BILL ANALYSIS
SB 7
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SENATE THIRD READING
SB 7 (Wiggins)
As Amended July 13, 2009
Majority vote
SENATE VOTE : 34-0
UTILITES & COMMERCE 10-3
APPROPRIATIONS 12-4
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|Ayes:|Fuentes, Buchanan, |Ayes:|De Leon, Ammiano, |
| |Carter, Fong, Furutani, | |Charles Calderon, Coto, |
| |Huffman, Krekorian, | |Davis, Fuentes, Hall, |
| |Skinner, Swanson, Torrico | |John A. Perez, Skinner, |
| | | |Solorio, Torlakson, Hill |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Duvall, Fuller, Villines |Nays:|Conway, Duvall, Harkey, |
| | | |Miller |
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SUMMARY : Allows net-metered customers who use wind and solar to
produce more electricity than they consume in a given year to
carry the credits for the excess production forward and apply
those credits against excess consumption for up to two years.
Specifically, 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 California Public Utilities Commission (PUC) to
evaluate the costs and benefits of #1) above, including the
impacts on customers participating and not participating in
net metering, as part of PUC's required June 30, 2010
assessment of the California Solar Initiative (CSI).
EXISTING LAW :
1)Creates CSI, a $3.3 billion declining rebate program to offset
the cost of installing solar panels on homes, businesses, and
public buildings. The program requires that in order to be
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eligible for CSI rebates, among other requirements, the solar
energy must be intended to offset part or all of the
consumer's own electricity demand (the panels should not
produce more electricity than the customer's historic peak
demand).
2)Requires investor owned utilities (IOUs) to offer customers
with solar or wind generation that is smaller than one
megawatt in size, a net-metered tariff where the customer can
sell back electricity produced from the solar or wind facility
that exceeds that customer's usage at a moment in time as a
bill credit against electricity that the customer receives
from the utility when their renewable facility produces less
than the customer is consuming. Caps the total amount of
solar and wind generation that can be subject to net metering
at 2.5 % of each utility's aggregate peak demand.
3)Requires all publicly owned utilities other than the Los
Angeles Department of Water and Power (LADWP) to offer a
net-metering tariff as provided in #2) above, or offer a
co-metering tariff where the bill credit is based only on the
cost of generation and not the entire retail rate. Exempts
LADWP from the net-metering and co-metering requirements.
FISCAL EFFECT : Minor absorbable special fund costs for 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.
COMMENTS : 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. When the customer
generates electricity, he/she uses most of it for his or her own
facility. Any excess electricity passes through the meter and
is distributed to the electricity grid. At the 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.
The current net-metering program is specifically limited to
projects that are sized only to meet the customer's own demand.
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The net-metering program works in tandem with CSI to provide
grants to a customer installing solar energy systems. Given the
current prices of solar panels, onsite solar energy is not cost
effective for most utility customers unless the customer can
receive both CSI rebates and net metering.
This bill provides that net-metered customers that produce more
electricity over the course of a year than they consume, and
thus have excess bill credits, will be allowed to carry those
credits forward and apply the credits toward any excess
consumption they have in the next two years. This rewards
customers that have excess production in one year due to
temporary changes in behavior.
Opposition: Several electric utilities oppose this bill because
they believe the bill undermines the requirements of CSI and net
metering that subsidized solar energy system should be sized to
meet a customer's load and thus should not be producing excess
electricity that they are required to buy at a high price. They
are also concerned that allowing excess energy production to be
carried forward from one year to the next will result in a cost
shift from the customers with solar generation to non-solar
customers. On this point, while the bill may result in some
cost shift due to the very limited number of solar customers
that would ever be able to claim the bill credit under this
bill, the cost shift will likely be negligible.
Additionally, Environment California has expressed concerns that
this bill could increase an incentive they believe exists today
for solar customers with excess energy to waste energy so they
not loose any bill credits. Environment California is concerned
that the provisions in this bill that allow customers to carry
the bill credits forward might perpetuate these potentially
wasteful incentives as customers build up ever bigger reserves
over a two year period and have ever greater desire to "use up"
their reserve.
Related legislation: AB 970 (Huffman) allows net-metered
customers that produce more electricity than they consume to be
paid by IOUs for their excess production.
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083
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FN: 0002338