BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
SB 874 - Bowen Hearing Date:
April 22, 2003 S
As Amended: April 10, 2003 FISCAL B
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DESCRIPTION
Current law authorizes customers to install specified electric
generation systems which, when electricity is produced, turn the
customer's electric meter backward, a process known as "net
metering."
This bill requires the California Public Utilities Commission
(CPUC) to adopt regulations which require utilities to respond
expeditiously to a customer's request to net meter. If the
utility believes it will have to alter the electric grid to
comply with the request, the utility is required to clearly
describe and justify those alterations. The CPUC is required to
resolve any disputes.
BACKGROUND
SB 656 (Alquist), Chapter 369, Statutes of 1995, required all
electric utilities to buy back any electricity generated by a
customer-owned solar and 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 or wind system. The generated
electricity spins the meter backwards, making it equivalent to
the customer using less electricity. California is one of
thirty-five states with a net metering program.
As originally created, the net metering program applied
primarily to residential applications because the size was
limited to 10 kilowatts (kw). Recent changes to the program
have increased the maximum size to 1,000 kw so commercial and
industrial users could take advantage of the technology. That
change allows large solar and wind electric generation
facilities to be placed in areas where generation has never
existed, which consequently could require changes to be made to
the electric grid. Only the utility can determine whether any
changes are indeed necessary, but arguably, the utility may not
have a great deal of incentive to make those changes since
accommodating a net metering system means it will be losing part
or all of a customer's electrical load. This bill requires the
CPUC to develop regulations to ensure the utility doesn't drag
its feet on a net metering system request.
There are about 2,200 net-metered customers today, with pending
applications for an additional 700. Total net-metered capacity
is about 6 megawatts (MW), with an additional 3 MW pending. On
a typical hot summer day, electric demand is about 50,000 MW.
COMMENTS
Giving The CPUC The Referee's Whistle . Increasing the maximum
size of net metered installations has increased the points of
friction between net metered customers and the serving
utilities. A net metered customer would like to get their
system on line as soon as possible and not have to pay for any
electrical grid-related upgrades. While the utility may have
little incentive to bring a net metered customer on line
quickly, it does have a responsibility to ensure that any system
upgrades associated with bringing that net metered customer on
line aren't unfairly shifted to other utility customers.
This bill takes no position on how disputes should be resolved.
Rather, it directs the CPUC to create a process for resolving
differences of opinion on how quickly systems should be
installed and how any costs associated with grid improvements
should be apportioned.
POSITIONS
Sponsor:
Author
Support:
AMECO
California Solar Energy Industries Association
EcoEnergies
Light Energy Systems
Performance Solar Inc.
POCO Solar Energy
Six Rivers Solar, Inc.
SoCal Solar Energy
Team Solar Inc.
Oppose:
None on file
Randy Chinn
SB 874 Analysis
Hearing Date: April 22, 2003