BILL ANALYSIS                                                                                                                                                                                                    






                                                          SB 656

Date of Hearing: June 12, 1995

           ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
                       Mickey Conroy, Chair

           SB 656 (Alquist) - As Amended:  June 7, 1995

 SUBJECT

Public utilities: energy metering

 DIGEST

 Existing law:

1)  Vests the California Public Utilities Commission (CPUC) with  
    the regulatory authority over public utilities.

2)  Requires a utility to pay independent electricity producers  
    the actual cost the utility avoids but not producing the  
    energy itself.


 This bill would require every electric utility in the state that  
offers residential service, whether or not the entity is subject  
to the jurisdiction of the CPUC, to develop a standard tariff  
providing for net energy metering to eligible customer-generators.  
 This bill would only apply to those systems that produce up to 10  
kW and would be restricted to 0.1% of a utilities peak demand.

 FISCAL EFFECT

Minor/absorbable cost to the CPUC.

 COMMENTS

1)  According to the sponsor, California Solar Energy Industries  
    Association, this bill removes a significant obstacle to the  

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    installation of residential photovoltaic solar energy systems,  
    many of which are manufactured in California. The systems cost  
    between $30,000 and $40,000 each with a system life of 25  
    years.  The systems are primarily designed to offset the  
    customer's own electricity use.

2)  This bill concerns residential customers who employ the use of  
    their own solar energy generation and also obtain power from  
    the traditional power sources of utility.  The bill would  
    require the utility, whether municipal or investor-owned to  
    provide a specific contract for the sale of unconsumed  
    customer generated energy back to the utility.

    "Net energy metering" would determine the conditions of the  
    sale.  Net energy metering is a method of subtracting the  
    excess energy produced by the resident from the energy  
    received from the utility.  The customer would have a meter  
    that would measure the flow of electricity both to and from a  
    resident.  The tariff would establish a set price for which  
    the excess electricity generated by the customer would be sold  
    back to the utility.  If the customer generated a surplus of  
    electricity at the end of the month, the the utility would pay  
    the customer according to the contracted rate.  In other  
    words, the electricity supplied by the utility would be  
    "netted out" against the electricity sold to the utility.

3)  The concept embodied in this bill is available to CPUC  
    regulated utility customers as one of the options available in  
    Standard Offer No. 1 contracts.  In order to take advantage of  
    those type of contracts a generator must be certified as a  
    qualified facilities (QF) pursuant to federal law.  

    According to the CPUC, the main effect of CPUC regulated  
    utilities and their customers is to make net sales  
    arrangements available to customers without them becoming QF's  
    first.  The addition of net energy metering customers who are  
    not QF's should have no adverse effects on utilities or  
    ratepayers since there is no cap on the number of power  

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    producers that could accept a net sales agreement under  
    Standard Offer No. 1.

4)  Opposition claims that the purpose of this measure is to  
    provide an electric ratepayer subsidy to purchasers of  
    expensive residential photovoltaic systems.  They claim that  
    the accounting system by which the kwh are supplied to the  
    utility would be "netted out" against kwh sold to the utility.  
     This approach assumes that such kwh have the same value, when  
    they are not.  A kwh delivered to a customer is a retail  
    commodity while a kwh sold to the utility is a wholesale  
    commodity and the prices for the two commodities are  
    different.  Instead of netting out kilowatt hours sold,  
    opposition believes a more accurate system would net out the  
    relative prices of the commodities that have been exchanged.

    Furthermore, while the amount of money that would be involved  
    is small, it is the principal where the opposition objects,  
    particularly at a time when the legislature and the CPUC are  
    attempting to reduce electric rates.

5)  Turn disagrees that residential ratepayers will will bear  
    additional costs.  While utilities do average their  
    distribution and transmission costs over all ratepayers, they  
    believe that net energy metering will offer potential for  
    systemwide efficiencies, including diminished peakload  
    requirements and lowered distribution costs.


 SUPPORT                                                  

California Solar Energy Industries Assn., (Sponsor)
California Energy Commission, Sacramento
ASE, Solar Energy Society, La Crescenta
Advanced Photovoltaic Systems, Inc., San Bruno
APT - Ananda Power Technologies, Inc., Nevada City
Becker Electric/Solar Quest, North San Juan
CEERT - Center for Energy Efficiency and Renewable Technologies,  

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    Sacramento
Earth Care, Ukiah
Electron Connection, Hornbrook
Independent Energy, Inc. - Goldline, San Diego
IPP - Independent Power Providers, North Fork
Gen-Sun Electric Solar systems, Lucerne Valley
Glidden Construction Company, Santa Barbara
Goldline Electronic Controls, San Diego
Heliotrope General, Spring Valley
Home Power Magazine
Land and Sea Solar, Santa Cruz
NRDC - Natural Resources Defense Council, San Francisco
Off-Line, Independent Energy Systems, North Fork
Pacific Solar, Belmont
PowerLight Corporation, Berkeley
Real Goods, Ukiah
SEA - Solar Engineering Applications, Santa Clara
Seacrest Builders, Laguna Beach
SES - Solar Electric Specialties Company, Santa Barbara
SEIA - Solar Energy Industries Assocaition, Washington, D.C.
Siemens (ROLM Communications), Santa Clara
Siemens Solar Industries, Camarillo
Sierra Solar
Solar Depot, San Rafael
Solec International, Inc., Hawthorne
Solar Self-Help, Inc., Concord
Solarex (several areas)
Southern California Edison Company
TURN - Toward Utilitiy Rate Normalization, San Francisco
U.L.C. Enterprises
UNI-SOLAR - United Solar Systems Corporation, San Diego
Utility Consumer's Action Network, San Diego
UPC - Utility Power Group, Chatsworth
Western Energy Services, Inc., Laguna Hills
Mr. Michael Williams, Citizen, Mount Shasta
Mr. Philip G. Mullen, Citizen, La Crescenta
Ms. Brenda Hinton, Citizen, Ukiah


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                                                          SB 656

 OPPOSITION

Pacific Gas & Electric



































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