BILL NUMBER: AB 1920 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Huffman
(Coauthors: Assembly Members Laird and Portantino)
(Coauthor: Senator Migden)
FEBRUARY 8, 2008
An act to amend Section 25782 of the Public Resources Code, and to
amend Sections 387.5 and 2827 of the Public Utilities Code, relating
to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1920, as introduced, Huffman. Renewable energy resources: net
metering.
(1) The existing Public Utilities Act imposes various duties and
responsibilities on the Public Utilities Commission with respect to
the purchase of electricity and requires the commission to review and
adopt a procurement plan and a renewable energy procurement plan for
each electrical corporation pursuant to the California Renewables
Portfolio Standard Program. The program requires that a retail seller
of electricity, including electrical corporations, community choice
aggregators, and electric service providers, but not including local
publicly owned electric utilities, purchase a specified minimum
percentage of electricity generated by eligible renewable energy
resources, as defined, in any given year as a specified percentage of
total kilowatthours sold to retail end-use customers each calendar
year. Under existing law the governing board of a local publicly
owned electric utility is responsible for implementing and enforcing
a renewables portfolio standard.
The act defines an "electric service provider" as an entity that
offers electrical service to customers within the service territory
of an electrical corporation, as defined. Pursuant to the act, an
"electric service provider" does not include an electrical
corporation or a local publicly owned electric corporation, but does
include the unregulated affiliates and subsidiaries of an electrical
corporation.
Existing law relative to private energy producers defines an
"electric service provider" as an electrical corporation, electrical
cooperative, or local publicly owned electric utility, excluding a
local publicly owned electric utility that serves more than 750,000
customers and that also conveys water to its customers. Existing law
relative to private energy producers requires every electric service
provider, upon request, to make available to an eligible
customer-generator, as defined, a standard contract or tariff 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 a specified amount. Existing law provides
that where the electricity generated by the eligible
customer-generator exceeds the electricity supplied by the electric
service provider during a 12-month period, the eligible
customer-generator is a net electricity producer and the electric
service provider retains any excess kilowatthours generated and the
customer-generator is not owed compensation for those excess
kilowatthours unless the electric service provider enters into a
purchase agreement with the eligible customer-generator for those
excess kilowatthours.
This bill would replace the definition of "electric service
provider" in existing law relative to private energy producers with a
definition of "electric utility or cooperative." The bill would
expand the definition of an "eligible customer-generator" to include
customers that generate electricity using an eligible renewable
energy resource that meets existing sizing, interconnection, and
operating requirements for solar and wind generation. The bill would
require the ratemaking authority, as defined, for the electric
utility or cooperative to adopt, by July 1, 2009, a net surplus
electricity compensation rate to compensate a net surplus
customer-generator, as defined, for net surplus electricity, as
defined, generated by an eligible customer-generator and delivered to
the grid that is in excess of the amount of electricity that is
delivered from the grid to the eligible customer-generator. The bill
would require the electric utility or cooperative to offer a standard
contract or tariff to eligible customer-generators that includes
this rate. The bill would provide that upon adoption of the net
surplus electricity compensation rate, any renewable energy credit,
as defined, for net surplus electricity belongs to the electric
utility or cooperative purchasing the electricity and that net
surplus electricity counts toward the electric utility or cooperative'
s renewables portfolio standard purchasing requirements.
Under existing law, a violation of any order, decision, rule,
direction, demand, or requirement of the commission is a crime.
Because the this bill would require action by the commission to
implement its requirements, a violation of these provisions would
impose a state-mandated local program by expanding the definition of
a crime.
(2) In a decision, the commission adopted the California Solar
Initiative to provide incentives to customer-side photovoltaics and
solar thermal electric projects under one megawatt. Existing law
requires the commission, in implementing the California Solar
Initiative, as defined, to authorize the award of monetary incentives
for up to the first megawatt of alternating current generated by a
solar energy system, as defined, that meets eligibility criteria
established by the State Energy Resources Conservation and
Development Commission. The eligibility requirements include a
requirement that the solar energy system is intended primarily to
offset part or all of the consumer's own electricity demand. Existing
law requires the governing body of a local publicly owned electric
utility that sells electricity at retail, to adopt, implement, and
finance a solar initiative program, for the purpose of investing in,
and encouraging the increased installation of, residential and
commercial solar energy systems, meeting certain requirements. The
eligibility requirements include the requirement that solar energy
systems receiving monetary incentives are intended primarily to
offset part or all of the consumer's own electricity demand.
This bill would provide that investments for solar energy systems
that exceed the electricity demand of a consumer shall be permitted,
but only the capacity needed to offset part or all of the electricity
demand of a consumer is eligible for ratepayer funded monetary
incentives pursuant to the solar initiative programs.
(3) 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: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 25782 of the Public Resources Code is amended
to read:
25782. (a) The commission shall, by January 1, 2008, in
consultation with the Public Utilities Commission, local publicly
owned electric utilities, and interested members of the public,
establish eligibility criteria for solar energy systems receiving
ratepayer funded incentives that include all of the following:
(1) Design, installation, and electrical output standards or
incentives.
(2) The solar energy system is intended primarily to offset part
or all of the consumer's own electricity demand
of the consumer . Investments for solar
energy systems that exceed the electricity demand of the consumer
shall be permitted, but only the capacity needed to offset part or
all of the electricity demand of the consumer is eligible for
ratepayer funded monetary incentives.
(3) All components in the solar energy system are new and unused,
and have not previously been placed in service in any other location
or for any other application.
(4) The solar energy system has a warranty of not less than 10
years to protect against defects and undue degradation of electrical
generation output.
(5) The solar energy system is located on the same premises of the
end-use consumer where the consumer's own electricity demand is
located.
(6) The solar energy system is connected to the electrical
corporation's electrical distribution system within the state.
(7) The solar energy system has meters or other devices in place
to monitor and measure the system's performance and the quantity of
electricity generated by the system.
(8) The solar energy system is installed in conformance with the
manufacturer's specifications and in compliance with all applicable
electrical and building code standards.
(b) The commission shall establish conditions on ratepayer funded
incentives that require all of the following:
(1) Appropriate siting and high quality installation of the solar
energy system by developing installation guidelines that maximize the
performance of the system and prevent qualified systems from being
inefficiently or inappropriately installed. The conditions
established by the commission shall not impact housing designs or
densities presently authorized by a city, county, or city and county.
The goal of this paragraph is to achieve efficient installation of
solar energy systems to promote the greatest energy production per
ratepayer dollar.
(2) Optimal solar energy system performance during periods of peak
electricity demand.
(3) Appropriate energy efficiency improvements in the new or
existing home or commercial structure where the solar energy system
is installed.
(c) The commission shall set rating standards for equipment,
components, and systems to assure reasonable performance and shall
develop standards that provide for compliance with the minimum
ratings.
(d) Upon establishment of eligibility criteria pursuant to
subdivision (a), no ratepayer funded incentives shall be made for a
solar energy system that does not meet the eligibility criteria.
SEC. 2. Section 387.5 of the Public Utilities Code is amended to
read:
387.5. (a) In order to further the state goal of encouraging the
installation of 3,000 megawatts of photovoltaic solar energy in
California within 10 years, the governing body of a local publicly
owned electric utility, as defined in subdivision (d) of Section
9604, that sells electricity at retail, shall adopt, implement, and
finance a solar initiative program, funded in accordance with
subdivision (b), for the purpose of investing in, and encouraging the
increased installation of, residential and commercial solar energy
systems.
(b) On or before January 1, 2008, a local publicly owned electric
utility shall offer monetary incentives for the installation of solar
energy systems of at least two dollars and eighty cents ($2.80) per
installed watt, or for the electricity produced by the solar energy
system, measured in kilowatthours, as determined by the governing
board of a local publicly owned electric utility, for photovoltaic
solar energy systems. The incentive level shall decline each year
thereafter at a rate of no less than an average of 7 percent per
year.
(c) A local publicly owned electric utility shall initiate a
public proceeding to fund a solar energy program to adequately
support the goal of installing 3,000 megawatts of photovoltaic solar
energy in California. The proceeding shall determine what additional
funding, if any, is necessary to provide the incentives pursuant to
subdivision (b). The public proceeding shall be completed and the
comprehensive solar energy program established by January 1, 2008.
(d) The solar energy program of a local publicly owned electric
utility shall be consistent with all of the following:
(1) That a solar energy system receiving monetary incentives
comply with the eligibility criteria, design, installation, and
electrical output standards or incentives established by the State
Energy Resources Conservation and Development Commission pursuant to
Section 25782 of the Public Resources Code.
(2) That solar energy systems receiving monetary incentives are
intended primarily to offset part or all of the consumer's own
electricity demand. Investments for solar energy systems that
exceed the electricity demand of a consumer shall be permitted, but
only the capacity needed to offset part or all of the electricity
demand of the consumer is eligible for ratepayer funded monetary
incentives.
(3) That all components in the solar energy system are new and
unused, and have not previously been placed in service in any other
location or for any other application.
(4) That the solar energy system has a warranty of not less than
10 years to protect against defects and undue degradation of
electrical generation output.
(5) That the solar energy system be located on the same premises
of the end-use consumer where the consumer's own electricity demand
is located.
(6) That the solar energy system be connected to the electric
utility's electrical distribution system within the state.
(7) That the solar energy system has meters or other devices in
place to monitor and measure the system's performance and the
quantity of electricity generated by the system.
(8) That the solar energy system be installed in conformance with
the manufacturer's specifications and in compliance with all
applicable electrical and building code standards.
(e) A local publicly owned electric utility shall, on an annual
basis beginning June 1, 2008, make available to its customers, to the
Legislature, and to the State Energy Resources Conservation and
Development Commission, information relating to the utility's solar
initiative program established pursuant to this section, including,
but not limited to, the number of photovoltaic solar watts installed,
the total number of photovoltaic systems installed, the total number
of applicants, the amount of incentives awarded, and the
contribution toward the program goals.
(f) In establishing the program required by this section, no
moneys shall be diverted from any existing programs for low-income
ratepayers, or from cost-effective energy efficiency or demand
response programs.
(g) The statewide expenditures for solar programs adopted,
implemented, and financed by local publicly owned electric utilities
shall be seven hundred eighty-four million dollars ($784,000,000).
The expenditure level for each local publicly owned electric utility
shall be based on that utility's percentage of the total statewide
load served by all local publicly owned electric utilities.
Expenditures by a local publicly owned electric utility may be less
than the utility's cap amount, provided that funding is adequate to
provide the incentives required by subdivisions (a) and (b).
SEC. 3. 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 combined with net surplus
compensation, co-energy metering, and wind energy co-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 and encourage
conservation and efficiency .
(b) As used in this section, the following definitions
apply terms have the following meanings
:
(1) "Electric service provider"
(1) "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 has elected to apply a
generation-to-generation energy and time-of-use credit formula as
provided in subdivision (i).
(2) "Electrical cooperative" means an electrical cooperative as
defined in Section 2776.
(3) "Electric utility or
cooperative" 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 , except an electric service
provider, 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)
(4) "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 utility or
cooperative , who uses a solar or a wind turbine
electrical generating facility, or a hybrid system of both
an eligible renewable energy resource , with a capacity of
not more than one megawatt that is located on the customer's owned,
leased, or rented premises, and 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 .
(5) "Eligible renewable energy resource" has the same meaning as
in Section 399.12.
(3)
(6) "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.
(7) "Net surplus customer-generator" means an eligible
customer-generator that generates more electricity during a 12-month
period than is supplied by the electric utility or cooperative to the
eligible customer-generator during the same 12-month period.
(8) "Net surplus electricity" means all electricity generated by
an eligible customer-generator measured in kilowatthours over a
12-month period that exceeds the amount of electricity consumed by
that eligible customer-generator.
(9) "Net surplus electricity compensation" means a per
kilowatthour rate offered by the electric utility or cooperative to
the net surplus customer-generator for net surplus electricity that
is set by the ratemaking authority pursuant to subdivision (h).
(10) "Ratemaking authority" means, for an electrical corporation
or electrical cooperative, the commission, and for a local publicly
owned electric utility, the local elected body responsible for
setting the rates of the local publicly owned utility.
(4)
(11) "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
utility or cooperative shall develop a standard contract or
tariff providing for net energy metering, and shall make this
standard contract or tariff 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 2.5 percent of the electric
service provider's utility or cooperative's
aggregate customer peak demand. 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 eligible customer-generator, at the expense
of the electric utility or cooperative, and the additional metering
shall be used only to provide the information necessary to accurately
bill or credit the eligible customer-generator pursuant to
subdivision (h), or to collect generating system performance
information for research purposes relative to the eligible renewable
energy resource. If the existing electrical meter of an eligible
customer-generator is not capable of measuring the flow of
electricity in two directions, the eligible 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 that is receiving
service other than through the standard contract or tariff may elect
to receive service through the standard contract or tariff until the
electric utility or cooperative reaches the generation limit of this
paragraph. Eligibility for net energy metering does not limit an
eligible customer-generator' s eligibility for any other
rebate, incentive, or credit provided by the electric utility or
cooperative, or pursuant to any governmental program, including
rebates and incentives provided pursuant to the California So
lar Initiative.
(2) (A) On an annual basis, beginning in
2003, every electric service provider utility
or cooperative 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 and the net surplus electricity
purchased by the electric utility or cooperative pursuant to this
section . For those electric service providers who are
operating pursuant to Section 394, they
(B) An electric service provider
operating pursuant to Section 394 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 eligible customer-generator has net
energy metering. The
(C) The ratemaking authority
shall develop a process for making the information required by this
paragraph available to energy service providers
electric utilities and cooperatives , and for using that
information to determine when, pursuant to paragraph
paragraphs (1) and (3), a service
provider an electric utility or cooperative is
not obligated to provide net energy metering to additional
eligible customer-generators in its service area.
(3) Notwithstanding paragraph (1), an electric service
provider An electric utility or
cooperative is not obligated to provide net energy metering to
additional eligible customer-generators in its service
area when the combined total peak demand of all customer-generators
served by all the electric service providers
utilities or cooperatives in that service area furnishing net
energy metering to eligible customer-generators exceeds 2.5 percent
of the aggregate customer peak demand of those electric
service providers utilities or cooperatives .
(4) By January 1, 2010, the commission, in consultation with the
State Energy Resources Conservation and
Development Commission, shall submit a report to the
Governor and the Legislature on the costs and benefits of net energy
metering and net surplus electricity compensation , wind
energy co-metering, and co-energy metering to participating customers
and nonparticipating customers and with options to replace the
economic costs and benefits of net energy metering, wind energy
co-metering, and co-energy metering with a mechanism that more
equitably balances the interests of participating and
nonparticipating customers, and that incorporates the findings of the
report on economic and environmental costs and benefits of net
metering required by subdivision (n).
(d) Electric service providers Every
electric utility or cooperative shall make all necessary
forms and contracts for net energy metering and net
surplus electricity compensation service available for download
from the Internet.
(e) (1) Every electric service provider
utility or cooperative shall ensure that requests for
establishment of net energy metering and net surplus electricity
compensation 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 it receives a completed
application form for net energy metering service or
net surplus electricity compensation , 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 Every
electric utility or cooperative 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
it receives a completed application form from
the eligible customer-generator for an interconnection agreement.
If an electric service provider is unable to process the
(3) If an electric utility or
cooperative is unable to process a request within the allowable
timeframe , the electric service provider
pursuant to paragraph (1) or (2), it shall notify the
eligible 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 service provider that does not
provide distribution service for the direct transactions, the
service provider electric utility or
cooperative that provides distribution service for an
the eligible customer-generator is not obligated
to provide net energy metering or net surplus electricity
compensation 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 service provider , and the
customer is an eligible customer-generator, the service
provider electric utility or cooperative 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
and net surplus electricity compensation in an amount set by
the ratemaking authority.
(g) Except for the time-variant kilowatthour pricing portion of
any tariff adopted by the commission pursuant to paragraph (4) of
subdivision (a) of Section 2851, 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 renewable energy resource , 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
renewable energy resource . 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
eligible customer-generator's choice of electric
service provider as to whom it purchases electricity
from that is not self-generated . 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 eligible 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
renewable energy resource 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 utility or cooperative , and at each
anniversary date thereafter, be billed for electricity used during
that 12-month period. The electric service
provider utility or cooperative shall
determine if the eligible residential or small commercial
customer-generator was a net consumer or a net producer of
electricity surplus customer-generator during
that period.
(2) At the end of each 12-month period, where the electricity
supplied during the period by the electric service provider
utility or cooperative 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 utility or
cooperative shall be owed compensation for the eligible
customer-generator's net kilowatthour consumption over that
same 12-month 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
contracts or tariffs employing "baseline" and "over
baseline" rates or charges , 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 utility or
cooperative 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 utility or cooperative
would charge for electricity over the baseline quantity during that
billing period.
(B) For all eligible customer-generators taking service under
contracts or tariffs employing "time of use" rates or
charges , 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
utility or cooperative 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) subparagraph (A) of paragraph
(1) of subdivision (c) shall apply.
(C) For all eligible residential and small commercial
customer-generators and for each billing period, the net balance of
moneys owed to the electric service provider
utility or cooperative for net consumption of electricity or
credits owed to the eligible 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 eligible
commercial, industrial, and agricultural customer-generators
, the net balance of moneys owed shall be paid in
accordance with the electric service provider's
utility or cooperative's normal billing cycle, except that
if the eligible 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 eligible commercial,
industrial, or agricultural 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 utility or cooperative during
that same period, the eligible customer-generator is a net
electricity producer surplus customer-generator
and the electric service provider utility or
cooperative shall retain any excess kilowatthours
provide net surplus electricity compensation for any
net surplus electricity 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.
Every electric utility or cooperative shall, by January 31, 2009,
provide notice of this paragraph to existing customer-generators, in
a form approved by the ratemaking authority. For any eligible
customer-generator receiving service pursuant to a contract or tariff
that provides that the electric utility or cooperative retains any
excess kilowatthours and that the eligible customer-generator is not
owed compensation for those excess kilowatthours, the requirements of
this paragraph shall commence on February 1, 2009, and the eligible
customer-generator's 12-month billing cycle will continue until
January 31, 2010. The requirements of this paragraph apply to any
eligible customer-generator that commence service pursuant to the
standard contract or tariff after January 1, 2009.
(4) The ratemaking authority shall, by July 1, 2009, establish a
net surplus electricity compensation rate to compensate the net
surplus customer-generator for all net surplus electricity generated
by the net surplus customer-generator. The commission shall establish
the rate in a ratemaking proceeding. The ratemaking authority for a
local publicly owned electric utility shall establish the rate in a
public proceeding. The net surplus electricity compensation rate
shall be established so as to provide the net surplus
customer-generator fair and adequate compensation for the net surplus
electricity, including the value of the electricity itself, the
value of the renewable attributes of the electricity, the carbon
value or other environmental attributes of the electricity, the
time-of-use value or peak demand value of the electricity, and the
distributed generation value of the electricity.
(5) (A) Upon adoption of the net surplus electricity compensation
rate by the ratemaking authority, any renewable energy credit, as
defined in Section 399.12, for net surplus electricity purchased by
the electric utility or cooperative shall belong to the electric
utility or cooperative. Any renewable energy credit associated with
electricity generated by the eligible customer-generator that is
utilized by the eligible customer-generator shall remain the property
of the eligible customer-generator.
(B) Upon adoption of the net surplus electricity compensation rate
by the ratemaking authority, the net surplus electricity purchased
by the electric utility or cooperative shall count toward the
electric utility or cooperative's renewables portfolio standard
annual procurement targets for purposes of paragraph (1) of
subdivision (b) of Section 399.15, or for a local publicly owned
electric utility, the renewables portfolio standard annual
procurement targets established pursuant to Section 387.
(4)
(6) The electric service provider
utility or cooperative shall provide every eligible
residential or small commercial customer-generator with net
electricity consumption and net surplus electricity generation
information with each regular bill. That information shall
include the current monetary balance owed the electric
service provider utility or cooperative for net
electricity consumed , or the net surplus electricity
generated, since the last 12-month period ended.
Notwithstanding this subdivision, an electric service
provider utility or cooperative shall permit
that customer to pay monthly for net energy consumed.
(5)
(7) If an eligible residential or small commercial
customer-generator terminates the customer relationship with the
electric service provider, the electric service provider
utility or cooperative, the electricity distribution
utility or cooperative 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)
(8) If an electric service provider or electric
utility or cooperative providing net energy metering
to a residential or small commercial customer-generator ceases
providing that electrical electric
service to that customer during any 12-month period, and the
customer-generator enters into a new net energy metering
contract or tariff with a new electric service provider or
electric utility or cooperative , the 12-month period, with
respect to that new electric service provider or electric
utility or cooperative , shall commence on the date on which
the new electric service provider or electric utility or
cooperative 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 electric
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 local publicly owned electric utility
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 an electric utility or cooperative to
reduce its costs for purchasing and installing a time-of-use meter.
(2) The consumption of electricity from the electric
service provider local publicly owned electric utility
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
local publicly owned electric utility 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 local publicly owned
electric utility 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 local
publicly owned electric utility 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 a local publicly owned electric
utility may choose to carry the credit over as a kilowatthour
credit consistent with the provisions of any applicable contract
or 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 local publicly
owned electric utility 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 , including Underwriters Laboratories
and, where applicable, rules of the Public Utilities
Commission 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
Net energy metering and co-energy metering
customers shall not be exempt from the public benefits
charge goods charges imposed pursuant to Article 7
(commencing with Section 381), Article 8 (commencing with Section
385), or Article 15 (commencing with Section 399) of Chapter 2.3 of
Part 1 . In its report to the Legislature, the commission shall
examine different methods to ensure that the public
benefits charge remains a nonbypassable charge goods
charges remain nonbypassable .
() A net energy metering , co-energy metering, or
wind energy co-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
energy metering , co-energy metering, and wind energy
co-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 (),
a an eligible customer-generator shall
not be required to replace its existing meter except as set forth in
paragraph (3) of subdivision (b) subparagraph
(A) of paragraph (1) of subdivision (c) , nor shall the
electric service provider utility or
cooperative 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)
(n) It is the intent of the Legislature that
the Treasurer incorporate net energy metering and co-energy
metering , including net surplus electricity
compensation, co-energy metering, and wind energy co-metering
projects undertaken pursuant to this section as sustainable building
methods or distributive energy technologies for purposes of
evaluating low-income housing projects.
SEC. 4. 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.