BILL NUMBER: SB 118 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 27, 2004
AMENDED IN ASSEMBLY AUGUST 23, 2004
AMENDED IN ASSEMBLY JUNE 19, 2003
AMENDED IN SENATE MAY 7, 2003
AMENDED IN SENATE APRIL 21, 2003
INTRODUCED BY Senator Bowen
FEBRUARY 3, 2003
An act to amend Section 25744 of, to add Section 25402.10 to,
and to add Division 16.7 (commencing with Section 26420) to
, the Public Resources Code, and to amend Sections
399.15 and 2827 of 399.6, 399.8, 2827, 3345,
and 3370 of, and to add Sections 385.1 and 760 to , and to add
Chapter 8 (commencing with Section 2830) to Part 2 of Division 1
of , the Public Utilities Code, relating to solar energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 118, as amended, Bowen. Solar Energy:
renewable energy: solar energy generation.
(1) The existing Public Utilities Act requires the Public
Utilities Commission (CPUC) to require Pacific Gas and Electric
Company, San Diego Gas and Electric, and Southern California Edison
to identify a separate electrical rate component to fund programs
that enhance system reliability and provide in state benefits. This
rate component is a nonbypassable element of local distribution and
collected on the basis of usage. The funds are collected to support
cost effective energy efficiency and conservation activities, public
interest research and development not adequately provided by
competitive and regulated markets, and renewable energy resources.
Existing commission resolutions refer to the nonbypassable rate
component as a "Public Goods Charge" (PGC). Existing law requires
the State Energy Resources Conservation and Development Commission
(Energy Commission) to transfer funds collected by electrical
corporations for in-state operation and development of existing and
new and emerging renewable resources technologies into the Renewable
Resource Trust Fund, to fund specified programs. Existing law
requires that 17.5% of the money collected under the renewable energy
PGC be used to fund the Emerging Renewable Resources Account within
the Renewable Resource Trust Fund for the purpose of a multiyear,
consumer-based program to foster the development of emerging
renewable technologies in distributed generation applications.
Under the Reliable Electric Service Investments Act, the Energy
Commission was required to hold moneys collected for renewable energy
and deposited in the Renewable Resource Trust Fund until further
action by the Legislature. The act requires the Energy Commission to
create an initial investment plan, in accordance with specified
objectives, to govern the allocation of funds in the Renewable
Resource Trust Fund collected between January 1, 2002, and January 1,
2007, in order to ensure a fully competitive and self-sustaining
California renewable energy supply. Existing law requires the Energy
Commission, on or before March 31, 2006, to prepare an investment
plan proposing the application of moneys collected between January 1,
2007, and January 1, 2012, and prohibits expenditures from the
accounts within the Renewable Resource Trust Fund without further
legislative action.
This bill would enact the Solar Energy Peak Procurement Act. The
bill would except moneys expended through the Emerging Renewable
Resources Account from the requirement that the Energy Commission
prepare an investment plan on or before March 31, 2006, and would
authorize the commission to advance moneys to the Emerging Renewable
Resources Account and to expend those moneys without further
legislative action, subject to certain existing repayment provisions.
The bill would require the Energy Commission to ensure proportional
program support through the Emerging Renewable Resources Account, for
affordable housing units, within certain limits.
(2) Existing law requires the Public Utilities Commission,
in consultation with the Independent System Operator and the State
Energy Resources Conservation and Development Commission (Energy
Commission) , to adopt initiatives, on or before March 7,
2001, to reduce demand for electricity and reduce load during peak
demand periods, including differential incentives for renewable or
super clean distributed generation resources. Existing law requires
the commission, in consultation with the Energy Commission, to
administer, until January 1, 2008, a self-generation incentive
program for distributed generation resources in the same form that
exists on January 1, 2004.
Existing law requires the Energy Commission to expand and
accelerate development of alternative sources of energy, including
solar resources. Existing law requires the Energy Commission, until
January 1, 2006, and to the extent that funds are appropriated for
that purpose in the annual Budget Act, to implement a grant program
to accomplish specified goals, including making solar energy systems
cost competitive with alternate forms of energy.
This bill would create the Solar Energy Peak Procurement Fund
for expenditure, upon appropriation, for a state program for
subsidizing all customer classes for the installed cost of
grid-connected solar photovoltaic systems in the service territory of
investor-owned utilities. The bill would require the
State Energy Resources Conservation and
Development Commission, not later than July 1, 2005, to
award rebates to support the installation of grid-connected solar
energy systems, subject to a prescribed declining schedule
terminating as of January 1, 2015. The bill would require
5% of the program to be dedicated for defined affordable housing. The
bill would also require the commission to develop a zero-interest
revolving loan program by June 30, 2005, to finance grid-connected
solar energy systems for affordable housing projects. These
provisions would be known as the Solar Energy Peak Procurement Act
require the Energy Commission to ensure proportional
program support for affordable housing units, within certain limits
.
The bill would require the Public Utilities Commission
CPUC to open a proceeding to examine the relative
costs and benefits between solar rebate programs and
commission-administered interruptible demand reduction programs
to establish a program, known as the Solar Energy Peak
Procurement Program, to encourage the use of photovoltaic systems.
The bill would require the commission to fund the program by reducing
purchases of electricity, spending unallocated funds previously
authorized for demand management and interruptible programs, and
substituting a photovoltaic incentive program for less cost effective
demand management and interruptible programs.
The bill would create the Solar Peak Energy Procurement Fund for
expenditure, upon appropriation, for a state program of subsidizing
all customer classes for the installed cost grid-connected solar
photovoltaic systems in the service territory of investor-owned
utilities. The bill would also create the Solar Peak Energy
Affordable Housing Revolving Fund for the same purpose, but limited
to subsidies for defined affordable housing units . The
bill would require the Public Utilities Commission
CPUC to direct utilities to deposit a portion of electric
rate revenues in the Solar Peak Energy Peak
Procurement Fund from unallocated funds previously authorized
for demand management and interruptible programs and rates that
previously paid for those programs and that the commission
CPUC determines are less cost effective than the
photovoltaic incentive system established by the bill. The
bill would require the CPUC to make certain reports to the
Legislature.
(3) Existing law requires that the PGC be adjusted annually at a
rate equal to the lesser of the annual growth in electric commodity
sales or inflation, as defined.
This bill would require that the amounts collected to fund energy
efficiency, renewable energy, and research, development, and
demonstration during 2005 and 2006, be set at the levels established
by the CPUC for 2004, and would require that any moneys collected
above those 2004 levels during 2005 and 2006, be transferred to the
Solar Energy Peak Procurement Fund.
(4) Existing law requires each local publicly owned electric
utility to establish a nonbypassable usage based charge to fund
investments in specified public purpose programs, including energy
efficiency and conservation, investment in renewable energy
resources, research, development and demonstration programs, and
providing services for low-income electricity customers. The charge
is required to be not less than the lowest expenditure of the 3
largest electrical corporations in California based on a percentage
of revenue.
This bill would require every local publicly owned electric
utility, as defined, to establish a solar program consistent with the
Solar Energy Peak Procurement Program. Each local publicly owned
electric utility would be required to report, on an annual basis, to
its customers and to the Energy Commission, information relative to
the utility's solar program and would authorize the Energy Commission
to establish guidelines for the information to be included in the
annual report.
(5) Existing law requires a solar energy system to meet applicable
standards and requirements imposed by state and local permitting
authorities.
This bill would require that beginning January 1, 2010, a seller
of production homes, as defined, offer a solar energy system, as
defined, option to all customers negotiating to purchase a new
production home and to disclose certain information.
(2) Existing law requires the Public Utilities Commission to
establish a renewables portofolio standard requiring all electrical
corporations to procure a minimum quantity of output from renewable
energy resources, as specified. Existing law requires the commission
to implement prescribed annual procurement targets for electrical
corporations use of renewable energy resources.
This bill would specify that electricity generated from
net-metered solar energy systems shall be counted towards an
electrical corporation's annual renewable energy resource procurement
targets.
(3)
(6) Existing law requires every electric service provider,
as defined, to develop a standard contract or tariff providing for
net energy metering, and to make this contract available to eligible
customer generators, upon request. Existing law requires every
electric service provider, upon request, to make available to
eligible customer generators contracts for net energy metering on a
first-come-first-served basis until the time that the total rated
generating capacity used by eligible customer generators exceeds 0.5%
of the electric service provider's aggregate customer peak demand.
This bill would require that every electric service provider, upon
request, make available to eligible customer generators contracts
for net energy metering on a first-come-first-served basis until the
time that the total rated generating capacity used by eligible
customer generators exceeds 3% 1.5% of
the electric service provider's aggregate customer peak demand.
(4) The bill would not become operative unless Assembly Bill 2006
is enacted.
(7) Existing law authorizes the CPUC to fix the rates and charges
for every public utility, and requires that those rates and charges
be just and reasonable.
This bill would require the CPUC, in collaboration with the Energy
Commission, to develop optional time-variant electricity pricing
tariffs for all customers that are not subject to mandatory
time-variant pricing.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known, and may be cited as the Solar
Energy Peak Procurement Act.
SEC. 2. Section 25402.10 is added to the Public Resources
Code, to read:
25402.10. (a) As used in this section, the following terms have
the following meanings:
(1) "kW" means kilowatts as measured from the alternating current
side of the solar energy system inverter consistent with Section 223
of Title 15 of the United States Code.
(2) "Production home" means a single family residence constructed
as part of a development of at least 50 homes per project that is
intended or offered for sale.
(3) "Solar energy system" means a photovoltaic solar collector or
other photovoltaic solar energy device that has a primary purpose of
providing for the collection, and distribution of solar energy for
the generation of electricity, and that produces at least 1 kW
alternating current rated peak electricity.
(b) A seller of production homes shall, beginning January 1, 2010,
offer a solar energy system option to all customers that enter into
negotiations to purchase a new production home constructed on land
for which an application for a tentative subdivision map has been
deemed complete on or after January 1, 2007, and shall disclose the
following:
(1) The total installed cost of the solar energy system option.
(2) The estimated cost savings associated with the solar energy
system option, as determined by the commission.
SEC. 4. Section 25744 of the Public Resources Code is amended to
read:
25744. (a) Seventeen and one-half percent of the money collected
pursuant to the renewable energy public goods charge shall be used
for a multiyear, consumer-based program to foster the development of
emerging renewable technologies in distributed generation
applications.
(b) Any funds used for emerging technologies pursuant to this
section shall be expended in accordance with the report,
subject to all of the following requirements:
(1) Funding for emerging technologies shall be provided through a
competitive, market-based process that shall be in place for a period
of not less than five years, and shall be structured so as to allow
eligible emerging technology manufacturers and suppliers to
anticipate and plan for increased sale and installation volumes over
the life of the program.
(2) The program shall provide monetary rebates, buydowns, or
equivalent incentives, subject to subparagraph (C), to purchasers,
lessees, lessors, or sellers of eligible electricity generating
systems. Incentives shall benefit the end-use consumer of renewable
generation by directly and exclusively reducing the purchase or lease
cost of the eligible system, or the cost of electricity produced by
the eligible system. Incentives shall be issued on the basis of the
rated electrical generating capacity of the system measured in watts,
or the amount of electricity production of the system, measured in
kilowatthours. Incentives shall be limited to a maximum percentage
of the system price, as determined by the commission.
(3) Eligible distributed emerging technologies are photovoltaic,
solar thermal electric, fuel cell technologies that utilize renewable
fuels, and wind turbines of not more than 50 kilowatts rated
electrical generating capacity per customer site, and other
distributed renewable emerging technologies that meet the emerging
technology eligibility criteria established by the commission.
Eligible electricity generating systems are intended primarily to
offset part or all of the consumer's own electricity demand, and
shall not be owned by local publicly owned electric utilities, nor be
located at a customer site that is not receiving distribution
service from an electrical corporation that is subject to the
renewable energy public goods charge and contributing funds to
support programs under this chapter. All eligible electricity
generating system components shall be new and unused, shall not have
been previously placed in service in any other location or for any
other application, and shall have a warranty of not less than five
years to protect against defects and undue degradation of electrical
generation output. Systems and their fuel resources shall be located
on the same premises of the end-use consumer where the consumer's
own electricity demand is located, and all eligible electricity
generating systems shall be connected to the utility grid in
California. The commission may require eligible electricity
generating systems to have meters in place to monitor and measure a
system's performance and generation. Only systems that will be
operated in compliance with applicable law and the rules of the
Public Utilities Commission shall be eligible for funding.
(4) The commission shall limit the amount of funds available for
any system or project of multiple systems and reduce the level of
funding for any system or project of multiple systems that has
received, or may be eligible to receive, any government or utility
funds, incentives, or credit.
(5) In awarding funding, the commission may provide preference to
systems that provide tangible demonstrable benefits to communities
with a plurality of minority or low-income populations.
(6) In awarding funding, the commission shall develop and
implement eligibility criteria and a system that provides preference
to systems based upon system performance, taking into account
factors, including, but not limited to, shading, insulation levels,
and installation orientation.
(7) At least once annually, the commission shall publish and make
available to the public the balance of funds available for emerging
renewable energy resources for rebates, buydowns, and other
incentives for the purchase of these resources.
(c) The commission shall ensure proportional program support, not
to exceed 10 percent of overall program funds, for the installation
of solar energy systems on the new construction and rehabilitation of
affordable housing units, including single and multifamily
residential housing. In addition, the commission shall ensure that
additional and proportional resources, not to exceed 5 percent of
overall program funds, are provided for the unique needs of
subsidized low-income housing through targeted financing mechanisms
and support, including a revolving loan fund, technical assistance,
and other needs as identified in consultation with the California Tax
Credit Allocation Committee.
(d) Nonresidential rebates awarded pursuant to subdivision (b) or
funded through the Solar Energy Peak Procurement Program pursuant to
Chapter 8 (commencing with Section 2830) of Part 2 of Division 1 of
the Public Utilities Code, shall be paid directly to the contractor
who will perform or subcontract the construction work pursuant to an
agreement between the commission and the contractor.
Division 16.7 (commencing with Section 26421) is added to the
Public Resources Code, to read:
DIVISION 16.7. SOLAR ENERGY SYSTEM REBATES
26421. (a) "Affordable housing," as used in this division, means
a housing project undertaken pursuant to Section 50052.5, 50053, or
50199.4 of the Health and Safety Code.
(b) "Solar energy system," as used in this division, means a
photovoltaic solar collector or other photovoltaic solar energy
device that has a primary purpose of providing for the collection,
storage, and distribution of solar energy for the generation of
electricity. A solar energy system shall have a minimum manufacturer'
s warranty, as determined by the commission, and shall meet all
applicable safety and performance standards established by the
National Electrical Code, the institute of Electrical and Electronics
Engineers, and accredited testing laboratories such as Underwriters
laboratories and, where applicable, rules of the Public Utilities
Commission regarding safety and reliability.
26422. (a) Not later than July 1, 2005, the commission shall
award rebates to support the installation of grid-connected solar
energy systems and shall adopt a schedule of declining rebates for
this purpose, subject to all of the following:
(1) The maximum rebate in year one shall be no greater than
three dollars ($3) two dollars eighty cents
($2.80) per watt, and shall decline each year thereafter as
determined by the commission.
(2) The rebate shall be zero as of January 1, 2015.
(b) The program shall be funded through the Solar Peak
Energy Energy Peak Procurement Fund as provided
in Section 2832 2834 of the Public
Utilities Code.
(c) Five percent of funding received for this program shall be
dedicated to rebates for reducing the cost of grid-connected solar
energy systems for affordable housing.
(d) By June 30, 2005 the commission shall also develop a
zero-interest revolving loan program to finance grid-connected solar
energy systems for affordable housing projects. This program shall
be funded from the Solar Peak Energy Affordable Housing Revolving
Fund as provided in Section 2832 of the Public Utilities Code.
(c) The president of the Public Utilities Commission and the
chairman of the State Energy Resources Conservation and Development
Commission shall, no later than March of 2005, appear before the
Senate Committee on Energy, Utilities and Communications and the
Assembly Committee on Utilities and Commerce to issue a progress
report on meeting the deadline for the creation of the Solar Energy
Peak Procurement Program.
(d) The commission shall specify that this program is on a
first-come first-serve basis for applicants.
26423. The commission shall ensure proportional program support,
not to exceed 10 percent of overall program funds, for installation
of solar energy systems on the new construction and rehabilitation of
affordable housing units, including single and multifamily
residential housing. In addition to the rebate, the commission shall
also ensure that additional and proportional resources, not to
exceed 5 percent of overall program funds, are provided for the
unique needs of subsidized low-income housing through targeted
financing mechanisms and support, including a revolving loan fund,
technical assistance, and other needs as identified in consultation
with the California Tax Credit Allocation Committee.
SEC. 2. Section 399.15 of the Public Utilities Code is amended to
read:
399.15. (a) In order to fulfill unmet long-term resource needs,
the commission shall establish a renewables portfolio standard
requiring all electrical corporations to procure a minimum quantity
of output from eligible renewable energy resources as a specified
percentage of total kilowatthours sold to their retail end-use
customers each calendar year, if sufficient funds are made available
pursuant to paragraph (2), and Sections 399.6 and 383.5 to cover the
above-market costs of eligible renewables, and subject to all of the
following:
(1) An electric corporation shall not be required to enter into
long-term contracts with eligible renewable energy resources that
exceed the market prices established pursuant to subdivision (c) of
this section.
(2) The Energy Commission shall provide supplemental energy
payments from funds in the New Renewable Resources Account in the
Renewable Resource Trust Fund to eligible renewable energy resources
pursuant to Section 383.5,, consistent with this article, for
above-market costs. Indirect costs associated with the purchase of
eligible renewable energy resources, such as imbalance energy
charges, sale of excess energy, decreased generation from existing
resources, or transmission upgrades shall not be eligible for
supplemental energy payments, but shall be recoverable by an
electrical corporation in rates, as authorized by the commission.
(3) For purposes of setting annual procurement targets, the
commission shall establish an initial baseline for each electrical
corporation based on the actual percentage of retail sales procured
from eligible renewable energy resources in 2001, and, to the extent
applicable, adjusted going forward pursuant to subdivision (a) of
Section 399.12.
(4) Electricity generated from net metered solar energy systems
shall be counted towards an electrical corporation's annual
renewable energy resource procurement targets.
(b) The commission shall implement annual procurement targets for
each electrical corporation as follows:
(1) Beginning on January 1, 2003, each electrical corporation
shall, pursuant to subdivision (a), increase its total procurement of
eligible renewable energy resources by at least an additional 1
percent of retail sales per year so that 20 percent of its retail
sales are procured from eligible renewable energy resources no later
than December 31, 2017. An electrical corporation with 20 percent of
retail sales procured from eligible renewable energy resources in
any year shall not be required to increase its procurement of such
resources in the following year.
(2) Only for purposes of establishing these targets, the
commission shall include all power sold to retail customers by the
Department of Water Resources pursuant to Section 80100 of the Water
Code in the calculation of retail sales by an electrical corporation.
(3) In the event that an electrical corporation fails to procure
sufficient eligible renewable energy resources in a given year to
meet any annual target established pursuant to this subdivision, the
electrical corporation shall procure additional eligible renewable
energy resources in subsequent years to compensate for the shortfall
if sufficient funds are made available pursuant to paragraph (2), and
Sections 399.6 and 383.5 to cover the above-market costs of eligible
renewables.
(4) If supplemental energy payments from the Energy Commission, in
combination with the market prices approved by the commission, are
insufficient to cover the above-market costs of eligible renewable
energy resources, the commission shall allow an electrical
corporation to limit its annual procurement obligation to the
quantity of eligible renewable energy resources that can be procured
with available supplemental energy payments.
(c) The commission shall establish a methodology to determine the
market price of electricity for terms corresponding to the length of
contracts with renewable generators, in consideration of the
following:
(1) The long-term market price of electricity for fixed price
contracts, determined pursuant to the electrical corporation's
general procurement activities as authorized by the commission.
(2) The long-term ownership, operating, and fixed-price fuel costs
associated with fixed-price electricity from new generating
facilities.
(3) The value of different products including baseload, peaking,
and as-available output.
(d) The establishment of a renewables portfolio standard shall not
constitute implementation by the commission of the federal Public
Utility Regulatory Policies Act of 1978 (Public Law 95-617).
(e) The commission shall consult with the Energy Commission in
calculating market prices under subdivision (c) and establishing
other renewables portfolio standard policies.
SEC. 3.
SEC. 5. Section 385.1 is added to the Public Utilities Code, to
read:
385.1. (a) Every local publicly owned electric utility, as
defined in Section 9604, that has retail customers, shall establish a
solar program consistent with the Solar Energy Peak Procurement
Program established pursuant to Chapter 8 (commencing with Section
2830) of Part 2 and Division 16.7 (commencing with Section 26421) of
the Public Resources Code, to fund program expenditure levels
consistent with those established for the three largest electrical
corporations in California, at a rate proportional to the size of the
ratepayer base served by the local publicly owned electric utility.
Every local publicly owned electric utility shall establish the
program within a reasonable period of time, but not to exceed six
months, after the commission adopts and implements any solar homes
program pursuant to Chapter 8 (commencing with Section 2830).
(b) Each local publicly owned electric utility shall report, on an
annual basis, to its customers and to the State Energy Resources
Conservation and Development Commission, information relative to the
utility's solar program. The State Energy Resources Conservation and
Development Commission may establish guidelines for the information
to be included in the annual report.
(c) The charge imposed pursuant to this subdivision shall fund the
local publicly owned electric utility's administrative and reporting
costs pursuant to this section.
SEC. 6. Section 399.6 of the Public Utilities Code is amended to
read:
399.6. (a) In order to optimize public investment and ensure that
the most cost-effective and efficient investments in renewable
resources are vigorously pursued, the Energy Commission shall create
an investment plan as set forth in paragraphs (1) to (3), inclusive,
to govern the allocation of funds provided pursuant to this article.
The Energy Commission's long-term goal shall be a fully competitive
and self-sustaining California renewable energy supply. The
investment plan shall be in accordance with all of the following:
(1) The investment plan's objective shall be to increase, in the
near term, the quantity of California's electricity generated by
in-state renewable energy resources, while protecting system
reliability, fostering resource diversity, and obtaining the greatest
environmental benefits for California residents.
(2) An additional objective of the plan shall be to identify and
support emerging renewable energy technologies that have the greatest
near-term commercial promise and that merit targeted assistance.
(3) The investment plan shall contain specific numerical targets,
reflecting the projected impact of the plan, for both of the
following:
(A) Increased quantity of California electrical generation
produced from emerging technologies and from overall renewable
resources.
(B) Increased supply of renewable generation available from
facilities other than those selling to investor-owned utilities under
contracts entered into prior to 1996 under the federal Public
Utilities Regulatory Policies Act of 1978 (P.L. 95-617).
(b) The Energy Commission shall, on an annual basis, evaluate
progress on meeting the targets set forth in subparagraphs (A) and
(B) of paragraph (3) of subdivision (a), or any substitute provisions
adopted by the Legislature upon review of the investment plan, and
assess the impact of the investment plan on reducing the cost to
Californians of renewable energy generation.
(c) In preparing these investment plans, the Energy Commission
shall recommend allocations among all of the following:
(1) (A) Except as provided in subparagraph (B), production
incentives for new renewable energy, including repowered or
refurbished renewable energy.
(B) Allocations may not be made for renewable energy that is
generated by a project that remains under a power purchase contract
with an electrical corporation originally entered into prior to
September 24, 1996, whether amended or restated thereafter.
(C) Notwithstanding subparagraph (B), production incentives for
incremental new, repowered, or refurbished renewable energy from
existing projects under a power purchase contract with an electrical
corporation originally entered into prior to September 24, 1996,
whether amended or restated thereafter, may be allowed in any month,
if all of the following occur:
(i) The project's power purchase contract provides that all energy
delivered and sold under the contract is paid at a price that does
not exceed commission-approved short-run avoided cost of energy.
(ii) Either of the following:
(I) The power purchase contract is amended to provide that the
kilowatthours used to determine the capacity payment in any
time-of-delivery period in any month under the contract shall be
equal to the actual kilowatthour production, but no greater than the
five-year average of the kilowatthours delivered for the
corresponding time-of-delivery period and month, in the years 1994 to
1998, inclusive.
(II) If a project's installed capacity as of December 31, 1998, is
less than 75 percent of the nameplate capacity as stated in the
power purchase contract, the power purchase contract is amended to
provide that the kilowatthours used to determine the capacity payment
in any time-of-delivery period in any month under the contract shall
be equal to the actual kilowatthour production, but no greater than
the product of the five-year average of the kilowatthours delivered
for the corresponding time-of-delivery period and month, in the years
1994 to 1998, inclusive, and the ratio of installed capacity as of
December 31 of the previous year, but not to exceed contract
nameplate capacity, to the installed capacity as of December 31,
1998.
(iii) The production incentive is payable only with respect to the
kilowatthours delivered in a particular month that exceeds the
corresponding five-year average calculated pursuant to clause (ii).
(2) Rebates, buydowns, or equivalent incentives for emerging
renewable technologies.
(3) Customer credits for renewables not under contract with a
utility.
(4) Customer education.
(5) Incentives for reducing fuel costs that are confirmed to the
satisfaction of the Energy Commission at solid fuel biomass energy
facilities in order to provide demonstrable environmental and public
benefits, including, but not limited to, air quality.
(6) Solar thermal generating resources that enhance the
environmental value or reliability of the electrical system and that
require financial assistance to remain economically viable, as
determined by the Energy Commission. The Energy Commission may
require financial disclosure from applicants for purposes of this
paragraph.
(7) Specified fuel cell technologies, if the Energy Commission
makes all of the following findings:
(A) The specified technologies have similar or better air
pollutant characteristics than renewable technologies in the
investment plan.
(B) The specified technologies require financial assistance to
become commercially viable by reference to wholesale generation
prices.
(C) The specified technologies could contribute significantly to
the infrastructure development or other innovation required to meet
the long-term objective of a self-sustaining, competitive supply of
renewable energy.
(8) Existing wind-generating resources, if the Energy Commission
finds that the existing wind-generating resources are a
cost-effective source of reliable and environmental benefits compared
with other eligible sources, and that the existing wind-generating
resources require financial assistance to remain economically viable,
as determined by the Energy Commission. The Energy Commission may
require financial disclosure from applicants for the purposes of this
paragraph.
(d) The commission shall establish a cap on the aggregate amount
of funds that may be awarded to public entities from the program that
provides customer credits for renewables. The intent of the cap is
to assure adequate funding of credits for residential and small
commercial customers.
(e) Notwithstanding any other provision of law, moneys
collected for renewable energy pursuant to this article shall be
transferred to the Renewable Resource Trust Fund of the Energy
Commission, to be held until further action by the Legislature.
The Energy Commission shall prepare and submit to the
Legislature, on or before March 31, 2001, an initial investment plan
for these moneys, addressing the application of moneys collected
between January 1, 2002, and January 1, 2007. The initial investment
plan shall also include an evaluation of and report to the
Legislature regarding the appropriateness and structure of a
mandatory state purchase of renewable energy. On or before March 31,
2006, the Energy Commission shall prepare an investment plan
proposing the application of moneys collected between January 1,
2007, and January 1, 2012. No Except for
those moneys expended through the Emerging Renewable Resources
Account, no moneys may be expended in the years covered by
these plans without further legislative action.
(f) Notwithstanding subdivision (e), the commission may advance
moneys to the Emerging Renewable Resources Account and expend those
moneys without further legislative action, subject to subdivision (f)
of Section 25751 of the Public Resources Code.
SEC. 7. Section 399.8 of the Public Utilities Code is amended to
read:
399.8. (a) In order to ensure that the citizens of this state
continue to receive safe, reliable, affordable, and environmentally
sustainable electric service, it is the policy of this state and the
intent of the Legislature that prudent investments in energy
efficiency, renewable energy, and research, development and
demonstration shall continue to be made.
(b) (1) Every customer of an electrical corporation, shall pay
a nonbypassable system benefits charge authorized pursuant to this
article. The system benefits charge shall fund energy efficiency,
renewable energy, and research, development and demonstration.
(2) Local publicly owned electric utilities shall continue to
collect and administer system benefits charges pursuant to Section
385.
(c) (1) The commission shall require each electrical corporation
to identify a separate rate component to collect revenues to fund
energy efficiency, renewable energy, and research, development and
demonstration programs authorized pursuant to this section beginning
January 1, 2002, through January 1, 2012. The rate component shall
be a nonbypassable element of the local distribution service and
collected on the basis of usage.
(2) This rate component may not exceed, for any tariff schedule,
the level of the rate component that was used to recover funds
authorized pursuant to Section 381 on January 1, 2000. If the
amounts specified in paragraph (1) of subdivision (d) are not
recovered fully in any year, the commission shall reset the rate
component to restore the unrecovered balance, provided that the rate
component may not exceed, for any tariff schedule, the level of the
rate component that was used to recover funds authorized pursuant to
Section 381 on January 1, 2000. Pending restoration, any annual
shortfalls shall be allocated pro rata among the three funding
categories in the proportions established in paragraph (1) of
subdivision (d).
(d) The commission shall order San Diego Gas and Electric Company,
Southern California Edison Company, and Pacific Gas and Electric
Company to collect these funds commencing on January 1, 2002, as
follows:
(1) Two hundred twenty-eight million dollars ($228,000,000) per
year in total for energy efficiency and conservation activities, one
hundred thirty-five million dollars ($135,000,000) in total per year
for renewable energy, and sixty-two million five hundred thousand
dollars ($62,500,000) in total per year for research, development and
demonstration. The funds for energy efficiency and conservation
activities shall continue to be allocated in proportions established
for the year 2000 as set forth in paragraph (1) of subdivision (c) of
Section 381.
(2) The amounts shall be adjusted annually at a rate equal to the
lesser of the annual growth in electric commodity sales or inflation,
as defined by the gross domestic product deflator. The amounts
collected to fund energy efficiency, renewable energy, and research,
development and demonstration, from January 1, 2005, to December 31,
2006, shall be those levels established by the commission for 2004.
Any additional moneys collected as a result of the difference
between the rate component amount specified in paragraph (2) of
subdivision (c) and the amounts required to be collected pursuant to
this subdivision, from January 1, 2005, to December 31, 2006, shall
be transferred at least quarterly to the Solar Energy Peak
Procurement Fund established pursuant to Section 2833.
(e) The commission and the Energy Commission shall retain and
continue their oversight responsibilities as set forth in Sections
381 and 383, and Chapter 7.1 (commencing with Section 25620) and
Chapter 8.6 (commencing with Section 25740) of Division 15 of the
Public Resources Code.
(f) (1) On or before January 1, 2004, the Governor shall appoint
an independent review panel including, but not limited to, members
with expertise on the energy service needs of large and small
electricity consumers, system reliability issues, and energy-related
public policy. On or before January 1, 2005, the panel shall prepare
and submit to the Legislature and the Energy Commission a report
evaluating the energy efficiency, renewable energy, and research,
development and demonstration programs funded under this section.
Reasonable costs associated with the review in each of the three
program categories, including technical assistance, may be charged to
the relevant program category under procedures to be developed by
the commission for energy efficiency and by the Energy Commission for
renewable energy and research development and demonstration.
(2) The report shall also assess all of the following:
(A) Whether ongoing programs are consistent with the statutory
goals.
(B) Whether potential synergies among the program categories
described in paragraph (1) that could provide enhanced public value
have been identified and incorporated in the programs.
(C) If established targets for increased renewable generation are
likely to be achieved.
(D) What changes should be made to result in a more efficient use
of public resources.
(3) The report shall also compare the Energy Commission's programs
with efforts undertaken by other states and assess, as an
alternative, the relative costs and benefits of adopting a tradable
minimum renewable energy requirement in California. The evaluation
shall include recommendations intended to optimize renewable resource
development at the least cost.
(4) For energy efficiency programs, the report shall include an
evaluation of all of the following:
(A) The net benefits secured for residential customers, taking
into account both public and private costs, including improvements in
that customer group's ability to avoid or reduce consumption of
relatively costly peak electricity.
(B) Whether the programs provide a balance of benefits to all
sectors that contribute to the funding.
(C) The extent to which competition in energy markets including,
but not limited to, load participation in ancillary services markets,
and improvements in technology affect the continuing need for such
programs.
(D) The status and growth of the private, competitive energy
services industry that provides energy efficiency services and other
energy products to customers.
(E) The commercial availability of any new technologies that
reduce electricity demands during high-priced periods.
(F) Customers' willingness and ability to reduce consumption or
adopt energy efficiency measures without program support.
(G) The extent to which the programs have delivered cost-effective
energy efficiency not adequately provided by markets and as a result
have reduced energy demand and consumption.
(H) The relative cost-effectiveness of program expenditures
compared to other current or potential expenditures to enhance system
reliability.
(5) The report shall include specific recommendations aimed at
assisting the Legislature in determining whether to change or
eliminate the collection of the system benefits charge on or after
January 1, 2007.
(6) The panel may update and revise the report as needed.
(g) Promptly after receiving the panel's report, the commission
shall convene a proceeding to address implementation of the panel's
energy efficiency recommendations.
(h) An applicant for the Large Nonresidential Standard Performance
Contract Program funded pursuant to paragraph (1) of subdivision (b)
and an electrical corporation shall promptly attempt to resolve
disputes that arise related to the program's guidelines and
parameters prior to entering into a program agreement. The applicant
shall provide the electrical corporation with written notice of any
dispute. Within 10 business days after receipt of the notice, the
parties shall meet to resolve the dispute. If the dispute is not
resolved within 10 business days after the date of the meeting, the
electrical corporation shall notify the applicant of his or her right
to file a complaint with the commission, which complaint shall
describe the grounds for the complaint, injury, and relief sought.
The commission shall issue its findings in response to a filed
complaint within 30 business days of the date of receipt of the
complaint. Prior to issuance of its findings, the commission shall
provide a copy of the complaint to the electrical corporation, which
shall provide a response to the complaint to the commission within
five business days of the date of receipt. During the dispute
period, the amount of estimated financial incentives shall be held in
reserve until the dispute is resolved.
SEC. 8. Section 760 is added to the Public Utilities Code, to
read:
760. The commission, in collaboration with the State Energy
Resources Conservation and Development Commission, shall develop
optional time-variant electricity pricing tariffs for all customers
that are not subject to mandatory time-variant pricing as of January
1, 2004, including net metered customers.
SEC. 9. Section 2827 of the Public Utilities Code is amended
to read:
2827. (a) The Legislature finds and declares that a program to
provide net energy metering for eligible customer-generators is one
way to encourage substantial private investment in renewable energy
resources, stimulate in-state economic growth, reduce demand for
electricity during peak consumption periods, help stabilize
California's energy supply infrastructure, enhance the continued
diversification of California's energy resource mix, and reduce
interconnection and administrative costs for electricity suppliers.
(b) As used in this section, the following definitions apply:
(1) "Electric service provider" means an electrical corporation,
as defined in Section 218, a local publicly owned electric utility,
as defined in Section 9604, or an electrical cooperative, as defined
in Section 2776, or any other entity that offers electrical service.
This section shall not apply to a local publicly owned electric
utility, as defined in Section 9604 of the Public Utilities Code,
that serves more than 750,000 customers and that also conveys water
to its customers.
(2) "Eligible customer-generator" means a residential, small
commercial customer as defined in subdivision (h) of Section 331,
commercial, industrial, or agricultural customer of an electric
service provider, who uses a solar or a wind turbine electrical
generating facility, or a hybrid system of both, with a capacity of
not more than one megawatt that is located on the customer's owned,
leased, or rented premises, is interconnected and operates in
parallel with the electric grid, and is intended primarily to offset
part or all of the customer's own electrical requirements.
(3) "Net energy metering" means measuring the difference between
the electricity supplied through the electric grid and the
electricity generated by an eligible customer-generator and fed back
to the electric grid over a 12-month period as described in
subdivision (h). Net energy metering shall be accomplished using a
single meter capable of registering the flow of electricity in two
directions. An additional meter or meters to monitor the flow of
electricity in each direction may be installed with the consent of
the customer-generator, at the expense of the electric service
provider, and the additional metering shall be used only to provide
the information necessary to accurately bill or credit the
customer-generator pursuant to subdivision (h), or to collect solar
or wind electric generating system performance information for
research purposes. If the existing electrical meter of an eligible
customer-generator is not capable of measuring the flow of
electricity in two directions, the customer-generator shall be
responsible for all expenses involved in purchasing and installing a
meter that is able to measure electricity flow in two directions. If
an additional meter or meters are installed, the net energy metering
calculation shall yield a result identical to that of a single
meter. An eligible customer-generator who already owns an existing
solar or wind turbine electrical generating facility, or a hybrid
system of both, is eligible to receive net energy metering service in
accordance with this section.
(4) "Wind energy co-metering" means any wind energy project
greater than 50 kilowatts, but not exceeding one megawatt, where the
difference between the electricity supplied through the electric grid
and the electricity generated by an eligible customer-generator and
fed back to the electric grid over a 12-month period is as described
in subdivision (h). Wind energy co-metering shall be accomplished
pursuant to Section 2827.8.
(5) "Co-energy metering" means a program that is the same in all
other respects as a net energy metering program, except that the
local publicly owned electric utility, as defined in Section 9604,
has elected to apply a generation-to-generation energy and
time-of-use credit formula as provided in subdivision (i).
(6) "Ratemaking authority" means, for an electrical corporation as
defined in Section 218, or an electrical cooperative as defined in
Section 2776, the commission, and for a local publicly owned electric
utility as defined in Section 9604, the local elected body
responsible for regulating the rates of the local publicly owned
utility.
(c) (1) Every electric service provider shall develop a standard
contract or tariff providing for net energy metering, and shall make
this contract available to eligible customer-generators, upon
request, on a first-come-first-served basis until the time that the
total rated generating capacity used by eligible customer-generators
exceeds 3 1.5 percent of the electric
service provider's aggregate customer peak demand.
(2) On an annual basis, beginning in 2003, every electric service
provider shall make available to the ratemaking authority information
on the total rated generating capacity used by eligible
customer-generators that are customers of that provider in the
provider's service area. For those electric service providers who
are operating pursuant to Section 394, they shall make available to
the ratemaking authority the information required by this paragraph
for each eligible customer-generator that is their customer for each
service area of an electric corporation, local publicly owned
electric utility, or electrical cooperative, in which the customer
has net energy metering. The ratemaking authority shall develop a
process for making the information required by this paragraph
available to energy service providers, and for using that information
to determine when, pursuant to paragraph (3), a service provider is
not obligated to provide net energy metering to additional
customer-generators in its service area.
(3) Notwithstanding paragraph (1), an electric service provider is
not obligated to provide net energy metering to additional
customer-generators in its service area when the combined total peak
demand of all customer-generators served by all the electric service
providers in that service area furnishing net energy metering to
eligible customer-generators exceeds 3 1.5
percent of the aggregate customer peak demand of those electric
service providers.
(d) Electric service providers shall make all necessary forms and
contracts for net metering service available for download from the
Internet.
(e) (1) Every electric service provider shall ensure that requests
for establishment of net energy metering are processed in a time
period not exceeding that for similarly situated customers requesting
new electric service, but not to exceed 30 working days from the
date the electric service provider receives a completed application
form for net metering service, including a signed interconnection
agreement from an eligible customer-generator and the electric
inspection clearance from the governmental authority having
jurisdiction. If an electric service provider is unable to process
the request within the allowable timeframe, the electric service
provider shall notify both the customer-generator and the ratemaking
authority of the reason for its inability to process the request and
the expected completion date.
(2) Electric service providers shall ensure that requests for an
interconnection agreement from an eligible customer-generator are
processed in a time period not to exceed 30 working days from the
date the electric service provider receives a completed application
form from the eligible customer-generator for an interconnection
agreement. If an electric service provider is unable to process the
request within the allowable timeframe, the electric service provider
shall notify the customer-generator and the ratemaking authority of
the reason for its inability to process the request and the expected
completion date.
(f) (1) If a customer participates in direct transactions pursuant
to paragraph (1) of subdivision (b) of Section 365 with an electric
supplier that does not provide distribution service for the direct
transactions, the service provider that provides distribution service
for an eligible customer-generator is not obligated to provide net
energy metering to the customer.
(2) If a customer participates in direct transactions pursuant to
paragraph (1) of subdivision (b) of Section 365 with an electric
supplier, and the customer is an eligible customer-generator, the
service provider that provides distribution service for the direct
transactions may recover from the customer's electric service
provider the incremental costs of metering and billing service
related to net energy metering in an amount set by the ratemaking
authority.
(g) Each net energy metering contract or tariff shall be
identical, with respect to rate structure, all retail rate
components, and any monthly charges, to the contract or tariff to
which the same customer would be assigned if the customer did not use
an eligible solar or wind electrical generating facility, except
that eligible customer-generators shall not be assessed standby
charges on the electrical generating capacity or the kilowatthour
production of an eligible solar or wind electrical generating
facility. The charges for all retail rate components for eligible
customer-generators shall be based exclusively on the
customer-generator's net kilowatthour consumption over a 12-month
period, without regard to the customer-generator's choice of electric
service provider. Any new or additional demand charge, standby
charge, customer charge, minimum monthly charge, interconnection
charge, or any other charge that would increase an eligible
customer-generator's costs beyond those of other customers who are
not customer-generators in the rate class to which the eligible
customer-generator would otherwise be assigned if the customer did
not own, lease, rent, or otherwise operate an eligible solar or wind
electrical generating facility are contrary to the intent of this
section, and shall not form a part of net energy metering contracts
or tariffs.
(h) For eligible residential and small commercial
customer-generators, the net energy metering calculation shall be
made by measuring the difference between the electricity supplied to
the eligible customer-generator and the electricity generated by the
eligible customer-generator and fed back to the electric grid over a
12-month period. The following rules shall apply to the annualized
net metering calculation:
(1) The eligible residential or small commercial
customer-generator shall, at the end of each 12-month period
following the date of final interconnection of the eligible
customer-generator's system with an electric service provider, and at
each anniversary date thereafter, be billed for electricity used
during that period. The electric service provider shall determine if
the eligible residential or small commercial customer-generator was
a net consumer or a net producer of electricity during that period.
(2) At the end of each 12-month period, where the electricity
supplied during the period by the electric service provider exceeds
the electricity generated by the eligible residential or small
commercial customer-generator during that same period, the eligible
residential or small commercial customer-generator is a net
electricity consumer and the electric service provider shall be owed
compensation for the eligible customer-generator's net kilowatthour
consumption over that same period. The compensation owed for the
eligible residential or small commercial customer-generator's
consumption shall be calculated as follows:
(A) For all eligible customer-generators taking service under
tariffs employing "baseline" and "over baseline" rates, any net
monthly consumption of electricity shall be calculated according to
the terms of the contract or tariff to which the same customer would
be assigned to or be eligible for if the customer was not an eligible
customer-generator. If those same customer-generators are net
generators over a billing period, the net kilowatthours generated
shall be valued at the same price per kilowatthour as the electric
service provider would charge for the baseline quantity of
electricity during that billing period, and if the number of
kilowatthours generated exceeds the baseline quantity, the excess
shall be valued at the same price per kilowatthour as the electric
service provider would charge for electricity over the baseline
quantity during that billing period.
(B) For all eligible customer-generators taking service under
tariffs employing "time of use" rates, any net monthly consumption of
electricity shall be calculated according to the terms of the
contract or tariff to which the same customer would be assigned to or
be eligible for if the customer was not an eligible
customer-generator. When those same customer-generators are net
generators during any discrete time of use period, the net
kilowatthours produced shall be valued at the same price per
kilowatthour as the electric service provider would charge for retail
kilowatthour sales during that same time of use period. If the
eligible customer-generator's time of use electrical meter is unable
to measure the flow of electricity in two directions, paragraph (3)
of subdivision (b) shall apply.
(C) For all residential and small commercial customer-generators
and for each billing period, the net balance of moneys owed to the
electric service provider for net consumption of electricity or
credits owed to the customer-generator for net generation of
electricity shall be carried forward as a monetary value until the
end of each 12-month period. For all commercial, industrial, and
agricultural customer-generators the net balance of moneys owed shall
be paid in accordance with the electric service provider's normal
billing cycle, except that if the commercial, industrial, or
agricultural customer-generator is a net electricity producer over a
normal billing cycle, any excess kilowatthours generated during the
billing cycle shall be carried over to the following billing period
as a monetary value, calculated according to the procedures set forth
in this section, and appear as a credit on the customer-generator's
account, until the end of the annual period when paragraph (3) shall
apply.
(3) At the end of each 12-month period, where the electricity
generated by the eligible customer-generator during the 12-month
period exceeds the electricity supplied by the electric service
provider during that same period, the eligible customer-generator is
a net electricity producer and the electric service provider shall
retain any excess kilowatthours generated during the prior 12-month
period. The eligible customer-generator shall not be owed any
compensation for those excess kilowatthours unless the electric
service provider enters into a purchase agreement with the eligible
customer-generator for those excess kilowatthours.
(4) The electric service provider shall provide every eligible
residential or small commercial customer-generator with net
electricity consumption information with each regular bill. That
information shall include the current monetary balance owed the
electric service provider for net electricity consumed since the last
12-month period ended. Notwithstanding this subdivision, an
electric service provider shall permit that customer to pay monthly
for net energy consumed.
(5) If an eligible residential or small commercial
customer-generator terminates the customer relationship with the
electric service provider, the electric service provider shall
reconcile the eligible customer-generator's consumption and
production of electricity during any part of a 12-month period
following the last reconciliation, according to the requirements set
forth in this subdivision, except that those requirements shall apply
only to the months since the most recent 12-month bill.
(6) If an electric service provider providing net metering to a
residential or small commercial customer-generator ceases providing
that electrical service to that customer during any 12-month period,
and the customer-generator enters into a new net metering contract or
tariff with a new electric service provider, the 12-month period,
with respect to that new electric service provider, shall commence on
the date on which the new electric service provider first supplies
electric service to the customer-generator.
(i) Notwithstanding any other provisions of this section, the
following provisions shall apply to an eligible customer-generator
with a capacity of more than 10 kilowatts, but not exceeding one
megawatt, that receives electrical service from a local publicly
owned electric utility, as defined in Section 9604, that has elected
to utilize a co-energy metering program unless the electric service
provider chooses to provide service for eligible customer-generators
with a capacity of more than 10 kilowatts in accordance with
subdivisions (g) and (h):
(1) The eligible customer-generator shall be required to utilize a
meter, or multiple meters, capable of separately measuring
electricity flow in both directions. All meters shall provide
"time-of-use" measurements of electricity flow, and the customer
shall take service on a time-of-use rate schedule. If the existing
meter of the eligible customer-generator is not a time-of-use meter
or is not capable of measuring total flow of energy in both
directions, the eligible customer-generator shall be responsible for
all expenses involved in purchasing and installing a meter that is
both time-of-use and able to measure total electricity flow in both
directions. This subdivision shall not restrict the ability of an
eligible customer-generator to utilize any economic incentives
provided by a government agency or the electric service provider to
reduce its costs for purchasing and installing a time-of-use meter.
(2) The consumption of electricity
from the electric service provider shall result in a cost to the
eligible customer-generator to be priced in accordance with the
standard rate charged to the eligible customer-generator in
accordance with the rate structure to which the customer would be
assigned if the customer did not use an eligible solar or wind
electrical generating facility. The generation of electricity
provided to the electric service provider shall result in a credit to
the eligible customer-generator and shall be priced in accordance
with the generation component, established under the applicable
structure to which the customer would be assigned if the customer did
not use an eligible solar or wind electrical generating facility.
(3) All costs and credits shall be shown on the eligible
customer-generator's bill for each billing period. In any months in
which the eligible customer-generator has been a net consumer of
electricity calculated on the basis of value determined pursuant to
paragraph (2), the customer-generator shall owe to the electric
service provider the balance of electricity costs and credits during
that billing period. In any billing period in which the eligible
customer-generator has been a net producer of electricity calculated
on the basis of value determined pursuant to paragraph (2), the
electric service provider shall owe to the eligible
customer-generator the balance of electricity costs and credits
during that billing period. Any net credit to the eligible
customer-generator of electricity costs may be carried forward to
subsequent billing periods, provided that an electric service
provider may choose to carry the credit over as a kilowatt hour
credit consistent with the provisions of any applicable tariff,
including any differences attributable to the time of generation of
the electricity. At the end of each 12-month period, the electric
service provider may reduce any net credit due to the eligible
customer-generator to zero.
(j) A solar or wind turbine electrical generating system, or a
hybrid system of both, used by an eligible customer-generator shall
meet all applicable safety and performance standards established by
the National Electrical Code, the Institute of Electrical and
Electronics Engineers, and accredited testing laboratories such as
Underwriters Laboratories and, where applicable, rules of the Public
Utilities Commission regarding safety and reliability. A
customer-generator whose solar or wind turbine electrical generating
system, or a hybrid system of both, meets those standards and rules
shall not be required to install additional controls, perform or pay
for additional tests, or purchase additional liability insurance.
(k) If the commission determines that there are cost or revenue
obligations for an electric corporation, as defined in Section 218,
that may not be recovered from customer-generators acting pursuant to
this section, those obligations shall remain within the customer
class from which any shortfall occurred and may not be shifted to any
other customer class. Net-metering and co-metering customers shall
not be exempt from the public benefits charge. In its report to the
Legislature, the commission shall examine different methods to ensure
that the public benefits charge remains a nonbypassable charge.
(l) A net metering customer shall reimburse the Department of
Water Resources for all charges that would otherwise be imposed on
the customer by the commission to recover bond-related costs pursuant
to an agreement between the commission and the Department of Water
Resources pursuant to Section 80110 of the Water Code, as well as the
costs of the department equal to the share of the department's
estimated net unavoidable power purchase contract costs attributable
to the customer. The commission shall incorporate the determination
into an existing proceeding before the commission, and shall ensure
that the charges are nonbypassable. Until the commission has made a
determination regarding the nonbypassable charges, net metering shall
continue under the same rules, procedures, terms, and conditions as
were applicable on December 31, 2002.
(m) In implementing the requirements of subdivisions (k) and (l),
a customer-generator shall not be required to replace its existing
meter except as set forth in paragraph (3) of subdivision (b), nor
shall the electric service provider require additional measurement of
usage beyond that which is necessary for customers in the same rate
class as the eligible customer-generator.
(n) On or before January 1, 2005, the commission shall submit a
report to the Governor and the Legislature that assesses the economic
and environmental costs and benefits of net metering to
customer-generators, ratepayers, and utilities, including any
beneficial and adverse effects on public benefit programs and special
purpose surcharges. The report shall be prepared by an independent
party under contract with the commission.
(o) It is the intent of the Legislature that the Treasurer
incorporate net energy metering and co-energy metering projects
undertaken pursuant to this section as sustainable building methods
or distributive energy technologies for purposes of evaluating
low-income housing projects.
SEC. 4.
SEC. 10. Chapter 8 (commencing with Section 2830) is added
to Part 2 of Division 1 of the Public Utilities Code, to
read:
CHAPTER 8. SOLAR ENERGY PEAK PROCUREMENT PROGRAM
2830. (a) The Legislature finds and declares that:
(1) Electricity created from solar energy using photovoltaic
systems provides reliable electricity during peak demand periods.
(2) Electricity generated by photovoltaic systems is a reliable
substitute for the purchase of expensive, conventionally-generated
electricity during peak demand periods.
(3) Electricity generated by photovoltaic systems is a substitute
for demand management activities which lower peak demand.
(4) Electricity generated by photovoltaic systems is a substitute
for interruptible energy programs which lower peak demand.
(5) The commission requires utilities to procure peak demand
period electricity supplies and allocates those costs to all
customers.
(6) The commission has established demand management programs and
interruptible energy programs whose costs are allocated to all
customers.
(7) It is the intent of the Legislature that this program remain
in effect for 10 years and that the subsidy level per kilowatt of
capacity be reduced to zero at the end of those 10 years.
(b) It is the intent of the Legislature that this program be
funded at a level of up to one hundred million dollars
($100,000,000) annually and that this program not result in fee or
rate increases. The commission shall not increase for any
reason the amount designated for this program, regardless of any
increase in applications or lack of funding.
(c) It is the intent of the Legislature that the customers of each
utility benefit in proportion to the amount paid for the program by
those customers.
(d) It is the intent of the Legislature that existing photovoltaic
programs be harmonized with the program established by this
legislation.
2831. The commission shall establish the Solar Energy Peak
Procurement Program, as provided in this chapter, to encourage the
use of solar photovoltaic systems and shall fund that program by
reducing the purchases of electricity during peak demand periods,
spending unallocated funds previously authorized for demand
management and interruptible programs, and substituting a
photovoltaic incentive program for less cost-effective demand
management and interruptible programs.
2832. (a)
2831. The commission shall by January 1, 2006, open a proceeding
to examine the relative costs and benefits between solar rebate
programs and commission-administered interruptible and demand
reduction programs, as follows:
(a) The proceeding shall review the self-generation incentive
program administered by the commission to harmonize it with the solar
energy programs administered by the California Energy Commission and
shall issue a report on its recommendations to the Legislature.
(b) The proceeding shall include the commission conducting a cost
versus benefit analysis to examine the relative costs and benefits
between solar rebate programs and commission-administered
interruptible and demand reduction programs that are in the best
interests of ratepayers.
(c) The proceeding shall review the cost and benefits of net
metering and report to the Legislature on whether the net metering
cap should be changed.
2832. The commission shall consider how customer owned
photovoltaic distributed generation pursuant to this program can be
integrated with future procurement plans, resource adequacy, and
energy efficiency decisions.
2833. The Solar Peak Energy Energy
Peak Procurement Fund is hereby created in the State Treasury.
Moneys in the fund may be expended, upon appropriation by the
Legislature, for the state's administration of the program, to be
used to encourage the deployment of grid-connected solar photovoltaic
systems in the service territory of investor-owned utilities by
subsidizing the installed cost of those systems for all customer
classes.
(b) The Solar Peak Energy Affordable Housing Revolving Fund is
hereby created in the State Treasury. Moneys in the fund may be
expended, upon appropriation by the Legislature, for the state's
administration of the program established by this chapter, to be used
to encourage the deployment of grid-connected solar photovoltaic
systems in the service territory of investor-owned utilities by
subsidizing the installed cost of those systems exclusively for
affordable housing units, as defined in subdivision (a) of Section
26420 of the Public Resources Code.
2833.
2834. The commission shall direct utilities to regularly
deposit a portion of the moneys derived from electric rates into the
Solar Peak Energy Procurement Fund. The commission shall determine
the amount of electric rates to be deposited. That amount shall come
from unallocated unused funds
previously authorized for demand management and interruptible
programs and rates which previously paid for demand management and
interruptible programs which the commission determines to be less
cost effective than the photovoltaic incentive program established by
Division 16.7 (commencing with Section 26420) of the Public
Resources Code.
SEC. 5. This act shall not be operative unless Assembly Bill 2006
of the 2003-04 Session of the Legislature is enacted.
2835. On or before December 31, 2005, the commission shall report
to the Legislature on whether the commission was able to obtain
funding from existing programs sufficient to achieve the purposes of
the act enacting this chapter, and shall submit recommendations for
additional funding sources, if necessary.
SEC. 11.