The Net Surplus Compensation Rate (NSCR) compensates Net Energy Metering (NEM) customers for electricity they produce in excess of their on-site load over the course of a 12-month period, referred to as the "Relevant Period." NEM customers who produce excess power over their Relevant Period are known as Net Surplus Generators.

NSCR is calculated using a market-based mechanism derived from an hourly day-ahead electricity market price known as the Default Load Aggregation Point (DLAP) price. Southern California Edison's DLAP price reflects the costs SCE avoids in procuring power during the time period Net Surplus Generators are likely to produce excess power with their solar or wind generating facilities.

As a NEM customer on Annual Billing, your annual energy bill will come once every 12 months and will include your energy usage charges for the entire year. This annual billing period coincides with your Relevant Period. During your Relevant Period, your net energy usage charges or credits are tracked on a monthly basis. At the end of your Relevant Period, the energy usage charges from each month are added together, and any net energy usage credits are applied to the account. The balance is used to determine the total amount due that will be listed on your annual energy bill.

The NSCR provided below for a particular month applies to any customer with a relevant period ending in that month. Each month's NSCR is the rate paid for the customer's net surplus production over the entire Relevant Period. For example, if your Relevant Period ends in February of each year, you will refer to the NSCR for February to determine the price to be paid to you for your net surplus energy.