BILL ANALYSIS
AB 920
Page 1
Date of Hearing: April 27, 2009
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Nancy Skinner, Chair
AB 920 (Huffman) - As Introduced: February 26, 2009
SUBJECT : Solar and wind distributed generation
SUMMARY : Establishes a program to compensate
customer-generators for surplus energy produced by solar and
wind energy systems.
EXISTING LAW :
1)Requires investor-owned and publicly-owned utilities 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 "net metering." Provides no
additional compensation for "net surplus," i.e. if the
customer generates more electricity than the customer consumes
in a 12-month period. As a result, solar and wind energy
systems are generally sized at or below the customer's demand.
2)Establishes subsidy programs for the installation of solar
energy systems administered by the Public Utilities Commission
(PUC) and the California Energy Commission (CEC). These
programs, known collectively as the California Solar
Initiative (CSI), are to provide $3.2 billion in subsidies
over 10 years in the form of rebates for the installation of
photovoltaic projects.
THIS BILL :
1)Defines a "net surplus customer-generator" as a
customer-generator that generates more electricity in a
12-month period than the customer purchases from the utility
in that same period.
2)Requires all utilities that offer net-metering to purchase all
net surplus electricity produced from the customer's wind or
solar generator at a rate set by the PUC or the publicly-owned
utility. The rate shall be set to provide the
customer-generator "just and reasonable" compensation for the
surplus energy sales, while leaving other ratepayers
unaffected.
AB 920
Page 2
3)Provides that the utility shall own the renewable energy
credits (RECs) associated with any net surplus electricity it
must purchase. The customer will retain the REC associated
with any electricity generated and consumed by the customer.
FISCAL EFFECT : Unknown
COMMENTS :
Background. Since 1996, state law has required electric
utilities to buy back 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.
The boundaries of net metering have been expanded progressively
via a string of statutes over the past several years.
Individual project size has been increased 100 fold, to one
megawatt, and total utility capacity has been increased 25 fold,
to 2.5%, to allow larger and more solar energy systems. The
cost to non-participating ratepayers has also grown
substantially.
Because residential customers have been eligible for net
metering from the beginning, the program hasn't changed as much
for them. This bill represents a new method of expanding net
metering to encourage larger projects, even at smaller sites,
like single-family homes.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL-CIO
AB 920
Page 3
Breathe California
California Association of REALTORS
Coalition for Clean Air
Environment California
Planning and Conservation League
San Diego County Board of Supervisors
Sierra Club California
TURN
Opposition
California Association of Small and Multi-jurisdictional
Utilities
Pacific Gas and Electric Company
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092