The True-Up Bill in California, Explained

Start with the account and the bill period

Read the utility name, any community-choice or other generation supplier, and the solar program shown on the account. Then compare the billing or settlement dates, current amount due, detailed energy charges, imports and exports with a comparable prior statement. A utility and a generation supplier can have separate roles on one bill, so a provider name or a city name alone is not enough to identify the charge.

Monthly payment and annual settlement are different account questions

Use the account's published billing guidance. SCE, for example, describes an Annual Billing Option in which set fees are paid monthly and net energy charges are due at the end of a 12-month cycle, and a Monthly Billing Option in which set fees and net energy charges are paid monthly. Its annual settlement guidance applies regardless of that billing option. Other providers and generation suppliers can use their own billing and settlement processes.

Read generation and delivery separately

If the bill shows a community-choice supplier, read its generation charge or credit separately from the utility's delivery charges. SCE says the CCA generation line is separate from SCE delivery and is not an additional charge. For a question about generation credits or charges, contact the supplier named on that line. For delivery, meter, recorded-usage or account questions, contact the utility.

Check the system record before drawing a conclusion

Compare the bill's imported and exported energy with the system's recorded production for the same period. Note changes in occupancy, vehicles, heating or cooling, charging schedules, equipment settings, weather-related use, or a change in the billing plan. A balance can prompt questions, but it does not by itself establish a billing error, failed equipment, or a need for more panels.

Use the right support path for an unexplained line item

Keep the bill, production record and prior comparable statement together. Ask the utility or generation supplier responsible for the line item to explain it under the account's current program and billing option. If a project is considered later, compare written assumptions about the actual bill, current program and measured production; do not use a settlement total alone as a design recommendation.

What "NEM" means on your bill, utility by utility

The word "NEM" shows up differently depending on your utility, which is why the same search phrase can turn up confusing answers across providers. SDG&E literally labels bill lines "NEM Charges" and "NEM Credits," plus a running "Cumulative Balance" and "Current Account Balance." PG&E's general bill-terms glossary has no entry called "NEM Charges" — PG&E instead shows your month's energy charges and credits on a separate NEM or Solar Billing statement, carried forward each cycle; if you're describing that running energy-charge/credit line, that's what PG&E means even without the literal label. SCE doesn't use "NEM charges" as a bill-line label either. Net Energy Metering is the name of the tariff itself, not a line item; the annual reconciliation event is a "settlement statement" (or "settlement bill") covering your 12-month "Relevant Period." LADWP isn't part of any of this — it's a municipal utility the CPUC doesn't regulate, and it sets its own net-metering and billing rules; confirm specifics directly with LADWP.

What builds up monthly vs. what settles at the annual true-up

PG&E: each cycle's energy charges and credits carry forward on your NEM statement. The True-Up Statement issued at the end of the 12th billing month reconciles all charges and credits; any balance due lands on that final bill, any remaining credit balance is applied, and a new 12-month billing period begins. If you produced more than you used for the year, PG&E pays a CPUC-set Net Surplus Compensation rate, roughly $0.02 to $0.04 a kWh.

SCE: unused credits accrue and roll forward through your Relevant Period. At the end of that period, SCE issues a settlement statement; remaining credits offset the Energy Export Credit Charge Adjustment, and any exported surplus beyond that is compensated at SCE's wholesale Net Surplus Compensation rate for the kWh exported beyond what you used. SCE's own materials don't describe what happens to a non-NSC-eligible leftover balance beyond that offset.

SDG&E: export credits post monthly at the time-of-export Avoided Cost Calculator value. At the True-Up Date, SDG&E backs out the ACC-based credits already applied on net-exported kWh and re-compensates that energy at the lower Net Surplus Compensation rate instead — this "Annual True-Up Adjustment" can show as a charge even though you exported power, and unused credits don't carry to the next cycle.

Why your true-up bill came in large

A few things stack up over a 12-month cycle. California solar output drops sharply in the months right before most true-up dates land, so the last stretch of the cycle often draws more from the grid than it exports, working through credit built up over summer. There's also an import/export rate mismatch: what you buy back from the grid is billed at your full retail time-of-use rate, while what you exported was credited at the lower Avoided-Cost or Net Surplus Compensation rate — the same kilowatt-hour is worth more coming in than it was worth going out. Added load since the system was sized — a new EV, a pool pump, added air conditioning, or simply a bigger household — pulls down banked credits faster than the array can replace them. And non-bypassable charges apply every month regardless of your credit balance and don't zero out at true-up.

Before you pay: what to check

Confirm the statement period is close to 12 months — PG&E itself notes some customers' True-Up billing cycles may be less than a year, so check the dates against your interconnection anniversary. Confirm you were on the rate plan and NEM/NBT tariff you actually agreed to for the full period, not a mid-year plan mix-up. Confirm the imported and exported kWh totals roughly match your own monitoring app or inverter log for the same months. Confirm any Net Surplus Compensation line uses your utility's stated rate — PG&E's roughly $0.02 to $0.04/kWh CPUC rate, SCE's wholesale NSC rate, or SDG&E's ACC-to-NSC adjustment — rather than an unfamiliar number. And confirm that new equipment added partway through the cycle, such as an EV charger, battery, or extra panels, is only affecting usage from its install date forward, not the full 12 months.

If the true-up bill looks wrong

Call your utility's solar or NEM billing line first with your account number and the specific line item you're questioning, and ask for a re-review. Keep your own export and import totals from your monitoring app as your side of the record. If the utility's customer service can't resolve it, the CPUC accepts a complaint once you've tried that first — its own guidance states that if you cannot resolve the problem after talking with the utility's customer service, you may file an informal complaint with the Commission. That path covers PG&E, SCE, and SDG&E, which the CPUC regulates; LADWP and other municipal utilities run their own separate dispute process. A payment arrangement is a different option from a dispute: it's for a balance you agree is correct but can't pay all at once.

NEM 2.0 and net billing settle different things at true-up

The CPUC describes NEM 1.0 and NEM 2.0 as annual billing with an annual true-up: both charges and credits roll over for 12 months, so a winter shortfall can wait on the account until the settlement. That is why a NEM 2.0 true-up can be large. Watch the year-to-date energy charges on each monthly statement to see where it is heading.

Net billing, the tariff for PG&E, SCE and SDG&E applications since April 15, 2023, bills monthly. The CPUC says payment is due each month so customers are not surprised by a large annual bill after their true-up date. Extra credits in a sunny month roll forward until the annual true-up, which then settles what is left.

What leftover solar credit is worth at true-up

If you exported more than you used over the 12 months, the surplus is paid at net surplus compensation. The CPUC says that rate is based on the recent market price of energy, was set in Decision 11-06-016 under AB 920, and is about $0.02 to $0.03 per kWh. PG&E puts its current rate at about $0.02 to $0.04, works out eligibility automatically, and resets any remaining credits to zero before the next 12-month cycle.

SCE lists two groups as ineligible for its net surplus compensation: Community Choice Aggregation customers and Direct Access customers. If a CCA supplies your power, read its own solar page for how it settles the generation side.

The lesson for sizing: a kilowatt-hour you bank to the true-up is paid far less than one you use at home, so a system built to pile up credits does not pay.

Charges a true-up cannot wipe out

Some lines sit outside the netting. PG&E says its Base Services Charge, about $24 a month for most residential customers since March 2026, is not eligible to be offset by monthly generation credits; CARE, FERA and deed-restricted affordable housing customers pay a reduced charge. SCE says its solar credits can reduce certain charges, but fixed fees, non-bypassable charges and taxes are not eligible for reduction. Budget for those lines every month, whatever the credit balance.

Keep the next true-up predictable

Find your true-up month on the statement and mark it. Each month, compare the year-to-date energy charges with the same point last year. Check production against the installer's estimate before winter, not after the bill. Move flexible use, such as laundry, pool pumps and EV charging, into sunny hours, because on a time-of-use rate the hour matters as much as the kilowatt-hour. If the balance keeps rising, work through the causes above before adding panels or a battery.