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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