BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 560|
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THIRD READING
Bill No: AB 560
Author: Skinner (D)
Amended: 9/1/09 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 9-1, 7/7/09
AYES: Padilla, Benoit, Corbett, Cox, Kehoe, Lowenthal,
Simitian, Strickland, Wiggins
NOES: Calderon
NO VOTE RECORDED: Wright
SENATE APPROPRIATIONS COMMITTEE : 12-1, 8/27/09
AYES: Kehoe, Cox, Corbett, Denham, Hancock, Leno, Oropeza,
Price, Runner, Wolk, Wyland, Yee
NOES: Walters
ASSEMBLY FLOOR : 47-22, 5/14/09 - See last page for vote
SUBJECT : Net energy metering
SOURCE : The Solar Alliance
DIGEST : This bill increases, from 2.5 percent to 3.5
percent, the percentage of an electric utilitys peak load
that may be provided by customers operating solar or wind
systems under a net energy meeting tariff.
ANALYSIS : Current law requires the state's investor
owned utilities (IOUs), publicly owned utilities (POUs),
except the Los Angeles Department of Water and Power, and
CONTINUED
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any other entity offering retail electric service, to
credit all electricity generated by a customer-owned solar
or wind system against the customer's usage of electricity
sold by the utility, on a kilowatt hour basis, a procedure
known as "net energy metering" (NEM). Participation by all
utilities is capped at 2.5 percent of each utility's
aggregate peak electricity demand.
Background
Net Energy Metering - The primary benefit of the California
Solar Initiative (CSI) program is derived from the solar
customer's eligibility for NEM which is authorized under
state law separately from the CSI program. Utility
customers that generate power from a wind or solar system
are eligible for NEM under which the electricity purchases
of the customer are netted against the electricity
generated by the customer's own solar or wind electric
system. When the sun is shining or the wind is blowing,
the generated electricity spins the meter backward, making
it financially equivalent to using less electricity for the
customer with the same effect as the electric utility
paying the customer the full retail price for the
electricity. When the sun stops shining and the wind stops
blowing, the customer draws electricity from the grid and
their meter spins forward using the credit on the meter.
In theory, depending on weather patters, system size and
customer behavior, the customer will have a zero energy
bill at the end of a 12-month cycle.
The full retail price of electricity includes the utility's
cost of generating, distributing and transmitting the
power, public goods programs (e.g., energy efficiency),
low-income customer assistance (e.g., CARE), energy crisis
costs and other charges not related to generation. By
compensating the solar or wind customer at the full retail
rate, the utility is using ratepayer funds to pay the solar
or wind customer at a rate well above the value of the
generated power which is about one-third of the total cost
of a typical residential customer's bill. The solar or
wind customer does not pay transmission or distribution
costs even though they are still connected to the
electrical grid and use it for all their generation needs
when the sun isn't shining and the wind isn't blowing
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(approximately 18 hours a day). Consequently, those unpaid
transmission and distribution costs and public goods
charges are a subsidy, the cost of which is ultimately
shifted to all other ratepayers in the class. All customer
classes are eligible for NEM.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
CPUC oversight Minor and
absorbable Special*
Increased electricity Unknown, potentially up to $1,000
per year Various
costs to state
agencies
SUPPORT : (Verified 9/1/09)
The Solar Alliance (source)
AEE Solar, Inc.
Applied Materials
Borrego Solar Systems
Brightline Defense Project
California Building Industry Association
California Business Properties Association
California Interfaith Power and Light
California Public Utilities Commission
California Retailers Association
California Solar Energy Industries Association
City of San Jose
Clean Power Campaign
Coalition for Clean Air
Conergy
County School Facilities Consortium
East Bay Municipal Utility District
Environment California
Evergreen Solar, Inc.
Family Winemakers of California
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Friends of the Earth
Global Green USA
GRID Alternatives
Inland Empire Utilities Agency
Kyocera International, Inc.
KyotoUSA
Large-scale Solar Association
Lennar Corporation
Macy's Inc.
Mainstream Energy Corporation
Natural Resources Defense Council
Pacific Environment
Pacific Gas and Electric
Planning and Conservation League
REC Solar, Inc.
San Francisco Board of Supervisors
Sharp Solar
Sierra Club California
Silicon Valley Leadership Group
SolarCity
Solar World California
Southern California Edison
SPG Solar, Inc.
Standard Pacific Homes
SunPower Corporation
SunTech American
Tioga Energy, Inc.
Tim Lewis Communities
Union of Concerned Scientists
US Green Building Council
Village at Heritage Springs, LLC
Vote Solar Initiative
Woodside Homes of Northern California
OPPOSITION : (Verified 9/1/09)
Coalition of California Utility Workers
Sempra Energy
State Association of Electrical Workers
The Utility Reform Network
ARGUMENTS IN SUPPORT : According to the author's office,
the purpose of this bill is to remove unnecessary barriers
to meeting the goals of CSI. Net metering is an important
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piece of the overall financing of rooftop solar, without
net-metering few solar installations would be economically
viable.
The sponsor of the bill, Solar Alliance, and other
supporters believe that since CSI has been successful and
net-metering is a key part of that success, the cap on net
metering should be eliminated entirely or increased to a
level that exceeds the 3,000 megawatt goal of CSI this
year. They argue, "If California expects to achieve the
goals of the California Solar Initiative, continue to be a
leader in the deployment of solar, and build a sustainable,
long term renewable energy economy, then the cap on net
metering must be lifted." The supporters also argue that
there is no evidence that the net-metered solar power
creates any negative impact on grid stability so this is no
longer a valid reason to cap net metering.
ARGUMENTS IN OPPOSITION : The Utility Reform Network
(TURN) is also opposed to increasing the cap at this time,
unless the cap increase is coupled with other changes to
the net-metering program that TURN believes will help
ensure that the non-customer generator ratepayers receive
some benefit from the subsidy. Specifically, TURN would
like to change current rules that provide that the customer
generator owns all of the Renewable Energy Credits
associated with that generation, even for electricity that
is sold to the utility.
ASSEMBLY FLOOR :
AYES: Arambula, Beall, Blakeslee, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Coto, Davis, De La Torre, De Leon, Eng, Evans,
Feuer, Fong, Furutani, Galgiani, Hall, Hayashi,
Hernandez, Hill, Huber, Huffman, Krekorian, Lieu, Bonnie
Lowenthal, Ma, Mendoza, Monning, Nava, John A. Perez, V.
Manuel Perez, Portantino, Price, Ruskin, Salas, Skinner,
Solorio, Swanson, Torlakson, Torres, Torrico, Yamada
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Conway, Cook, DeVore, Duvall, Emmerson, Fuller, Gilmore,
Hagman, Jeffries, Knight, Logue, Miller, Niello, Nielsen,
Silva, Audra Strickland, Tran, Villines
NO VOTE RECORDED: Ammiano, Fletcher, Fuentes, Gaines,
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Garrick, Harkey, Jones, Nestande, Saldana, Smyth, Bass
DLW:cm 9/1/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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