Amended in Senate September 6, 2013

Amended in Senate September 3, 2013

Amended in Senate August 21, 2013

Amended in Senate August 12, 2013

Amended in Senate July 8, 2013

Amended in Assembly April 23, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 327


Introduced by Assembly Member Perea

(Coauthors: Assembly Members Bonilla, Buchanan, Daly, Eggman, Garcia, Gray, and Pan)

(Coauthor: Senator Correa)

February 13, 2013


An act to amend Sections 382, 399.15, 739.1, 2827, and 2827.10 of, to amend and renumber Section 2827.1 of, to add Sections 769 and 2827.1 to, and to repeal and add Sections 739.9 and 745 of, the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

AB 327, as amended, Perea. Electricity: natural gas: rates: net energy metering: California Renewables Portfolio Standard Program.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical and gas corporations, as defined. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law requires the commission to designate a baseline quantity of electricity and gas necessary to supply a significant portion of the reasonable energy needs of the average residential customer and requires that electrical and gas corporations file rates and charges, to be approved by the commission, providing baseline rates. Existing law requires the commission, in establishing the baseline rates, to avoid excessive rate increases for residential customers. Existing law requires the commission to establish a program of assistance to low-income electric and gas customers, referred to as the California Alternate Rates for Energy (CARE) program. The CARE program provides lower rates to low-income customers that are financed through a separate rate component, which is required to be a nonbypassable element of the local distribution service and collected on the basis of usage. Eligibility for the CARE program is for those electric and gas customers with annual household incomes that are no greater than 200% of the federal poverty guideline levels.

Existing law revises certain prohibitions upon raising residential electrical rates adopted during the energy crisis of 2000-01, to authorize the commission to increase the rates charged residential customers for electricity usage up to 130% of the baseline quantities by the annual percentage change in the Consumer Price Index from the prior year plus 1%, but not less than 3% and not more than 5% per year. Existing law additionally authorizes the commission to increase the rates in effect for CARE program participants for electricity usage up to 130% of baseline quantities by the annual percentage increase in benefits under the CalWORKs program, as defined, not to exceed 3%, and subject to the limitation that the CARE rates not exceed 80% of the corresponding rates charged to residential customers not participating in the CARE program. Existing law states the intent of the Legislature that CARE program participants be afforded the lowest possible electric and gas rates and, to the extent possible, be exempt from additional surcharges attributable to the energy crisis of 2000-01.

This bill would repeal the limitations upon increasing the electric service rates of residential customers, including the rate increase limitations applicable to electric service provided to CARE customers, but would require the commission, in establishing rates for CARE program participants, to ensure that low-income ratepayers are not jeopardized or overburdened by monthly energy expenditures and to adopt CARE rates in which the level of discount for low-income electricity and gas ratepayers correctly reflects their level of need, as determined by a specified needs assessment. The bill would require that this needs assessment be performed not less often than every 3rd year. The bill would revise the CARE program eligibility requirements to provide that for one-person households, program eligibility would be based on 2-person household guideline levels. The bill would require the commission, when establishing the CARE discounts for an electrical corporation with 100,000 or more customer accounts in California, to ensure that the average effective CARE discount be no less than 30% and no more than 35% of the revenues that would have been produced for the same billed usage by non-CARE customers and that the entire discount be provided in the form of a reduction in the overall bill for the eligible CARE customer. The bill would require that increases to rates and charges in rate design proceedings, including any reduction in the CARE discount, be reasonable and subject to a reasonable phase-in schedule relative to the rates and charges in effect prior to January 1, 2014. The bill would authorize the commission to approve new, or expand existing, fixed charges, as defined, for an electrical corporation for the purpose of collecting a reasonable portion of the fixed costs of providing service to residential customers. The bill would require the commission to ensure that any new or expanded fixed charges reasonably reflect an appropriate portion of the different costs of serving small and large customers, do not unreasonably impair incentives for conservation and energy efficiency, and do not overburden low-income and moderate-income customers. The bill would impose a $10 limit per residential customer account per month for customers not enrolled in the CARE program, would impose a $5 per month limit per residential customer account per month for customers enrolled in the CARE program, and would, beginning January 1, 2016, authorize the commission to adjust this maximum allowable fixed charge by no more than the annual percentage increase in the Consumer Price Index for the prior calendar year. The bill would authorize the commission to consider whether minimum bills are an appropriate substitute for any fixed charges.

Existing law prohibits the commission from requiring or permitting an electrical corporation to do any of the following: (1) employ mandatory or default time-variant pricing, as defined, with or without bill protection, as defined, for residential customers prior to January 1, 2013, (2) employ mandatory or default time-variant pricing, without bill protection, for residential customers prior to January 1, 2014, or (3) employ mandatory or default real-time pricing, without bill protection, for residential customers prior to January 1, 2020. Existing law authorizes the commission to authorize an electrical corporation to offer residential customers the option of receiving service pursuant to time-variant pricing and to participate in other demand response programs. Existing law requires the commission to only approve an electrical corporation’s use of default time-variant pricing for residential customers, beginning January 1, 2014, if those residential customers have the option to not receive service pursuant to time-variant pricing and incur no additional charges, as specified, as a result of the exercise of that option. Existing law exempts certain customers from being subject to default time-variant pricing.

This bill would delete these provisions and instead prohibit the commission from requiring or permitting an electrical corporation from employing mandatory or default time-variant pricing, as defined, for any residential customer, except that beginning January 1, 2018, the commission may require or authorize an electrical corporation to employ default time-of-use pricing to residential customers, subject to specified limitations and conditions. The bill would permit the commission to authorize an electrical corporation to offer residential customers the option of receiving service pursuant to time-variant pricing and to participate in other demand response programs. The bill would provide that a residential customer would have the option to not receive service pursuant to time-variant pricing and not incur any additional charge as a result of the exercise of that option. Unless the commission has authorized an electrical corporation to employ default time-of-use pricing, the bill would require the commission to require each electrical corporation to offer default rates to residential customers with at least 2 usage tiers and would require that the first tier include electricity usage of no less than the baseline quantity established by the commission. The bill would authorize the commission to modify the baseline seasonal definitions and applicable percentage of average consumption for one or more climate zones.

Existing law requires every electric utility, defined to include an electrical corporation, local publicly owned electric utility, or an electrical cooperative, to develop a standard contract or tariff providing for net energy metering, as defined, and to make this contract or tariff available to eligible customer generators, as defined, upon request for generation by a renewable electrical generation facility, as defined. An electric utility, upon request, is required to make available to eligible customer generators contracts or tariffs 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. Existing law authorizes a local publicly owned electric utility to elect to instead offer co-energy metering, which uses a generation-to-generation energy and time-of-use credit formula, as specified.

This bill would require a large electrical corporation, defined as an electrical corporation with more than 100,000 service connections in California, to provide net energy metering to additional eligible customer-generators in its service area through July 1, 2017, or until the corporation reaches its net energy metering program limit, as specified. The bill would require the commission to develop a standard contract or tariff for eligible customer-generators with a renewable electrical generation facility that is a customer of a large electrical corporation no later than December 31, 2015. In developing the standard contract or tariff for large electrical corporations, the commission would be required to take specified actions. The bill would require the large electrical corporation to offer the standard contract or tariff to an eligible customer-generator beginning July 1, 2017, or prior to that date if ordered to do so by the commission because it has reached the net energy metering program limit established for the corporation. The bill would provide that there shall be no limitation on the number of new eligible customer-generators entitled to receive service pursuant to the new standard contract or tariff developed by the commission for a large electrical corporation.

Existing law provides that a fuel cell electrical generation facility is not eligible for the tariff unless it commences operation before January 1, 2015.

This bill would instead provide thatbegin delete a customer withend delete a fuel cellbegin delete that has local air quality benefits is eligible for the tariff for a period of time to be determined by the commission.end deletebegin insert electrical generation facility is not eligible for the tariff unless it commences operation before January 1, 2017.end insert

The Public Utilities Act requires each electrical corporation, as a part of its distribution planning process, to consider specified nonutility owned distributed energy resources as an alternative to investments in its distribution system to ensure reliable electric services at the lowest possible costs.

This bill would require an electrical corporation, by July 1, 2015, to submit to the commission a distribution resources plan proposal, as specified, to identify optimal locations for the deployment of preferred resources, as defined. The bill would require the commission to review each distribution resources plan proposal submitted by an electrical corporation and approve, or modify and approve, a distribution resources plan for the corporation. The bill would require that any electrical corporation spending on distribution infrastructure necessary to accomplish the distribution resources plan be proposed and considered as part of the next general rate case for the corporation and would authorize the commission to approve this proposed spending if it concludes that ratepayers would realize net benefits and the associated costs are just and reasonable.

The California Renewables Portfolio Standard Program requires the Public Utilities Commission to establish a rewewables portfolio standard requiring all retail sellers, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources, as defined, at specified percentages of the total kilowatthours sold to their retail end-customers during specified compliance periods. The program additionally requires each local publicly owned electric utility, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources to achieve the targets established by the program. Existing law prohibits the commission from requiring the procurement of eligible renewable energy resources in excess of the specified quantities.

This bill would authorize the commission to require a retail seller to procure eligible renewable energy resources in excess of the specified quantities.

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 portions of this bill are within the act and require action by the commission to implement their requirements, a violation of these provisions would impose a state-mandated local program by creating a new crime or expanding an existing 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:

P7    1

SECTION 1.  

Section 382 of the Public Utilities Code is
2amended to read:

3

382.  

(a) Programs provided to low-income electricity
4customers, including, but not limited to, targeted energy-efficiency
5services and the California Alternate Rates for Energy program
6shall be funded at not less than 1996 authorized levels based on
7an assessment of customer need.

8(b) In order to meet legitimate needs of electric and gas
9customers who are unable to pay their electric and gas bills and
10who satisfy eligibility criteria for assistance, recognizing that
11electricity is a basic necessity, and that all residents of the state
12should be able to afford essential electricity and gas supplies, the
13commission shall ensure that low-income ratepayers are not
14jeopardized or overburdened by monthly energy expenditures.
15Energy expenditure may be reduced through the establishment of
16different rates for low-income ratepayers, different levels of rate
17assistance, and energy efficiency programs.

18(c) Nothing in this section shall be construed to prohibit electric
19and gas providers from offering any special rate or program for
20low-income ratepayers that is not specifically required in this
21section.

22(d) Beginning in 2002, an assessment of the needs of
23low-income electricity and gas ratepayers shall be conducted
24periodically by the commission with the assistance of the
25Low-Income Oversight Board. A periodic assessment shall be
26made not less often than every third year. The assessment shall
27evaluate low-income program implementation and the effectiveness
28of weatherization services and energy efficiency measures in
29low-income households. The assessment shall consider whether
30existing programs adequately address low-income electricity and
31gas customers’ energy expenditures, hardship, language needs,
32and economic burdens.

33(e) The commission shall, by not later than December 31, 2020,
34ensure that all eligible low-income electricity and gas customers
35are given the opportunity to participate in low-income energy
36efficiency programs, including customers occupying apartments
37or similar multiunit residential structures. The commission and
38electrical corporations and gas corporations shall make all
P8    1reasonable efforts to coordinate ratepayer-funded programs with
2other energy conservation and efficiency programs and to obtain
3additional federal funding to support actions undertaken pursuant
4to this subdivision.

5These programs shall be designed to provide long-term
6reductions in energy consumption at the dwelling unit based on
7an audit or assessment of the dwelling unit, and may include
8improved insulation, energy efficient appliances, measures that
9utilize solar energy, and other improvements to the physical
10structure.

11(f) The commission shall allocate funds necessary to meet the
12low-income objectives in this section.

13

SEC. 2.  

Section 399.15 of the Public Utilities Code is amended
14to read:

15

399.15.  

(a) In order to fulfill unmet long-term resource needs,
16the commission shall establish a renewables portfolio standard
17requiring all retail sellers to procure a minimum quantity of
18electricity products from eligible renewable energy resources as
19a specified percentage of total kilowatthours sold to their retail
20end-use customers each compliance period to achieve the targets
21established under this article. For any retail seller procuring at least
2214 percent of retail sales from eligible renewable energy resources
23in 2010, the deficits associated with any previous renewables
24portfolio standard shall not be added to any procurement
25requirement pursuant to this article.

26(b) The commission shall implement renewables portfolio
27standard procurement requirements only as follows:

28(1) Each retail seller shall procure a minimum quantity of
29eligible renewable energy resources for each of the following
30compliance periods:

31(A) January 1, 2011, to December 31, 2013, inclusive.

32(B) January 1, 2014, to December 31, 2016, inclusive.

33(C) January 1, 2017, to December 31, 2020, inclusive.

34(2) (A) No later than January 1, 2012, the commission shall
35establish the quantity of electricity products from eligible
36renewable energy resources to be procured by the retail seller for
37each compliance period. These quantities shall be established in
38the same manner for all retail sellers and result in the same
39percentages used to establish compliance period quantities for all
40retail sellers.

P9    1(B) In establishing quantities for the compliance period from
2January 1, 2011, to December 31, 2013, inclusive, the commission
3shall require procurement for each retail seller equal to an average
4of 20 percent of retail sales. For the following compliance periods,
5the quantities shall reflect reasonable progress in each of the
6intervening years sufficient to ensure that the procurement of
7electricity products from eligible renewable energy resources
8achieves 25 percent of retail sales by December 31, 2016, and 33
9percent of retail sales by December 31, 2020. The commission
10shall require retail sellers to procure not less than 33 percent of
11retail sales of electricity products from eligible renewable energy
12resources in all subsequent years.

13(C) Retail sellers shall be obligated to procure no less than the
14quantities associated with all intervening years by the end of each
15compliance period. Retail sellers shall not be required to
16demonstrate a specific quantity of procurement for any individual
17intervening year.

18(3) The commission may require the procurement of eligible
19renewable energy resources in excess of the quantities specified
20in paragraph (2).

21(4) Only for purposes of establishing the renewables portfolio
22standard procurement requirements of paragraph (1) and
23determining the quantities pursuant to paragraph (2), the
24commission shall include all electricity sold to retail customers by
25the Department of Water Resources pursuant to Division 27
26(commencing with Section 80000) of the Water Code in the
27calculation of retail sales by an electrical corporation.

28(5) The commission shall waive enforcement of this section if
29it finds that the retail seller has demonstrated any of the following
30conditions are beyond the control of the retail seller and will
31prevent compliance:

32(A) There is inadequate transmission capacity to allow for
33sufficient electricity to be delivered from proposed eligible
34renewable energy resource projects using the current operational
35protocols of the Independent System Operator. In making its
36findings relative to the existence of this condition with respect to
37a retail seller that owns transmission lines, the commission shall
38consider both of the following:

39(i) Whether the retail seller has undertaken, in a timely fashion,
40reasonable measures under its control and consistent with its
P10   1obligations under local, state, and federal laws and regulations, to
2develop and construct new transmission lines or upgrades to
3existing lines intended to transmit electricity generated by eligible
4renewable energy resources. In determining the reasonableness of
5a retail seller’s actions, the commission shall consider the retail
6seller’s expectations for full-cost recovery for these transmission
7lines and upgrades.

8(ii) Whether the retail seller has taken all reasonable operational
9measures to maximize cost-effective deliveries of electricity from
10eligible renewable energy resources in advance of transmission
11availability.

12(B) Permitting, interconnection, or other circumstances that
13delay procured eligible renewable energy resource projects, or
14there is an insufficient supply of eligible renewable energy
15resources available to the retail seller. In making a finding that this
16condition prevents timely compliance, the commission shall
17consider whether the retail seller has done all of the following:

18(i) Prudently managed portfolio risks, including relying on a
19sufficient number of viable projects.

20(ii) Sought to develop one of the following: its own eligible
21renewable energy resources, transmission to interconnect to eligible
22renewable energy resources, or energy storage used to integrate
23eligible renewable energy resources. This clause shall not require
24an electrical corporation to pursue development of eligible
25renewable energy resources pursuant to Section 399.14.

26(iii) Procured an appropriate minimum margin of procurement
27above the minimum procurement level necessary to comply with
28the renewables portfolio standard to compensate for foreseeable
29delays or insufficient supply.

30(iv) Taken reasonable measures, under the control of the retail
31seller, to procure cost-effective distributed generation and allowable
32unbundled renewable energy credits.

33(C) Unanticipated curtailment of eligible renewable energy
34resources necessary to address the needs of a balancing authority.

35(6) If the commission waives the compliance requirements of
36this section, the commission shall establish additional reporting
37requirements on the retail seller to demonstrate that all reasonable
38actions under the control of the retail seller are taken in each of
39the intervening years sufficient to satisfy future procurement
40requirements.

P11   1(7) The commission shall not waive enforcement pursuant to
2this section, unless the retail seller demonstrates that it has taken
3all reasonable actions under its control, as set forth in paragraph
4(5), to achieve full compliance.

5(8) If a retail seller fails to procure sufficient eligible renewable
6energy resources to comply with a procurement requirement
7pursuant to paragraphs (1) and (2) and fails to obtain an order from
8the commission waiving enforcement pursuant to paragraph (5),
9the commission shall exercise its authority pursuant to Section
102113.

11(9) Deficits associated with the compliance period shall not be
12added to a future compliance period.

13(c) The commission shall establish a limitation for each electrical
14corporation on the procurement expenditures for all eligible
15renewable energy resources used to comply with the renewables
16portfolio standard. In establishing this limitation, the commission
17shall rely on the following:

18(1) The most recent renewable energy procurement plan.

19(2) Procurement expenditures that approximate the expected
20cost of building, owning, and operating eligible renewable energy
21resources.

22(3) The potential that some planned resource additions may be
23delayed or canceled.

24(d) In developing the limitation pursuant to subdivision (c), the
25commission shall ensure all of the following:

26(1) The limitation is set at a level that prevents disproportionate
27rate impacts.

28(2) The costs of all procurement credited toward achieving the
29renewables portfolio standard are counted towards the limitation.

30(3) Procurement expenditures do not include any indirect
31expenses, including imbalance energy charges, sale of excess
32energy, decreased generation from existing resources, transmission
33 upgrades, or the costs associated with relicensing any utility-owned
34hydroelectric facilities.

35(e) (1) No later than January 1, 2016, the commission shall
36prepare a report to the Legislature assessing whether each electrical
37corporation can achieve a 33-percent renewables portfolio standard
38by December 31, 2020, and maintain that level thereafter, within
39the adopted cost limitations. If the commission determines that it
40is necessary to change the limitation for procurement costs incurred
P12   1by any electrical corporation after that date, it may propose a
2revised cap consistent with the criteria in subdivisions (c) and (d).
3The proposed modifications shall take effect no earlier than January
41, 2017.

5(2) Notwithstanding Section 10231.5 of the Government Code,
6the requirement for submitting a report imposed under paragraph
7(1) is inoperative on January 1, 2021.

8(3) A report to be submitted pursuant to paragraph (1) shall be
9submitted in compliance with Section 9795 of the Government
10Code.

11(f) If the cost limitation for an electrical corporation is
12insufficient to support the projected costs of meeting the
13renewables portfolio standard procurement requirements, the
14electrical corporation may refrain from entering into new contracts
15or constructing facilities beyond the quantity that can be procured
16within the limitation, unless eligible renewable energy resources
17can be procured without exceeding a de minimis increase in rates,
18consistent with the long-term procurement plan established for the
19electrical corporation pursuant to Section 454.5.

20(g) (1) The commission shall monitor the status of the cost
21limitation for each electrical corporation in order to ensure
22compliance with this article.

23(2) If the commission determines that an electrical corporation
24may exceed its cost limitation prior to achieving the renewables
25portfolio standard procurement requirements, the commission shall
26do both of the following within 60 days of making that
27determination:

28(A) Investigate and identify the reasons why the electrical
29corporation may exceed its annual cost limitation.

30(B) Notify the appropriate policy and fiscal committees of the
31Legislature that the electrical corporation may exceed its cost
32limitation, and include the reasons why the electrical corporation
33may exceed its cost limitation.

34(h) The establishment of a renewables portfolio standard shall
35not constitute implementation by the commission of the federal
36Public Utility Regulatory Policies Act of 1978 (Public Law
3795-617).

38

SEC. 3.  

Section 739.1 of the Public Utilities Code is amended
39to read:

P13   1

739.1.  

(a) The commission shall continue a program of
2assistance to low-income electric and gas customers with annual
3household incomes that are no greater than 200 percent of the
4federal poverty guideline levels, the cost of which shall not be
5borne solely by any single class of customer. For one-person
6households, program eligibility shall be based on two-person
7household guideline levels. The program shall be referred to as
8the California Alternate Rates for Energy or CARE program. The
9commission shall ensure that the level of discount for low-income
10electric and gas customers correctly reflects the level of need.

11(b) The commission shall establish rates for CARE program
12 participants, subject to both of the following:

13(1) That the commission ensure that low-income ratepayers are
14not jeopardized or overburdened by monthly energy expenditures,
15pursuant to subdivision (b) of Section 382.

16(2) That the level of the discount for low-income electricity and
17gas ratepayers correctly reflects the level of need as determined
18by the needs assessment conducted pursuant to subdivision (d) of
19Section 382.

20(c) In establishing CARE discounts for an electrical corporation
21with 100,000 or more customer accounts in California, the
22commission shall ensure all of the following:

23(1) The average effective CARE discount shall not be less than
2430 percent or more than 35 percent of the revenues that would
25have been produced for the same billed usage by non-CARE
26customers. The average effective discount determined by the
27commission shall reflect any charges not paid by CARE customers,
28including payments for the California Solar Initiative, payments
29for the self-generation incentive program made pursuant to Section
30379.6, payment of the separate rate component to fund the CARE
31program made pursuant to subdivision (a) of Section 381, payments
32made to the Department of Water Resources pursuant to Division
3327 (commencing with Section 80000) of the Water Code, and any
34discount in a fixed charge. The average effective CARE discount
35shall be calculated as a weighted average of the CARE discounts
36provided to individual customers.

37(2) If an electrical corporation provides an average effective
38CARE discount in excess of the maximum percentage specified
39in paragraph (1), the electrical corporation shall not reduce, on an
40annual basis, the average effective CARE discount by more than
P14   1a reasonable percentage decrease below the discount in effect on
2January 1, 2013, or that the electrical corporation had been
3authorized to place in effect by that date.

4(3) The entire discount shall be provided in the form of a
5reduction in the overall bill for the eligible CARE customer.

6(d) The commission shall work with electrical and gas
7corporations to establish penetration goals. The commission shall
8authorize recovery of all administrative costs associated with the
9implementation of the CARE program that the commission
10determines to be reasonable, through a balancing account
11mechanism. Administrative costs shall include, but are not limited
12to, outreach, marketing, regulatory compliance, certification and
13verification, billing, measurement and evaluation, and capital
14improvements and upgrades to communications and processing
15equipment.

16(e) The commission shall examine methods to improve CARE
17enrollment and participation. This examination shall include, but
18need not be limited to, comparing information from CARE and
19the Universal Lifeline Telephone Service (ULTS) to determine
20the most effective means of utilizing that information to increase
21CARE enrollment, automatic enrollment of ULTS customers who
22are eligible for the CARE program, customer privacy issues, and
23alternative mechanisms for outreach to potential enrollees. The
24commission shall ensure that a customer consents prior to
25enrollment. The commission shall consult with interested parties,
26including ULTS providers, to develop the best methods of
27informing ULTS customers about other available low-income
28programs, as well as the best mechanism for telephone providers
29to recover reasonable costs incurred pursuant to this section.

30(f) (1) The commission shall improve the CARE application
31process by cooperating with other entities and representatives of
32California government, including the California Health and Human
33Services Agency and the Secretary of California Health and Human
34Services, to ensure that all gas and electric customers eligible for
35public assistance programs in California that reside within the
36service territory of an electrical corporation or gas corporation,
37are enrolled in the CARE program. The commission may determine
38that gas and electric customers are categorically eligible for CARE
39assistance if they are enrolled in other public assistance programs
40with substantially the same income eligibility requirements as the
P15   1CARE program. To the extent practicable, the commission shall
2develop a CARE application process using the existing ULTS
3application process as a model. The commission shall work with
4electrical and gas corporations and the Low-Income Oversight
5Board established in Section 382.1 to meet the low-income
6objectives in this section.

7(2) The commission shall ensure that an electrical corporation
8or gas corporation with a commission-approved program to provide
9discounts based upon economic need in addition to the CARE
10program, including a Family Electric Rate Assistance program,
11utilize a single application form, to enable an applicant to
12alternatively apply for any assistance program for which the
13applicant may be eligible. It is the intent of the Legislature to allow
14applicants under one program, that may not be eligible under that
15program, but that may be eligible under an alternative assistance
16program based upon economic need, to complete a single
17application for any commission-approved assistance program
18offered by the public utility.

19(g) It is the intent of the Legislature that the commission ensure
20CARE program participants receive affordable electric and gas
21service that does not impose an unfair economic burden on those
22participants.

23(h) The commission’s program of assistance to low-income
24electric and gas customers shall, as soon as practicable, include
25nonprofit group living facilities specified by the commission, if
26the commission finds that the residents in these facilities
27substantially meet the commission’s low-income eligibility
28requirements and there is a feasible process for certifying that the
29assistance shall be used for the direct benefit, such as improved
30quality of care or improved food service, of the low-income
31residents in the facilities. The commission shall authorize utilities
32to offer discounts to eligible facilities licensed or permitted by
33appropriate state or local agencies, and to facilities, including
34women’s shelters, hospices, and homeless shelters, that may not
35have a license or permit but provide other proof satisfactory to the
36utility that they are eligible to participate in the program.

37(i) (1) In addition to existing assessments of eligibility, an
38electrical corporation may require proof of income eligibility for
39those CARE program participants whose electricity usage, in any
40monthly or other billing period, exceeds 400 percent of baseline
P16   1usage. The authority of an electrical corporation to require proof
2of income eligibility is not limited by the means by which the
3CARE program participant enrolled in the program, including if
4the participant was automatically enrolled in the CARE program
5because of participation in a governmental assistance program. If
6a CARE program participant’s electricity usage exceeds 400
7percent of baseline usage, the electrical corporation may require
8the CARE program participant to participate in the Energy Savings
9Assistance Program (ESAP), which includes a residential energy
10assessment, in order to provide the CARE program participant
11with information and assistance in reducing his or her energy usage.
12Continued participation in the CARE program may be conditioned
13upon the CARE program participant agreeing to participate in
14ESAP within 45 days of notice being given by the electrical
15corporation pursuant to this paragraph. The electrical corporation
16may require the CARE program participant to notify the utility of
17whether the residence is rented, and if so, a means by which to
18contact the landlord, and the electrical corporation may share any
19evaluation and recommendation relative to the residential structure
20that is made as part of an energy assessment, with the landlord of
21the CARE program participant. Requirements imposed pursuant
22to this paragraph shall be consistent with procedures adopted by
23the commission.

24(2) If a CARE program participant’s electricity usage exceeds
25600 percent of baseline usage, the electrical corporation shall
26require the CARE program participant to participate in ESAP,
27which includes a residential energy assessment, in order to provide
28the CARE program participant with information and assistance in
29reducing his or her energy usage. Continued participation in the
30CARE program shall be conditioned upon the CARE program
31participant agreeing to participate in ESAP within 45 days of a
32notice made by the electrical corporation pursuant to this paragraph.
33The electrical corporation may require the CARE program
34participant to notify the utility of whether the residence is rented,
35and if so, a means by which to contact the landlord, and the
36electrical corporation may share any evaluation and
37recommendation relative to the residential structure that is made
38as part of an energy assessment, with the landlord of the CARE
39program participant. Following the completion of the energy
40assessment, if the CARE program participant’s electricity usage
P17   1continues to exceed 600 percent of baseline usage, the electrical
2corporation may remove the CARE program participant from the
3program if the removal is consistent with procedures adopted by
4the commission. Nothing in this paragraph shall prevent a CARE
5program participant with electricity usage exceeding 600 percent
6of baseline usage from participating in an appeals process with the
7electrical corporation to determine whether the participant’s usage
8levels are legitimate.

9(3) A CARE program participant in a rental residence shall not
10be removed from the program in situations where the landlord is
11nonresponsive when contacted by the electrical corporation or
12does not provide for ESAP participation.

13

SEC. 4.  

Section 739.9 of the Public Utilities Code is repealed.

14

SEC. 5.  

Section 739.9 is added to the Public Utilities Code, to
15read:

16

739.9.  

(a) “Fixed charge” means any fixed customer charge,
17basic service fee, demand differentiated basic service fee, demand
18charge, or other charge not based upon the volume of electricity
19consumed.

20(b) Increases to electrical rates and charges in rate design
21proceedings, including any reduction in the California Alternate
22Rates for Energy (CARE) discount, shall be reasonable and subject
23to a reasonable phase-in schedule relative to the rates and charges
24in effect prior to January 1, 2014.

25(c) Except as provided in subdivision (c) of Section 745, the
26commission shall require each electrical corporation to offer default
27rates to residential customers with at least two usage tiers. The
28first tier shall include electricity usage of no less than the baseline
29quantity established pursuant to paragraph (1) of subdivision (d)
30of Section 739.

31(d) Consistent with the requirements of Section 739, the
32commission may modify the seasonal definitions and applicable
33percentage of average consumption for one or more climatic zones.

34(e) The commission may adopt new, or expand existing, fixed
35charges for the purpose of collecting a reasonable portion of the
36fixed costs of providing electric service to residential customers.
37The commission shall ensure that any approved charges do all of
38the following:

39(1) Reasonably reflect an appropriate portion of the different
40costs of serving small and large customers.

P18   1(2) Not unreasonably impair incentives for conservation and
2energy efficiency.

3(3) Not overburden low-income customers.

4(f) For the purposes of this section and Section 739.1, the
5commission may, beginning January 1, 2015, authorize fixed
6charges that do not exceed ten dollars ($10) per residential
7customer account per month for customers not enrolled in the
8CARE program and five dollars ($5) per residential customer
9account per month for customers enrolled in the CARE program.
10Beginning January 1, 2016, the maximum allowable fixed charge
11may be adjusted by no more than the annual percentage increase
12in the Consumer Price Indexbegin delete orend deletebegin insert forend insert the prior calendar year. This
13subdivision applies to any default rate schedule, at least one
14optional tiered rate schedule, and at least one optional time variant
15rate schedule.

16(g) This section does not require the commission to approve
17any new or expanded fixed charge.

18(h) The commission may consider whether minimum bills are
19appropriate as a substitute for any fixed charges.

20

SEC. 6.  

Section 745 of the Public Utilities Code is repealed.

21

SEC. 7.  

Section 745 is added to the Public Utilities Code, to
22read:

23

745.  

(a) For purposes of this section, “time-variant pricing”
24includes time-of-use rates, critical peak pricing, and real-time
25pricing, but does not include programs that provide customers with
26discounts from standard tariff rates as an incentive to reduce
27consumption at certain times, including peak time rebates.

28(b) The commission may authorize an electrical corporation to
29offer residential customers the option of receiving service pursuant
30to time-variant pricing and to participate in other demand response
31programs. The commission shall not establish a mandatory or
32default time-variant pricing tariff for any residential customer
33except as authorized in subdivision (c).

34(c) Beginning January 1, 2018, the commission may require or
35authorize an electrical corporation to employ default time-of-use
36pricing for residential customers subject to all of the following:

37(1) Residential customers receiving a medical baseline allowance
38pursuant to subdivision (c) of Section 739, customers requesting
39third-party notification pursuant to subdivision (c) of Section 779.1,
40customers who the commission has ordered cannot be disconnected
P19   1from service without an in-person visit from a utility representative
2(Decision 12-03-054 (March 22, 2012), Decision on Phase II
3Issues: Adoption of Practices to Reduce the Number of Gas and
4Electric Service Disconnections, Order 2 (b) at page 55), and other
5customers designated by the commission in its discretion shall not
6be subject to default time-of-use pricing without their affirmative
7consent.

8(2) The commission shall ensure that any time-of-use rate
9schedule does not cause unreasonable hardship for senior citizens
10or economically vulnerable customers in hot climate zones.

11(3) The commission shall strive for time-of-use rate schedules
12that utilize time periods that are appropriate for at least the
13following five years.

14(4) A residential customer shall not be subject to a default
15time-of-use rate schedule unless that residential customer has been
16provided with not less than one year of interval usage data from
17an advanced meter and associated customer education and,
18following the passage of this period, is provided with no less than
19one year of bill protection during which the total amount paid by
20the residential customer for electric service shall not exceed the
21amount that would have been payable by the residential customer
22under that customer’s previous rate schedule.

23(5) Each electrical corporation shall provide each residential
24customer, not less than once per year, using a reasonable delivery
25method of the customer’s choosing, a summary of available tariff
26options with a calculation of expected annual bill impacts under
27each available tariff. The summary shall not be provided to
28customers who notify the utility that they choose not to receive
29the summary. The reasonable costs of providing this service shall
30be recovered in rates.

31(6) Residential customers have the option to not receive service
32pursuant to a time-of-use rate schedule and incur no additional
33charges as a result of the exercise of that option. Prohibited charges
34include, but are not limited to, administrative fees for switching
35away from time-of-use pricing, hedging premiums that exceed any
36actual costs of hedging, and more than a proportional share of any
37discounts or other incentives paid to customers to increase
38participation in time-of-use pricing. This prohibition on additional
39charges is not intended to ensure that a customer will necessarily
P20   1experience a lower total bill as a result of the exercise of the option
2to not receive service pursuant to a time-of-use rate schedule.

3

SEC. 8.  

Section 769 is added to the Public Utilities Code, to
4read:

5

769.  

(a) For purposes of this section,begin delete “preferredend deletebegin insert “distributedend insert
6 resources” means distributed renewable generation resources,
7energy efficiency, energy storage, electric vehicles, and demand
8response technologies.

9(b) Not later than July 1, 2015, each electrical corporation shall
10submit to the commission a distribution resources plan proposal
11to identify optimal locations for the deployment ofbegin delete preferredend delete
12begin insert distributed end insert resources. Each proposal shall do all of the following:

13(1) Evaluate locational benefits and costs ofbegin delete preferredend deletebegin insert distributedend insert
14 resources located on the distribution system. This evaluation shall
15be based on reductions or increases in local generation capacity
16needs, avoided or increased investments in distribution
17infrastructure, safety benefits, reliability benefits, and any other
18savings thebegin delete preferredend deletebegin insert distributedend insert resources provides to the electric
19 grid or costs to ratepayers of the electrical corporation.

20(2) Propose or identify standard tariffs, contracts, or other
21mechanisms for the deployment of cost-effectivebegin delete preferredend delete
22begin insert distributed end insert resources that satisfy distribution planning objectives.

23(3) Propose cost-effective methods of effectively coordinating
24existing commission-approved programs, incentives, and tariffs
25to maximize the locational benefits and minimize the incremental
26costs ofbegin delete preferredend deletebegin insert distributedend insert resources.

27(4) Identify any additional utility spending necessary to integrate
28cost-effectivebegin delete preferredend deletebegin insert distributedend insert resources into distribution
29planning consistent with the goal of yielding net benefits to
30ratepayers.

begin insert

31(5) Identify barriers to the deployment of distributed resources,
32including, but not limited to, safety standards related to technology
33or operation of the distribution circuit in a manner that ensures
34reliable service.

end insert

35(c) The commission shall review each distribution resources
36plan proposal submitted by an electrical corporation and approve,
37or modify and approve, a distribution resources plan for the
38corporation. The commission may modify any plan as appropriate
39to minimize overall system costs and maximize ratepayer benefit
40from investments inbegin delete preferredend deletebegin insert distributedend insert resources.

P21   1(d) Any electrical corporation spending on distribution
2infrastructure necessary to accomplish the distribution resources
3plan shall be proposed and considered as part of the next general
4rate case for the corporation. The commission may approve
5proposed spending if it concludes that ratepayers would realize
6net benefits and the associated costs are just and reasonable. The
7commission may also adopt criteria, benchmarks, and
8accountability mechanisms to evaluate the success of any
9investment authorized pursuant to a distribution resources plan.

10

SEC. 9.  

Section 2827 of the Public Utilities Code is amended
11to read:

12

2827.  

(a) The Legislature finds and declares that a program
13to provide net energy metering combined with net surplus
14compensation, co-energy metering, and wind energy co-metering
15for eligible customer-generators is one way to encourage substantial
16private investment in renewable energy resources, stimulate in-state
17economic growth, reduce demand for electricity during peak
18consumption periods, help stabilize California’s energy supply
19infrastructure, enhance the continued diversification of California’s
20energy resource mix, reduce interconnection and administrative
21costs for electricity suppliers, and encourage conservation and
22efficiency.

23(b) As used in this section, the following terms have the
24following meanings:

25(1) “Co-energy metering” means a program that is the same in
26all other respects as a net energy metering program, except that
27the local publicly owned electric utility has elected to apply a
28generation-to-generation energy and time-of-use credit formula
29as provided in subdivision (i).

30(2) “Electrical cooperative” means an electrical cooperative as
31defined in Section 2776.

32(3) “Electric utility” means an electrical corporation, a local
33publicly owned electric utility, or an electrical cooperative, or any
34other entity, except an electric service provider, that offers electrical
35service. This section shall not apply to a local publicly owned
36electric utility that serves more than 750,000 customers and that
37also conveys water to its customers.

38(4) “Eligible customer-generator” means a residential customer,
39small commercial customer as defined in subdivision (h) of Section
40331, or commercial, industrial, or agricultural customer of an
P22   1electric utility, who uses a renewable electrical generation facility,
2or a combination of those facilities, with a total capacity of not
3more than one megawatt, that is located on the customer’s owned,
4leased, or rented premises, and is interconnected and operates in
5parallel with the electrical grid, and is intended primarily to offset
6part or all of the customer’s own electrical requirements.

7(5) “Large electrical corporation” means an electrical
8corporation with more than 100,000 service connections in
9California.

10(6) “Net energy metering” means measuring the difference
11between the electricity supplied through the electrical grid and the
12electricity generated by an eligible customer-generator and fed
13back to the electrical grid over a 12-month period as described in
14subdivisions (c) and (h).

15(7) “Net surplus customer-generator” means an eligible
16customer-generator that generates more electricity during a
1712-month period than is supplied by the electric utility to the
18eligible customer-generator during the same 12-month period.

19(8) “Net surplus electricity” means all electricity generated by
20an eligible customer-generator measured in kilowatthours over a
2112-month period that exceeds the amount of electricity consumed
22by that eligible customer-generator.

23(9) “Net surplus electricity compensation” means a per
24kilowatthour rate offered by the electric utility to the net surplus
25customer-generator for net surplus electricity that is set by the
26ratemaking authority pursuant to subdivision (h).

27(10) “Ratemaking authority” means, for an electrical
28corporation, the commission, for an electrical cooperative, its
29ratesetting body selected by its shareholders or members, and for
30a local publicly owned electric utility, the local elected body
31responsible for setting the rates of the local publicly owned utility.

32(11) “Renewable electrical generation facility” means a facility
33that generates electricity from a renewable source listed in
34paragraph (1) of subdivision (a) of Section 25741 of the Public
35Resources Code. A small hydroelectric generation facility is not
36an eligible renewable electrical generation facility if it will cause
37an adverse impact on instream beneficial uses or cause a change
38in the volume or timing of streamflow.

39(12) “Wind energy co-metering” means any wind energy project
40greater than 50 kilowatts, but not exceeding one megawatt, where
P23   1the difference between the electricity supplied through the electrical
2grid and the electricity generated by an eligible customer-generator
3and fed back to the electrical grid over a 12-month period is as
4described in subdivision (h). Wind energy co-metering shall be
5accomplished pursuant to Section 2827.8.

6(c) (1) Except as provided in paragraph (4) and in Section
7 2827.1, every electric utility shall develop a standard contract or
8tariff providing for net energy metering, and shall make this
9standard contract or tariff available to eligible customer-generators,
10upon request, on a first-come-first-served basis until the time that
11the total rated generating capacity used by eligible
12customer-generators exceeds 5 percent of the electric utility’s
13aggregate customer peak demand. Net energy metering shall be
14accomplished using a single meter capable of registering the flow
15of electricity in two directions. An additional meter or meters to
16monitor the flow of electricity in each direction may be installed
17with the consent of the eligible customer-generator, at the expense
18of the electric utility, and the additional metering shall be used
19only to provide the information necessary to accurately bill or
20credit the eligible customer-generator pursuant to subdivision (h),
21 or to collect generating system performance information for
22research purposes relative to a renewable electrical generation
23facility. If the existing electrical meter of an eligible
24customer-generator is not capable of measuring the flow of
25electricity in two directions, the eligible customer-generator shall
26be responsible for all expenses involved in purchasing and
27installing a meter that is able to measure electricity flow in two
28directions. If an additional meter or meters are installed, the net
29 energy metering calculation shall yield a result identical to that of
30a single meter. An eligible customer-generator that is receiving
31service other than through the standard contract or tariff may elect
32to receive service through the standard contract or tariff until the
33electric utility reaches the generation limit set forth in this
34paragraph. Once the generation limit is reached, only eligible
35customer-generators that had previously elected to receive service
36pursuant to the standard contract or tariff have a right to continue
37to receive service pursuant to the standard contract or tariff.
38Eligibility for net energy metering does not limit an eligible
39customer-generator’s eligibility for any other rebate, incentive, or
40credit provided by the electric utility, or pursuant to any
P24   1governmental program, including rebates and incentives provided
2pursuant to the California Solar Initiative.

3(2) An electrical corporation shall include a provision in the net
4energy metering contract or tariff requiring that any customer with
5an existing electrical generating facility and meter who enters into
6a new net energy metering contract shall provide an inspection
7report to the electrical corporation, unless the electrical generating
8facility and meter have been installed or inspected within the
9previous three years. The inspection report shall be prepared by a
10California licensed contractor who is not the owner or operator of
11the facility and meter. A California licensed electrician shall
12perform the inspection of the electrical portion of the facility and
13meter.

14(3) (A) On an annual basis, every electric utility shall make
15available to the ratemaking authority information on the total rated
16generating capacity used by eligible customer-generators that are
17customers of that provider in the provider’s service area and the
18net surplus electricity purchased by the electric utility pursuant to
19this section.

20(B) An electric service provider operating pursuant to Section
21394 shall make available to the ratemaking authority the
22information required by this paragraph for each eligible
23customer-generator that is their customer for each service area of
24an electrical corporation, local publicly owned electrical utility,
25or electrical cooperative, in which the eligible customer-generator
26has net energy metering.

27(C) The ratemaking authority shall develop a process for making
28the information required by this paragraph available to electric
29utilities, and for using that information to determine when, pursuant
30to paragraphs (1) and (4), an electric utility is not obligated to
31provide net energy metering to additional eligible
32customer-generators in its service area.

33(4) (A) An electric utility that is not a large electrical
34corporation is not obligated to provide net energy metering to
35additional eligible customer-generators in its service area when
36the combined total peak demand of all electricity used by eligible
37customer-generators served by all the electric utilities in that
38service area furnishing net energy metering to eligible
39customer-generators exceeds 5 percent of the aggregate customer
40peak demand of those electric utilities.

P25   1(B)  The commission shall require every large electrical
2corporation to make the standard contract or tariff available to
3eligible customer-generators, continuously and without
4interruption, until such times as the large electrical corporation
5reaches its net energy metering program limit or July 1, 2017,
6whichever is earlier. A large electrical corporation reaches its
7program limit when the combined total peak demand of all
8electricity used by eligible customer-generators served by all the
9electric utilities in the large electrical corporation’s service area
10furnishing net energy metering to eligible customer-generators
11exceeds 5 percent of the aggregate customer peak demand of those
12electric utilities. For purposes of calculating a large electrical
13corporation’s program limit, “aggregate customer peak demand”
14means the highest sum of the noncoincident peak demands of all
15of the large electrical corporation’s customers that occurs in any
16calendar year. To determine the aggregate customer peak demand,
17every large electrical corporation shall use a uniform method
18approved by the commission. The program limit calculated
19pursuant to this paragraph shall not be less than the following:

20(i) For San Diego Gas and Electric Company, when it has made
21607 megawatts of nameplate generating capacity available to
22eligible customer-generators.

23(ii) For Southern California Edison Company, when it has made
242,240 megawatts of nameplate generating capacity available to
25eligible customer-generators.

26(iii) For Pacific Gas and Electric Company, when it has made
272,409 megawatts of nameplate generating capacity available to
28eligible customer-generators.

29(C) Every large electrical corporation shall file a monthly report
30with the commission detailing the progress toward the net energy
31metering program limit established in subparagraph (B). The report
32shall include separate calculations on progress toward the limits
33based on operating solar energy systems, cumulative numbers of
34interconnection requests for net energy metering eligible systems,
35and any other criteria required by the commission.

36(D) Beginning July 1, 2017, or upon reaching the net metering
37program limit of subparagraph (B), whichever is earlier, the
38obligation of a large electrical corporation to provide service
39pursuant to a standard contract or tariff shall be pursuant to Section
40begin delete 2827.1.end deletebegin insert 2827.1 and applicable state and federal requirements.end insert

P26   1(d) Every electric utility shall make all necessary forms and
2contracts for net energy metering and net surplus electricity
3compensation service available for download from the Internet.

4(e) (1) Every electric utility shall ensure that requests for
5establishment of net energy metering and net surplus electricity
6compensation are processed in a time period not exceeding that
7for similarly situated customers requesting new electric service,
8but not to exceed 30 working days from the date it receives a
9completed application form for net energy metering service or net
10surplus electricity compensation, including a signed interconnection
11agreement from an eligible customer-generator and the electric
12inspection clearance from the governmental authority having
13jurisdiction.

14(2) Every electric utility shall ensure that requests for an
15interconnection agreement from an eligible customer-generator
16are processed in a time period not to exceed 30 working days from
17the date it receives a completed application form from the eligible
18customer-generator for an interconnection agreement.

19(3) If an electric utility is unable to process a request within the
20 allowable timeframe pursuant to paragraph (1) or (2), it shall notify
21the eligible customer-generator and the ratemaking authority of
22the reason for its inability to process the request and the expected
23completion date.

24(f) (1) If a customer participates in direct transactions pursuant
25to paragraph (1) of subdivision (b) of Section 365, or Section 365.1,
26with an electric service provider that does not provide distribution
27service for the direct transactions, the electric utility that provides
28distribution service for the eligible customer-generator is not
29obligated to provide net energy metering or net surplus electricity
30compensation to the customer.

31(2) If a customer participates in direct transactions pursuant to
32paragraph (1) of subdivision (b) of Section 365 with an electric
33service provider, and the customer is an eligible
34customer-generator, the electric utility that provides distribution
35service for the direct transactions may recover from the customer’s
36electric service provider the incremental costs of metering and
37billing service related to net energy metering and net surplus
38electricity compensation in an amount set by the ratemaking
39authority.

P27   1(g) Except for the time-variant kilowatthour pricing portion of
2any tariff adopted by the commission pursuant to paragraph (4) of
3subdivision (a) of Section 2851, each net energy metering contract
4or tariff shall be identical, with respect to rate structure, all retail
5rate components, and any monthly charges, to the contract or tariff
6to which the same customer would be assigned if the customer did
7not use a renewable electrical generation facility, except that
8eligible customer-generators shall not be assessed standby charges
9on the electrical generating capacity or the kilowatthour production
10of a renewable electrical generation facility. The charges for all
11retail rate components for eligible customer-generators shall be
12based exclusively on the customer-generator’s net kilowatthour
13consumption over a 12-month period, without regard to the eligible
14customer-generator’s choice as to from whom it purchases
15electricity that is not self-generated. Any new or additional demand
16charge, standby charge, customer charge, minimum monthly
17charge, interconnection charge, or any other charge that would
18increase an eligible customer-generator’s costs beyond those of
19other customers who are not eligible customer-generators in the
20rate class to which the eligible customer-generator would otherwise
21be assigned if the customer did not own, lease, rent, or otherwise
22operate a renewable electrical generation facility is contrary to the
23intent of this section, and shall not form a part of net energy
24metering contracts or tariffs.

25(h) For eligible customer-generators, the net energy metering
26calculation shall be made by measuring the difference between
27the electricity supplied to the eligible customer-generator and the
28electricity generated by the eligible customer-generator and fed
29back to the electrical grid over a 12-month period. The following
30rules shall apply to the annualized net metering calculation:

31(1) The eligible residential or small commercial
32customer-generator, at the end of each 12-month period following
33the date of final interconnection of the eligible
34customer-generator’s system with an electric utility, and at each
35anniversary date thereafter, shall be billed for electricity used
36during that 12-month period. The electric utility shall determine
37if the eligible residential or small commercial customer-generator
38was a net consumer or a net surplus customer-generator during
39that period.

P28   1(2) At the end of each 12-month period, where the electricity
2supplied during the period by the electric utility exceeds the
3electricity generated by the eligible residential or small commercial
4 customer-generator during that same period, the eligible residential
5or small commercial customer-generator is a net electricity
6consumer and the electric utility shall be owed compensation for
7the eligible customer-generator’s net kilowatthour consumption
8over that 12-month period. The compensation owed for the eligible
9residential or small commercial customer-generator’s consumption
10shall be calculated as follows:

11(A) For all eligible customer-generators taking service under
12contracts or tariffs employing “baseline” and “over baseline” rates,
13any net monthly consumption of electricity shall be calculated
14according to the terms of the contract or tariff to which the same
15customer would be assigned to, or be eligible for, if the customer
16was not an eligible customer-generator. If those same
17 customer-generators are net generators over a billing period, the
18net kilowatthours generated shall be valued at the same price per
19kilowatthour as the electric utility would charge for the baseline
20quantity of electricity during that billing period, and if the number
21of kilowatthours generated exceeds the baseline quantity, the excess
22shall be valued at the same price per kilowatthour as the electric
23utility would charge for electricity over the baseline quantity during
24that billing period.

25(B) For all eligible customer-generators taking service under
26contracts or tariffs employing time-of-use rates, any net monthly
27consumption of electricity shall be calculated according to the
28terms of the contract or tariff to which the same customer would
29be assigned, or be eligible for, if the customer was not an eligible
30customer-generator. When those same customer-generators are
31net generators during any discrete time-of-use period, the net
32 kilowatthours produced shall be valued at the same price per
33kilowatthour as the electric utility would charge for retail
34kilowatthour sales during that same time-of-use period. If the
35eligible customer-generator’s time-of-use electrical meter is unable
36to measure the flow of electricity in two directions, paragraph (1)
37of subdivision (c) shall apply.

38(C) For all eligible residential and small commercial
39customer-generators and for each billing period, the net balance
40of moneys owed to the electric utility for net consumption of
P29   1electricity or credits owed to the eligible customer-generator for
2net generation of electricity shall be carried forward as a monetary
3value until the end of each 12-month period. For all eligible
4commercial, industrial, and agricultural customer-generators, the
5net balance of moneys owed shall be paid in accordance with the
6electric utility’s normal billing cycle, except that if the eligible
7commercial, industrial, or agricultural customer-generator is a net
8electricity producer over a normal billing cycle, any excess
9kilowatthours generated during the billing cycle shall be carried
10over to the following billing period as a monetary value, calculated
11according to the procedures set forth in this section, and appear as
12a credit on the eligible commercial, industrial, or agricultural
13customer-generator’s account, until the end of the annual period
14when paragraph (3) shall apply.

15(3) At the end of each 12-month period, where the electricity
16generated by the eligible customer-generator during the 12-month
17period exceeds the electricity supplied by the electric utility during
18that same period, the eligible customer-generator is a net surplus
19customer-generator and the electric utility, upon an affirmative
20election by the net surplus customer-generator, shall either (A)
21provide net surplus electricity compensation for any net surplus
22electricity generated during the prior 12-month period, or (B) allow
23the net surplus customer-generator to apply the net surplus
24electricity as a credit for kilowatthours subsequently supplied by
25the electric utility to the net surplus customer-generator. For an
26eligible customer-generator that does not affirmatively elect to
27receive service pursuant to net surplus electricity compensation,
28the electric utility shall retain any excess kilowatthours generated
29during the prior 12-month period. The eligible customer-generator
30not affirmatively electing to receive service pursuant to net surplus
31electricity compensation shall not be owed any compensation for
32the net surplus electricity unless the electric utility enters into a
33purchase agreement with the eligible customer-generator for those
34excess kilowatthours. Every electric utility shall provide notice to
35eligible customer-generators that they are eligible to receive net
36surplus electricity compensation for net surplus electricity, that
37they must elect to receive net surplus electricity compensation,
38and that the 12-month period commences when the electric utility
39receives the eligible customer-generator’s election. For an electric
40utility that is an electrical corporation or electrical cooperative,
P30   1the commission may adopt requirements for providing notice and
2the manner by which eligible customer-generators may elect to
3receive net surplus electricity compensation.

4(4) (A) An eligible customer-generator with multiple meters
5may elect to aggregate the electrical load of the meters located on
6the property where the renewable electrical generation facility is
7located and on all property adjacent or contiguous to the property
8on which the renewable electrical generation facility is located, if
9those properties are solely owned, leased, or rented by the eligible
10customer-generator. If the eligible customer-generator elects to
11aggregate the electric load pursuant to this paragraph, the electric
12utility shall use the aggregated load for the purpose of determining
13whether an eligible customer-generator is a net consumer or a net
14surplus customer-generator during a 12-month period.

15(B) If an eligible customer-generator chooses to aggregate
16pursuant to subparagraph (A), the eligible customer-generator shall
17be permanently ineligible to receive net surplus electricity
18compensation, and the electric utility shall retain any kilowatthours
19in excess of the eligible customer-generator’s aggregated electrical
20load generated during the 12-month period.

21(C) If an eligible customer-generator with multiple meters elects
22to aggregate the electrical load of those meters pursuant to
23subparagraph (A), and different rate schedules are applicable to
24service at any of those meters, the electricity generated by the
25renewable electrical generation facility shall be allocated to each
26of the meters in proportion to the electrical load served by those
27meters. For example, if the eligible customer-generator receives
28electric service through three meters, two meters being at an
29agricultural rate that each provide service to 25 percent of the
30customer’s total load, and a third meter, at a commercial rate, that
31provides service to 50 percent of the customer’s total load, then
3250 percent of the electrical generation of the eligible renewable
33generation facility shall be allocated to the third meter that provides
34service at the commercial rate and 25 percent of the generation
35shall be allocated to each of the two meters providing service at
36the agricultural rate. This proportionate allocation shall be
37computed each billing period.

38(D) This paragraph shall not become operative for an electrical
39corporation unless the commission determines that allowing
40eligible customer-generators to aggregate their load from multiple
P31   1meters will not result in an increase in the expected revenue
2obligations of customers who are not eligible customer-generators.
3The commission shall make this determination by September 30,
42013. In making this determination, the commission shall determine
5if there are any public purpose or other noncommodity charges
6that the eligible customer-generators would pay pursuant to the
7net energy metering program as it exists prior to aggregation, that
8the eligible customer-generator would not pay if permitted to
9aggregate the electrical load of multiple meters pursuant to this
10paragraph.

11(E) A local publicly owned electric utility or electrical
12cooperative shall only allow eligible customer-generators to
13aggregate their load if the utility’s ratemaking authority determines
14that allowing eligible customer-generators to aggregate their load
15from multiple meters will not result in an increase in the expected
16revenue obligations of customers that are not eligible
17 customer-generators. The ratemaking authority of a local publicly
18owned electric utility or electrical cooperative shall make this
19determination within 180 days of the first request made by an
20eligible customer-generator to aggregate their load. In making the
21determination, the ratemaking authority shall determine if there
22are any public purpose or other noncommodity charges that the
23eligible customer-generator would pay pursuant to the net energy
24metering or co-energy metering program of the utility as it exists
25prior to aggregation, that the eligible customer-generator would
26not pay if permitted to aggregate the electrical load of multiple
27meters pursuant to this paragraph. If the ratemaking authority
28determines that load aggregation will not cause an incremental
29rate impact on the utility’s customers that are not eligible
30customer-generators, the local publicly owned electric utility or
31electrical cooperative shall permit an eligible customer-generator
32to elect to aggregate the electrical load of multiple meters pursuant
33to this paragraph. The ratemaking authority may reconsider any
34determination made pursuant to this subparagraph in a subsequent
35public proceeding.

36(F) For purposes of this paragraph, parcels that are divided by
37a street, highway, or public thoroughfare are considered contiguous,
38provided they are otherwise contiguous and under the same
39ownership.

P32   1(G) An eligible customer-generator may only elect to aggregate
2the electrical load of multiple meters if the renewable electrical
3generation facility, or a combination of those facilities, has a total
4generating capacity of not more than one megawatt.

5(H) Notwithstanding subdivision (g), an eligible
6customer-generator electing to aggregate the electrical load of
7multiple meters pursuant to this subdivision shall remit service
8charges for the cost of providing billing services to the electric
9utility that provides service to the meters.

10(5) (A) The ratemaking authority shall establish a net surplus
11electricity compensation valuation to compensate the net surplus
12customer-generator for the value of net surplus electricity generated
13by the net surplus customer-generator. The commission shall
14establish the valuation in a ratemaking proceeding. The ratemaking
15authority for a local publicly owned electric utility shall establish
16the valuation in a public proceeding. The net surplus electricity
17compensation valuation shall be established so as to provide the
18net surplus customer-generator just and reasonable compensation
19for the value of net surplus electricity, while leaving other
20ratepayers unaffected. The ratemaking authority shall determine
21whether the compensation will include, where appropriate
22justification exists, either or both of the following components:

23(i) The value of the electricity itself.

24(ii) The value of the renewable attributes of the electricity.

25(B) In establishing the rate pursuant to subparagraph (A), the
26ratemaking authority shall ensure that the rate does not result in a
27shifting of costs between eligible customer-generators and other
28bundled service customers.

29(6) (A) Upon adoption of the net surplus electricity
30compensation rate by the ratemaking authority, any renewable
31energy credit, as defined in Section 399.12, for net surplus
32electricity purchased by the electric utility shall belong to the
33electric utility. Any renewable energy credit associated with
34electricity generated by the eligible customer-generator that is
35utilized by the eligible customer-generator shall remain the property
36of the eligible customer-generator.

37(B) Upon adoption of the net surplus electricity compensation
38rate by the ratemaking authority, the net surplus electricity
39purchased by the electric utility shall count toward the electric
40utility’s renewables portfolio standard annual procurement targets
P33   1for the purposes of paragraph (1) of subdivision (b) of Section
2399.15, or for a local publicly owned electric utility, the renewables
3portfolio standard annual procurement targets established pursuant
4to Section 387.

5(7) The electric utility shall provide every eligible residential
6or small commercial customer-generator with net electricity
7consumption and net surplus electricity generation information
8with each regular bill. That information shall include the current
9monetary balance owed the electric utility for net electricity
10consumed, or the net surplus electricity generated, since the last
1112-month period ended. Notwithstanding this subdivision, an
12electric utility shall permit that customer to pay monthly for net
13energy consumed.

14(8) If an eligible residential or small commercial
15customer-generator terminates the customer relationship with the
16electric utility, the electric utility shall reconcile the eligible
17customer-generator’s consumption and production of electricity
18during any part of a 12-month period following the last
19reconciliation, according to the requirements set forth in this
20subdivision, except that those requirements shall apply only to the
21months since the most recent 12-month bill.

22(9) If an electric service provider or electric utility providing
23net energy metering to a residential or small commercial
24customer-generator ceases providing that electric service to that
25customer during any 12-month period, and the customer-generator
26enters into a new net energy metering contract or tariff with a new
27electric service provider or electric utility, the 12-month period,
28with respect to that new electric service provider or electric utility,
29shall commence on the date on which the new electric service
30provider or electric utility first supplies electric service to the
31customer-generator.

32(i) Notwithstanding any other provisions of this section,
33paragraphs (1), (2), and (3) shall apply to an eligible
34customer-generator with a capacity of more than 10 kilowatts, but
35not exceeding one megawatt, that receives electric service from a
36local publicly owned electric utility that has elected to utilize a
37co-energy metering program unless the local publicly owned
38electric utility chooses to provide service for eligible
39customer-generators with a capacity of more than 10 kilowatts in
40accordance with subdivisions (g) and (h):

P34   1(1) The eligible customer-generator shall be required to utilize
2a meter, or multiple meters, capable of separately measuring
3electricity flow in both directions. All meters shall provide
4time-of-use measurements of electricity flow, and the customer
5shall take service on a time-of-use rate schedule. If the existing
6meter of the eligible customer-generator is not a time-of-use meter
7or is not capable of measuring total flow of electricity in both
8directions, the eligible customer-generator shall be responsible for
9all expenses involved in purchasing and installing a meter that is
10both time-of-use and able to measure total electricity flow in both
11directions. This subdivision shall not restrict the ability of an
12eligible customer-generator to utilize any economic incentives
13provided by a governmental agency or an electric utility to reduce
14its costs for purchasing and installing a time-of-use meter.

15(2) The consumption of electricity from the local publicly owned
16electric utility shall result in a cost to the eligible
17customer-generator to be priced in accordance with the standard
18rate charged to the eligible customer-generator in accordance with
19the rate structure to which the customer would be assigned if the
20customer did not use a renewable electrical generation facility.
21The generation of electricity provided to the local publicly owned
22electric utility shall result in a credit to the eligible
23customer-generator and shall be priced in accordance with the
24generation component, established under the applicable structure
25to which the customer would be assigned if the customer did not
26use a renewable electrical generation facility.

27(3) All costs and credits shall be shown on the eligible
28customer-generator’s bill for each billing period. In any months
29in which the eligible customer-generator has been a net consumer
30of electricity calculated on the basis of value determined pursuant
31to paragraph (2), the customer-generator shall owe to the local
32publicly owned electric utility the balance of electricity costs and
33credits during that billing period. In any billing period in which
34the eligible customer-generator has been a net producer of
35electricity calculated on the basis of value determined pursuant to
36paragraph (2), the local publicly owned electric utility shall owe
37to the eligible customer-generator the balance of electricity costs
38and credits during that billing period. Any net credit to the eligible
39customer-generator of electricity costs may be carried forward to
40subsequent billing periods, provided that a local publicly owned
P35   1electric utility may choose to carry the credit over as a kilowatthour
2credit consistent with the provisions of any applicable contract or
3tariff, including any differences attributable to the time of
4generation of the electricity. At the end of each 12-month period,
5the local publicly owned electric utility may reduce any net credit
6due to the eligible customer-generator to zero.

7(j) A renewable electrical generation facility used by an eligible
8customer-generator shall meet all applicable safety and
9performance standards established by the National Electrical Code,
10the Institute of Electrical and Electronics Engineers, and accredited
11testing laboratories, including Underwriters Laboratories
12Incorporated and, where applicable, rules of the commission
13regarding safety and reliability. A customer-generator whose
14renewable electrical generation facility meets those standards and
15rules shall not be required to install additional controls, perform
16or pay for additional tests, or purchase additional liability
17insurance.

18(k) If the commission determines that there are cost or revenue
19obligations for an electrical corporation that may not be recovered
20from customer-generators acting pursuant to this section, those
21obligations shall remain within the customer class from which any
22shortfall occurred and shall not be shifted to any other customer
23class. Net energy metering and co-energy metering customers shall
24not be exempt from the public goods charges imposed pursuant to
25Article 7 (commencing with Section 381), Article 8 (commencing
26with Section 385), or Article 15 (commencing with Section 399)
27of Chapter 2.3 of Part 1.

28(l) A net energy metering, co-energy metering, or wind energy
29co-metering customer shall reimburse the Department of Water
30Resources for all charges that would otherwise be imposed on the
31customer by the commission to recover bond-related costs pursuant
32to an agreement between the commission and the Department of
33Water Resources pursuant to Section 80110 of the Water Code,
34as well as the costs of the department equal to the share of the
35department’s estimated net unavoidable power purchase contract
36costs attributable to the customer. The commission shall
37incorporate the determination into an existing proceeding before
38the commission, and shall ensure that the charges are
39nonbypassable. Until the commission has made a determination
40regarding the nonbypassable charges, net energy metering,
P36   1co-energy metering, and wind energy co-metering shall continue
2under the same rules, procedures, terms, and conditions as were
3applicable on December 31, 2002.

4(m) In implementing the requirements of subdivisions (k) and
5(l), an eligible customer-generator shall not be required to replace
6its existing meter except as set forth in paragraph (1) of subdivision
7(c), nor shall the electric utility require additional measurement of
8usage beyond that which is necessary for customers in the same
9rate class as the eligible customer-generator.

10(n) It is the intent of the Legislature that the Treasurer
11incorporate net energy metering, including net surplus electricity
12compensation, co-energy metering, and wind energy co-metering
13projects undertaken pursuant to this section as sustainable building
14methods or distributive energy technologies for purposes of
15evaluating low-income housing projects.

16

SEC. 10.  

Section 2827.1 of the Public Utilities Code is
17amended and renumbered to read:

18

2827.3.  

(a) By October 1, 2013, the commission shall complete
19a study to determine who benefits from, and who bears the
20economic burden, if any, of, the net energy metering program
21authorized pursuant to Section 2827, and to determine the extent
22to which each class of ratepayers and each region of the state
23receiving service under the net energy metering program is paying
24the full cost of the services provided to them by electrical
25corporations, and the extent to which those customers pay their
26share of the costs of public purpose programs. In evaluating
27program costs and benefits for purposes of the study, the
28commission shall consider all electricity generated by renewable
29electric generating systems, including the electricity used onsite
30to reduce a customer’s consumption of electricity that otherwise
31would be supplied through the electrical grid, as well as the
32electrical output that is being fed back to the electrical grid for
33which the customer receives credit or net surplus electricity
34compensation under net energy metering. The study shall quantify
35the costs and benefits of net energy metering to participants and
36nonparticipants and shall further disaggregate the results by utility,
37customer class, and household income groups within the residential
38class. The study shall further gather and present data on the income
39distribution of residential net energy metering participants. In order
40to assess the costs and benefits at various levels of net energy
P37   1metering implementation, the study shall be conducted using
2multiple net energy metering penetration scenarios, including, at
3a minimum, the capacity needed to reach the solar photovoltaic
4goals of the California Solar Initiative pursuant to Section 25780
5of the Public Resources Code, and the estimated net energy
6metering capacity under the 5-percent minimum requirement of
7paragraphs (1) and (4) of subdivision (c) of Section 2827.

8(b) (1) The commission shall report the results of the study to
9the Legislature within 30 days of its completion.

10(2) The report shall be submitted in compliance with Section
119795 of the Government Code.

12(3) Pursuant to Section 10231.5 of the Government Code, this
13section is repealed on July 1, 2017.

14

SEC. 11.  

Section 2827.1 is added to the Public Utilities Code,
15to read:

16

2827.1.  

(a) For purposes of this section, “eligible
17customer-generator,” “large electrical corporation,” and “renewable
18electrical generation facility” have the same meanings as defined
19in Section 2827.

20(b) begin deleteThe end deletebegin insertNotwithstanding any other law, the end insertcommission shall
21develop a standard contract or tariff, begin deleteincluding end deletebegin insertwhich may include end insert
22net energy metering, for eligible customer-generators with a
23renewable electrical generation facility that is a customer of a large
24electrical corporation no later than December 31, 2015. The
25commission may develop the standard contract or tariff prior to
26December 31, 2015, and may require a large electrical corporation
27that has reached the net energy metering program limit of
28subparagraph (B) of paragraph (4) of subdivision (c) of Section
292827 to offer the standard contract or tariff to eligible
30customer-generators. A large electrical corporation shall offer the
31standard contract or tariff to an eligible customer-generator
32beginning July 1, 2017, or prior to that date if ordered to do so by
33the commission because it has reached the net energy metering
34program limit of subparagraph (B) of paragraph (4) of subdivision
35(c) of Section 2827. The commission may revise the standard
36contract or tariff as appropriate to achieve the objectives of this
37section. In developing the standard contract or tariff, the
38commission shall do all of the following:

39(1) Ensure that the standard contract or tariff made available to
40eligible customer-generators ensures that customer-sited renewable
P38   1distributed generation continues to grow sustainably and include
2specific alternatives designed for growth among residential
3customers in disadvantaged communities.

4(2) Establish terms of service and billing rules for eligible
5customer-generators.

6(3) Ensure that the standard contract or tariff made available to
7eligible customer-generators is based on the costs and benefits of
8the renewable electrical generation facility.

9(4) Ensure that the total benefits of the standard contract or tariff
10to all customers and the electrical system are approximately equal
11to the total costs.

12(5) Allow projects greater than one megawatt that do not have
13significant impact on the distribution grid to be built to the size of
14the onsite load if the projects with a capacity of more than one
15megawatt arebegin delete not exempted fromend deletebegin insert subject toend insert reasonable
16interconnection charges established pursuant to the commission’s
17Electric Rulebegin delete 21.end deletebegin insert 21 and applicable state and federal requirements.end insert

18(6) Establish a transition period during which eligible
19customer-generators taking service under a net energy metering
20tariff or contract prior to July 1, 2017, or until the electrical
21corporation reaches its net energy metering program limit pursuant
22to subparagraph (B) of paragraph (4) of subdivision (c) of Section
232827,begin insert whichever is earlier,end insert shall be eligible to continue service
24under the previously applicable net energy metering tariff for a
25length of time to be determined by the commissionbegin insert by March 31,
262014end insert
. Any rules adopted by the commission shall consider a
27 reasonable expected payback period based on the year the customer
28initially took service under the tariff or contract authorized by
29Section 2827.

begin insert

30(7) The commission shall determine which rates and tariffs are
31applicable to customer generators only during a rulemaking
32proceeding. Any fixed charges for residential customer generators
33that differ from the fixed charges allowed pursuant to subdivision
34(f) of Section 739.9 shall be authorized only in a rulemaking
35proceeding involving every large electrical corporation. The
36commission shall ensure customer generators are provided electric
37service at rates that are just and reasonable.

end insert

38(c) Beginning July 1, 2017, or when ordered to do so by the
39commission because the large electrical corporation has reached
40its capacity limitation of subparagraph (B) of paragraph (4) of
P39   1subdivision (c) of Section 2827, all new eligible
2customer-generators shall be subject to the standard contract or
3tariff developed by the commission and any rules, terms, and rates
4developed pursuant to subdivision (b). There shall be no limitation
5on the amount of generating capacity or number of new eligible
6customer-generators entitled to receive service pursuant to the
7standard contract or tariff after July 1, 2017. An eligible
8customer-generator that has received service under a net energy
9metering standard contract or tariff pursuant to Section 2827 that
10is no longer eligible to receive service shall be eligible to receive
11service pursuant to the standard contract or tariff developed by the
12commission pursuant to this section.

13

SEC. 12.  

Section 2827.10 of the Public Utilities Code is
14amended to read:

15

2827.10.  

(a) As used in this section, the following terms have
16the following meanings:

17(1) “Electrical corporation” means an electrical corporation, as
18defined in Section 218.

19(2) “Eligible fuel cell electrical generating facility” means a
20facility that includes the following:

21(A) Integrated powerplant systems containing a stack, tubular
22array, or other functionally similar configuration used to
23electrochemically convert fuel to electric energy.

24(B) An inverter and fuel processing system where necessary.

25(C) Other plant equipment, including heat recovery equipment,
26necessary to support the plant’s operation or its energy conversion.

27(3) (A) “Eligible fuel cell customer-generator” means a
28customer of an electrical corporation that meets all the following
29criteria:

30(i) Uses a fuel cell electrical generating facility with a capacity
31of not more than one megawatt that is located on or adjacent to
32the customer’s owned, leased, or rented premises, is interconnected
33and operates in parallel with the electrical grid while the grid is
34operational or in a grid independent mode when the grid is
35nonoperational, and is sized to offset part or all of the eligible fuel
36cell customer-generator’s own electrical requirements.

37(ii) Is the recipient of local, state, or federal funds, or who
38self-finances projects designed to encourage the development of
39eligible fuel cell electrical generating facilities.

P40   1(iii) Uses technology the commission has determined will
2achieve reductions in emissions of greenhouse gases pursuant to
3subdivision (b), and meets the emission requirements for eligibility
4for funding set forth in subdivision (c), of Section 379.6.

5(B) For purposes of this paragraph, a person or entity is a
6customer of the electrical corporation if the customer is physically
7located within the service territory of the electrical corporation
8and receives bundled service, distribution service, or transmission
9service from the electrical corporation.

10(4) “Net energy metering” means measuring the difference
11between the electricity supplied through the electrical grid and the
12difference between the electricity generated by an eligible fuel cell
13electrical generating facility and fed back to the electrical grid over
14a 12-month period as described in subdivision (e). Net energy
15metering shall be accomplished using a time-of-use meter capable
16of registering the flow of electricity in two directions. If the existing
17electrical meter of an eligible fuel cell customer-generator is not
18capable of measuring the flow of electricity in two directions, the
19eligible fuel cell customer-generator shall be responsible for all
20expenses involved in purchasing and installing a meter that is able
21to measure electricity flow in two directions. If an additional meter
22or meters are installed, the net energy metering calculation shall
23yield a result identical to that of a time-of-use meter.

24(b) (1) Every electrical corporation, not later than March 1,
252004, shall file with the commission a standard tariff providing
26for net energy metering for eligible fuel cell customer-generators,
27consistent with this section. Subject to the limitation in subdivision
28(f), every electrical corporation shall make this tariff available to
29eligible fuel cell customer-generators upon request, on a
30first-come-first-served basis, until the total cumulative rated
31generating capacity of the eligible fuel cell electrical generating
32facilities receiving service pursuant to the tariff reaches a level
33equal to its proportionate share of a statewide limitation of 500
34megawatts cumulative rated generation capacity served under this
35section. The proportionate share shall be calculated based on the
36ratio of the electrical corporation’s peak demand compared to the
37total statewide peak demand.

38(2) To continue the growth of the market for onsite electric
39generation using fuel cells, the commission may review and
40incrementally raise the limitation established in paragraph (1) on
P41   1the total cumulative rated generating capacity of the eligible fuel
2cell electrical generating facilities receiving service pursuant to
3the tariff in paragraph (1).

4(c) In determining the eligibility for the cumulative rated
5generating capacity within an electrical corporation’s service
6territory, preference shall be given to facilities that, at the time of
7installation, are located in a community with significant exposure
8to air contaminants or localized air contaminants, or both,
9including, but not limited to, communities of minority populations
10or low-income populations, or both, based on the ambient air
11quality standards established pursuant to Section 39607 of the
12Health and Safety Code.

13(d) (1) Each net energy metering contract or tariff shall be
14identical, with respect to rate structure, all retail rate components,
15and any monthly charges, to the contract or tariff to which the
16customer would be assigned if the customer was not an eligible
17fuel cell customer-generator. Any new or additional demand
18charge, standby charge, customer charge, minimum monthly
19charge, interconnection charge, or other charge that would increase
20an eligible fuel cell customer-generator’s costs beyond those of
21other customers in the rate class to which the eligible fuel cell
22customer-generator would otherwise be assigned are contrary to
23the intent of the Legislature in enacting this section, and may not
24form a part of net energy metering tariffs.

25(2) The commission shall authorize an electrical corporation to
26charge a fuel cell customer-generator a fee based on the cost to
27the utility associated with providing interconnection inspection
28services for that fuel cell customer-generator.

29(e) The net metering calculation shall be made by measuring
30the difference between the electricity supplied to the eligible fuel
31cell customer-generator and the electricity generated by the eligible
32fuel cell customer-generator and fed back to the electrical grid
33over a 12-month period. The following rules shall apply to the
34annualized metering calculation:

35(1) The eligible fuel cell customer-generator shall, at the end
36of each 12-month period following the date of final interconnection
37of the eligible fuel cell electrical generating facility with an
38electrical corporation, and at each anniversary date thereafter, be
39billed for electricity used during that period. The electrical
40corporation shall determine if the eligible fuel cell
P42   1customer-generator was a net consumer or a net producer of
2electricity during that period. For purposes of determining if the
3eligible fuel cell customer-generator was a net consumer or a net
4producer of electricity during that period, the electrical corporation
5shall aggregate the electrical load of the meters located on the
6property where the eligible fuel cell electrical generation facility
7is located and on all property adjacent or contiguous to the property
8on which the facility is located, if those properties are solely
9owned, leased, or rented by the eligible fuel cell
10customer-generator. Each aggregated account shall be billed and
11measured according to a time-of-use rate schedule.

12(2) At the end of each 12-month period, where the electricity
13supplied during the period by the electrical corporation exceeds
14the electricity generated by the eligible fuel cell customer-generator
15during that same period, the eligible fuel cell customer-generator
16is a net electricity consumer and the electrical corporation shall
17be owed compensation for the eligible fuel cell
18customer-generator’s net kilowatthour consumption over that same
19period. The compensation owed for the eligible fuel cell
20customer-generator’s consumption shall be calculated as follows:

21(A) The generation charges for any net monthly consumption
22of electricity shall be calculated according to the terms of the tariff
23to which the same customer would be assigned to or be eligible
24for if the customer was not an eligible fuel cell customer-generator.
25When the eligible fuel cell customer-generator is a net generator
26during any discrete time-of-use period, the net kilowatthours
27produced shall be valued at the same price per kilowatthour as the
28electrical corporation would charge for retail kilowatthour sales
29for generation, exclusive of any surcharges, during that same
30time-of-use period. If the eligible fuel cell customer-generator’s
31time-of-use electrical meter is unable to measure the flow of
32electricity in two directions, paragraph (4) of subdivision (a) shall
33apply. All other charges, other than generation charges, shall be
34calculated in accordance with the eligible fuel cell
35customer-generator’s applicable tariff and based on the total
36kilowatthours delivered by the electrical corporation to the eligible
37fuel cell customer-generator. To the extent that charges for
38transmission and distribution services are recovered through
39demand charges in any particular month, no standby reservation
40charges shall apply in that monthly billing cycle.

P43   1(B) The net balance of moneys owed shall be paid in accordance
2with the electrical corporation’s normal billing cycle.

3(3) At the end of each 12-month period, where the electricity
4generated by the eligible fuel cell customer-generator during the
512-month period exceeds the electricity supplied by the electrical
6corporation during that same period, the eligible fuel cell
7customer-generator is a net electricity producer and the electrical
8corporation shall retain any excess kilowatthours generated during
9the prior 12-month period. The eligible fuel cell customer-generator
10 shall not be owed any compensation for those excess kilowatthours.

11(4) If an eligible fuel cell customer-generator terminates service
12with the electrical corporation, the electrical corporation shall
13reconcile the eligible fuel cell customer-generator’s consumption
14and production of electricity during any 12-month period.

begin delete

15(f) A customer with a fuel cell that has local air quality benefits
16shall be eligible for the tariff for a period of time to be determined
17by the commission.

end delete
begin insert

18(f) No fuel cell electrical generating facility shall be eligible for
19the tariff unless it commences operation prior to January 1, 2017,
20unless a later enacted statute, that is chaptered before January 1,
212017, extends this eligibility commencement date. The tariff shall
22remain in effect for an eligible fuel cell electrical generating facility
23that commences operation pursuant to the tariff prior to January
241, 2017. A fuel cell customer-generator shall be eligible for the
25tariff established pursuant to this section only for the operating
26life of the eligible fuel cell electrical generating facility.

end insert
27

SEC. 13.  

No reimbursement is required by this act pursuant
28to Section 6 of Article XIII B of the California Constitution because
29the only costs that may be incurred by a local agency or school
30district will be incurred because this act creates a new crime or
31infraction, eliminates a crime or infraction, or changes the penalty
32for a crime or infraction, within the meaning of Section 17556 of
33the Government Code, or changes the definition of a crime within
34the meaning of Section 6 of Article XIII B of the California
35Constitution.



O

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