BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 816|
|Office of Senate Floor Analyses | |
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|327-4478 | |
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THIRD READING
Bill No: SB 816
Author: Kehoe (D)
Amended: 4/13/05
Vote: 21
SENATE ENERGY, UTIL. & COMMUNICATIONS COMM. : 9-0, 4/5/05
AYES: Escutia, Battin, Bowen, Campbell, Cox, Dunn, Kehoe,
Murray, Simitian
NO VOTE RECORDED: Morrow, Alarcon
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Electric service providers: net metering
SOURCE : City of San Diego
San Diego Gas & Electric
DIGEST : This bill establishes a separate net metering
cap for the San Diego Gas & Electric Company.
ANALYSIS :
Existing law:
1. Requires all energy service providers (ESPs), including
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 against the customer's usage of
electricity sold by the utility, a procedure known as
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"net metering."
2. Permits solar or wind electric generation systems as
large as one megawatt (MW) to be eligible for net
metering.
3. Requires ESPs to offer net metering until net metering
customers account for 0.5 percent of the ESP's aggregate
peak demand.
4. Requires the PUC to hire an independent party to prepare
a report assesses the economic and environmental costs
and benefits of net metering to customer-generators,
ratepayers, and utilities by January 1, 2005.
This bill permits continuation of net metering until net
metering customers in San Diego Gas & Electric's (SDG&E)
service territory exceed 50 MW.
Comments
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 percent 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
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level five times greater - 0.5 percent of utility peak
demand.
According to the author's office, SDG&E is the only IOU
close to meeting the existing net metering cap (0.5
percent) and, without an adjustment to the cap, SDG&E will
no longer offer net metering to new customers. The
author's office states available remaining net metering
capacity will be used up within the next year when
currently proposed projects are installed. Further, the
City of San Diego has a goal of installing 50 MW of
renewable energy by 2014.
According to SDG&E, it had 8.68 MW (1,638 customers) of
installed net metering capacity as of August 2004, a bit
less than half the 0.5 percent cap, and another 3.98 MW
(549 customers) in process - a total of 12.66 MW or about
two-thirds of the 0.5 percent cap. Tripling the cap, as
this bill proposes, gives SDG&E several years of net
metering expansion at the current pace, or room for a
dramatic short-term expansion.
Related legislation . SB 1 (Murray and Campbell) which
contains the Governor's proposal, the Million Solar Roofs
initiative, and AB 1547 (Levine) both raise the net
metering cap statewide.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 4/27/05)
City of San Diego (co-source)
San Diego Gas and Electric (co-source)
NC:mel 4/27/05 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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