BILL NUMBER: AB 1755 CHAPTERED
BILL TEXT
CHAPTER 855
FILED WITH SECRETARY OF STATE SEPTEMBER 25, 1998
APPROVED BY GOVERNOR SEPTEMBER 24, 1998
PASSED THE ASSEMBLY AUGUST 20, 1998
PASSED THE SENATE AUGUST 18, 1998
AMENDED IN SENATE AUGUST 17, 1998
AMENDED IN SENATE JULY 20, 1998
AMENDED IN SENATE JUNE 29, 1998
AMENDED IN SENATE JUNE 22, 1998
AMENDED IN SENATE JUNE 11, 1998
AMENDED IN SENATE JUNE 3, 1998
AMENDED IN ASSEMBLY MARCH 9, 1998
INTRODUCED BY Assembly Members Keeley, Olberg, and Takasugi
(Coauthors: Senators Knight and McPherson)
FEBRUARY 4, 1998
An act to amend Section 2827 of the Public Utilities Code, and to
add and repeal Section 73 of the Revenue and Taxation Code, relating
to solar energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1755, Keeley. Solar and wind turbine energy systems: net
energy metering.
(1) Existing law requires every electric utility in the state,
including a privately owned or publicly owned public utility,
municipally owned utility, and electrical cooperative that offers
residential service, whether or not the entity is subject to the
jurisdiction of the Public Utilities Commission, to develop a
standard contract or tariff providing for net energy metering to be
available to eligible customer-generators, in accordance with
specified restrictions. Existing law defines "net energy metering"
to mean using a single, nondemand, non-time-differentiated meter to
measure the difference between the electricity supplied by a utility
and the electricity generated by an eligible customer-generator.
Existing law defines "eligible customer-generator" to mean a
residential customer of an electric utility, including specified
entities, who owns and operates a solar electrical generating
facility with a capacity of not more than 10 kilowatts that is
located on the customer's premises, operates in parallel with the
utility's transmission and distribution facilities, and is intended
primarily to offset part or all of the customer's own electrical
requirements.
This bill would require every electric service provider, as
defined, to develop a standard contract and make the contract
available to customer-generators, as prescribed. The bill would
modify the definitions of net energy metering and eligible
customer-generator, and would define ratemaking authority, as
specified. The bill would require net energy metering to be
accomplished, as specified.
(2) Former statutory property tax law, enacted pursuant to the
authority granted to the Legislature pursuant to paragraph (1) of
subdivision (c) of Section 2 of Article XIIIA of the California
Constitution, generally provided that the term "newly constructed" as
used in the California Constitution does not include the
construction or addition of any active solar energy system, as
defined. The former statutory provisions specified related matters
pertaining to active solar energy systems subject to the exclusion.
The former provisions applied only to the lien dates for fiscal years
1981-82 to 1993-94, inclusive, and were repealed as of January 1,
1995.
This bill would, until January 1, 2006, reinstate those exclusion
provisions for an active solar energy system, as defined, to apply to
property tax lien dates for the 1999-2000 to 2004-05 fiscal years,
inclusive. The bill would, as part of a statement of legislative
intent, define the term "parts" with respect to the definition of the
term "active solar energy system". By requiring local taxing
authorities to perform duties with regard to the reenactment of the
active solar energy system exclusion, the bill would impose a
state-mandated local program.
(3) 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 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 for eligible customer-generators is one
way to encourage private investment in renewable energy resources,
stimulate in-state economic growth, enhance the continued
diversification of California's energy resource mix, and reduce
interconnection and administrative costs for electricity suppliers.
(b) As used in this section, the following definitions apply:
(1) "Electric service provider" means an electric corporation, as
defined in Section 218, a local publicly owned electric utility, as
defined in Section 9604, or an electrical cooperative, as defined in
Section 2776. "Electric service provider" also means an entity that
offers electrical service to residential and small commercial
customers, as defined in Section 394, if that entity offers net
energy metering. Any entity that offers net energy metering to
residential and small commercial customers shall comply with this
section.
(2) "Eligible customer-generator" means a residential customer, or
a small commercial customer as defined in subdivision (h) of Section
331, of an electric service provider, who uses a solar or a wind
turbine electrical generating facility, or a hybrid system of both,
with a capacity of not more than 10 kilowatts that is located on the
customer's premises, is interconnected and operates in parallel with
the electric grid, and is intended primarily to offset part or all of
the customer's own electrical requirements.
(3) "Net energy metering" means measuring the difference between
the electricity supplied through the electric grid and the
electricity generated by an eligible customer-generator and fed back
to the electric grid over a 12-month period as described in
subdivision (e). 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 customer-generator, at the expense of the electric service
provider, and the additional metering shall be used only to provide
the information necessary to accurately bill or credit the
customer-generator pursuant to the provisions of subdivision (e), or
to collect solar or wind electric generating system performance
information for research purposes. If the existing electrical meter
of an eligible customer-generator is not capable of measuring the
flow of electricity in two directions, the 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 who already owns an
existing solar or wind turbine electrical generating facility, or a
hybrid system of both, is eligible to receive net energy metering
service in accordance with this section.
(4) "Ratemaking authority" means, for an electrical corporation as
defined in Section 218, or an electrical cooperative as defined in
Section 2776, the commission, and for a local publicly owned electric
utility as defined in Section 9604, the local elected body
responsible for regulating the rates of the utility.
(c) (1) Every electric service provider shall develop a standard
contract or tariff providing for net energy metering, and shall make
this contract 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
equals one-tenth of 1 percent of the electric service provider's
aggregate customer peak demand.
(2) On an annual basis, beginning in 1999, every electric service
provider 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. For those electric service providers who
are operating pursuant to Section 394, they 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 electric corporation, local publicly owned
electric utility, or electrical cooperative, in which the customer
has net energy metering. The ratemaking authority shall develop a
process for making the information required by this paragraph
available to energy service providers, and for using that information
to determine when, pursuant to paragraph (3), a service provider is
not obligated to provide net energy metering to additional
customer-generators in its service area.
(3) Notwithstanding paragraph (1), an electric service provider is
not obligated to provide net energy metering to additional
customer-generators in its service area when the combined total peak
demand of all customer-generators served by all the electric service
providers in that service area furnishing net energy metering to
eligible customer-generators equals one-tenth of 1 percent of the
aggregate customer peak demand of those electric service providers.
(d) 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 such customer was not an
eligible customer-generator. 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 customer-generator's
choice of electric service provider, in accordance with subdivision
(e). Any new or additional demand charge, standby charge, customer
charge, minimum monthly charge, interconnection charge, or other
charge that would increase an eligible customer-generator's costs
beyond those of other customers in the rate class to which the
eligible customer-generator would otherwise be assigned are contrary
to the intent of this legislation, and shall not form a part of net
energy metering contracts or tariffs.
(e) 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 electric grid over a 12-month
period. The following rules shall apply to the annualized net
metering calculation:
(1) The eligible customer-generator shall, at the end of each
12-month period following the date of final interconnection of the
eligible customer-generator's system with an electric service
provider, and at each anniversary date thereafter, be billed for
electricity used during that period. The electric service provider
shall determine if the eligible customer-generator was a net consumer
or a net producer of electricity during that period.
(2) At the end of each 12-month period, where the electricity
supplied during the period by the electric service provider exceeds
the electricity generated by the eligible customer-generator during
that same period, the eligible customer-generator is a net
electricity consumer and the electric service provider shall be owed
compensation for the eligible customer-generator's net kilowatthour
consumption over that same period. The compensation owed for the
eligible customer-generator's net 12-month kilowatthour consumption
shall be calculated based on the average retail price per
kilowatthour for the eligible customer-generator's rate class over
that same period.
(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 service
provider during that same period, the eligible customer-generator is
a net electricity producer and the electric service provider shall
retain any excess kilowatthours generated during the prior 12-month
period. The eligible customer-generator shall not be owed any
compensation for those excess kilowatthours unless the electric
service provider enters into a purchase agreement with the eligible
customer-generator for those excess kilowatthours.
(4) The electric service provider shall provide every eligible
customer-generator with net electricity consumption information on
each regular bill. That information shall include the current
monetary balance owed the electric service provider for net
electricity consumed since the last 12-month period ended.
Notwithstanding subdivision (e), an electric service provider shall,
upon the request of an eligible customer-generator, permit that
customer to pay monthly for net energy consumed.
(5) If an eligible customer-generator terminates the customer
relationship with the electric service provider, the electric service
provider 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.
(f) A solar or wind turbine electrical generating system, or a
hybrid system of both, 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 such as
Underwriters Laboratories and, where applicable, rules of the Public
Utilities Commission regarding safety and reliability. A
customer-generator whose solar or wind turbine electrical generating
system, or a hybrid system of both, meets those standards and rules
shall not be required to install additional controls, perform or pay
for additional tests, or purchase additional liability insurance.
SEC. 2. Section 73 is added to the Revenue and Taxation Code, to
read:
73. (a) Pursuant to the authority granted to the Legislature
pursuant to paragraph (1) of subdivision (c) of Section 2 of Article
XIIIA of the California Constitution, the term "newly constructed,"
as used in subdivision (a) of Section 2 of Article XIIIA of the
California Constitution, does not include the construction or
addition of any active solar energy system, as defined in subdivision
(b).
(b) (1) "Active solar energy system" means a system that uses
solar devices, which are thermally isolated from living space or any
other area where the energy is used, to provide for the collection,
storage, or distribution of solar energy.
(2) "Active solar energy system" does not include solar swimming
pool heaters or hot tub heaters.
(3) Active solar energy systems may be used for any of the
following:
(A) Domestic, recreational, therapeutic, or service water heating.
(B) Space conditioning.
(C) Production of electricity.
(D) Process heat.
(E) Solar mechanical energy.
(c) (1) (A) The Legislature finds and declares that the definition
of spare parts in this paragraph is declarative of the intent of the
Legislature, in prior statutory enactments of this section that
excluded active solar energy systems from the term "newly
constructed," as used in the California Constitution, thereby
creating a tax appraisal exclusion.
(B) An active solar energy system that uses solar energy in the
production of electricity includes storage devices, power
conditioning equipment, transfer equipment, and parts related to the
functioning of those items. In general, the use of solar energy in
the production of electricity involves the transformation of sunlight
into electricity through the use of devices such as solar cells or
other collectors. However, an active solar energy system used in the
production of electricity includes only equipment used up to, but
not including, the stage of the transmission or use of the
electricity. For the purpose of this paragraph, the term "parts"
includes spare parts that are owned by the owner of, or the
maintenance contractor for, an active solar energy system that uses
solar energy in the production of electricity and which spare parts
were specifically purchased, designed, or fabricated by or for that
owner or maintenance contractor for installation in an active solar
energy system that uses solar energy in the production of
electricity, thereby including those parts in the tax appraisal
exclusion created by this section.
(2) An active solar energy system that uses solar energy in the
production of electricity also includes pipes and ducts that are used
exclusively to carry energy derived from solar energy. Pipes and
ducts that are used to carry both energy derived from solar energy
and from energy derived from other sources are active solar energy
system property only to the extent of 75 percent of their full cash
value.
(3) An active solar energy system that uses solar energy in the
production of electricity does not include auxiliary equipment, such
as furnaces and hot water heaters, that use a source of power other
than solar energy to provide usable energy. An active solar energy
system that uses solar energy in the production of electricity does
include equipment, such as ducts and hot water tanks, that is
utilized by both auxiliary equipment and solar energy equipment, that
is, dual use equipment. That equipment is active solar energy
system property only to the extent of 75 percent of its full cash
value.
(d) This section shall apply to property tax lien dates for the
1999-2000 to 2004-05 fiscal years, inclusive. For purposes of
supplemental assessment, this section shall apply only to qualifying
construction or additions completed on or after January 1, 1999.
(e) This section shall remain in effect only until January 1,
2006, and as of that date is repealed, unless a later enacted statute
that is enacted before January 1, 2006, deletes or extends that
date.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
duties imposed on a local agency or school district by this act were
expressly included in a ballot measure approved by the voters in a
statewide election, within the meaning of Section 17556 of the
Government Code.
Notwithstanding Section 17580 of the Government Code, unless
otherwise specified, the provisions of this act shall become
operative on the same date that the act takes effect pursuant to the
California Constitution.