The decision may be a temporary victory for the Distributed Solar Industry as legal challenges and further CPUC proceedings loom.

In one of the most anticipated decisions in recent memory, the California Public Utilities Commission (CPUC) on January 28, 2016, by a 3-2 vote, approved a decision (Decision No. 16-01-044 (January 28, 2016) (the Decision) that largely leaves in effect the existing retail rate structure for new net energy metering (NEM) customers. The existing retail rates for NEM customers permit the customer to offset each kilowatt hour (kWh) of renewable energy generated against the retail rate per kWh the customer would otherwise pay for electricity their retail electric utility supplies. This Decision fixes new NEM rates for renewable energy generators once the three major California investor-owned electric utilities (Pacific Gas & Electric Company (PG&E), Southern California Edison Company (SCE) and San Diego Gas & Electric Company (SDG&E), together, the IOUs) reach the current NEM program limit of 5% of their aggregate customer peak demand, or by July 1, 2017. The Decision declined to impose any fixed charges on new or so-called successor NEM (NEM 2.0) residential customers while the CPUC is determining in other proceedings whether, and, if so, how, such fees should be imposed on the IOUs’ residential customers. The Decision does require NEM 2.0 customers to pay some fees not previously collected through NEM rates.