Committee adopts ordinance changes to expand virtual net energy metering for multifamily buildings

The Energy and Environment Committee of the Los Angeles City Council voted 3-0 Sept. 16 to adopt recommendations in the City Administrative Officer reports and a draft ordinance amending the Department of Water and Power’s virtual net energy metering (VNM) pilot program to increase participation by multifamily properties and their tenants.

Committee Chair Council Member Adrienne Nazarian said the package would implement changes staff described as intended "to make it easier for our customers to participate." Staff from the Los Angeles Department of Water and Power (LADWP) told the committee the changes are designed to pair VNM with the agency’s Comprehensive Affordable Multifamily Retrofits program (CAMR) to deliver solar and retrofit benefits to low-income tenants.

The ordinance and accompanying rule changes lower the VNM minimum system-size threshold from 30 kilowatts to 10 kilowatts, reimburse certain VNM application fees for CAMR projects, and allow CAMR participants to receive other DWP incentives that were previously incompatible with VNM participation. LADWP also proposed a Clean Energy Adder (CEA) incentive that would provide $1 per watt for projects in disadvantaged communities that are not otherwise CAMR participants (a 10 kW system would qualify for up to $10,000). Staff said the VNM and CAMR incentives will reimburse construction costs only and will not pay more than the actual construction cost.

David Jaco, Executive Director of Distributed Energy Solutions at LADWP, described the changes as a way to better align the programs and increase tenant access to rooftop solar. Michael Buck, who oversees LADWP’s distributed energy resource programs, said VNM "allows customers in multifamily dwellings to install a solar system on the building, sell all of the energy to LADWP, and allocate a portion of those proceeds to the tenants of the building." Enya, a CAMR manager at LADWP, called CAMR the department’s "signature initiative" that bundles efficiency, electrification and solar to reduce tenant energy burden.

LADWP staff told the committee CAMR launched in May 2022 and has enrolled 430 buildings representing more than 22,000 tenant units. Staff said 7 projects are completed and paid, 20 are under construction, and projects typically take one to three years from application to completion. According to LADWP, 87% of CAMR projects are located in disadvantaged communities as identified using the state CalEnviroScreen tool; staff also gave a citywide estimate of roughly 500,000 multifamily units that could potentially qualify under the program’s income criteria out of about 850,000 total multifamily units in the city.

Staff described layering of funding — including $5 million from the city’s Climate Equity Fund, state allocations under a California Energy Commission program (staff said roughly $40 million was being aligned by the state for similar retrofit efforts), and grants from agencies such as the South Coast Air Quality Management District — to push many CAMR projects toward full cost coverage.

Council Member Nazarian moved to adopt the CAO recommendations and the ordinance; Padilla seconded. The committee vote was three ayes with Council Members Yaroslavsky and Raman absent.

The committee packet listed the item as "Board of Water and Power Commissioners and City Attorney reports and ordinance relative to virtual net energy metering pilot program changes." The committee adopted the draft ordinance at the committee level as recorded in the meeting minutes; no additional timeline for full council action was stated in the transcript.