AB 2619: Net energy metering.
- Session Year: 2023-2024
- House: Assembly
- Latest Version Date: 2024-02-14
Current Status:
Failed
(2024-04-17: In committee: Set, first hearing. Hearing canceled at the request of author.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law requires every electric utility, defined to include electrical corporations, local publicly owned electric utilities, and electrical cooperatives, to develop a standard contract or tariff for net energy metering, as defined, for generation by a renewable electrical generation facility, as defined, and to make this contract or tariff available to eligible customer-generators, as defined, 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% of the electric utilitys aggregate customer peak demand.
Existing law requires the commission to have developed a 2nd standard contract or tariff for each large electrical corporation, as defined, to provide net energy metering to additional eligible customer-generators in the electrical corporations service territory and imposes no limitation on the number of new eligible customer-generators entitled to receive service pursuant to this 2nd standard contract or tariff. Existing law requires the commission, in developing the 2nd standard contract or tariff, to ensure that customer-sited renewable distributed generation continues to grow sustainably and to include specific alternatives designed for growth among residential customers in disadvantaged communities. Existing law authorizes the commission to revise the 2nd standard contract or tariff as appropriate. Pursuant to that authorization, the commission has instituted rulemakings and issued decisions relating to the 2nd standard contract or tariff.
This bill would require all eligible customer-generators of large electrical corporations receiving service under the 2nd standard contract or tariff to be subject to a specified version of the tariff developed by the commission in a specified rulemaking. The bill would require the commission to develop a new standard contract or tariff providing for net energy metering for eligible customer-generators of large electrical corporations, and would require every other electric utility to revise its standard contract or tariff providing for net energy metering. The bill would require every electric utility to make the standard contract or tariff available to all new eligible customer-generators beginning on January 1, 2027. By adding new duties on local publicly owned electric utilities, the bill would impose a state-mandated local program.
The bill would require the commission to design the standard contract or tariff for large electrical corporations to achieve an annual rate of installation of solar renewable electrical generation facilities that is sufficient to meet the states anticipated need for customer-side solar generation resources, as provided. The bill would require the commission to adjust the standard contract or tariff for large electrical corporations to ensure that the annual rate of installation of renewable electrical generation facilities in disadvantaged communities is reasonably comparable to the statewide annual rate.
Under existing law, a violation of any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because certain provisions of the bill would require an order, decision, rule, direction, demand, or requirement of the commission to implement, this bill would impose a state-mandated local program by creating new 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 specified reasons.
(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 Californias energy supply infrastructure, enhance the continued diversification of Californias 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 customers 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 customers own electrical requirements.
(B)(i)Notwithstanding subparagraph (A), eligible customer-generator includes the Department of Corrections and Rehabilitation using a renewable electrical generation technology, or a combination of renewable electrical generation technologies, with a total capacity of not more than eight megawatts, that is located on the departments 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 facilitys own electrical requirements. The amount of any wind generation exported to the electrical grid shall not exceed 1.35 megawatt at any time.
(ii)Notwithstanding paragraph (2) of subdivision (e), an electrical corporation shall be afforded a prudent but necessary time, as determined by the executive director of the commission, to study the impacts of a request for interconnection of a renewable generator with a capacity of greater than one megawatt under this subparagraph. If the study reveals the need for upgrades to the transmission or distribution system arising solely from the interconnection, the electrical corporation shall be afforded the time necessary to complete those upgrades before the interconnection and those costs shall be borne by the customer-generator. Upgrade projects shall comply with applicable state and federal requirements, including requirements of the Federal Energy Regulatory Commission.
(C)(i)For purposes of this subparagraph, a United States Armed Forces base or facility is an establishment under the jurisdiction of the United States Army, Navy, Air Force, Marine Corps, Space Force, or Coast Guard.
(ii)Notwithstanding subparagraph (A), a United States Armed Forces base or facility is an eligible customer-generator if the base or facility uses a renewable electrical generation facility, or a combination of those facilities, the renewable electrical generation facility is located on premises owned, leased, or rented by the United States Armed Forces base or facility, the renewable electrical generation facility is interconnected and operates in parallel with the electrical grid, the renewable electrical generation facility is intended primarily to offset part or all of the base or facilitys own electrical requirements, and the renewable electrical generation facility has a generating capacity that does not exceed the lesser of 12 megawatts or one megawatt greater than the minimum load of the base or facility over the prior 36 months. Unless prohibited by federal law, a renewable electrical generation facility shall not be eligible for net energy metering for privatized military housing pursuant to this subparagraph if the renewable electrical generation facility was procured using a sole source process. A renewable electrical generation facility procured using best value criteria, if otherwise eligible, may be used for net energy metering for privatized military housing pursuant to this subparagraph. For these purposes, best value criteria means a value determined by objective criteria and may include, but is not limited to, price, features, functions, and life-cycle costs.
(iii)A United States Armed Forces base or facility that is an eligible customer generator pursuant to this subparagraph shall not receive compensation for exported generation.
(iv)Notwithstanding paragraph (2) of subdivision (e), an electrical corporation shall be afforded a prudent but necessary time, as determined by the executive director of the commission but not less than 60 working days, to study the impacts of a request for interconnection of a renewable electrical generation facility with a capacity of greater than one megawatt pursuant to this subparagraph. If the study reveals the need for upgrades to the transmission or distribution system arising solely from the interconnection, the electrical corporation shall be afforded the time necessary to complete those upgrades before the interconnection and the costs of those upgrades shall be borne by the eligible customer-generator. Upgrade projects shall comply with applicable state and federal requirements, including requirements of the Federal Energy Regulatory Commission. For any a renewable generation facility that interconnects directly to the transmission grid or that requires transmission upgrades, the United States Armed Forces base or facility shall comply with all Federal Energy Regulatory Commission interconnection procedures and requirements.
(v)An electrical corporation shall make a tariff, as approved by the commission, available pursuant to this subparagraph by November 1, 2015.
(vi)This subparagraph shall not apply to a tariff made available pursuant to Section 2827.1.
(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 utilitys 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-generators 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 providers 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 corporations 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 corporations program limit, aggregate customer peak demand means the highest sum of the noncoincident peak demands of all of the large electrical corporations 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)(i)Beginning July 1, 2017, or upon reaching the net metering program limit of subparagraph (B), whichever is earlier, and until January 1, 2027, 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.
(ii)Beginning January 1, 2027, the obligation of an electric utility to provide service pursuant to a standard contract or tariff shall be pursuant to Section 2827.2 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. 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 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 customers 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-generators net kilowatthour consumption over a 12-month period, without regard to the eligible customer-generators 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-generators 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-generators 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-generators net kilowatthour consumption over that 12-month period. The compensation owed for the eligible residential or small commercial customer-generators 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 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-generators 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 utilitys 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-generators 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-generators 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-generators 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 customers total load, and a third meter, at a commercial rate, that provides service to 50 percent of the customers 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 utilitys 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 before 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 utilitys 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 used 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 utilitys 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-generators 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 provision 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 use 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 use 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 use 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-generators 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 and the costs of the department equal to the share of the departments 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 and the electric utility shall not 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.
SEC. 2.Section 2827.1 of the Public Utilities Code is amended to read:2827.1.(a)For purposes of this section, eligible customer-generator, large electrical corporation, and renewable electrical generation facility have the same meanings as defined in Section 2827.
(b)Notwithstanding any other law, the commission shall develop a standard contract or tariff, which may include net energy metering, for eligible customer-generators with a renewable electrical generation facility that is a customer of a large electrical corporation no later than December 31, 2015. The commission may develop the standard contract or tariff prior to before December 31, 2015, and may require a large electrical corporation that has reached the net energy metering program limit of subparagraph (B) of paragraph (4) of subdivision (c) of Section 2827 to offer the standard contract or tariff to eligible customer-generators. A large electrical corporation shall offer the standard contract or tariff to an eligible customer-generator beginning July 1, 2017, or prior to before that date if ordered to do so by the commission because it has reached the net energy metering program limit of subparagraph (B) of paragraph (4) of subdivision (c) of Section 2827. The commission may revise the standard contract or tariff as appropriate to achieve the objectives of this section. In developing the standard contract or tariff, the commission shall do all of the following:
(1)Ensure that the standard contract or tariff made available to eligible customer-generators ensures that customer-sited renewable distributed generation continues to grow sustainably and include specific alternatives designed for growth among residential customers in disadvantaged communities.
(2)Establish terms of service and billing rules for eligible customer-generators.
(3)Ensure that the standard contract or tariff made available to eligible customer-generators is based on the costs and benefits of the renewable electrical generation facility.
(4)Ensure that the total benefits of the standard contract or tariff to all customers and the electrical system are approximately equal to the total costs.
(5)Allow projects greater than one megawatt that do not have significant impact on the distribution grid to be built to the size of the onsite load if the projects with a capacity of more than one megawatt are subject to reasonable interconnection charges established pursuant to the commissions Electric Rule 21 and applicable state and federal requirements.
(6)Establish a transition period during which eligible customer-generators taking service under a net energy metering tariff or contract prior to before July 1, 2017, or until the electrical corporation reaches its net energy metering program limit pursuant to subparagraph (B) of paragraph (4) of subdivision (c) of Section 2827, whichever is earlier, shall be eligible to continue service under the previously applicable net energy metering tariff for a length of time to be determined by the commission by March 31, 2014. Any rules adopted by the commission shall consider a reasonable expected payback period based on the year the customer initially took service under the tariff or contract authorized by Section 2827.
(7)The commission shall determine which rates and tariffs are applicable to customer generators only during a rulemaking proceeding. Any fixed charges for residential customer generators that differ from the fixed charges allowed pursuant to subdivision (e) of Section 739.9 shall be authorized only in a rulemaking proceeding involving every large electrical corporation. The commission shall ensure customer generators are provided electric service at rates that are just and reasonable.
(c)(1)Beginning July 1, 2017, or when ordered to do so by the commission because the large electrical corporation has reached its capacity limitation of subparagraph (B) of paragraph (4) of subdivision (c) of Section 2827, and until January 1, 2027, all new eligible customer-generators shall be subject to the standard contract or tariff developed by the commission and any rules, terms, and rates developed pursuant to subdivision (b). There shall be no limitation on the amount of generating capacity or number of new eligible customer-generators entitled to receive service pursuant to the standard contract or tariff after July 1, 2017. An eligible customer-generator that has received service under a net energy metering standard contract or tariff pursuant to Section 2827 that is no longer eligible to receive service shall be eligible to receive service pursuant to the standard contract or tariff developed by the commission pursuant to this section.
(2)(A)All eligible customer-generators receiving service under the standard contract or tariff established pursuant to this section, including eligible customer-generators who entered into a contract to receive service pursuant to this section before January 1, 2025, shall be subject to the standard contract or tariff developed by the commission in Rulemaking 14-07-002, Order Instituting Rulemaking to Develop a Successor to Existing Net Energy Metering Tariffs Pursuant to Public Utilities Code Section 2827.1, and to Address Other Issues Related to Net Energy Metering.
(B)Beginning January 1, 2027, all new eligible customer-generators shall be subject to the standard contract or tariff developed pursuant to Section 2827.2.
SEC. 3.Section 2827.2 is added to the Public Utilities Code, to read:2827.2.(a)For purposes of this section, electric utility, eligible customer-generator, large electrical corporation, net energy metering, and renewable electrical generation facility have the same meanings as defined in Section 2827.
(b)(1)Notwithstanding any other law, the commission shall develop a new standard contract or tariff providing for net energy metering for eligible customer-generators with a renewable electrical generation facility that is a customer of a large electrical corporation.
(2)Every electric utility other than a large electrical corporation shall revise its standard contract or tariff providing for net energy metering, and shall make this standard contract or tariff available to eligible customer-generators.
(c)Every electric utility shall make the standard contract or tariff developed pursuant to subdivision (b) available to all new eligible customer-generators beginning on January 1, 2027.
(d)(1)The commission shall design the standard contract or tariff developed pursuant to paragraph (1) of subdivision (b) to ensure that the state can achieve an annual rate of installation of solar renewable electrical generation facilities that is sufficient to meet the anticipated need for customer-side solar generation resources described in the joint report issued pursuant to Section 454.53.
(2)The commission shall adjust the standard contract or tariff developed pursuant to paragraph (1) of subdivision (b) as necessary for eligible customer-generators located in disadvantaged communities to ensure that the annual rate of installation of renewable electrical generation facilities in these locations is reasonably comparable to the statewide annual rate of installation of renewable electrical generation facilities.
(e)(1)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-generators 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 eligible customer-generator 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.
(2)An eligible customer-generators renewable electrical generation facility, and electricity generated from the renewable electrical generation facility, is neither the property of the electric utility nor the property of the state.
(3)An eligible customer-generator may use electricity from its renewable electrical generation facility to serve onsite loads or over-the-fence transactions allowed under Sections 216 and 218.
SEC. 4.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because 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 XIIIB of the California Constitution.
|
Date
|
Status
|
|---|---|
| Apr 17, 2024 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Mar 4, 2024 | Referred to Com. on U. & E. |
| Feb 15, 2024 | From printer. May be heard in committee March 16. |
| Feb 14, 2024 | Read first time. To print. |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| 350 Bay Area Action | ** Support | |
| 350 Conejo | ** Support | |
| 350 Humboldt | ** Support | |
| 350 Sacramento | ** Against | |
| 350 South Bay LA | ** Support | |
| 350 Southland Legislative Alliance | ** Support | |
| 350 Ventura County Climate Hub | ** Support | |
| 50 Acterra Action for a Healthy Planet | ** Support | |
| Alameda County Democratic Party | ** Support | |
| Aztec Solar Inc. | ** Support | |
| Ballona Institute | ** Support | |
| Ban SUP | ** Support | |
| CalChamber | ** Against | |
| California Alliance for Community Energy | ** Support | |
| California Climate Voters | ** Support | |
| CALIFORNIA CONSTRUCTION & INDUSTRIAL MATERIALS ASSOCIATION | ** Support | |
| California Solar & Storage Association | ** Support | |
| California State Association Of Electrical Workers | ** Against | |
| California Wind Energy Association | ** Against | |
| Californians for Energy Choice | ** Support | |
| Center For Biological Diversity | ** Support | |
| Change Begins With Me | ** Support | |
| Clean Coalition | ** Support | |
| Clean Earth 4 Kids | ** Support | |
| cleanearth4kids.org | ** Support | |
| Climate Reality Project, Los Angeles Chapter | ** Support | |
| Climate Reality Project, San Fernando Valley | ** Support | |
| Cloverdale Indivisible | ** Support | |
| Coalition of California Utility Employees | ** Against | |
| Coastal Lands Action Network | ** Support | |
| Contra Costa Move On | ** Support | |
| Courageous Resistance of The Desert | ** Support | |
| Custom Power Solar | ** Support | |
| Defend Ballona Wetlands | ** Support | |
| East Valley Indivisibles | ** Support | |
| Edison International And Affiliates, Including Southern California Edison | ** Against | |
| Engie North America | ** Support | |
| Extinction Rebellion San Francisco Bay Area | ** Support | |
| Feminists In Action | ** Support | |
| First Response Solar | ** Support | |
| Foundation Wind Power | ** Support | |
| Freedom Forever | ** Support | |
| Glendale Environmental Coalition | ** Support | |
| GOODLEAP LLC | ** Support | |
| Hammond Climate Solutions | ** Support | |
| Hang Out Do Good | ** Support | |
| Indian Valley Indivisibe | ** Support | |
| Indivisible 36 | ** Support | |
| Indivisible 41 | ** Support | |
| Indivisible 43 | ** Support | |
| Indivisible Alta Pasadena | ** Support | |
| Indivisible Auburn Ca | ** Support | |
| Indivisible Beach Cities | ** Support | |
| Indivisible CA 45 | ** Support | |
| Indivisible Ca-25 Simi Valley Porter Ranch | ** Support | |
| Indivisible California Green Team | ** Support | |
| Indivisible Claremont / Inland Valley | ** Support | |
| Indivisible Colusa County | ** Support | |
| Indivisible East Bay | ** Support | |
| Indivisible El Dorado Hills | ** Support | |
| Indivisible Elmwood | ** Support | |
| Indivisible Euclid | ** Support | |
| Indivisible Manteca | ** Support | |
| Indivisible Marin | ** Support | |
| Indivisible Media City Burbank | ** Support | |
| Indivisible Mendocino | ** Support | |
| Indivisible Normal Heights | ** Support | |
| Indivisible OC 46 | ** Support | |
| Indivisible OC 48 | ** Support | |
| Indivisible Petaluma | ** Support | |
| Indivisible Resisters Walnut Creek | ** Support | |
| Indivisible Ross Valley | ** Support | |
| Indivisible Sacramento | ** Support | |
| Indivisible San Diego Central | ** Support | |
| Indivisible San Jose | ** Support | |
| Indivisible San Pedro | ** Support | |
| Indivisible Santa Barbara | ** Support | |
| Indivisible Santa Cruz County | ** Support | |
| Indivisible Sausalito | ** Support | |
| Indivisible Sebastopol | ** Support | |
| Indivisible Sf | ** Support | |
| Indivisible Sf Peninsula And Ca-14 | ** Support | |
| Indivisible Sonoma County | ** Support | |
| Indivisible South Bay LA | ** Support | |
| Indivisible Stanislaus | ** Support | |
| indivisible ventura | ** Support | |
| Indivisible West Side LA | ** Support | |
| Indivisible Yolo | ** Support | |
| Laguna Beach City Of | ** Support | |
| Livermore Indivisible | ** Support | |
| Local Clean Energy Alliance | ** Support | |
| Long Beach Alliance for Clean Energy | ** Support | |
| Long Beach Environmental Alliance | ** Support | |
| Los Angeles Indivisible | ** Support | |
| mill valley community action network | ** Support | |
| Orchard City Indivisible | ** Support | |
| our revolution, long beach | ** Support | |
| Pacific Gas And Electric Company | ** Against | |
| Pearlx Infrastructure LLC | ** Support | |
| Progressive Democrats of America, California | ** Support | |
| Progressive Democrats Of Santa Monica Mountains | ** Support | |
| Prologis Management, LLC | ** Support | |
| recolte energy | ** Support | |
| Rooted in Resistance | ** Support | |
| San Diego 350 | ** Support | |
| San Diego Gas and Electric Company | ** Against | |
| San Joaquin Valley Democratic Club | ** Support | |
| San Jose Community Energy Advocates | ** Support | |
| San Luis Obispo Mothers for Peace | ** Support | |
| Santa Cruz Climate Action Network | ** Support | |
| SFV Indivisible | ** Support | |
| Silicon Valley Youth Climate Action | ** Support | |
| Socal 350 | ** Support | |
| Solar Optimum | ** Support | |
| SOLAR TECHNOLOGIES | ** Support | |
| SolarCraft | ** Support | |
| Solaredge Technologies INC | ** Support | |
| Sonoma County Democratic Party | ** Support | |
| Sun Light & Power | ** Support | |
| Sunnova Energy Corporation | ** Support | |
| Sustainable Systems Research Foundation | ** Support | |
| The Climate Alliance of Santa Cruz County | ** Support | |
| The Climate Center | ** Support | |
| The Climate Reality Project, Silicon Valley | ** Against | |
| The Resistance Northridge-indivisible | ** Support | |
| The Utility Reform Network | ** Against | |
| Together We Will Contra Costa | ** Support | |
| Tww/indivisible - Los Gatos | ** Support | |
| Valley Women's Club of San Lorenzo Valley | ** Support | |
| Venice Resistance | ** Support | |
| Women's Alliance Los Angeles | ** Support | |
| Women'S Energy Matters | ** Support | |
| Yalla Indivisible | ** Support |
Date of Hearing: April 17, 2024
ASSEMBLY COMMITTEE ON UTILITIES AND ENERGY
Cottie Petrie-Norris, Chair
ABPCA Bill Id:AB 2619 (
Author:Connolly) – As Introduced Ver:February 14, 2024
SUBJECT: Net energy metering
SUMMARY: Requires the California Public Utilities Commission (CPUC) to develop, by 2027, a new solar tariff to replace the current net billing tariff (NBT). Requires that the new tariff be structured to ensure achievement of an annual rate of rooftop solar installation sufficient to meet anticipated need described in the Joint SB 100 Report. Reverts all NBT customer-generators to the prior net energy metering (NEM) tariff, until the new tariff is available in 2027. Finally, requires all publicly owned utilities, except the Los Angeles Department of Water and Power (LADWP), and electrical corporations to revise their NEM tariff, and explicitly prohibits the addition of charges specific to NEM customers from the tariff.
EXISTING LAW:
- Requires every electric utility, defined to include electrical corporations, local publicly owned electric utilities, and electrical cooperatives, to develop a standard contract or tariff for NEM, for generation by a renewable electrical generation facility, and to make this 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 five percent of the electric utility’s aggregate customer peak demand. (Public Utilities Code § 2827)
- Requires the CPUC, for a large electrical corporation, as defined, to have developed a second standard contract or tariff to provide NEM to additional eligible customer-generators in the electrical corporation’s service territory and imposes no limitation on the number of new eligible customer-generators entitled to receive service pursuant to this second standard contract or tariff. (Public Utilities Code § 2827.1)
- Requires the CPUC to ensure that the second standard contract or tariff made available to eligible customer-generators by large electrical corporations ensures that customer-sited renewable distributed generation continues to grow sustainably. Requires the CPUC, in developing this standard contract or tariff, to include specific alternatives designed for growth among residential customers in disadvantaged communities. (Public Utilities Code § 2827.1(b)(1))
- Establishes the policy that all of the state's retail electricity be supplied with a mix of RPS-eligible and zero-carbon resources by December 31, 2045, and 100% of electricity procured to serve all state agencies by December 31, 2035, for a total of 100% clean energy. Requires the California Public Utilities Commission (CPUC), in consultation with the California Energy Commission (CEC), California Air Resources Board (CARB), and all California balancing authorities, to issue a joint report to the Legislature by January 1, 2021, reviewing and evaluating the 100% clean energy policy. (Public Utilities Code § 454.53)
FISCAL EFFECT: Unknown. This bill is keyed fiscal and will be referred to the Committee on Appropriations for its review.
BACKGROUND:
Net Energy Metering (NEM) – California’s NEM program started in 1997, prompted by SB 656 (Alquist, Chapter 369, Statutes of 1995). It allows customers who install eligible renewable electrical generation facilities to serve onsite energy needs and receive credits on their electric bills for surplus energy sent to the electric grid. Most customer-sited, grid-connected solar in California is interconnected through NEM tariffs. Enrollment in the first NEM program, now colloquially known as “NEM 1.0”, continued and was phased out between 2016 and 2017.
The Legislature called for the revision of NEM 1.0 per AB 327 (Perea, Chapter 611, Statutes of 2013) primarily to address the cost associated with the full retail credits available under the tariff. The CPUC responded with what is commonly referred to as NEM 2.0 in 2016. Customers taking service under that tariff – NEM 2.0 – pay the cost to connect to the grid; take service on a “time-of-use” rate plan; and pay “non-bypassable” charges that are not offset with surplus energy credits. On August 27, 2020, the CPUC initiated Rulemaking 20-08-020 to develop a successor to the NEM 2.0 tariff, as part of the requirement in statute and a commitment in a previous decision to review the current tariff to address the shift in costs to nonparticipating customers. The CPUC released a proposed decision in December 2021.[1] However, the final decision was delayed while the CPUC considered party comments and evaluated alternatives. On December 15, 2022 the CPUC adopted a new decision establishing the NBT, or colloquially NEM 3.0.[2]
The NBT applied to customers who submit an interconnection application on or after April 15, 2023. The NBT made a number of changes from NEM 2.0, replacing export compensation tied to the retail rate with the avoided cost calculator, and financially incentivizing customers to install battery storage paired with their solar. Moreover, the NBT decision did not affect existing rooftop solar customers; those legacy NEM 1.0 and NEM 2.0 customers remain on their tariff. The NBT decision also did not include any charges unique to solar customers (despite early draft decisions doing that). The result of these changes led to a drop in the compensation rooftop solar customers will receive, increasing the payback period to 9 years.[3]
According to the CPUC, as of 2021, the NEM program had enabled 1.3 million customer installations, equating to roughly 10 gigawatts (GWs) of customer-sited renewable generation, almost all of which is rooftop solar. Now, NEM systems reduce the demand on the electric grid by as much as 25% during midday when the sun is shining.[4]
California’s Clean Energy Goals – AB 1279 (Muratsuchi, Chapter 337, Statutes of 2022) codified into law the state’s goals to achieve net zero greenhouse gas (GHG) emissions and a reduction of statewide anthropogenic GHGs to at least 85% below 1990 levels by 2045. This parallels the state’s goals for 100% new zero-emission vehicle sales by 2035 and 100% clean electricity by 2045, as established by Governor Newsom’s Executive Order N-79-20 and SB 100 (De León, Chapter 312, Statutes of 2018), respectively. Actualizing these goals will require a significant buildout of clean energy infrastructure. In February 2024, the CPUC adopted its preferred portfolio of generation resources needed to meet our decarbonization goals in 2035.[5] The decision adopted over 56 GW of new resources.[6] For context, in 2018 California’s total electric system generation capacity was ~80 GW.[7]
On a longer horizon, the Joint Agency SB 100 Report looks at planning 20+ years out to determine how best to implement the 100% clean electricity by 2045 policy.[8] The first SB 100 report was finalized in March 2021, and included analyses of many pathways to achieve the state’s 2045 clean energy goal.[9] While showing that achievement of our 100% clean electricity policy is technically achievable, many barriers and expenses must be overcome. For example, to meet our goals, the SB 100 report showed California will need to roughly triple its current electricity power capacity by 2045. This equates to roughly 6 GW of new solar, wind, and battery storage resources needed annually for the next two decades; an unprecedented acceleration and scale.[10] The SB 100 Report will be updated every four years, with future work focused on critical topics, such as land use. [11]
COMMENTS:
- Author’s Statement. According to the author, “California will need to deploy unprecedented amounts of new clean energy generation to achieve 100% clean energy by 2045. We need to make sure that we continue to deploy enough customer-side solar to stay on track to reach our clean energy goals. Net energy metering (NEM) has been the strongest incentive for homeowners to install solar and begin exporting clean energy to the grid. However, the NEM 3.0 decision by the California Public Utilities Commission (CPUC) dramatically reduced the incentives for new solar customers, causing a steep decline in solar installations, driving widespread job losses in the solar industry, and leading many Californians to decide that, under NEM 3.0, solar doesn’t pencil out in their family budgets. This bill requires the CPUC to go back to the drawing board and design a new NEM tariff that will ensure that California stays on track to deploy the amount of customer solar we need to reach 100% clean energy by 2045.”
- Conflicting Realities. This bill reverts all NBT customer-generators to the NEM 2.0 tariff, until the new tariff specified in this bill is available in 2027. The bill proposes this reversion despite the CPUC having spent three years developing the record and adopting a successor to NEM 2.0, in an effort to address program inequities while still compensating customer-generators under a reasonable payback period.[12] The author and supporters of this measure justify this reversion by citing the impact NBT has had on the solar industry, including declining solar sales and thousands of lost jobs,[13] compounded with high interest rates making financing of solar more challenging. As noted previously, California needs to roughly triple its electricity power capacity by 2045, and will be relying on all available resources to meet its ambitious goals. The supporters of this bill view the return to NEM 2.0, and the subsequent adoption of the successor tariff as prescribed in this bill, as the minimum needed to keep pace with our clean energy goals.
However, investor-owned utility (IOU) data provided to the committee paints a different picture of the rooftop solar industry in the state. As shown in Figure 1, data provided by Southern California Edison show a significant rush to interconnect solar systems beginning around December 2022 (when the CPUC issued its final NEM 2.0 decision), and then rapidly declining around summer 2023 (after the application period for NEM 2.0 ended; all subsequent customer-generator interconnections were on the NBT). Data provided by Pacific Gas & Electric show a similar trend. These data seem to indicate the recent decline in sales may have been simply a return to the mean after a spike in NEM applications.
It is unclear to the committee just how dire the situation is for California rooftop solar under the NBT. The often quoted “80% decline in sales[14]” may be a matter of perspective: 80% decline compared to the high of February – April 2023; or an 80% decline from the historical average? The utilities have stated that 2024 shows a pace of solar adoption similar to 2019-2020 levels, prior to the CPUC kicking off the NEM 3.0 debate. Even so, the California Solar & Storage Alliance, writing in support, notes the historic pace of rooftop solar adoption was falling short of the state’s goal even prior to the rush, providing motivation for the proposed changes to NEM policy as proposed under this measure.
Figure 1 - SCE monthly solar volume (number of applications vs. month); July 2017-Jan 1, 2024.
- DER in SB 100. This bill proposes the creation of a new customer-generator tariff, the detail and impact of which is unclear. The bill merely states the new tariff must ensure the state can achieve an annual rate of installation of solar that is sufficient to meet the anticipated need described in the Joint SB 100 report. As noted above, the Joint SB 100 report is a once-in-four-year planning document outlining how best to implement the 100% clean electricity by 2045 policy.[15] The first iteration of the SB 100 report came out in March 2021; the subsequent edition is expected in the spring of next year.
As part of the 2021 SB 100 report’s analysis of the resource mix needed by 2045, the model was provided a 39 GW input to account for customer-side solar. This 39 GWs is an assumption based off of CEC projections for likely rooftop solar adoption. It’s a fixed value. When the model was run to optimize for reliability and least cost, “no additional customer solar was selected.”[16] The CEC went on to note “factors outside system costs, such as customer preference and resilience benefits, may affect customer-side resource adoption.”
It is therefore unclear what is the SB 100 report’s “anticipated need for customer-side solar” called for under this bill to establish the new tariff. Presumably, the author intends the 39 GW input to serve as this “anticipated need.” However, as written, the “anticipated need” could be interpreted as 0 GW, as the SB 100 report does not identify a need for rooftop solar as an output.
The SB 100 report is also not a static document. It is updated every 4 years. That update involves a reassessment of its inputs and assumptions. In February, the CEC held a workshop on inputs to inform the 2025 report.[17] That workshop discussed a high DER scenario as a model sensitivity. Given this, it is unclear which value for rooftop solar’s “anticipated need” this bill is referencing: the value in the 2021 SB 100 Report; the value to be used in the 2025 update; or the value to be used in the 2025 “DER Focus” scenario.
Given this uncertainty, it is unclear the impact of the new tariff called for under this measure. However, if 39 GW is the assumed target, that would roughly equate to just under 2 GW of rooftop solar installation needed per year. The CPUC reports residential rooftop solar installations were roughly 956 megawatts (MWs) per year in 2021. So the 39 GW target would require a doubling of current installation rates. The subsequent tariff called for under this bill would likely need to be more lucrative than NBT, or even NEM 2.0, in order to sustain that growth.
- The Cost Shift. The controversy associated with NEM is that the customers with NEM (most of whom have roof-top solar) are subsidized by customers without NEM (i.e. “non-participants”). Extensive study has occurred for several years describing and categorizing the cost shift. According to a recent report by the Public Advocates Office (PAO), the annual cost of NEM on non-participants has approximately doubled since 2021, resulting in an estimated $6.5 billion for the program in 2024 alone.[18] For reference, PAO notes the cost of NEM was approximately $3.4 billion in 2021.
The CPUC in its annual utility cost report has noted “three critical and overlapping policy fronts must be actively managed to address the risk of high electric rates.” These include ballooning wildfire expenses, the need to ensure low-income customers benefit from electrification, and the need to mitigate cost shifts from DER incentives.[19]
Supporters of this bill, however, note the “so-called ‘cost-shift’ is a utility fabrication.” They raise issue with the use of retail energy rates in the calculations used by PAO and others to quantify the cost shift. Instead, they point to “cost of service” as a better metric. A 2021 analysis commissioned by the CPUC examined NEM cost shifts through the cost of service metric. [20] The study notes, “Comparing estimates of bills and cost of service prior to the installation of NEM-eligible technologies to the post-installation values, however, will provide evidence of whether the installation of NEM-eligible technologies is causing cost shifts.”[21] The study found that “residential NEM customers’ aggregate utility bills were substantially less than their cost of service,”[22] resulting in non-participating ratepayers seeing increased rates.[23]
- Need for Amendments. While DER, and rooftop solar in particular, has been recognized as playing an important role in California’s clean energy future, how best to value these resources – and at what level – has remained a topic of ongoing debate. This bill seeks to tip the scale back toward compensation structures for DER that the CPUC only recently changed. The CPUC’s changes were an effort to address growing affordability concerns, which are exacerbated by rooftop solar policies; a claim many in support of this bill dispute. While many of the details of the tariff proposed under this measure are unclear, the CPUC was able to provide an initial analysis of the ratepayer impacts of implementing the bill. They find roughly $21-47 billion in ratepayer costs over a five year period would result if this measure were adopted; this is roughly $11-25 billion more than the cost shift from NBT.
Given the desire to balance DER development with affordability, and recognizing the benefits DER can provide to local communities, the environment, and the grid, it may be beneficial to permit an evaluation of NEM tariffs, as put forward by this measure. However, given the potential tens of billions of dollars in costs associated with this proposal, it may be prudent to assign any associated costs of implementing the new tariff to an alternative funding source outside of electric rates. As such, the committee recommends striking the provisions requiring customers to revert to NEM 2.0 until 2027, and instead retain the tariff development proposed by Section 2827.2 of this bill. The committee recommends tying any costs to compensate customer-generators to be paid outside of electric rates, namely the Greenhouse Gas Reduction Fund, such that non-participating ratepayers experience no cost-shift associated with implementing this measure.
- Related Legislation.
AB 2256 (Friedman) requires the California Public Utilities Commission (CPUC) to revise, as appropriate, the net energy metering (NEM) tariff, to include – among other considerations – ensuring the tariff is based on the cost of service analysis and the total benefits, including nonenergy benefits, of the NEM facility. Explicitly states the CPUC is not required to ensure nonparticipating ratepayer indifference in implementing this bill. Status: set for hearing in this committee on April 17, 2024
- Prior Legislation.
AB 1139 (Lorena Gonzalez) directed the CPUC to adopt a new NEM standard contract or tariff, which the bill defines as the "replacement tariff," by August 1, 2022, and requires an electrical IOU to offer the replacement tariff to an eligible customer-generator by December 31, 2023. If the CPUC fails to act, the CPUC is required to adopt a new tariff under terms prescribed by this bill. Status: Died – Assembly Inactive file.
AB 327 (Perea) instituted several rate reforms and required the CPUC to adopt a successor NEM tariff no later than December 31, 2015. Status: Chapter 611, Statutes of 2013
REGISTERED SUPPORT / OPPOSITION:
Support
350 Bay Area Action
350 Conejo
350 Humboldt
350 South Bay LA
350 Southland Legislative Alliance
350 Ventura County Climate Hub
50 Acterra Action for A Healthy Planet
Alameda County Democratic Party
Aztec Solar INC.
Ballona Institute
Ban Sup (single Use Plastic)
California Alliance for Community Energy
California Climate Voters
California Construction & Industrial Materials Association
California Solar & Storage Association
Californians for Energy Choice
Center for Biological Diversity
Change Begins With Me
Clean Coaliton
Clean Earth 4 Kids
Cleanearth4kids.org
Climate Reality Project, Los Angeles Chapter
Climate Reality Project, San Fernando Valley
Cloverdale Indivisible
Coastal Lands Action Network (CLAN)
Contra Costa Moveon
Courageous Resistance of The Desert
Custom Power Solar
Defend Ballona Wetlands
East Valley Indivisibles
Engie North America
Extinction Rebellion San Francisco Bay Area
Feminists in Action (formerly Indivisible CA 34 Womens)
First Response Solar
Freedom Forever
Glendale Environmental Coalition
Goodleap LLC
Hammond Climate Solutions
Hang Out Do Good
Indian Valley Indivisibe
Indivisible 36
Indivisible 41
Indivisible 43
Indivisible Alta Pasadena
Indivisible Auburn CA
Indivisible Beach Cities
Indivisible CA 45
Indivisible Ca-25 Simi Valley Porter Ranch
Indivisible California Green Team
Indivisible Claremont / Inland Valley
Indivisible Colusa County
Indivisible East Bay
Indivisible El Dorado Hills
Indivisible Elmwood
Indivisible Euclid
Indivisible Manteca
Indivisible Marin
Indivisible Media City Burbank
Indivisible Mendocino
Indivisible Normal Heights
Indivisible Oc 46
Indivisible Oc 48
Indivisible Petaluma
Indivisible Resisters Walnut Creek
Indivisible Ross Valley
Indivisible Sacramento
Indivisible San Diego Centra
Indivisible San Jose
Indivisible San Pedro
Indivisible Santa Barbara
Indivisible Santa Cruz County
Indivisible Sausalito
Indivisible Sebastopol
Indivisible Sf
Indivisible Sf Peninsula and Ca-14
Indivisible Sonoma County
Indivisible South Bay LA
Indivisible Stanislaus
Indivisible Ventura
Indivisible West Side LA
Indivisible Yolo
Laguna Beach; City of
Livermore Indivisible
Local Clean Energy Alliance
Long Beach Alliance for Clean Energy
Long Beach Environmental Alliance
Los Angeles Indivisible
Mill Valley Community Action Network
Orchard City Indivisible
Our Revolution Long Beach
Pearlx Infrastructure, LLC
Progressive Democrats of America, California
Progressive Democrats of Santa Monica Mountains
Prologis Management, LLC
Recolte Energy
Rooted in Resistance
San Diego 350
San Joaquin Valley Democratic Club
San Jose Community Energy Advocates
San Luis Obispo Mothers for Peace
Santa Cruz Climate Action Network
Sfv Indivisible
Silicon Valley Youth Climate Action
Socal 350
Solar Optimum
Solar Technologies
Solarcraft
Solaredge Technologies INC
Sonoma County Democratic Party
Sun Light & Power
Sunnova Energy Corporation
Sustainable Systems Research Foundation
The Climate Alliance of Santa Cruz County
The Climate Center
The Resistance Northridge-indivisible
Together We Will Contra Costa
Tww/indivisible - Los Gatos
Valley Women's Club of San Lorenzo Valley
Venice Resistance
Womeen's Energy Matters
Women's Alliance Los Angeles
Yalla Indivisible
Support If Amended
Foundation Wind Power
Oppose
350 Sacramento
Calchamber
California State Association of Electrical Workers
California Wind Energy Association
Coalition of California Utility Employees
Edison International and Affiliates, Including Southern California Edison
Pacific Gas and Electric Company
San Diego Gas and Electric Company
The Climate Reality Project: Silicon Valley
The Utility Reform Network (TURN)
Analysis Prepared by: Laura Shybut / U. & E. / (916) 319-2083
See Decision Revising Net Energy Metering and Subtariffs, CPUC, December 13, 2021, at: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M430/K903/430903088.PDF ↑
D. 22-12-056 ↑
CPUC, “Fact Sheet: Modernizing NEM to Meet California’s Reliability and Climate Goals;” November 10, 2022. https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/net-energy-metering-nem/nemrevisit/final-fact-sheet-nem.pdf ↑
CPUC Fact Sheet; “Modernizing California’s Net Energy Metering Program to Meet our Clean Energy Goals.” December 13, 2021. ↑
D. 24-02-047; CPUC; Decision Adopting 2023 Preferred System Plan and Related Matters, and Addressing Two Petitions for Modification; R. 20-05-003; February 20, 2024. https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M525/K918/525918033.PDF ↑
Table 4, pg. 68; D. 24-02-047, Ibid. ↑
CEC 2018 Total System Electric Generation website: 277,764 GWh/8760h=32GW ↑
CEC, CPUC, & CARB; 2021 SB 100 Joint Agency Report: Achieving 100 Percent Clean Electricity in California: An Initial Assessment;” March 2021. ↑
Pg. 12, 2021 SB 100 Report. ↑
Pg. 11, 2021 SB 100 Joint Agency Report Summary, “Achieving 100% Clean Electricity in California” ↑
Pg. 1, 2021 SB 100 Report. ↑
National average payback period ~8.7 years; “What’s the Average Solar Panel Payback Period? (2024)” Architectural Digest; updated February 6, 2024. For panels that have ~25 year lifespan, a payback of <10 years provides at least 15 years of savings. ↑
Julie Cart; “What’s happened since California cut home solar payments? Demand has plunged 80%” CalMatters; January 26, 2024. ↑
Ivan Penn, “California Has Dealt a Blow to Renewable Energy, Some Businesses Say;” NewYork Times; Jan. 14, 2024. ↑
CEC, CPUC, & CARB; 2021 SB 100 Joint Agency Report: Achieving 100 Percent Clean Electricity in California: An Initial Assessment;” March 2021. ↑
Pg. 104, SB 100 Report; Ibid. ↑
file:///C:/Users/shybutla/Downloads/TN254504_20240216T082207_Presentation%20for%20SB100%20Inputs%20and%20Assumptions%20Workshop.pdf ↑
CalPAO, “Rooftop solar incentive to cost customers without solar an estimated $6.5 billion in 2024.” February 28, 2024. ↑
Pg. 17, CPUC, 2022 Senate Bill 695 Report, May 2022. https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/office-of-governmental-affairs-division/reports/2022/2022-sb-695-report.pdf ↑
Verdant, NEM 2.0 Lookback Study; July 21, 2021. https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/net-energy-metering-nem/nem-evaluation/nem-2_lookback_study.pdf ↑
Pg. 95, Verdant, NEM 2.0 Lookback Study; July 21, 2021. https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/net-energy-metering-nem/nem-evaluation/nem-2_lookback_study.pdf ↑
Ibid. ↑
Pg. 1, Ibid. ↑
Bill Author
Bill Co-Author(s):