BILL ANALYSIS �
AB 2584
Page 1
Date of Hearing: May 21, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2584 (Nestande) - As Amended: May 6, 2014
Policy Committee: Utilities and
Commerce Vote: 12-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill provides that wind energy co-metering is available for
a United States Department of Defense (DOD) installation that
operates a wind turbine and is served by Southern California
Edison, if the generating capacity does not exceed 1.5
megawatts.
FISCAL EFFECT
No additional state costs.
COMMENTS
1)Rationale. In accordance with federal emission reduction and
renewable energy mandates, the military installed a 1.5 mega
watt (MW) wind turbine at the Marine Corps Logistics Base
(MCLB) in Barstow. In partnership with Southern California
Edison (SCE) the electricity generated by the turbine is added
to the power grid. However, in order to comply with its Net
Energy Metering (NEM) interconnect arrangement with SCE, the
base had to de-rate the turbine to operate under 1 MW.
In response to MCLB Barstow's requests to allow the turbine to
operate at its full 1.5 MW capacity, SCE indicated 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
AB 2584
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their ongoing energy costs.
The author is seeking a legislative solution so the Marine
Corps may fully utilize its renewable energy assets while
reducing its operating costs.
2)Background. 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.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081