CPUC Likely to Implement NEM 1.0 Reservation System

by Tom Williard, Principal - Sage Renewables

On December 23rd, 2015, the California Public Utilities Commission (CPUC) released a ruling and a Staff Proposal for instituting an NEM 1.0 reservation system. The proposal would allow customers of the large electrical utilities in the state of California who are developing PV systems to reserve an NEM 1.0 allocation for their project prior to interconnection. The intent of the reservation system is to allow customers developing solar PV projects to know whether the project will be interconnected under NEM 1.0 or NEM 2.0 regulations, which can significantly affect the financial performance of the project.

This ruling seeks public comment on key questions concerning the proposed reservation system:

1. Should the reservation system be limited to six months?
2. Should completion deadlines be established for residential and/or commercial clients?

Comments may be filed no later than January 18, 2016. Reply comments may be filed no later than January 25, 2016.

Proposal Details

The Staff Proposal is similar to, though simpler than, the reservation system created for the California Solar Initiative (CSI):

• The reservation system would become active approximately six months before the utility is anticipated to reach its NEM 1.0 cap. For the three Investor Owned Utilities (IOUs), the estimated opening of the reservation systems are as follows:

• Reservation would last for 6 months. Residential customers will not be eligible for extension of the reservation.
• Requires a signed contract document for financing and/or purchase of the system.
• Reservation process to integrated into the NEM interconnection application process.
• There may be a project completion deadline similar to CSI, most likely for residential projects.
• Reservations are not valid beyond June 30, 2017.
• Reservation applications received after the capacity limit has been reached will be put on a wait list.
• No reservation fee.

The NEM 1.0 reservation process, integrated with the NEM interconnection application process, is shown below.