BILL ANALYSIS 1
1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
AB 918 - Keeley
Hearing Date: August 24, 2000 A
As Amended: August 10, 2000 FISCAL
B
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1
8
DESCRIPTION
Current law requires every electrical corporation to offer
net energy metering. When a net energy metering customer
consumes more energy that he or she produces, the customer
shall pay the electrical corporation based on the average
retail price per kilowatt-hour.
This bill changes that calculation by requiring that for
each month a customer's energy consumption exceeds the
amount of energy produced, that net consumption shall be
valued as if that were the customer's actual consumption.
In those months where the customer's energy production
exceeds their amount of consumption, that net energy
production shall be valued at the same price the electrical
corporation would charge. This calculation is made each
month and the total shall be tallied and paid after 12
months.
This bill provides that if a net energy metering customer
changes electrical corporations, a new 12 month period will
begin with the start of service with the new electrical
corporation.
This bill provides that if a net energy metering customer
buys electricity from anyone other than the electrical
corporation, the electrical corporation may recover the
incremental costs related to the net energy metering from
the customer's supplier of electricity.
BACKGROUND
In 1995, the Legislature passed SB 656 (Alquist), Chapter
369, Statutes of 1995, which required all electric
utilities to buy back any electricity generated by a
customer-owned solar electric 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 solar
electric system. In other words, when the customer buys
electricity, the meter spins forward. When the customer
generates electricity, the meter spins backward. The
number of customers who can take advantage of net metering
is limited by statute and is only available to customers
who have wind or solar electric generating systems.
In 1998, the Legislature passed AB 1755 (Keeley), Chapter
855, Statutes of 1998, which clarified the definition of
net energy metering and expanded the eligibility for net
energy metering.
COMMENTS
1)Changing The Way Net Usage Is Billed . This bill provides
additional specificity to the valuation of the net energy
consumed or produced by a net metering customers by
treating the net usage as if it were the customer's total
usage.
For example, if a customer consumes 1,000 kwh of
electricity and their wind turbine produces 600 kwh of
electricity in a month, the customer would owe the
utility for 400 kwh of electricity priced at the level
that any 400 kwh (residential) customer who doesn't use
net metering would pay.
Extending on that example, if the first 250 kwh of usage
is considered baseline usage and, therefore, priced at a
lower rate, the customer would pay for 250 kwh at the
lower rate and 150 kwh at the higher non-baseline rate.
Absent this bill, the customer would be billed for those
400 kwh at the "average retail price" for the customer
class. Calculating the average retail price requires
determining the amount of usage at baseline and
non-baseline rates across the entire customer class
recognizing the changes to those rates over the 12 month
period.
2)Currently less than 500 customers are net metered
statewide.
3)Technically Speaking . There are two technical amendments
the author and committee may wish to consider adopting.
The first is on Page 6, Line 13, where "and" should be
inserted after "provider,". The second is on Page 6,
Line 14, where "and" should be stricken and replaced with
",".
PRIOR VOTES
Assembly Health Committee (14-0)*
Assembly Appropriations Committee (19-2)*
Assembly Floor (71-2)*
Senate Insurance Committee (6-1)*
Senate Appropriations Committee (5-2)*
*Votes not relevant to current version of the bill.
POSITIONS
Sponsor:
California Solar Energy Industries Association
Support:
California Solar Energy Industries Association
Clean Power Campaign
Pacific Gas and Electric
Sacramento Municipal Utility District
Oppose:
None on file
Randy Chinn
AB 918 Analysis
Hearing Date: August 24, 2000