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.   








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          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 








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            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