BILL ANALYSIS
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THIRD READING
Bill No: AB 728
Author: Negrete McLeod (D)
Amended: 8/16/05 in Senate
Vote: 21
SENATE ENER., UTIL. & COM. COMMITTEE : 10-0, 6/30/05
AYES: Escutia, Morrow, Alarcon, Battin, Bowen, Cox, Dunn,
Kehoe, Murray, Simitian
NO VOTE RECORDED: Campbell
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 78-0, 5/26/05 (Passed on Consent) - See
last page for vote
SUBJECT : Electricity: biogas digester
customer-generators
SOURCE : Inland Empire Utilities Agency
Western Dairy Association
DIGEST : This bill expands an existing pilot project
allowing net energy metering for customer-owned electric
generation projects fueled by manure methane production
(biogas digestion).
ANALYSIS : Existing law requires investor-owned utilities
(IOUs), municipal utilities or any other entity offering
retail electric service, to credit all electricity
CONTINUED
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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."
Existing law 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, requires
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 ten
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 percent of the utility
load. AB 29X (Kehoe), Chapter 8, Statutes of 2001, expands
the net metering program to large commercial and industrial
customers by raising the maximum size of the net-metered
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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 replaces the cap, but at a
level five times greater - 0.5 percent of utility peak
demand. SB 1 (Murray) and AB 816 (Kehoe), will 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.
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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/24/05)
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Inland Empire Utilities Agency (co-source)
Western Dairy Association (co-source)
Chino Basin Coalition
Pacific Gas and Electric Company
San Juaquin Valley Unified Air Pollution Control District
Southern California Edison
The Dolphin Group
Western United Dairymen
OPPOSITION : (Verified 8/24/05)
Clean Power Campaign
Sierra Club California
ASSEMBLY FLOOR :
AYES: Aghazarian, Arambula, Baca, Bass, Benoit, Berg,
Bermudez, Blakeslee, Bogh, Calderon, Canciamilla, Chan,
Chavez, Chu, Cogdill, Cohn, Coto, Daucher, De La Torre,
DeVore, Dymally, Emmerson, Evans, Frommer, Garcia,
Goldberg, Hancock, Harman, Haynes, Jerome Horton, Shirley
Horton, Houston, Huff, Jones, Karnette, Keene, Klehs,
Koretz, La Malfa, La Suer, Laird, Leno, Leslie, Levine,
Lieber, Liu, Matthews, Maze, McCarthy, Montanez,
Mountjoy, Mullin, Nation, Nava, Negrete McLeod, Niello,
Oropeza, Parra, Pavley, Plescia, Richman, Ridley-Thomas,
Sharon Runner, Ruskin, Saldana, Salinas, Spitzer,
Strickland, Torrico, Tran, Umberg, Vargas, Villines,
Walters, Wolk, Wyland, Yee, Nunez
NO VOTE RECORDED: Gordon, Nakanishi
NC:do 8/24/05 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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