California’s Solar Surplus Has Led to Curtailment, Cost-Related Issues
February 26, 2025
LAist
Severin Borenstein, Faculty Director of the Energy Institute, talks about the CPUC report on rooftop solar credits with LAist and highlights how a significant portion of high electricity rates is driven by cost shifts.
“The average retail rate in California if you’re a customer of PG&E or SDG&E is over $0.40 cents per-kilowatt hour, and if you’re a customer of Southern California Edison it’s still over $0.30 cents per-kilowatt hour. But the actual cost of delivering another kilowatt hour to your house is closer to $0.10 cents per kilowatt hour. The difference is paying for all sorts of fixed costs of the system. So when somebody is paying for fewer kilowatt hours, those fixed costs still need to be covered. And the way they are covered in our electricity system is not that the shareholders take a hit, it’s that the rates get raised for all the other customers. So that’s the sort of fundamental of the cost shift. The CPUC understands that, that’s why they changed the policy for new systems starting in April of 2023…they are now going back and looking at systems that were installed before that. And I think there is a case, I don’t think we should undercut people who put in systems and would end up losing money, but what I think the CPUC should be doing is saying ‘there’s some people that put in systems in 2016, 2017, 2018 and they paid a significant amount for them, but they have saved far more than that since then’. And at some point they need to go back to paying their fair share of fixed costs.”
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