BILL ANALYSIS
AB 920
Page 1
ASSEMBLY THIRD READING
AB 920 (Huffman)
As Introduced February 26, 2009
Majority vote
UTILITIES & COMMERCE 11-3 NATURAL
RESOURCES 6-3
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|Ayes:|Fuentes, Blakeslee, De La |Ayes:|Skinner, Brownley, |
| |Torre, Carter, Fong, | |Chesbro, |
| |Huffman, Krekorian, | |De Leon, Hill, Huffman |
| |Skinner, Smyth, Swanson, | | |
| |Torrico | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Duvall, Tom Berryhill, |Nays:|Gilmore, Knight, Logue |
| |Fuller | | |
| | | | |
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APPROPRIATIONS 12-5
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|Ayes:|De Leon, Ammiano, Charles | | |
| |Calderon, Davis, Fuentes, | | |
| |Hall, John A. Perez, Price, | | |
| |Skinner, Solorio, Torlakson, | | |
| |Krekorian | | |
| | | | |
|-----+------------------------------+-+--------------------------|
|Nays:|Nielsen, Duvall, Harkey, | | |
| |Miller, | | |
| |Audra Strickland | | |
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SUMMARY : Expands the current net-metering programs for wind and
solar, to allow the net-metered customers to sell any excess
electricity they produce over the course of a year to their
electric utility. Specifically, 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.
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2)Requires all investor owned utilities (IOUs) and publicly
owned utilities (POUs) 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 California Public
Utilities Commission (PUC) or POU. The rate shall be set to
provide the customer-generator "just and reasonable"
compensation for the surplus energy sales, leave all other
ratepayers indifferent, and shall not result in any cost
shifting to non-customer generators.
3)Caps the amount of net surplus electricity a utility must
purchase at 2.5% of each electric utility's aggregate peak
demand.
4)Provides that the utility shall own all of the renewable
attributes or renewable energy credits (RECs) associated with
any net surplus electricity it must purchase. The customer
will retain REC of any renewable energy credit associated with
any electricity generated by the customer that is utilized by
the customer.
EXISTING LAW :
1)Creates the California Solar Initiative (CSI), a $3.3 billion
declining rebate program to offset the cost of installing
solar panels on homes, businesses, and public buildings. The
program requires that in order to be eligible for CSI rebates,
among other requirements, the solar energy must be intended to
offset part or all of the consumer's own electricity demand
(the panels should not produce more electricity than the
customer's historic peak demand).
2)Requires IOUs to offer customers with solar or wind generation
that is smaller than one megawatt in size, a net-metered
tariff where the customer can sell back electricity produced
from the solar or wind facility that exceeds that customer's
usage at a moment in time as a bill credit against electricity
that the customer receives from the utility when their
renewable facility produces less than the customer is
consuming. Caps the total amount of solar and wind generation
that can be subject to net-metering at 2.5% of each utility's
aggregate peak demand.
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3)Requires all POUs other than the Los Angeles Department of
Water and Power (LADWP) to offer a net-metering tariff as
provided in 2) above, or offer a co-metering tariff where the
bill credit is based only on the cost of generation and not
the entire retail rate. Exempts LADWP from the net-metering
and co-metering requirements.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, one-time costs of about $250,000 in 2010; ongoing
costs of about $210,000 for the two analyst positions to monitor
compliance with the PUC decision and the impacts on net-metering
customers and other ratepayers.
COMMENTS : According to the author, the purpose of this bill is
to allow electric utility customers who install solar or wind
generators on their property to be paid by their electric
utility for all the "surplus" electricity they produce. The
author believes this will encourage homeowners and businesses to
conserve more electricity (and thus have more surplus power they
can sell to the utility) and will allow property owners to
install the maximum number of solar panels on their home.
Under net-metering, electric utilities are required to "buy
back" any electricity generated by a customer-owned generator
solar or wind generator that is not used by that customer. When
the customer generates electricity, he/she uses most of it for
his or her own facility. Any excess electricity 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
distributed to the electricity grid by the customer. This
results in the utility "buying" the excess power and paying for
it in the form of a bill credit.
The bill credit is set at the customer's retail cost (a cost
that is much higher than the wholesale generation costs since it
includes transmission, distribution, public good charges, and
the utility's rate of return). If the customer-generator is
being paid the retail price, the add-on costs are shifted to the
utilities' other ratepayers. The bill is settled at the end of
the year instead of on a monthly basis. This allows the
customer to balance high production months against low
production months. Since it is a bill credit, if for some
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reason the customer is a net energy producer (meaning over the
course of a year the customer-generator produces more than he or
she consumes) the year-end bill will be zero, but no check will
be written to the customer.
This bill provides that a customer of IOUs and most POUs that
installs solar or wind generators on their own property that
produce more electricity than the customer's own demand (up to
one megawatt in size) will receive a check from the utility for
that surplus generation. To be eligible for CSI rebates the
system must still be sized to actual or projected load of the
customer-generator at the time the solar energy system is
installed. This means that customers cannot intentionally
oversize a solar energy system and receive a CSI rebate. If the
customer's future electricity usage is less than the usage at
the time of installation the customer will be under a
net-metered tariff that gives the customer a bill credit valued
at the retail rate of electricity for any excess the customer
produces during the year, but at the end of the year if bill
credits exceed the total electricity the customer consumed from
the utility the customer will be a net surplus producer and the
utility would then owe the customer money for the net surplus
electricity. The net surplus power electricity would be valued
at a rate set by PUC at a just and reasonable rate that ensures
no cost shifting. This rate will likely be less than the value
associated with retail rate for the electricity credited against
their bill.
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083
FN: 0001130