BILL ANALYSIS �
AB 2165
Page 1
ASSEMBLY THIRD READING
AB 2165 (Hill)
As Amended May 7, 2012
Majority vote
UTILITIES & COMMERCE 10-1
APPROPRIATIONS 11-5
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|Ayes:|Bradford, Buchanan, Fong, |Ayes:|Blumenfield, Bradford, |
| | | |Charles Calderon, Campos, |
| |Bonnie Lowenthal, Gorell, | |Davis, Gatto, Hall, Hill, |
| |Huffman, Nestande, | |Lara, Mitchell, Solorio |
| |Skinner, Swanson, Valadao | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Knight |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
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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% 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)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
AB 2165
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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)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 one megawatt.
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 : According to the Assembly Appropriations
Committee, one-time special funds 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 file an application to charge customers a fee for
interconnection inspection services. �Public Utilities
Reimbursement Account] All other costs would be absorbable to
the Public Utilities Commission (PUC).
COMMENTS : 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.
The Fuel Cell NEM statute requires that these customers be
responsible for all other charges except generation. As such,
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this type of NEM does not require a subsidy from non-NEM
ratepayers.
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 - Alternating Current (CEC-AC) rating is a
publicly available value that is generally accepted by 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.
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.
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083
FN: 0003473