BILL ANALYSIS
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THIRD READING
Bill No: AB 594
Author: Leno (D)
Amended: 7/21/04 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 5-1, 6/22/04
AYES: Bowen, Battin, Dunn, Murray, Sher
NOES: McClintock
NO VOTE RECORDED: Morrow, Alarcon, Vasconcellos
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : Not relevant
SUBJECT : Private energy producers: Hetch Hetchy Water
and Power
solar generation
SOURCE : San Francisco Public Utilities Commission
DIGEST : This bill authorizes a form of net energy
metering for photovoltaic systems owned and operated by the
City and County of San Francisco.
ANALYSIS : 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
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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 one 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.
This bill provides for the termination of this arrangement,
as specified.
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
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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.
In November 2001, San Francisco voters authorized the city
to issue revenue bonds to improve existing, and develop
new, renewable energy facilities. As a result, San
Francisco is developing approximately five megawatts of
photovoltaic systems to serve municipal facilities. Under
certain conditions, the photovoltaic systems could generate
power that exceeds the city's municipal electricity needs.
This bill would authorize San Francisco to see its excess
photovoltaic power to PG&E at a discount.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/4/04)
San Francisco Public Utilities Commission (source)
Bluewater Network
California Solar Energy Industries Association
City and County of San Francisco
Environment California
Greenpeace
Sierra Club California
Vote Solar Initiative
NC:sl 8/6/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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