Gov­er­nor Jer­ry Brown
State Capi­tol
Sacra­men­to, CA 95814

Sen­ate Pro Tem Kevin de Leon
State Capi­tol
Sacra­men­to, CA 95814

RE:  Cal­i­for­nia Dis­trib­uted Pow­er

Dear Gov­er­nor Brown and Sen­a­tor de Leon:

As lead­ing investors in California’s clean­tech indus­try, we great­ly appre­ci­ate your lead­er­ship to estab­lish strong renew­able ener­gy goals that will reduce cli­mate pol­lu­tion. With only three weeks left in this year’s leg­isla­tive ses­sion, we wish to bring to your atten­tion an impor­tant gap in cur­rent state pol­i­cy efforts.

As Gov­er­nor Brown not­ed in his Jan­u­ary 2015 State of the State address, deriv­ing 50 per­cent of our elec­tric­i­ty from renew­able sources by 2030 will require trans­form­ing our elec­tric­i­ty grid and dis­trib­uted pow­er must play an impor­tant role. This means expand­ed deploy­ment of rooftop solar, which is occur­ring across the state in large part because of the avail­abil­i­ty of net ener­gy meter­ing (NEM).

The NEM pol­i­cy has helped California’s solar indus­try grow into a world leader and lever­age bil­lions of dol­lars in pri­vate invest­ment in the instal­la­tion of dis­trib­uted solar ener­gy sys­tems across the state. This pol­i­cy has helped cre­ate more than 54,000 solar jobs all over Cal­i­for­nia — greater than the total num­ber of per­sons employed by the state’s five largest util­i­ties. The NEM pol­i­cy is also spurring inno­va­tions that have enabled the solar indus­try to scale, bring down costs sub­stan­tial­ly, and save ener­gy con­sumers in Cal­i­for­nia bil­lions of dol­lars.

Leg­is­la­tion that Gov­er­nor Brown signed two years ago, AB 327, requires that the Pub­lic Util­i­ties Com­mis­sion (PUC) devel­op new NEM rules by the end of the year that now are pro­ject­ed to be imple­ment­ed for new cus­tomers in many com­mu­ni­ties across the state dur­ing 2016. In recent fil­ings at the PUC, the util­i­ties have pro­posed end­ing NEM and replac­ing it with rad­i­cal­ly dif­fer­ent pro­grams and rate designs that would destroy the eco­nom­ics for solar cus­tomers.

Investors have been com­mit­ting cap­i­tal to California’s rapid­ly grow­ing rooftop solar indus­try with the expec­ta­tion that the state’s solar-friend­ly poli­cies will not be dra­mat­i­cal­ly changed overnight. That expec­ta­tion is now being called into ques­tion by the util­i­ties’ pro­pos­als and the PUC Ener­gy Division’s appar­ent deci­sion to apply the wrong cost-effec­tive­ness test when eval­u­at­ing the pro­gram. This mar­ket uncer­tain­ty is com­pound­ed by imple­men­ta­tion of sig­nif­i­cant changes to elec­tric­i­ty rates and tar­iffs, the sched­uled step-down of the fed­er­al Invest­ment Tax Cred­it for solar at the end of 2016, and the focus of the renew­able port­fo­lio stan­dard (RPS) on larg­er sys­tems.

We ask that you restore pol­i­cy cer­tain­ty for California’s rooftop solar indus­try by ensur­ing that a sus­tain­able NEM pol­i­cy con­tin­ues. This will reas­sure the mar­ket and the ven­ture cap­i­tal com­mu­ni­ty of the state’s ongo­ing com­mit­ment to include dis­trib­uted pow­er in California’s clean ener­gy plans. It will encour­age addi­tion­al pri­vate-sec­tor invest­ment and job growth in our state’s grow­ing clean­tech indus­try and send a pow­er­ful sig­nal to mar­kets in oth­er states.

Sin­cere­ly,

Nan­cy E. Pfund
Man­ag­ing Part­ner

Raj Atlu­ru
Ven­ture investor

Rick Brown, Ph.D.
Pres­i­dent, Ter­raVerde Renew­able Part­ners

Josh Cohen
Man­ag­ing Part­ner, City Light Cap­i­tal

Robert Dav­en­port III
Man­ag­ing Part­ner, Bright­path

John Doerr
Part­ner, Klein­er Perkins Caulfield & Byers

Ira Ehren­preis
Man­ag­ing Part­ner, DBL Part­ners

Char­lie Finnie
Man­ag­ing Part­ner, Green­er Cap­i­tal

John Fish­er
Man­ag­ing Direc­tor, Drap­er Fish­er Jurvet­son

Josh Green
Man­ag­ing Part­ner, CCM Ener­gy

David Kirk­patrick
Man­ag­ing Direc­tor, SJF Ven­tures

Ben Kort­lang
Part­ner, Klein­er Perkins Caulfield & Byers

David Prend
Man­ag­ing Gen­er­al Part­ner, Rock­port Cap­i­tal

Zeb Rice
Man­ag­ing Part­ner, Ange­leno Group

Dipen­der Salu­ja
Part­ner & Man­ag­ing Direc­tor, Capri­corn Invest­ment Group

Steve Vas­sal­lo
Gen­er­al Part­ner, Foun­da­tion Cap­i­tal

Steve West­ly
Man­ag­ing Part­ner, West­ly Group

Don Wood
Part­ner, Drap­er Fish­er Jurvet­son

cc:           Assem­bly Speak­er Toni Atkins
Assem­bly Mem­ber Susan Bonil­la
Assem­bly Mem­ber Jim Coop­er
Assem­bly Mem­ber Richard Gor­don
Assem­bly Mem­ber Patrick O’Donnell
Assem­bly Mem­ber Hen­ry Perea
Assem­bly Mem­ber Bill Quirk
Assem­bly Mem­ber Antho­ny Ren­don
Assem­bly Mem­ber Phil Ting
Assem­bly Mem­ber Das Williams