BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2165
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          Date of Hearing:   May 2, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    AB 2165 (Hill) - As Amended:  April 23, 2012 

          Policy Committee:                              
          UtilitiesVote:10-1

          Urgency:     No                   State Mandated Local Program: 
          Yes    Reimbursable:              No

           SUMMARY  

          This bill expands the cap on net energy metering (NEM) for 
          electricity generation using fuel cells. Specifically, this 
          bill:

          1)Expands the current NEM cap-from 112.5 megawatts (MW) 
            statewide within the territories of the state-regulated 
            electrical corporations, and 45 MW for any single electrical 
            corporation with peak demand exceeding 10,000 MW and 22.5 MW 
            for any electrical corporation with peak demand less than 
            10,000 MW-to 1 percent of an electrical corporation's 
            aggregate customer peak demand.

          2)Authorizes the Public Utilities Commission (PUC) to 
            incrementally increase the 1 percent cap in order to continue 
            growth of the market for this application of fuel cell 
            technology.

          3)Requires the PUC to authorize electrical corporations to 
            charge fuel cell customer-generators a fee based on the 
            utility's cost to provide interconnection inspection services.

          4)Eliminates the existing requirement that fuel cell generating 
            facilities commence operation by January 1, 2014 in order 
            eligible for the NEM tariff.

           FISCAL EFFECT  

          One-time special fund cost of around $130,000 for a half-time 
          regulatory analyst and a half-time administrative law judge, for 
          a rulemaking and associated analytical work, should a utility 








                                                                  AB 2165
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          file an application to charge customers a fee for 
          interconnection inspection services. �Public Utilities 
          Reimbursement Account] All other costs would be absorbable to 
          the PUC.

           COMMENTS  

           1)Purpose  . According to the author, the state'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 NEM to encourage customers to adopt 
            fuel cells and thus expand in-state manufacturing. Unlike 
            other net metering programs, the fuel cell program makes the 
            customer-generator responsible for all other electricity 
            service charges except generation, and as such does not 
            require a subsidy from non-NEM ratepayers.
           2)Technical Amendment  . On page 5, in line 10 and in line 12, 
            replace "customer" with "fuel cell customer-generator." 
           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081