BILL ANALYSIS Ó
AB 2339
Page A
ASSEMBLY THIRD READING
AB
2339 (Irwin and Low)
As Amended April 18, 2016
Majority vote
------------------------------------------------------------------
|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Utilities |10-2 |Gatto, Burke, Chávez, |Patterson, |
| | | |Obernolte |
| | | | |
| | | Cristina Garcia, | |
| | | | |
| | | | |
| | | Eduardo Garcia, | |
| | |Hadley, Quirk, | |
| | |Santiago, Ting, | |
| | | | |
| | | | |
| | | Mark Stone | |
| | | | |
| | | | |
------------------------------------------------------------------
SUMMARY: Specifies a method of calculating aggregated peak
demand to those of publicly owned electric utilities, irrigation
districts, and electrical cooperatives with more than 25,000
AB 2339
Page B
accounts that they may use for the requirement to offer net
energy metering (NEM) to their customers and exempts those
utilities that have adopted a successor to NEM prior to January
1, 2016.
FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS:
1)Author's Statement: "[NEM] is an innovative program that
enables California electric consumers to invest in solar
energy to reduce their energy costs and support clean,
renewable energy. By law, all utilities are required to offer
a NEM program to its customers on a first-come, first-serve
basis until the generating capacity used by customers exceeds
5% of the utility's aggregate customer peak demand.
Electricity providers are separated into two categories,
investor-owned utilities (IOUs) and publicly-owned utilities
(POUs). IOUs, including [Pacific Gas and Electric] and
Southern California Edison, and POUs now calculate their 5%
limits or caps differently. AB 327 (Perea), Chapter 611,
Statues of 2013 codified a California Public Utilities
Commission (CPUC) decision that IOUs use non-coincident peak
demand to determine aggregate customer peak demand, and thus
the 5% NEM cap. However, by calculating the NEM cap using
highest peak demand, POUs are calculating their caps in a way
that limits the number of customers who can access NEM
compared with IOUs. Faced with a lower threshold for the 5%
cap, proportionally more customers in POU territories are
unable to participate in NEM programs than in IOU territories
creating a disparity since some of the largest POUs are
located in the Central Valley or inland parts of the state.
This will create a uniform, statewide framework for all
electric utilities in California that will offer electric
consumers an equal opportunity to save money and choose
AB 2339
Page C
cleaner energy."
2)Large Electrical Corporations and Publicly Owned Utilities -
What's the difference? This bill requires all POUs and
electrical cooperatives, except for Los Angeles Department of
Water and Power to use the method of calculating the capacity
limit on offering NEM that applies to large electrical
corporations.
Electrical corporations are owned by shareholders and
investors and regulated by the CPUC. POUs, irrigation
districts, and electrical cooperatives are non-profit entities
owned by a local government or customers of the utility and
managed by locally elected officials or public employees.
Companies that fit the statutory definition of a large
electrical corporation are Southern California Edison (SCE)
(3.7 million accounts), Pacific Gas and Electric (PG&E) (5.3
million accounts), and San Diego Gas and Electric (SDG&E) (1.4
million accounts). Companies exempted from the requirement to
calculate the NEM cap using non-coincident peak are: Liberty
Utilities, Pacificorp, and Bear Valley Electric Service.
The table below provides the number of accounts associated
with each of the utilities. Note that the account threshold
of 25,000 does not apply to IOUs, thus this requirement does
not apply to Pacificorp and Liberty Utilities (each have more
than 25,000 customers).
-------------------------------------------------------------
| | Number of | Utility Type |
| Utility | Customer | |
| | Accounts | |
| | (2014) | |
|------------------------------+--------------+---------------|
AB 2339
Page D
|Eastside Power Authority | 5|Publicly Owned |
|------------------------------+--------------+---------------|
|Power & Water Resources | 17|Publicly Owned |
|Pooling Authority | | |
|------------------------------+--------------+---------------|
|Valley Electric Association | | Cooperative |
| | 44 | |
|------------------------------+--------------+---------------|
|Port of Stockton | |Publicly Owned |
| | 51 | |
|------------------------------+--------------+---------------|
|Victorville, City of | |Publicly Owned |
| | 51 | |
|------------------------------+--------------+---------------|
|City of Industry | |Publicly Owned |
| | 80 | |
|------------------------------+--------------+---------------|
|Port of Oakland | |Publicly Owned |
| | 134 | |
|------------------------------+--------------+---------------|
|Lathrop ID | 180|Publicly Owned |
|------------------------------+--------------+---------------|
|Cerritos, City of | |Publicly Owned |
| | 303 | |
|------------------------------+--------------+---------------|
|Pittsburg, City of (Island | |Publicly Owned |
|Energy) | 481 | |
|------------------------------+--------------+---------------|
|Rancho Cucamonga Municipal | |Publicly Owned |
|Utility | 581 | |
|------------------------------+--------------+---------------|
|Shelter Cove Resort | | Special |
|Improvement District | 609 | District |
|------------------------------+--------------+---------------|
|Biggs Municipal Utilities | |Publicly Owned |
| | 654 | |
|------------------------------+--------------+---------------|
|Kirkwood Meadows PUD | |Publicly Owned |
| | 764 | |
AB 2339
Page E
|------------------------------+--------------+---------------|
|Corona, City of | |Publicly Owned |
| | 1,016 | |
|------------------------------+--------------+---------------|
|Vernon, City of | |Publicly Owned |
| | 1,133 | |
|------------------------------+--------------+---------------|
|City and County of San | |Publicly Owned |
|Francisco | 2,312 | |
|------------------------------+--------------+---------------|
|Surprise Valley Electric | | Cooperative |
|Co-op | 2,744 | |
|------------------------------+--------------+---------------|
|Gridley Electric Utility | |Publicly Owned |
| | 2,881 | |
|------------------------------+--------------+---------------|
|Needles, City of | |Publicly |
| | 3,520 |Owned |
|------------------------------+--------------+---------------|
|Shasta Lake, City of | |Publicly Owned |
| | 4,423 | |
|------------------------------+--------------+---------------|
|Anza Electric Co-op | | Cooperative |
| | 4,520 | |
|------------------------------+--------------+---------------|
|Healdsburg, City of | |Publicly Owned |
| | 5,718 | |
|------------------------------+--------------+---------------|
|Moreno Valley Electric | |Publicly Owned |
|Utility | 6,185 | |
|------------------------------+--------------+---------------|
|Trinity Public Utilities | |Publicly Owned |
|District | 7,261 | |
|------------------------------+--------------+---------------|
|Ukiah, City of | |Publicly Owned |
| | 7,627 | |
|------------------------------+--------------+---------------|
|Merced Irrigation District | |Publicly Owned |
| | 8,930 | |
AB 2339
Page F
|------------------------------+--------------+---------------|
|Lassen Municipal Utility | |Publicly Owned |
|District | 11,227 | |
|------------------------------+--------------+---------------|
|Banning, City of | |Publicly Owned |
| | 11,888 | |
|------------------------------+--------------+---------------|
|Truckee Donner Public | |Publicly Owned |
|Utilities District | 13,328 | |
|------------------------------+--------------+---------------|
|Plumas-Sierra Rural Electric | | Cooperative |
|Co-op | 14,497 | |
|------------------------------+--------------+---------------|
|Lompoc, City of | |Publicly Owned |
| | 15,584 | |
|------------------------------+--------------+---------------|
|Azusa Light and Water | |Publicly Owned |
| | 16,680 | |
|------------------------------+--------------+---------------|
|Colton Electric Utility | |Publicly Owned |
|Department | 18,443 | |
|------------------------------+--------------+---------------|
|Bear Valley Electric Service | |Investor-Owned |
| | 24,125 | |
|------------------------------+--------------+---------------|
|Lodi Electric Utility | |Publicly Owned |
| | 25,533 | |
|------------------------------+--------------+---------------|
|Palo Alto, City of | |Publicly Owned |
| | 29,192 | |
|------------------------------+--------------+---------------|
|Alameda Municipal Power | |Publicly Owned |
| | 34,298 | |
|------------------------------+--------------+---------------|
|Redding Electric Utility | |Publicly Owned |
| | 43,670 | |
|------------------------------+--------------+---------------|
|PacifiCorp | |Investor-Owned |
| | 43,937 | |
AB 2339
Page G
|------------------------------+--------------+---------------|
|Liberty Utilities | |Investor-Owned |
| | 48,929 | |
|------------------------------+--------------+---------------|
|Burbank Water and Power | |Publicly Owned |
| | 52,368 | |
|------------------------------+--------------+---------------|
|Silicon Valley Power | |Publicly Owned |
| | 53,361 | |
|------------------------------+--------------+---------------|
|Roseville Electric | |Publicly Owned |
| | 57,229 | |
|------------------------------+--------------+---------------|
|Pasadena Water and Power | |Publicly Owned |
| | 65,039| |
|------------------------------+--------------+---------------|
|Anaheim, City of | |Publicly Owned |
| | 70,667 | |
|------------------------------+--------------+---------------|
|Glendale Water and Power* | |Publicly Owned |
| | 85,629 | |
|------------------------------+--------------+---------------|
|Turlock Irrigation District | |Publicly Owned |
| | 102,381 | |
|------------------------------+--------------+---------------|
|Riverside, City of | |Publicly Owned |
| | 108,238 | |
|------------------------------+--------------+---------------|
|Modesto Irrigation District | |Publicly Owned |
| | 117,132 | |
|------------------------------+--------------+---------------|
|Imperial Irrigation District | |Publicly Owned |
| | 151,410 | |
|------------------------------+--------------+---------------|
|Sacramento Municipal Utility | |Publicly Owned |
|District | 613,326 | |
|------------------------------+--------------+---------------|
|Los Angeles Department of | |Publicly Owned |
|Water & Power | 866,095 | |
AB 2339
Page H
|------------------------------+--------------+---------------|
|San Diego Gas & Electric | 1,422,847 |Investor-Owned |
| | | |
|------------------------------+--------------+---------------|
|Southern California Edison | 3,758,295 |Investor-Owned |
| | | |
|------------------------------+--------------+---------------|
|Pacific Gas & Electric | 5,339,262 |Investor-Owned |
| | | |
| | | |
| | | |
-------------------------------------------------------------
* Note: According to a directory published by the
California Municipal Utilities Association Glendale has
85,629 accounts. At the time of this analysis the correct
number of accounts was not known.
1)Benefits, Utility Revenues, and Cost of Service: Discussions
about NEM usually include discussions about benefits, utility
revenues, and cost of service. Similar to the proceeding
underway at the CPUC, some POUs are working on addressing
these issues through a public process, particularly those who
have or have nearly reached their NEM caps.
The City of Palo Alto is working toward implementing its
successor tariff by May 2016 in anticipation of reaching its
current NEM cap by the summer of 2016. A recent City Council
staff report<1> by the City of Palo Alto discusses the issues
that they are addressing in developing their successor
approach to the current NEM structure:
? an increasing block electricity rate structure,
---------------------
<1>
http://www.cityofpaloalto.org/civicax/filebank/documents/50383
AB 2339
Page I
(or tiered rate structure such as the one in use in
Palo Alto), can create situations in which highly
efficient, low-energy use NEM customers receive a
lower NEM compensation rate than high-energy
consuming NEM customers. Low-energy consuming
households who conserve and have implemented many
home energy efficiency measures may only reach the
first or second electricity usage tiers over the
course of a month. For example, if a household that
consumes 600 kilowatt hours (kWh) per month installs
a solar [photovoltaic] system that is sized to meet
all of the household's electricity usage over the
course of the year, the household would, in effect,
be compensated at a rate of 11.2 ?/kWh for the
energy generated from their on-site system under the
current rate structure. By contrast, if a higher
energy-using household using 1,200 kWh/month
installs a solar system of the exact same size as
the lower-energy consuming household, the
high-energy consuming household is effectively
compensated at 17.4 ?/kWh for the energy generated
from their on-site system.
2)NEM cap methodology: This bill establishes the same
methodology for POUs as IOUs when calculating their 5% caps
for their respective NEM programs.
3)Transition to a successor tariff: In addition to establishing
a method for calculating the aggregate cap on offering NEM to
utility customers, AB 327 (Perea), Chapter 611, Statutes of
2013, also includes statute directing the CPUC to develop a
NEM successor tariff that would replace the current NEM tariff
once the NEM cap is reached.
Because POUs, Irrigation Districts, and Electric Cooperatives
have governance by Boards and elected officials, they also
develop and adopt their electric rate structures through a
public process. For some, their process has been completed
and a successor tariff has been approved by their governing
body, such as in the case of Turlock Irrigation District
AB 2339
Page J
(TID). It is unclear if the author intends to invalidate an
action that has already been adopted by a governing board of a
POU or electric cooperative.
TID adopted a successor tariff in 2015. This bill would exempt
TID from the requirement from undoing its successor tariff.
4)Related legislation:
a) SB 550 (Hertzberg) of 2015: POU NEM cap calculation.
Died in the Senate Appropriations Committee.
b) AB 1530 (Levine) of the current legislative session.
Currently pending in the Senate Energy, Utilities and
Communications Committee.
c) AB 327 (Perea), Chapter 611, Statutes of 2013:
Residential rate reform, distributed energy resources, and
large electrical corporation NEM cap calculation.
Analysis Prepared by:
Sue Kateley / U. & C. / (916) 319-2083 FN:
0002751