BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 58|
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THIRD READING
Bill No: AB 58
Author: Keeley (D), et al
Amended: 8/6/02 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 8-0, 6/25/02
AYES: Bowen, Morrow, Alarcon, Battin, Dunn, Murray, Sher,
Vasconcellos
ASSEMBLY FLOOR : 69-0, 1/22/02 - See last page for vote
SUBJECT : Net energy metering
SOURCE : Author
DIGEST : This bill makes a number of substantive changes
to existing net metering rules.
ANALYSIS : Current law requires all energy service
providers, which include investor-owned electric utilities
(IOUs), municipal utilities, or any other entity offering
retail electric service, to credit all electricity
generated by a customer-owned solar or wind system against
the customer's usage of electricity sold by the utility, a
procedure known as "net metering".
Current law allows net metering customers to employ solar
or wind electric generation systems as large as 1 megawatt
(Mw). This size limitation is reduced to 10 kilowatts (kw)
as of January 1, 2003.
CONTINUED
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This bill deletes that sunset, allowing net metering for
systems up to 1 Mw to continue indefinitely.
Current law doesn't limit the overall amount of net metered
capacity in any energy service provider's service area. As
of January 1, 2003, the overall amount of net metered
capacity is limited to one-tenth of one percent of the peak
electrical demand for each utility.
This bill raises the total cap on net metered capacity
tenfold, to one percent of the peak electric demand for
each energy service provider.
This bill requires eligible net metered customers with a
capacity of greater than 10 kw but less than 1 Mw to use
time-of-use meters to measure electricity consumed and
generated, and to value the electricity appropriate to the
time of use. The electricity produced by the net metered
customer is credited at the value for electric generation
at that time of use.
This bill requires that net metered customers are
responsible for non-generation charges based on the net
kilowatt hours (kwh) consumed.
This bill requires energy service providers to make all
necessary forms and contracts for net metered service
available on the Internet.
This bill requires the State Public Utilities Commission
(PUC) to assess the economic and environmental costs and
benefits of net metering and report to the Legislature by
January 1, 2007.
Background
In 1995, the Legislature passed SB 656 (Alquist), Chapter
369, Statutes of 1995, which required all electric
utilities to buy back any electricity generated by a
customer-owned solar and wind systems system. This
buy-back program is known as "net metering" because the
electricity purchases of the customer are netted against
the electricity generated by the customer's solar electric
system. The generated electricity spins the meter
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backward, making it equivalent to the customer using less
electricity. Thirty-five states have net metering programs
today with the maximum size of the net metered system
limited to 100 kw.
Net metering was initially permitted for systems up to 10
kw making it suitable for residential-sized applications.
(A typical residential net-metered system is 2 kw - 4 kw).
The total amount of capacity that could be net metered was
capped at 0.1 percent of the utility load. In 2001, the
Legislature passed AB 29X (Kehoe), Chapter 8, Statutes of
the First Extraordinary Session of 2001, which expanded the
net metering program to large commercial and industrial
customers by raising the maximum size of the net-metered
system to 1 Mw and lifting the cap on total net metered
capacity. Because of concerns over the effect of these
changes, the provisions of AB 29X relating to net metering
were sunsetted on January 1, 2003.
There are about 2,200 net-metered customers today, with
pending applications for an additional 700. Total
net-metered capacity is about 6 Mw, with an additional 3 Mw
pending. Including the pending projects, total net-metered
capacity in California is only about 0.02 percent of
utility peak load.
This bill makes a number of substantive changes to existing
net metering rules. Conceptually, the bill changes the
concept of net metering from one where the net metered
customer is treated the same as a non-net metered customer
to one where the net metered customer is considered a
generator whose output is paid for at the utility's cost.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/6/02)
Abel Greenhouse Company
Brummitt Energy Associates Inc.
CAL-AIR, Inc.
California Construction Authority
California Solar Energy Industries Association
City of Arcata
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City of Santa Rosa
Clean Power Campaign
Coalition of California Utility Employees
Dale Enterprises
Enertron Consultants
Harmony Farm Supply & Nursery
International Brotherhood of Electrical
Workers, Local 332
Marin County Community Development
Agency
National Solar Power
Offline Independent Energy Systems
Office of Ratepayer Advocates
PFG Energy Capital
Powerlight Solar Electric Systems
Real Goods Design & Consulting Group
Schott Applied Power
Shell Solar Industries
Short Electric
Sierra Club
Solar Depot
Solar Technologies
UNI-SOLAR
Verve Enterprises
15 Individuals
ASSEMBLY FLOOR
AYES: Aanestad, Alquist, Aroner, Ashburn, Bogh, Briggs,
Calderon, Bill Campbell, Canciamilla, Cardenas, Cardoza,
Cedillo, Chan, Chavez, Chu, Cogdill, Corbett, Correa,
Cox, Daucher, Diaz, Dickerson, Dutra, Firebaugh, Florez,
Frommer, Goldberg, Havice, Hollingsworth, Jackson,
Keeley, Kehoe, Kelley, Koretz, La Suer, Leach, Leonard,
Liu, Longville, Lowenthal, Maddox, Maldonado, Matthews,
Migden, Nakano, Negrete McLeod, Oropeza, Robert Pacheco,
Rod Pacheco, Pavley, Pescetti, Reyes, Runner, Salinas,
Shelley, Simitian, Steinberg, Strickland, Strom-Martin,
Thomson, Vargas, Washington, Wayne, Wiggins, Wright,
Wyland, Wyman, Zettel, Hertzberg
NC:kb 8/7/02 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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