California-2021-AB1139-Amended

Amended IN Assembly April 08, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 1139

Introduced by Assembly Member Lorena Gonzalez
(Principal coauthor: Assembly Member Quirk)

February 18, 2021

An act to amend Section 739.1 of, to repeal Sections 2827.1 and 2827.7 of, and to repeal and add Section 2827 of, the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL'S DIGEST

AB 1139, as amended, Lorena Gonzalez. Energy: California Alternate Rates for Energy program: net energy metering: electrical corporation distributed eligible renewable energy resource allocations: interconnections.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations and gas corporations. Existing law requires the commission to continue a program of assistance to low-income electric and gas customers with annual household incomes that are no greater than 200% of the federal poverty guideline levels, referred to as the California Alternate Rates for Energy (CARE) ~~program.~~ program, and requires that the cost not be borne solely by any single class of customer. Existing law requires the commission, in establishing CARE discounts for an electrical corporation with 100,000 or more customer accounts in California, to ensure that the average effective CARE discount shall not be less than 30% or more than 35% of the revenues that would have been produced for the same billed usage by non-CARE customers.

This bill would require the commission, in establishing CARE discounts for an electrical corporation with 100,000 or more customer accounts in California, to ensure that the average effective CARE discount shall not be less than 40% or more than 45% of the revenues that would have been produced for the same billed usage by non-CARE customers. The bill would require that 25% of the cost of the CARE program be paid for exclusively by the residential class of customers.

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 utility’s aggregate customer peak demand. For a large electrical corporation, as defined, existing law required the commission to develop a new standard contract or tariff to provide net energy metering to additional eligible customer-generators in its service territory and there is no limitation on the number of new eligible customer-generators entitled to receive service pursuant to this new standard contract or tariff developed by the commission for a large electrical corporation.

This bill would repeal those provisions and require all electrical corporations to submit, by advice letter, a standard net energy metering contract or tariff that would take effect beginning on July 1, 2022, and apply to all customer self-generators and replace all prior standard contracts and tariffs, except as specified. The bill would require that the new net energy metering contract or tariff credit the customer self-generator for any electricity exported by the customer self-generator to the distribution system or transmission system at a rate equal to the hourly wholesale market rate applicable at the time of the export and the location of the customer self-generator and that the customer self-generator shall be charged for electricity imported from the distribution system or transmission system at a rate equal to the otherwise applicable tariff for customers in the same class of service who are not customer self-generators. For customer self-generators taking energy supply service from a community choice aggregator, the bill would authorize the aggregator to determine to provide credits and charges in different amounts. The bill would require that a customer self-generator be charged a monthly grid access charge equal to the costs attributable to the customer’s gross electricity usage billed at the otherwise applicable rates for all elements of retail service except for generation, minus the amount the customer paid for nongeneration elements of retail service paid as part of the rate for imported electricity.

Beginning July 1, 2022, this bill would require the commission to annually allocate up to the following amounts, divided proportionately among the electrical corporations based on the number of residential customers of each electrical corporation, for the following purposes: (1) $300,000,000 for residential customer self-generators who both participate in the CARE program and live in multifamily housing or in underserved communities to discount the initial purchase cost for the renewable electrical generation facility, (2) $300,000,000 to eliminate any rate premium required and provide an additional 10% discount for residential customers who participate in the CARE program to participate in a 100% solar option under the Green Tariff Shared Renewables Program, and (3) $500,000,000 for facilities serving public buildings to discount the initial purchase cost for the renewable electrical generation facility. The bill would require the commission to annually allocate up to 5% of the funds to marketing and customer education designed to maximize participation in those programs. The bill would authorize the electrical corporations to collect the projected annual amounts used to implement these programs as a nonbypassable charge on distribution.

This bill would require that an electrical corporation ensure that requests for establishment of a customer self-generator interconnection 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 customer self-generator service, and if an electrical corporation is unable to process a request within the allowed time, the bill would require the electrical corporation to notify the customer self-generator and the commission of the reason for its inability to process the request and the expected completion date.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because certain provisions of the ~~act~~ 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 a specified reason.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES

The people of the State of California do enact as follows:

SECTION 1.

This act shall be known, and may be cited, as the Solar Equity and Ratepayer Relief Act.

SEC. 2.

The Legislature finds and declares all of the following:

(a) When the net energy metering program was initially enacted in 1995 (Chapter 369 of the Statutes of 1995), it was reasonable for most electrical service customers to subsidize the small minority of customers who participated in the rooftop solar program. This cost shift was just and reasonable because the fledgling rooftop photovoltaic solar energy industry needed a public subsidy to become established and to create a big enough market to drive down costs.
(b) Those goals have been accomplished. There are now one million net energy metering customers with solar energy systems with a generating capacity of nearly 10,000 megawatts. The cost of solar energy systems has dropped more than 70 percent.
(c) While the cost of solar energy systems has dropped, the subsidy to the rooftop solar industry has grown to $3,000,000,000 in 2021. This means that in 2021 customers without rooftop solar are each spending more than $200 per customer every year to subsidize those with rooftop solar energy systems. The subsidy is projected to grow to more than $4,500,000,000 by 2030, or more than $300 per customer per year.
(d) The subsidy is not cost effective for ratepayers. According to the January 21, 2021, Net-Energy Metering 2.0 Lookback Study prepared at the request of the Public Utilities Commission, the benefit-cost ratio of the current net energy metering program is only 0.37, meaning that the costs to ratepayers not participating in the program are almost triple the benefits.
(e) This cost shift is unreasonably increasing electrical service rates for customers without rooftop solar energy systems.
(f) This cost shift is economically unjust. The median income of those with rooftop solar energy systems using net energy metering is much higher than the median income of those who do not participate in the program.
(g) According to a study published in the journal Nature Sustainability, even after accounting for household income, rooftop solar has been disproportionately installed in majority White communities compared to communities of color.
(h) Section 451 of the Public Utilities Code requires that all charges by public utilities to customers be just and reasonable. Unjust or unreasonable charges are unlawful.
(i) To remedy the growing unjust and unreasonable charges, the Legislature enacted Assembly Bill 327 (Chapter 611 of the Statutes of 2013). Certain provisions of that act required the commission to revise the net energy metering program so that nonparticipating customers do not subsidize rooftop solar energy system customers. The commission has not done so, resulting in a continuation of this unsustainable and unjust cost shift.
(j) It is time to reduce rates for electrical service for all customers and particularly for lower income customers.
(k) It is time to make California’s net energy metering programs fairer to lower income customers. Customers who have been burdened by high rates and shut out of solar energy system programs deserve lower rates and more opportunities to participate in the solar energy system revolution.
(l) This act replaces the current net energy metering structure for residential customers with a fairer net energy metering structure.
(m) Rooftop solar customers will continue to see economic benefits from their solar energy systems in two ways. Rooftop solar customers will be paid the wholesale market rate for electricity they export to the electrical grid and will continue to self-supply their own usage, rather than buying electricity from their electrical utility or community choice aggregator. This will allow rooftop solar customers to continue to have lower electrical service bills than nonparticipating customers.
(n) To the extent they obtain their electricity over the electrical grid, rooftop solar customers will also pay for their usage of the transmission and distribution grid they rely on just like customers that do not participate in net energy metering.
(o) California must continue to expand solar generation to advance the state’s environmental and climate change goals for the electrical industry. This act will enable California to increase solar generation by targeting subsidies to lower income customers, reduce rates for all customers, reduce rates even further for lower income customers, and enable lower income Californians to participate in solar energy system generation.
(p) Targeted solar energy system subsidies will create tens of thousands of good jobs.

SEC. 2.SEC. 3.

Section 739.1 of the Public Utilities Code is amended to read:

739.1.

(a) The commission shall continue a program of assistance to low-income electric and gas customers with annual household incomes that are no greater than 200 percent of the federal poverty guideline ~~levels, the cost of which~~ levels. Except as provided in paragraph (4) of subdivision (c), the cost of the program shall not be borne solely by any single class of customer. For one-person households, program eligibility shall be based on two-person household guideline levels. The program shall be referred to as the California Alternate Rates for Energy or CARE program. The commission shall ensure that the level of discount for low-income electric and gas customers correctly reflects the level of need.

(b) The commission shall establish rates for CARE program participants, subject to both of the following:

(1) That the commission ensure that low-income ratepayers are not jeopardized or overburdened by monthly energy expenditures, pursuant to subdivision (b) of Section 382.

(2) That the level of the discount for low-income electricity and gas ratepayers correctly reflects the level of need as determined by the needs assessment conducted pursuant to subdivision (d) of Section 382.

(c) In establishing CARE discounts for an electrical corporation with 100,000 or more customer accounts in California, the commission shall ensure all of the following:

(1) The average effective CARE discount shall not be less than 40 percent or more than 45 percent of the revenues that would have been produced for the same billed usage by non-CARE customers. The average effective discount determined by the commission shall reflect any charges not paid by CARE customers, including payments for the California Solar Initiative, payments for the self-generation incentive program made pursuant to Section 379.6, payment of the separate rate component to fund the CARE program made pursuant to subdivision (a) of Section 381, payments made to the Department of Water Resources pursuant to Division 27 (commencing with Section 80000) of the Water Code, and any discount in a fixed charge. The average effective CARE discount shall be calculated as a weighted average of the CARE discounts provided to individual customers.

(2) If an electrical corporation provides an average effective CARE discount in excess of the maximum percentage specified in paragraph (1), the electrical corporation shall not reduce, on an annual basis, the average effective CARE discount by more than a reasonable percentage decrease below the discount in effect on January 1, 2013, or that the electrical corporation had been authorized to place in effect by that date.

(3) The entire discount shall be provided in the form of a reduction in the overall bill for the eligible CARE customer.

(4) Twenty-five percent of the CARE program shall be paid for exclusively by the residential class of customers.

(d) The commission shall work with electrical and gas corporations to establish penetration goals. The commission shall authorize recovery of all administrative costs associated with the implementation of the CARE program that the commission determines to be reasonable, through a balancing account mechanism. Administrative costs shall include, but are not limited to, outreach, marketing, regulatory compliance, certification and verification, billing, measurement and evaluation, and capital improvements and upgrades to communications and processing equipment.

(e) The commission shall examine methods to improve CARE enrollment and participation. This examination shall include, but need not be limited to, comparing information from CARE and the Universal Lifeline Telephone Service (ULTS) to determine the most effective means of utilizing that information to increase CARE enrollment, automatic enrollment of ULTS customers who are eligible for the CARE program, customer privacy issues, and alternative mechanisms for outreach to potential enrollees. The commission shall ensure that a customer consents prior to enrollment. The commission shall consult with interested parties, including ULTS providers, to develop the best methods of informing ULTS customers about other available low-income programs, as well as the best mechanism for telephone providers to recover reasonable costs incurred pursuant to this section.

(f) (1) The commission shall improve the CARE application process by cooperating with other entities and representatives of California government, including the California Health and Human Services Agency and the Secretary of California Health and Human Services, to ensure that all gas and electric customers eligible for public assistance programs in California that reside within the service territory of an electrical corporation or gas corporation, are enrolled in the CARE program. The commission may determine that gas and electric customers are categorically eligible for CARE assistance if they are enrolled in other public assistance programs with substantially the same income eligibility requirements as the CARE program. To the extent practicable, the commission shall develop a CARE application process using the existing ULTS application process as a model. The commission shall work with electrical and gas corporations and the Low-Income Oversight Board established in Section 382.1 to meet the low-income objectives in this section.

(2) The commission shall ensure that an electrical corporation or gas corporation with a commission-approved program to provide discounts based upon economic need in addition to the CARE program, including a Family Electric Rate Assistance program, utilize a single application form, to enable an applicant to alternatively apply for any assistance program for which the applicant may be eligible. It is the intent of the Legislature to allow applicants under one program, that may not be eligible under that program, but that may be eligible under an alternative assistance program based upon economic need, to complete a single application for any commission-approved assistance program offered by the public utility.

(g) It is the intent of the Legislature that the commission ensure CARE program participants receive affordable electric and gas service that does not impose an unfair economic burden on those participants.

(h) The commission’s program of assistance to low-income electric and gas customers shall, as soon as practicable, include nonprofit group living facilities specified by the commission, if the commission finds that the residents in these facilities substantially meet the commission’s low-income eligibility requirements and there is a feasible process for certifying that the assistance shall be used for the direct benefit, such as improved quality of care or improved food service, of the low-income residents in the facilities. The commission shall authorize utilities to offer discounts to eligible facilities licensed or permitted by appropriate state or local agencies, and to facilities, including women’s shelters, hospices, and homeless shelters, that may not have a license or permit but provide other proof satisfactory to the utility that they are eligible to participate in the program.

(i) (1) In addition to existing assessments of eligibility, an electrical corporation may require proof of income eligibility for those CARE program participants whose electricity usage, in any monthly or other billing period, exceeds 400 percent of baseline usage. The authority of an electrical corporation to require proof of income eligibility is not limited by the means by which the CARE program participant enrolled in the program, including if the participant was automatically enrolled in the CARE program because of participation in a governmental assistance program. If a CARE program participant’s electricity usage exceeds 400 percent of baseline usage, the electrical corporation may require the CARE program participant to participate in the Energy Savings Assistance Program (ESAP), which includes a residential energy assessment, in order to provide the CARE program participant with information and assistance in reducing their energy usage. Continued participation in the CARE program may be conditioned upon the CARE program participant agreeing to participate in ESAP within 45 days of notice being given by the electrical corporation pursuant to this paragraph. The electrical corporation may require the CARE program participant to notify the utility of whether the residence is rented, and if so, a means by which to contact the landlord, and the electrical corporation may share any evaluation and recommendation relative to the residential structure that is made as part of an energy assessment, with the landlord of the CARE program participant. Requirements imposed pursuant to this paragraph shall be consistent with procedures adopted by the commission.

(2) If a CARE program participant’s electricity usage exceeds 600 percent of baseline usage, the electrical corporation shall require the CARE program participant to participate in ESAP, which includes a residential energy assessment, in order to provide the CARE program participant with information and assistance in reducing their energy usage. Continued participation in the CARE program shall be conditioned upon the CARE program participant agreeing to participate in ESAP within 45 days of a notice made by the electrical corporation pursuant to this paragraph. The electrical corporation may require the CARE program participant to notify the utility of whether the residence is rented, and if so, a means by which to contact the landlord, and the electrical corporation may share any evaluation and recommendation relative to the residential structure that is made as part of an energy assessment, with the landlord of the CARE program participant. Following the completion of the energy assessment, if the CARE program participant’s electricity usage continues to exceed 600 percent of baseline usage, the electrical corporation may remove the CARE program participant from the program if the removal is consistent with procedures adopted by the commission. Nothing in this paragraph shall prevent a CARE program participant with electricity usage exceeding 600 percent of baseline usage from participating in an appeals process with the electrical corporation to determine whether the participant’s usage levels are legitimate.

(3) A CARE program participant in a rental residence shall not be removed from the program in situations where the landlord is nonresponsive when contacted by the electrical corporation or does not provide for ESAP participation.

SEC. 3.SEC. 4.

Section 2827 of the Public Utilities Code is repealed.

SEC. 4.SEC. 5.

Section 2827 is added to the Public Utilities Code, to read:

2827.

(a) As used in this section, the following terms have the following meanings:

(1) “Customer self-generator” means a residential, commercial, industrial, or agricultural customer of an electrical corporation, who uses a renewable electrical generation facility, or a combination of those facilities, that is located behind the customer’s meter, and is interconnected and operates in parallel with the electrical grid, and whose capacity is sized to primarily offset part or all of the customer’s own electrical requirements, but which shall not exceed one megawatt unless, as of December 31, 2021, it was eligible for, and receiving service pursuant to, a net energy metering contract or tariff approved by the commission pursuant to ~~this section or Section 2727.1.~~ former Section 2827 or former Section 2827.1, as those sections existed on that date.

(2) “Gross electricity usage” means that total usage of a customer self-generator that is served by either imports from the grid or production from an onsite renewable electrical generation facility.

(3) “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.

(b) The commission shall require all electrical corporations to submit by advice letter a standard net energy metering contract or tariff that shall take effect beginning on July 1, 2022, and apply to all customer self-generators. The standard contract or tariff shall replace all prior standard contracts and tariffs and shall provide for all of the following:

(1) The customer self-generator shall be credited for any electricity exported by the customer self-generator to the distribution system or transmission system, as applicable, at a rate equal to the hourly wholesale market rate applicable at the time of the export and the location of the customer self-generator. These credits shall be applied to the customer self-generator’s other bill obligations.

(2) The customer self-generator shall be charged for electricity imported by the customer self-generator from the distribution system or transmission system, as applicable, at a rate equal to the otherwise applicable tariff for customers in the same class of service who are not customer self-generators.

(3) Notwithstanding paragraphs (1) and (2), for customer self-generators taking energy supply service from a community choice aggregator, the aggregator may determine to provide credits and charges in different amounts.

(4) Notwithstanding the limitations of subdivision (f) of Section 739.9, the customer self-generator shall be charged a monthly grid access charge equal to the costs attributable to the customer’s gross electricity usage billed at the otherwise applicable rates for all elements of retail service except for generation, including all nonbypassable charges, such as those authorized by Sections 366.1, 366.2, and 380, minus the amount the customer paid for nongeneration elements of retail service paid as part of the rate for imported electricity.

(5) Notwithstanding paragraphs (1) through (4), inclusive, any customer self-generator that previously began service under a net energy metering contract or tariff prior to January 1, 2022, may continue to take service under that contract or tariff as follows

(A) If the original net energy metering interconnection was prior to January 1, 2014, a customer self-generator may continue to take service under that contract or tariff until July 1, 2022.

(B) If the original net energy metering interconnection was after January 1, 2014, and prior to January 1, 2017, a customer self-generator may continue to take service under that contract or tariff until July 1, 2023.

(C) If the original net energy metering interconnection was after January 1, 2017, and prior to January 1, 2022, a customer self-generator may continue to take service under that contract or tariff until July 1, 2024.

(6) Notwithstanding paragraphs (1) to (4), inclusive, a nonresidential customer self-generator that pays a demand charge may take service under the tariff for customer self-generators that existed as of December 31, 2021. The commission may revise the tariff, if the revised tariff requires the customer self-generator to pay a demand charge or grid benefit charge that ensures that there are no costs shifted from that customer to any other customers or customer classes.

(A) Annually allocate up to three hundred million dollars ($300,000,000) statewide, divided proportionately among the electrical corporations based on the number of residential customers of each electrical corporation, which shall be used for residential customer self-generators who both participate in the California Alternative Rates for Energy program implemented pursuant to Section 739.1 and live in multifamily housing or in underserved communities, as defined in Section 1601, to discount the initial purchase cost for the renewable electrical generation facility. The discount to the initial purchase cost shall be designed to maximize the number of participating customers. ~~The commission may utilize additional revenue sources in addition to the amount provided in this subparagraph.~~ The renewable electrical generation facilities serving these customer self-generators shall be newly constructed, behind the customer meter, and located on or near their housing.

(B) Annually allocate up to three hundred million dollars ($300,000,000) statewide, divided proportionately among the electrical corporations based on the number of residential customers of each electrical corporation, which shall be used to eliminate any rate premium required and provide an additional 10-percent discount for residential customers who participate in the California Alternative Rates for Energy program implemented pursuant to Section 739.1 to participate in a 100-percent solar option under the Green Tariff Shared Renewables Program provided in Section 2833. The premium elimination and 10-percent discount shall be in addition to the discount provided in Section 739.1. All renewable electric generating facilities supplying electricity pursuant to this subparagraph shall be newly constructed to supply electricity for this program and shall meet the product content category requirements of paragraph (1) of subdivision (b) of Section 399.16 in addition to the requirement of subdivision (e) of Section 2833. The facility size and program size limits in subdivisions (b) and (d) of Section 2833 shall not apply to participation in the Green Tariff Shared Renewables Program under this subparagraph. Funds shall be allocated pursuant to this subparagraph notwithstanding subdivision (q) of Section 2833.

(C) Annually allocate up to five hundred million dollars ($500,000,000) statewide, divided proportionately among the electrical corporations based on the number of residential customers of each electrical corporation, which shall be used for facilities serving public buildings to discount the initial purchase cost for the renewable electrical generation facility. The discount to the initial purchase cost shall be designed to maximize the number of facilities served. ~~The commission may utilize additional revenue sources in addition to the amount provided in this subparagraph.~~ The renewable electrical generation facilities serving these customer self-generators shall be newly constructed, behind the customer meter, and located on or near the public building. For purposes of this subparagraph, a public building is any building owned by the state or a political subdivision of the state, as defined in subdivision (a) of Section 8698 of the Government Code.

(D) Annually allocate up to 5 percent of the funds described in this paragraph to marketing and customer education designed to maximize participation in these programs.

(E) Authorize the electrical corporations to collect the projected annual amounts used to implement this paragraph as a nonbypassable charge on distribution. Any revenue authorized and collected but not used for this purpose shall be trued up and credited back to distribution customers of the electrical corporation.

(2) Notwithstanding paragraph (1) of subdivision (a) of Section 1720 of the Labor Code, construction of any renewable electrical generation facility to supply power for the programs described in paragraph (1) shall constitute a public works project for purposes of Article 2 (commencing with Section 1770) of Chapter 1 of Part 7 of Division 2 of the Labor Code.

(d) (1) Every electrical corporation shall ensure that requests for establishment of a customer self-generator interconnection 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 customer self-generator service, including a signed interconnection agreement from a customer self-generator and the electric inspection clearance from the governmental authority having jurisdiction.

(2) Every electrical corporation shall ensure that requests for an interconnection agreement from a customer self-generator are processed in a time period not to exceed 30 working days from the date it receives a completed application form from the customer self-generator for an interconnection agreement.

(3) If an electrical corporation is unable to process a request within the allowed time pursuant to paragraph (1) or (2), it shall notify the customer self-generator and the commission of the reason for its inability to process the request and the expected completion date.

(e) (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 electrical corporation that provides distribution service for the eligible customer-generator is not obligated to provide the standard contract or tariff provided in this section 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 a customer self-generator, the electrical corporation 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 the standard contract or tariff provided in this section in an amount set by the commission.

(f) A renewable electrical generation facility used by a customer self-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.

(g) A customer self-generator shall reimburse the Department of Water Resources for all charges that would otherwise be imposed on the customer’s gross electricity usage 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 or Division 28 (commencing with Section 80500) 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 ensure that the charges are nonbypassable.

(h) The commission may authorize distributed resources located on the customer side of the meter to participate in any wholesale energy market transactions permitted by federal or state law. Distributed resources may be aggregated for this purpose. Notwithstanding Section 769, the commission shall not authorize or permit any distributed resources located on the customer side of the meter to be used to defer investment by an electrical corporation in the distribution system. For purposes of this subdivision, “distributed resources” has the same meaning as in subdivision (a) of Section 769.

SEC. 5.SEC. 6.

Section 2827.1 of the Public Utilities Code is repealed.

SEC. 6.SEC. 7.

Section 2827.7 of the Public Utilities Code is repealed.

SEC. 7.SEC. 8.

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.