BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair


          AB 2514 (Bradford) - Net energy metering.
          
          Amended: August 6, 2012         Policy Vote: EU&C 7-2
          Urgency: No                     Mandate: No
          Hearing Date: August 6, 2012                           
          Consultant: Brendan McCarthy    
          
          This bill does not meet the criteria for referral to the 
          Suspense File.
          
          
          Bill Summary: AB 2514 would require the Public Utilities 
          Commission to complete a study on the net energy metering 
          program, to address the benefits and burdens of the program on 
          ratepayers.

          Fiscal Impact: The Public Utilities Commission has recently 
          ordered a study  on the costs and benefits of the net energy 
          metering program. According to the Commission, this bill will 
          require the Commission to expand the scope of that report, 
          increasing the costs to prepare the report by about $100,000 
          (Public Utilities Commission Utilities Reimbursement Account).

          Background: Under current law, investor owned utilities and 
          publicly owned utilities (except the Los Angeles Department of 
          Water and Power) are required to credit any excess electricity 
          generated by a customer's solar or wind energy system against 
          the customer's electricity bill. In essence, this system allows 
          a customer's meter to spin backward when generation exceeds the 
          customer's use. This is referred to as "net energy metering". 
          The amount of net energy metering for each utility is capped at 
          five percent of the utility's aggregate peak energy demand. 
          Under AB 920 (Huffman Chapter 376, Statutes of 2009), net energy 
          metering customers are allowed to roll over excess generation 
          credits or the customer may be compensated for excess 
          generation.

          Under a recent decision of the Public Utilities Commission, the 
          method for calculating the cap, above which investor owned 
          utilities would no longer have to offer additional net energy 
          metering to customers, was defined. The effect of implementing 
          the new methodology for calculating the net energy metering cap 








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          will be to expand net energy metering beyond the level that was 
          previously thought to be the maximum use under the cap. As part 
          of that decision, the Commission ordered a study to be conducted 
          on the costs and benefits of net energy metering and the impacts 
          of the program on ratepayers who do not participate. (A study 
          conducted by the Commission in 2010 indicated that 
          non-participating ratepayers are subsidizing participants by 
          about $20 million per year.)

          Proposed Law: AB 2514 would require the Public Utilities 
          Commission to complete a study on the net energy metering 
          program, to address the benefits and burdens of the program on 
          ratepayers. The bill requires the Commission to expand the scope 
          of the study that has already been ordered in a Commission 
          decision. For example, the bill requires the study to address 
          electricity generated and used onsite as well as electricity 
          returned to the electrical grid.