BILL ANALYSIS
AB 58
Page A
PROPOSED CONFERENCE REPORT NO. 1 - August 27, 2002
AB 58 (Keeley)
As Amended August 6, 2002
Majority vote
------------------------------------------------------------------
|ASSEMBLY: | |(January 22, |SENATE: | |(August 14, |
| | |2002) | | |2002) |
------------------------------------------------------------------
(vote not relevant) (vote not
relevant)
ASSEMBLY CONFERENCE VOTE : 3-0 SENATE CONFERENCE VOTE :3-0
-----------------------------------------------------------------
|Ayes:|Keeley, Pescetti, Wright |Ayes:|Morrow, Bowen, Alarcon |
| | | | |
| | | | |
-----------------------------------------------------------------
Original Committee Reference: U. & C.
SUMMARY : Changes existing rules applicable to net electricity
metering. Specifically, the conference committee amendments :
1)Eliminate a sunset on net-metering authorization in existing
law, thereby allowing net metering for systems up to one (1)
megawatt (MW) to continue indefinitely.
2)Require the California Energy Commission (CEC), in
administering the public goods charge (PGC)<1> funds, to
establish a separate rebate for eligible emerging renewable
technologies for affordable housing projects, allowing CEC to
set reasonable limits on the total amount of funds so
dedicated.
3)Establish "co-metering" as an option for local publicly owned
electric utilities, whereby the utility can elect to apply a
---------------------------
<1> Existing law requires public utilities to collect a separate
rate charge to fund cost-effective energy efficiency, public
interest renewable energy research, and related "public goods"
programs.
AB 58
Page B
generation-to-generation<2> energy and time-of-use<3> credit
formula.
4)Raise the cap on the total amount of net-metered capacity from
one-tenth of 1% (0.1%) of the peak electrical demand for each
utility to one half of 1% (0.5%) of the peak electric demand
for each energy service provider.
5)Provide that if the California Public Utilities Commission
(PUC) determines that there are cost or revenue obligations
for an electric corporation that may not be recovered from
customer-generators, those obligations shall not be shifted to
any other customer class.
6)Provide that net-metering and co-metering customers shall not
be exempt from PGC.
7)Provide that net-metering customers shall reimburse bond
related and power purchase costs of the Department of Water
Resources that are attributable to net-metering customers.
8)Exempt from the net-metering program any local publicly owned
electric utility that serves greater than 750,000 customers
and that also conveys water to its customers -- i.e., the City
of Los Angeles Department of Water & Power.
9)Grandfather existing net-metering projects and those for which
local and state permits have been acquired by entitling those
projects to the net metering benefits in place at the time.
10)Apply co-metering to wind energy projects greater than 50
kilowatts.
11)Require PUC to assess the economic and environmental costs
and benefits of net metering and report to the Governor and
the Legislature by January 1, 2007.
---------------------------
<2> Under this billing system, all the electricity going in gets
billed at full retail, which includes transmission costs, etc,
that the utility must account for, while the electricity going
out to the utility is billed at a rate covering only the cost of
generation of the electricity.
<3> A typical time-of-use customer would pay a higher electrical
rate during peak-use hours, and in return would be charged a
lower rate at night, in the morning, and on weekends.
AB 58
Page C
EXISTING LAW :
1)Requires all energy service providers, which include
investor-owned electric utilities, municipal utilities, and
the like, to credit all electricity generated by a
customer-owned solar or wind system against the customer's
usage of electricity sold by the utility, which is known as
"net metering."
2)Allows net metering customers to employ solar or wind electric
generation systems as large as (1) MW. Effective January 1,
2003, the size limitation is reduced to 10 kW.
3)Limits, effective January 1, 2003, the overall amount of net
metered capacity to one-tenth of one percent of the peak
electrical demand for each utility.
AS PASSED BY THE ASSEMBLY , this bill:
1)Required electric service providers to process a net metering
application in the same time frame within which requests for
new electric service from similarly situated customers are
handled, but not to exceed one month in any event.
2)Directed electric service providers that are unable to process
the request within the specified time frame to notify
customers-generators and PUC of the reason therefor, and the
date on which the request will be completed.
3)Required electric service providers to make all necessary
forms and contracts for net energy metering available for
download from the Internet.
4)Specified that customer generation of electricity, entitled
under current law to net metering terms in effect on the date
of installation, to be so entitled regardless of a change in
customer or ownership of the energy system.
The Senate amendments :
1)Eliminate a sunset on authorization for net metering in
AB 58
Page D
existing law, thereby allowing net metering for systems up to
one (1) megawatt (MW) to continue indefinitely.
2)Raise the cap on the total amount of net-metered capacity from
one-tenth of one percent of the peak electrical demand for
each utility to one percent of the peak electric demand for
each energy service provider.
3)Require eligible net-metered customers with a capacity of
greater than 10 kilowatts (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.
4)Credit the electricity produced by the net-metered customer at
the value for electric generation at that time of use.
5)Provide that net-metered customers must pay the non-generation
related charges of the utility based on the net kilowatt-hours
consumed.
6)Require PUC to assess the economic and environmental costs and
benefits of net metering and report to the Legislature by
January 1, 2007.
COMMENTS : In 1995, the Legislature passed SB 656 (Alquist),
Chapter 369, Statutes of 1995, requiring electric utilities to
buy back any electricity generated by a customer-owned solar
electric system. This buy-back program is known as "net
metering" because the net electricity generated by a customer is
credited against electricity consumed.
At the outset, net metering was allowed for systems up to 10 kW
capacity, making it suitable for residential applications.
Typically, a residential net-metered system is from (2) to (4)
kW.
In 2001, the Legislature passed AB X1 29 (Kehoe), Chapter 8,
Statutes of 2001, the First Extraordinary Session, 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 by lifting the cap on total
net metered capacity. These provisions sunset January 2003, but
are continued indefinitely by this bill.
AB 58
Page E
Photovoltaic (PV) solar system cells are generally made from
thin wafers of silicon, the second most abundant substance on
earth, the same substance that makes up sand. To make the
wafers, the silicon is heated to extreme temperatures, and
chemicals, usually boron and phosphorous, are added. The
addition of these chemicals makes the silicon atoms unstable
(the electrons less tightly held). When photons of sunlight hit
a solar panel, some are absorbed into the solar cells, where
their energy releases some of the modified silicon's electrons.
Introducing batteries to a PV system allows electricity to be
stored when the sun is shining. This electricity can then be
used to provide power after the sun goes down.
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083
FN: 0007615