BILL ANALYSIS �
AB 2584
Page A
Date of Hearing: April 28, 2014
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 2584 (Nestande) - As Amended: March 28, 2014
SUBJECT : Energy: California Renewables Portfolio Standard
Program
SUMMARY : This bill would provide that wind energy co-metering
is available for a United States Department of Defense (DOD)
installation, if the generating capacity does not exceed 1.5
megawatts. Specifically, this bill :
1)Applies to US DOD installations with a capacity of more than
50 kilowatts, but not exceeding 1.5 megawatts.
EXISTING LAW
1)Provides the California Public Utilities Commission (PUC) with
regulatory authority over public utilities, including
electrical corporations and gas corporations. (California
Constitution, Article 12, Section 3)
2)Authorizes the PUC to fix rates, establish rules, examine
records, issue subpoenas, administer oaths, take testimony,
punish for contempt, and prescribe a uniform system of
accounts for all public utilities subject to its jurisdiction.
(California Constitution, Article 12, Section 6)
3)Defines net energy metering as measuring the difference
between the electricity supplied through the electrical grid
and the electricity generated by an eligible
customer-generator and fed back to the electrical grid over a
12-month period. (Public Utilities Code 2827(b)(6))
4)Defines co-metering as the same in all other respects to a net
energy metering program, except that the local publicly owned
electric utility has elected to apply a
generation-to-generation energy and time-of-use credit formula
(Public Utilities Code 2827(b)(1))
5)Requires nearly every utility in California to provide a net
metering rate to customers connecting renewable energy
projects to utility service equipment until the total
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renewable capacity equals no more than 5% of each utilities'
aggregated peak electricity demand. (Public Utilities Code
2827(c)(1))
6)Requires payment for excess electricity generation to be
credited to the customer's utility account at the retail rate
of electricity based on the customer's applicable tariff.
(Public Utilities Code 2827(h)(2)(C))
7)Establishes various provisions applying to eligible
customer-generators utilizing wind energy co-metering with a
capacity of more than 50 kilowatts, but not exceeding one
megawatt, and authorizes electric service providers to waive
these provisions. (Public Utilities Code 2827.8)
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's statement: The author is "seeking this legislative
solution so the Marine Corps is able to fully utilize its
renewable energy assets at MCLB Barstow. Doing so will help
the base toward its goals of energy security while reducing
its operating costs. This is a common-sense measure that is
good for taxpayers and eases the burden on our Armed Forces."
2)Marine Corps Logistics Base (MCLB) Barstow. MCLB Barstow is
located in San Bernardino County about 130 miles northeast of
Los Angeles. Its mission is to rebuild and repair
ground-combat and combat-support equipment and to support
military bases in the Southwest. In terms of electricity, the
base is served by Southern California Edison (SCE). Its total
peak demand is about 7.2 MW, with an average demand of about
3.2 MW.
3)MCLB Barstow's wind turbine. In accordance with emission
reduction and renewable energy mandates from the President,
Congress, DOD, and Department of the Navy, the base installed
a wind turbine with a 1.5 MW capacity in 2009. The military
has noted that by generating an average of more than 3,000
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megawatt hours of renewable power each year,<1> the turbine
reduces annual electricity costs by approximately $500,000 and
provides 30 percent of the power needs of the Nebo side of the
base.<2>
Southern California Edison (SCE) was the main contractor for
the installation of the wind turbine, having provided
financing, design, and construction services.<3> In
partnership with SCE, the electricity generated by the turbine
is added directly to the power grid. However, the base had to
de-rate the turbine to operate under 1 MW to comply with its
Net Energy Metering (NEM) interconnect arrangement with the
investor-owned utility Southern California Edison (SCE).
In response to MCLB Barstow's requests to allow the turbine to
operate at its full 1.5 MW capacity, SCE has replied that
state law prohibits this under the current tariff. SCE has
instead proposed that MCLB Barstow terminate the NEM agreement
and apply for interconnection as a Rule 21 non-exporting
generator. This option would require the base to apply, pay
associated application and study fees, install equipment to
prevent export, and be subject to SCE's standby and departing
load tariffs. MCLB Barstow says that this route would increase
their ongoing energy costs.
According to the author, if the turbine was able to operate up
to 1.5 MW, it would largely offset the base's load and result
in only minimal export back onto the grid. For example, it is
stated that in September 2013 (an average month for wind
resources and energy use at MCLB Barstow), the base exported
on five occasions and only at night, for a total of 1,400 kWh.
In comparison, the average monthly electricity consumption for
California residential utility customers in 2012 was 573 kWh
--------------------------
<1> http://www.navy.mil/submit/display.asp?story_id=43886
<2>
http://www.mclbbarstow.marines.mil/News/NewsArticleDisplay/tabid/
9411/Article/82136/mclb-barstow-wind-turbine-a-marine-corps-first
.aspx
<3> http://www.navy.mil/submit/display.asp?story_id=38644
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per month.<4> Therefore, if MCLB Barstow export continues
along this trend - about 2.5 average residential customer's
worth - it is minimal. If the turbine is allowed to operate at
full capacity, the exact extent to which export will be
increased is unknown. However, based on historic data, the
author asserts that at the full 1.5 MW capacity, export would
only marginally increase (and only in the evenings), after
solar generation has stopped on the SCE transmission line.
The author also claims that turbine reliability would increase
if it were allowed to operate at its intended capacity.
The author may wish to consider an amendment clarifying that
the bill's provisions are limited to a DOD installation
located in Southern California which operates a wind turbine
and is served by Southern California Edison.
4)Net energy metering and co-metering. Under NEM, an electric
utility is required to "buy back" any electricity generated by
a customer-owned generator that is not consumed by the
customer on-site. The price is set by the applicable retail
rate under the customer's existing contract. When the customer
generates electricity, they use most of it for their own
facility, but any excess electricity passes through a meter
and is redistributed to the electricity grid. At the end of
the year, the electric utility calculates the amount of
electricity distributed to the grid by the customer and
reduces the customer's annual bill by the amount of
electricity generated by the customer. This results in the
utility "buying" the excess power and paying for it in the
form of a bill credit. NEM is available to all utility
customers, including residential, commercial, industrial,
agricultural, and government.
NEM allows the credit at the customer's retail price - a price
higher than the generation costs, as the retail price includes
non-generation charges, including but not limited to
transmission and distribution service, the California Rates
for Energy (CARE) subsidy, public good charges, and service
charges for the California Public Utilities Commission (PUC),
California Independent System Operator (CAISO), and utility
return on investment. If the customer-generator is being paid
the retail price, the non-generation costs are shifted to the
--------------------------
<4> US Energy Information Administration.
http://www.eia.gov/tools/faqs/faq.cfm?id=97&t=3
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utilities' other ratepayers.
"Co-energy metering" is similar to net energy metering, except
that the electric utility applies a generation-to-generation
energy and time-of-use credit formula.
5)Suggested amendments.
SECTION 1. Section 2827.8 of the Public Utilities Code is
amended to read:
2827.8. Notwithstanding any other provisions of this article,
the following provisions apply to an eligible
customer-generator utilizing wind energy co-metering with a
capacity of more than 50 kilowatts, but not exceeding one
megawatt, or for a United States Department of Defense
installation located in Southern California which operates a
wind turbine and is served by Southern California Edison , not
exceeding 1.5 megawatts, unless approved by the electric
utility.
(a) The eligible customer-generator shall be required to
utilize a meter, or multiple meters, capable of separately
measuring electricity flow in both directions. Nothing in this
section precludes the use of advanced metering infrastructure
devices. All meters shall provide "time-of-use" measurements
of electricity flow, and the customer shall take service on a
time-of-use rate schedule. If the existing meter of the
eligible customer-generator is not a time-of-use meter or is
not capable of measuring total flow of energy in both
directions, the eligible customer-generator is responsible for
all expenses involved in purchasing and installing a meter
that is both time-of-use and able to measure total electricity
flow in both directions. This subdivision shall not restrict
the ability of an eligible customer-generator to utilize any
economic incentives provided by a government agency or the
electric utility to reduce its costs for purchasing and
installing a time-of-use meter.
(b) The consumption of electricity from the electric utility
for wind energy co-metering by an eligible customer-generator
shall be priced in accordance with the standard rate charged
to the eligible customer-generator in accordance with the rate
structure to which the customer would be assigned if the
customer did not use an eligible wind electrical generating
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facility. The generation of electricity provided to the
electric utility shall result in a credit to the eligible
customer-generator and shall be priced in accordance with the
generation component, excluding surcharges to cover the
purchase of power by the Department of Water Resources,
established under the applicable structure to which the
customer would be assigned if the customer did not use an
eligible wind electrical generating facility.
REGISTERED SUPPORT / OPPOSITION :
Support
United States Marine Corps
Opposition
Southern California Public Power Authority (SCPPA)
Analysis Prepared by : Brandon Gaytan / U. & C. / (916)
319-2083