BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 7|
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THIRD READING
Bill No: SB 7
Author: Wiggins (D)
Amended: 5/5/09
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 11-0, 4/27/09
AYES: Padilla, Benoit, Calderon, Corbett, Cox, Kehoe,
Lowenthal, Simitian, Strickland, Wiggins, Wright
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Renewable energy sources: feed-in tariff: net
metering
SOURCE : Recolte Energy
Southern California Edison
DIGEST : This bill requires an electrical distribution
utility or cooperative to allow eligible energy generation
customers to apply for kilowatt-hour credits on net surplus
electricity generated during the following 24 months. This
bill provides that a required report on the costs and
benefits of various metering programs and the impacts of
excess energy and credit generation which is to be
submitted by June 30, 2010 instead by June 30, 2009 and
requires the report to additionally evaluate the impact of
the generation of excess kilowatt-hours and excess credit
based on time-of-use rate on participating and
non-participating customers.
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ANALYSIS : Current law established the California Solar
Initiative which call for the installation of 3,000 MW of
new, solar-produced electricity by 2016 to be installed on
the customer's side of the meter. Targeted expenditures
under the California Solar Initiative (CSI), funded by a
surcharge on all ratepayers, is $3.3 billion over 10 years,
distributed between three distinct program components: The
CSI ($2.167 million/1940MW); the New Solar Homes
Partnership ($400 million 360 MW); and the Publicly Owned
Utility Programs ($700 million /700 MW). Homeowners,
businesses, and government agencies in California's IOU
territories installed 158 MW of distributed solar
photovoltaics (PV) in 2008, doubling the 78 MW installed in
IOU territories in 2007. California now has a cumulative
total of 441 MW of distributed solar PV systems, the
highest level of solar installations in the country.
Existing law allows a customer of a utility provider (e.g.
PG & E, SMUD, etc.) to sell solar power to the utility
provider to offset the cost of his/her electric bill. This
is referred to as net-energy metering. If the customer
produces enough solar power to cover their electrical use,
the customer owes nothing on their bill at the end of the
year. If the customer produces less solar power than the
electricity consumed, at the end of the year the customer
owes the utility provider money.
Current law also requires the California Public Utilities
Commission to submit a report to the governor and the
Legislature no later than January 1, 2010 on the costs and
benefits of net energy metering, 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. This bill extends the date
to June 1, 2010.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 5/19/09)
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Recolte Energy (co-source)
Southern California Edison (co-source)
California Farm Bureau Federation
City of Calistoga
City of Oakland
David Arthur Vineyards
diRosa
Family Winemakers of California
Far Niente
Napa Valley Vintners
New Media Learning
Peter A. & Vernice H. Gasser Foundation
Redwood Empire Chapter
Schramsberg
Sustainable Napa County
The Wine Institute
Vintage Highschool
OPPOSITION : (Verified 5/19/09)
PG&E (unless amended)
Southern California Edison
ARGUMENTS IN SUPPORT : The author's office is concerned
about perceived inequities in the current net metering
program for CSI customers. The author's office is aware of
constituents who have installed solar but are generating
more electricity in a 12-month net metering cycle than they
can use. Consequently, the customer sees excess generation
for which they receive no compensation and feel that they
should be paid for that excess. The author's office is
also concerned that net metered customers are not receiving
compensation based on the value of the excess electricity
at the time it is generated. CSI customer scan be on a
flat rate or time-of-use rat (TOU). Either way, at least
in the PG& E territory, net metered customers receive a
billing that shows other calculations but at the end of
12-months, regardless of a credit of kWh or TOU, the meter
is rolled back and both calculations are zeroed out. The
results on paper can show a credit balance I dollars for
TOU but a deficit on an hourly basis or even a deficit on
the generation side, and an excess on an hourly basis but a
deficit on TOU . At the end of the customer's 12-month net
metering cycle when usage is "trued-up" the customer can
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think they are owed money when in fact they are not under
the laws of the program and its intended structure.
In short, the problem is that the customer can also produce
more solar power than the customer consumes, but the
utility provider doesn't have to pay the customer anything
at the end of the year. While some will argue that was the
deal made under the net-energy metering statutes, others
will argue that it's not fair because the customer produced
solar power when their utility company agreed to buy the
power, but in the end, the customer/solar producer believes
he/she didn't get paid.
ARGUMENTS IN OPPOSITION : The power companies suggest
that customer-generators who have an interest in generating
more power than is needed to meet their own demands should
instead enter into a Power Purchase Agreement with the
investor-owned utility to sell their surplus power under
existing feed-in-tariff (FIT) programs. In order to
qualify for the existing FIT program under today's rules,
the customer cannot receive the SCI incentive payment noted
above. They support changes to existing law that allows
customer generators to qualify for the CSI incentive
payment (sized to the portion of the system that serves
on-site load) as well as the FIT program. They point out
that language which allows for that treatment is included
in the current version of SB 32. "The customer would then
have the option of choosing either net metering, but
foregoing any payment for surplus power at the end of the
year, or receiving compensation for all of their surplus
power under the FIT."
DLW:do 5/20/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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