BILL ANALYSIS 1
1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
AB 594 - Leno Hearing Date: June 22, 2004
A
As Amended: March 2, 2004 FISCAL/URGENCY
B
5
9
4
DESCRIPTION
This bill requires Pacific Gas and Electric (PG&E) to credit the
City and County of San Francisco for any excess electricity
exported to the PG&E grid from up to 5 megawatts of proposed
solar generation facilities that would serve municipal
facilities in San Francisco. The required credit is equivalent
to the generation component of the appropriate time-of-use rate
for the electricity, plus an "adder," to be determined by the
California Public Utilities Commission (CPUC), to reflect the
locational and environmental value of the generation.
BACKGROUND
SB 656 (Alquist), Chapter 369, Statutes of 1995, required all
electric utilities to buy back any electricity generated by a
customer-owned solar or wind 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 backward, making it equivalent to the customer
using less electricity.
Net metering was initially permitted for systems up to 10
kilowatts making it suitable for residential-sized applications
(a typical residential net-metered system is 2 - 4 kilowatts).
The total amount of capacity that could be net metered was
capped at 0.1 percent of the utility load. AB 29X (Kehoe),
Chapter 8, Statutes of 2001, expanded the net metering program
to large commercial and industrial customers by raising the
maximum size of the net-metered system to 1 megawatt and lifting
the cap on total net metered capacity. The provisions of AB 29X
relating to net metering were to sunset on January 1, 2003, but
were subsequently extended by AB 58 (Keeley), Chapter 836,
Statutes of 2002, which also replaced the cap at 0.5 percent of
utility peak load.
Because most municipal load in San Francisco is served by
electricity from Hetch Hetchy Water and Power (delivered via
PG&E's transmission and distribution system), the load is not
eligible for net metering. This bill creates a surrogate
program designed for San Francisco municipal load. The bill
allows solar facilities to get credit for excess electricity
production under a limited form of net-metering, in which PG&E
pays for excess electricity at the time-of-use generation rate,
rather than the full retail rate.
COMMENTS
Accident of existing laws prevents San Francisco from being
compensated for excess solar power. San Francisco's municipal
load is served via a longstanding wholesale wheeling arrangement
with PG&E, where most of the power comes from San Francisco's
Hetch Hetchy project and the balance is purchased at wholesale.
Existing net metering policies don't accommodate San Francisco's
unique arrangement. Unless San Francisco becomes a community
choice aggregator, it can't sell solar power to retail customers
due to the suspension of direct access. Without this bill, San
Francisco would have to use all solar generation on site - it
would not be compensated for any excess. What this bill
proposes is consistent with existing net metering statutes,
except the credit San Francisco will get is less (generation
component of rate) than a customer eligible for net metering
would get (full retail rate). If San Francisco establishes
itself as a community choice aggregator (which would allow it to
sell its power to retail customers), this bill would become
inoperative.
PRIOR VOTES
Assembly Floor (56-19)*
Assembly Appropriations Committee (20-4)*
Assembly Natural Resources Committee
(9-1)*
*Votes reflect a previous, unrelated version of the bill.
POSITIONS
Sponsor:
San Francisco Public Utilities Commission
Support:
Bluewater Network
California Solar Energy Industries Association
City and County of San Francisco
Environment California
Greenpeace
Sierra Club California
Vote Solar Initiative
Oppose:
None on file
Lawrence Lingbloom
AB 594 Analysis
Hearing Date: June 22, 2004