BILL ANALYSIS                                                                                                                                                                                                    



                                                                       


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          |SENATE RULES COMMITTEE            |                   AB 918|
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                                 THIRD READING
                                        

          Bill No:  AB 918
          Author:   Keeley (D)
          Amended:  8/25/00 in Senate
          Vote:     21

            
           SENATE INSURANCE COMMITTEE  :  Not Relevant

           SENATE ENERGY, U.&C. COMMITTEE  :  7-0, 8/24/00
          AYES:  Bowen, Alarcon, Hughes, Kelley, Peace, Solis,  
            Vasconcellos

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           ASSEMBLY FLOOR  :  Not Relevant
           

           SUBJECT  :    Public utilities:  net energy metering

           SOURCE  :     California Solar Energy Industries Association

           
           DIGEST  :    This bill provides clarification of the Public  
          Utilities Code law providing for net energy metering for  
          small solar and wind energy system owners.

           ANALYSIS  :    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  
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          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







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          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.  
           
           FISCAL EFFECT :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          No fiscal impact on the state.  Minor, absorbable costs for  
          the Public Utilities Commission Utilities Reimbursement  
          Account.

           SUPPORT  :   (Verified  8/24/00)

          California Solar Energy Industries Association (source)
          Clean Power Campaign
          Pacific Gas and Electric
          Sacramento Municipal Utility District


          NC:cm  8/29/00   Senate Floor Analyses 








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                         SUPPORT/OPPOSITION:  SEE ABOVE

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