BILL NUMBER: SB 489	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Wolk

                        FEBRUARY 17, 2011

   An act to amend Section 2827 of, and to repeal Section 2827.9 of,
the Public Utilities Code, relating to electricity.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 489, as introduced, Wolk. Electricity: net energy metering.
   Existing law, relative to private energy producers, requires every
electric utility, as defined, 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 5% of the electric utility's aggregate
customer peak demand. The existing definition of an eligible
customer-generator requires that the generating facility use a solar
or wind turbine, or a hybrid system of both and have a generating
capacity of not more than 1 megawatt.
   This bill would revise the definition of an eligible
customer-generator to instead require that the generating facility be
an eligible renewable energy resource, as defined in the California
renewables portfolio standard program, and that it have a generating
capacity of not more than 1.5 megawatts. The bill would make other
conforming and technical, nonsubstantive revisions.
   Existing law established a pilot program to provide energy net
metering for eligible biogas digester customer-generators.
   This bill would repeal that pilot program.
   Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the
commission is a crime.
   Because an order of the commission would be required to implement
certain of the bill's requirements and a violation of an order or
decision of the commission implementing its requirements would be a
crime, the bill would impose a state-mandated local program by
creating a new crime.
   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 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, reduce interconnection and administrative costs for electricity
suppliers, and encourage conservation and efficiency.
   (b) As used in this section, the following terms have the
following meanings:
   (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" means an electrical corporation, a local
publicly owned electric utility, or an electrical cooperative, 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 that serves more than 750,000 customers and
that also conveys water to its customers.
   (4) "Eligible customer-generator" means a residential customer,
small commercial customer as defined in subdivision (h) of Section
331, or commercial, industrial, or agricultural customer of an
electric utility, 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   and one-half
megawatts,  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
defined in Article 16 (commencing with Section 399.11) of Chapter 2.3
of Part 1.  
   (5) 
    (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
subdivisions (c) and (h). 
   (6) 
    (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 to the eligible
customer-generator during the same 12-month period. 
   (7) 
    (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. 
   (8) 
    (9)  "Net surplus electricity compensation" means a per
kilowatthour rate offered by the electric utility to the net surplus
customer-generator for net surplus electricity that is set by the
ratemaking authority pursuant to subdivision (h). 
   (9) 
    (10)  "Ratemaking authority" means, for an electrical
corporation  or electrical cooperative  , the
commission,  for an electrical cooperative, its ratesetting body
selected by its shareholders or members,  and for a local
publicly owned electric utility, the local elected body responsible
for setting the rates of the local publicly owned utility. 
   (10) 
    (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.
   (c) (1) Every electric utility 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 5 percent of the electric
utility'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, 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  solar or wind electric  generating
system performance information for research purposes  relative to
eligible renewable energy resources  . 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 reaches the generation limit set
forth in this paragraph. Once the generation limit is reached, only
eligible customer-generators that had previously elected to receive
service pursuant to the standard contract or tariff have a right to
continue to receive service pursuant to the standard contract or
tariff. 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 pursuant to
any governmental program, including rebates and incentives provided
pursuant to the California Solar Initiative.
   (2) An electrical corporation shall include a provision in the net
energy metering contract or tariff requiring that any customer with
an existing electrical generating facility and meter who enters into
a new net energy metering contract shall provide an inspection report
to the electrical corporation, unless the electrical generating
facility and meter have been installed or inspected within the
previous three years. The inspection report shall be prepared by a
California licensed contractor who is not the owner or operator of
the facility and meter. A California licensed electrician shall
perform the inspection of the electrical portion of the facility and
meter.
   (3) (A) On an annual basis, beginning in 2003, every electric
utility 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 pursuant to this section.
   (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
  electrical  corporation, local publicly owned
 electric   electrical  utility, or
electrical cooperative, in which the eligible customer-generator has
net energy metering.
   (C) The ratemaking authority shall develop a process for making
the information required by this paragraph available to electric
utilities, and for using that information to determine when, pursuant
to paragraphs (1) and (4), an electric utility is not obligated to
provide net energy metering to additional eligible
customer-generators in its service area.
   (4) An electric utility 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 electricity used by
eligible customer-generators served by all the electric utilities in
that service area furnishing net energy metering to eligible
customer-generators exceeds 5 percent of the aggregate customer peak
demand of those electric utilities.
   (5) By January 1, 2010, the commission, in consultation with the
Energy Commission, shall submit a report to the Governor and the
Legislature 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, and that incorporates the findings of the
report on economic and environmental costs and benefits of net
metering required by subdivision (n).
   (d) Every electric utility 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 utility 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 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.
   (2) Every electric utility 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 it receives a completed application form from the eligible
customer-generator for an interconnection agreement.
   (3) If an electric utility is unable to process a request within
the allowable timeframe 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  , or Section
365.1,  with an electric service provider that does not provide
distribution service for the direct transactions, the electric
utility that provides distribution service for 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
service provider, and the customer is an eligible customer-generator,
the electric utility 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 as to from whom it purchases electricity
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  is contrary to the intent of this
section, and shall not form a part of net energy metering contracts
or tariffs.
   (h) For eligible 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 utility, and at
each anniversary date thereafter  shall  , be billed for
electricity used during that 12-month period. The electric utility
shall determine if the eligible residential or small commercial
customer-generator was a net consumer or a net 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 utility 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 utility shall be owed compensation for the eligible
customer-generator's net kilowatthour consumption over that 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,
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 utility 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
utility 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, 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, 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 utility 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 (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 utility 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
utility'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 utility
during that same period, the eligible customer-generator is a net
surplus customer-generator and the electric utility  shall
 , upon an affirmative election by the  eligible
  net surplus  customer-generator,  shall 
either (A) provide net surplus electricity compensation for any net
surplus electricity generated during the prior 12-month period, or
(B) allow the  eligible   net surplus 
customer-generator to apply the net surplus electricity as a credit
for kilowatthours subsequently supplied by the electric utility to
the  net  surplus customer-generator. For an eligible
customer-generator that does not affirmatively elect to receive
service pursuant to net surplus electricity compensation, the
electric utility shall retain any excess kilowatthours generated
during the prior 12-month period. The eligible customer-generator not
affirmatively electing to receive service pursuant to net surplus
electricity compensation shall not be owed any compensation for the
net surplus electricity unless the electric utility enters into a
purchase agreement with the eligible customer-generator for those
excess kilowatthours. Every electric utility shall  , by
January 31, 2010,  provide notice to eligible
customer-generators that they are eligible to receive net surplus
electricity compensation for net surplus electricity, that they must
elect to receive net surplus electricity compensation, and that the
12-month period commences when the electric utility receives the
eligible customer-generator's election.  The commission may,
for   For  an electric utility that is an
electrical corporation or electrical cooperative,  the commission
may  adopt requirements for providing notice and the manner by
which eligible customer-generators may elect to receive net surplus
electricity compensation.
   (4) (A) The ratemaking authority shall  , by January 1,
2011,  establish a net surplus electricity compensation
valuation to compensate the net surplus customer-generator for the
value of net surplus electricity generated by the net surplus
customer-generator. The commission shall establish the valuation in a
ratemaking proceeding. The ratemaking authority for a local publicly
owned electric utility shall establish the valuation in a public
proceeding. The net surplus electricity compensation valuation shall
be established so as to provide the net surplus customer-generator
just and reasonable compensation for the value of net surplus
electricity, while leaving other ratepayers unaffected. The
ratemaking authority shall determine whether the compensation will
include, where appropriate justification exists, either or both of
the following components:
   (i) The value of the electricity itself.
   (ii) The value of the renewable attributes of the electricity.
   (B) In establishing the rate pursuant to subparagraph (A), the
ratemaking authority shall ensure that the rate does not result in a
shifting of costs between  solar   eligible
 customer-generators and other bundled service customers.
   (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 shall belong to the electric utility. 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 shall count toward the electric utility's
renewables portfolio standard annual procurement targets for the
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.
   (6) The electric utility 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 utility for net electricity
consumed, or the net surplus electricity generated, since the last
12-month period ended. Notwithstanding this subdivision, an electric
utility shall permit that customer to pay monthly for net energy
consumed.
   (7) If an eligible residential or small commercial
customer-generator terminates the customer relationship with the
electric utility, the electric utility 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.
   (8) If an electric service provider or electric utility providing
net energy metering to a residential or small commercial
customer-generator ceases providing that 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, the 12-month period,
with respect to that new electric service provider or electric
utility, shall commence on the date on which the new electric service
provider or electric utility first supplies electric service to the
customer-generator.
   (i) Notwithstanding any other provisions of this section, 
the following provisions   paragraphs (1), (2), and (3)
 shall apply to an eligible customer-generator with a capacity
of more than 10 kilowatts, but not exceeding one  megawatt
  and one-half megawatts  , that receives electric
service from a local publicly owned electric utility that has elected
to utilize a co-energy metering program unless the 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  
electricity  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 governmental agency or an electric
utility to reduce its costs for purchasing and installing a
time-of-use meter.
   (2) The consumption of electricity from the 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   renewable energy resource  .
The generation of electricity provided to the 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
  renewable energy resource  .
   (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 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 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 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 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,   An eligible renewable
energy resource  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, including
Underwriters Laboratories and, where applicable, rules of the
commission regarding safety and reliability. A customer-generator
whose  solar or wind turbine electrical generating system, or
a hybrid system of both,   eligible renewable 
 energy resource  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 electrical 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   shall  not be
shifted to any other customer class. Net energy metering and
co-energy metering customers shall not be exempt from the public
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 goods charges remain nonbypassable.
   (  l  ) 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 (
 l  ), an eligible customer-generator shall not be required
to replace its existing meter except as set forth in paragraph (1) of
subdivision (c), nor shall the electric utility require additional
measurement of usage beyond that which is necessary for customers in
the same rate class as the eligible customer-generator.
   (n) It is the intent of the Legislature that the Treasurer
incorporate net 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. 
   (o) It is the intent of the Legislature that the commission not
conduct a separate rulemaking prior to allowing all eligible
customer-generators using any eligible renewable energy resource to
participate in the standard contract or tariff made available
pursuant to this section. 
  SEC. 2.  Section 2827.9 of the Public Utilities Code is repealed.

   2827.9.  (a) (1) The Legislature finds and declares that a pilot
program to provide net energy metering for eligible biogas digester
customer-generators would enhance the continued diversification of
California's energy resource mix and would encourage the installation
of livestock air emission controls that the State Air Resources
Board believes may produce multiple environmental benefits.
   (2) The Legislature further finds and declares that the net energy
metering pilot program authorized pursuant to this section for
eligible biogas digester customer-generators, which nets out
generation charges against generation charges on a time-of-use basis,
furthers the intent of Chapter 7 of the Statutes of 2001, First
Extraordinary Session, by facilitating the implementation of energy
efficiency programs in order to reduce consumption of energy, reduce
the costs associated with energy demand, and achieve a reduction in
peak electricity demand.
   (b) As used in this section, the following definitions apply:
   (1) "Electrical corporation" means an electrical corporation, as
defined in Section 218.
   (2) (A) "Eligible biogas digester customer-generator" means a
customer of an electrical corporation that meets both of the
following criteria:
   (i) Uses a biogas digester electrical generating facility with a
capacity of not more than one megawatt that is located on or adjacent
to the customer's owned, leased, or rented premises, is
interconnected and operates in parallel with the electric grid, and
is sized to offset part or all of the eligible biogas digester
customer-generator's own electrical requirements.
   (ii) Is the recipient of local, state, or federal funds, or who
self-finances pilot projects designed to encourage the development of
eligible biogas digester electrical generating facilities.
   (B) Notwithstanding subparagraph (A), up to three large biogas
digester electrical generating facilities with a generating capacity
of more than one megawatt and not more than 10 megawatts, otherwise
meeting the criteria of this section, shall be eligible for
participation in the pilot program.
   (3) "Eligible biogas digester electrical generating facility"
means a generating facility used to produce electricity by either a
manure methane production project or as a byproduct of the anaerobic
digestion of biosolids and animal waste.
   (4) "Net energy metering" means measuring the difference between
the electricity supplied through the electric grid and the difference
between the electricity generated by an eligible biogas digester
customer-generator and fed back to the electric grid over a 12-month
period as described in subdivision (e). Net energy metering shall be
accomplished using a time-of-use meter capable of registering the
flow of electricity in two directions. If the existing electrical
meter of an eligible biogas digester customer-generator is not
capable of measuring the flow of electricity in two directions, the
eligible biogas digester 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 time-of-use meter.
   (c) Every electrical corporation shall file with the commission a
standard tariff providing for net energy metering for eligible biogas
digester customer-generators, consistent with this section. Every
electrical corporation shall make this tariff available to eligible
biogas digester customer-generators upon request, on a
first-come-first-served basis, until the combined statewide
cumulative rated generating capacity used by the eligible biogas
digester customer-generators in the service territories of the three
largest electrical corporations in the state reaches 50 megawatts. An
eligible biogas digester customer-generator shall be eligible for
the tariff for the life of the eligible biogas digester electrical
generating facility.
   (d) 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 was not an
eligible biogas digester customer-generator, except as set forth in
subdivision (e). Any new or additional demand charge, standby charge,
customer charge, minimum monthly charge, interconnection charge, or
other charge that would increase an eligible biogas digester
customer-generator's costs beyond those of other customers in the
rate class to which the eligible biogas digester customer-generator
would otherwise be assigned are contrary to the intent of this
legislation, and shall not form a part of net energy metering
tariffs.
   (e) 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 metering
calculation:
   (1) The eligible biogas digester customer-generator shall, at the
end of each 12-month period following the date of final
interconnection of the eligible biogas digester customer-generator's
system with an electrical corporation, and at each anniversary date
thereafter, be billed for electricity used during that period. The
electrical corporation shall determine if the eligible biogas
digester customer-generator was a net consumer or a net producer of
electricity during that period. For purposes of determining if the
biogas digester customer-generator was a net consumer or a net
producer of electricity during that period, the electrical
corporation shall aggregate the electrical load of a dairy operation
under the same ownership, including, but not limited to, the
electrical load attributable to milking operations, milk
refrigeration, and water pumping located on property adjacent or
contiguous to the dairy. Each aggregated account shall be billed and
measured according to a time-of-use rate schedule.
   (2) At the end of each 12-month period, where the electricity
supplied during the period by the electrical corporation exceeds the
electricity generated by the eligible biogas digester
customer-generator during that same period, the eligible biogas
digester customer-generator is a net electricity consumer and the
electrical corporation shall be owed compensation for the eligible
biogas digester customer-generator's net kilowatthour consumption
over that same period. The compensation owed for the eligible biogas
digester customer-generator's consumption shall be calculated as
follows:
   (A) The generation charges for any net monthly consumption of
electricity shall be calculated according to the terms of the tariff
to which the same customer would be assigned to or be eligible for if
the customer was not an eligible biogas digester customer-generator.
When those eligible biogas digester 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 electrical corporation would charge for retail
kilowatthour sales for generation, exclusive of any surcharges,
during that same time-of-use period. If the eligible biogas digester
customer-generator's time-of-use electrical meter is unable to
measure the flow of electricity in two directions, paragraph (4) of
subdivision (b) shall apply. All other charges, other than generation
charges, shall be calculated in accordance with the eligible biogas
digester customer-generator's applicable tariff and based on the
total killowatthours delivered by the electrical corporation to the
eligible biogas digester customer-generator. To the extent that
charges for transmission and distribution services are recovered
through demand charges in any particular month, no standby
reservation charges shall apply in that monthly billing cycle.
   (B) The net balance of moneys owed shall be paid in accordance
with the electrical corporation's normal billing cycle.
   (3) At the end of each 12-month period, where the electricity
generated by the eligible biogas digester customer-generator during
the 12-month period exceeds the electricity supplied by the
electrical corporation during that same period, the eligible biogas
digester customer-generator is a net electricity producer and the
electrical corporation shall retain any excess kilowatthours
generated during the prior 12-month period. The eligible biogas
digester customer-generator shall not be owed any compensation for
those excess kilowatthours.
   (4) If an eligible biogas digester customer-generator terminates
service with the electrical corporation, the electrical corporation
shall reconcile the eligible biogas digester customer-generator's
consumption and production of electricity during any 12-month period.

   (f) No biogas digester electrical generating facility shall be
eligible for participation in the tariff established pursuant to this
section, that has not commenced operation by December 31, 2009. A
biogas digester customer-generator shall be eligible for the tariff
established pursuant to this section, only for the operating life of
the eligible biogas digester electrical generating facility.
   (g) No biogas digester electrical generating facility that is
subject to the best available control technology (BACT) requirements
shall be eligible for participation in the tariff pursuant to this
section unless the biogas digester electrical generating facility has
installed the best available control technology as required by the
regional air pollution control district at the time of installation
to ensure the maximum feasible reductions in toxic and criteria
pollutants.
   (h) On or before December 31, 2008, the commission, in
collaboration with the State Air Resources Board, shall report to the
Legislature all of the following information:
   (1) The impact of the pilot program on emissions of air
pollutants.
   (2) The impact of the pilot program on the reliability of the
transmission and distribution grid.
   (3) The impact of the pilot program on ratepayers. 
  SEC. 3.  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.