. Petitioners had an
opportunity to challenge this position in Rulemaking (R.) 14-10-003,
prior to adoption of D.22-05-002, but did not. Following the filing of
briefs in R.20-08-020, the Commission adopted D.22-05-002, which
updated the Avoided Cost Calculator for 2022. (Id.) In that decision, the
Commission declined to include out-of-state methane leakage values in
the Avoided Cost Calculator. (Id.; D.22-05-002 at pp. 45-47.) Moreover,
as TURN comments, “there is no basis to assign this value uniquely to
behind the meter generation for purposes of assessing successor tariff

22
options,” especially as this value can be secured from large-scale in-state
renewable resources, energy efficiency, and conservation. (APP13341.)
Petitioners have not shown that the Commission’s determination
to use the Avoided Cost Calculator, without inclusion of out-of-state
methane, is improper. Therefore, the Commission did not err in its
decision.

1. The Commission’s decision to reject

Protect Our Communities Foundation’s
resiliency benefits proposal was proper.
Petitioners allege that the Commission erred by not including a
value for resiliency benefits. (Petition at pp. 45-48.) Petitioners focus on
the fact that the Commission said that the benefits of resiliency are
“individual,” and argue that these benefits benefit society as a whole and
should be included. (Id. at pp. 45-46.) This argument does not
sufficiently address how this issue is analyzed in the Decision and the
limited nature of the evidence presented to the Commission.
The Decision notes that Petitioner, Protect Our Communities
Foundation, supported adoption of resiliency benefits for solar systems
paired with energy storage because “paired storage offers ‘resiliency-
related benefits that accrue to society as a whole,’ such as the ability to
generate onsite power during a heat wave, the ability to prevent
increased emergency room visits during heat waves; the ability to
prevent food spoilage and waste due to loss of refrigeration; and the
ability to continue educational classes during remote learning.”
(Decision at pp. 68-69 [APP18312-APP18313], citing Opening Brief of the
Protect Our Communities Foundation, August 31, 2021, at pp. 22-23.)
The Utility Reform Network argued that these benefits are either
private—meaning that the benefits accrue to an individual that invests

23
in paired storage at their home or business and not society as a whole—
or highly speculative and limited to very unique circumstances.
(Decision at p. 69 [APP18313], citing Reply Brief of The Utility Reform
Network Regarding a Successor to the Current Net Energy Metering
Tariff, September 14, 2021, at p. 18.)
In response to these arguments, the Commission declined to adopt
resiliency adders. (Decision at p. 69 [APP18313].) The Decision states
that “[n]either SEIA [Solar Energy Industries Association]/Vote Solar
nor PCF [Protection Our Communities Foundation] have provided
convincing evidence that the examples of resiliency benefits offered are
more than individual benefits.” (Id.) The Commission goes on to state
that the examples provided are “either private benefits or highly
speculative and limited to unique circumstances; none of which lead the
Commission to ascribe to a resiliency adder for all net energy
customers.” (Ibid.) However, the Commission recognized that “evolving
analysis and changing grid conditions may result in more persuasive
arguments in favor of quantifying resiliency benefits in the future,
especially locational ones….” (Id. at pp. 69-70 [APP18313-APP18314].)
Therefore, the Commission stated that it remained open to considering
this issue again in the future. (Id. at p. 70 [APP18314].)
For the reasons stated above, the Commission did not commit legal
error by rejecting a resiliency adder.

2. The Commission’s analysis of land use

benefits was reasonable.
Petitioners’ argument for the land conservation benefits of rooftop
solar versus utility-scale solar is unsupported. Petitioners fail to explain
how the information provided by the California Solar and Storage
Association, and jointly by the Solar Energy Industries Association and

24
Vote Solar, where they argued for land use benefits, amounts to
substantial evidence in the record to support a land-use societal benefit.
Nor have Petitioners explained why the information provided by the
California Wind Energy Association (CalWEA), arguing against the need
for the benefit, is not relevant. They simply contend, without further
analysis, that there is a benefit that the Commission must quantify and
include in the Decision.
More specifically, Petitioners argue that the Avoided Cost
Calculator did not properly value avoided land-use impacts. (Petition at
p. 53.) As the Commission stated in its decision, “[n]either CALSSA
[California Solar and Storage Association] nor SEIA [Solar Energy
Industries Association]/Vote Solar offer any evidence that increased net
energy metering installations will directly result in decreased utility
scale projects.” (Decision at p. 71 [APP18315].) And the Decision notes
that the California Wind Energy Association presented an analysis of SB
100 indicating that the need for utility-scale renewables would remain
virtually the same if the growth rate of customer-side solar was reduced.
(Id., citing Exh. CWA-01 at p. 8.) Petitioners fail to point to contrary
evidence. Therefore, the Commission was reasonably unpersuaded by
the arguments for a land-use societal benefit. (Id.)

3. The Decision properly addressed

Petitioner’s misconception regarding
avoided transmission costs.
Petitioners argue that the Avoided Cost Calculator and the
Decision underestimate avoided transmission costs. (Petition at p. 55-
56.) The Decision stated the following regarding contentions made by
Petitioner, the Center for Biological Diversity, regarding avoided
transmission costs:

25
 This decision takes this opportunity to refute once and for
all a misconception that continues to be argued by some
parties regarding transmission avoided costs in the Avoided
Cost Calculator. Center for Biological Diversity contends
that the Avoided Cost Calculator does not accurately
account for the avoided costs of transmission and relies
upon a 2017-2018 CAISO [California Independent System
Operator] Transmission Plan from March 22, 2018. The
Center asserts that this report confirms that increased
solar (and energy efficiency) led to a $2.6 billion savings to
ratepayers. This misconception has been refuted by the
Commission in previous decisions. In D.20-04-010, the
Commission confirmed that the statement regarding
distributed energy resources saving $2 billion in avoided
transmission costs had been refuted by CAISO in the
record of R.14-10-003. The Commission further declared
that this is a ‘false statement and a factual
misinterpretation.’

(Decision at pp. 204-205 [APP18448-APP18449], citing Center for

Biological Diversity Opening Comments to November 10, 2022 Proposed
Decision, at p. 9 and D.20-04-010 at p. 76-77.) This amounts to another
collateral attack on a prior Commission decision, which, is prohibited.
(§ 1709.) Petitioners’ argument fails.

4. The Commission’s decision to reject

Petitioners’ Societal Cost Test proposal
was reasonable because it is not yet
finalized.
Petitioners argue that the Decision should have adopted the
Societal Cost Test in this proceeding, but fail to point to any evidence in
the record supporting the assertion that adoption of this test is
necessary to support the Commission’s decision. (Petition at pp. 57-59.)
Petitioner, Protect Our Communities Foundation, argued during
the proceeding that the Societal Cost Test should be adopted despite it
not yet being approved for use in this or other proceedings. (Decision at

26
p. 66 [APP18310], citing Opening Brief of Protect Our Communities
Foundation, August 31, 2021, at pp. 26-27.) The Coalition of California
Utility Employees, on the other hand noted that the Societal Cost Test is
a work in progress and should not serve as a basis for the successor tariff
ultimately adopted in the proceeding. [APP13048.]
In a footnote, the Decision explains that in D.19-05-019 “the
Commission adopted three elements of the Societal Cost Test (societal
discount rate, social cost of carbon, and air quality co-benefits) for
informational purposes and to test and evaluate the details of the three
elements.” (Decision at p. 66, fn. 131 [APP18310].) And it noted that
“[t]he test is being piloted in the Integrated Resources Planning
proceeding.” (Ibid.) Within that proceeding, a “final review of the three
elements will be reviewed in R. [Rulemaking] 14-10-003 or a successor
proceeding.” (Ibid.)4
Here, the Commission decided that the Societal Cost Test would
not be applied in this proceeding because it is not yet finalized. This
determination is reasonable. For the reasons stated above, Petitioners
have not shown legal error in the Commission’s consideration of the
benefits of customer-sited renewable distributed generation.

C. The Decision properly accounts for the costs

of customer-sited renewable distributed
generation.
Petitioners argue that the Decision commits legal error by
arbitrarily treating customers’ reduced use of grid-supplied energy while

4The Societal Cost Test is currently being reviewed in R.22-11-013. (See

Scoping Ruling,
https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M510/K287/51028775
8.PDF.)

27
on the net energy metering successor tariff as a cost of distributed
generation. (Petition at p. 62.) They further argue that:
[o]ther than NEM solar customers, utility customers are
not accused of increasing costs when they do reduce their
use of utility-supplied electricity. These non-NEM actions
could be drying clothes on a clothesline instead of in an
electric dryer, or switching out an incandescent light bulb
for an efficient LED.

(Petition at 63.) Petitioners’ arguments were properly rejected in the

Decision.
Public Utilities Code section 2827.1 requires the Commission to
ensure “that the total benefits of the standard contract or tariff to all
customers and the electric system are approximately equal to the total
costs.” (Pub. Util. Code, § 2827.1, subd. (b)(4).) Regarding Petitioners’
comparison of energy efficiency measures versus customer-sited
distributed generation, the Decision did not find that analysis
convincing. The Decision notes comments made by Natural Resources
Defense Council that “hanging laundry (i.e., conservation) and self-
consumption (i.e., distribution) have different grid impacts.”
(Decision at p. 113 [APP18357], citing Exh. NRD-02 at p. 27.) Natural
Resources Defense Council discussed how “in conservation the customer
permanently reduces their load, but net energy metering customers
intermittently reduce their load depending upon the performance of the
solar system.” (Ibid.) Furthermore, the Decision notes the Joint
Utilities’ explanation that:
when net energy metering customers avoid paying
volumetric rates when self-generating, they avoid
paying certain aspects of the bill for which all
customers are responsible including grid services
such as transmission, distribution, and the cost

28
 allocation mechanism, policy mandates such as
CARE [California Alternate Rates for Energy],
program subsidies for energy efficiency programs,
public purpose programs, the Wildfire Fund, and
Nuclear Decommissioning; and the costs of utility
provided customer services. These costs (which are
currently only assessed via the volumetric rate) are
thus shifted to non-net energy metering customers
in addition to their own costs for these items. Joint
Utilities further explain that behind-the-meter solar
without paired storage, ‘does not decrease the need
for the distribution or transmission system and
resiliency, reliability, and safety upgrades to that
infrastructure.’ Joint Utilities assert utilities
through ratepayers ‘continue to pay generation
legacy costs, as well as procure new generation to
instantly meet net energy metering customers
demand should their systems be, for whatever
reason, unavailable to serve all or part of their load.’

(Decision at pp. 112-113 [APP18356-APP18357], citing Joint Opening

Brief of Pacific Gas and Electric Company (U 39-E), San Diego Gas &
Electric Company (U 902-E), and Southern California Edison Company
(U 338-E), August 31, 2021, at pp. 70-71.) The Protect Our Communities
Foundation did not present persuasive arguments given the concerns
expressed in the Decision. Therefore, the Commission’s determination
was reasonable.
As well, the Decision notes that Petitioner, Protect Our
Communities Foundation, asked the Commission to focus on a cost-of-
service analysis instead of relying on the Avoided Cost Calculator.
(Decision at p. 61 [APP18305].) The Decision states that Protect Our
Communities Foundation’s justification for this is its claim that “the
Avoided Cost Calculator underestimates transmission and distribution
costs, reduced greenhouse gases, and system resiliency and reliability;

29
all of which the Commission addressed in D.20-04-010.” (Decision at
p. 61 [APP18305], citing D.20-04-010 at pp. 42-43. 50-56, 56-61, and 69-
70.) The Commission explained that “PCF [Protect Our Communities
Foundation] is essentially asking the Commission to upend three prior
decisions requiring use of the Avoided Cost Calculator as the
determinant of the inputs for the standard practice manual cost-
effectiveness test and instead use the Lookback Study’s cost-of-service
analysis.” (Decision at pp. 61 and 14 [APP18305, APP18258], stating
that “[t]he Lookback Study conducted in 2020 entails a cost-effectiveness
analysis consistent with the Commission’s Standard Practice Manual
and D.19-05-019, Decision Adopting Cost-Effectiveness Analysis
Framework Policies for all Distributed Energy Resources; and a cost-of-
service analysis that compares the cost to serve NEM 2.0 [Net Energy
Metering 2.0] customers against their total bill payments.”) Because
these issues have already been decided, the Decision reasonably denied
this request. (Decision at p. 61 [APP18305].)

D. The Decision ensures that customer-sited

renewable distributed generation continues to
grow sustainably as required by Pub. Util.
Code section 2827.1, subdivision (b)(1).
Section 2827.1, subdivision (b)(1) requires that the tariff ensure
that “customer-sited renewable distributed generation continues to grow
sustainably….” (Pub. Util. Code, § 2827.1, subd. (b)(1).)

30
 1. The Decision’s nine-year payback period
will not hinder the continued
sustainable growth of customer-
generators.
There is no doubt that almost all parties to the underlying
proceeding agree that the NEM program has exceeded expectations for
customer-sited renewable electric generation. The success of the
Commission’s implementation of Section 2827.1(b)(1) was evident from
the start. The Decision’s adoption of the successor tariff continues to
meet this requirement because new customer-generators can still benefit
financially from new customer-generation and expect a nine-year
payback period for their installations. (Decision at p. 77, [APP18321],
citing The Utility Reform Network’s Opening Brief at 38.)
Nevertheless, Petitioners argue that increasing the payback period
to up to nine years will slow adoption of customer-sited renewable
distributed generation to a point where the number of solar installations
is no longer growing sustainably. (Petition at pp. 69-70.) They claim
that application of this increased payback period violates section 2827.1,
subdivision (b)(1). (Ibid.) Here, however, the statute does not include a
requirement that the current growth rates generally be maintained. (Id.
at pp. 69-74.) Petitioners’ arguments are not persuasive.
In the Decision, the Commission emphasizes that growth of the
market “should not come at the undue and burdensome financial
expense of nonparticipant ratepayers.” (Decision at pp. 58 and 13
[APP18302, APP18257], citing D.21-02-007.) The Decision focuses on
the Commission’s prior interpretation of this term in D.16-09-036 and
notes that “[a]lowing the net energy metering tariff to result in growing
costs shifted to nonparticipant ratepayers is not sustainable to the
overall health of net energy metering.” (Decision at pp. 57-58

31
[APP18301-APP18302], citing D.16-09-036 at p, 13.) Notably, The
Utility Reform Network emphasized the Commission has long taken the
position that the “sustainable growth” criteria is no more important than
other provisions of the statute, and that “the Commission was not
placing a greater emphasis on achieving sustainable growth” over other
statutory obligations. (Id. at p. 56 [APP18300]; Reply Brief of The Utility
Reform Network Regarding a Successor to the Current Net Energy
Metering Tariff, September 14, 2021, at p. 39 [APP13362] citing
D.16-09-036.)
Among the numerous suggested interpretations of the statute, The
Utility Reform Network commented that the requirement to grow
sustainably “can be satisfied if a successor tariff is found to be cost-
effective for certain participants over a reasonably defined timeframe.”
(Decision at p. 56 [APP18300]; Opening Brief of The Utility Reform
Network Regarding a Successor to the Current Net Energy Metering
Tariff, August 31, 2021, at p. 47 [APP12172], citing exh. TRN-01 at
pp. 31-32.) Another example is the Coalition of California Utility
Employees’ recommendation that the Commission adopt the United
Nation’s definition describing “growth that is repeatable, ethical, and
responsible to, and for, current and future communities.” (Id. at p. 56
[APP18300]; Opening Brief of the Coalition of California Utility
Employees, August 31, 2021, at p. 11 [APP11560], citing CUE-02 at
p. 13, citing from “What Does Sustainable Growth Really Mean?” Forbes,
Rich Miller, August 16, 2018. See also the United Nations view on
sustainability at: https://sustainabledevelopment.un.org/rio20/about.)
The Coalition of California Utility Employees described this as meaning
that growth of the net energy metering tariff “is not sustainable if it does

32
not take into account inequities caused by the tariff, either now or in the
future.” (Id. at pp. 56-57 [APP18300-APP18301]; Opening Brief of the
Coalition of California Utility Employees, August 31, 2021, at p. 11
[APP11560].)
Additionally, many parties provided comments on what “grow
sustainably” should look like in the context of the length of time required
for participating customer bill savings to recover the participating
customer’s investment in the net energy metering-eligible resource.
(Decision at p. 71 [APP18315], citing Opening Brief of The Utility Reform
Network Regarding a Successor to the Current Net Energy Metering
Tariff, August 31, 2021, at p. 36.) This period is commonly referred to as
the “payback period.”
The Decision discusses a number of proposals by solar parties to
the proceeding. (Decision at p. 73 [APP18317].) The California Solar
and Storage Association proposed a maximum recovery period of seven
years based on the collective experience of its members. (Id. at pp. 73-74
[APP18317-APP18318], citing Opening Brief of the California Solar &
Storage Association, August 31, 2021, at p. 20, citing exh. CSA-01 at
60:15-61:23.) The Solar Energy Industries Association/Vote Solar
argued that a payback period longer than 10 years would be unlikely to
attract significant customer interest and opposed a payback period more
than 15 years. (Id. at p. 74 [APP18318].) The Small Business Utility
Advocates argued that based on its analysis increasing the payback
period from five to nine years would reduce solar uptake by 55 percent.
(Ibid.)
In contrast, however, the Joint Utilities and the Public Advocates
Office argued that the Net Energy Metering 2.0 payback periods were

33
too short. (Decision at p. 75 [APP18319].) The Joint Utilities argued
that the payback period was three to five years for a solar energy system
that one major solar manufacturer estimated to have a useful life of 35
years. (Ibid., citing Joint Reply Brief of Pacific Gas and Electric
Company (U 39-E), San Diego Gas & Electric Company (U 902-E), and
Southern California Edison Company (U 338-E), September 14, 2021, at
p. 27, citing 2013 NREL Study at abstract and Exh. PAO-02 at pp. 3-16
to 3-17.) As the Public Advocates Office noted, “[i]t speaks volumes that
even SEIA’s [the Solar Energy Industry Association’s] expert witness
testified that the current payback periods in California are too short.”
(Opening Brief of the Public Advocates Office, August 31, 2021, at p. 27
[APP11182], [citing Hearing Transcript, Vol. 8 at 1282-1283, Testimony
of Thomas R. Beach: “I think that all parties for this case, as far as I
know, have agreed that paybacks should be longer in California, that
they’re too short.”].)
The Commission took these perspectives into consideration and
agreed that it should consider the length of time for a customer’s
payback period, but it was not persuaded that payback periods are the
predominant factor for customers when considering solar adoption.
(Decision at p. 76 [APP18320].) The Decision cited to 2013 and 2017
National Renewable Energy Laboratory studies “showing that
consumers (especially in California where rates are amongst the highest
in the nation) look at monthly bill savings when making an economic
decision on adopting solar.” (Ibid.) The 2013 National Renewable
Energy Laboratory study states that:
previously, the consumer behavior literature has suggested
that residential customers primarily use a simple payback
time to evaluate a new technology. However, with the

34
 strong growth of third-party owned systems, we expected
that leasing customers are frequently being pitched PV
systems based on the monthly bill savings rather than a
payback time. Surprisingly, customers who bought PV
systems are also increasingly using monthly bill savings.

(Decision at pp. 76-77 [APP18320-APP18321], citing 2013 National

Renewable Energy Laboratory Study at p. 6.)
The Decision also notes comments by The Utility Reform Network
that a tariff expected to produce a fully discounted payback in a future
year may still result in the customer realizing net savings in
every year. (Decision at p. 77 [APP18321], citing Opening Brief of The
Utility Reform Network Regarding a Successor to the Current Net Energy
Metering Tariff, August 31, 2021, at p. 38.) In the end, the Commission
determined that a successor tariff that targets a nine-year simple
payback for a stand-alone solar system, which is equivalent to nearly
$100 in monthly bill savings for an average residential customer, is a
balanced approach that protects consumers and ensures that customer-
sited renewable distributed generation continues to grow sustainably.
(Decision at p. 78 [APP18322].)
Given the breadth of opinions presented to the Commission on an
appropriate payback period, and support for a focus on monthly bill
savings, the Commission’s decision to apply a nine-year payback period
was appropriate. Petitioners have not shown that the Commission erred
in this determination.
Finally, Petitioners point to Finding of Fact 197 in the Decision to
support their analysis. (Petition at p. 71, citing Decision at p. 226,
Finding of Fact (FOF) 197.) Finding of Fact 197 states that “[t]he
inability to achieve higher bill savings and reasonable payback periods

35
are barriers to increased participation by low-income customers.”
(Decision at p. 226 [APP18470], FOF 197.) Petitioners claim this is a
concession by the Commission that, despite the Legislature’s command,
the successor tariff will decrease solar adoption rates. (Petition at p. 71.)
As stated above, the adoption rate is required to grow sustainably and
not necessarily to grow at the same rate as before. More importantly,
Petitioners fail to place the Finding of Fact they cite within the context
of how the Decision addresses the requirement in section 2827.1,
subdivision (b)(1) that the tariff include specific alternatives designed for
growth among residential customers in disadvantaged communities.
(Pub. Util. Code, § 2827.1, subd. (b)(1).) This is discussed in detail
below.
Petitioners disagree with the Commission’s focus on the cost shift
from utility customers who participate in the net energy metering tariff
and those who do not. (Petition at pp. 67-69.) Petitioners argue that the
Commission has misinterpreted Public Utilities Code section 2827.1 and
is elevating the issue of costs to non-participants over cost-effectiveness
to the electrical system as a whole. (Ibid.) And, in relation to that
argument, Petitioners contend that the Commission has not modified the
program in a way that ensures the continued growth of distributed
renewable generation. (Id. at pp. 69-77.) Petitioners’ argument is
unsupported.
Petitioners’ allegation – that the Commission places such a heavy
focus on impacts on nonparticipants that it violates Pub. Util. Code
section 2827.1, subdivisions (b)(3) and (4) – ignores concerns the
Commission and other parties have expressed with the sustainability of

36
the program given the extent of cost shifting from participants to
nonparticipants.
For example, the Decision notes comments by the Independent
Energy Producers Association that, without any changes to the current
tariff structure, the financial burden on the shrinking pool of
nonparticipants is unsustainable and would disproportionately fall on
lower-income ratepayers. (Decision at p. 48 [APP18292], citing Reply
Brief of the Independent Energy Producers Association, September 14,
2021, at p. 4.) However, contrary to Petitioners’ claims, the Decision
declined to adopt proposals “focused solely on meeting the cost-
effectiveness thresholds and eliminating the cost shift without any true
deference to attempting to ensure customer-sited renewable generation
continues to grow sustainably.” (Decision at p. 137 [APP18381].)
The Commission’s effort in the Decision - to balance the need for
continued sustainable growth with the need to ensure that the total
benefits of the standard contract or tariff to all customers and the
electrical system are approximately equal to the total costs – is
exemplified in how it addresses the payback period and provides a glide
path with the Avoided Cost Calculator plus adder. Both topics are
discussed further below.
For the reasons stated above, Petitioners have not shown that the
Decision erred in addressing the cost shift.

37
 E. The Decision properly addressed alternatives
designed for growth among residential
customers in disadvantaged communities as
required by Public Utilities Code Section
2827.1, subdivision (b)(1).
Section 2827.1, subdivision (b)(1) requires that the tariff “include
specific alternatives designed for growth among residential customers in
disadvantaged communities.” (§ 2827.1, subd. (b)(1).)
Petitioners allege that the Commission violates this statutory
mandate by eliminating a proposed equity fund and rejecting a separate
proposed cost of solar installation analysis for low-income communities.
(Petition at p.78) And Petitioners argue that the Commission improperly
deferred consideration of the benefits of net energy metering community
solar systems and other benefits of distributed generation that accrue to
disadvantaged communities and other low-income community residents.
(Id. at pp. 17-19; § 2827.1 (b)(1).) Therefore, they allege that the
Decision erred in its treatment of alternatives for growth in
disadvantaged communities.
First, Petitioners argue that the Commission improperly relied on
an “uncertain and separate legislative program” to replace an equity
fund included in a prior proposed decision that was not adopted.
(Petition at pp. 78-84.) However, Petitioners fail to acknowledge the
numerous other programs the Commission has adopted to accomplish
Section 2827.1(b)(1)’s directive to develop alternatives designed for
growth in disadvantaged communities and other elements in the
Decision that address this requirement.
For example, in D.18-06-027, the Commission adopted three new
programs pursuant to the requirement that the tariff “include specific
alternatives designed for growth among residential customers in

38
disadvantaged communities.” (Pub. Util. Code, § 2827.1, subd. (b)(1)
The first program, the Disadvantaged Communities-Single-family Solar
Homes program, serves residential low-income customers living in
single-family homes in disadvantaged communities by providing no cost
solar installations. (D.18-06-027 at p. 3.) The second program, the
Disadvantaged Communities-Green Tariff program, serves customers
living in disadvantaged communities who meet the income eligibility
requirements for the low-income assistance programs California
Alternate Rates for Energy (CARE) or Family Electric Rate Assistance
(FERA) program by providing them with 100% clean energy from a pool
of projects and a 20 percent bill discount. (D.18-06-027 at p. 3.) The
third program, the Community Solar Green Tariff program, is designed
to allow primarily low-income customers in Disadvantaged Communities
to benefit from the development of solar generation projects located in
their own or nearby communities and a 20 percent bill discount.
(D.18-06-027 at pp. 3-4.) These programs were discussed in the
testimony of both The Utility Reform Network and the Joint Utilities.
(Exhs. TRN-01 at p. 32 [APP08079] and IOU-01 at p. 168 [APP08828].)
Additionally, Petitioners fail to acknowledge how the successor
tariff adopts extra bill credits for low-income customers, residential
customers living in disadvantaged communities, and customers living in
California Indian Country to support growth in disadvantaged
communities. The Decision notes that low-income customers who
participated in Net Energy Metering 2.0 received lower bill savings
benefits and a longer payback period than other customers. (Decision at
p. 175 [APP18419], citing Net Energy Metering 2.0 Lookback Study,
January 21, 2021, at p. 94.) This resulted in less frequent installations

39
of distributed generation in low-income and disadvantaged communities.
(Ibid.) While the Decision says this was primarily due to the cost of
systems, the Commission also considered “the inability to: (1) achieve a
higher bill savings; and (2) receive payback in a reasonable number of
years….” (Ibid.)
In direct response to these concerns, the Decision adopted over
double the amount of extra bill credits for low-income customers,
residential customers living in disadvantaged communities, and
customers living in California Indian Country as part of the glide path
adder. (Decision at p. 175 [APP18419].) The bill credit amount was
determined by targeting an average payback period of nine years or less
to achieve equivalency with other customers. (Ibid.) This is yet one
more way the Decision clearly addressed the requirement for growth in
disadvantaged communities.
The Decision also includes a required performance evaluation of
the successor tariff with an emphasis on evaluating equity, affordability,
and grid benefits. (Decision at p. 200 [APP18444].) Data on the
successor tariff will be collected for three years and a draft evaluation
completed within five years of implementation of the successor tariff.
(Ibid.)
Second, Petitioners allege that the glide path adder amount is
based on an inaccurate cost of installing solar in disadvantaged
communities. (Petition at p. 84.)
The Decision adopted a cost of solar of $3.30 per watt after
properly considering a wide range of values, and this result has more
than ample record support. At the low end, the Joint Utilities and The
Utility Reform Network argued for use of the National Renewable

40
Energy Laboratory Annual Technology baseline value of $2.36 per watt.
(Decision at p. 79 [APP18323].) The California Solar and Storage
Association proposed $3.80 per watt from the December 2020 edition of
the Lawrence Berkeley National Laboratory’s Tracking the Sun report
as a more accurate calculation. (Id. at 80 [APP18324], citing Opening
Brief of the California Solar & Storage Association, August 31, 2021, at
p. 32, citing CSA-01 at p. 63:7 to 67:10.) The Utility Reform Network
argued that the Tracking the Sun value included costs for main
electrical panel upgrades, and permitting and interconnection delays
that should not be included in the estimate. (Ibid., citing Reply Brief of
The Utility Reform Network Regarding a Successor to the Current Net
Energy Metering Tariff, September 14, 2021, at pp. 27-28.)
Also, the Decision notes comments by the Natural Resources
Defense Council that, during comments on the Lookback Study both the
Solar Energy Industries Association and the California Solar and
Storage Association argued that $3.80 a watt for the cost of solar was too
high. (Decision at pp. 81-82 [APP18235-APP18326], citing Comments of
the Solar Energy Industries Association and Vote Solar on the Net
Energy Metering 2.0 Lookback Study, February 2021, at p. 10 and
Comments of the California Solar & Storage Association on the Net
Energy Metering 2.0 Lookback Study, February 2021, at p. 2.) Given the
absence of costs for financing panel upgrades or installation delays in
the $2.34 watt value and the admittedly high value of $3.80, the
Commission chose a value that fell between the two numbers. (Decision
at p. 82 [APP18326].)
The Decision also includes a discussion of the potential for a
separate cost of solar for low-income households, but declined to adopt it

41
because the proposal was based on data from the Commission’s
Disadvantaged Communities-Solar on Single Family Homes program,
which the Commission explained has unique requirements and is not
analogous to the tariff in this proceeding “where a homeowner is making
their own choices in an open, competitive market.” (Decision at p. 84
[APP18328].) Petitioners have not shown this determination to be
unreasonable.
Third, Petitioners argue that it was legal error for the Decision to
defer certain matters to other proceedings. Specifically, they allege
that the Decision violates section 2827.1, subdivision (b)(1) by
improperly deferring consideration of the benefits of net energy
metering community solar systems in disadvantaged communities.
(Petition at p. 87; Pub. Util. Code, § 2827.1, subd. (b)(1).) Petitioners’
arguments do not show legal error as explained below.
It is well-established that determinations concerning how to
organize Commission proceedings are entirely within the discretion of
the Commission. Pursuant to the California Constitution, “[s]ubject to
statute and due process, the commission may establish its own
procedures.” (Cal. Const., art. XII, § 2.) The California Supreme Court
has thus explained that there is:
…a strong presumption of the correctness of the
findings and conclusions of the commission which
may choose its own criteria or method of arriving at
its decisions, even if irregular, provided
unreasonableness is not “clearly established….

(Pacific Telephone and Telegraph Co. v. Public Utilities Com. (1965) 62

Cal. 2d 634, 647; see also, e.g., San Pablo Bay Pipeline Co., LLC v. Public
Utilities Com. (2015) 243 Cal.App.4th 295, 313 [holding that the

42
Commission may employ even “unwritten procedures on a case-by-case
basis provided that those procedures do not contradict a statute and are
consistent with the requirements of due process.”].) Thus, absent some
violation of law, it is for the Commission to decide how to organize its
proceedings.
Additionally, Public Utilities Code section 701 empowers the
Commission to do “all things. . . which are necessary and convenient” to
exercise its regulatory authority over public utilities. (Pub. Util Code.,
§ 701.) This authority reasonably includes determining which
proceeding would most efficiently and effectively address a particular
issue.
Here, the Commission declined to adopt a successor tariff
specifically for community distributed energy resources in the Decision
because to do so was premature. (Decision at p. 188 [APP18432].) The
Decision notes that the Scoping Memo includes within the scope of the
proceeding coordination with other proceedings and there are aspects of
community solar that are being considered in other proceedings. (Ibid.)
The Decision goes on to note the consolidated proceeding of Application
(A.) 22-05-022, A.22-05-023, and A.22-05-024, filed in May 2022, where
PG&E, SDG&E, and SCE each filed applications for their Green Tariff
Shared Renewables program, Disadvantaged Communities Green Tariff
program, and Community Solar Green Tariff program. (Decision at
p. 188 [APP18432].)
The Decision explicitly considers AB 2316 (Ward, 2022) which
requires the Commission to evaluate customer renewable energy
subscription programs to determine whether they achieve specified
goals, including whether the program efficiently serves distinct groups;

43
minimizes duplicative offerings; and promotes robust participation by
low-income customers. (Ibid.) Further, AB 2316 requires the
Commission to provide a report to the Legislature by March 31, 2024,
that justifies any actions taken as a result of each program and explains
whether it would be beneficial to ratepayers to establish a new
community renewable energy program. (Ibid.) The Decision goes on to
explain that a recent ruling in A.22-05-022 et al. directed parties to
consider matters such as AB 2316 when determining the schedule for
that proceeding. (Ibid.)
The Commission determined that full consideration of community
renewable energy program tariffs would be best examined in the
narrower context of A.22-05-022, et al. which would allow a comparison
of the costs and benefits of proposals for new community solar renewable
energy programs directly with existing community solar programs. (Id.
at 188-89 [APP18432-APP18433].) And, there may be parties that
participate in the Commission’s more focused disadvantaged community
proceedings that do not participate in the larger, overall net energy
metering proceeding. Petitioners’ arguments do not show that this
determination is unreasonable. Under the circumstances, it is entirely
reasonable to defer discussion of the issues mentioned above to a more
narrowly focused proceeding. Therefore, the Commission did not err in
making this determination.
As explained above, none of the Petitioners’ three arguments
demonstrates that the Commission erred when it adopted its approach
concerning disadvantaged communities.

44
 F. The Decision’s changes to the tariff for
commercial, agricultural, and industrial
sectors are appropriate.
Petitioners claim that the record lacks substantial evidence to
support the Decision’s treatment of non-residential customers under the
revised tariff. (Petition at pp. 89-93.) They also allege that the
Commission abused its discretion by not following direction in previous
Commission Decisions when it revised the tariff for non-residential
customers. (Ibid.) Specifically, they argue that the Commission
committed legal error by overly relying on the Ratepayer Impact
Measure test in violation of direction in the Standard Practice Manual.
(Ibid.)
As evidence of the Commission’s alleged abuse of its discretion,
Petitioners cite to the Decision’s Finding of Fact 35 which states that
“[t]he Standard Practice Manual states that the cost effectiveness tests
should not be used individually, but instead consider the tradeoffs
between the tests.” (Petition at p. 90, citing Decision at p. 210, FOF 35.)
Here, the Commission did consider the tradeoffs between the tests.
The three tests considered were the Participant Cost Test (PCT), Total
Resources Cost (TRC) test, and Ratepayer Impact Measure (RIM) test.
When looking at the three tests, the Commission noted that the results
of the Ratepayer Impact Measure test “fared poorly” and “the RIM test is
useful for examining whether disproportionate impacts occur on
nonparticipants, as part of complying with the statute’s requirements to
ensure that benefits approximately equal costs to all customers; such an
examination cannot be conducted with the TRC test.” (Decision at p. 50.
[APP18294].) Therefore, the Commission decided to place more weight
on the results of the Ratepayer Impact Measure test. (Ibid.)

45
 As stated above, the Commission did consider the tradeoffs
between the tests. Petitioners, despite alleging abuse of discretion or
lack of substantial evidence, seek only to have this Court re-weigh the
evidence. Such claims do not demonstrate legal error.
IV. CONCLUSION
Based on the foregoing, the arguments raised in the petition have
no merit. Therefore, the Commission respectfully requests that the
Petition be summarily denied.
Respectfully submitted,

CHRISTINE JUN HAMMOND

By: /s/ CHRISTINE JUN HAMMOND

CHRISTINE JUN HAMMOND

Attorney for Respondent

California Public Utilities
Commission
505 Van Ness Avenue
San Francisco, CA 94102
Dated: June 21, 2023 Telephone: (415) 703-2682

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 CERTIFICATE OF WORD COUNT
I certify this answer of Respondent California Public Utilities
Commission to the Petition for Writ of Review contains 9923 words. In
completing this word count, I relied on the “word count” function of the
Microsoft Word program.

June 21, 2023 /s/ CHRISTINE JUN HAMMOND

CHRISTINE JUN HAMMOND

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