BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 594|
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                              UNFINISHED BUSINESS


          Bill No:  SB 594
          Author:   Wolk (D), et al.
          Amended:  8/23/12
          Vote:     21

           
          PRIOR VOTES NOT RELEVANT

           ASSEMBLY FLOOR  :  Not available


           SUBJECT  :    Energy:  net energy metering

           SOURCE  :     Author


           DIGEST  :    This bill allows an electric utility customer to 
          aggregate their electricity usage on multiple meters for 
          purposes of establishing the maximum project size for 
          renewable generation and fuel cells for purposes of net 
          energy metering (NEM).

           Assembly Amendments  delete the Senate version of the bill 
          relating to local public health laboratories and (1) add 
          language that would condition the authorization, to 
          aggregate the electrical load of the meters, upon the 
          commission making a determination that permitting eligible 
          customer-generators to aggregate their load from multiple 
          meters will not result in an increase in the expected 
          revenue obligations of customers who are not eligible 
          customer-generator; (2) add language that states an 
          electric utility that is a local publicly owned electric 
          utility or electrical cooperative, the bill would condition 
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          this authorization upon the utility's ratemaking authority, 
          as defined, making a determination that permitting 
          aggregation will not result in an increase in the expected 
          revenue obligations of customers who are not eligible 
          customer-generators; (3) incorporate additional changes, 
          proposed by AB 2165, to be operative only if AB 2165 and 
          this bill are both chaptered and become effective on or 
          before January 1, 2013, and this bill is chaptered last; 
          and (4) and make clarifying and technical changes.

           ANALYSIS  :    Existing law:

          1.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 five percent of the electric 
            utility's aggregate customer peak demand.

          2.Requires the electric utility, upon an affirmative 
            election by the eligible customer-generator to receive 
            service pursuant to this contract or tariff, to either:

             A.   Provides net surplus electricity compensation for 
               any net surplus electricity generated in the 12-month 
               period, or 

             B.   Allows the eligible customer-generator to apply the 
               net surplus electricity as a credit for kilowatt hours 
               subsequently supplied by the electric utility to the 
               surplus customer-generator.

          1.Establishes a net energy metering program that is 
            available to an eligible fuel cell customer-generator, as 
            defined.

          2.Requires that the net metering calculation be made by 
            measuring the difference between the electricity supplied 
            to the eligible fuel cell customer-generator and the 
            electricity generated by the eligible fuel cell 
            customer-generator and fed back to the electrical grid 
            over a 12-month period.


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          3.Requires that an electrical corporation determine if the 
            eligible fuel cell customer-generator was a net consumer 
            or producer of electricity during the 12-month period. 
            For purposes of making this determination, existing law 
            requires that the electrical corporation aggregate the 
            electrical load of the eligible fuel cell 
            customer-generator under the same ownership.

          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 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 load 
            for purposes of establishing the maximum size generation 
            renewable generation to be used for both NEM credits and 
            maximum rebates allowed through the California Solar 
            Initiative. 

          3.Allows aggregation of electricity usage of multiple 
            meters for purposes of establishing the maximum project 
            size for fuel cell customer-generation. 

          4.Prohibits an electric utility customer who uses 
            aggregated NEM from receiving compensation for surplus 
            kilowatt-hours. 

          5.Prevents implementation of NEM aggregation if Public 
            Utilities Commission (PUC) determines NEM aggregation 
            would result in a cost shift to non-participating 
            ratepayers. 

          6.Requires NEM aggregation customers to remit payment for 
            billing services. 

          7.Prohibits a publicly owned utility from offering 
            aggregated NEM if it would cause a rate impact on non-NEM 
            customers within that publicly owned utility's service 
            area. 


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          8.Adds chaptering language to ensure that the provisions in 
            AB 2165 (Hill), relating to Fuel Cell NEM are not 
            impacted by the provisions in this bill. 

           Background

           California is seeking to reduce its greenhouse gas 
          emissions to 1990 levels by 2020, with over a quarter of 
          those reductions coming from the energy sector, and has 
          adopted a 33 percent Renewable Portfolio Standard goal. 
          Governor Jerry Brown has also called for 12,000 megawatts 
          of new distributed generation in California.  To achieve 
          these goals, the Legislature had created several renewable 
          energy programs. Some are designed to facilitate large, 
          utility scale energy systems, while others, like the NEM 
          program, promote small-scale distributed energy production. 


          NEM allows customers to install clean, renewable energy 
          systems on-site for the purpose of generating power and 
          receiving a financial credit on their utility bill for that 
          power at the full retail rate.  This rate compensates 
          customers for the power they generate without requiring 
          their power use to coincide with their system's production. 
           This program is capped at five percent of each utility's 
          peak demand, meaning utilities must allow customers to 
          install these distributed generation systems and credit 
          their bills until the power generated by the facilities in 
          the utility territory equals five percent of the overall 
          peak customer demand. 

          NEM is an important tool for reaching our renewable energy 
          goals; however, significant obstacles continue to block 
          some customers from efficiently and economically 
          participating in the program.  Specifically, 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 renewable facilities 
          for each meter to utilize NEM.  This is incredibly costly 
          and inefficient.  Nor does it allow the ability to optimize 
          the location of the renewable facility on the property, 
          since the incentive is to join the facility with the 
          largest energy usage.  This bill removes this obstacle by 
          allowing customers to aggregate all the energy consumed at 

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          each of their meters located on the same property as the 
          renewable energy facility, or on their contiguous property, 
          and net that use against the power produced at a single 
          renewable facility. 

          These customers would still be required to follow all the 
          rules and limitations currently in place for the NEM 
          program, including the program's five percent cap and 
          limiting the system size to meet the load of the meters 
          on-site, with an overall system size limit of one megawatt. 


           Comments
           
          According to the author's office, 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 renewable facilities 
          for each meter to utilize NEM.  This bill removes this 
          obstacle by allowing customers to aggregate all the energy 
          consumed at each of their meters located on the same 
          property as the renewable energy facility, or on their 
          contiguous property, and net that use against the power 
          produced at a single renewable facility. 

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  Yes

          According to the Assembly Appropriations Committee, PUC 
          will incur ongoing special fund costs of about $120,000 for 
          one regulatory analyst position to implement the new NEM 
          authorization.  (Public Utilities Reimbursement Account)

          SUPPORT  :   (Verified  8/30/12)

          Ag Biomass Center, Inc.
          Agricultural Energy Consumers Association 
          American Farmland Trust 
          BTL Enterprises 
          California Climate and Agriculture Network 
          California Compost Coalition 
          California Cotton Ginners and Growers Association 
          California Farm Bureau Federation 
          California League of Food Processors 

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          California Off-Highway Vehicle Association 
          California Poultry Federation 
          California Solar Energy Industry Association 
          Clean World Partners 
          City of American Canyon 
          Coalition for Adequate School Housing 
          Community Alliance with Family Farmers 
          Del Mesa Carmel 
          Dixon Ridge Farms 
          Domaine Carneros Winery 
          Environmental California 
          Far Niente Winery 
          First Northern Bank 
          Four Winds Grocers 
          Fully Belly Farms 
          Gasser Foundation 
          Green Build Energy Group 
          Hedgerow Farms 
          Lundberg Family Farms 
          Mainstream Energy 
          Mira International 
          Napa County 
          Napa Mill 
          Napa Valley Vintners 
          Quattrocci Kwok Architects 
          Recolte Energy 
          Regional Council of Rural Counties 
          Ridge Vineyards 
          School Energy Coalition 
          Sierra Club California 
          Solar Energy Industry Association 
          Sonoma Valley Unified School District 
          Sustainable Agriculture Education 
          Sustainable Conservation 
          Sustainable Napa County 
          Swanton Berry Farms, Inc.
          United Cerebral Palsy of the North Bay 
          Vista Livestock Company 
          Vote Solar 
          Western Agricultural Processors 
          Wine Institute

           OPPOSITION  :    (Verified  8/30/12)


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          Pacific Gas and Electric Company 
          San Diego Gas & Electric Company 
          Southern California Edison


          RM:n   8/30/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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