BILL ANALYSIS
AB 728
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Date of Hearing: April 25, 2005
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Lloyd E. Levine, Chair
AB 728 (Negrete McLeod) - As Introduced: February 17, 2005
SUBJECT : Electricity: biogas digester customer-generators: net
metering.
SUMMARY : Deletes a sunset provision in a statute that allows
net energy metering for customer-owned electric generation
projects fueled by manure methane production. Specifically,
this bill :
1)Deletes all references to a pilot project in the code section
that allows net energy metering for customer-owned biogas
digester electric generation projects fueled by manure methane
production.
2)Raises the current cap on size of an eligible biogas digester
customer-generator from 1 megawatt to 10 megawatts.
3)Removes a cap on the total amount of load within an electrical
corporation's service territory that would be eligible for net
metering of biogas digester customer-generators.
4)Deletes a sunset date of January 1, 2006 contained in the
provision that allows net energy metering for customer owned
electric generation biogas digesters.
EXISTING LAW :
1)Creates a pilot project to allow for net metering of eligible
biogas digester customer-generators, which sunsets on January
1, 2006.
2)Requires every electrical corporation to establish a
net-metering tariff for eligible biogas digester
customer-generators.
3)Caps the size of an eligible biogas digester
customer-generator at one megawatt.
4)Caps the total amount of load within an electrical
corporation's service territory that would be eligible for net
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metering of biogas digester customer-generators at 5
megawatts.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author's office, the purpose of
this bill is to delete a sunset on the net metering program that
permits dairies to offset the amount of electricity they
purchased with the amount of electricity generated by a customer
owned generation unit, which converts methane gas from manure
into electricity. These units are referred to biogas digestion
generators.
1) Background : In 2001, the Legislature passed SBX1 5(Sher),
Chapter 7, Statutes of 2001, which appropriated $15 million for
grants for pilot projects designed to encourage the development
of biogas digestion power production technologies.
In 2002, the Legislature passed AB 2228 (Negrete McLeod),
Chapter 845, Statutes of 2002, which created a pilot project to
permit net metering for customer-owned electric generation
projects fueled by manure methane production. The bill limited
the size of eligible biogas digesters to units that produce one
megawatt or less and the total amount of generation that would
be eligible to have a net meter to no more than 5 megawatts in
each service territory.
AB 2228 limited the qualified projects to those that are less
than one megawatt in part because net meter customer generation
cannot be scheduled by the electric utility. The utility thus
must take the power when it is produced, whether they need it at
that moment in time or not. The electric utility can easily
adapt to small amounts of unscheduled load coming onto the grid
at any time, but the utility may have reliability problems if
they cannot schedule larger generators.
The pilot project was funded by the appropriation in SBX1 5 and
had a sunset date of January 1, 2006. According to the
sponsors, since the pilot project was put into place, 5
customers have installed biogas digester generators and are
operating under the net-metering tariff. Another 8 customers are
in the process of constructing biogas digester generators. The
entire $15 million appropriation has been spent.
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2) What is net metering : Under net metering, the electric
utility is required to buy back any electricity generated by a
customer-owned generator as measured by an electric meter that
can measure the flow of electricity in both directions. When
the customer is generating excess power, the electricity not
being used passes through the meter and is distributed to the
electricity grid. At the end of the year, the electric
corporation calculates the amount of electricity distributed to
the grid by the customer and reduces the customer's annual bill
by the amount of electricity generated by the customer
multiplied by the utility's standard generation costs.
3) Results from the pilot project : AB 2228 did not contain
stated goals of the pilot project or require a report to be
conducted that summarizes the project to determine the project's
effectiveness. Consequently, no data have been compiled to
determine the impacts the pilot project has had in efforts to
reduce emissions from dairies, on the electricity grid's
reliability and safety, or on to ratepayers. Given the fact that
none of this critical information has been prepared, the
committee may want to consider amending the bill to, instead of
deleting the sunset and eliminating or raising the existing
caps, extend the current pilot project until 2010 and require a
report to the Legislature detailing: 1) the effectiveness of the
program in reducing air emissions, 2) the impacts the program
has on grid reliability and safety, and 3) the cost and benefits
the program imposes on other ratepayers .
REGISTERED SUPPORT / OPPOSITION :
Support
Inland Empire Utilities Agency (Sponsor)
Chino Basin Coalition (CBC)
Milk Producers Council (MPC)
Southern California Edison (If Amended)
Western United Dairymen (Sponsor)
Opposition
Pacific Gas & Electric (Oppose Unless Amended)
AB 728
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Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083