Three environmental groups, including one from San Diego, will present arguments this week before the California Supreme Court, attempting to get a controversial rooftop solar policy overturned.

“We’ve been working on this for a long time and we hope the court makes the right decision,” said Roger Lin, senior attorney for the Center for Biological Diversity.

The hearing, scheduled for today in Los Angeles, centers on whether the California Public Utilities Commission made the legally correct call nearly when it changed the rules regarding how an estimated 2 million rooftop solar customers get compensated when their systems generate more electricity than they consume.

In December 2022, the CPUC’s five commissioners unanimously voted to approve the third iteration of the state’s Net Energy Metering program, dubbed NEM 3.0.

The complex 260-page decision included incentives to encourage customers to pair their solar installations with battery storage systems.

But the portion of the decision that raised the most hackles revised the rules so that new rooftop solar customers would no longer be credited at the retail rate of electricity when their systems generated surplus energy. Instead, they get paid at the “actual avoided cost,” which is lower.

The CPUC’s decision, which went into effect in April 2023, said the change sends “more accurate price signals that encourage electrification” across the state.

The commission determined that changes need to be made, agreeing in large part with California utilities that said the earlier NEM rules were too generous.

They argued that the growing number of rooftop installations leads to a “cost shift” that leaves customers who don’t have solar paying an unfair share of the fixed costs that come with maintaining the electric system — substations, transformers, poles and wires, etc.

Opponents of the CPUC decision have long disputed the cost-shift argument, saying it doesn’t properly take into account the benefits of rooftop solar, such as reducing the need for utilities to spend ratepayer dollars on building more infrastructure.

They also argue that the lower compensation rate undercuts the incentive for potential customers to put solar on their roofs because it will take longer for new customers to recoup the cost of spending thousands of dollars on their installations.

Shortly after the CPUC decision, the Center for Biological Diversity, the Environmental Working Group and the San Diego-based Protect Our Communities Foundation tried to overturn NEM 3.0’s rules.

After the CPUC rebuffed the groups’ request for a rehearing, the trio took their case to the California Court of Appeals.

But in a 40-page ruling in December 2023, Associate Justice Victor Rodríguez authored a 3-0 decision upholding the CPUC’s decision, saying, “We must give ‘great weight’ to the Commission’s interpretation of the provisions of the Public Utilities Code.”

Undeterred, the three groups petitioned the California Supreme Court to hear their case, and last year the high court agreed. It’s on the docket for oral arguments before all seven justices during today’s morning session.

“This case revolves around whether the Public Utilities Commission actually looked at the cost and benefits of rooftop solar, specifically,” said Lin of the Center for Biological Diversity, citing a statute passed by the state Legislature that calls on the CPUC to promote the growth of renewable power in the state.

The petitioners also argue the appeals court gave too much deference to the CPUC, and the ruling did not go far enough to help disadvantaged communities.