2. Procedural Background

On July 14, 2010, Lite Solar, Inc., a Calif. Corporation (Lite Solar) filed a petition requesting that the Commission amend Section 780.5 of the Public Utilities Code to:

1) Allow owners of individual meter multifamily residential properties that install net metered renewable energy systems to install a master-meter and convert the existing individual meters to sub-meters and bill tenants based on the actual measured-sub-metered usage of that tenant.

2) Establish that owners that install, own, and operate renewable energy equipment, such as solar panels, on their property and bill the tenants for actual usage are not considered public utilities.

Lite Solar states installation of master meters on multiunit properties built after 1978 is prohibited pursuant to the Public Utility Regulatory Policy Act (PURPA) of 1978, and claims existing rules promulgated by PURPA effectively inhibit multiunit properties with individual electric meters from installing solar photovoltaic systems. Lite Solar characterizes the problem as part of an overall master metering issue addressed in Section 780.5 of the Public Utilities Code and urges us to amend Section 780.5 to allow master metering in multitenant buildings to encourage installation of solar photovoltaic on rooftops.

On August 13, 2010, the Attorney General of California (Attorney General) filed a response to the petition. While the Attorney General is generally supportive of Lite Solar's petition to remove the barriers or disincentives for all multiunit buildings in order for the owners of such buildings to participate in the California Solar Initiative (CSI), it acknowledges that the Commission cannot grant Lite Solar's petition without additional legislative enactments. The Attorney General however, believes the Commission can exercise other options that do not require legislative action to achieve the same results. Accordingly, the Attorney General recommends the Commission expand virtual net metering (VNM), which was established as a pilot for multifamily affordable solar housing in Decision (D.) 08-10-036, to all multitenant properties to solve the problem of allocating benefits from a single solar energy system to multiple individually metered tenants.¹

The Attorney General recognizes that D.08-10-036 has already directed the assigned Administrative Law Judge (ALJ) in the Distributed Generation (DG) and CSI rulemaking (Rulemaking (R.) 10-05-004) to issue a ruling to explore expansion of VNM to all multitenant properties that install solar energy systems, and urges the Commission to take immediate action as directed in D.08-10-036 by issuing a proposed rule regarding expansion of VNM.

San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas) also filed a timely joint response to Lite Solar's petition stating that the petition should be denied because it is contrary to law and beyond the Commission's jurisdiction. In SDG&E's and SoCalGas's view, Lite Solar's petition requires amending a statute which is something that only the Legislature can do. As a result, SDG&E and SoCalGas believe it is a waste of Commission resources to initiate such a rulemaking.

¹ VNM pilot tariffs allow projects that participate in the CSI Multifamily Affordable Solar Housing (MASH) Program to allocate the kilowatt hour credits from a single solar system to multiple utility accounts without requiring the system to be physically interconnected to each tenant's meter. For more information on the pilot VNM tariffs, see: http://www.cpuc.ca.gov/PUC/energy/DistGen/vnm.htm.