BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1214
                                                                  Page  1

          Date of Hearing:   May 7, 2003

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Darrell Steinberg, Chair

                  AB 1214 (Firebaugh) - As Amended:  April 28, 2003 

          Policy Committee:                               
          UtilitiesVote:13-0

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill requires every electrical corporation to file a  
          standard tariff with the Public Utilities Commission (PUC) by  
          March 2004, providing for net metering for eligible fuel cell  
          customer-generators, until January 2009, up to a maximum of 75  
          megawatts for each electrical corporation's service territory.

           FISCAL EFFECT  

          Absorbable special fund costs to the PUC for reviewing tariffs  
          submitted by the electrical corporations.

           COMMENTS  

           Background and Purpose  .  SB 656 (Alquist)-Chapter 369, Statutes  
          of 1995, required the electric utilities to buy back any  
          electricity generated by a customer-owned solar and wind  
          systems.  This buy-back program is known as "net metering"  
          because the customer's electricity purchases are credited  
          against the electricity generated by the customer's power  
          system. The generated electricity spins the meter backward,  
          making it equivalent to the customer using less electricity.  AB  
          2228 (Negrete McLeod)-Chapter 845, Statutes of 2002, established  
          a net metering pilot program for customer-generators producing  
          energy using biogas digester energy systems.  This bill creates  
          a similar pilot program for net metering of energy generated  
          using fuel cells.

          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  








                                                                  AB 1214
                                                                  Page  2

          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. 

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