BILL ANALYSIS �
AB 1391
Page 1
Date of Hearing: April 4, 2011
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 1391 (Committee on Utilities and Commerce) - As Introduced:
February 23, 2011
SUBJECT : Electricity: net energy metering: report.
SUMMARY : Deletes an obsolete statute that directs the Public
Utilities Commission (PUC) to complete a report by January 1,
2010.
EXISTING LAW :
1 Requires every electric utility, as defined, to make
available to an eligible customer-generator, as defined,
a standard contract or tariff for net energy metering on
a first-come-first-serve basis until the time that the
total rated generating capacity used by the eligible
customer-generators exceeds 5% of the electric utility's
aggregate customer peak demand.
2 Requires the PUC, in consultation with the
California Energy Commission, to submit a report to the
Governor and the Legislature by January 1, 2010 on the
costs and benefits of net energy metering, wind energy,
co-metering, and co-energy metering.
FISCAL EFFECT : None.
BACKGROUND : Net Energy Metering (NEM) is an electricity tariff
billing mechanism. Customers who install small solar, wind,
biogas, and fuel cell generation facilities (1 MW or less) to
serve all or a portion of onsite electricity needs are eligible
to participate in the program. NEM allows a customer-generator
to receive a financial credit for power generated by their
onsite system and fed back to the utility, where it might
maximize generation potential, while offsetting electricity
usage at another location. An example, placing solar panels over
a city parking lot with little electricity needs, to offset a
large city-owned user such as City Hall.
NEM encourages private investment in renewable energy
resources, stimulates in-state economic growth, reduces demand
for electricity during peak consumption periods, helps stabilize
AB 1391
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California's energy supply infrastructure, enhances the
continued diversification of
California's energy resource mix, reduces interconnection and
administrative costs for electricity suppliers, and encourage
conservation and efficiency.
Currently, there are many existing programs in statute that
allow a municipality or public entity to generate electricity in
one location and receive a bill credit, or a net-metered tariff,
for a meter in another location(s). Each has been added in a
piecemeal fashion. For example, in 2002, SB 1038 (Sher) Chapter
515, Statutes of 2002, allowed the City of Davis to use
electricity generated from PVUSA to receive a bill credit at a
benefiting account or accounts designated by the City of Davis.
The same bill allowed California State University (CSU), Fresno
to receive a bill credit for the electricity generated at a
biomass facility owned by CSU Fresno known as the Dinuba
Facility. The CSU Fresno net-energy metering allowance
sunsetted on January 1, 2008.
In 2008, AB 2466 (Laird), Chapter 540, Statutes of 2008, created
a comprehensive "Local Government Renewable Energy
Self-Generation Program." AB 2466 allowed an eligible facility
to not exceed 1 MW, and it limited the statewide capacity for
the three largest investor-owned utilities (IOUs) to 250 MW.
After the IOUs offer service or contracts to its proportionate
share of the 250-MW limitation, it does not need to provide
net-metering allowances to additional local government
generation facilities.
Reporting Requirement: Public Utilities Code section 2827
requires the PUC to submit a report to the Governor and the
Legislature on the costs and benefits of net energy metering.
In March 2010, the PUC published its report and concluded that
the estimated average net cost of net energy metering is "$0.12
per kilowatt-hour (kWH) exported, which is relatively high on a
cents per kWh basis?" According to the U.S. Energy Information
Administration, day-ahead (usually higher) wholesale prices in
California at a Southern California hub (SP-15) in a moderate
month (October 2010) averaged between $0.037 to $0.038 per kWh,
or about one-third the price of the net-energy metering price.
The PUC report justifies the higher price by noting that net
energy metering is not designed as an energy procurement
program, and "the volume of energy exported to the utilities is
small compared to the total solar generation and it is de
minimus compared to the total energy procured by the utilities."
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This bill deletes the reporting requirement in statute since it
has already been submitted to the Legislature in March 2010.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083