BILL NUMBER: AB 2649 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 6, 2014
AMENDED IN ASSEMBLY APRIL 21, 2014
AMENDED IN ASSEMBLY MARCH 28, 2014
INTRODUCED BY Assembly Members Mullin, V. Manuel Pérez, and Gorell
(Coauthors: Assembly Members Allen, Atkins, Maienschein, Ting,
Wieckowski, and Williams)
(Coauthors: Senators Block, Correa, DeSaulnier, Fuller, Hill,
Roth, and Vidak)
FEBRUARY 21, 2014
An act to amend Section 2827 of the Public Utilities
Code, relating to energy, and declaring the urgency thereof, to take
effect immediately. An act to add Article 9.5
(commencing with Section 389) to Chapter 2.3 of Part 1 of Division 1
of the Public Utilities Code, relating to public utilities, and
declaring the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 2649, as amended, Mullin. Net energy metering:
military bases. Public Utilities: federal facilities:
electrical charges.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations,
as defined. Existing law requires every electric utility, as
defined, to develop a standard contract or tariff providing for net
energy metering, as defined, and to make this contract or tariff
available to eligible customer-generators, as defined, upon request
for generation by a renewable electrical generation facility, as
defined. An eligible customer-generator is defined as meaning a
residential customer, small commercial customer, or commercial,
industrial, or agricultural customer of an electric utility, who uses
a renewable electrical generation facility, or a combination of
those facilities, with a total capacity of not more than one
megawatt, that is located on the customer's owned, leased, or rented
premises, and is interconnected and operates in parallel with the
electrical grid, and is intended primarily to offset part or all of
the customer's own electrical requirements. Existing
law relative to restructuring of the electrical services industry
requires the commission to establish an effective mechanism that
ensures the recovery of certain uneconomic costs for
generation-related assets and obligations incurred by electrical
corporations in the transition to the restructured market
(competition transition charges) and other specified nonbypassable
charges. Existing law requires the commission to approve and
establish standby charges and to review and adjust the standby
charges to encourage the utilization of electricity generated from
other than conventional power sources.
This bill would authorize a United States military
installation to exceed the one megawatt capacity limitation if the
total capacity of all renewable electrical generation facilities on
the military installation does not exceed 100% of the minimum daytime
load measured in the previous 12 months or if the total capacity of
all renewable electrical generation facilities on the military
installation does not result in the export of electricity beyond the
meter and the military installation adopts reasonable and
cost-effective control methods to ensure the generation of
electricity from renewable electrical generation facilities does not
exceed load. The bill would provide that each physically separate and
distinct building within privatized residential housing communities
on contiguous military properties is a separate premise for purposes
of the one megawatt capacity limitation, in a manner identical to how
it would be treated if located in an equivalent civilian community.
require the commission, on or before April 1, 2015, to
require an electrical corporation to calculate and assess the
competition transition charges and other specified nonbypassable
charges based on the actual metered consumption of electricity by
military bases and facilities and privatized military housing, as
defined. The bill would require the commission to calculate the
standby charges for those facilities, as specified. The bill would
require the commission to require the electrical corporations to
implement the above provisions through advice letters submitted
before April 1, 2015. The bill would specify that those facilities
that operate independent generation facilities are not obligated to
enter into an interconnection agreement with an electrical
corporation.
Under existing law, a violation of the Public Utilities Act or an
order or direction of the commission is a crime.
This bill would be part of the act and an order or other action of
the commission would be required to implement the bill. Because a
violation of this bill or an order or other action of the commission
implementing those provisions would be a crime, this bill would
thereby impose a state-mandated local program by creating new crimes
and by expanding the definition of existing crimes.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Article 9.5 (commencing with Section
389) is added to Chapter 2.3 of Part 1 of Division 1 of the
Public Utilities Code , to read:
Article 9.5. Federal Facilities
389. The Legislature finds and declares all of the following:
(a) The United States Department of Defense provides national
defense and global security that benefits Californians and California'
s economy.
(b) The United States Department of Defense facilities located in
California provide more than seventy billion dollars
($70,000,000,000) in direct spending and 300,000 jobs in California.
(c) The United States Department of Defense is working to achieve
energy efficiency and renewable energy goals to meet both
presidential and departmental directives.
(d) The amount of electricity that the United States Department of
Defense facilities located in California seek to generate on their
own premises will serve their own electricity needs and will not
export electricity.
(e) Military bases approximate small cities in electrical load,
diversity of land uses, and size.
(f) Given the crucial contribution of our military, California
should assist military facilities in California in achieving their
energy independence goals.
(g) The military owns and maintains its electric distribution
system. Generation serving the military's own electricity load
without export should not require upgrades to this distribution
system. Even if upgrades are necessary, the military, not the
ratepayers, will bear these costs.
(h) At the request of the Governor and the electrical
corporations, military bases have historically demonstrated their
commitment and ability to provide demand reduction management at
times of grid emergencies.
(i) Development of additional energy facilities on military bases
and military family housing will create opportunities for jobs for
veterans at a time when many California service members are
reentering the workforce and can provide skilled workers. Established
programs, such as "Helmets to Hardhats," also provide valuable and
needed transition from the battlefield to the civilian community.
389.3. (a) For the purposes of this article, the following shall
apply:
(1) "Facilities" means either of the following:
(A) Military bases and facilities.
(B) Privatized military housing.
(2) "Independent generation facility" means an electrical
generation facility that meets all of the following requirements:
(A) Is sized to provide no more than 100 percent of a facility's
average minimum daytime load, measured in the prior 12 months.
(B) Is prevented from exporting electricity to an electrical
corporation's distribution system through a double throw switch or
operating scheme specifically designed and engineered for that
operation.
(C) Is operated in parallel with the electrical transmission and
distribution system.
(3) "Military bases and facilities" mean those establishments
under the jurisdiction of the United States Army, United States Air
Force, United States Navy, United States Marine Corps, or the United
States Coast Guard.
(4) "Privatized military housing" means housing facilities managed
by a private entity for the purpose of providing housing to active
duty service members and their family members that are not
individually metered for purposes of calculating electricity charges
paid to an electrical corporation.
(5) "Standby demand" means the entire reserved capacity needed to
serve the electrical load of a facility that is regularly served by
the facility's independent generation facility when that generation
facility experiences a partial or complete outage.
(b) To the extent authorized by federal law, an operator of an
independent generation facility shall notify the electrical
corporation pursuant to subdivision (b) of Section 119085 of the
Health and Safety Code.
(c) (1) The facilities shall not be obligated to enter into an
interconnection agreement for an independent generation facility.
(2) If a facility requests an interconnection agreement, the
electrical corporation shall ensure that the request is processed in
a time period not to exceed 30 working days from the date of receipt
of the completed application by the electrical corporation.
(3) If a facility requests an interconnection agreement, an
electrical corporation shall not impose any requirements or fees,
such as telemetry or metering devices, electric grid reliability
studies, fees for electric grid reliability studies, interconnection
charges, or require payment for the cost of any studies deemed
necessary by the electrical corporation, on an interconnection
request.
(d) On or before April 1, 2015, and to the extent authorized by
federal law, the commission shall, for a facility, do all of the
following:
(1) Require an electrical corporation to calculate and assess,
based on the actual metered consumption of electricity provided from
either the electrical corporation or an electric service provider
that delivers electricity through the distribution system of the
electrical corporation for the facility's billing period, the
following charges:
(A) The competition transition charge imposed pursuant to Section
330.
(B) The charge imposed pursuant to Section 367, commonly known as
the power charge indifference adjustment.
(C) The nuclear decommission charge imposed pursuant to Section
379.
(D) The charge imposed pursuant to Section 366.1 to recover
bond-related costs pursuant to an agreement between the commission
and the Department of Water Resources pursuant to Section 80110 of
the Water Code.
(E) The charge imposed pursuant to Section 379.6 for the support
of the self-generation incentive program.
(F) The charges imposed pursuant to Section 381 or 384 for the
support of public interest programs.
(G) Transmission and distribution charges as approved by the
commission on the applicable tariff.
(2) (A) Calculate the standby charge for a facility that is
currently subject to a standby charge based on the facility's standby
demand. The standby demand shall be designated by the facility and
remain at that level for a minimum of 12 months unless the electrical
corporation determines that the standby demand needs to be adjusted
to meet the actual demand.
(B) Upon an electrical corporation's determination that the
facility's designated standby demand is too low and does not reflect
the actual level of needed reserved capacity, over any 15 minute
period or through onsite verification, the electrical corporation
shall increase the standby demand to reflect the actual needed
reserve capacity.
(C) Upon an electrical corporation's determination that the
facility's designated standby demand is too high, over any 15 minute
period or through onsite verification, the electrical corporation
shall decrease the standby demand to reflect the actual needed
reserve capacity.
(D) If the standby demand is adjusted by the electrical
corporation, another adjustment in the standby demand shall not be
made for 12 months from the adjustment.
(E) To the extent authorized by federal law, a facility shall
notify the electrical corporation of permanent or material changes in
the size, type, and operations of the facility for future
adjustments to the standby demand.
(3) Require electrical corporations to implement the provisions of
this section through advice letters submitted prior to April 1,
2015.
(e) Any activities undertaken on a facility's premises that reduce
demand for an electrical corporation's supplied electricity, such as
energy efficiency, load reduction, or independent generation are not
subject to charges assessed on electricity delivered from the
electrical corporation's distribution system or other charges of any
kind that would increase the facility's costs beyond those of other
customers in the rate class to which the facility would otherwise be
assigned if the independent generation facility was not installed at
the facility.
(f) The commission may adjust the size limit for independent
generation facilities on facilities if it determines that it can be
done in a manner that does not affect the safety or reliability of
electricity service to other customers of the electrical corporation.
389.5. Notwithstanding this article, facilities, at their sole
discretion, may develop eligible energy generation projects
authorized pursuant to Section 2827 or 2827.1 or through an
electrical corporation's Generation Facility Interconnection Rule 21,
as applicable and pursuant to applicable rules and tariffs.
SEC. 2. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
SEC. 3. This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
To allow renewable energy development in military installations
and facilities in support of the state's energy policies and the
United States military's renewable energy and national security goals
as well as to support military families and veterans hiring
programs, it is necessary for this act to take effect immediately.
SECTION 1. The Legislature finds and declares
all of the following:
(a) Existing interpretation of the state's net energy metering law
has hindered the development of renewable electrical generation
facilities on military installations, preventing the military from
making progress towards meeting its renewable energy and energy
security goals.
(b) Military installations should not be defined as a single
location or premise for purposes of developing renewable electrical
generation facilities that are eligible for net energy metering
because military bases more approximate the electricity load and
layout of a small city. Since it would be unsuitable to limit the net
metered capacity of a small city to one megawatt, the Legislature
finds that military installations should be given the same
flexibility as a small city to generate electricity from renewable
electrical generation facilities to meet its onsite demand in order
to meet renewable energy and energy security goals, including the
Secretary of the Navy's goal for installations to obtain 50 percent
of their shore power from alternative sources by 2020.
(c) Application of the one megawatt capacity limitation for
renewable electrical generation facilities that are eligible for net
energy metering to an entire military base prevents military families
living in privatized military housing from benefiting from rooftop
solar energy.
(d) Clarification of how the one megawatt capacity limitation
should be applied to military installations will create substantial
job opportunities, including those for veterans and their families,
promote economic development in military communities, and bring the
benefits of eligible renewable energy resources, including bill
savings which will benefit communities of military families. The
Legislature therefore finds it is necessary to clarify how the one
megawatt capacity limitation for renewable electrical generation
facilities that are eligible for net energy metering is to apply to
military installations and military family housing communities.
SEC. 2. Section 2827 of the Public Utilities
Code is amended to read:
2827. (a) The Legislature finds and declares that a program to
provide net energy metering combined with net surplus compensation,
co-energy metering, and wind energy co-metering for eligible
customer-generators is one way to encourage substantial private
investment in renewable energy resources, stimulate in-state economic
growth, reduce demand for electricity during peak consumption
periods, help stabilize California's energy supply infrastructure,
enhance the continued diversification of California's energy resource
mix, reduce interconnection and administrative costs for electricity
suppliers, and encourage conservation and efficiency.
(b) As used in this section, the following terms have the
following meanings:
(1) "Co-energy metering" means a program that is the same in all
other respects as 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 as
provided in subdivision (i).
(2) "Electrical cooperative" means an electrical cooperative as
defined in Section 2776.
(3) "Electric utility" means an electrical corporation, a local
publicly owned electric utility, or an electrical cooperative, or any
other entity, except an electric service provider, that offers
electrical service. This section shall not apply to a local publicly
owned electric utility that serves more than 750,000 customers and
that also conveys water to its customers.
(4) (A) "Eligible customer-generator" means a residential
customer, small commercial customer as defined in subdivision (h) of
Section 331, or commercial, industrial, or agricultural customer of
an electric utility, who uses a renewable electrical generation
facility, or a combination of those facilities, with a total capacity
of not more than one megawatt, that is located on the customer's
owned, leased, or rented premises, and is interconnected and operates
in parallel with the electrical grid, and is intended primarily to
offset part or all of the customer's own electrical requirements.
(B) (i) A United States military installation may exceed the one
megawatt capacity limitation if either of the following apply:
(I) The total capacity of all renewable electrical generation
facilities on the military installation does not exceed 100 percent
of the minimum daytime load measured in the previous 12 months.
(II) The total capacity of all renewable electrical generation
facilities on the military installation does not result in the export
of electricity beyond the meter and the military installation adopts
reasonable and cost-effective control methods to ensure the
generation of electricity from renewable electrical generation
facilities does not exceed load.
(ii) Each physically separate and distinct building within
privatized residential housing communities on contiguous military
properties shall be a separate premise for purposes of the one
megawatt capacity limitation, in a manner identical to how they would
be treated if located in an equivalent civilian community.
(5) "Large electrical corporation" means an electrical corporation
with more than 100,000 service connections in California.
(6) "Net energy metering" means 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 as described in
subdivisions (c) and (h).
(7) "Net surplus customer-generator" means an eligible
customer-generator that generates more electricity during a 12-month
period than is supplied by the electric utility to the eligible
customer-generator during the same 12-month period.
(8) "Net surplus electricity" means all electricity generated by
an eligible customer-generator measured in kilowatthours over a
12-month period that exceeds the amount of electricity consumed by
that eligible customer-generator.
(9) "Net surplus electricity compensation" means a per
kilowatthour rate offered by the electric utility to the net surplus
customer-generator for net surplus electricity that is set by the
ratemaking authority pursuant to subdivision (h).
(10) "Ratemaking authority" means, for an electrical corporation,
the commission, for an electrical cooperative, its ratesetting body
selected by its shareholders or members, and for a local publicly
owned electric utility, the local elected body responsible for
setting the rates of the local publicly owned utility.
(11) "Renewable electrical generation facility" means a facility
that generates electricity from a renewable source listed in
paragraph (1) of subdivision (a) of Section 25741 of the Public
Resources Code. A small hydroelectric generation facility is not an
eligible renewable electrical generation facility if it will cause an
adverse impact on instream beneficial uses or cause a change in the
volume or timing of streamflow.
(12) "Wind energy co-metering" means any wind energy project
greater than 50 kilowatts, but not exceeding one megawatt, where 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 is as
described in subdivision (h). Wind energy co-metering shall be
accomplished pursuant to Section 2827.8.
(c) (1) Except as provided in paragraph (4) and in Section 2827.1,
every electric utility shall develop a standard contract or tariff
providing for net energy metering, and shall make this standard
contract or tariff available to eligible customer-generators, upon
request, on a first-come-first-served basis until the time that the
total rated generating capacity used by eligible customer-generators
exceeds 5 percent of the electric utility's aggregate customer peak
demand. Net energy metering shall be accomplished using a single
meter capable of registering the flow of electricity in two
directions. An additional meter or meters to monitor the flow of
electricity in each direction may be installed with the consent of
the eligible customer-generator, at the expense of the electric
utility, and the additional metering shall be used only to provide
the information necessary to accurately bill or credit the eligible
customer-generator pursuant to subdivision (h), or to collect
generating system performance information for research purposes
relative to a renewable electrical generation facility. If the
existing electrical meter of an eligible customer-generator is not
capable of measuring the flow of electricity in two directions, the
eligible customer-generator shall be responsible for all expenses
involved in purchasing and installing a meter that is able to measure
electricity flow in two directions. If an additional meter or meters
are installed, the net energy metering calculation shall yield a
result identical to that of a single meter. An eligible
customer-generator that is receiving service other than through the
standard contract or tariff may elect to receive service through the
standard contract or tariff until the electric utility reaches the
generation limit set forth in this paragraph. Once the generation
limit is reached, only eligible customer-generators that had
previously elected to receive service pursuant to the standard
contract or tariff have a right to continue to receive service
pursuant to the standard contract or tariff. Eligibility for net
energy metering does not limit an eligible customer-generator's
eligibility for any other rebate, incentive, or credit provided by
the electric utility, or pursuant to any governmental program,
including rebates and incentives provided pursuant to the California
Solar Initiative.
(2) An electrical corporation shall include a provision in the net
energy metering contract or tariff requiring that any customer with
an existing electrical generating facility and meter who enters into
a new net energy metering contract shall provide an inspection report
to the electrical corporation, unless the electrical generating
facility and meter have been installed or inspected within the
previous three years. The inspection report shall be prepared by a
California licensed contractor who is not the owner or operator of
the facility and meter. A California licensed electrician shall
perform the inspection of the electrical portion of the facility and
meter.
(3) (A) On an annual basis, every electric utility shall make
available to the ratemaking authority information on the total rated
generating capacity used by eligible customer-generators that are
customers of that provider in the provider's service area and the net
surplus electricity purchased by the electric utility pursuant to
this section.
(B) An electric service provider operating pursuant to Section 394
shall make available to the ratemaking authority the information
required by this paragraph for each eligible customer-generator that
is their customer for each service area of an electrical corporation,
local publicly owned electrical utility, or electrical cooperative,
in which the eligible customer-generator has net energy metering.
(C) The ratemaking authority shall develop a process for making
the information required by this paragraph available to electric
utilities, and for using that information to determine when, pursuant
to paragraphs (1) and (4), an electric utility is not obligated to
provide net energy metering to additional eligible
customer-generators in its service area.
(4) (A) An electric utility that is not a large electrical
corporation is not obligated to provide net energy metering to
additional eligible customer-generators in its service area when the
combined total peak demand of all electricity used by eligible
customer-generators served by all the electric utilities in that
service area furnishing net energy metering to eligible
customer-generators exceeds 5 percent of the aggregate customer peak
demand of those electric utilities.
(B) The commission shall require every large electrical
corporation to make the standard contract or tariff available to
eligible customer-generators, continuously and without interruption,
until such times as the large electrical corporation reaches its net
energy metering program limit or July 1, 2017, whichever is earlier.
A large electrical corporation reaches its program limit when the
combined total peak demand of all electricity used by eligible
customer-generators served by all the electric utilities in the large
electrical corporation's service area furnishing net energy metering
to eligible customer-generators exceeds 5 percent of the aggregate
customer peak demand of those electric utilities. For purposes of
calculating a large electrical corporation's program limit,
"aggregate customer peak demand" means the highest sum of the
noncoincident peak demands of all of the large electrical corporation'
s customers that occurs in any calendar year. To determine the
aggregate customer peak demand, every large electrical corporation
shall use a uniform method approved by the commission. The program
limit calculated pursuant to this paragraph shall not be less than
the following:
(i) For San Diego Gas and Electric Company, when it has made 607
megawatts of nameplate generating capacity available to eligible
customer-generators.
(ii) For Southern California Edison Company, when it has made
2,240 megawatts of nameplate generating capacity available to
eligible
customer-generators.
(iii) For Pacific Gas and Electric Company, when it has made 2,409
megawatts of nameplate generating capacity available to eligible
customer-generators.
(C) Every large electrical corporation shall file a monthly report
with the commission detailing the progress toward the net energy
metering program limit established in subparagraph (B). The report
shall include separate calculations on progress toward the limits
based on operating solar energy systems, cumulative numbers of
interconnection requests for net energy metering eligible systems,
and any other criteria required by the commission.
(D) Beginning July 1, 2017, or upon reaching the net metering
program limit of subparagraph (B), whichever is earlier, the
obligation of a large electrical corporation to provide service
pursuant to a standard contract or tariff shall be pursuant to
Section 2827.1 and applicable state and federal requirements.
(d) Every electric utility shall make all necessary forms and
contracts for net energy metering and net surplus electricity
compensation service available for download from the Internet.
(e) (1) Every electric utility shall ensure that requests for
establishment of net energy metering and net surplus electricity
compensation are processed in a time period not exceeding that for
similarly situated customers requesting new electric service, but not
to exceed 30 working days from the date it receives a completed
application form for net energy metering service or net surplus
electricity compensation, including a signed interconnection
agreement from an eligible customer-generator and the electric
inspection clearance from the governmental authority having
jurisdiction.
(2) Every electric utility shall ensure that requests for an
interconnection agreement from an eligible customer-generator are
processed in a time period not to exceed 30 working days from the
date it receives a completed application form from the eligible
customer-generator for an interconnection agreement.
(3) If an electric utility is unable to process a request within
the allowable timeframe pursuant to paragraph (1) or (2), it shall
notify the eligible customer-generator and the ratemaking authority
of the reason for its inability to process the request and the
expected completion date.
(f) (1) If a customer participates in direct transactions pursuant
to paragraph (1) of subdivision (b) of Section 365, or Section
365.1, with an electric service provider that does not provide
distribution service for the direct transactions, the electric
utility that provides distribution service for the eligible
customer-generator is not obligated to provide net energy metering or
net surplus electricity compensation to the customer.
(2) If a customer participates in direct transactions pursuant to
paragraph (1) of subdivision (b) of Section 365, or Section 365.1,
with an electric service provider, and the customer is an eligible
customer-generator, the electric utility that provides distribution
service for the direct transactions may recover from the customer's
electric service provider the incremental costs of metering and
billing service related to net energy metering and net surplus
electricity compensation in an amount set by the ratemaking
authority.
(g) Except for the time-variant kilowatthour pricing portion of
any tariff adopted by the commission pursuant to paragraph (4) of
subdivision (a) of Section 2851, each net energy metering contract or
tariff shall be identical, with respect to rate structure, all
retail rate components, and any monthly charges, to the contract or
tariff to which the same customer would be assigned if the customer
did not use a renewable electrical generation facility, except that
eligible customer-generators shall not be assessed standby charges on
the electrical generating capacity or the kilowatthour production of
a renewable electrical generation facility. The charges for all
retail rate components for eligible customer-generators shall be
based exclusively on the customer-generator's net kilowatthour
consumption over a 12-month period, without regard to the eligible
customer-generator's choice as to from whom it purchases electricity
that is not self-generated. Any new or additional demand charge,
standby charge, customer charge, minimum monthly charge,
interconnection charge, or any other charge that would increase an
eligible customer-generator's costs beyond those of other customers
who are not eligible customer-generators in the rate class to which
the eligible customer-generator would otherwise be assigned if the
customer did not own, lease, rent, or otherwise operate a renewable
electrical generation facility is contrary to the intent of this
section, and shall not form a part of net energy metering contracts
or tariffs.
(h) For eligible customer-generators, the net energy metering
calculation shall be made by measuring the difference between the
electricity supplied to the eligible customer-generator and the
electricity generated by the eligible customer-generator and fed back
to the electrical grid over a 12-month period. The following rules
shall apply to the annualized net metering calculation:
(1) The eligible residential or small commercial
customer-generator, at the end of each 12-month period following the
date of final interconnection of the eligible customer-generator's
system with an electric utility, and at each anniversary date
thereafter, shall be billed for electricity used during that 12-month
period. The electric utility shall determine if the eligible
residential or small commercial customer-generator was a net consumer
or a net surplus customer-generator during that period.
(2) At the end of each 12-month period, where the electricity
supplied during the period by the electric utility exceeds the
electricity generated by the eligible residential or small commercial
customer-generator during that same period, the eligible residential
or small commercial customer-generator is a net electricity consumer
and the electric utility shall be owed compensation for the eligible
customer-generator's net kilowatthour consumption over that 12-month
period. The compensation owed for the eligible residential or small
commercial customer-generator's consumption shall be calculated as
follows:
(A) For all eligible customer-generators taking service under
contracts or tariffs employing "baseline" and "over baseline" rates,
any net monthly consumption of electricity shall be calculated
according to the terms of the contract or tariff to which the same
customer would be assigned to, or be eligible for, if the customer
was not an eligible customer-generator. If those same
customer-generators are net generators over a billing period, the net
kilowatthours generated shall be valued at the same price per
kilowatthour as the electric utility would charge for the baseline
quantity of electricity during that billing period, and if the number
of kilowatthours generated exceeds the baseline quantity, the excess
shall be valued at the same price per kilowatthour as the electric
utility would charge for electricity over the baseline quantity
during that billing period.
(B) For all eligible customer-generators taking service under
contracts or tariffs employing time-of-use rates, any net monthly
consumption of electricity shall be calculated according to the terms
of the contract or tariff to which the same customer would be
assigned, or be eligible for, if the customer was not an eligible
customer-generator. When those same customer-generators are net
generators during any discrete time-of-use period, the net
kilowatthours produced shall be valued at the same price per
kilowatthour as the electric utility would charge for retail
kilowatthour sales during that same time-of-use period. If the
eligible customer-generator's time-of-use electrical meter is unable
to measure the flow of electricity in two directions, paragraph (1)
of subdivision (c) shall apply.
(C) For all eligible residential and small commercial
customer-generators and for each billing period, the net balance of
moneys owed to the electric utility for net consumption of
electricity or credits owed to the eligible customer-generator for
net generation of electricity shall be carried forward as a monetary
value until the end of each 12-month period. For all eligible
commercial, industrial, and agricultural customer-generators, the net
balance of moneys owed shall be paid in accordance with the electric
utility's normal billing cycle, except that if the eligible
commercial, industrial, or agricultural customer-generator is a net
electricity producer over a normal billing cycle, any excess
kilowatthours generated during the billing cycle shall be carried
over to the following billing period as a monetary value, calculated
according to the procedures set forth in this section, and appear as
a credit on the eligible commercial, industrial, or agricultural
customer-generator's account, until the end of the annual period when
paragraph (3) shall apply.
(3) At the end of each 12-month period, where the electricity
generated by the eligible customer-generator during the 12-month
period exceeds the electricity supplied by the electric utility
during that same period, the eligible customer-generator is a net
surplus customer-generator and the electric utility, upon an
affirmative election by the net surplus customer-generator, shall
either (A) provide net surplus electricity compensation for any net
surplus electricity generated during the prior 12-month period, or
(B) allow the net surplus customer-generator to apply the net surplus
electricity as a credit for kilowatthours subsequently supplied by
the electric utility to the net surplus customer-generator. For an
eligible customer-generator that does not affirmatively elect to
receive service pursuant to net surplus electricity compensation, the
electric utility shall retain any excess kilowatthours generated
during the prior 12-month period. The eligible customer-generator not
affirmatively electing to receive service pursuant to net surplus
electricity compensation shall not be owed any compensation for the
net surplus electricity unless the electric utility enters into a
purchase agreement with the eligible customer-generator for those
excess kilowatthours. Every electric utility shall provide notice to
eligible customer-generators that they are eligible to receive net
surplus electricity compensation for net surplus electricity, that
they must elect to receive net surplus electricity compensation, and
that the 12-month period commences when the electric utility receives
the eligible customer-generator's election. For an electric utility
that is an electrical corporation or electrical cooperative, the
commission may adopt requirements for providing notice and the manner
by which eligible customer-generators may elect to receive net
surplus electricity compensation.
(4) (A) An eligible customer-generator with multiple meters may
elect to aggregate the electrical load of the meters located on the
property where the renewable electrical generation facility is
located and on all property adjacent or contiguous to the property on
which the renewable electrical generation facility is located, if
those properties are solely owned, leased, or rented by the eligible
customer-generator. If the eligible customer-generator elects to
aggregate the electric load pursuant to this paragraph, the electric
utility shall use the aggregated load for the purpose of determining
whether an eligible customer-generator is a net consumer or a net
surplus customer-generator during a 12-month period.
(B) If an eligible customer-generator chooses to aggregate
pursuant to subparagraph (A), the eligible customer-generator shall
be permanently ineligible to receive net surplus electricity
compensation, and the electric utility shall retain any kilowatthours
in excess of the eligible customer-generator's aggregated electrical
load generated during the 12-month period.
(C) If an eligible customer-generator with multiple meters elects
to aggregate the electrical load of those meters pursuant to
subparagraph (A), and different rate schedules are applicable to
service at any of those meters, the electricity generated by the
renewable electrical generation facility shall be allocated to each
of the meters in proportion to the electrical load served by those
meters. For example, if the eligible customer-generator receives
electric service through three meters, two meters being at an
agricultural rate that each provide service to 25 percent of the
customer's total load, and a third meter, at a commercial rate, that
provides service to 50 percent of the customer's total load, then 50
percent of the electrical generation of the eligible renewable
generation facility shall be allocated to the third meter that
provides service at the commercial rate and 25 percent of the
generation shall be allocated to each of the two meters providing
service at the agricultural rate. This proportionate allocation shall
be computed each billing period.
(D) This paragraph shall not become operative for an electrical
corporation unless the commission determines that allowing eligible
customer-generators to aggregate their load from multiple meters will
not result in an increase in the expected revenue obligations of
customers who are not eligible customer-generators. The commission
shall make this determination by September 30, 2013. In making this
determination, the commission shall determine if there are any public
purpose or other noncommodity charges that the eligible
customer-generators would pay pursuant to the net energy metering
program as it exists prior to aggregation, that the eligible
customer-generator would not pay if permitted to aggregate the
electrical load of multiple meters pursuant to this paragraph.
(E) A local publicly owned electric utility or electrical
cooperative shall only allow eligible customer-generators to
aggregate their load if the utility's ratemaking authority determines
that allowing eligible customer-generators to aggregate their load
from multiple meters will not result in an increase in the expected
revenue obligations of customers that are not eligible
customer-generators. The ratemaking authority of a local publicly
owned electric utility or electrical cooperative shall make this
determination within 180 days of the first request made by an
eligible customer-generator to aggregate their load. In making the
determination, the ratemaking authority shall determine if there are
any public purpose or other noncommodity charges that the eligible
customer-generator would pay pursuant to the net energy metering or
co-energy metering program of the utility as it exists prior to
aggregation, that the eligible customer-generator would not pay if
permitted to aggregate the electrical load of multiple meters
pursuant to this paragraph. If the ratemaking authority determines
that load aggregation will not cause an incremental rate impact on
the utility's customers that are not eligible customer-generators,
the local publicly owned electric utility or electrical cooperative
shall permit an eligible customer-generator to elect to aggregate the
electrical load of multiple meters pursuant to this paragraph. The
ratemaking authority may reconsider any determination made pursuant
to this subparagraph in a subsequent public proceeding.
(F) For purposes of this paragraph, parcels that are divided by a
street, highway, or public thoroughfare are considered contiguous,
provided they are otherwise contiguous and under the same ownership.
(G) An eligible customer-generator may only elect to aggregate the
electrical load of multiple meters if the renewable electrical
generation facility, or a combination of those facilities, has a
total generating capacity of not more than one megawatt.
(H) Notwithstanding subdivision (g), an eligible
customer-generator electing to aggregate the electrical load of
multiple meters pursuant to this subdivision shall remit service
charges for the cost of providing billing services to the electric
utility that provides service to the meters.
(5) (A) The ratemaking authority shall establish a net surplus
electricity compensation valuation to compensate the net surplus
customer-generator for the value of net surplus electricity generated
by the net surplus customer-generator. The commission shall
establish the valuation in a ratemaking proceeding. The ratemaking
authority for a local publicly owned electric utility shall establish
the valuation in a public proceeding. The net surplus electricity
compensation valuation shall be established so as to provide the net
surplus customer-generator just and reasonable compensation for the
value of net surplus electricity, while leaving other ratepayers
unaffected. The ratemaking authority shall determine whether the
compensation will include, where appropriate justification exists,
either or both of the following components:
(i) The value of the electricity itself.
(ii) The value of the renewable attributes of the electricity.
(B) In establishing the rate pursuant to subparagraph (A), the
ratemaking authority shall ensure that the rate does not result in a
shifting of costs between eligible customer-generators and other
bundled service customers.
(6) (A) Upon adoption of the net surplus electricity compensation
rate by the ratemaking authority, any renewable energy credit, as
defined in Section 399.12, for net surplus electricity purchased by
the electric utility shall belong to the electric utility. Any
renewable energy credit associated with electricity generated by the
eligible customer-generator that is utilized by the eligible
customer-generator shall remain the property of the eligible
customer-generator.
(B) Upon adoption of the net surplus electricity compensation rate
by the ratemaking authority, the net surplus electricity purchased
by the electric utility shall count toward the electric utility's
renewables portfolio standard annual procurement targets for the
purposes of paragraph (1) of subdivision (b) of Section 399.15, or
for a local publicly owned electric utility, the renewables portfolio
standard annual procurement targets established pursuant to Section
399.30.
(7) The electric utility shall provide every eligible residential
or small commercial customer-generator with net electricity
consumption and net surplus electricity generation information with
each regular bill. That information shall include the current
monetary balance owed the electric utility for net electricity
consumed, or the net surplus electricity generated, since the last
12-month period ended. Notwithstanding this subdivision, an electric
utility shall permit that customer to pay monthly for net energy
consumed.
(8) If an eligible residential or small commercial
customer-generator terminates the customer relationship with the
electric utility, the electric utility shall reconcile the eligible
customer-generator's consumption and production of electricity during
any part of a 12-month period following the last reconciliation,
according to the requirements set forth in this subdivision, except
that those requirements shall apply only to the months since the most
recent 12-month bill.
(9) If an electric service provider or electric utility providing
net energy metering to a residential or small commercial
customer-generator ceases providing that electric service to that
customer during any 12-month period, and the customer-generator
enters into a new net energy metering contract or tariff with a new
electric service provider or electric utility, the 12-month period,
with respect to that new electric service provider or electric
utility, shall commence on the date on which the new electric service
provider or electric utility first supplies electric service to the
customer-generator.
(i) Notwithstanding any other provisions of this section,
paragraphs (1), (2), and (3) shall apply to an eligible
customer-generator with a capacity of more than 10 kilowatts, but not
exceeding one megawatt, that receives electric service from a local
publicly owned electric utility that has elected to utilize a
co-energy metering program unless the local publicly owned electric
utility chooses to provide service for eligible customer-generators
with a capacity of more than 10 kilowatts in accordance with
subdivisions (g) and (h):
(1) The eligible customer-generator shall be required to utilize a
meter, or multiple meters, capable of separately measuring
electricity flow in both directions. 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 electricity in both directions,
the eligible customer-generator shall be 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 governmental agency or an electric utility to reduce
its costs for purchasing and installing a time-of-use meter.
(2) The consumption of electricity from the local publicly owned
electric utility shall result in a cost to the eligible
customer-generator to 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 a renewable electrical generation facility. The
generation of electricity provided to the local publicly owned
electric utility shall result in a credit to the eligible
customer-generator and shall be priced in accordance with the
generation component, established under the applicable structure to
which the customer would be assigned if the customer did not use a
renewable electrical generation facility.
(3) All costs and credits shall be shown on the eligible
customer-generator's bill for each billing period. In any months in
which the eligible customer-generator has been a net consumer of
electricity calculated on the basis of value determined pursuant to
paragraph (2), the customer-generator shall owe to the local publicly
owned electric utility the balance of electricity costs and credits
during that billing period. In any billing period in which the
eligible customer-generator has been a net producer of electricity
calculated on the basis of value determined pursuant to paragraph
(2), the local publicly owned electric utility shall owe to the
eligible customer-generator the balance of electricity costs and
credits during that billing period. Any net credit to the eligible
customer-generator of electricity costs may be carried forward to
subsequent billing periods, provided that a local publicly owned
electric utility may choose to carry the credit over as a
kilowatthour credit consistent with the provisions of any applicable
contract or tariff, including any differences attributable to the
time of generation of the electricity. At the end of each 12-month
period, the local publicly owned electric utility may reduce any net
credit due to the eligible
customer-generator to zero.
(j) A renewable electrical generation facility used by an eligible
customer-generator shall meet all applicable safety and performance
standards established by the National Electrical Code, the Institute
of Electrical and Electronics Engineers, and accredited testing
laboratories, including Underwriters Laboratories Incorporated and,
where applicable, rules of the commission regarding safety and
reliability. A customer-generator whose renewable electrical
generation facility meets those standards and rules shall not be
required to install additional controls, perform or pay for
additional tests, or purchase additional liability insurance.
(k) If the commission determines that there are cost or revenue
obligations for an electrical corporation that may not be recovered
from customer-generators acting pursuant to this section, those
obligations shall remain within the customer class from which any
shortfall occurred and shall not be shifted to any other customer
class. Net energy metering and co-energy metering customers shall not
be exempt from the public goods charges imposed pursuant to Article
7 (commencing with Section 381), Article 8 (commencing with Section
385), or Article 15 (commencing with Section 399) of Chapter 2.3 of
Part 1.
(l) A net energy metering, co-energy metering, or wind energy
co-metering customer shall reimburse the Department of Water
Resources for all charges that would otherwise be imposed on the
customer by the commission to recover bond-related costs pursuant to
an agreement between the commission and the Department of Water
Resources pursuant to Section 80110 of the Water Code, as well as the
costs of the department equal to the share of the department's
estimated net unavoidable power purchase contract costs attributable
to the customer. The commission shall incorporate the determination
into an existing proceeding before the commission, and shall ensure
that the charges are nonbypassable. Until the commission has made a
determination regarding the nonbypassable charges, net energy
metering, co-energy metering, and wind energy co-metering shall
continue under the same rules, procedures, terms, and conditions as
were applicable on December 31, 2002.
(m) In implementing the requirements of subdivisions (k) and (
l ), an eligible customer-generator shall not be
required to replace its existing meter except as set forth in
paragraph (1) of subdivision (c), nor shall the electric utility
require additional measurement of usage beyond that which is
necessary for customers in the same rate class as the eligible
customer-generator.
(n) It is the intent of the Legislature that the Treasurer
incorporate net energy metering, including net surplus electricity
compensation, co-energy metering, and wind energy co-metering
projects undertaken pursuant to this section as sustainable building
methods or distributive energy technologies for purposes of
evaluating low-income housing projects.
(o) Nothing in this section limits the authority of the
commission, an electric utility, or any local, state, or federal
agency to ensure the safe and reliable operation of a renewable
electrical generation facility.
SEC. 3. This act is an urgency statute
necessary for the immediate preservation of the public peace, health,
or safety within the meaning of Article IV of the Constitution and
shall go into immediate effect. The facts constituting the necessity
are:
In order to allow renewable energy development on military
installations in support of the state's energy policies and the
United States military's renewable energy and national security
goals, as well as to support military families and veterans hiring
programs, it is necessary that this act take effect immediately.