California rewrites the calculator that decides what a distributed energy resource is worth, and refuses to cap its carbon value

The California Public Utilities Commission adopted Decision 26-09-007 at its 3 September 2026 voting meeting, issuing it on 8 September, updating the Avoided Cost Calculator beginning with the 2026 model. The proceeding is R.22-11-013, and it remains open. The Avoided Cost Calculator is not a minor technical artefact. Under D.16-06-007 the Commission directed that a single avoided cost model apply to all distributed energy resource proceedings, and this is it. It calculates what a distributed resource saves the system across generation capacity, energy, transmission and distribution capacity, ancillary services, greenhouse gas emissions and high global warming potential gases. Its outputs feed the cost-effectiveness tests applied to demand response and energy efficiency, among other purposes. In practice it is the arithmetic that decides whether a battery, a thermostat programme or a heat pump is deemed worth paying for in California. The decision adopts seven changes. It applies a single electricity-based value to represent both electricity and natural gas greenhouse gas values, and removes the GHG rebalancing component that previously reconciled the two. It adopts a simplified Integrated Calculation for generation capacity and GHG costs, which the decision says addresses transparency issues and sensitivity to minor inconsistencies between the RESOLVE and SERVM models. It switches capacity allocation factors from expected unserved energy to loss of load hours, so the model measures how often the system runs short rather than how much energy goes unserved. It allocates generation capacity value to particular days by energy price rather than by temperature, which the Commission says better reflects electricity use in winter as well as summer. It represents the reliability difference between weekdays and weekends. For transmission, it bases peak capacity allocation factors on the Integrated Energy Policy Report load forecast rather than historical loads, and standardises marginal transmission cost calculation on the Discounted Total Investment Method across all electric utilities. It also refuses something. The Commission's own Energy Division staff had proposed capping the total GHG value in both the electric and gas models at the high societal cost of carbon adopted in the Societal Cost Test, arguing it would protect ratepayers from a carbon value exceeding the benefit emissions reductions provide to society, and would damp volatility between ACC cycles. Southern California Edison supported the cap. Conclusion of Law 3 declines it. Conclusion of Law 4 keeps the option alive: the Commission may reconsider if the RESOLVE model's GHG shadow prices become, in its words, persistently high and unrealistic. What none of this tells you is what happens to any particular household. The decision is about method, not outcomes, and it does not mention net energy metering or the Net Billing Tariff. [UNVERIFIED] Trade coverage suggests the single-GHG-value change may trim the calculated benefit of building electrification, and the ACC is widely described as the metric underneath California's rooftop solar export rates: but the decision makes no finding on either point, and this sweep has not modelled the values. The 2026 ACC electric, gas and integrated models are now posted, and a draft calculator workshop was held on 9 September, so the numbers are checkable by anyone willing to open the spreadsheet.