BILL NUMBER: AB 327	CHAPTERED
	BILL TEXT

	CHAPTER  611
	FILED WITH SECRETARY OF STATE  OCTOBER 7, 2013
	APPROVED BY GOVERNOR  OCTOBER 7, 2013
	PASSED THE SENATE  SEPTEMBER 9, 2013
	PASSED THE ASSEMBLY  SEPTEMBER 12, 2013
	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

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, 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, no later than
December 31, 2015, 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. 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 that a fuel cell electrical
generation facility is not eligible for the tariff unless it
commences operation before January 1, 2017.
   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 distributed 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.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 382 of the Public Utilities Code is amended to
read:
   382.  (a) Programs provided to low-income electricity customers,
including, but not limited to, targeted energy-efficiency services
and the California Alternate Rates for Energy program shall be funded
at not less than 1996 authorized levels based on an assessment of
customer need.
   (b) In order to meet legitimate needs of electric and gas
customers who are unable to pay their electric and gas bills and who
satisfy eligibility criteria for assistance, recognizing that
electricity is a basic necessity, and that all residents of the state
should be able to afford essential electricity and gas supplies, the
commission shall ensure that low-income ratepayers are not
jeopardized or overburdened by monthly energy expenditures. Energy
expenditure may be reduced through the establishment of different
rates for low-income ratepayers, different levels of rate assistance,
and energy efficiency programs.
   (c) Nothing in this section shall be construed to prohibit
electric and gas providers from offering any special rate or program
for low-income ratepayers that is not specifically required in this
section.
   (d) Beginning in 2002, an assessment of the needs of low-income
electricity and gas ratepayers shall be conducted periodically by the
commission with the assistance of the Low-Income Oversight Board. A
periodic assessment shall be made not less often than every third
year. The assessment shall evaluate low-income program implementation
and the effectiveness of weatherization services and energy
efficiency measures in low-income households. The assessment shall
consider whether existing programs adequately address low-income
electricity and gas customers' energy expenditures, hardship,
language needs, and economic burdens.
   (e) The commission shall, by not later than December 31, 2020,
ensure that all eligible low-income electricity and gas customers are
given the opportunity to participate in low-income energy efficiency
programs, including customers occupying apartments or similar
multiunit residential structures. The commission and electrical
corporations and gas corporations shall make all reasonable efforts
to coordinate ratepayer-funded programs with other energy
conservation and efficiency programs and to obtain additional federal
funding to support actions undertaken pursuant to this subdivision.
   These programs shall be designed to provide long-term reductions
in energy consumption at the dwelling unit based on an audit or
assessment of the dwelling unit, and may include improved insulation,
energy efficient appliances, measures that utilize solar energy, and
other improvements to the physical structure.
   (f) The commission shall allocate funds necessary to meet the
low-income objectives in this section.
  SEC. 2.  Section 399.15 of the Public Utilities Code is amended to
read:
   399.15.  (a) In order to fulfill unmet long-term resource needs,
the commission shall establish a renewables portfolio standard
requiring all retail sellers to procure a minimum quantity of
electricity products from eligible renewable energy resources as a
specified percentage of total kilowatthours sold to their retail
end-use customers each compliance period to achieve the targets
established under this article. For any retail seller procuring at
least 14 percent of retail sales from eligible renewable energy
resources in 2010, the deficits associated with any previous
renewables portfolio standard shall not be added to any procurement
requirement pursuant to this article.
   (b) The commission shall implement renewables portfolio standard
procurement requirements only as follows:
   (1) Each retail seller shall procure a minimum quantity of
eligible renewable energy resources for each of the following
compliance periods:
   (A) January 1, 2011, to December 31, 2013, inclusive.
   (B) January 1, 2014, to December 31, 2016, inclusive.
   (C) January 1, 2017, to December 31, 2020, inclusive.
   (2) (A) No later than January 1, 2012, the commission shall
establish the quantity of electricity products from eligible
renewable energy resources to be procured by the retail seller for
each compliance period. These quantities shall be established in the
same manner for all retail sellers and result in the same percentages
used to establish compliance period quantities for all retail
sellers.
   (B) In establishing quantities for the compliance period from
January 1, 2011, to December 31, 2013, inclusive, the commission
shall require procurement for each retail seller equal to an average
of 20 percent of retail sales. For the following compliance periods,
the quantities shall reflect reasonable progress in each of the
intervening years sufficient to ensure that the procurement of
electricity products from eligible renewable energy resources
achieves 25 percent of retail sales by December 31, 2016, and 33
percent of retail sales by December 31, 2020. The commission shall
require retail sellers to procure not less than 33 percent of retail
sales of electricity products from eligible renewable energy
resources in all subsequent years.
   (C) Retail sellers shall be obligated to procure no less than the
quantities associated with all intervening years by the end of each
compliance period. Retail sellers shall not be required to
demonstrate a specific quantity of procurement for any individual
intervening year.
   (3) The commission may require the procurement of eligible
renewable energy resources in excess of the quantities specified in
paragraph (2).
   (4) Only for purposes of establishing the renewables portfolio
standard procurement requirements of paragraph (1) and determining
the quantities pursuant to paragraph (2), the commission shall
include all electricity sold to retail customers by the Department of
Water Resources pursuant to Division 27 (commencing with Section
80000) of the Water Code in the calculation of retail sales by an
electrical corporation.
   (5) The commission shall waive enforcement of this section if it
finds that the retail seller has demonstrated any of the following
conditions are beyond the control of the retail seller and will
prevent compliance:
   (A) There is inadequate transmission capacity to allow for
sufficient electricity to be delivered from proposed eligible
renewable energy resource projects using the current operational
protocols of the Independent System Operator. In making its findings
relative to the existence of this condition with respect to a retail
seller that owns transmission lines, the commission shall consider
both of the following:
   (i) Whether the retail seller has undertaken, in a timely fashion,
reasonable measures under its control and consistent with its
obligations under local, state, and federal laws and regulations, to
develop and construct new transmission lines or upgrades to existing
lines intended to transmit electricity generated by eligible
renewable energy resources. In determining the reasonableness of a
retail seller's actions, the commission shall consider the retail
seller's expectations for full-cost recovery for these transmission
lines and upgrades.
   (ii) Whether the retail seller has taken all reasonable
operational measures to maximize cost-effective deliveries of
electricity from eligible renewable energy resources in advance of
transmission availability.
   (B) Permitting, interconnection, or other circumstances that delay
procured eligible renewable energy resource projects, or there is an
insufficient supply of eligible renewable energy resources available
to the retail seller. In making a finding that this condition
prevents timely compliance, the commission shall consider whether the
retail seller has done all of the following:
   (i) Prudently managed portfolio risks, including relying on a
sufficient number of viable projects.
   (ii) Sought to develop one of the following: its own eligible
renewable energy resources, transmission to interconnect to eligible
renewable energy resources, or energy storage used to integrate
eligible renewable energy resources. This clause shall not require an
electrical corporation to pursue development of eligible renewable
energy resources pursuant to Section 399.14.
   (iii) Procured an appropriate minimum margin of procurement above
the minimum procurement level necessary to comply with the renewables
portfolio standard to compensate for foreseeable delays or
insufficient supply.
   (iv) Taken reasonable measures, under the control of the retail
seller, to procure cost-effective distributed generation and
allowable unbundled renewable energy credits.
   (C) Unanticipated curtailment of eligible renewable energy
resources necessary to address the needs of a balancing authority.
   (6) If the commission waives the compliance requirements of this
section, the commission shall establish additional reporting
requirements on the retail seller to demonstrate that all reasonable
actions under the control of the retail seller are taken in each of
the intervening years sufficient to satisfy future procurement
requirements.
   (7) The commission shall not waive enforcement pursuant to this
section, unless the retail seller demonstrates that it has taken all
reasonable actions under its control, as set forth in paragraph (5),
to achieve full compliance.
   (8) If a retail seller fails to procure sufficient eligible
renewable energy resources to comply with a procurement requirement
pursuant to paragraphs (1) and (2) and fails to obtain an order from
the commission waiving enforcement pursuant to paragraph (5), the
commission shall exercise its authority pursuant to Section 2113.
   (9) Deficits associated with the compliance period shall not be
added to a future compliance period.
   (c) The commission shall establish a limitation for each
electrical corporation on the procurement expenditures for all
eligible renewable energy resources used to comply with the
renewables portfolio standard. In establishing this limitation, the
commission shall rely on the following:
   (1) The most recent renewable energy procurement plan.
   (2) Procurement expenditures that approximate the expected cost of
building, owning, and operating eligible renewable energy resources.

   (3) The potential that some planned resource additions may be
delayed or canceled.
   (d) In developing the limitation pursuant to subdivision (c), the
commission shall ensure all of the following:
   (1) The limitation is set at a level that prevents
disproportionate rate impacts.
   (2) The costs of all procurement credited toward achieving the
renewables portfolio standard are counted towards the limitation.
   (3) Procurement expenditures do not include any indirect expenses,
including imbalance energy charges, sale of excess energy, decreased
generation from existing resources, transmission upgrades, or the
costs associated with relicensing any utility-owned hydroelectric
facilities.
   (e) (1) No later than January 1, 2016, the commission shall
prepare a report to the Legislature assessing whether each electrical
corporation can achieve a 33-percent renewables portfolio standard
by December 31, 2020, and maintain that level thereafter, within the
adopted cost limitations. If the commission determines that it is
necessary to change the limitation for procurement costs incurred by
any electrical corporation after that date, it may propose a revised
cap consistent with the criteria in subdivisions (c) and (d). The
proposed modifications shall take effect no earlier than January 1,
2017.
   (2) Notwithstanding Section 10231.5 of the Government Code, the
requirement for submitting a report imposed under paragraph (1) is
inoperative on January 1, 2021.
   (3) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code.
   (f) If the cost limitation for an electrical corporation is
insufficient to support the projected costs of meeting the renewables
portfolio standard procurement requirements, the electrical
corporation may refrain from entering into new contracts or
constructing facilities beyond the quantity that can be procured
within the limitation, unless eligible renewable energy resources can
be procured without exceeding a de minimis increase in rates,
consistent with the long-term procurement plan established for the
electrical corporation pursuant to Section 454.5.
   (g) (1) The commission shall monitor the status of the cost
limitation for each electrical corporation in order to ensure
compliance with this article.
   (2) If the commission determines that an electrical corporation
may exceed its cost limitation prior to achieving the renewables
portfolio standard procurement requirements, the commission shall do
both of the following within 60 days of making that determination:
   (A) Investigate and identify the reasons why the electrical
corporation may exceed its annual cost limitation.
   (B) Notify the appropriate policy and fiscal committees of the
Legislature that the electrical corporation may exceed its cost
limitation, and include the reasons why the electrical corporation
may exceed its cost limitation.
   (h) The establishment of a renewables portfolio standard shall not
constitute implementation by the commission of the federal Public
Utility Regulatory Policies Act of 1978 (Public Law 95-617).
  SEC. 3.  Section 739.1 of the Public Utilities Code is amended to
read:
   739.1.  (a) The commission shall continue a program of assistance
to low-income electric and gas customers with annual household
incomes that are no greater than 200 percent of the federal poverty
guideline levels, the cost of which shall not be borne solely by any
single class of customer. For one-person households, program
eligibility shall be based on two-person household guideline levels.
The program shall be referred to as the California Alternate Rates
for Energy or CARE program. The commission shall ensure that the
level of discount for low-income electric and gas customers correctly
reflects the level of need.
   (b) The commission shall establish rates for CARE program
participants, subject to both of the following:
   (1) That the commission ensure that low-income ratepayers are not
jeopardized or overburdened by monthly energy expenditures, pursuant
to subdivision (b) of Section 382.
   (2) That the level of the discount for low-income electricity and
gas ratepayers correctly reflects the level of need as determined by
the needs assessment conducted pursuant to subdivision (d) of Section
382.
   (c) In establishing CARE discounts for an electrical corporation
with 100,000 or more customer accounts in California, the commission
shall ensure all of the following:
   (1) The average effective CARE discount shall not be less than 30
percent or more than 35 percent of the revenues that would have been
produced for the same billed usage by non-CARE customers. The average
effective discount determined by the commission shall reflect any
charges not paid by CARE customers, including payments for the
California Solar Initiative, payments for the self-generation
incentive program made pursuant to Section 379.6, payment of the
separate rate component to fund the CARE program made pursuant to
subdivision (a) of Section 381, payments made to the Department of
Water Resources pursuant to Division 27 (commencing with Section
80000) of the Water Code, and any discount in a fixed charge. The
average effective CARE discount shall be calculated as a weighted
average of the CARE discounts provided to individual customers.
   (2) If an electrical corporation provides an average effective
CARE discount in excess of the maximum percentage specified in
paragraph (1), the electrical corporation shall not reduce, on an
annual basis, the average effective CARE discount by more than a
reasonable percentage decrease below the discount in effect on
January 1, 2013, or that the electrical corporation had been
authorized to place in effect by that date.
   (3) The entire discount shall be provided in the form of a
reduction in the overall bill for the eligible CARE customer.
   (d) The commission shall work with electrical and gas corporations
to establish penetration goals. The commission shall authorize
recovery of all administrative costs associated with the
implementation of the CARE program that the commission determines to
be reasonable, through a balancing account mechanism. Administrative
costs shall include, but are not limited to, outreach, marketing,
regulatory compliance, certification and verification, billing,
measurement and evaluation, and capital improvements and upgrades to
communications and processing equipment.
   (e) The commission shall examine methods to improve CARE
enrollment and participation. This examination shall include, but
need not be limited to, comparing information from CARE and the
Universal Lifeline Telephone Service (ULTS) to determine the most
effective means of utilizing that information to increase CARE
enrollment, automatic enrollment of ULTS customers who are eligible
for the CARE program, customer privacy issues, and alternative
mechanisms for outreach to potential enrollees. The commission shall
ensure that a customer consents prior to enrollment. The commission
shall consult with interested parties, including ULTS providers, to
develop the best methods of informing ULTS customers about other
available low-income programs, as well as the best mechanism for
telephone providers to recover reasonable costs incurred pursuant to
this section.
   (f) (1) The commission shall improve the CARE application process
by cooperating with other entities and representatives of California
government, including the California Health and Human Services Agency
and the Secretary of California Health and Human Services, to ensure
that all gas and electric customers eligible for public assistance
programs in California that reside within the service territory of an
electrical corporation or gas corporation, are enrolled in the CARE
program. The commission may determine that gas and electric customers
are categorically eligible for CARE assistance if they are enrolled
in other public assistance programs with substantially the same
income eligibility requirements as the CARE program. To the extent
practicable, the commission shall develop a CARE application process
using the existing ULTS application process as a model. The
commission shall work with electrical and gas corporations and the
Low-Income Oversight Board established in Section 382.1 to meet the
low-income objectives in this section.
   (2) The commission shall ensure that an electrical corporation or
gas corporation with a commission-approved program to provide
discounts based upon economic need in addition to the CARE program,
including a Family Electric Rate Assistance program, utilize a single
application form, to enable an applicant to alternatively apply for
any assistance program for which the applicant may be eligible. It is
the intent of the Legislature to allow applicants under one program,
that may not be eligible under that program, but that may be
eligible under an alternative assistance program based upon economic
need, to complete a single application for any commission-approved
assistance program offered by the public utility.
   (g) It is the intent of the Legislature that the commission ensure
CARE program participants receive affordable electric and gas
service that does not impose an unfair economic burden on those
participants.
   (h) The commission's program of assistance to low-income electric
and gas customers shall, as soon as practicable, include nonprofit
group living facilities specified by the commission, if the
commission finds that the residents in these facilities substantially
meet the commission's low-income eligibility requirements and there
is a feasible process for certifying that the assistance shall be
used for the direct benefit, such as improved quality of care or
improved food service, of the low-income residents in the facilities.
The commission shall authorize utilities to offer discounts to
eligible facilities licensed or permitted by appropriate state or
local agencies, and to facilities, including women's shelters,
hospices, and homeless shelters, that may not have a license or
permit but provide other proof satisfactory to the utility that they
are eligible to participate in the program.
   (i) (1) In addition to existing assessments of eligibility, an
electrical corporation may require proof of income eligibility for
those CARE program participants whose electricity usage, in any
monthly or other billing period, exceeds 400 percent of baseline
usage. The authority of an electrical corporation to require proof of
income eligibility is not limited by the means by which the CARE
program participant enrolled in the program, including if the
participant was automatically enrolled in the CARE program because of
participation in a governmental assistance program. If a CARE
program participant's electricity usage exceeds 400 percent of
baseline usage, the electrical corporation may require the CARE
program participant to participate in the Energy Savings Assistance
Program (ESAP), which includes a residential energy assessment, in
order to provide the CARE program participant with information and
assistance in reducing his or her energy usage. Continued
participation in the CARE program may be conditioned upon the CARE
program participant agreeing to participate in ESAP within 45 days of
notice being given by the electrical corporation pursuant to this
paragraph. The electrical corporation may require the CARE program
participant to notify the utility of whether the residence is rented,
and if so, a means by which to contact the landlord, and the
electrical corporation may share any evaluation and recommendation
relative to the residential structure that is made as part of an
energy assessment, with the landlord of the CARE program participant.
Requirements imposed pursuant to this paragraph shall be consistent
with procedures adopted by the commission.
   (2) If a CARE program participant's electricity usage exceeds 600
percent of baseline usage, the electrical corporation shall require
the CARE program participant to participate in ESAP, which includes a
residential energy assessment, in order to provide the CARE program
participant with information and assistance in reducing his or her
energy usage. Continued participation in the CARE program shall be
conditioned upon the CARE program participant agreeing to participate
in ESAP within 45 days of a notice made by the electrical
corporation pursuant to this paragraph. The electrical corporation
may require the CARE program participant to notify the utility of
whether the residence is rented, and if so, a means by which to
contact the landlord, and the electrical corporation may share any
evaluation and recommendation relative to the residential structure
that is made as part of an energy assessment, with the landlord of
the CARE program participant. Following the completion of the energy
assessment, if the CARE program participant's electricity usage
continues to exceed 600 percent of baseline usage, the electrical
corporation may remove the CARE program participant from the program
if the removal is consistent with procedures adopted by the
commission. Nothing in this paragraph shall prevent a CARE program
participant with electricity usage exceeding 600 percent of baseline
usage from participating in an appeals process with the electrical
corporation to determine whether the participant's usage levels are
legitimate.
   (3) A CARE program participant in a rental residence shall not be
removed from the program in situations where the landlord is
nonresponsive when contacted by the electrical corporation or does
not provide for ESAP participation.
  SEC. 4.  Section 739.9 of the Public Utilities Code is repealed.
  SEC. 5.  Section 739.9 is added to the Public Utilities Code, to
read:
   739.9.  (a) "Fixed charge" means any fixed customer charge, basic
service fee, demand differentiated basic service fee, demand charge,
or other charge not based upon the volume of electricity consumed.
   (b) Increases to electrical rates and charges in rate design
proceedings, including any reduction in the California Alternate
Rates for Energy (CARE) discount, shall be reasonable and subject to
a reasonable phase-in schedule relative to the rates and charges in
effect prior to January 1, 2014.
   (c) Except as provided in subdivision (c) of Section 745, the
commission shall require each electrical corporation to offer default
rates to residential customers with at least two usage tiers. The
first tier shall include electricity usage of no less than the
baseline quantity established pursuant to paragraph (1) of
subdivision (d) of Section 739.
   (d) Consistent with the requirements of Section 739, the
commission may modify the seasonal definitions and applicable
percentage of average consumption for one or more climatic zones.
   (e) The commission may adopt new, or expand existing, fixed
charges for the purpose of collecting a reasonable portion of the
fixed costs of providing electric service to residential customers.
The commission shall ensure that any approved charges do all of the
following:
   (1) Reasonably reflect an appropriate portion of the different
costs of serving small and large customers.
   (2) Not unreasonably impair incentives for conservation and energy
efficiency.
   (3) Not overburden low-income customers.
   (f) For the purposes of this section and Section 739.1, the
commission may, beginning January 1, 2015, authorize fixed charges
that do not exceed ten dollars ($10) per residential customer account
per month for customers not enrolled in the CARE program and five
dollars ($5) per residential customer account per month for customers
enrolled in the CARE program. Beginning January 1, 2016, the maximum
allowable fixed charge may be adjusted by no more than the annual
percentage increase in the Consumer Price Index for the prior
calendar year. This subdivision applies to any default rate schedule,
at least one optional tiered rate schedule, and at least one
optional time variant rate schedule.
   (g) This section does not require the commission to approve any
new or expanded fixed charge.
   (h) The commission may consider whether minimum bills are
appropriate as a substitute for any fixed charges.
  SEC. 6.  Section 745 of the Public Utilities Code is repealed.
  SEC. 7.  Section 745 is added to the Public Utilities Code, to
read:
    745.  (a) For purposes of this section, "time-variant pricing"
includes time-of-use rates, critical peak pricing, and real-time
pricing, but does not include programs that provide customers with
discounts from standard tariff rates as an incentive to reduce
consumption at certain times, including peak time rebates.
   (b) The commission may 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 commission shall not establish a mandatory or default
time-variant pricing tariff for any residential customer except as
authorized in subdivision (c).
   (c) Beginning January 1, 2018, the commission may require or
authorize an electrical corporation to employ default time-of-use
pricing for residential customers subject to all of the following:
   (1) Residential customers receiving a medical baseline allowance
pursuant to subdivision (c) of Section 739, customers requesting
third-party notification pursuant to subdivision (c) of Section
779.1, customers who the commission has ordered cannot be
disconnected from service without an in-person visit from a utility
representative (Decision 12-03-054 (March 22, 2012), Decision on
Phase II Issues: Adoption of Practices to Reduce the Number of Gas
and Electric Service Disconnections, Order 2 (b) at page 55), and
other customers designated by the commission in its discretion shall
not be subject to default time-of-use pricing without their
affirmative consent.
   (2) The commission shall ensure that any time-of-use rate schedule
does not cause unreasonable hardship for senior citizens or
economically vulnerable customers in hot climate zones.
   (3) The commission shall strive for time-of-use rate schedules
that utilize time periods that are appropriate for at least the
following five years.
   (4) A residential customer shall not be subject to a default
time-of-use rate schedule unless that residential customer has been
provided with not less than one year of interval usage data from an
advanced meter and associated customer education and, following the
passage of this period, is provided with no less than one year of
bill protection during which the total amount paid by the residential
customer for electric service shall not exceed the amount that would
have been payable by the residential customer under that customer's
previous rate schedule.
   (5) Each electrical corporation shall provide each residential
customer, not less than once per year, using a reasonable delivery
method of the customer's choosing, a summary of available tariff
options with a calculation of expected annual bill impacts under each
available tariff. The summary shall not be provided to customers who
notify the utility that they choose not to receive the summary. The
reasonable costs of providing this service shall be recovered in
rates.
   (6) Residential customers have the option to not receive service
pursuant to a time-of-use rate schedule and incur no additional
charges as a result of the exercise of that option. Prohibited
charges include, but are not limited to, administrative fees for
switching away from time-of-use pricing, hedging premiums that exceed
any actual costs of hedging, and more than a proportional share of
any discounts or other incentives paid to customers to increase
participation in time-of-use pricing. This prohibition on additional
charges is not intended to ensure that a customer will necessarily
experience a lower total bill as a result of the exercise of the
option to not receive service pursuant to a time-of-use rate
schedule.
  SEC. 8.  Section 769 is added to the Public Utilities Code, to
read:
   769.  (a) For purposes of this section, "distributed resources"
means distributed renewable generation resources, energy efficiency,
energy storage, electric vehicles, and demand response technologies.
   (b) Not later than July 1, 2015, each electrical corporation shall
submit to the commission a distribution resources plan proposal to
identify optimal locations for the deployment of distributed
resources. Each proposal shall do all of the following:
   (1) Evaluate locational benefits and costs of distributed
resources located on the distribution system. This evaluation shall
be based on reductions or increases in local generation capacity
needs, avoided or increased investments in distribution
infrastructure, safety benefits, reliability benefits, and any other
savings the distributed resources provides to the electric grid or
costs to ratepayers of the electrical corporation.
   (2) Propose or identify standard tariffs, contracts, or other
mechanisms for the deployment of cost-effective distributed resources
that satisfy distribution planning objectives.
   (3) Propose cost-effective methods of effectively coordinating
existing commission-approved programs, incentives, and tariffs to
maximize the locational benefits and minimize the incremental costs
of distributed resources.
   (4) Identify any additional utility spending necessary to
integrate cost-effective distributed resources into distribution
planning consistent with the goal of yielding net benefits to
ratepayers.
   (5) Identify barriers to the deployment of distributed resources,
including, but not limited to, safety standards related to technology
or operation of the distribution circuit in a manner that ensures
reliable service.
   (c) The commission shall 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 commission may modify any plan as appropriate to
minimize overall system costs and maximize ratepayer benefit from
investments in distributed resources.
   (d) Any electrical corporation spending on distribution
infrastructure necessary to accomplish the distribution resources
plan shall be proposed and considered as part of the next general
rate case for the corporation. The commission may approve proposed
spending if it concludes that ratepayers would realize net benefits
and the associated costs are just and reasonable. The commission may
also adopt criteria, benchmarks, and accountability mechanisms to
evaluate the success of any investment authorized pursuant to a
distribution resources plan.
  SEC. 9.  Section 2827 of the Public Utilities Code is amended to
read:
   2827.  (a) The Legislature finds and declares that a program to
provide net energy metering combined with net surplus compensation,
co-energy metering, and wind energy co-metering for eligible
customer-generators is one way to encourage substantial private
investment in renewable energy resources, stimulate in-state economic
growth, reduce demand for electricity during peak consumption
periods, help stabilize California's energy supply infrastructure,
enhance the continued diversification of California's energy resource
mix, reduce interconnection and administrative costs for electricity
suppliers, and encourage conservation and efficiency.
   (b) As used in this section, the following terms have the
following meanings:
   (1) "Co-energy metering" means a program that is the same in all
other respects as a net energy metering program, except that the
local publicly owned electric utility has elected to apply a
generation-to-generation energy and time-of-use credit formula as
provided in subdivision (i).
   (2) "Electrical cooperative" means an electrical cooperative as
defined in Section 2776.
   (3) "Electric utility" means an electrical corporation, a local
publicly owned electric utility, or an electrical cooperative, or any
other entity, except an electric service provider, that offers
electrical service. This section shall not apply to a local publicly
owned electric utility that serves more than 750,000 customers and
that also conveys water to its customers.
   (4) "Eligible customer-generator" means a residential customer,
small commercial customer as defined in subdivision (h) of Section
331, or commercial, industrial, or agricultural customer of an
electric utility, who uses a renewable electrical generation
facility, or a combination of those facilities, with a total capacity
of not more than one megawatt, that is located on the customer's
owned, leased, or rented premises, and is interconnected and operates
in parallel with the electrical grid, and is intended primarily to
offset part or all of the customer's own electrical requirements.
   (5) "Large electrical corporation" means an electrical corporation
with more than 100,000 service connections in California.
   (6) "Net energy metering" means measuring the difference between
the electricity supplied through the electrical grid and the
electricity generated by an eligible customer-generator and fed back
to the electrical grid over a 12-month period as described in
subdivisions (c) and (h).
   (7) "Net surplus customer-generator" means an eligible
customer-generator that generates more electricity during a 12-month
period than is supplied by the electric utility to the eligible
customer-generator during the same 12-month period.
   (8) "Net surplus electricity" means all electricity generated by
an eligible customer-generator measured in kilowatthours over a
12-month period that exceeds the amount of electricity consumed by
that eligible customer-generator.
   (9) "Net surplus electricity compensation" means a per
kilowatthour rate offered by the electric utility to the net surplus
customer-generator for net surplus electricity that is set by the
ratemaking authority pursuant to subdivision (h).
   (10) "Ratemaking authority" means, for an electrical corporation,
the commission, for an electrical cooperative, its ratesetting body
selected by its shareholders or members, and for a local publicly
owned electric utility, the local elected body responsible for
setting the rates of the local publicly owned utility.
   (11) "Renewable electrical generation facility" means a facility
that generates electricity from a renewable source listed in
paragraph (1) of subdivision (a) of Section 25741 of the Public
Resources Code. A small hydroelectric generation facility is not an
eligible renewable electrical generation facility if it will cause an
adverse impact on instream beneficial uses or cause a change in the
volume or timing of streamflow.
   (12) "Wind energy co-metering" means any wind energy project
greater than 50 kilowatts, but not exceeding one megawatt, where the
difference between the electricity supplied through the electrical
grid and the electricity generated by an eligible customer-generator
and fed back to the electrical grid over a 12-month period is as
described in subdivision (h). Wind energy co-metering shall be
accomplished pursuant to Section 2827.8.
   (c) (1) Except as provided in paragraph (4) and in Section 2827.1,
every electric utility shall develop a standard contract or tariff
providing for net energy metering, and shall make this standard
contract or tariff available to eligible customer-generators, upon
request, on a first-come-first-served basis until the time that the
total rated generating capacity used by eligible customer-generators
exceeds 5 percent of the electric utility's aggregate customer peak
demand. Net energy metering shall be accomplished using a single
meter capable of registering the flow of electricity in two
directions. An additional meter or meters to monitor the flow of
electricity in each direction may be installed with the consent of
the eligible customer-generator, at the expense of the electric
utility, and the additional metering shall be used only to provide
the information necessary to accurately bill or credit the eligible
customer-generator pursuant to subdivision (h), or to collect
generating system performance information for research purposes
relative to a renewable electrical generation facility. If the
existing electrical meter of an eligible customer-generator is not
capable of measuring the flow of electricity in two directions, the
eligible customer-generator shall be responsible for all expenses
involved in purchasing and installing a meter that is able to measure
electricity flow in two directions. If an additional meter or meters
are installed, the net energy metering calculation shall yield a
result identical to that of a single meter. An eligible
customer-generator that is receiving service other than through the
standard contract or tariff may elect to receive service through the
standard contract or tariff until the electric utility reaches the
generation limit set forth in this paragraph. Once the generation
limit is reached, only eligible customer-generators that had
previously elected to receive service pursuant to the standard
contract or tariff have a right to continue to receive service
pursuant to the standard contract or tariff. Eligibility for net
energy metering does not limit an eligible customer-generator's
eligibility for any other rebate, incentive, or credit provided by
the electric utility, or pursuant to any governmental program,
including rebates and incentives provided pursuant to the California
Solar Initiative.
   (2) An electrical corporation shall include a provision in the net
energy metering contract or tariff requiring that any customer with
an existing electrical generating facility and meter who enters into
a new net energy metering contract shall provide an inspection report
to the electrical corporation, unless the electrical generating
facility and meter have been installed or inspected within the
previous three years. The inspection report shall be prepared by a
California licensed contractor who is not the owner or operator of
the facility and meter. A California licensed electrician shall
perform the inspection of the electrical portion of the facility and
meter.
   (3) (A) On an annual basis, every electric utility shall make
available to the ratemaking authority information on the total rated
generating capacity used by eligible customer-generators that are
customers of that provider in the provider's service area and the net
surplus electricity purchased by the electric utility pursuant to
this section.
   (B) An electric service provider operating pursuant to Section 394
shall make available to the ratemaking authority the information
required by this paragraph for each eligible customer-generator that
is their customer for each service area of an electrical corporation,
local publicly owned electrical utility, or electrical cooperative,
in which the eligible customer-generator has net energy metering.
   (C) The ratemaking authority shall develop a process for making
the information required by this paragraph available to electric
utilities, and for using that information to determine when, pursuant
to paragraphs (1) and (4), an electric utility is not obligated to
provide net energy metering to additional eligible
customer-generators in its service area.
   (4) (A) An electric utility that is not a large electrical
corporation is not obligated to provide net energy metering to
additional eligible customer-generators in its service area when the
combined total peak demand of all electricity used by eligible
customer-generators served by all the electric utilities in that
service area furnishing net energy metering to eligible
customer-generators exceeds 5 percent of the aggregate customer peak
demand of those electric utilities.
   (B)  The commission shall require every large electrical
corporation to make the standard contract or tariff available to
eligible customer-generators, continuously and without interruption,
until such times as the large electrical corporation reaches its net
energy metering program limit or July 1, 2017, whichever is earlier.
A large electrical corporation reaches its program limit when the
combined total peak demand of all electricity used by eligible
customer-generators served by all the electric utilities in the large
electrical corporation's service area furnishing net energy metering
to eligible customer-generators exceeds 5 percent of the aggregate
customer peak demand of those electric utilities. For purposes of
calculating a large electrical corporation's program limit,
"aggregate customer peak demand" means the highest sum of the
noncoincident peak demands of all of the large electrical corporation'
s customers that occurs in any calendar year. To determine the
aggregate customer peak demand, every large electrical corporation
shall use a uniform method approved by the commission. The program
limit calculated pursuant to this paragraph shall not be less than
the following:
   (i) For San Diego Gas and Electric Company, when it has made 607
megawatts of nameplate generating capacity available to eligible
customer-generators.
   (ii) For Southern California Edison Company, when it has made
2,240 megawatts of nameplate generating capacity available to
eligible customer-generators.
   (iii) For Pacific Gas and Electric Company, when it has made 2,409
megawatts of nameplate generating capacity available to eligible
customer-generators.
   (C) Every large electrical corporation shall file a monthly report
with the commission detailing the progress toward the net energy
metering program limit established in subparagraph (B). The report
shall include separate calculations on progress toward the limits
based on operating solar energy systems, cumulative numbers of
interconnection requests for net energy metering eligible systems,
and any other criteria required by the commission.
   (D) Beginning July 1, 2017, or upon reaching the net metering
program limit of subparagraph (B), whichever is earlier, the
obligation of a large electrical corporation to provide service
pursuant to a standard contract or tariff shall be pursuant to
Section 2827.1 and applicable state and federal requirements.
   (d) Every electric utility shall make all necessary forms and
contracts for net energy metering and net surplus electricity
compensation service available for download from the Internet.
   (e) (1) Every electric utility shall ensure that requests for
establishment of net energy metering and net surplus electricity
compensation are processed in a time period not exceeding that for
similarly situated customers requesting new electric service, but not
to exceed 30 working days from the date it receives a completed
application form for net energy metering service or net surplus
electricity compensation, including a signed interconnection
agreement from an eligible customer-generator and the electric
inspection clearance from the governmental authority having
jurisdiction.
   (2) Every electric utility shall ensure that requests for an
interconnection agreement from an eligible customer-generator are
processed in a time period not to exceed 30 working days from the
date it receives a completed application form from the eligible
customer-generator for an interconnection agreement.
   (3) If an electric utility is unable to process a request within
the allowable timeframe pursuant to paragraph (1) or (2), it shall
notify the eligible customer-generator and the ratemaking authority
of the reason for its inability to process the request and the
expected completion date.
   (f) (1) If a customer participates in direct transactions pursuant
to paragraph (1) of subdivision (b) of Section 365, or Section
365.1, with an electric service provider that does not provide
distribution service for the direct transactions, the electric
utility that provides distribution service for the eligible
customer-generator is not obligated to provide net energy metering or
net surplus electricity compensation to the customer.
   (2) If a customer participates in direct transactions pursuant to
paragraph (1) of subdivision (b) of Section 365 with an electric
service provider, and the customer is an eligible customer-generator,
the electric utility that provides distribution service for the
direct transactions may recover from the customer's electric service
provider the incremental costs of metering and billing service
related to net energy metering and net surplus electricity
compensation in an amount set by the ratemaking authority.
   (g) Except for the time-variant kilowatthour pricing portion of
any tariff adopted by the commission pursuant to paragraph (4) of
subdivision (a) of Section 2851, each net energy metering contract or
tariff shall be identical, with respect to rate structure, all
retail rate components, and any monthly charges, to the contract or
tariff to which the same customer would be assigned if the customer
did not use a renewable electrical generation facility, except that
eligible customer-generators shall not be assessed standby charges on
the electrical generating capacity or the kilowatthour production of
a renewable electrical generation facility. The charges for all
retail rate components for eligible customer-generators shall be
based exclusively on the customer-generator's net kilowatthour
consumption over a 12-month period, without regard to the eligible
customer-generator's choice as to from whom it purchases electricity
that is not self-generated. Any new or additional demand charge,
standby charge, customer charge, minimum monthly charge,
interconnection charge, or any other charge that would increase an
eligible customer-generator's costs beyond those of other customers
who are not eligible customer-generators in the rate class to which
the eligible customer-generator would otherwise be assigned if the
customer did not own, lease, rent, or otherwise operate a renewable
electrical generation facility is contrary to the intent of this
section, and shall not form a part of net energy metering contracts
or tariffs.
   (h) For eligible customer-generators, the net energy metering
calculation shall be made by measuring the difference between the
electricity supplied to the eligible customer-generator and the
electricity generated by the eligible customer-generator and fed back
to the electrical grid over a 12-month period. The following rules
shall apply to the annualized net metering calculation:
   (1) The eligible residential or small commercial
customer-generator, at the end of each 12-month period following the
date of final interconnection of the eligible customer-generator's
system with an electric utility, and at each anniversary date
thereafter, shall be billed for electricity used during that 12-month
period. The electric utility shall determine if the eligible
residential or small commercial customer-generator was a net consumer
or a net surplus customer-generator during that period.
   (2) At the end of each 12-month period, where the electricity
supplied during the period by the electric utility exceeds the
electricity generated by the eligible residential or small commercial
customer-generator during that same period, the eligible residential
or small commercial customer-generator is a net electricity consumer
and the electric utility shall be owed compensation for the eligible
customer-generator's net kilowatthour consumption over that 12-month
period. The compensation owed for the eligible residential or small
commercial customer-generator's consumption shall be calculated as
follows:
   (A) For all eligible customer-generators taking service under
contracts or tariffs employing "baseline" and "over baseline" rates,
any net monthly consumption of electricity shall be calculated
according to the terms of the contract or tariff to which the same
customer would be assigned to, or be eligible for, if the customer
was not an eligible customer-generator. If those same
customer-generators are net generators over a billing period, the net
kilowatthours generated shall be valued at the same price per
kilowatthour as the electric utility would charge for the baseline
quantity of electricity during that billing period, and if the number
of kilowatthours generated exceeds the baseline quantity, the excess
shall be valued at the same price per kilowatthour as the electric
utility would charge for electricity over the baseline quantity
during that billing period.
   (B) For all eligible customer-generators taking service under
contracts or tariffs employing time-of-use rates, any net monthly
consumption of electricity shall be calculated according to the terms
of the contract or tariff to which the same customer would be
assigned, or be eligible for, if the customer was not an eligible
customer-generator. When those same customer-generators are net
generators during any discrete time-of-use period, the net
kilowatthours produced shall be valued at the same price per
kilowatthour as the electric utility would charge for retail
kilowatthour sales during that same time-of-use period. If the
eligible customer-generator's time-of-use electrical meter is unable
to measure the flow of electricity in two directions, paragraph (1)
of subdivision (c) shall apply.
   (C) For all eligible residential and small commercial
customer-generators and for each billing period, the net balance of
moneys owed to the electric utility for net consumption of
electricity or credits owed to the eligible customer-generator for
net generation of electricity shall be carried forward as a monetary
value until the end of each 12-month period. For all eligible
commercial, industrial, and agricultural customer-generators, the net
balance of moneys owed shall be paid in accordance with the electric
utility's normal billing cycle, except that if the eligible
commercial, industrial, or agricultural customer-generator is a net
electricity producer over a normal billing cycle, any excess
kilowatthours generated during the billing cycle shall be carried
over to the following billing period as a monetary value, calculated
according to the procedures set forth in this section, and appear as
a credit on the eligible commercial, industrial, or agricultural
customer-generator's account, until the end of the annual period when
paragraph (3) shall apply.
   (3) At the end of each 12-month period, where the electricity
generated by the eligible customer-generator during the 12-month
period exceeds the electricity supplied by the electric utility
during that same period, the eligible customer-generator is a net
surplus customer-generator and the electric utility, upon an
affirmative election by the net surplus customer-generator, shall
either (A) provide net surplus electricity compensation for any net
surplus electricity generated during the prior 12-month period, or
(B) allow the net surplus customer-generator to apply the net surplus
electricity as a credit for kilowatthours subsequently supplied by
the electric utility to the net surplus customer-generator. For an
eligible customer-generator that does not affirmatively elect to
receive service                                              pursuant
to net surplus electricity compensation, the electric utility shall
retain any excess kilowatthours generated during the prior 12-month
period. The eligible customer-generator not affirmatively electing to
receive service pursuant to net surplus electricity compensation
shall not be owed any compensation for the net surplus electricity
unless the electric utility enters into a purchase agreement with the
eligible customer-generator for those excess kilowatthours. Every
electric utility shall provide notice to eligible customer-generators
that they are eligible to receive net surplus electricity
compensation for net surplus electricity, that they must elect to
receive net surplus electricity compensation, and that the 12-month
period commences when the electric utility receives the eligible
customer-generator's election. For an electric utility that is an
electrical corporation or electrical cooperative, the commission may
adopt requirements for providing notice and the manner by which
eligible customer-generators may elect to receive net surplus
electricity compensation.
   (4) (A) An eligible customer-generator with multiple meters may
elect to aggregate the electrical load of the meters located on the
property where the renewable electrical generation facility is
located and on all property adjacent or contiguous to the property on
which the renewable electrical generation facility is located, if
those properties are solely owned, leased, or rented by the eligible
customer-generator. If the eligible customer-generator elects to
aggregate the electric load pursuant to this paragraph, the electric
utility shall use the aggregated load for the purpose of determining
whether an eligible customer-generator is a net consumer or a net
surplus customer-generator during a 12-month period.
   (B) If an eligible customer-generator chooses to aggregate
pursuant to subparagraph (A), the eligible customer-generator shall
be permanently ineligible to receive net surplus electricity
compensation, and the electric utility shall retain any kilowatthours
in excess of the eligible customer-generator's aggregated electrical
load generated during the 12-month period.
   (C) If an eligible customer-generator with multiple meters elects
to aggregate the electrical load of those meters pursuant to
subparagraph (A), and different rate schedules are applicable to
service at any of those meters, the electricity generated by the
renewable electrical generation facility shall be allocated to each
of the meters in proportion to the electrical load served by those
meters. For example, if the eligible customer-generator receives
electric service through three meters, two meters being at an
agricultural rate that each provide service to 25 percent of the
customer's total load, and a third meter, at a commercial rate, that
provides service to 50 percent of the customer's total load, then 50
percent of the electrical generation of the eligible renewable
generation facility shall be allocated to the third meter that
provides service at the commercial rate and 25 percent of the
generation shall be allocated to each of the two meters providing
service at the agricultural rate. This proportionate allocation shall
be computed each billing period.
   (D) This paragraph shall not become operative for an electrical
corporation unless the commission determines that allowing eligible
customer-generators to aggregate their load from multiple meters will
not result in an increase in the expected revenue obligations of
customers who are not eligible customer-generators. The commission
shall make this determination by September 30, 2013. In making this
determination, the commission shall determine if there are any public
purpose or other noncommodity charges that the eligible
customer-generators would pay pursuant to the net energy metering
program as it exists prior to aggregation, that the eligible
customer-generator would not pay if permitted to aggregate the
electrical load of multiple meters pursuant to this paragraph.
   (E) A local publicly owned electric utility or electrical
cooperative shall only allow eligible customer-generators to
aggregate their load if the utility's ratemaking authority determines
that allowing eligible customer-generators to aggregate their load
from multiple meters will not result in an increase in the expected
revenue obligations of customers that are not eligible
customer-generators. The ratemaking authority of a local publicly
owned electric utility or electrical cooperative shall make this
determination within 180 days of the first request made by an
eligible customer-generator to aggregate their load. In making the
determination, the ratemaking authority shall determine if there are
any public purpose or other noncommodity charges that the eligible
customer-generator would pay pursuant to the net energy metering or
co-energy metering program of the utility as it exists prior to
aggregation, that the eligible customer-generator would not pay if
permitted to aggregate the electrical load of multiple meters
pursuant to this paragraph. If the ratemaking authority determines
that load aggregation will not cause an incremental rate impact on
the utility's customers that are not eligible customer-generators,
the local publicly owned electric utility or electrical cooperative
shall permit an eligible customer-generator to elect to aggregate the
electrical load of multiple meters pursuant to this paragraph. The
ratemaking authority may reconsider any determination made pursuant
to this subparagraph in a subsequent public proceeding.
   (F) For purposes of this paragraph, parcels that are divided by a
street, highway, or public thoroughfare are considered contiguous,
provided they are otherwise contiguous and under the same ownership.
   (G) An eligible customer-generator may only elect to aggregate the
electrical load of multiple meters if the renewable electrical
generation facility, or a combination of those facilities, has a
total generating capacity of not more than one megawatt.
   (H) Notwithstanding subdivision (g), an eligible
customer-generator electing to aggregate the electrical load of
multiple meters pursuant to this subdivision shall remit service
charges for the cost of providing billing services to the electric
utility that provides service to the meters.
   (5) (A) The ratemaking authority shall establish a net surplus
electricity compensation valuation to compensate the net surplus
customer-generator for the value of net surplus electricity generated
by the net surplus customer-generator. The commission shall
establish the valuation in a ratemaking proceeding. The ratemaking
authority for a local publicly owned electric utility shall establish
the valuation in a public proceeding. The net surplus electricity
compensation valuation shall be established so as to provide the net
surplus customer-generator just and reasonable compensation for the
value of net surplus electricity, while leaving other ratepayers
unaffected. The ratemaking authority shall determine whether the
compensation will include, where appropriate justification exists,
either or both of the following components:
   (i) The value of the electricity itself.
   (ii) The value of the renewable attributes of the electricity.
   (B) In establishing the rate pursuant to subparagraph (A), the
ratemaking authority shall ensure that the rate does not result in a
shifting of costs between eligible customer-generators and other
bundled service customers.
   (6) (A) Upon adoption of the net surplus electricity compensation
rate by the ratemaking authority, any renewable energy credit, as
defined in Section 399.12, for net surplus electricity purchased by
the electric utility shall belong to the electric utility. Any
renewable energy credit associated with electricity generated by the
eligible customer-generator that is utilized by the eligible
customer-generator shall remain the property of the eligible
customer-generator.
   (B) Upon adoption of the net surplus electricity compensation rate
by the ratemaking authority, the net surplus electricity purchased
by the electric utility shall count toward the electric utility's
renewables portfolio standard annual procurement targets for the
purposes of paragraph (1) of subdivision (b) of Section 399.15, or
for a local publicly owned electric utility, the renewables portfolio
standard annual procurement targets established pursuant to Section
387.
   (7) The electric utility shall provide every eligible residential
or small commercial customer-generator with net electricity
consumption and net surplus electricity generation information with
each regular bill. That information shall include the current
monetary balance owed the electric utility for net electricity
consumed, or the net surplus electricity generated, since the last
12-month period ended. Notwithstanding this subdivision, an electric
utility shall permit that customer to pay monthly for net energy
consumed.
   (8) If an eligible residential or small commercial
customer-generator terminates the customer relationship with the
electric utility, the electric utility shall reconcile the eligible
customer-generator's consumption and production of electricity during
any part of a 12-month period following the last reconciliation,
according to the requirements set forth in this subdivision, except
that those requirements shall apply only to the months since the most
recent 12-month bill.
   (9) If an electric service provider or electric utility providing
net energy metering to a residential or small commercial
customer-generator ceases providing that electric service to that
customer during any 12-month period, and the customer-generator
enters into a new net energy metering contract or tariff with a new
electric service provider or electric utility, the 12-month period,
with respect to that new electric service provider or electric
utility, shall commence on the date on which the new electric service
provider or electric utility first supplies electric service to the
customer-generator.
   (i) Notwithstanding any other provisions of this section,
paragraphs (1), (2), and (3) shall apply to an eligible
customer-generator with a capacity of more than 10 kilowatts, but not
exceeding one megawatt, that receives electric service from a local
publicly owned electric utility that has elected to utilize a
co-energy metering program unless the local publicly owned electric
utility chooses to provide service for eligible customer-generators
with a capacity of more than 10 kilowatts in accordance with
subdivisions (g) and (h):
   (1) The eligible customer-generator shall be required to utilize a
meter, or multiple meters, capable of separately measuring
electricity flow in both directions. All meters shall provide
time-of-use measurements of electricity flow, and the customer shall
take service on a time-of-use rate schedule. If the existing meter of
the eligible customer-generator is not a time-of-use meter or is not
capable of measuring total flow of electricity in both directions,
the eligible customer-generator shall be responsible for all expenses
involved in purchasing and installing a meter that is both
time-of-use and able to measure total electricity flow in both
directions. This subdivision shall not restrict the ability of an
eligible customer-generator to utilize any economic incentives
provided by a governmental agency or an electric utility to reduce
its costs for purchasing and installing a time-of-use meter.
   (2) The consumption of electricity from the local publicly owned
electric utility shall result in a cost to the eligible
customer-generator to be priced in accordance with the standard rate
charged to the eligible customer-generator in accordance with the
rate structure to which the customer would be assigned if the
customer did not use a renewable electrical generation facility. The
generation of electricity provided to the local publicly owned
electric utility shall result in a credit to the eligible
customer-generator and shall be priced in accordance with the
generation component, established under the applicable structure to
which the customer would be assigned if the customer did not use a
renewable electrical generation facility.
   (3) All costs and credits shall be shown on the eligible
customer-generator's bill for each billing period. In any months in
which the eligible customer-generator has been a net consumer of
electricity calculated on the basis of value determined pursuant to
paragraph (2), the customer-generator shall owe to the local publicly
owned electric utility the balance of electricity costs and credits
during that billing period. In any billing period in which the
eligible customer-generator has been a net producer of electricity
calculated on the basis of value determined pursuant to paragraph
(2), the local publicly owned electric utility shall owe to the
eligible customer-generator the balance of electricity costs and
credits during that billing period. Any net credit to the eligible
customer-generator of electricity costs may be carried forward to
subsequent billing periods, provided that a local publicly owned
electric utility may choose to carry the credit over as a
kilowatthour credit consistent with the provisions of any applicable
contract or tariff, including any differences attributable to the
time of generation of the electricity. At the end of each 12-month
period, the local publicly owned electric utility may reduce any net
credit due to the eligible customer-generator to zero.
   (j) A renewable electrical generation facility used by an eligible
customer-generator shall meet all applicable safety and performance
standards established by the National Electrical Code, the Institute
of Electrical and Electronics Engineers, and accredited testing
laboratories, including Underwriters Laboratories Incorporated and,
where applicable, rules of the commission regarding safety and
reliability. A customer-generator whose renewable electrical
generation facility meets those standards and rules shall not be
required to install additional controls, perform or pay for
additional tests, or purchase additional liability insurance.
   (k) If the commission determines that there are cost or revenue
obligations for an electrical corporation that may not be recovered
from customer-generators acting pursuant to this section, those
obligations shall remain within the customer class from which any
shortfall occurred and shall not be shifted to any other customer
class. Net energy metering and co-energy metering customers shall not
be exempt from the public goods charges imposed pursuant to Article
7 (commencing with Section 381), Article 8 (commencing with Section
385), or Article 15 (commencing with Section 399) of Chapter 2.3 of
Part 1.
   (l) A net energy metering, co-energy metering, or wind energy
co-metering customer shall reimburse the Department of Water
Resources for all charges that would otherwise be imposed on the
customer by the commission to recover bond-related costs pursuant to
an agreement between the commission and the Department of Water
Resources pursuant to Section 80110 of the Water Code, as well as the
costs of the department equal to the share of the department's
estimated net unavoidable power purchase contract costs attributable
to the customer. The commission shall incorporate the determination
into an existing proceeding before the commission, and shall ensure
that the charges are nonbypassable. Until the commission has made a
determination regarding the nonbypassable charges, net energy
metering, co-energy metering, and wind energy co-metering shall
continue under the same rules, procedures, terms, and conditions as
were applicable on December 31, 2002.
   (m) In implementing the requirements of subdivisions (k) and (
 l  ), an eligible customer-generator shall not be required
to replace its existing meter except as set forth in paragraph (1) of
subdivision (c), nor shall the electric utility require additional
measurement of usage beyond that which is necessary for customers in
the same rate class as the eligible customer-generator.
   (n) It is the intent of the Legislature that the Treasurer
incorporate net energy metering, including net surplus electricity
compensation, co-energy metering, and wind energy co-metering
projects undertaken pursuant to this section as sustainable building
methods or distributive energy technologies for purposes of
evaluating low-income housing projects.
  SEC. 10.  Section 2827.1 of the Public Utilities Code is amended
and renumbered to read:
   2827.3.  (a) By October 1, 2013, the commission shall complete a
study to determine who benefits from, and who bears the economic
burden, if any, of, the net energy metering program authorized
pursuant to Section 2827, and to determine the extent to which each
class of ratepayers and each region of the state receiving service
under the net energy metering program is paying the full cost of the
services provided to them by electrical corporations, and the extent
to which those customers pay their share of the costs of public
purpose programs. In evaluating program costs and benefits for
purposes of the study, the commission shall consider all electricity
generated by renewable electric generating systems, including the
electricity used onsite to reduce a customer's consumption of
electricity that otherwise would be supplied through the electrical
grid, as well as the electrical output that is being fed back to the
electrical grid for which the customer receives credit or net surplus
electricity compensation under net energy metering. The study shall
quantify the costs and benefits of net energy metering to
participants and nonparticipants and shall further disaggregate the
results by utility, customer class, and household income groups
within the residential class. The study shall further gather and
present data on the income distribution of residential net energy
metering participants. In order to assess the costs and benefits at
various levels of net energy metering implementation, the study shall
be conducted using multiple net energy metering penetration
scenarios, including, at a minimum, the capacity needed to reach the
solar photovoltaic goals of the California Solar Initiative pursuant
to Section 25780 of the Public Resources Code, and the estimated net
energy metering capacity under the 5-percent minimum requirement of
paragraphs (1) and (4) of subdivision (c) of Section 2827.
   (b) (1) The commission shall report the results of the study to
the Legislature within 30 days of its completion.
   (2) The report shall be submitted in compliance with Section 9795
of the Government Code.
   (3) Pursuant to Section 10231.5 of the Government Code, this
section is repealed on July 1, 2017.
  SEC. 11.  Section 2827.1 is added to the Public Utilities Code, to
read:
   2827.1.  (a) For purposes of this section, "eligible
customer-generator," "large electrical corporation," and "renewable
electrical generation facility" have the same meanings as defined in
Section 2827.
   (b) Notwithstanding any other law, the commission shall develop a
standard contract or tariff, which may include net energy metering,
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. The commission may
develop the standard contract or tariff prior to December 31, 2015,
and may require a large electrical corporation that has reached the
net energy metering program limit of subparagraph (B) of paragraph
(4) of subdivision (c) of Section 2827 to offer the standard contract
or tariff to eligible customer-generators. A large electrical
corporation shall 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 of subparagraph (B) of paragraph
(4) of subdivision (c) of Section 2827. The commission may revise the
standard contract or tariff as appropriate to achieve the objectives
of this section. In developing the standard contract or tariff, the
commission shall do all of the following:
   (1) Ensure that the standard contract or tariff made available to
eligible customer-generators ensures that customer-sited renewable
distributed generation continues to grow sustainably and include
specific alternatives designed for growth among residential customers
in disadvantaged communities.
   (2) Establish terms of service and billing rules for eligible
customer-generators.
   (3) Ensure that the standard contract or tariff made available to
eligible customer-generators is based on the costs and benefits of
the renewable electrical generation facility.
   (4) Ensure that the total benefits of the standard contract or
tariff to all customers and the electrical system are approximately
equal to the total costs.
   (5) Allow projects greater than one megawatt that do not have
significant impact on the distribution grid to be built to the size
of the onsite load if the projects with a capacity of more than one
megawatt are subject to reasonable interconnection charges
established pursuant to the commission's Electric Rule 21 and
applicable state and federal requirements.
   (6) Establish a transition period during which eligible
customer-generators taking service under a net energy metering tariff
or contract prior to July 1, 2017, or until the electrical
corporation reaches its net energy metering program limit pursuant to
subparagraph (B) of paragraph (4) of subdivision (c) of Section
2827, whichever is earlier, shall be eligible to continue service
under the previously applicable net energy metering tariff for a
length of time to be determined by the commission by March 31, 2014.
Any rules adopted by the commission shall consider a reasonable
expected payback period based on the year the customer initially took
service under the tariff or contract authorized by Section 2827.
   (7) The commission shall determine which rates and tariffs are
applicable to customer generators only during a rulemaking
proceeding. Any fixed charges for residential customer generators
that differ from the fixed charges allowed pursuant to subdivision
(f) of Section 739.9 shall be authorized only in a rulemaking
proceeding involving every large electrical corporation. The
commission shall ensure customer generators are provided electric
service at rates that are just and reasonable.
   (c) Beginning July 1, 2017, or when ordered to do so by the
commission because the large electrical corporation has reached its
capacity limitation of subparagraph (B) of paragraph (4) of
subdivision (c) of Section 2827, all new eligible customer-generators
shall be subject to the standard contract or tariff developed by the
commission and any rules, terms, and rates developed pursuant to
subdivision (b). There shall be no limitation on the amount of
generating capacity or number of new eligible customer-generators
entitled to receive service pursuant to the standard contract or
tariff after July 1, 2017. An eligible customer-generator that has
received service under a net energy metering standard contract or
tariff pursuant to Section 2827 that is no longer eligible to receive
service shall be eligible to receive service pursuant to the
standard contract or tariff developed by the commission pursuant to
this section.
  SEC. 12.  Section 2827.10 of the Public Utilities Code is amended
to read:
   2827.10.  (a) As used in this section, the following terms have
the following meanings:
   (1) "Electrical corporation" means an electrical corporation, as
defined in Section 218.
   (2) "Eligible fuel cell electrical generating facility" means a
facility that includes the following:
   (A) Integrated powerplant systems containing a stack, tubular
array, or other functionally similar configuration used to
electrochemically convert fuel to electric energy.
   (B) An inverter and fuel processing system where necessary.
   (C) Other plant equipment, including heat recovery equipment,
necessary to support the plant's operation or its energy conversion.
   (3) (A) "Eligible fuel cell customer-generator" means a customer
of an electrical corporation that meets all the following criteria:
   (i) Uses a fuel cell electrical generating facility with a
capacity of not more than one megawatt that is located on or adjacent
to the customer's owned, leased, or rented premises, is
interconnected and operates in parallel with the electrical grid
while the grid is operational or in a grid independent mode when the
grid is nonoperational, and is sized to offset part or all of the
eligible fuel cell customer-generator's own electrical requirements.
   (ii) Is the recipient of local, state, or federal funds, or who
self-finances projects designed to encourage the development of
eligible fuel cell electrical generating facilities.
   (iii) Uses technology the commission has determined will achieve
reductions in emissions of greenhouse gases pursuant to subdivision
(b), and meets the emission requirements for eligibility for funding
set forth in subdivision (c), of Section 379.6.
   (B) For purposes of this paragraph, a person or entity is a
customer of the electrical corporation if the customer is physically
located within the service territory of the electrical corporation
and receives bundled service, distribution service, or transmission
service from the electrical corporation.
   (4) "Net energy metering" means measuring the difference between
the electricity supplied through the electrical grid and the
difference between the electricity generated by an eligible fuel cell
electrical generating facility and fed back to the electrical grid
over a 12-month period as described in subdivision (e). Net energy
metering shall be accomplished using a time-of-use meter capable of
registering the flow of electricity in two directions. If the
existing electrical meter of an eligible fuel cell customer-generator
is not capable of measuring the flow of electricity in two
directions, the eligible fuel cell customer-generator shall be
responsible for all expenses involved in purchasing and installing a
meter that is able to measure electricity flow in two directions. If
an additional meter or meters are installed, the net energy metering
calculation shall yield a result identical to that of a time-of-use
meter.
   (b) (1) Every electrical corporation, not later than March 1,
2004, shall file with the commission a standard tariff providing for
net energy metering for eligible fuel cell customer-generators,
consistent with this section. Subject to the limitation in
subdivision                                                    (f),
every electrical corporation shall make this tariff available to
eligible fuel cell customer-generators upon request, on a
first-come-first-served basis, until the total cumulative rated
generating capacity of the eligible fuel cell electrical generating
facilities receiving service pursuant to the tariff reaches a level
equal to its proportionate share of a statewide limitation of 500
megawatts cumulative rated generation capacity served under this
section. The proportionate share shall be calculated based on the
ratio of the electrical corporation's peak demand compared to the
total statewide peak demand.
   (2) To continue the growth of the market for onsite electric
generation using fuel cells, the commission may review and
incrementally raise the limitation established in paragraph (1) on
the total cumulative rated generating capacity of the eligible fuel
cell electrical generating facilities receiving service pursuant to
the tariff in paragraph (1).
   (c) In determining the eligibility for the cumulative rated
generating capacity within an electrical corporation's service
territory, preference shall be given to facilities that, at the time
of installation, are located in a community with significant exposure
to air contaminants or localized air contaminants, or both,
including, but not limited to, communities of minority populations or
low-income populations, or both, based on the ambient air quality
standards established pursuant to Section 39607 of the Health and
Safety Code.
   (d) (1) Each net energy metering contract or tariff shall be
identical, with respect to rate structure, all retail rate
components, and any monthly charges, to the contract or tariff to
which the customer would be assigned if the customer was not an
eligible fuel cell customer-generator. Any new or additional demand
charge, standby charge, customer charge, minimum monthly charge,
interconnection charge, or other charge that would increase an
eligible fuel cell customer-generator's costs beyond those of other
customers in the rate class to which the eligible fuel cell
customer-generator would otherwise be assigned are contrary to the
intent of the Legislature in enacting this section, and may not form
a part of net energy metering tariffs.
   (2) The commission shall authorize an electrical corporation to
charge a fuel cell customer-generator a fee based on the cost to the
utility associated with providing interconnection inspection services
for that fuel cell customer-generator.
   (e) The net metering calculation shall be made by measuring the
difference between the electricity supplied to the eligible fuel cell
customer-generator and the electricity generated by the eligible
fuel cell customer-generator and fed back to the electrical grid over
a 12-month period. The following rules shall apply to the annualized
metering calculation:
   (1) The eligible fuel cell customer-generator shall, at the end of
each 12-month period following the date of final interconnection of
the eligible fuel cell electrical generating facility with an
electrical corporation, and at each anniversary date thereafter, be
billed for electricity used during that period. The electrical
corporation shall determine if the eligible fuel cell
customer-generator was a net consumer or a net producer of
electricity during that period. For purposes of determining if the
eligible fuel cell customer-generator was a net consumer or a net
producer of electricity during that period, the electrical
corporation shall aggregate the electrical load of the meters located
on the property where the eligible fuel cell electrical generation
facility is located and on all property adjacent or contiguous to the
property on which the facility is located, if those properties are
solely owned, leased, or rented by the eligible fuel cell
customer-generator. Each aggregated account shall be billed and
measured according to a time-of-use rate schedule.
   (2) At the end of each 12-month period, where the electricity
supplied during the period by the electrical corporation exceeds the
electricity generated by the eligible fuel cell customer-generator
during that same period, the eligible fuel cell customer-generator is
a net electricity consumer and the electrical corporation shall be
owed compensation for the eligible fuel cell customer-generator's net
kilowatthour consumption over that same period. The compensation
owed for the eligible fuel cell customer-generator's consumption
shall be calculated as follows:
   (A) The generation charges for any net monthly consumption of
electricity shall be calculated according to the terms of the tariff
to which the same customer would be assigned to or be eligible for if
the customer was not an eligible fuel cell customer-generator. When
the eligible fuel cell customer-generator is a net generator during
any discrete time-of-use period, the net kilowatthours produced shall
be valued at the same price per kilowatthour as the electrical
corporation would charge for retail kilowatthour sales for
generation, exclusive of any surcharges, during that same time-of-use
period. If the eligible fuel cell customer-generator's time-of-use
electrical meter is unable to measure the flow of electricity in two
directions, paragraph (4) of subdivision (a) shall apply. All other
charges, other than generation charges, shall be calculated in
accordance with the eligible fuel cell customer-generator's
applicable tariff and based on the total kilowatthours delivered by
the electrical corporation to the eligible fuel cell
customer-generator. To the extent that charges for transmission and
distribution services are recovered through demand charges in any
particular month, no standby reservation charges shall apply in that
monthly billing cycle.
   (B) The net balance of moneys owed shall be paid in accordance
with the electrical corporation's normal billing cycle.
   (3) At the end of each 12-month period, where the electricity
generated by the eligible fuel cell customer-generator during the
12-month period exceeds the electricity supplied by the electrical
corporation during that same period, the eligible fuel cell
customer-generator is a net electricity producer and the electrical
corporation shall retain any excess kilowatthours generated during
the prior 12-month period. The eligible fuel cell customer-generator
shall not be owed any compensation for those excess kilowatthours.
   (4) If an eligible fuel cell customer-generator terminates service
with the electrical corporation, the electrical corporation shall
reconcile the eligible fuel cell customer-generator's consumption and
production of electricity during any 12-month period.
   (f) No fuel cell electrical generating facility shall be eligible
for the tariff unless it commences operation prior to January 1,
2017, unless a later enacted statute, that is chaptered before
January 1, 2017, extends this eligibility commencement date. The
tariff shall remain in effect for an eligible fuel cell electrical
generating facility that commences operation pursuant to the tariff
prior to January 1, 2017. A fuel cell customer-generator shall be
eligible for the tariff established pursuant to this section only for
the operating life of the eligible fuel cell electrical generating
facility.
  SEC. 13.   No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.