BILL ANALYSIS
AB 2228
Page A
Date of Hearing: April 15, 2002
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Roderick D. Wright, Chair
AB 2228 (Negrete McLeod) - As Amended: April 11, 2002
SUBJECT : Public utilities: net energy metering.
SUMMARY : Establishes a pilot program for users of agricultural
biogas digesters to participate in utility net energy metering
programs. Specifically, this bill :
1)Defines an eligible customer-generator as a customer of an
electric service provider (ESP) who uses a biogas electrical
generating facility, with a system capacity of one megawatt
(MW) or less, located on the customer's premises, is
interconnected and operates in parallel with the electric
grid, and is intended primarily to offset part or all of the
customer's own electrical requirements.
2)Requires eligible participants in the pilot program to have
received all or part of the funding for the biogas generation
system from state or federal government sources for the new
biogas digester equipment.
3)Requires program participants to abide by the terms and
conditions contained within the applicable net energy metering
contract or tariff.
4)Relieves ESP from providing net metering services in the pilot
program once the combined total biogas generation provided by
the eligible biogas customer-generators in the ESP's service
territory equals 10 megawatts.
EXISTING LAW:
1)Requires every ESP to develop a standard contract or tariff
providing for net energy metering, to be available to eligible
customer-generators.
2)Defines "net energy metering" as measuring the difference
between electricity supplied through the electric grid, and
electricity generated by an eligible customer-generator, and
fed back to the electric grid over a 12-month period.
AB 2228
Page B
3)Defines "eligible customer-generator" as a customer of an ESP
who uses a solar or a wind turbine electrical generating
facility, or a hybrid system of both, with a system capacity
of one MW or less,<1> located on the customer's premises, is
interconnected and operates in parallel with the electric
grid, and is intended primarily to offset part or all of the
customer's own electrical requirements.
4)Appropriates $15 million in grants to be used for pilot
projects designed to encourage the development of biogas
digestion power production technologies.
FISCAL EFFECT : Unknown.
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.
In 1998, AB 1755 (Keeley), [Chapter 855, Statutes of 1998],
clarified the definition of net energy metering and expanded the
eligibility for net energy metering. More recently, AB 918
(Keeley), [Chapter 1043, Statutes of 2000], and AB 29X1 (Kehoe),
[Chapter 8, Statutes of 2001], modified the net metering
program, adding temporary provisions to expand eligible customer
classes to include all commercial, industrial and agricultural
customers, and increased the allowable facility size to 1 MW.
Project size
Under the existing net metering program, larger projects (up to
1 MW) are net metering-eligible through the end of this year, at
which time the maximum size of a project eligible for net
metering is 10 kilowatts. This measure allows agricultural
biogas digester-generator projects up to 1 MW in size, raising
subsidy issues.
Burdens vs. benefits
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<1> After January 1, 2003, only customers with system capacity
of 10 kilowatts or less are eligible for net metering.
AB 2228
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At last week's hearing, several Members of the Committee
discussed views about what appropriate Legislative and public
policy should be concerning distributed generation, net metering
and other special energy programs and incentives that are
subsidized to a greater or lesser degree by other
non-participating ratepayers.
In general, Members suggested that the beneficiaries of these
incentives and subsidies should themselves provide benefits to
the ratepayers or the state in return for those enjoyed -- or at
least do no economic harm to the remaining customers on the
grid. Examples might be, providing power to the grid during
peak demand times of the day, agreeing to power interruption
during times when energy reserves are deficient.
Last year the Legislature enacted SB X1 5<2> (Sher), which among
other things appropriated $15 million in grants for pilot
projects that encourage biogas digestion power production
technologies.
Sponsors of this measure have indicated willingness to advance
the policies articulated in SB X1 5, which requires distribution
of grant funds to projects offering "immediate benefits in peak
energy demand reduction and more efficient use of energy," even
though all grants funds under that bill may have already been
encumbered.
The sponsors are considering things such as, further limits to
the project-specific load, as well as service territory-wide
megawatt limits, and living under a "time of use" tariff pricing
and billing contract.
REGISTERED SUPPORT / OPPOSITION :
Support
Inland Empire Utilities Agency
Opposition
California Solar Energy Industries Association
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083
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<2> Chap. 7, Stats. 2001
AB 2228
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