BILL ANALYSIS
SB 7
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Date of Hearing: August 19, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
SB 7 (Wiggins) - As Amended: July 13, 2009
Policy Committee:
UtilitiesVote:10-3
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill:
1)Allows net-metered customer-generators who produce more
electricity, using wind or solar power, than they consume in a
given year to apply credits for the excess production over a
given year against any excess consumption over the following
two years.
2)Requires the Public Utilities Commission (PUC) to evaluate the
costs and benefits of (1), including the impacts on customers
participating and not participating in net metering, as part
of the commission's required June 30, 2010 assessment of the
California Solar Initiative (CSI).
FISCAL EFFECT
Minor absorbable special fund costs for the PUC associated with
approving the modification to utilities' net metering tariffs
and incorporating the costs and benefits of the bill's
provisions into the CSI assessment. [Public Utilities
Reimbursement Account]
COMMENTS
1)Background . Under net metering, the electric utility is
required to "buy back" any electricity generated by a
customer-owned generator as measured by an electric meter that
can measure the flow of electricity in both directions. Any
excess electricity from the customer-generator passes through
the meter and is distributed to the electricity grid. At the
SB 7
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end of the year, the electric corporation calculates the
amount of electricity distributed to the grid by the customer
and reduces the customer's annual bill by the amount of
electricity generated by the customer. This results in the
utility "buying" the excess power and paying for it in the
form of a bill credit. If for some reason the customer is a
net energy producer, i.e. over the course of a year the
customer-generator produces more than they consume, the
year-end bill will be zero, but no check is written or no
credit is provided to the customer.
The current net-metering program is specifically limited to
projects that are sized only to meet the customer's own
demand. The net-metering program works in tandem with the CSI
to provide grants to a customer installing solar energy
systems. Given the current price of solar panels, onsite solar
energy is not cost effective for most utility customers absent
CSI rebates and net metering.
2)Purpose . This bill allows net-metered customers producing
excess electricity over the course of a year to carry bill
credits forward and apply the credits toward any excess
consumption they have in the following two years. This would
reward customers with excess production in one year due to
temporary changes in behavior.
The bill likely will have a very limited impact on solar
customer generators. If the solar customers are net surplus
producers due to the fact that they installed a solar energy
system that was larger than their needs or they made energy
efficiency investments, the bill will not provide the
customers any additional benefit. This is because these
customers probably will always be net surplus producers of
electricity, thus there will never be excess consumption to
offset with the bill credit they carry forward. The only
customers that would be able to use the extended bill credits
are those with excess production in one year due to one-time
changes, such as a long vacation or unusual weather patterns,
and then went back to their normal usage in future years.
3)Related Legislation . AB 920 (Huffman), allows net-metered
customer-generators to sell any excess wind or solar
electricity they produce over a 12-month period to their
electric utility.
SB 7
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Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081