BILL NUMBER: SB 1 INTRODUCED
BILL TEXT
INTRODUCED BY Senators Murray and Campbell
DECEMBER 6, 2004
An act to amend Section 25744 of, and to add Sections 25407,
25744.4, and 25744.5 to, the Public Resources Code, and to amend
Sections 399.6, 399.8, and 2827 of, and to add Section 379.8 to, the
Public Utilities Code, relating to energy, and making an
appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 1, as introduced, Murray. Energy: renewable energy resources:
California Renewables Portfolio Standard Program.
(1) Existing law requires the State Energy Resources Conservation
and Development Commission (Energy Commission) to expand and
accelerate development of alternative sources of energy, including
solar resources. Existing law requires the Energy Commission, until
January 1, 2006, and to the extent that funds are appropriated for
that purpose in the annual Budget Act, to implement a grant program
to accomplish specified goals, including making solar energy systems
cost competitive with alternate forms of energy.
The existing Public Utilities Act requires the Public Utilities
Commission (PUC) to require Pacific Gas and Electric Company, San
Diego Gas and Electric, and Southern California Edison to identify a
separate electrical rate component to fund programs that enhance
system reliability and provide in state benefits. This rate component
is a nonbypassable element of local distribution and collected on
the basis of usage. The funds are collected to support cost-effective
energy efficiency and conservation activities, public interest
research and development not adequately provided by competitive and
regulated markets, and renewable energy resources. Existing PUC
resolutions refer to the nonbypassable rate component as a "Public
Goods Charge" (PGC). Existing law requires that the PGC not exceed,
for any tariff schedule, the level that was in effect on January 1,
2000. Existing law requires that the PGC be adjusted annually at a
rate equal to the lesser of the annual growth in electric commodity
sales or inflation, as defined. Existing law requires the Energy
Commission to transfer funds collected by electrical corporations for
in state operation and development of existing and new and emerging
renewable resources technologies into the Renewable Resource Trust
Fund, to fund specified programs.
Existing law requires that 17.5% of the money collected under the
renewable energy public goods charge be used to fund the Emerging
Renewable Resources Account within the Renewable Resource Trust
Account, for the purpose of a multiyear, consumer-based program to
foster the development of emerging renewable technologies in
distributed generation applications.
This bill would establish the Solar Homes Peak Energy Procurement
Subaccount within the Emerging Renewable Resources Account and would
make the moneys therein available, upon appropriation by the
Legislature, to fund the Solar Homes Peak Energy Procurement Program,
which the bill would establish. The bill would require the Energy
Commission to award rebates, and would authorize the Energy
Commission to provide incentives, to support the installation of
solar energy systems, as defined, on existing and new residential
construction. The bill would require that the amounts collected to
fund energy efficiency, renewable energy, and research, development,
and demonstration be set at the levels established by the PUC for
2005, and would require that any moneys collected above those 2005
levels during 2006 and 2007 be transferred to the Solar Homes Peak
Energy Procurement Subaccount.
This bill would require that the PUC, on or before February 1,
2006, and in consultation with the Energy Commission, issue an order
initiating an investigation and opening a ratemaking proceeding, or
to expand the scope of an existing proceeding, to adopt and implement
a program to invest in residential solar energy systems. The bill
would require the PUC to complete its investigation and proceeding
and adopt the program no later than January 1, 2008. The bill would
require every local publicly owned electric utility, as defined, to
establish a solar homes program consistent with the program adopted
and implemented by the PUC, within a reasonable time after the PUC
establishes any program for electrical corporations. Each local
publicly owned electric utility would be required to report, on an
annual basis, to its customers and to the Energy Commission,
information relative to the utility's solar homes program and would
authorize the Energy Commission to establish guidelines for the
information to be included in the annual report.
(2) Under the Reliable Electric Service Investments Act, the
Energy Commission was required to hold moneys collected for renewable
energy and deposited in the Renewable Resource Trust Fund until
further action by the Legislature. The act requires the Energy
Commission to create an initial investment plan, in accordance with
specified objectives, to govern the allocation of funds in the
Renewable Resource Trust Fund collected between January 1, 2002, and
January 1, 2007, in order to ensure a fully competitive and self
sustaining California renewable energy supply. Existing law requires
the Energy Commission, on or before March 31, 2006, to prepare an
investment plan proposing the application of moneys collected between
January 1, 2007, and January 1, 2012.
This bill would delete the requirement that moneys collected for
renewable energy and deposited in the Renewal Resource Trust Fund be
held until further action by the Legislature. The bill would require
the Energy Commission, on or before March 31, 2006, to prepare a
report, rather than an investment plan, describing the application of
moneys collected between January 1, 2007, and January 1, 2012, and
to describe the use of any funds applied toward program activities
during the period January 1, 2002, through March 31, 2006.
(3) Existing law authorizes a local government to develop and
administer a program to encourage the construction of buildings that
use solar thermal and photovoltaic systems meeting certain standards
and requires that any program recognize owners and builders who
participate in the program by awarding these owners and builders a
"Sunny Homes Seal."
This bill would require that beginning January 1, 2008, a seller
of production homes, as defined, offer the option of a solar energy
system, as defined, to all customers negotiating to purchase a new
production home and to disclose certain information.
(4) Existing law requires every electric service provider, as
defined, to develop a standard contract or tariff providing for net
energy metering, and to make this contract available to eligible
customer generators, upon request. Existing law requires every
electric service provider, upon request, to make available to
eligible customer generators contracts for net energy metering on a
first-come-first-served basis until the time that the total rated
generating capacity used by eligible customer generators exceeds 0.5%
of the electric service provider's aggregate customer peak demand.
This bill would require that every electric service provider, upon
request, make available to eligible customer generators contracts
for net energy metering on a first-come-first-served basis until the
time that the total rated generating capacity used by eligible
customer generators exceeds 5% of the electric service provider's
aggregate customer peak demand and would delete certain provisions of
existing law relative to the annualized net metering calculation.
(5) Under existing law, a violation of the Public Utilities Act or
an order or direction of the PUC is a crime.
Because various provisions of this bill are within the act and
require action by the PUC to implement the bill's requirements, a
violation of those provisions would be a crime thereby imposing a
state-mandated local program by creating a new crime.
(6) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:(a) California has a pressing need to procure a steady
supply of affordable and reliable peak electricity.
(b) Solar generated electricity is uniquely suited to California's
needs because it produces electricity when California needs it most,
during the peak demand hours in summer afternoons when the sun is
brightest and air-conditioners are running at capacity.
(c) Procuring solar electric generation capacity to meet peak
electricity demand increases system reliability and decreases
California's dependence on unstable fossil fuel supplies.
(d) Solar generated electricity diversifies California's energy
portfolio. California currently relies on natural gas for the bulk of
its electricity generation needs. Increasing energy demands place
increasing pressure on limited natural gas supplies and threaten to
raise costs.
(e) More than 150,000 homes will be built annually in California
in the coming years, challenging energy reliability and
affordability, and increasing air pollution, a widespread public
health problem that burdens all Californians.
(f) Investing in residential solar electricity generation
installations today will lower the cost of solar generated
electricity for all Californians in the future. In 10 years, solar
peak electric generation can be procured without the need for
rebates. Japan implemented a similar targeted program several years
ago. Today, the number of solar generation installations in Japan
continues to grow even though the subsidy program ceased operation in
2004.
(g) Increasing California's solar electricity generation market
will also bring additional manufacturing, installation, and sales
jobs to the state at a higher rate than most conventional energy
production sources.
(h) The Million Solar Homes Peak Energy Procurement Program is a
cost-effective investment by ratepayers in peak electricity
generation capacity and ratepayers will recoup the cost of their
investment through lower rates as a result of avoiding purchases of
electricity at peak rates, with additional system reliability and
pollution reduction benefits.
SEC. 2. Section 25407 is added to the Public Resources Code, to
read:
25407. (a) As used in this section, the following terms have the
following meanings:(1) "kW" means kilowatts as measured from the
alternating current side of a solar energy system inverter consistent
with Section 223 of Title 15 of the United States Code.
(2) "Production home" means a single-family residence constructed
as part of a development of at least 25 homes per project that is
intended or offered for sale.
(3) "Solar energy system" means a photovoltaic solar collector or
other photovoltaic solar energy device that has a primary purpose of
providing for the collection and distribution of solar energy for the
generation of electricity, and that produces at least one kW
alternating current rated peak electricity.
(b) A seller of production homes shall, beginning January 1, 2009,
offer a solar energy system option to all customers that enter into
negotiations to purchase a new production home. The information shall
include estimated total costs and estimated energy savings specific
to the climate zone.
SEC. 3. Section 25744 of the Public Resources Code is amended to
read:
25744. (a) Seventeen and one-half percent of the money collected
pursuant to the renewable energy public goods charge shall be used
for a multiyear, consumer-based program to foster the development of
emerging renewable technologies in distributed generation
applications.(b) Any funds used for emerging technologies pursuant to
this section shall be expended in accordance with the report,
subject to all of the following requirements:
(1) Funding for emerging technologies shall be provided through a
competitive, market-based process that shall be in place for a period
of not less than five years, and shall be structured so as to allow
eligible emerging technology manufacturers and suppliers to
anticipate and plan for increased sale and installation volumes over
the life of the program.
(2) The program shall provide monetary rebates, buydowns, or
equivalent incentives, subject to subparagraph (C)
paragraph (3) , to purchasers, lessees, lessors, or
sellers of eligible electricity generating systems. Incentives shall
benefit the end-use consumer of renewable generation by directly and
exclusively reducing the purchase or lease cost of the eligible
system, or the cost of electricity produced by the eligible system.
Incentives shall be issued on the basis of the rated electrical
generating capacity of the system measured in watts, or the amount of
electricity production of the system, measured in kilowatthours.
Incentives shall be limited to a maximum percentage of the system
price, as determined by the commission.
(3) Eligible distributed emerging technologies are photovoltaic,
solar thermal electric, fuel cell technologies that utilize renewable
fuels, and wind turbines of not more than 50 kilowatts rated
electrical generating capacity per customer site, and other
distributed renewable emerging technologies that meet the emerging
technology eligibility criteria established by the commission.
Eligible electricity generating systems are intended primarily to
offset part or all of the consumer's own electricity demand, and
shall not be owned by local publicly owned electric utilities, nor be
located at a customer site that is not receiving distribution
service from an electrical corporation that is subject to the
renewable energy public goods charge and contributing funds to
support programs under this chapter. All eligible electricity
generating system components shall be new and unused, shall not have
been previously placed in service in any other location or for any
other application, and shall have a warranty of not less than five
years to protect against defects and undue degradation of electrical
generation output. Systems and their fuel resources shall be located
on the same premises of the end-use consumer where the consumer's own
electricity demand is located, and all eligible electricity
generating systems shall be connected to the utility grid in
California. The commission may require eligible electricity
generating systems to have meters in place to monitor and measure a
system's performance and generation. Only systems that will be
operated in compliance with applicable law and the rules of the
Public Utilities Commission shall be eligible for funding.
(4) The commission shall limit the amount of funds available for
any system or project of multiple systems and reduce the level of
funding for any system or project of multiple systems that has
received, or may be eligible to receive, any government or utility
funds, incentives, or credit.
(5) In awarding funding, the commission may provide preference to
systems that provide tangible demonstrable benefits to communities
with a plurality of minority or low-income populations.
(6) In awarding funding, the commission shall develop and
implement eligibility criteria and a system that provides preference
to systems based upon system performance, taking into account
factors, including, but not limited to, shading, insulation levels,
and installation orientation.
(7) At least once annually, the commission shall publish and make
available to the public the balance of funds available for emerging
renewable energy resources and for the Solar Homes Peak Energy
Procurement Program, for rebates, buydowns, and other
incentives for the purchase of these resources , as well as the
percentage of new homes that are equipped with solar energy systems
.
(c) Awards for solar energy systems shall be made subject to
all of the following:
(1) Awards shall be for the installation of solar energy systems
on new or existing residences located at a customer site that is or
will be receiving electrical distribution service from an electrical
corporation that is subject to Section 383 or 399.8 of the Public
Utilities Code.
(2) The maximum rebate in year one shall be no greater than two
dollars and eighty cents ($2.80) per watt, and shall decline each
year thereafter at a rate of no less than 7 percent per year.
(3) The rebate amount shall be zero as of January 1, 2016.
(4) The schedule shall be made available to the public no less
than 60 days in advance of its adoption and the commencement of the
first decline in rebates.
(5) The commission may increase the rebate level by not more than
50 percent above the maximum level established by the commission
pursuant to paragraph (2) for solar energy systems that are installed
on "zero energy homes." Prior to any increase in the rebate level,
the commission shall adopt a definition of "zero energy homes,"
through a process including at least one public hearing with not less
than 30 days' notice.
(6) The Commission may establish eligibility criteria for solar
energy systems, including the following:
(A) The solar energy system is intended primarily to offset part
or all of the consumer's own electricity demand.
(B) All eligible solar energy system components are new and
unused, and have not previously been placed in service in any other
location or for any other application.
(C) Each eligible solar energy system has a warranty of not less
than 10 years to protect against defects and undue degradation of
electrical generation output.
(D) Each eligible solar energy system is located on the same
premises of the end use consumer where the consumer's own electricity
demand is located.
(E) Each eligible solar energy system is connected to the
electrical corporation's grid within the state.
(7) The commission may limit the amount of funds available for any
system or project of multiple systems and reduce the level of
funding for any system or project of multiple systems that has
received, or may be eligible to receive, any other government or
utility funding, incentive, or credit.
(8) In awarding funding, the commission may provide preference to
systems that provide tangible demonstrable benefits to communities
with a plurality of minority or low-income populations.
(9) Consistent with the requirements of this subdivision, the
commission may adjust the rebate schedule based upon changing market
conditions and other factors.
(10) The commission may provide monetary incentives to purchasers,
lessees, lessors, or sellers of eligible solar energy systems. Any
incentives provided shall benefit the end use consumer by directly
and exclusively reducing the purchase or lease cost of the eligible
solar energy system, or the cost of electricity produced by the
eligible solar energy system. Incentives shall be issued on the basis
of the rated electrical capacity of the system measured in watts, or
in the electricity production of the system, measured in
kilowatthours, as determined by the commission.
(11) As used in this subdivision, the following terms have the
following meanings:
(A) "kW" means kilowatts as measured from the alternating current
side of the solar energy system inverter consistent with Section 223
of Title 15 of the United States Code.
(B) "Solar energy system" means a photovoltaic solar collector or
other photovoltaic solar energy device that has a primary purpose of
providing for the collection and distribution of solar energy for the
generation of electricity, and that produces at least one kW
alternating current rated peak electricity.
(C) "Solar Homes Peak Energy Procurement Program" means the
program established by this subdivision and administered by the
commission pursuant to Section 25744.5.
(d) Notwithstanding Section 399.6 of the Public
Utilities Code, the commission may expend, until December 31, 2008,
up to sixty million dollars ($60,000,000) of the funding allocated to
the Renewable Resources Trust Fund for the program established in
this section, subject to the repayment requirements of subdivision
(f) of Section 25751.
SEC. 4. Section 25744.4 is added to the Public Resources Code , to
read:
25744.4. (a) The Solar Homes Peak Energy Procurement Subaccount
is hereby created within the Emerging Renewable Resources Account.
Nothwithstanding Section 25751, moneys in the account may only be
expended upon appropriation by the Legislature in the annual Budget
Act or upon supplemental appropriation. The subaccount shall contain
money from all interest, repayments, disencumbrances, royalties, and
any other proceeds appropriated, transferred, or otherwise received
for purposes pertaining to the Solar Homes Peak Energy Procurement
Program. Any appropriations that are made from the subaccount shall
have an encumbrance period of not longer than two years, and a
liquidation period of not longer than four years.(b) The commission
shall report annually to the appropriate budget committees of the
Legislature on any encumbrances or liquidations that are outstanding
at the time the commission's budget is submitted to the Legislature
for review.
(c) Any funds used for applications received after January 1,
2006, for the Solar Homes Peak Procurement Program shall be expended
in accordance with the following:
(1) The commission shall award rebates to support the Solar Homes
Peak Energy Procurement Program and shall adopt a schedule of
declining rebates for this purpose, subject to all of the following:
(A) Awards shall be for the installation of solar energy systems
on new or existing residences located at a customer site that is or
will be receiving electrical distribution service from an electrical
corporation that is subject to Section 383 or 399.8 of the Public
Utilities Code.
(B) The maximum rebate in year one shall be no greater than two
dollars and eighty cents ($2.80) per watt, and shall decline each
year thereafter at a rate of no less than 7 percent per year.
(C) The rebate amount shall be zero as of January 1, 2015.
(D) The schedule shall be made available to the public no less
than 60 days in advance of its adoption and the commencement of the
first decline in rebates.
(E) The commission may increase the rebate level by not more than
50 percent above the maximum level established by the commission
pursuant to paragraph (2) for solar energy systems that are installed
on "zero energy homes." Prior to any increase in the rebate level,
the commission shall adopt a definition of "zero energy homes,"
through a public process, including at least one public hearing with
not less than 30 days' notice.
(F) The Commission may establish eligibility criteria for solar
energy systems, including the following:
(i) The solar energy system is intended primarily to offset part
or all of the consumer's own electricity demand.
(ii) All eligible solar energy system components are new and
unused, and have not previously been placed in service in any other
location or for any other application.
(iii) Each eligible solar energy system has a warranty of not less
than 10 years to protect against defects and undue degradation of
electrical generation output.
(iv) Each eligible solar energy system and the fuel resource for
the system is located on the same premises of the end-use consumer
where the consumer's own electricity demand is located.
(v) Each eligible solar energy system is connected to the
electrical corporation's grid within the state.
(G) The commission may limit the amount of funds available for any
system or project of multiple systems and reduce the level of
funding for any system or project of multiple systems that has
received, or may be eligible to receive, any other government or
utility funding, incentive, or credit.
(H) In awarding funding, the commission may provide preference to
systems that provide tangible demonstrable benefits to communities
with a plurality of minority or low-income populations.
(2) Consistent with the requirements of paragraph (1), the
commission may adjust the rebate schedule based upon changing market
conditions and other factors.
(3) The commission may provide monetary incentives to purchasers,
lessees, lessors, or sellers of eligible solar energy systems. Any
incentives provided shall benefit the end-use consumer by directly
and exclusively reducing the purchase or lease cost of the eligible
solar energy system, or the cost of electricity produced by the
eligible solar energy system. Incentives shall be issued on the basis
of the rated electrical capacity of the system measured in watts, or
in the electricity production of the system, measured in
kilowatthours, as determined by the commission.
(d) The commission shall ensure proportional program support, not
to exceed 10 percent of overall program funds, for the installation
of solar energy systems on the new construction and rehabilitation of
affordable housing units, including single and multifamily
residential housing. In addition to the rebate, the commission shall
also ensure that additional and proportional resources, not to exceed
5 percent of overall program funds, are provided for the unique
needs of subsidized low-income housing through targeted financing
mechanisms and support, including a revolving loan fund, technical
assistance, and other needs as identified in consultation with the
California Tax Credit Allocation Committee.
(e) To ensure optimal performance of solar energy systems, the
commission shall make adjustments to all rebate and incentive
programs based on outcome and reasoned analysis of the commission's
performance-based incentive pilot program. These adjustments shall be
completed no later than January 1, 2007.
(f) As used in this section, the following terms have the
following meanings:
(A) "kW" means kilowatts as measured from the alternating current
side of the solar energy system inverter consistent with Section 223
of Title 15 of the United States Code.
(B) "Solar energy system" means a photovoltaic solar collector or
other photovoltaic solar energy device that has a primary purpose of
providing for the collection and distribution of solar energy for the
generation of electricity, and that produces at least one kW
alternating current rated peak electricity.
SEC. 5. Section 25744.5 is added to the Public Resources Code , to
read:
25744.5. In administering the Solar Homes Peak Energy Procurement
Program, the commission shall do all the following:(a) Examine
financing options that could lower solar energy system financing
costs to the homeowner. The commission shall examine wholesale and
retail mortgage markets, and other issues that it deems appropriate.
The commission shall submit a report of its findings and
recommendations to the Legislature and the Governor no later than
January 1, 2007.
(b) Establish conditions on rebate or incentive awards that, as
determined by the commission, require or encourage all of the
following:
(1) Appropriate siting and high quality installation of solar
energy systems.
(2) Optimal solar energy system performance during periods of peak
electricity demand, including the use of advanced metering systems,
in-home performance meters, dispatchable battery backup systems, and
performance-based incentives.
(3) Appropriate energy efficiency improvements in the new or
existing home where the solar energy system is installed.
(c) Acquire, if determined to be necessary, appropriate technical
and administrative services or expertise to support the Solar Homes
Peak Energy Procurement Program. The commission may award contracts
to develop or administer all or a portion of the Solar Homes Peak
Energy Procurement Program.
(d) The commission shall adopt guidelines governing the Solar
Homes Peak Energy Procurement Program authorized under this chapter,
at a publicly noticed meeting offering all interested parties an
opportunity to comment. Substantive changes to the guidelines may
not be adopted without at least 10 days' written notice to the
public. The public notice of meetings required by this subdivision
may not be less than 30 days. Notwithstanding any other provision of
law, any guidelines adopted pursuant to this chapter shall be exempt
from the requirements of Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 of the Government Code.
(e) By January 1, 2007, the commission shall publish educational
materials designed to demonstrate how builders may incorporate those
energy efficiency measures that best complement solar homes.
(f) The commission shall develop and publish the estimated annual
electrical savings for solar energy systems.
(g) The commission shall provide assistance to builders and
contractors in support of the Solar Homes Peak Energy Procurement
Program. The assistance includes technical workshops, training,
educational materials, and related research.
SEC. 6. Section 379.8 is added to the Public Utilities Code, to
read:
379.8. Notwithstanding any other law, on or before February 1,
2006, the commission, in consultation with the State Energy Resources
Conservation and Development Commission shall issue an order
initiating an investigation and opening a ratemaking proceeding, or
expanding the scope of an existing proceeding, to adopt and implement
a program to invest in residential solar energy systems, consistent
with all of the following:(a) The objective of the investigation and
proceeding shall be to evaluate current programs of the commission
and the State Energy Resources Conservation and Development
Commission to determine whether those programs are adequately funded
to achieve the goal of placing solar energy systems on 1,000,000
homes by December 31, 2018.
(b) The proceeding shall include public hearings that encourage
participation by a broad and diverse range of interests from all
areas of the state, and interested state entities, including the
State Energy Resources Conservation and Development Commission.
(c) The commission shall include the reasonable cost of the
program in the distribution revenue requirements of electrical
corporations.
(d) Any charge imposed to fund the programs adopted and
implemented pursuant to this section shall be imposed upon all
customers.
(e) No charge in excess of five cents ($0.05) per kilowatthour may
be imposed to fund programs adopted and implemented pursuant to this
section.
(f) The commission shall complete its investigation and proceeding
and adopt the program no later than January 1, 2008.
(g) The program adopted by the commission pursuant to this
section, shall be a cost-effective investment by ratepayers in peak
electricity generation capacity that enables ratepayers to recoup the
cost of their investment as a result of avoiding purchases of
electricity at peak rates generated by traditional powerplants and
peaker generation units, with additional system reliability and
pollution reduction benefits.
(h) Every local publicly owned electric utility, as defined in
Section 9604, shall establish a solar homes program consistent with
the program adopted and implemented by the commission pursuant to
this section, to fund program expenditure levels consistent with
those established for the three largest electrical corporations in
California, at a rate proportional to the size of the ratepayer base
served by the local publicly owned electric utility. Every local
publicly owned electric utility shall establish the program within a
reasonable period of time, but not to exceed six months, after the
commission adopts and implements any solar homes program pursuant to
this section. Each local publicly owned electric utility shall
report, on an annual basis, to its customers and to the State Energy
Resources Conservation and Development Commission, information
relative to the utility's solar homes program. The State Energy
Resources Conservation and Development Commission may establish
guidelines for the information to be included in the annual report.
The charge imposed pursuant this subdivision shall fund the utility's
administrative and reporting costs pursuant to this section.
SEC. 7. Section 399.6 of the Public Utilities Code is amended to
read:
399.6. (a) In order to optimize public investment and ensure that
the most cost-effective and efficient investments in renewable
resources are vigorously pursued, the Energy Commission shall create
an investment plan as set forth in paragraphs (1) to (3), inclusive,
to govern the allocation of funds provided pursuant to this article.
The Energy Commission's long-term goal shall be a fully competitive
and self-sustaining California renewable energy supply. The
investment plan shall be in accordance with all of the following:(1)
The investment plan's objective shall be to increase, in the near
term, the quantity of California's electricity generated by in-state
renewable energy resources, while protecting system reliability,
fostering resource diversity, and obtaining the greatest
environmental benefits for California residents.
(2) An additional objective of the plan shall be to identify and
support emerging renewable energy technologies that have the greatest
near-term commercial promise and that merit targeted assistance.
(3) The investment plan shall contain specific numerical targets,
reflecting the projected impact of the plan, for both of the
following:
(A) Increased quantity of California electrical generation
produced from emerging technologies and from overall renewable
resources.
(B) Increased supply of renewable generation available from
facilities other than those selling to investor-owned utilities under
contracts entered into prior to 1996 under the federal Public
Utilities Regulatory Policies Act of 1978 (P.L. 95-617).
(b) The Energy Commission shall, on an annual basis, evaluate
progress on meeting the targets set forth in subparagraphs (A) and
(B) of paragraph (3) of subdivision (a), or any substitute provisions
adopted by the
Legislature upon review of the investment plan, and assess the impact
of the investment plan on reducing the cost to Californians of
renewable energy generation.
(c) In preparing these investment plans
the investment plan , the Energy Commission shall recommend
allocations among all of the following:
(1) (A) Except as provided in subparagraph (B), production
incentives for new renewable energy, including repowered or
refurbished renewable energy.
(B) Allocations may not be made for renewable energy that is
generated by a project that remains under a power purchase contract
with an electrical corporation originally entered into prior to
September 24, 1996, whether amended or restated thereafter.
(c) Notwithstanding subparagraph (B), production incentives for
incremental new, repowered, or refurbished renewable energy from
existing projects under a power purchase contract with an electrical
corporation originally entered into prior to September 24, 1996,
whether amended or restated thereafter, may be allowed in any month,
if all of the following occur:
(i) The project's power purchase contract provides that all energy
delivered and sold under the contract is paid at a price that does
not exceed commission-approved short-run avoided cost of energy.
(ii) Either of the following:
(I) The power purchase contract is amended to provide that the
kilowatthours used to determine the capacity payment in any
time-of-delivery period in any month under the contract shall be
equal to the actual kilowatthour production, but no greater than the
five-year average of the kilowatthours delivered for the
corresponding time-of-delivery period and month, in the years 1994 to
1998, inclusive.
(II) If a project's installed capacity as of December 31, 1998, is
less than 75 percent of the nameplate capacity as stated in the
power purchase contract, the power purchase contract is amended to
provide that the kilowatthours used to determine the capacity payment
in any time-of-delivery period in any month under the contract shall
be equal to the actual kilowatthour production, but no greater than
the product of the five-year average of the kilowatthours delivered
for the corresponding time-of-delivery period and month, in the years
1994 to 1998, inclusive, and the ratio of installed capacity as of
December 31 of the previous year, but not to exceed contract
nameplate capacity, to the installed capacity as of December 31,
1998.
(iii) The production incentive is payable only with respect to the
kilowatthours delivered in a particular month that exceeds the
corresponding five-year average calculated pursuant to clause (ii).
(2) Rebates, buydowns, or equivalent incentives for emerging
renewable technologies.
(3) Customer credits for renewables not under contract with a
utility.
(4) Customer education.
(5) Incentives for reducing fuel costs that are confirmed to the
satisfaction of the Energy Commission at solid fuel biomass energy
facilities in order to provide demonstrable environmental and public
benefits, including, but not limited to, air quality.
(6) Solar thermal generating resources that enhance the
environmental value or reliability of the electrical system and that
require financial assistance to remain economically viable, as
determined by the Energy Commission. The Energy Commission may
require financial disclosure from applicants for purposes of this
paragraph.
(7) Specified fuel cell technologies, if the Energy Commission
makes all of the following findings:
(A) The specified technologies have similar or better air
pollutant characteristics than renewable technologies in the
investment plan.
(B) The specified technologies require financial assistance to
become commercially viable by reference to wholesale generation
prices.
(C) The specified technologies could contribute significantly to
the infrastructure development or other innovation required to meet
the long-term objective of a self-sustaining, competitive supply of
renewable energy.
(8) Existing wind-generating resources, if the Energy Commission
finds that the existing wind-generating resources are a
cost-effective source of reliable and environmental benefits compared
with other eligible sources, and that the existing wind-generating
resources require financial assistance to remain economically viable,
as determined by the Energy Commission. The Energy Commission may
require financial disclosure from applicants for the purposes of this
paragraph.
(d) The commission shall establish a cap on the aggregate amount
of funds that may be awarded to public entities from the program that
provides customer credits for renewables. The intent of the cap is
to assure adequate funding of credits for residential and small
commercial customers.
(e) Notwithstanding any other provision of law, moneys
collected for renewable energy pursuant to this article shall be
transferred to the Renewable Resource Trust Fund of the Energy
Commission, to be held until further action by the Legislature.
The Energy Commission shall prepare and submit to the
Legislature, on or before March 31, 2001, an initial investment plan
for these moneys, addressing the application of moneys collected
between January 1, 2002, and January 1, 2007. The initial investment
plan shall also include an evaluation of and report to the
Legislature regarding the appropriateness and structure of a
mandatory state purchase of renewable energy. On or before March 31,
2006, the Energy Commission shall prepare an investment plan
proposing a report describing the application
of moneys collected between January 1, 2007, and January 1, 2012.
No moneys may be expended in the years covered by these
plans without further legislative action The report
shall describe the use of moneys applied toward program activities
during the period commencing January 1, 2002, through March 31, 2006
.
SEC. 8. Section 399.8 of the Public Utilities Code is amended to
read:
399.8. (a) In order to ensure that the citizens of this state
continue to receive safe, reliable, affordable, and environmentally
sustainable electric service, it is the policy of this state and the
intent of the Legislature that prudent investments in energy
efficiency, renewable energy, and research, development and
demonstration shall continue to be made.(b) (1) Every customer of an
electrical corporation, shall pay a nonbypassable system benefits
charge authorized pursuant to this article. The system benefits
charge shall fund energy efficiency, renewable energy, and research,
development and demonstration.
(2) Local publicly owned electric utilities shall continue to
collect and administer system benefits charges pursuant to Section
385.
(c) (1) The commission shall require each electrical corporation
to identify a separate rate component to collect revenues to fund
energy efficiency, renewable energy, and research, development and
demonstration programs authorized pursuant to this section beginning
January 1, 2002, through January 1, 2012. The rate component shall be
a nonbypassable element of the local distribution service and
collected on the basis of usage.
(2) This rate component may not exceed, for any tariff schedule,
the level of the rate component that was used to recover funds
authorized pursuant to Section 381 on January 1, 2000. If the amounts
specified in paragraph (1) of subdivision (d) are not recovered
fully in any year, the commission shall reset the rate component to
restore the unrecovered balance, provided that the rate component may
not exceed, for any tariff schedule, the level of the rate component
that was used to recover funds authorized pursuant to Section 381 on
January 1, 2000. Pending restoration, any annual shortfalls shall be
allocated pro rata among the three funding categories in the
proportions established in paragraph (1) of subdivision (d).
(d) The commission shall order San Diego Gas and Electric Company,
Southern California Edison Company, and Pacific Gas and Electric
Company to collect these funds commencing on January 1, 2002, as
follows:
(1) Two hundred twenty-eight million dollars ($228,000,000) per
year in total for energy efficiency and conservation activities, one
hundred thirty-five million dollars ($135,000,000) in total per year
for renewable energy, and sixty-two million five hundred thousand
dollars ($62,500,000) in total per year for research, development and
demonstration. The funds for energy efficiency and conservation
activities shall continue to be allocated in proportions established
for the year 2000 as set forth in paragraph (1) of subdivision (c) of
Section 381.
(2) The amounts shall be adjusted annually at a rate equal to the
lesser of the annual growth in electric commodity sales or inflation,
as defined by the gross domestic product deflator. The amounts
collected to fund energy efficiency, renewable energy, and research,
development and demonstration, shall be those levels established by
the commission for 2005. Any additional moneys collected for the
period from January 1, 2006, to December 31, 2007, inclusive, as a
result of the
difference between the rate component amount specified by paragraph
(2) of subdivision (c ) and the amounts
required to be collected pursuant to this subdivision, shall be
transferred at least quarterly to the Solar Homes Peak Energy
Procurement Subaccount within the Emerging Renewable Resources
Account in the Renewable Resource Trust Fund of the State Energy
Resources Conservation and Development Commission.
(e) The commission and the Energy Commission shall retain and
continue their oversight responsibilities as set forth in Sections
381 and 383, and Chapter 7.1 (commencing with Section 25620) and
Chapter 8.6 (commencing with Section 25740) of Division 15 of the
Public Resources Code.
(f) (1) On or before January 1, 2004, the Governor shall appoint
an independent review panel including, but not limited to, members
with expertise on the energy service needs of large and small
electricity consumers, system reliability issues, and energy-related
public policy. On or before January 1, 2005, the panel shall prepare
and submit to the Legislature and the Energy Commission a report
evaluating the energy efficiency, renewable energy, and research,
development and demonstration programs funded under this section.
Reasonable costs associated with the review in each of the three
program categories, including technical assistance, may be charged to
the relevant program category under procedures to be developed by
the commission for energy efficiency and by the Energy Commission for
renewable energy and research development and demonstration.
(2) The report shall also assess all of the following:
(A) Whether ongoing programs are consistent with the statutory
goals.
(B) Whether potential synergies among the program categories
described in paragraph (1) that could provide enhanced public value
have been identified and incorporated in the programs.
(C) If established targets for increased renewable generation are
likely to be achieved.
(D) What changes should be made to result in a more efficient use
of public resources.
(3) The report shall also compare the Energy Commission's programs
with efforts undertaken by other states and assess, as an
alternative, the relative costs and benefits of adopting a tradable
minimum renewable energy requirement in California. The evaluation
shall include recommendations intended to optimize renewable resource
development at the least cost.
(4) For energy efficiency programs, the report shall include an
evaluation of all of the following:
(A) The net benefits secured for residential customers, taking
into account both public and private costs, including improvements in
that customer group's ability to avoid or reduce consumption of
relatively costly peak electricity.
(B) Whether the programs provide a balance of benefits to all
sectors that contribute to the funding.
(C) The extent to which competition in energy markets including,
but not limited to, load participation in ancillary services markets,
and improvements in technology affect the continuing need for such
programs.
(D) The status and growth of the private, competitive energy
services industry that provides energy efficiency services and other
energy products to customers.
(E) The commercial availability of any new technologies that
reduce electricity demands during high-priced periods.
(F) Customers' willingness and ability to reduce consumption or
adopt energy efficiency measures without program support.
(G) The extent to which the programs have delivered cost-effective
energy efficiency not adequately provided by markets and as a result
have reduced energy demand and consumption.
(H) The relative cost-effectiveness of program expenditures
compared to other current or potential expenditures to enhance system
reliability.
(5) The report shall include specific recommendations aimed at
assisting the Legislature in determining whether to change or
eliminate the collection of the system benefits charge on or after
January 1, 2007.
(6) The panel may update and revise the report as needed.
(g) Promptly after receiving the panel's report, the commission
shall convene a proceeding to address implementation of the panel's
energy efficiency recommendations.
(h) An applicant for the Large Nonresidential Standard Performance
Contract Program funded pursuant to paragraph (1) of subdivision (b)
and an electrical corporation shall promptly attempt to resolve
disputes that arise related to the program's guidelines and
parameters prior to entering into a program agreement. The applicant
shall provide the electrical corporation with written notice of any
dispute. Within 10 business days after receipt of the notice, the
parties shall meet to resolve the dispute. If the dispute is not
resolved within 10 business days after the date of the meeting, the
electrical corporation shall notify the applicant of his or her right
to file a complaint with the commission, which complaint shall
describe the grounds for the complaint, injury, and relief sought.
The commission shall issue its findings in response to a filed
complaint within 30 business days of the date of receipt of the
complaint. Prior to issuance of its findings, the commission shall
provide a copy of the complaint to the electrical corporation, which
shall provide a response to the complaint to the commission within
five business days of the date of receipt. During the dispute period,
the amount of estimated financial incentives shall be held in
reserve until the dispute is resolved.
(i) The commission shall, on or before February 1, 2007, issue an
order opening a ratemaking or other appropriate proceeding to timely
implement the changes made to subdivision (d) during the 2005 portion
of the 2005-06 Regular Session.
SEC. 9. Section 2827 of the Public Utilities Code is amended to
read:
2827. (a) The Legislature finds and declares that a program to
provide net energy metering for eligible customer-generators is one
way to encourage substantial private investment in renewable energy
resources, stimulate in-state economic growth, reduce demand for
electricity during peak consumption periods, help stabilize
California's energy supply infrastructure, enhance the continued
diversification of California's energy resource mix, and reduce
interconnection and administrative costs for electricity suppliers.
(b) As used in this section, the following definitions apply:
(1) "Electric service provider" means an electrical corporation,
as defined in Section 218, a local publicly owned electric utility,
as defined in Section 9604, or an electrical cooperative, as defined
in Section 2776, or any other entity that offers electrical service.
This section shall not apply to a local publicly owned electric
utility, as defined in Section 9604 of the Public Utilities Code,
that serves more than 750,000 customers and that also conveys water
to its customers.
(2) "Eligible customer-generator" means a residential, small
commercial customer as defined in subdivision (h) of Section 331,
commercial, industrial, or agricultural customer of an electric
service provider, who uses a solar or a wind turbine electrical
generating facility, or a hybrid system of both, with a capacity of
not more than one megawatt that is located on the customer's owned,
leased, or rented premises, is interconnected and operates in
parallel with the electric grid, and is intended primarily to offset
part or all of the customer's own electrical requirements.
(3) "Net energy metering" means measuring the difference between
the electricity supplied through the electric grid and the
electricity generated by an eligible customer-generator and fed back
to the electric grid over a 12-month period as described in
subdivision (h). Net energy metering shall be accomplished using a
single meter capable of registering the flow of electricity in two
directions. An additional meter or meters to monitor the flow of
electricity in each direction may be installed with the consent of
the customer-generator, at the expense of the electric service
provider, and the additional metering shall be used only to provide
the information necessary to accurately bill or credit the
customer-generator pursuant to subdivision (h), or to collect solar
or wind electric generating system performance information for
research purposes. If the existing electrical meter of an eligible
customer-generator is not capable of measuring the flow of
electricity in two directions, the customer-generator shall be
responsible for all expenses involved in purchasing and installing a
meter that is able to measure electricity flow in two directions. If
an additional meter or meters are installed, the net energy metering
calculation shall yield a result identical to that of a single meter.
An eligible customer-generator who already owns an existing solar or
wind turbine electrical generating facility, or a hybrid system of
both, is eligible to receive net energy metering service in
accordance with this section.
(4) "Wind energy co-metering" means any wind energy project
greater than 50 kilowatts, but not exceeding one megawatt, where the
difference between the electricity supplied through the electric grid
and the electricity generated by an eligible customer-generator and
fed back to the electric grid over a 12-month period is as described
in subdivision (h). Wind energy co-metering shall be accomplished
pursuant to Section 2827.8.
(5) "Co-energy metering" means a program that is the same in all
other respects as a net energy metering program, except that the
local publicly owned electric utility, as defined in Section 9604,
has elected to apply a generation-to-generation energy and
time-of-use credit formula as provided in subdivision (i).
(6) "Ratemaking authority" means, for an electrical corporation as
defined in Section 218, or an electrical cooperative as defined in
Section 2776, the commission, and for a local publicly owned electric
utility as defined in Section 9604, the local elected body
responsible for regulating the rates of the local publicly owned
utility.
(c) (1) Every electric service provider shall develop a standard
contract or tariff providing for net energy metering, and shall make
this contract available to eligible customer-generators, upon
request, on a first-come-first-served basis until the time that the
total rated generating capacity used by eligible customer-generators
exceeds one-half of 1 5 percent of
the electric service provider's aggregate customer peak demand.
(2) On an annual basis, beginning in 2003, every electric service
provider shall make available to the ratemaking authority information
on the total rated generating capacity used by eligible
customer-generators that are customers of that provider in the
provider's service area. For those electric service providers who are
operating pursuant to Section 394, they shall make available to the
ratemaking authority the information required by this paragraph for
each eligible customer-generator that is their customer for each
service area of an electric corporation, local publicly owned
electric utility, or electrical cooperative, in which the customer
has net energy metering. The ratemaking authority shall develop a
process for making the information required by this paragraph
available to energy service providers, and for using that information
to determine when, pursuant to paragraph (3), a service provider is
not obligated to provide net energy metering to additional
customer-generators in its service area.
(3) Notwithstanding paragraph (1), an electric service provider is
not obligated to provide net energy metering to additional
customer-generators in its service area when the combined total peak
demand of all customer-generators served by all the electric service
providers in that service area furnishing net energy metering to
eligible customer-generators exceeds one-half of 1
5 percent of the aggregate customer peak demand of
those electric service providers.
(d) Electric service providers shall make all necessary forms and
contracts for net metering service available for download from the
Internet.
(e) (1) Every electric service provider shall ensure that requests
for establishment of net energy metering are processed in a time
period not exceeding that for similarly situated customers requesting
new electric service, but not to exceed 30 working days from the
date the electric service provider receives a completed application
form for net metering service, including a signed interconnection
agreement from an eligible customer-generator and the electric
inspection clearance from the governmental authority having
jurisdiction. If an electric service provider is unable to process
the request within the allowable timeframe, the electric service
provider shall notify both the customer-generator and the ratemaking
authority of the reason for its inability to process the request and
the expected completion date.
(2) Electric service providers shall ensure that requests for an
interconnection agreement from an eligible customer-generator are
processed in a time period not to exceed 30 working days from the
date the electric service provider receives a completed application
form from the eligible customer-generator for an interconnection
agreement. If an electric service provider is unable to process the
request within the allowable timeframe, the electric service provider
shall notify the customer-generator and the ratemaking authority of
the reason for its inability to process the request and the expected
completion date.
(f) (1) If a customer participates in direct transactions pursuant
to paragraph (1) of subdivision (b) of Section 365 with an electric
supplier that does not provide distribution service for the direct
transactions, the electric service provider that provides
distribution service for an eligible customer-generator is not
obligated to provide net energy metering to the customer.
(2) If a customer participates in direct transactions pursuant to
paragraph (1) of subdivision (b) of Section 365 with an electric
supplier, and the customer is an eligible customer-generator, the
electric service provider that provides distribution
service for the direct transactions may recover from the customer's
electric service provider the incremental costs of metering and
billing service related to net energy metering in an amount set by
the ratemaking authority.
(g) Each net energy metering contract or tariff shall be
identical, with respect to rate structure, all retail rate
components, and any monthly charges, to the contract or tariff to
which the same customer would be assigned if the customer did not use
an eligible solar or wind electrical generating facility, except
that eligible customer-generators shall not be assessed standby
charges on the electrical generating capacity or the kilowatthour
production of an eligible solar or wind electrical generating
facility. The charges for all retail rate components for eligible
customer-generators shall be based exclusively on the
customer-generator's net kilowatthour consumption over a 12-month
period, without regard to the customer-generator's choice of electric
service provider. Any new or additional demand charge, standby
charge, customer charge, minimum monthly charge, interconnection
charge, or any other charge that would increase an eligible
customer-generator's costs beyond those of other customers who are
not customer-generators in the rate class to which the eligible
customer-generator would otherwise be assigned if the customer did
not own, lease, rent, or otherwise operate an eligible solar or wind
electrical generating facility are contrary to the intent of this
section, and shall not form a part of net energy metering contracts
or tariffs.
(h) For eligible residential and small commercial
customer-generators, the net energy metering calculation shall be
made by measuring the difference between the electricity supplied to
the eligible customer-generator and the electricity generated by the
eligible customer-generator and fed back to the electric grid over a
12-month period. The following rules shall apply to the annualized
net metering calculation:
(1) The eligible residential or small commercial
customer-generator shall, at the end of each 12-month period
following the date of final interconnection of the eligible
customer-generator's system with an electric service provider, and at
each anniversary date thereafter, be billed for electricity used
during that period. The electric service provider shall determine if
the eligible residential or small commercial customer-generator was a
net consumer or a net producer of electricity during that period.
(2) At the end of each 12-month period, where the electricity
supplied during the period by the electric service provider exceeds
the electricity generated by the eligible residential or small
commercial customer-generator during that same period, the eligible
residential or small commercial customer-generator is a net
electricity consumer and the electric service provider shall be owed
compensation for the eligible customer-generator's net kilowatthour
consumption over that same
period. The compensation owed for the eligible residential or small
commercial customer-generator's consumption shall be calculated as
follows:
(A) For all eligible customer-generators taking service under
tariffs employing "baseline" and "over baseline" rates, any net
monthly consumption of electricity shall be calculated according to
the terms of the contract or tariff to which the same customer would
be assigned to or be eligible for if the customer was not an eligible
customer-generator. If those same customer-generators are net
generators over a billing period, the net kilowatthours generated
shall be valued at the same price per kilowatthour as the electric
service provider would charge for the baseline quantity of
electricity during that billing period, and if the number of
kilowatthours generated exceeds the baseline quantity, the excess
shall be valued at the same price per kilowatthour as the electric
service provider would charge for electricity over the baseline
quantity during that billing period.
(B) For all eligible customer-generators taking service under
tariffs employing "time of use" rates, any net monthly consumption of
electricity shall be calculated according to the terms of the
contract or tariff to which the same customer would be assigned to or
be eligible for if the customer was not an eligible
customer-generator. When those same customer-generators are net
generators during any discrete time of use period, the net
kilowatthours produced shall be valued at the same price per
kilowatthour as the electric service provider would charge for retail
kilowatthour sales during that same time of use period. If the
eligible customer-generator's time of use electrical meter is unable
to measure the flow of electricity in two directions, paragraph (3)
of subdivision (b) shall apply.
(C) For all residential and small commercial
customer-generators and for each billing period, the net balance of
moneys owed to the electric service provider for net consumption of
electricity or credits owed to the customer-generator for net
generation of electricity shall be carried forward as a monetary
value until the end of each 12-month period. For all commercial,
industrial, and agricultural customer-generators the net
balance of moneys owed shall be paid in accordance with the electric
service provider's normal billing cycle, except that if the
commercial, industrial, or agricultural customer-generator
is a net electricity producer over a normal billing cycle, any excess
kilowatthours generated during the billing cycle shall be carried
over to the following billing period as a monetary value, calculated
according to the procedures set forth in this section, and appear as
a credit on the customer-generator's account, until the end of the
annual period when paragraph (3) shall apply.
(3) At the end of each 12-month period, where the electricity
generated by the eligible customer-generator during the 12-month
period exceeds the electricity supplied by the electric service
provider during that same period, the eligible customer-generator is
a net electricity producer and the electric service provider shall
retain any excess kilowatthours generated during the prior 12-month
period. The eligible customer-generator shall not be owed any
compensation for those excess kilowatthours unless the electric
service provider enters into a purchase agreement with the eligible
customer-generator for those excess kilowatthours.
(4) The electric service provider shall provide every eligible
residential or small commercial customer-generator with net
electricity consumption information with each regular bill. That
information shall include the current monetary balance owed the
electric service provider for net electricity consumed since the last
12-month period ended. Notwithstanding this subdivision, an
electric service provider shall permit that customer to pay monthly
for net energy consumed.
(5) If an eligible residential or small commercial
customer-generator terminates the customer relationship with the
electric service provider, the electric service provider shall
reconcile the eligible customer-generator's consumption and
production of electricity during any part of a 12-month period
following the last reconciliation, according to the requirements set
forth in this subdivision, except that those requirements shall apply
only to the months since the most recent 12-month bill.
(6) If an electric service provider providing net metering to a
residential or small commercial customer-generator ceases providing
that electrical service to that customer during any 12-month period,
and the customer-generator enters into a new net metering contract or
tariff with a new electric service provider, the 12-month period,
with respect to that new electric service provider, shall commence on
the date on which the new electric service provider first supplies
electric service to the customer-generator.
(i) Notwithstanding any other provisions of this section, the
following provisions shall apply to an eligible customer-generator
with a capacity of more than 10 kilowatts, but not exceeding one
megawatt, that receives electrical service from a local publicly
owned electric utility, as defined in Section 9604, that has elected
to utilize a co-energy metering program unless the electric service
provider chooses to provide service for eligible customer-generators
with a capacity of more than 10 kilowatts in accordance with
subdivisions (g) and (h):
(1) The eligible customer-generator shall be required to utilize a
meter, or multiple meters, capable of separately measuring
electricity flow in both directions. All meters shall provide
"time-of-use" measurements of electricity flow, and the customer
shall take service on a time-of-use rate schedule. If the existing
meter of the eligible customer-generator is not a time-of-use meter
or is not capable of measuring total flow of energy in both
directions, the eligible customer-generator shall be responsible for
all expenses involved in purchasing and installing a meter that is
both time-of-use and able to measure total electricity flow in both
directions. This subdivision shall not restrict the ability of an
eligible customer-generator to utilize any economic incentives
provided by a government agency or the electric service provider to
reduce its costs for purchasing and installing a time-of-use meter.
(2) The consumption of electricity from the electric service
provider shall result in a cost to the eligible customer-generator to
be priced in accordance with the standard rate charged to the
eligible customer-generator in accordance with the rate structure to
which the customer would be assigned if the customer did not use an
eligible solar or wind electrical generating facility. The generation
of electricity provided to the electric service provider shall
result in a credit to the eligible customer-generator and shall be
priced in accordance with the generation component, established under
the applicable structure to which the customer would be assigned if
the customer did not use an eligible solar or wind electrical
generating facility.
(3) All costs and credits shall be shown on the eligible
customer-generator's bill for each billing period. In any months in
which the eligible customer-generator has been a net consumer of
electricity calculated on the basis of value determined pursuant to
paragraph (2), the customer-generator shall owe to the electric
service provider the balance of electricity costs and credits during
that billing period. In any billing period in which the eligible
customer-generator has been a net producer of electricity calculated
on the basis of value determined pursuant to paragraph (2), the
electric service provider shall owe to the eligible
customer-generator the balance of electricity costs and credits
during that billing period. Any net credit to the eligible
customer-generator of electricity costs may be carried forward to
subsequent billing periods, provided that an electric service
provider may choose to carry the credit over as a kilowatt hour
credit consistent with the provisions of any applicable tariff,
including any differences attributable to the time of generation of
the electricity. At the end of each 12-month period, the electric
service provider may reduce any net credit due to the eligible
customer-generator to zero.
(j) A solar or wind turbine electrical generating system, or a
hybrid system of both, used by an eligible customer-generator shall
meet all applicable safety and performance standards established by
the National Electrical Code, the Institute of Electrical and
Electronics Engineers, and accredited testing laboratories such as
Underwriters Laboratories and, where applicable, rules of the Public
Utilities Commission regarding safety and reliability. A
customer-generator whose solar or wind turbine electrical generating
system, or a hybrid system of both, meets those standards and rules
shall not be required to install additional controls, perform or pay
for additional tests, or purchase additional liability insurance.
(k) If the commission determines that there are cost or revenue
obligations for an electric corporation, as defined in Section 218,
that may not be recovered from customer-generators acting pursuant to
this section, those obligations shall remain within the customer
class from which any shortfall occurred and may not be shifted to any
other customer class. Net-metering and co-metering customers shall
not be exempt from the public benefits charge. In its report to the
Legislature, the commission shall examine different methods to ensure
that the public benefits charge remains a nonbypassable charge.
(l) A net metering customer shall reimburse the Department of
Water Resources for all charges that would otherwise be imposed on
the customer by the commission to recover bond-related costs pursuant
to an agreement between the commission and the Department of Water
Resources pursuant to Section 80110 of the Water Code, as well as the
costs of the department equal to the share of the department's
estimated net unavoidable power purchase contract costs attributable
to the customer. The commission shall incorporate the determination
into an existing proceeding before the commission, and shall ensure
that the charges are nonbypassable. Until the commission has made a
determination regarding the nonbypassable charges, net metering shall
continue under the same rules, procedures, terms, and conditions as
were applicable on December 31, 2002.
(m) In implementing the requirements of subdivisions (k) and (l),
a customer-generator shall not be required to replace its existing
meter except as set forth in paragraph (3) of subdivision (b), nor
shall the electric service provider require additional measurement of
usage beyond that which is necessary for customers in the same rate
class as the eligible customer-generator.
(n) On or before January 1, 2005, the commission shall submit a
report to the Governor and the Legislature that assesses the economic
and environmental costs and benefits of net metering to
customer-generators, ratepayers, and utilities, including any
beneficial and adverse effects on public benefit programs and special
purpose surcharges. The report shall be prepared by an independent
party under contract with the commission.
(o) It is the intent of the Legislature that the Treasurer
incorporate net energy metering and co-energy metering projects
undertaken pursuant to this section as sustainable building methods
or distributive energy technologies for purposes of evaluating
low-income housing projects.
SEC. 10. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.