BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair


          AB 2165 (Hill) - Net energy metering: eligible fuel cell 
          customer-generators.
          
          Amended: June 25, 2012          Policy Vote: EU&C 11-2
          Urgency: No                     Mandate: Yes
          Hearing Date: July 2, 2012      Consultant: Marie Liu
          
          This bill does not meet the criteria for referral to the 
          Suspense File.
          
          
          Bill Summary: AB 2165 would raise the caps on fuel cell net 
          energy metering for the state and individual investor-owned 
          utilities (IOUs). This bill would also allow the PUC to 
          authorize an IOU to charge a fuel cell customer-generator a fee 
          for providing interconnection inspection services.

          Fiscal Impact: One-time costs of approximately $135,000 from the 
          Public Utilities Reimbursement Account (special fund), beginning 
          in 2013-14, for the PUC to authorize a utility to charge a fee 
          for providing interconnection inspection services.

          Background: Existing law requires the state's IOUs to offer fuel 
          cell net energy metering (NEM). Eligible fuel cells can be 
          powered by renewable or fossil-fuel and must be sized 1 megawatt 
          (MW) or less. The customer credit is based only on the 
          electricity generated and does not include non-generation costs 
          such as transmission, distribution, and public purpose charges. 
          Fuel cell NEM is distinct from full-retail NEM, which is offered 
          to customer-owned renewable electric generation, in that it 
          exempts the customer from paying transmission and distribution 
          costs. 

          Fuel cell NEM is capped under existing law to 45 MW for large 
          IOUs and 22.5 MW for smaller IOUs. There is also a statewide cap 
          of 112.5 MW.

          Proposed Law: AB 2165 would raise the cap on fuel cell NEW to 
          500 MW statewide, or a higher amount as determined by the 
          California Public Utilities Commission (PUC), with IOU caps 
          determined by its proportionate share of the state's peak 
          demand. This bill would also allow the PUC to authorize an IOU 








          AB 2165 (Hill)
          Page 1


          to charge a fuel cell customer-generator with a fee for 
          providing interconnection inspection services.

          Staff Comments: This bill would require the PUC to authorize a 
          utility to charge a fee to a fuel cell customer-generator to 
          cover costs associated with providing interconnection inspection 
          services to that customer-generator. This requirement would 
          likely cause the PUC to open a relatively straightforward 
          rulemaking that would require the staff workload equivalent of a 
          half-time regulatory analyst and a half-time administrative law 
          judge for a one-time cost of approximately $135,000. The PUC 
          indicates that the rest of the bill can be implemented with 
          limited modifications to the IOU's NEW tariffs, at a minimal and 
          absorbable cost to the PUC.