BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 1537 (Kehoe) - Energy: rates: net energy metering.
Amended: May 1, 2012 Policy Vote: EU&C 10-1
Urgency: No Mandate: No
Hearing Date: May 14, 2012 Consultant: Marie Liu
This bill meets the criteria for referral to the Suspense File.
Bill Summary: This bill would prohibit the California Public
Utilities Commission (PUC) from adopting any new charges that
only apply to customers with a net metering contract until
January 1, 2014.
Fiscal Impact: Likely one-time costs of hundreds of thousands of
dollars to the General Fund and special funds to offset the
costs of net energy meeting until 2014.
Background: Existing law requires electric utilities to credit
all electricity generated by a customer-owned renewable energy
system against the customer's usage of electricity sold by the
utility, a procedure known as "net energy metering" (NEM). Under
the California Solar Initiative (CSI), customers who install
solar system receive "full retail NEM" where the customer is
exempt from paying transmission and distribution costs on
electricity provided by the utility (the electricity from the
grid that the customer uses when his or her solar panels are not
producing, like at night).
As transmission and distribution costs are typically one-half to
two-thirds of a residential customer's billing, full retail NEM
offers a substantial subsidy to NEM customers with the costs
being shifted to non-NEM customers. Given that rooftop solar now
generates 1,173MW in the IOU territories, the cost of full
retail NEM comes at a cost of approximately $60 million to
non-NEM customers across the state. The Legislature has in the
past justified this subsidy as it stimulates the solar industry,
helps the state reach its renewable energy goals, and provides
other external benefits.
The PUC currently is considering a proposed decision that is
estimated to drastically increase the MW of rooftop solar
SB 1537 (Kehoe)
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eligible under the CSI. At the same time, San Diego Gas &
Electric applied to the PUC for a new rate element, called a
Network Use Charge, which would in effect charge NEM customers
electric distribution costs for energy that the customer
receives from the grid. This rate element has been dismissed by
the PUC.
Proposed Law: This bill would create a one-year moratorium on
the PUC adopting any new demand charge, standby charge, customer
charge, minimum monthly charge, interconnected charge, or other
fixed charge that only applies to NEM customers.
Staff Comments: This bill offers a temporary moratorium on new
changes to give the Legislature and the PUC an opportunity to
determine what subsidies are still necessary to support the
solar market. The PUC estimates that there no fiscal impacts to
the agency from this bill. However, the state itself is a
substantial electricity consumer using approximately 1.4% of the
of the state's electricity. Recognizing that the state is both
as a NEM and a non-NEM customer, the state likely pays hundreds
of thousands of dollars in subsidies for the CSI program. As
this bill prohibits this subsidy from being reduced by charging
NEM customers a fee, this bill continues a cost to the state in
the hundreds of thousands of dollars.