BILL ANALYSIS
AB 728
Page 1
Date of Hearing: May 18, 2005
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Judy Chu, Chair
AB 728 (Negrete McLeod) - As Amended: May 2, 2005
Policy Committee:
UtilitiesVote:11-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill expands an existing pilot project allowing net energy
metering for customer-owned electric generation projects fueled
by manure methane production (biogas digestion). Specifically,
this bill:
1)Allows up to three biogas digester generation projects under
the program to exceed the current 1 MW limit, and to have a
capacity of up to 10 MW.
2)Raises the current cap on statewide biogas digester generation
under the net metering tariff and within the territory of the
state's three investor-owned utilities, from 15 MW to 50 MW.
3)Makes the biogas digester projects eligible for the
net-metering tariff for the life of the facilities, but only
for those facilities commencing operation by December 31,
2009.
4)Requires the Public Utilities Commission (PUC) to report to
the Legislature by December 31, 2009 regarding the program's
impact on air emissions and on transmission and distribution
grid reliability.
FISCAL EFFECT
1)Absorbable costs to the PUC to review and approve tariffs for
biogas projects under the pilot program.
2)One-time minor costs for the PUC to complete the legislative
report.
AB 728
Page 2
COMMENTS
1)Background and Purpose . SBX1 5(Sher), Statutes of 2001, in
part appropriated $15 million for grants for pilot projects
designed to encourage the development of biogas digestion
power production technologies which convert methane gas from
manure into electricity. AB 2228 (Negrete McLeod), Statutes of
2002, established a pilot project to permit net metering for
such projects. The bill limited the size of eligible biogas
digesters to units producing 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 IOU service
territory.
The pilot project was assisted by the appropriation in SBX1 5
and had a sunset date of January 1, 2006. According to the
sponsors, five customers have installed biogas digester
generators and are operating under the net-metering tariff and
eight customers are in the process of constructing biogas
digester generators. The entire $15 million appropriation has
been spent. The author seeks to expand both the time frame and
the scope of the pilot program to include larger generation
units.
2)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.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081