BILL ANALYSIS Ó SB 594 Page 1 Date of Hearing: August 8, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 594 (Wolk) - As Amended: August 6, 2012 Policy Committee: UtilitiesVote:13-0 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill allows an electric utility customer to aggregate their electricity usage on multiple meters to establish the maximum project size for renewable generation and fuel cells as allowed under net energy metering (NEM). Specifically, this bill: 1)Allows the electric utility to use the sum of the electric load on multiple electric meters located on property adjacent or contiguous to the property on which the renewable generation facility is located, if those properties are solely owned, leased, or rented by the eligible customer-generator. 2)Allows the customer-generator to use the sum of the loads to establish the maximum size renewable generation to be used for both NEM credits and maximum rebates allowed through the California Solar Initiative (CSI). 3)Allows aggregation of electricity usage of multiple meters, as in (1), to establish the maximum project size for fuel cell customer-generation. 4)Prohibits an electric utility customer using aggregated NEM from receiving compensation for surplus kilowatt-hours (kWh) supplied to the grid. 5)Specifies that if an eligible customer-generator with multiple meters elects to aggregate their electrical load pursuant to (1), and different rate schedules are applicable to service at any of those meters, the electricity generated by the customer-generator shall be allocated to each of the meters in proportion to the electrical load served by those meters. SB 594 Page 2 6)Conditions the authorization in (1) on the Public Utilities Commission (PUC) making a determination by March 1, 2013, that permitting aggregation from multiple meters will not result in an increase in the expected revenue obligations from non-NEM customers. FISCAL EFFECT The PUC will incur ongoing special fund costs of about $120,000 for one regulatory analyst position to implement the new NEM authorization. ÝPublic Utilities Reimbursement Account] COMMENTS 1)Purpose . According to the author, "Customers with multiple meters, for example, farmers with separate meters for each of their irrigation pumps and other functions, are currently required to have separate facilities for each meter to utilize NEM. In some cases, customers are told they are only allowed to have one facility on their premises connected to one meter. Installing multiple facilities, if it is allowed, is incredibly costly and inefficient and does not allow the customer to optimize the location of the renewable facility on the property, since the incentive is to join the facility with the largest energy use." SB 594 is supported by numerous solar, agricultural and environmental groups. In support, the California Solar Energy Industries Association states, "This bill will create a pathway for previously disenfranchised customers to utilize renewable energy systems that are sized to their total load, rather than being limited to the load at the interconnected meter only." 2)NEM allows commercial and residential electricity customers to receive credits on their utility bills for on-site renewable energy generation in excess of their electric load that is exported to the electric grid. A standard NEM arrangement involves one onsite renewable customer-generator offsetting the electrical load of one meter-up to the 1 megawatt cap. The value of the NEM credit varies based on the customer's SB 594 Page 3 electricity rate schedule (known as a tariff). Each of these tariffs has a variety of rates for a kWh of electricity-as low as $0.08/kWh for a large agricultural customer, to as high as $0.52/kWh for a residential customer. 3)Opposition . The three large investor owned electrical utilities, the California Municipal Utilities Association (CMUA), and utility labor groups argue that the original intent of the NEM program was to allow customers to offset their own on-site energy needs. Southern California Edison states, "Expanding the NEM program to include oversized projects and aggregation as proposed in this legislation is not necessary because customer-generators can utilize other programs to sell renewable power to utilities under such circumstances." Analysis Prepared by : Israel Salas / Chuck Nicol / APPR. / (916) 319-2081