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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OPPOSITION
Pacific Gas & Electric
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