California Legislature—2015–16 Regular Session

Assembly BillNo. 2339


Introduced by Assembly Members Irwin and Low

February 18, 2016


An act to amend Section 2827 of the Public Utilities Code, relating to electricity.

LEGISLATIVE COUNSEL’S DIGEST

AB 2339, as introduced, Irwin. Net energy metering.

Existing law relative to private energy producers requires every electric utility, including electrical corporations and local publicly owned electric utilities, to develop a standard contract or tariff providing for net energy metering and to make this contract or tariff available to eligible customer-generators upon request for generation by a renewable electrical generation facility. Existing law provides that an electric utility that is not a large electrical corporation is not obligated to provide net energy metering when the combined total peak demand of all electricity used by eligible customer-generators in the service area exceeds 5% of the aggregate customer peak demand of the electric utility.

This bill would define the “aggregate customer peak demand” for the purposes of calculating the net energy metering program limit for electric utilities that are not large electrical corporations.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

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

P2    1

SECTION 1.  

Section 2827 of the Public Utilities Code is
2amended to read:

3

2827.  

(a) The Legislature finds and declares that a program
4to provide net energy metering combined with net surplus
5compensation, co-energy metering, and wind energy co-metering
6for eligible customer-generators is one way to encourage substantial
7private investment in renewable energy resources, stimulate in-state
8economic growth, reduce demand for electricity during peak
9consumption periods, help stabilize California’s energy supply
10infrastructure, enhance the continued diversification of California’s
11energy resource mix, reduce interconnection and administrative
12costs for electricity suppliers, and encourage conservation and
13efficiency.

14(b) As used in this section, the following terms have the
15following meanings:

16(1) “Co-energy metering” means a program that is the same in
17all other respects as a net energy metering program, except that
18the local publicly owned electric utility has elected to apply a
19generation-to-generation energy and time-of-use credit formula
20as provided in subdivision (i).

21(2) “Electrical cooperative” means an electrical cooperative as
22defined in Section 2776.

23(3) “Electric utility” means an electrical corporation, a local
24publicly owned electric utility, or an electrical cooperative, or any
25other entity, except an electric service provider, that offers electrical
26service. This section shall not apply to a local publicly owned
27electric utility that serves more than 750,000 customers and that
28also conveys water to its customers.

29(4) (A) “Eligible customer-generator” means a residential
30customer, small commercial customer as defined in subdivision
31(h) of Section 331, or commercial, industrial, or agricultural
32customer of an electric utility, who uses a renewable electrical
33generation facility, or a combination of those facilities, with a total
34capacity of not more than one megawatt, that is located on the
35customer’s owned, leased, or rented premises, and is interconnected
36and operates in parallel with the electrical grid, and is intended
37primarily to offset part or all of the customer’s own electrical
38requirements.

P3    1(B) (i) Notwithstanding subparagraph (A), “eligible
2customer-generator” includes the Department of Corrections and
3Rehabilitation using a renewable electrical generation technology,
4or a combination of renewable electrical generation technologies,
5with a total capacity of not more than eight megawatts, that is
6located on the department’s owned, leased, or rented premises,
7and is interconnected and operates in parallel with the electrical
8grid, and is intended primarily to offset part or all of the facility’s
9own electrical requirements. The amount of any wind generation
10exported to the electrical grid shall not exceed 1.35 megawatt at
11any time.

12(ii) Notwithstanding paragraph (2) of subdivision (e), an
13electrical corporation shall be afforded a prudent but necessary
14time, as determined by the executive director of the commission,
15to study the impacts of a request for interconnection of a renewable
16generator with a capacity of greater than one megawatt under this
17subparagraph. If the study reveals the need for upgrades to the
18transmission or distribution system arising solely from the
19interconnection, the electrical corporation shall be afforded the
20time necessary to complete those upgrades before the
21interconnection and those costs shall be borne by the
22 customer-generator. Upgrade projects shall comply with applicable
23state and federal requirements, including requirements of the
24Federal Energy Regulatory Commission.

25(C) (i) For purposes of this subparagraph, a “United States
26Armed Forces base or facility” is an establishment under the
27jurisdiction of the United States Army, Navy, Air Force, Marine
28Corps, or Coast Guard.

29(ii) Notwithstanding subparagraph (A), a United States Armed
30Forces base or facility is an “eligible customer-generator” if the
31base or facility uses a renewable electrical generation facility, or
32a combination of those facilities, the renewable electrical generation
33facility is located on premises owned, leased, or rented by the
34United States Armed Forces base or facility, the renewable
35electrical generation facility is interconnected and operates in
36parallel with the electrical grid, the renewable electrical generation
37facility is intended primarily to offset part or all of the base or
38facility’s own electrical requirements, and the renewable electrical
39generation facility has a generating capacity that does not exceed
40the lesser of 12 megawatts or one megawatt greater than the
P4    1minimum load of the base or facility over the prior 36 months.
2Unless prohibited by federal law, a renewable electrical generation
3facility shall not be eligible for net energy metering for privatized
4military housing pursuant to this subparagraph if the renewable
5electrical generation facility was procured using a sole source
6process. A renewable electrical generation facility procured using
7best value criteria, if otherwise eligible, may be used for net energy
8metering for privatized military housing pursuant to this
9subparagraph. For these purposes, “best value criteria” means a
10value determined by objective criteria and may include, but is not
11limited to, price, features, functions, and life-cycle costs.

12(iii) A United States Armed Forces base or facility that is an
13eligible customer generator pursuant to this subparagraph shall
14not receive compensation for exported generation.

15(iv) Notwithstanding paragraph (2) of subdivision (e), an
16electrical corporation shall be afforded a prudent but necessary
17time, as determined by the executive director of the commission
18but not less than 60 working days, to study the impacts of a request
19for interconnection of a renewable electrical generation facility
20with a capacity of greater than one megawatt pursuant to this
21subparagraph. If the study reveals the need for upgrades to the
22transmission or distribution system arising solely from the
23interconnection, the electrical corporation shall be afforded the
24time necessary to complete those upgrades before the
25interconnection and the costs of those upgrades shall be borne by
26the eligible customer-generator. Upgrade projects shall comply
27with applicable state and federal requirements, including
28requirements of the Federal Energy Regulatory Commission. For
29any renewable generation facility that interconnects directly to the
30transmission grid or that requires transmission upgrades, the United
31States Armed Forces base or facility shall comply with all Federal
32Energy Regulatory Commission interconnection procedures and
33requirements.

34(v) An electrical corporation shall make a tariff, as approved
35by the commission, available pursuant to this subparagraph by
36November 1, 2015.

37(5) “Large electrical corporation” means an electrical
38corporation with more than 100,000 service connections in
39California.

P5    1(6) “Net energy metering” means measuring the difference
2between the electricity supplied through the electrical grid and the
3electricity generated by an eligible customer-generator and fed
4back to the electrical grid over a 12-month period as described in
5subdivisions (c) and (h).

6(7) “Net surplus customer-generator” means an eligible
7customer-generator that generates more electricity during a
812-month period than is supplied by the electric utility to the
9eligible customer-generator during the same 12-month period.

10(8) “Net surplus electricity” means all electricity generated by
11an eligible customer-generator measured in kilowatthours over a
1212-month period that exceeds the amount of electricity consumed
13by that eligible customer-generator.

14(9) “Net surplus electricity compensation” means a per
15kilowatthour rate offered by the electric utility to the net surplus
16customer-generator for net surplus electricity that is set by the
17ratemaking authority pursuant to subdivision (h).

18(10) “Ratemaking authority” means, for an electrical
19corporation, the commission, for an electrical cooperative, its
20ratesetting body selected by its shareholders or members, and for
21a local publicly owned electric utility, the local elected body
22responsible for setting the rates of the local publicly owned utility.

23(11) “Renewable electrical generation facility” means a facility
24that generates electricity from a renewable source listed in
25paragraph (1) of subdivision (a) of Section 25741 of the Public
26Resources Code. A small hydroelectric generation facility is not
27an eligible renewable electrical generation facility if it will cause
28an adverse impact on instream beneficial uses or cause a change
29in the volume or timing of streamflow.

30(12) “Wind energy co-metering” means any wind energy project
31greater than 50 kilowatts, but not exceeding one megawatt, where
32the difference between the electricity supplied through the electrical
33grid and the electricity generated by an eligible customer-generator
34and fed back to the electrical grid over a 12-month period is as
35described in subdivision (h). Wind energy co-metering shall be
36accomplished pursuant to Section 2827.8.

37(c) (1) Except as provided in paragraph (4) and in Section
382827.1, every electric utility shall develop a standard contract or
39tariff providing for net energy metering, and shall make this
40standard contract or tariff available to eligible customer-generators,
P6    1upon request, on a first-come-first-served basis until the time that
2the total rated generating capacity used by eligible
3customer-generators exceeds 5 percent of the electric utility’s
4aggregate customer peak demand. Net energy metering shall be
5accomplished using a single meter capable of registering the flow
6of electricity in two directions. An additional meter or meters to
7monitor the flow of electricity in each direction may be installed
8with the consent of the eligible customer-generator, at the expense
9of the electric utility, and the additional metering shall be used
10only to provide the information necessary to accurately bill or
11credit the eligible customer-generator pursuant to subdivision (h),
12or to collect generating system performance information for
13research purposes relative to a renewable electrical generation
14facility. If the existing electrical meter of an eligible
15customer-generator is not capable of measuring the flow of
16electricity in two directions, the eligible customer-generator shall
17be responsible for all expenses involved in purchasing and
18installing a meter that is able to measure electricity flow in two
19directions. If an additional meter or meters are installed, the net
20energy metering calculation shall yield a result identical to that of
21a single meter. An eligible customer-generator that is receiving
22service other than through the standard contract or tariff may elect
23to receive service through the standard contract or tariff until the
24electric utility reaches the generation limit set forth in this
25paragraph. Once the generation limit is reached, only eligible
26customer-generators that had previously elected to receive service
27pursuant to the standard contract or tariff have a right to continue
28to receive service pursuant to the standard contract or tariff.
29Eligibility for net energy metering does not limit an eligible
30customer-generator’s eligibility for any other rebate, incentive, or
31credit provided by the electric utility, or pursuant to any
32governmental program, including rebates and incentives provided
33pursuant to the California Solar Initiative.

34(2) An electrical corporation shall include a provision in the net
35energy metering contract or tariff requiring that any customer with
36an existing electrical generating facility and meter who enters into
37a new net energy metering contract shall provide an inspection
38report to the electrical corporation, unless the electrical generating
39facility and meter have been installed or inspected within the
40previous three years. The inspection report shall be prepared by a
P7    1California licensed contractor who is not the owner or operator of
2the facility and meter. A California licensed electrician shall
3perform the inspection of the electrical portion of the facility and
4meter.

5(3) (A) On an annual basis, every electric utility shall make
6available to the ratemaking authority information on the total rated
7generating capacity used by eligible customer-generators that are
8customers of that provider in the provider’s service area and the
9net surplus electricity purchased by the electric utility pursuant to
10this section.

11(B) An electric service provider operating pursuant to Section
12394 shall make available to the ratemaking authority the
13information required by this paragraph for each eligible
14customer-generator that is their customer for each service area of
15an electrical corporation, local publicly ownedbegin delete electricalend deletebegin insert electricend insert
16 utility, or electrical cooperative, in which the eligible
17customer-generator has net energy metering.

18(C) The ratemaking authority shall develop a process for making
19the information required by this paragraph available to electric
20utilities, and for using that information to determine when, pursuant
21to paragraphs (1) and (4), an electric utility is not obligated to
22provide net energy metering to additional eligible
23customer-generators in its service area.

24(4) (A) begin insert(i)end insertbegin insertend insert An electric utility that is not a large electrical
25corporation is not obligated to provide net energy metering to
26additional eligible customer-generators in its service area when
27the combined total peak demand of all electricity used by eligible
28customer-generators served by all the electric utilities in that
29service area furnishing net energy metering to eligible
30customer-generators exceeds 5 percent of the aggregate customer
31peak demand of those electric utilities.begin insert end insertbegin insertAn electric utility that is
32not a large electrical corporation may determine aggregate
33customer peak demand using an estimation technique that the
34Energy Commission has determined to be reasonable.end insert

begin insert

35(ii) For the purpose of calculating the program limit of an
36electric utility that is not a large electrical corporation, the
37“aggregate customer peak demand” means the highest sum of the
38noncoincident peak demands of all the customers of electric utilities
39in that service area that occurs in any calendar year.

end insert

P8    1(B) The commission shall require every large electrical
2corporation to make the standard contract or tariff available to
3eligible customer-generators, continuously and without
4interruption, until such times as the large electrical corporation
5reaches its net energy metering program limit or July 1, 2017,
6whichever is earlier. A large electrical corporation reaches its
7program limit when the combined total peak demand of all
8electricity used by eligible customer-generators served by all the
9electric utilities in the large electrical corporation’s service area
10furnishing net energy metering to eligible customer-generators
11exceeds 5 percent of the aggregate customer peak demand of those
12electric utilities. For purposes of calculating a large electrical
13corporation’s program limit, “aggregate customer peak demand”
14means the highest sum of the noncoincident peak demands of all
15of the large electrical corporation’s customers that occurs in any
16calendar year. To determine the aggregate customer peak demand,
17every large electrical corporation shall use a uniform method
18approved by the commission. The program limit calculated
19pursuant to this paragraph shall not be less than the following:

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

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

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

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

36(D) Beginning July 1, 2017, or upon reaching the net metering
37program limit of subparagraph (B), whichever is earlier, the
38obligation of a large electrical corporation to provide service
39pursuant to a standard contract or tariff shall be pursuant to Section
402827.1 and applicable state and federal requirements.

P9    1(d) Every electric utility shall make all necessary forms and
2contracts for net energy metering and net surplus electricity
3compensation service available for download from the Internet.

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

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

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

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

31(2) If a customer participates in direct transactions pursuant to
32paragraph (1) of subdivision (b) of Section 365 or 365.1 with an
33electric service provider, and the customer is an eligible
34customer-generator, the electric utility that provides distribution
35service for the direct transactions may recover from the customer’s
36electric service provider the incremental costs of metering and
37billing service related to net energy metering and net surplus
38electricity compensation in an amount set by the ratemaking
39authority.

P10   1(g) Except for the time-variant kilowatthour pricing portion of
2any tariff adopted by the commission pursuant to paragraph (4) of
3subdivision (a) of Section 2851, each net energy metering contract
4or tariff shall be identical, with respect to rate structure, all retail
5rate components, and any monthly charges, to the contract or tariff
6to which the same customer would be assigned if the customer did
7not use a renewable electrical generation facility, except that
8eligible customer-generators shall not be assessed standby charges
9on the electrical generating capacity or the kilowatthour production
10of a renewable electrical generation facility. The charges for all
11retail rate components for eligible customer-generators shall be
12based exclusively on the customer-generator’s net kilowatthour
13 consumption over a 12-month period, without regard to the eligible
14customer-generator’s choice as to from whom it purchases
15electricity that is not self-generated. Any new or additional demand
16charge, standby charge, customer charge, minimum monthly
17charge, interconnection charge, or any other charge that would
18increase an eligible customer-generator’s costs beyond those of
19other customers who are not eligible customer-generators in the
20rate class to which the eligible customer-generator would otherwise
21be assigned if the customer did not own, lease, rent, or otherwise
22operate a renewable electrical generation facility is contrary to the
23intent of this section, and shall not form a part of net energy
24metering contracts or tariffs.

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

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

P11   1(2) At the end of each 12-month period, where the electricity
2supplied during the period by the electric utility exceeds the
3electricity generated by the eligible residential or small commercial
4customer-generator during that same period, the eligible residential
5or small commercial customer-generator is a net electricity
6consumer and the electric utility shall be owed compensation for
7the eligible customer-generator’s net kilowatthour consumption
8over that 12-month period. The compensation owed for the eligible
9residential or small commercial customer-generator’s consumption
10shall be calculated as follows:

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

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

38(C) For all eligible residential and small commercial
39customer-generators and for each billing period, the net balance
40of moneys owed to the electric utility for net consumption of
P12   1electricity or credits owed to the eligible customer-generator for
2net generation of electricity shall be carried forward as a monetary
3value until the end of each 12-month period. For all eligible
4commercial, industrial, and agricultural customer-generators, the
5net balance of moneys owed shall be paid in accordance with the
6electric utility’s normal billing cycle, except that if the eligible
7commercial, industrial, or agricultural customer-generator is a net
8electricity producer over a normal billing cycle, any excess
9kilowatthours generated during the billing cycle shall be carried
10over to the following billing period as a monetary value, calculated
11according to the procedures set forth in this section, and appear as
12a credit on the eligible commercial, industrial, or agricultural
13customer-generator’s account, until the end of the annual period
14when paragraph (3) shall apply.

15(3) At the end of each 12-month period, where the electricity
16generated by the eligible customer-generator during the 12-month
17period exceeds the electricity supplied by the electric utility during
18that same period, the eligible customer-generator is a net surplus
19customer-generator and the electric utility, upon an affirmative
20election by the net surplus customer-generator, shall either (A)
21provide net surplus electricity compensation for any net surplus
22electricity generated during the prior 12-month period, or (B) allow
23the net surplus customer-generator to apply the net surplus
24electricity as a credit for kilowatthours subsequently supplied by
25the electric utility to the net surplus customer-generator. For an
26eligible customer-generator that does not affirmatively elect to
27receive service pursuant to net surplus electricity compensation,
28the electric utility shall retain any excess kilowatthours generated
29during the prior 12-month period. The eligible customer-generator
30not affirmatively electing to receive service pursuant to net surplus
31electricity compensation shall not be owed any compensation for
32the net surplus electricity unless the electric utility enters into a
33purchase agreement with the eligible customer-generator for those
34excess kilowatthours. Every electric utility shall provide notice to
35eligible customer-generators that they are eligible to receive net
36surplus electricity compensation for net surplus electricity, that
37they must elect to receive net surplus electricity compensation,
38and that the 12-month period commences when the electric utility
39receives the eligible customer-generator’s election. For an electric
40utility that is an electrical corporation or electrical cooperative,
P13   1the commission may adopt requirements for providing notice and
2the manner by which eligible customer-generators may elect to
3receive net surplus electricity compensation.

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

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

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

38(D) This paragraph shall not become operative for an electrical
39corporation unless the commission determines that allowing
40eligible customer-generators to aggregate their load from multiple
P14   1meters will not result in an increase in the expected revenue
2obligations of customers who are not eligible customer-generators.
3The commission shall make this determination by September 30,
42013. In making this determination, the commission shall determine
5if there are any public purpose or other noncommodity charges
6that the eligible customer-generators would pay pursuant to the
7net energy metering program as it exists prior to aggregation, that
8the eligible customer-generator would not pay if permitted to
9aggregate the electrical load of multiple meters pursuant to this
10paragraph.

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

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

P15   1(G) An eligible customer-generator may only elect to aggregate
2the electrical load of multiple meters if the renewable electrical
3generation facility, or a combination of those facilities, has a total
4generating capacity of not more than one megawatt.

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

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

23(i) The value of the electricity itself.

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

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

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

37(B) Upon adoption of the net surplus electricity compensation
38rate by the ratemaking authority, the net surplus electricity
39purchased by the electric utility shall count toward the electric
40utility’s renewables portfolio standard annual procurement targets
P16   1for the purposes of paragraph (1) of subdivision (b) of Section
2399.15, or for a local publicly owned electric utility, the renewables
3portfolio standard annual procurement targets established pursuant
4to Section 399.30.

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

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

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

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

P17   1(1) The eligible customer-generator shall be required to utilize
2a meter, or multiple meters, capable of separately measuring
3electricity flow in both directions. All meters shall provide
4time-of-use measurements of electricity flow, and the customer
5shall take service on a time-of-use rate schedule. If the existing
6meter of the eligible customer-generator is not a time-of-use meter
7or is not capable of measuring total flow of electricity in both
8directions, the eligible customer-generator shall be responsible for
9all expenses involved in purchasing and installing a meter that is
10both time-of-use and able to measure total electricity flow in both
11directions. This subdivision shall not restrict the ability of an
12eligible customer-generator to utilize any economic incentives
13provided by a governmental agency or an electric utility to reduce
14its costs for purchasing and installing a time-of-use meter.

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

27(3) All costs and credits shall be shown on the eligible
28customer-generator’s bill for each billing period. In any months
29in which the eligible customer-generator has been a net consumer
30of electricity calculated on the basis of value determined pursuant
31to paragraph (2), the customer-generator shall owe to the local
32publicly owned electric utility the balance of electricity costs and
33credits during that billing period. In any billing period in which
34the eligible customer-generator has been a net producer of
35electricity calculated on the basis of value determined pursuant to
36paragraph (2), the local publicly owned electric utility shall owe
37to the eligible customer-generator the balance of electricity costs
38and credits during that billing period. Any net credit to the eligible
39customer-generator of electricity costs may be carried forward to
40subsequent billing periods, provided that a local publicly owned
P18   1electric utility may choose to carry the credit over as a kilowatthour
2credit consistent with the provisions of any applicable contract or
3tariff, including any differences attributable to the time of
4generation of the electricity. At the end of each 12-month period,
5the local publicly owned electric utility may reduce any net credit
6due to the eligible customer-generator to zero.

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

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

28(l) A net energy metering, co-energy metering, or wind energy
29co-metering customer shall reimburse the Department of Water
30Resources for all charges that would otherwise be imposed on the
31customer by the commission to recover bond-related costs pursuant
32to an agreement between the commission and the Department of
33Water Resources pursuant to Section 80110 of the Water Code,
34as well as the costs of the department equal to the share of the
35department’s estimated net unavoidable power purchase contract
36costs attributable to the customer. The commission shall
37incorporate the determination into an existing proceeding before
38the commission, and shall ensure that the charges are
39nonbypassable. Until the commission has made a determination
40regarding the nonbypassable charges, net energy metering,
P19   1co-energy metering, and wind energy co-metering shall continue
2under the same rules, procedures, terms, and conditions as were
3applicable on December 31, 2002.

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

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



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