BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de Le�n, Chair


          AB 2584 (Nestande) - Electricity: wind energy co-metering.
          
          Amended: June 16, 2014          Policy Vote: EU&C 7-3
          Urgency: No                     Mandate: No
          Hearing Date: August 4, 2014                      Consultant:  
          Marie Liu     
          
          This bill may meet the criteria for referral to the Suspense  
          File.

          Bill Summary: AB 2584 would require Southern California Edison  
          (SCE) to interconnect a 1.5 MW wind turbine located at the  
          United States Marine Corp Logistics Base, Barstow.

          Fiscal Impact: Unknown costs to the state as a ratepayer.

          Background: Public Utilities Code �2827 requires that the  
          state's investor-owned utilities, publicly-owned utilities, and  
          other entities offering retail electric service, to credit all  
          electricity generated by a customer-owned renewable electric  
          generation facility against the customer's usage of electricity  
          sold by the utility, on a kilowatt hour basis (kWH), a procedure  
          known as "net energy metering" (NEM). An individual renewable  
          electric generation facility cannot produce more than is needed  
          by the customer's own electrical requirements, up to one  
          megawatt (MW). Under the NEM program, customers are exempt from  
          paying transmission and distribution costs. 

          Public Utilities Code ��2827 and 2827.8 defines "wind energy  
          co-metering" as a wind energy project greater than 50 kWh, but  
          not exceeding one MW, where electricity generated by the  
          eligible customer-generator and fed back to the grid is credited  
          against the electricity supplied to the eligible  
          customer-generator by the grid.

          Proposed Law: This bill would raise the one MW limit to 1.5 MW  
          for a wind turbine located at the United States Marine Corp  
          Logistics Base, Barstow.

          Staff Comments: Greater participation in wind energy co-metering  
          will result in cost-shifts to other ratepayers, including the  
          state, as the participants are exempt from a number of costs  








          AB 2584 (Nestande)
          Page 1


          such as non-bypassable charges. As the state is the customer for  
          approximately 1% of electricity users in SCE's territory, these  
          cost shifts are not likely to be significant.

          In the area which the base is located, there is potentially  
          insufficient capacity on the transmission system. Should this  
          bill pass, the 1.5 MW wind turbine would add to any capacity  
          issues and would add cost pressures for infrastructure needs in  
          the area. These infrastructure costs are borne by all  
          electricity-users, including the state as a ratepayer. As  
          transmission infrastructure can have costs in the hundreds of  
          millions of dollars, the state's cost as a ratepayer can be in  
          the tens of thousands of dollars. However, this project would be  
          only one of several that necessitate the infrastructure  
          improvements. It is therefore unquantifiable which portion of  
          the transmission costs would be attributable to this bill.