BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
MARTHA M. ESCUTIA, CHAIRWOMAN
AB 728 - Negrete McLeod Hearing Date:
June 30, 2005 A
As Amended: May 2, 2005 FISCAL B
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DESCRIPTION
Existing law:
1. Requires investor-owned utilities (IOUs), municipal
utilities or any other entity offering retail electric
service, to credit all electricity generated by a
customer-owned solar or wind system up to one megawatt (MW)
in size against the customer's usage of electricity, a
procedure known as "net metering."
2. Creates a pilot program providing partial net metering
to customer-owned electric generation facilities fueled by
manure methane production (biogas). The net metered
customer only gets credit at the generation rate, rather
than the full retail rate offered to solar generation. The
program limits biogas facilities to one MW each, a total of
five MW per utility/15 MW statewide, and sunsets January 1,
2006.
(AB 2228 (Negrete McLeod), Chapter 845, Statutes of 2002)
This bill extends and expands the AB 2228 biogas program to
permit up to three additional large biogas facilities to be
developed over the next four years. The sunset is replaced by
provision permitting biogas facilities in service by December
31, 2009 to be eligible for net metering for the life of the
facility. The one MW per facility limit is modified to permit
up to three large facilities up to 10 MW, the five MW per
utility cap is eliminated, and the 15 MW statewide cap is
increased to 50 MW.
BACKGROUND
SB 656 (Alquist), Chapter 369, Statutes of 1995, required all
electric utilities to buy back any electricity generated by a
customer-owned solar or 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 own solar or wind electric system. The generated
electricity spins the meter backward, making it financially
equivalent to using less electricity for the customer.
Net metering was initially permitted for systems up to 10
kilowatts (kW) making it suitable for residential-sized
applications (a typical residential net-metered system is two to
four kW). The total amount of capacity that could be net
metered was capped at 0.1% of the utility load. AB 29X (Kehoe),
Chapter 8, Statutes of 2001, expanded the net metering program
to large commercial and industrial customers by raising the
maximum size of the net-metered system to one MW and lifting the
cap on total net-metered capacity. The provisions of AB 29X
relating to net metering were to sunset on January 1, 2003, but
were subsequently extended by AB 58 (Keeley), Chapter 836,
Statutes of 2002, which also replaced the cap, but at a level
five times greater - 0.5% of utility peak demand. SB 1 (Murray)
and AB 816 (Kehoe), pending in the Assembly, would increase the
net metering cap for solar systems.
Net metering has also been extended partially to larger solar
facilities and to non-solar renewable facilities by giving
credit at the utility's generation rate (akin to a wholesale
rate, rather than full retail rate) for electricity produced.
In 2002, AB 2228 created a pilot program providing partial net
metering to customer-owned electric generation projects fueled
by manure methane, or biogas. Under AB 2228, the net-metered
customer only gets credit at the generation rate, rather than
the full retail rate offered to solar customers. The pilot
program limits biogas facilities to one MW each, a total of five
MW per utility/15 MW statewide, and sunsets January 1, 2006.
The biogas production facilities described by this bill generate
fuel through the breakdown of animal wastes, primarily in
dairies. The manure is collected and stored in ponds or
digesters where it decomposes, or is "digested," releasing
methane. The methane is collected and used to fuel a combustion
engine or turbine which then produces electricity.
COMMENTS
1. What air quality standards will biogas projects be
required to achieve? Sierra Club California opposes this
bill on the basis that, absent an explicit requirement,
biogas projects will not employ Best Available Control
Technology (BACT) for NOx emissions and will produce higher
emissions than diesel generators. The bill's proponents
dispute this and indicate that biogas projects are subject
to air quality permitting standards on par with other
projects.
2. Technical amendments. The author and the committee may
wish to consider the following technical amendments:
On page 3, strike out lines 26-30.
On page 3, line 35, insert:
(B) Notwithstanding (A), up to three large biogas digester
electrical generating facilities with a generating capacity
of more than one megawatt and not more than 10 megawatts,
otherwise meeting the criteria of this section, shall be
eligible for participation in the pilot program.
On page 5, line 23, strike out "continuous" and insert:
contiguous
ASSEMBLY VOTES
Assembly Floor (78-0)
Assembly Appropriations Committee (18-0)
Assembly Utilities and Commerce Committee
(11-0)
POSITIONS
Sponsor:
Inland Empire Utilities Agency
Western Dairy Association
Support:
Chino Basin Coalition
Pacific Gas and Electric Company
Southern California Edison
The Dolphin Group
Western United Dairymen
Oppose:
Clean Power Campaign
Sierra Club California
Lawrence Lingbloom
AB 728 Analysis
Hearing Date: June 30, 2005