BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2228
                                                                  Page  1

          Date of Hearing:   May 8, 2002

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Darrell Steinberg, Chair

               AB 2228 (Negrete-McLeod) - As Amended:  April 23, 2002 

          Policy Committee:                              Utilities and  
          Commerce     Vote:                            16-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill establishes a pilot program, until January 2006, for  
          entities producing energy using biogas digester energy systems  
          to participate in utility net 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 program participants to abide by the terms and  
            conditions contained within the applicable net energy metering  
            contract or tariff.

          3)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, but also limits  
            the total megawatts under the program for all ESPs to 15  
            megawatts.

           FISCAL EFFECT  

          Minor absorbable special fund costs for the PUC to review any  
          tariffs developed by the ESPs for a customer-generator using  
          biogas electrical generation under the pilot program.









                                                                  AB 2228
                                                                  Page  2

           COMMENTS  

          Background and Purpose  . Chapter 369, Statutes of 1995 (SB 656,  
          Alquist), required 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.  Chapter 855, Statutes of 1998 (AB 1755,  
          Keeley), clarified the definition of net energy metering and  
          expanded the eligibility for net energy metering.  Chapter 1043,  
          Statutes of 2000 (AB 918, Keeley), and Chapter 8, Statutes of  
          2001 (AB 29X1, Kehoe), 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. 

          Under the existing net metering program, 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  
          will be only 10 kilowatts.  This bill allows agricultural biogas  
          digester-generator projects up to 1 MW in size through 2005 as a  
          pilot project.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081