Changes to Net Energy Metering (NEM) Net Surplus Compensation Rate (NSCR)
On October 11, 2009, Governor Schwarzenegger signed Assembly Bill 920 (AB 920 – Huffman – Solar and Wind Generation) into law.
Frequently Asked Questions
Please click within question text to be directed to answers.
- What is AB 920?
- Who is affected by AB 920?
- What is net surplus generation?
- How can I tell if I have generated surplus electricity?
- How long will this program be in effect?
- How does AB 920 affect SCE’s NEM customers?
- When will AB 920 take effect?
- How did SCE handle surplus energy before AB 920 went into effect?
- How does AB 920 change the way surplus energy is handled?
- Is compensation for surplus energy automatic for SCE’s NEM customers?
- What are RECs, and what do I need to do to receive payment for my RECs?
- What payment will I receive? How is it determined?
- How will I get compensated for the surplus electricity I generate?
- Is there a minimum amount that SCE will compensate me for?
- When will I receive payment?
- Sometimes I have a monetary credit at the time of my Relevant Period. Does this mean I will get credit?
- What will happen if I install a larger-than-necessary solar system?
- If I change my mind about the type of compensation I want to receive, can I change my selection?
- If I download the NEM Surplus Electricity Compensation Form, how can I return it to SCE?
- What will happen if I don’t send a selection form to SCE?
- How will SCE prompt customers when it is time to make a selection?
- Can I enroll in NSCR if I am a Direct Access customer?
- Can I enroll in NSCR if I am a Community Choice Aggregators or Energy Service Provider customer?
- Can I enroll if I am a MASH / NSHP low income customer?
- What if I add more solar panels?
- I moved into a house that has a solar system. How do I enroll in the program?
- What if my panels are owned by a third party?
- What if I own the system and the renewable attributes as well? Will SCE pay me for both components?
- I own more than one net energy metered property. Does this affect just me as the property owner, or each property I own??
- What would happen if I sold my house and moved out of the SCE service area before my 2011 true-up? Would I still receive partial payment?
- If I increase the capacity of my current system and become a net generator after the 2011 true up, will I be able to get a credit?
- If I am temporarily unable to be a net generator due to circumstances beyond my control, such as fire, acts of nature, etc., and I cannot qualify for the new NEM program, will I still be able to participate in NSC?
- What other incentives are available to me to increase my net generation capacity?
- Will this new program increase my rates?
- Is the NEM tariff available for review?
- Will I be able to get a credit for net surplus energy I generated before this new legislation took effect?
- Where can I find more information about the NEM rate schedule, including the NSCR?
- Who should customers contact if they have questions about choosing compensation?
Assembly Bill 920 (AB 920 – Huffman – Solar and Wind Generation) addresses several aspects of renewable energy in California, specifically the way SCE handles Net Energy Metering (NEM) net surplus generation. On October 11, 2009, Governor Schwarzenegger signed AB 920 into law. This changed the law that governs NEM for solar and small wind generators. Before the change, customers received no compensation at the end of their Relevant Periods for electricity exported to the grid beyond their own annual usage. As a result of AB 920, beginning January 1, 2011, customers can receive compensation for net exports to the grid at the time of their annual true up
Q2. Who is affected by AB 920?
AB 920 applies to Southern California Edison (SCE) Net Energy Metering (NEM) customers who produce solar, wind or hybrid energy (not biogas or fuel cell energy).
Q3. What is net surplus generation?
Net generation occurs when, over the course of your Relevant Period, your solar or wind generator exports more to the grid than you receive from SCE.
Q4. How can I tell if I have generated surplus electricity?
On your annual Relevant Period true-up statement, if the Total Energy Amount (kWh) is negative, you have generated surplus electricity and are entitled to compensation. If the Total Energy amount is positive, you used more electricity than you produced over the course of your Relevant Period.
Q5. How long will this program be in effect?
AB 920 has no identified end date at this time; however, the Legislature can make changes to any existing law, including AB 920, at any time.
Q6. How does AB 920 affect SCE’s NEM customers?
One provision of AB 920 directly affects SCE’s NEM customers by requiring SCE to offer compensation for any net surplus electricity that occurs during a customer’s Relevant Period. Customers must complete and return a Net Surplus Compensation Rate Selection Form (PDF) to receive compensation.
Q7. When will AB 920 take effect?
AB 920 provides that the program became effective as of January 1, 2011. The California Public Utilities Commission (CPUC), however, had to work with SCE to determine an appropriate Net Surplus Compensation Rate (NSCR) before SCE could begin compensating eligible NEM customers. SCE expects to begin compensating customers for their excess energy, retroactive to January 1, 2011, after the CPUC approves SCE’s regulatory filing, setting the NSCR sometime in 2011. SCE will notify eligible NEM customers when this occurs.
Q8. How did SCE handle surplus energy before AB 920 went into effect?
A customer’s NEM account has a designated Relevant Period of 12 months, based on the date the customer’s renewable energy generation system was interconnected to SCE’s system. Before AB 920, at the end of the Relevant Period, SCE reconciled the customer’s electricity consumption against accrued energy credits for the preceding Relevant Period, and zeroed out any remaining surplus energy credits.
Q9.How does AB 920 change the way surplus energy is handled?
AB 920 allows SCE to offer customers the option to receive compensation for any remaining net surplus energy generated during each 12-month Relevant Period. Customers can choose to receive compensation in the form of a check or roll-over credits to be used to reduce future energy charges.
Q10. Is compensation for surplus energy automatic for SCE’s NEM customers?
To ensure that customers do not miss an opportunity to receive Net Surplus Compensation (NSC) SCE automatically enrolls all of its NEM customers in the program and each customer will become eligible for payment starting with that customer’s 2011 true-up bill. However, customers may elect to opt out of the program and receive no compensation.
- If you have net surplus electricity at the end of your typical 12-month Relevant Period starting in 2011, you will qualify for compensation for any surplus electricity.
- If you do not have surplus electricity at the end of your typical 12-month Relevant Period, you will not be eligible for compensation and you will experience no change from the current NEM program. If you have net surplus electricity in any subsequent 12-month Relevant Period, you will qualify for compensation and will be notified of your eligibility.
- The value of the NSCR is established on a monthly basis, View the NSCR.
Q11. What are RECs, and what do I need to do to receive payment for my RECs?
REC stands for Renewable Energy Credit and represents the renewable attributes of your solar or wind energy generation. Each REC represents one MWH of renewable generation and it is tracked and recorded by the Western Renewable Energy Generation Information System. SCE must to obtain ownership certification of RECs from an NEM customer before providing compensation for any RECs. The CPUC has not yet established the value of RECs. When the REC program takes effect, you may become eligible to receive a subsequent payment, in addition to the payment you will receive for any net surplus electricity you generate, based on the value of the RECs.
If you are interested in seeking NSCR compensation for any renewable attributes of your generation, you must certify that you own the RECs associated with your generating facility and your net surplus generators must be certified as Renewable Portfolio Standard (PRS) eligible by the California Energy Commission (CEC). Your net surplus generator must also meet CEC-approved REC tracking requirements for your generation to be counted for RPS purpose. To be compensated for renewable attributes of your generation in the form of RECs, you must create RECs and transfer them to SCE. You must submit documentation before SCE can evaluate any NSC payment for REC attributes. This process has not been fully developed and may require CPUC and/or CEC approval.
Q12. What payment will I receive? How is it determined?
SCE will use a simple rolling average of day ahead “default load aggregation point” electricity prices from 7:00 a.m. to 5:00 p.m. corresponding to each customer’s 12-month Relevant Period, as the value of electricity portion of each customer’s individual NSCR. The NSC may fluctuate monthly, as it is based on a rolling 12 month average of spot market prices and will be posted electronically on a monthly basis. Based on current market prices, the rate would be approximately 4 cents per kWh.
Q13. How will I get compensated for the surplus electricity I generate?
At the end of your Relevant Period, if you have generated more kWh than used, SCE will send you a selection form which must be completed and returned to SCE before any compensation can be made. Your compensation selection will be noted in your SCE bill and kept in your billing records until you decide to change your selection. The selection form describes your compensation options. There are two ways an NEM customer can receive NSC:
- The customer may receive a check through the mail for the value of the net surplus generation, excluding any amount owed to SCE. At the end of each Relevant Period, the customer’s account will be zeroed out, and the new Relevant Period will begin on the next regularly-scheduled meter read date.
- The customer may roll the credit over to the next Relevant Period. SCE will reconcile the customer’s account and apply the NSC earned toward the customer’s next Relevant Period. At this point, the account will be zeroed out and the new Relevant Period will begin on the next regularly-scheduled meter read date. Any NSC credit can be applied to energy or non-energy charges. SCE will maintain a customer’s NSC credit indefinitely, until it is fully used, or until the account is closed. If your account is closed, SCE will return any unused credit in your account in the form of a check to the mailing address identified on your account.
Q14. Is there a minimum amount that SCE will compensate me for?
No, there is no minimum payment. SCE will compensate your for any NSC credit. Please refer to your tax advisor or the IRS for any rules related to the NSCR compensation.
Q15. When will I receive payment?
All customers who qualify as net surplus generators on or after January 1, 2011 are eligible to receive payment for their surplus electricity at the end of their Relevant Period. To receive compensation, you must submit your selection form to SCE. The form will be sent to you prior to the end of your Relevant Period. SCE expects to be able to start issuing payments sometime in third quarter of 2011. SCE will communicate with eligible NEM customers as soon as the CPUC approves SCE’s NSCR.
Q16. Sometimes I have a monetary credit at the time of my Relevant Period. Does this mean I will get credit?
Not necessarily. Payment is issued only if the customer has surplus net electricity (i.e., the customer exports more kilowatt-hours (kWh) to the grid than the customer uses over the Relevant Period). It is rare for a customer to have a monetary credit at the time of a Relevant Period and not actually have exported net surplus electricity. This can happen, however, with solar energy systems that export to SCE’s grid during peak periods when electricity is more expensive, and use energy from SCE’s grid during off-peak periods when electricity costs less.
Q17. What will happen if I install a larger-than-necessary solar system?
The NEM solar program is designed to enable customers to offset their usage, not to generate surplus energy to sell to SCE. To be a participant in the NEM program and NSCR, you are required to install a system that is sized to offset your annual onsite consumption.
Q18. If I change my mind about the type of compensation I want to receive, can I change my selection?
Yes. A customer can submit a new selection form once every 12 months to cancel participation in the program or to change the method of compensation. They must complete and return the Net Surplus Compensation Rate Selection Form (PDF).
Q19. If I download the NEM Surplus Electricity Compensation Form, how can I return it to SCE?
Please mail the form to:
Net Energy Metering – NSCR
Southern California Edison
1551 Walnut Grove Avenue
Rosemead, CA 91770-9810
Q20. What will happen if I don’t send a selection form to SCE?
If an eligible customer does not complete the form and select a compensation type for NSC, SCE will track and maintain a record of any NSC credit earned. Customers are not paid until SCE receives a completed selection form for the account.
Q21. How will SCE prompt customers when it is time to make a selection?
Before the end of each customer’s Relevant Period, SCE will send a notice reminding the customer that they may change the compensation selections.
Q22. Can I enroll in NSCR if I am a Direct Access customer?
At this time, the CPUC does not allow Direct Access customers to participate in this program. Direct Access customers’ ESPs may choose to offer NSC to their customers.
Q23. Can I enroll in NSCR if I am a Community Choice Aggregators or Energy Service Provider customer?
Customers of Community Choice Aggregators and Energy Service Providers are not eligible to receive payments from SCE for any NSC.
Q24. Can I enroll if I am a MASH / NSHP low income customer?
Yes. Each SCE owner of either a tenant unit account or a common area account who receives credit under our NEM Virtual Net Metering (VNM) tariff is eligible for NSCR. If the customer’s electricity (in kWh) allocated to their account exceeds their usage during the Relevant Period, the customer may receive NSC.
Q25. What if I add more solar panels?
If you add solar panels after you receive your Permission to Operate, you must submit a revised Interconnection Application for your new system, including all additional equipment, to SCE’s Generation Interconnection Services. SCE will perform an engineering analysis to ensure SCE’s facilities can accommodate the increased generation capabilities of the new system. You must still meet all the requirements of the NEM program to continue on the NEM rate, including the size limitations. If you received a CSI or SGIP incentive for your solar or wind installation, you must also satisfy the requirements of those programs.
Q26. I moved into a house that has a solar system. How do I enroll in the program?
Most customers who move into homes with previously interconnected solar PV systems are automatically enrolled in SCE’s NEM program and are therefore eligible for the NSCR. If your PV system is larger than 30 kW, you must submit an Interconnection Agreement Form and if the solar system is over three years old, it must be inspected before you are enrolled in the NEM program. If you meet the program requirements you can qualify for the NSCR.
Q27. What if my panels are owned by a third party?
If you are an NEM customer, you will still be eligible to receive compensation for any net surplus electricity you generate. However, if you have relinquished ownership of your RECs to your system’s third party owner, you will only be paid for the wholesale value of the net surplus electricity and not for the associated REC. This is because payment for surplus electricity under this program is comprised of two components: the value of actual electricity generated and the value of the renewable attributes of this electricity (i.e. RECs). At this time, the CPUC and CEC have not determined the specific requirements of the REC certification.
Q28. What if I own the system and the renewable attributes as well? Will SCE pay me for both components?
The CPUC has placed a hold on any compensation for RECs until the CEC has set up a process to verify and track these attributes. Once this process is in place, the CPUC should allow SCE to make an additional payment to you in exchange for the REC value of your excess kWh.
Q29. I own more than one net energy metered property. Does this affect just me as the property owner, or each property I own?
Each NEM account is treated separately and cannot be combined. In addition, you must be the SCE customer of record to participate in the NEM program and participate in NSCR if eligible.
Q30. What would happen if I sold my house and moved out of the SCE service area before my 2011 true-up? Would I still receive partial payment?
The legislation does not provide for pre-2011 compensation. If you moved before January 1, 2011, your account has been trued-up under the AB 920 program rules and you will not receive payment for any net surplus electricity you exported up to that time.
Q31. If I increase the capacity of my current system and become a net generator after the 2011 true up, will I be able to get a credit?
It depends on your continued eligibility for the NEM program. You will still need to qualify for NEM and file an amended Interconnection Agreement. If you meet the requirements for NEM and are a net surplus generator, you should be able to qualify for NSCR. Please see the question and answer above regarding adding more solar panels.
Q32. If I am temporarily unable to be a net generator due to circumstances beyond my control, such as fire, acts of nature, etc., and I cannot qualify for the new NEM program, will I still be able to participate in NSC?
Participation in the NEM program is a requirement for inclusion in the NSCR. If you subsequently re-qualify for NEM, then you will automatically be enrolled in the NSCR program.
Q33. What other incentives are available to me to increase my net generation capacity?
You can take advantage of any of SCE’s many energy efficiency program options.
Q34. Will this new program increase my rates?
We do not currently have information about how this program will impact electric rates.
Q35. Is the NEM tariff available for review?
Yes. A copy of the current tariff is available at www.sce.com/scheduleNEM. Please always check the date on the tariff to ensure it is the latest version.
Q36. Will I be able to get a credit for net surplus energy I generated before this new legislation took effect?
No. AB 920 became effective January 1, 2011.
Q37. Where can I find more information about the NEM rate schedule, including the NSCR?
For more detailed information please review the rate schedule.
Q38. Who should customers contact if they have questions about choosing compensation?
For questions regarding the new NSC options, call SCE Customer Service at one of the following telephone numbers, Monday through Friday, 8:00 a.m. - 5:00 p.m.:
Residential NEM Customers: (866) 701-7868
Business NEM Customers (866) 701-7869
