Amended in Senate April 4, 2013

Senate Bill No. 699

Introduced by Senator Hill

February 22, 2013

An act to begin delete amend Section 2827.10 of end delete begin insert add Section 769 to end insert the Public Utilities Code, relating to electricity.

LEGISLATIVE COUNSEL’S DIGEST

SB 699, as amended, Hill. Electricity: begin delete net energy metering. end delete begin insert electrical corporations: distribution system costs report. end insert

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Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as defined. The Public Utilities Act authorizes the commission to ascertain and fix just and reasonable standards, classifications, regulations, practices, measurements, or services to be furnished, imposed, observed, and followed by specified public utilities, including electrical corporations.

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This bill would require the Public Utilities Commission to require each electrical corporation to annually file with the Public Utilities Commission an electrical distribution report on the utility’s electrical distribution grid infrastructure costs incurred during the prior year. The bill would require the Public Utilities Commission, in consultation with the State Energy Resources Conservation and Development Commission, the Independent System Operator, and other key stakeholders, as determined by the Public Utilities Commission, to determine the specifications of the electrical distribution report to ensure that the report provides sufficient detail for stakeholders to evaluate the degree to which the incurred costs achieve specified policy objectives.

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Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the Public Utilities Commission is a crime.

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Because the provisions of this bill are within the act and require action by the Public Utilities Commission to implement its requirements, a violation of these provisions would impose a state-mandated local program by creating a new crime.

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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.

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This bill would provide that no reimbursement is required by this act for a specified reason.

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Existing law establishes a net energy metering program that is available to an eligible fuel cell customer-generator, which is defined as a customer of an electrical corporation that, among other things, uses a fuel cell electrical generating facility with capacity of not more than one megawatt. Existing law requires that the net metering calculation be made by measuring the difference between the electricity supplied to the eligible fuel cell customer-generator and the electricity generated by the eligible fuel cell customer-generator and fed back to the electrical grid over a 12-month period. Existing law requires every electrical corporation to file a standard tariff with the Public Utilities Commission providing for net energy metering for those customers.

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This bill would make a nonsubstantive change to these provisions.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 769 is added to the end insert begin insert Public Utilities Code end insert begin insert ,
to read: end insert

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begin insert 769. end insert   

The commission, as part of an existing proceeding and
using existing resources, shall require each electrical corporation
to annually file with the commission an electrical distribution
report on the utility’s electrical distribution grid infrastructure
costs incurred during the prior year. In consultation with the
Energy Commission, the Independent System Operator, and other
key stakeholders, as determined by the commission, the commission
shall determine the specifications of the electrical distribution
report to ensure that the report provides sufficient detail for
stakeholders to evaluate the degree to which the incurred costs
achieve the following policy objectives:

(a) Electrical distribution investments should be made in a
manner that maximizes the benefits and minimizes the long-term
costs to ratepayers in the achievement of state goals for the
deployment and integration of cost-effective distributed resources
and generation.

(b) Electrical distribution planning should reflect the presence
and benefits of distributed resources and generation.

(c) Electrical distribution investments should be made in
locations that best support the optimal deployment of cost-effective
distributed resources and generation.

(d) The full costs of installation and interconnection of
distributed resources and generation, including construction, fees,
tax liabilities, and maintenance charges, should be minimized.

(e) Investments in one-way voltage regulating devices, or in
other grid control or quality devices, that are intended to only
regulate voltage in one direction should be minimized or avoided.

(f) Electrical corporations should examine the potential use of
distributed resources and generation as part of each utility’s plans
to upgrade and or improve the stability and reliability of its
distribution system.

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begin insert SEC. 2. end insert   

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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.

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begin delete

SECTION 1.  

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 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, 2015,
unless a later enacted statute, that is chaptered before January 1,
2015, 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, 2015. 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.

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