BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair AB 2165 (Hill) - Net energy metering: eligible fuel cell customer-generators. Amended: June 25, 2012 Policy Vote: EU&C 11-2 Urgency: No Mandate: Yes Hearing Date: July 2, 2012 Consultant: Marie Liu This bill does not meet the criteria for referral to the Suspense File. Bill Summary: AB 2165 would raise the caps on fuel cell net energy metering for the state and individual investor-owned utilities (IOUs). This bill would also allow the PUC to authorize an IOU to charge a fuel cell customer-generator a fee for providing interconnection inspection services. Fiscal Impact: One-time costs of approximately $135,000 from the Public Utilities Reimbursement Account (special fund), beginning in 2013-14, for the PUC to authorize a utility to charge a fee for providing interconnection inspection services. Background: Existing law requires the state's IOUs to offer fuel cell net energy metering (NEM). Eligible fuel cells can be powered by renewable or fossil-fuel and must be sized 1 megawatt (MW) or less. The customer credit is based only on the electricity generated and does not include non-generation costs such as transmission, distribution, and public purpose charges. Fuel cell NEM is distinct from full-retail NEM, which is offered to customer-owned renewable electric generation, in that it exempts the customer from paying transmission and distribution costs. Fuel cell NEM is capped under existing law to 45 MW for large IOUs and 22.5 MW for smaller IOUs. There is also a statewide cap of 112.5 MW. Proposed Law: AB 2165 would raise the cap on fuel cell NEW to 500 MW statewide, or a higher amount as determined by the California Public Utilities Commission (PUC), with IOU caps determined by its proportionate share of the state's peak demand. This bill would also allow the PUC to authorize an IOU AB 2165 (Hill) Page 1 to charge a fuel cell customer-generator with a fee for providing interconnection inspection services. Staff Comments: This bill would require the PUC to authorize a utility to charge a fee to a fuel cell customer-generator to cover costs associated with providing interconnection inspection services to that customer-generator. This requirement would likely cause the PUC to open a relatively straightforward rulemaking that would require the staff workload equivalent of a half-time regulatory analyst and a half-time administrative law judge for a one-time cost of approximately $135,000. The PUC indicates that the rest of the bill can be implemented with limited modifications to the IOU's NEW tariffs, at a minimal and absorbable cost to the PUC.