Virtual Net Energy Metering
Virtual Net Energy Metering (VNM or VNEM) is a tariff arrangement that enables a multi-meter property owner to allocate the property's solar system's energy credits to tenants. The generated electricity does not flow directly to any tenant meter, but feeds directly back onto the grid. The participating utility then allocates the kilowatt-hours from the energy produced by the solar PV generating system to both the building owner's and tenants' individual utility accounts, based on a pre-arranged allocation agreement. The intent of VNEM is to help tenants receive the direct benefits of the building's solar system, rather than all of the benefits going to the building owner. The VNEM tariffs were first piloted under the CSI Multi-family Affordable Solar Housing Program (MASH) as a means of providing equal and direct benefits of the solar system to low income tenants in an affordable housing complex.
On December 8, 2011, Energy Division Staff hosted a workshop at the CPUC to discuss issues pertaining to the proposed VNM general market tariffs.
Historically, multi-tenant buildings with individual electric meters for each tenant faced difficulties installing distributed solar PV systems because of the problem of assigning the benefits of the generation to each tenant account. A system could easily be connected to a common area load or to an individual tenant, but if it was connected directly to multiple loads, there would be no way of ensuring equitable distribution of the generation. Some tenants would benefit more than others. Installing multiple systems, one for each tenant or load in the building, is cost prohibitive.
VNEM and the SOMAH Program
In accordance with Decision (D.)17-12-022, PG&E and Energy Division hosted a workshop on February 13, 2018 to discuss the IOUs' (SDG&E, SCE, Liberty Utilities Company, and PacifiCorp's) development of VNM tariffs for the Solar on Multifamily Affordable Housing (SOMAH) Program.
As stated in that Decision, the electric utilities were ordered to file a Tier 1 advice letter designating a VNEM tariff for use by SOMAH participants by March 14th, 2018. The advice letter could modify an existing VNEM tariff used for the program, such as that used by MASH participants, or may develop a new VNEM tariff based on the VNEM tariff used for the MASH program, as appropriate. More information and the finalized SOMAH VNM tariffs can be found on the SOMAH Program website here.
VNEM, the MASH Program and Affordable Housing
The MASH Program, established by AB 217, ran from 2008 to 2021 and had the first VNM tariff in California. Though the MASH program is closed, the MASH VNM successor tariffs in PG&E, SCE, and SDG&E territory remain open for new enrollments for qualified properties and generation projects. Multifamily properties that satisfy the MASH eligibility criteria and meet all other utility interconnection requirements may utilize the MASH tariff.
Important Decisions and Resolutions
- D.08-10-036 – Established VNEM as part of the Multifamily Affordable Solar Housing (MASH) program.
- (D.)11-07-031 (see section 4.0) – Directed PG&E, SCE and SDG&E to file advice letters proposing VNEM tariffs for market rate properties, and included proposed cost recovery for VNEM billing.
- April 19, 2012 Energy Division issued Resolution E-4481 authorizing the large electric IOUs VNEM tariffs.
- D.16-01-044 – Committed to continue VNEM as part of NEM successor tariff and adopted an industry proposal to make VNEM available to non-MASH program participants served by multiple service delivery points on a single property, "mirroring the same rule for low-income customers in the VNEM tariffs."
- D.17-12-005 – Allows VNEM interconnection with storage.
- August 17, 2017 ALJ Ruling seeking comment on VNEM and Energy Storage
- D.17-12-022 – SOMAH implementation decision requiring new SOMAH VNEM tariff.
- D.19-09-027 – SGIP Equity Resiliency Budget implementation and discussion on inclusion of multifamily properties in SGIP.
- D.20-08-007 – Modified D.16-01-044: to "confirm Commission policy to permit netting of energy from a single eligible renewable generating facility among customers or accounts behind multiple service delivery points and on multiple contiguous parcels, provided that those customers or accounts are part of the same multitenant or multi-meter facility (as specified)."
- Authorized PG&E, SCE, and SDG&E to submit a joint Advice Letter to propose modifications regarding a "common function" to the definition of "property" in the Joint IOUs' respective general market VNEM rate schedules.
- The Joint Advice Letter was rejected by the Energy Division by non-standard disposition on April 6, 2022.
- On September 10, 2020, SDG&E filed an application for rehearing of D.20-08-007 alleging the Decision 1) improperly eliminated the common function requirement from Commission-approved tariffs without developing a properly litigated, factual record on which to base that order, and 2) improperly placed the common function requirement into a staff process, rather than considering the issue in the new NEM Rulemaking proceeding.
- D.21-06-005 – SGIP Revisions include discussion of refinements of multifamily properties inclusion in SGIP and use of VNEM tariff (pp.76-80).
- On April 21, 2022, the Commission denied SDG&E's Application for rehearing of D.20-0-007. That order can be found here.