BILL ANALYSIS �
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Date of Hearing: April 16, 2011
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 2165 (Hill) - As Amended: February 23, 2012
SUBJECT : Net energy metering: eligible Fuel Cell
customer-generators.
SUMMARY : Expands the cap on Net Energy Metering (NEM) for
eligible fuel cell generators and makes revisions to the
definition of eligible fuel cell generators. Specifically, this
bill :
1)Establishes a requirement that electrical corporation must
offer a Fuel Cell NEM until the total capacity of NEM fuel
cell facilities reaches 1 percent of the aggregate customer
peak demand for an electrical service company territory.
2)Specifies that an eligible fuel cell generator must be located
within the service territory of the electrical corporation to
receive NEM.
3)Retains the existing sunset date for the Fuel Cell NEM on
January 1, 2014.
EXISTING LAW
1)Existing law, requires every electrical corporation to make
available to an eligible fuel cell customer-generator a
standard tariff for NEM on a first-come-first-served basis
until the total cumulative rated generating capacity used by
the eligible fuel cell customer-generators equals 45 megawatts
within the service territory of the electrical corporation,
for an electrical corporation with a peak demand above 10,000
megawatts, or equals 22.5 megawatts within the service
territory of the electrical corporation, for an electrical
corporation with a peak demand of 10,000 megawatts or below.
2)Existing law additionally limits the combined statewide
cumulative rated generating capacity used by the eligible fuel
cell customer-generators in the service territories of all
electrical corporations in the state to not more than 112.5
megawatts.
3)Limits the maximum capacity of a qualified fuel cell project
to no larger than 1 megawatt.
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4)Provides a credit equal to the retail price of electricity for
each kilowatt-hour produced that is not consumed on-site.
5)Requires the eligible fuel cell customer-generator to pay all
other utility charges, other than generation charges, except
to the extent that demand charges are used to recover
transmission and distribution charges, then no standby charges
are to be applied in that particular monthly billing cycle.
6)Sunsets the fuel cell NEM on January 1, 2014.
FISCAL EFFECT : Unknown
COMMENTS :
1)According to the author, California's Fuel Cell NEM program
has attracted new, innovative technologies to develop their
industry in the state. California-based fuel cell companies
are counting on Fuel Cell NEM to encourage customers to adopt
fuel cells and thereby expand in-state manufacturing. Raising
the cap will help customer finance the purchase of these
technologies.
2)The Fuel Cell NEM statute requires that these customers be
responsible for all other charges except generation. As such,
this type of NEM does not require a subsidy from non-NEM
ratepayers. The author may wish to consider an amendment to
eliminate the sunset date and allow the California Public
Utilities Commission (PUC) to review the impact of the 1% NEM
cap, in a proceeding and at such time that it deems necessary
and in order to continue the growth of the market for on-site
electric generation using Fuel Cells, incrementally raise the
cap.
3)The current method of calculating the cap using the "aggregate
customer peak demand for an electrical service company
territory" is to total the aggregate capacity of individual
NEM generation and divide it by the utility peak demand, to
arrive at the percentage of aggregate peak demand. The
California Energy Commission (CEC), CEC-AC rating is a
publicly available value that is generally accepted by
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industry of how much generation is actually interconnected to
the grid after the performance of the inverter is considered.
The Federal Energy Regulatory Commission (FERC) Form 1 filing
is also a publicly available value that is generally accepted
by industry. The author may wish to clarify the calculation of
the cap to ensure that all electric utilities are calculating
the cap consistently by using the peak demand reported in the
utility's Form 1 filing with the FERC and the sum of the
individual NEM customer capacity based on the CEC-AC rating.
4) Separate from NEM, each on-site generation facility that
is connected to the utility distribution system must be
inspected by utility to ensure that proper disconnection
equipment is accessible to utility personnel that may need
to work on power lines that may be energized by the on-site
generation facility. The requirement is established via PUC
Rule 21. The cost for these inspections is currently
embedded in the rates paid by other customers. The author
may wish to consider an amendment that allows the
electrical corporation to charge a fee based on the cost
for providing these inspection services so that non-NEM
customers are not required to pay for these services.
REGISTERED SUPPORT / OPPOSITION :
Support
Bloom Energy
California Hydrogen Business Council (CHBC)
Clean Power Campaign
Fuel Cell Hydrogen and Energy Association (FCHEA)
FuelCell Energy, Inc.
National Fuel Cell Research Center
TechNet
United Technologies Corporation (UTC)
Opposition
Southern California Edison (SCE)
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083
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