Akashma Online News

by Akashma News

California regulators claim that Net Energy Metering 3.0 (NEM 3.0) is a step toward equity in the state’s energy landscape. They argue that paying homeowners less for the solar energy they export to the grid helps protect low-income ratepayers who can’t afford to install panels. But behind this narrative lies a policy crafted under pressure from corporate utility giants, shaped by powerful lobbying, and quietly rubber-stamped by an appointed commission whose political connections run deep.

Under NEM 2.0, solar homeowners received credits of 20 to 30 cents per kilowatt-hour (kWh) for the electricity they sent to the grid—roughly equal to what they paid for energy drawn from it. NEM 3.0 slashed that rate to just 3 to 5 cents per kWh for new customers, claiming the change corrects an unfair “cost shift.”

The cost shift argument suggests that solar users were underpaying for grid maintenance and public programs, offloading those expenses onto non-solar customers. While that sounds fair in theory, the reality tells a different story.

Utilities now buy surplus solar power for pennies, only to resell it to neighbors at 30 to 40 cents per kWh. The difference goes straight into corporate profits. Meanwhile, the homeowners who invested thousands in solar technology—often encouraged by state and federal subsidies—get shortchanged.

The California Public Utilities Commission (CPUC) was empowered to reform net metering under Assembly Bill 327 (AB 327), passed in 2013. That legislation gave regulators broad authority to reshape solar compensation structures—authority that utilities lobbied hard to influence, ultimately leading to the adoption of NEM 3.0.

Follow the Money: Lobbying and Political Influence

Behind NEM 3.0 are California’s energy titans: Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E). These companies have long lobbied to weaken net metering policies, claiming financial harm while reporting increasing profits. Their strategy paid off

According to data compiled by the Solar Rights Alliance and Food & Water Watch, California’s utility industry has spent over $202 million on political campaigns since 2000. Of that, $11.3 million went to sitting legislators, and $2.5 million to Governor Gavin Newsom’s campaigns alone. Newsom, in turn, appointed every member of the current CPUC.

These same companies invested another $147 million in lobbying efforts, targeting legislation and regulatory decisions. Sempra Energy (parent company of SDG&E) donated $31,200 to Newsom, while PG&E and Edison International (SCE’s parent company) contributed hundreds of thousands more. These financial ties have raised serious questions about impartiality within the CPUC.

The Vote That Changed California’s Energy Landscape

On December 15, 2022, the CPUC unanimously approved NEM 3.0 under Decision D.22-12-056. The five commissioners—Alice Reynolds (President), Genevieve Shiroma, Clifford Rechtschaffen, John Reynolds, and Darcie L. Houck—voted in favor of reducing solar compensation rates for new customers.

Though commissioners themselves are not elected and do not receive direct campaign contributions, their appointments are inherently political. Governor Newsom’s financial ties to utilities cast a shadow over the commission’s decisions, especially when those decisions disproportionately benefit corporate interests at the expense of California homeowners.

Troubling Patterns and Whistleblower Warnings

The CPUC has a troubling history of close ties with the utility industry. In 2014, leaked emails revealed that PG&E executives had engaged in inappropriate communications with CPUC officials to sway regulatory outcomes (NBC Bay Area).

In 2020, former CPUC Executive Director Alice Stebbins alleged she was fired after exposing $200 million in uncollected fees from utilities. Stebbins claimed her dismissal was politically motivated and retaliatory, reinforcing the perception that CPUC oversight is compromised (ProPublica).

The False Promise of Equity

Proponents of NEM 3.0 say it promotes equity by eliminating cost burdens on non-solar customers. But what equity is achieved when public subsidies fund private solar systems, only for utilities to seize the value of that energy at below-market rates? What fairness is there when utilities export our surplus electricity to neighboring states at wholesale prices, while Californians pay premium rates at home?

If regulators truly cared about equity, they would have expanded access to solar for renters, low-income families, and community cooperatives. Instead, NEM 3.0 slams the door on future adopters, particularly those without the means to afford expensive battery storage systems.

Conclusion: A System Rigged Against the People

This isn’t about equity. It’s about control and profit. NEM 3.0 ensures utilities remain the central power brokers in California’s energy future. It undercuts local energy independence, disincentivizes clean energy adoption, and breaks trust with the very public that paid for the green transition.

Until California dismantles the cozy relationships between regulators and utility giants, and restores fair value for solar energy, we will continue to pay a premium for our own sunshine—while the real dividends go straight to corporate shareholders.