How to ensure solar billing compliance in California

Intro

Billing residents for solar energy on multifamily properties in California is an excellent tool for helping residents save money on bills while increasing NOI and property values. However, energy markets in California are regulated by the Public Utilities Commission, so it’s critical to ensure that resident billing software is code compliant.

This post will cover relevant Public Utilities Code and share how Glow Energy was designed to help customers achieve compliance.

‍Glow Energy’s compliant approach to tenant billing

Glow Energy was built to be compliant with the Public Utilities Code, particularly as it relates to “ownership” of a utility account at the meter level.

In the August 2, 2023 Proposed Decision of Administrative Law Judge Kelly A. Hymes pursuant to Rulemaking 20-80-020, the judge states the following:

"The Commission finds that if the tenant gives up their separately metered account for bill consolidation under the property owner, the customer is not in compliance with the VNEM tariff. Customer access to the VNEM tariff as well as the successor VNEM tariff is dependent on the tenant retaining account ownership."

When tenants sign up for Glow Energy, they connect their utility accounts to the Glow platform, but still retain ownership over their own account. Building owners or managers are never asked to “take over”  tenant-owned utility accounts, ensuring a building using Glow Energy is in compliance with the existing and successor VNEM tariffs as well as California Public Utilities Code Section 780.5.

Additionally, Glow Energy has gone further to ensure the most convenient and transparent resident experience. Below are the key features:

Utility account connect

Residents virtually “link” their electric utility accounts with Glow Energy. They continue to receive communications from the utility, are eligible to apply for discounted rate plans and can participate in Demand Response programs through Glow Energy’s platform.

Consolidated billing

Glow Energy presents residents with a single, unified bill for solar and utility charges.

Payment remittance

Glow Energy payments infrastructure allows a single payment to be split and remitted on behalf of the customer to both the utility and solar system owner. Additionally, Glow Energy’s payment architecture is fully compliant with money transmission regulations, eliminating the payments-related compliance burden on project owners. ‍

Glow Energy’s audit grade billing software

Glow Energy’s software accurately calculates and produces “counterfactual” electric bills for its customers. Counterfactual bills represent what a utility would have charged a customer in the absence of solar. Glow Energy’s counterfactual bill calculations are transparent and auditable by its customers and third-parties, and are guaranteed to be accurate.

With the utility counterfactual bill as a baseline, percentage savings are issued to benefitting accounts at a property based on the metered solar power delivered to the account.

Glow Energy guarantees that residents will pay less for solar energy vs energy supplied by the utility company.

Glow Energy’s Power Purchase Agreement

Glow Energy enters into a Power Purchase Agreement with all tenants using the platform. This PPA satisfies all requirements as laid out in the California Public Utilities Code Sections 2868 & 2869. To summarize, this PPA provides a contractual structure for energy sales and savings guarantees for tenants. The PPA clearly lays out the obligations of Glow Energy to its customers and ensures owners of solar equipment that utilize Glow Energy’s platform are compliant with the California Public Utilities Code and have appropriate recourse in the event of issues with a Glow customer. 

‍Conclusion

Energy is a regulated industry in California. Maximizing the return on investment on a distributed energy system on a multifamily property while ensuring compliance with the California Public Utilities code requires a thoughtfully-designed system such as Glow Energy.

If you have questions about solar billing compliance, schedule an appointment to speak with us here.

Appendix - Public Utilities Code references

Section 2868 

Under California Public Utilities Code Section 2868, a Glow Energy customer which owns a PV System on its real property selling electricity to its tenant(s) is defined as an “independent solar energy producer” and may sell electricity to its tenants either by delivering directly to tenant meters if the number of tenants is one or two, or through California’s current virtual net metering tariff (“VNEM Tariff”) which is available to multi-tenant properties and enables an owner of such property to allocate a PV System’s benefits to tenants across multiple units. 

Section 2869 

Pursuant to California Public Utilities Code Section 2869, an independent solar energy producer selling electricity to its tenants is required in its agreements with tenants to include: 

(A) a good faith estimate of the kilowatt hours to be delivered by the PV System to the tenant,

(B) a plain language explanation of the terms under which the pricing will be calculated over the life of the contract and the price tenant will charged per kilowatt hour,

(C) a plain language explanation of operation and maintenance responsibilities of the contract parties,

(D) a plain language explanation of the contract provisions regulating the disposition or transfer of the contract in the event of a transfer of ownership of the real property, as well as the costs or potential costs associated with the disposition or transfer of the contract, and

(E) a plain language explanation of the disposition of the solar energy system at the end of the term of the contract explaining that the tenants have no ownership interest in the PV System as a result of purchasing electricity generated by the PV System. 

Additionally, in the event that a Glow Energy customer acting as an independent solar energy producer is a master-meter customer of an local electric utility (“LEU”) who provides electric service to users who are tenants of a mobile-home park, apartment building, or similar residential complex, the Glow Energy customer must: (1) charge each tenant that is under a sub-metered system a rate for the solar generated electricity not to exceed the rate charged by the independent solar energy producer or the applicable LEU’s rate for an equivalent amount of electricity, whichever is lower and (2) comply with all rules set forth by their applicable LEU for master-meter customers.

‍Section 780.5‍

The commission shall require every residential unit in an apartment house or similar multiunit residential structure, condominium, and mobilehome park for which a building permit has been obtained on or after July 1, 1982, other than a dormitory or other housing accommodation provided by any postsecondary educational institution for its students or employees and other than farmworker housing, to be individually metered for electrical and gas service, except that separate metering for gas service is not required for residential units which are not equipped with gas appliances requiring venting or are equipped with only vented decorative appliances or which receive the majority of energy used for water or space heating from a solar energy system or through cogeneration technology.