BILL ANALYSIS
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THIRD READING
Bill No: AB 26XX
Author: Calderon (D)
Amended: 8/28/01 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 9-0, 8/29/01
AYES: Bowen, Morrow, Alarcon, Battin, Dunn, Murray,
Poochigian, Sher, Vincent
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : Not relevant
SUBJECT : Electrical energy: electrical corporations:
tariffs
SOURCE : Author
DIGEST : This bill requires the California Public
Utilities Commission, when establishing new tariffs for
customers using distributed energy resources, to consider
specified factors so that customers with more efficient
units pay a lower cost.
ANALYSIS : Existing law provides five- and ten-year
waivers of "stand charges" for specified distributed
generation (DG) installations and requires the California
Public Utilities Commission (PUC) to require investor-owned
utilities to establish new, cost-based tariffs applicable
to customers using DG.
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This bill requires the PUC, in establishing these new
tariffs, to consider coincident peak load and the
reliability of a customer's DG, so that customers with more
reliable DG and those that reduce peak demand pay lower
rates.
Background
DG is typically considered to be a site-specific generation
resource which is owned by the customer and used to meet
some or all of that customer's energy needs, including
electricity and, in many applications, heating.
Examples of DG units range from a residential rooftop solar
array to a collection of large combustion turbines at a
commercial office building or industrial facility. DG can
be used for reliability back-up (standby or emergency
generation), to meet base load requirements, to meet
peaking requirements, or to meet all on-site requirements,
and sell power adjacent sites ("over the fence"
transactions).
For a customer that owns a DG unit that is connected to the
utility distribution system, on-site generation is
complemented by power purchased through, and delivered by,
the utility. Depending on the reliability, capacity and
purpose of the DG unit, the customer may, at various times,
buy some or all of is power from the utility, or "sell"
power back to the utility through a net-metering
arrangement.
SB 28X (Sher), Chapter 12, Statutes of 2001, included
provisions establishing five- and ten-year waivers of
"standby charges" for specified DG installations and
requiring investor-owned utilities to establish new,
cost-based tariffs applicable to customers using DG.
Comments
More of the Same . SB 28X was constructed to reward the
most efficient, reliable, peak demand-reducing DG
installations by offering a longer waiver for more
efficient units and requiring customers to pay real-time
rates to qualify for the waiver. This bill applies a
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similar principle to the cost-based tariffs that will be in
effect after the waivers established by SB 28X expire.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/29/01)
Pacific Gas and Electric Company
NC:cm 9/7/01 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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