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.