BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 874|
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THIRD READING
Bill No: SB 874
Author: Bowen (D), et al
Amended: 4/10/03
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE : 7-0, 4/22/03
AYES: Bowen, Alarcon, Battin, Dunn, McClintock, Murray,
Sher
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Net energy metering
SOURCE : Author
DIGEST : This bill requires the Public Utilities
Commission to adopt regulations relating to a customer's
request to net meter and create a process for resolving
differences of opinion on how quickly systems should be
installed and how costs should be apportioned.
ANALYSIS : 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 State Public Utilities Commission
(PUC) 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
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clearly describe and justify those alterations. The PUC 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
PUC 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 six megawatts (MW), with an
additional 3 MW pending. On a typical hot summer day,
electric demand is about 50,000 MW.
Comments
Giving the PUC the Referee's Whistle . Increasing the
maximum size of net metered installations has increased the
points of friction between net metered customers and the
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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 PUC 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 5/6/03)
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.
NC:nl 5/7/03 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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