BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2228
                                                                  Page  1

          Date of Hearing:   May 15, 2002

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Darrell Steinberg, Chair

                 AB 2228 (Negrete-McLeod) - As Amended:  May 9, 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  
            electrical corporation who uses a biogas electrical generating  
            facility, with a system capacity of one megawatt (MW) or less,  
            that produces electricity by manure methane production or as a  
            byproduct of the anaerobic digestion of bio-solids and animal  
            wastes, and is intended primarily to offset part or all of the  
            customer's own electrical requirements. 

          2)Requires the electrical corporations to file with the Public  
            Utilities Commission a net energy metering tariff for program  
            participants. 

          3)Relieves the electrical corporations from providing net  
            metering services in the pilot program once the combined total  
            biogas generation provided by the eligible biogas  
            customer-generators in their service territory equals 5 MW.

           FISCAL EFFECT  

          Minor absorbable special fund costs for the PUC to review  
          tariffs developed pursuant to the pilot program.

           COMMENTS  

           Background and Purpose  . Chapter 369, Statutes of 1995 (SB 656,  








                                                                  AB 2228
                                                                  Page  2

          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