BILL ANALYSIS
AB 1214
Page A
Date of Hearing: April 21, 2003
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Sarah Reyes, Chair
AB 1214 (Firebaugh) - As Introduced: February 21, 2003
SUBJECT : Net energy metering: fuel cell customer-generators.
SUMMARY : Requires electrical corporations to provide net energy
metering to fuel-cell customer generators. Specifically, this
bill :
1)Requires every electrical corporation to file a standard
tariff with the California Public Utilities Commission (PUC)
providing for net metering for eligible fuel cell
customer-generators.
2)Provides that net metering is available to all eligible fuel
cell customer-generators on a first-come, first-serve basis,
until the total cumulative rated generating capacity used by
net metered fuel cell generators equals 75 megawatts (MW)
within the service territory of the electrical corporation.
3)Prohibits the addition of any additional demand charge,
standby charge, customer charge or any other charge to the net
metering tariff for fuel cell customers, and declares these
charges as contrary to the intent of the Legislature.
4)Specifies that net energy metering is the difference between
the electricity supplied to the eligible customer-generator
and the electricity generated by that customer and sent to the
electric grid.
5)Makes the net energy metering customer-generator responsible
for expenses involved in purchasing the two-directional time
of use meter.
6)Defines an eligible fuel cell customer-generator as a customer
of an electrical corporation that:
a) Uses a fuel cell electricity generating system of not
more than 1 MW that is located on or adjacent to the
customer's premises.
b) Receives local, state or federal funds, or who
AB 1214
Page B
self-finances projects designed to encourage development of
fuel cell electric generating facilities.
c) Uses technology that is defined in law as "ultra clean
and low-emission distributed generation."
7)Sunsets the provisions of the bill on January 1, 2009.
EXISTING LAW :
1)Establishes a pilot net metering program for customer-owned
electric generation projects fueled by manure methane
production that are less than 1 MW.
2)Provides for permanent net metering of solar photovoltaic
systems up to 1 MW capacity.
3)Establishes "co-metering" as an option for local publicly
owned electric utilities, whereby the utility can elect to
apply a generation-to-generation<1> energy and time-of-use<2>
credit formula.
4)Defines "ultra-clean and low-emission distributed generation"
to mean any electric generation technology commencing initial
operation between January 1, 2003, and December 31, 2005 that
produces zero emissions during its operation or produces
emissions during its operation that are equal to or less than
the 2007 State Air Resources Board emission limits for
distributed generation.
FISCAL EFFECT : Unknown.
COMMENTS :
Fuel Cells
---------------------------
<1> Under this billing system, all the electricity going in gets
billed at full retail, which includes transmission costs, etc.,
that the utility must account for, while the electricity going
out to the utility is credited at a rate that covers only the
cost of generation of the electricity.
<2> A typical time-of-use customer would pay a higher electrical
rate during peak-use hours, and in return would be charged a
lower rate at night, in the morning, and on weekends.
AB 1214
Page C
A fuel cell works like a battery but does not run down or need
recharging. It will produce electricity and heat as long as fuel
(hydrogen) is supplied. A fuel cell consists of two electrodes
- a negative electrode (or anode) and a positive electrode (or
cathode) - sandwiched around an electrolyte. Hydrogen is fed to
the anode, and oxygen is fed to the cathode. Activated by a
catalyst, hydrogen atoms separate into protons and electrons,
which take different paths to the cathode. The electrons go
through an external circuit, creating a flow of electricity.
The protons migrate through the electrolyte to the cathode,
where they reunite with oxygen and the electrons to produce
water and heat. Fuel cells can be used to power vehicles or to
provide electricity and heat to buildings.
Net Metering
In 1995, the Legislature passed SB 656 (Alquist)<3> which
required all electric utilities to buy back any electricity
generated by a customer-owned solar and wind systems system.
This buy-back program is known as "net metering" because the
electricity purchases of the customer are credited against the
electricity generated by the customer's electric system. The
generated electricity spins the meter backward, making it
equivalent to the customer using less electricity. Thirty-five
states have net metering programs today with the maximum size of
the net-metered system limited to 100 kilowatts.
Under the biogas digester net metering pilot program<4> after
which this bill is fashioned, the net-metered customer must
employ a time-of-use meter to value both their production and
consumption of electricity, and only gets credit at the
generation rate. This bill requires fuel-cell
customer-generators to use a time of use meter, but should be
amended to specify whether the customer-generator gets credit at
the full rate or at the generation rate.
REGISTERED SUPPORT / OPPOSITION :
Support
---------------------------
<3> Chapter 369, Statutes of 1995.
<4> The biogas digester net metering program was enacted into
law in 2002 by AB 2228 (Negrete McLeod), Chapter 845, Statutes
of 2002.
AB 1214
Page D
California Cast Metals Association (sponsor)
Fuel Cell Energy, Inc.
California Coalition of Fuel Cell Manufacturers
Opposition
None on file
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083