Bill Text: CA SB594 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Energy: net energy metering.

Spectrum: Moderate Partisan Bill (Democrat 7-2)

Status: (Passed) 2012-09-27 - Chaptered by Secretary of State. Chapter 610, Statutes of 2012. [SB594 Detail]

Download: California-2011-SB594-Amended.html

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BILL NUMBER: SB 594	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 15, 2012
	AMENDED IN ASSEMBLY  MARCH 1, 2012
	AMENDED IN SENATE  MAY 25, 2011
	AMENDED IN SENATE  MAY 11, 2011
	AMENDED IN SENATE  APRIL 28, 2011

INTRODUCED BY    Senator   Wolk 
 Senators   Wolk   and Blakeslee 
   (  Coauthor:   Senator  
Blakeslee   Coauthors:   Senators  
Leno   and Rubio  )
   (  Coauthor:   Assembly Member 
 Williams   Coauthors:   Assembly
Members   Gordon,   Hill,  Valadao, 
 Williams,   and Yamada  )

                        FEBRUARY 17, 2011

   An act to amend  Section   Sections 
2827  and 2827.10  of the Public Utilities Code, relating to
energy.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 594, as amended, Wolk. Energy: net energy metering.
   Existing law relative to private energy producers requires every
electric utility, as defined, to make available to an eligible
customer-generator, as defined, a standard contract or tariff for net
energy metering 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. Existing law requires the electric utility,
upon an affirmative election by the eligible customer-generator to
receive service pursuant to this contract or tariff, to either: (1)
provide net surplus electricity compensation for any net surplus
electricity generated in the 12-month period, or (2) allow the
eligible customer-generator to apply the net surplus electricity as a
credit for kilowatthours subsequently supplied by the electric
utility to the surplus customer-generator.
   This bill would authorize an eligible customer-generator with
multiple meters to elect to aggregate the electrical load of the
meters located on the property where the generation facility is
located and on all property adjacent or contiguous to the property on
which the generation facility is located, if those properties are
solely owned  , leased, or rented  by the eligible
customer-generator, as provided. This bill would prohibit an eligible
customer-generator that chooses to aggregate from receiving net
surplus electricity compensation and require the electric utility to
retain kilowatthours, as prescribed. 
   Existing law establishes a net energy metering program that is
available to an eligible fuel cell customer-generator, as defined.
Existing law requires that the net metering calculation be made by
measuring the difference between the electricity supplied to the
eligible fuel cell customer-generator and the electricity generated
by the eligible fuel cell customer-generator and fed back to the
electrical grid over a 12-month period. Existing law requires that an
electrical corporation determine if the eligible fuel cell
customer-generator was a net consumer or producer of electricity
during the 12-month period. For purposes of making this
determination, existing law requires that the electrical corporation
aggregate the electrical load of the eligible fuel cell
customer-generator under the same ownership.  
   This bill would require that in making the determination whether
the eligible fuel cell customer-generator is a net consumer or
producer of electricity during the 12-month period, the electrical
corporation aggregate the electrical load of the meters located on
the property where the eligible fuel cell electrical generation
facility is located and on all property adjacent or contiguous to the
property on which the facility is located, if those properties are
solely owned, leased, or rented by the eligible fuel cell
customer-generator.  
   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 the bill would require an expansion of the above-described
net energy metering programs and would require an order or decision
of the commission to implement, a violation of these provisions would
impose a state-mandated local program by expanding the definition of
a crime.  
   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.
State-mandated local program:  no   yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 2827 of the Public Utilities Code is amended to
read:
   2827.  (a) The Legislature finds and declares that a program to
provide net energy metering combined with net surplus compensation,
co-energy metering, and wind energy co-metering for eligible
customer-generators is one way to encourage substantial private
investment in renewable energy resources, stimulate in-state economic
growth, reduce demand for electricity during peak consumption
periods, help stabilize California's energy supply infrastructure,
enhance the continued diversification of California's energy resource
mix, reduce interconnection and administrative costs for electricity
suppliers, and encourage conservation and efficiency.
   (b) As used in this section, the following terms have the
following meanings:
   (1) "Co-energy metering" means a program that is the same in all
other respects as a net energy metering program, except that the
local publicly owned electric utility has elected to apply a
generation-to-generation energy and time-of-use credit formula as
provided in subdivision (i).
   (2) "Electrical cooperative" means an electrical cooperative as
defined in Section 2776.
   (3) "Electric utility" means an electrical corporation, a local
publicly owned electric utility, or an electrical cooperative, or any
other entity, except an electric service provider, that offers
electrical service. This section shall not apply to a local publicly
owned electric utility that serves more than 750,000 customers and
that also conveys water to its customers.
   (4) "Eligible customer-generator" means a residential customer,
small commercial customer as defined in subdivision (h) of Section
331, or commercial, industrial, or agricultural customer of an
electric utility, who uses a renewable electrical generation
facility, or a combination of those facilities, with a total capacity
of not more than one megawatt, that is located on the customer's
owned, leased, or rented premises, and is interconnected and operates
in parallel with the  electric   electrical
 grid, and is intended primarily to offset part or all of the
customer's own electrical requirements.
   (5) "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.
   (6) "Net energy metering" means measuring the difference between
the electricity supplied through the  electric  
electrical  grid and the electricity generated by an eligible
customer-generator and fed back to the  electric 
 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) "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 electric grid
and the electricity generated by an eligible customer-generator and
fed back to the  electric   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) Every electric utility shall develop a standard contract
or tariff providing for net energy metering, and shall make this
standard contract or tariff available to eligible
customer-generators, upon request, on a first-come-first-served basis
until the time that the total rated generating capacity used by
eligible customer-generators exceeds 5 percent of the electric
utility's aggregate customer peak demand. Net energy metering shall
be accomplished using a single meter capable of registering the flow
of electricity in two directions. An additional meter or meters to
monitor the flow of electricity in each direction may be installed
with the consent of the eligible customer-generator, at the expense
of the electric utility, and the additional metering shall be used
only to provide the information necessary to accurately bill or
credit the eligible customer-generator pursuant to subdivision (h),
or to collect generating system performance information for research
purposes relative to a renewable electrical generation facility. If
the existing electrical meter of an eligible customer-generator is
not capable of measuring the flow of electricity in two directions,
the eligible customer-generator shall be responsible for all expenses
involved in purchasing and installing a meter that is able to
measure electricity flow in two directions. If an additional meter or
meters are installed, the net energy metering calculation shall
yield a result identical to that of a single meter. An eligible
customer-generator that is receiving service other than through the
standard contract or tariff may elect to receive service through the
standard contract or tariff until the electric utility reaches the
generation limit set forth in this paragraph. Once the generation
limit is reached, only eligible customer-generators that had
previously elected to receive service pursuant to the standard
contract or tariff have a right to continue to receive service
pursuant to the standard contract or tariff. Eligibility for net
energy metering does not limit an eligible customer-generator's
eligibility for any other rebate, incentive, or credit provided by
the electric utility, or pursuant to any governmental program,
including rebates and incentives provided pursuant to the California
Solar Initiative.
   (2) An electrical corporation shall include a provision in the net
energy metering contract or tariff requiring that any customer with
an existing electrical generating facility and meter who enters into
a new net energy metering contract shall provide an inspection report
to the electrical corporation, unless the electrical generating
facility and meter have been installed or inspected within the
previous three years. The inspection report shall be prepared by a
California licensed contractor who is not the owner or operator of
the facility and meter. A California licensed electrician shall
perform the inspection of the electrical portion of the facility and
meter.
   (3) (A) On an annual basis, every electric utility shall make
available to the ratemaking authority information on the total rated
generating capacity used by eligible customer-generators that are
customers of that provider in the provider's service area and the net
surplus electricity purchased by the electric utility pursuant to
this section.
   (B) An electric service provider operating pursuant to Section 394
shall make available to the ratemaking authority the information
required by this paragraph for each eligible customer-generator that
is their customer for each service area of an electrical corporation,
local publicly owned electrical utility, or electrical cooperative,
in which the eligible customer-generator has net energy metering.
   (C) The ratemaking authority shall develop a process for making
the information required by this paragraph available to electric
utilities, and for using that information to determine when, pursuant
to paragraphs (1) and (4), an electric utility is not obligated to
provide net energy metering to additional eligible
customer-generators in its service area.
   (4) An electric utility 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.
   (d) Every electric utility shall make all necessary forms and
contracts for net energy metering and net surplus electricity
compensation service available for download from the Internet.
   (e) (1) Every electric utility shall ensure that requests for
establishment of net energy metering and net surplus electricity
compensation are processed in a time period not exceeding that for
similarly situated customers requesting new electric service, but not
to exceed 30 working days from the date it receives a completed
application form for net energy metering service or net surplus
electricity compensation, including a signed interconnection
agreement from an eligible customer-generator and the electric
inspection clearance from the governmental authority having
jurisdiction.
   (2) Every electric utility shall ensure that requests for an
interconnection agreement from an eligible customer-generator are
processed in a time period not to exceed 30 working days from the
date it receives a completed application form from the eligible
customer-generator for an interconnection agreement.
   (3) If an electric utility is unable to process a request within
the allowable timeframe pursuant to paragraph (1) or (2), it shall
notify the eligible customer-generator and the ratemaking authority
of the reason for its inability to process the request and the
expected completion date.
   (f) (1) If a customer participates in direct transactions pursuant
to paragraph (1) of subdivision (b) of Section 365, or Section
365.1, with an electric service provider that does not provide
distribution service for the direct transactions, the electric
utility that provides distribution service for the eligible
customer-generator is not obligated to provide net energy metering or
net surplus electricity compensation to the customer.
   (2) If a customer participates in direct transactions pursuant to
paragraph (1) of subdivision (b) of Section 365 with an electric
service provider, and the customer is an eligible customer-generator,
the electric utility that provides distribution service for the
direct transactions may recover from the customer's electric service
provider the incremental costs of metering and billing service
related to net energy metering and net surplus electricity
compensation in an amount set by the ratemaking authority.
   (g) Except for the time-variant kilowatthour pricing portion of
any tariff adopted by the commission pursuant to paragraph (4) of
subdivision (a) of Section 2851, each net energy metering contract or
tariff shall be identical, with respect to rate structure, all
retail rate components, and any monthly charges, to the contract or
tariff to which the same customer would be assigned if the customer
did not use a renewable electrical generation facility, except that
eligible customer-generators shall not be assessed standby charges on
the electrical generating capacity or the kilowatthour production of
a renewable electrical generation facility. The charges for all
retail rate components for eligible customer-generators shall be
based exclusively on the customer-generator's net kilowatthour
consumption over a 12-month period, without regard to the eligible
customer-generator's choice as to from whom it purchases electricity
that is not self-generated. Any new or additional demand charge,
standby charge, customer charge, minimum monthly charge,
interconnection charge, or any other charge that would increase an
eligible customer-generator's costs beyond those of other customers
who are not eligible customer-generators in the rate class to which
the eligible customer-generator would otherwise be assigned if the
customer did not own, lease, rent, or otherwise operate a renewable
electrical generation facility is contrary to the intent of this
section, and shall not form a part of net energy metering contracts
or tariffs.
   (h) For eligible customer-generators, the net energy metering
calculation shall be made by measuring the difference between the
electricity supplied to the eligible customer-generator and the
electricity generated by the eligible customer-generator and fed back
to the  electric   electrical  grid over a
12-month period. The following rules shall apply to the annualized
net metering calculation:
   (1) The eligible residential or small commercial
customer-generator, at the end of each 12-month period following the
date of final interconnection of the eligible customer-generator's
system with an electric utility, and at each anniversary date
thereafter  ,  shall  ,  be billed for
electricity used during that 12-month period. The electric utility
shall determine if the eligible residential or small commercial
customer-generator was a net consumer or a net surplus
customer-generator during that period.
   (2) At the end of each 12-month period, where the electricity
supplied during the period by the electric utility exceeds the
electricity generated by the eligible residential or small commercial
customer-generator during that same period, the eligible residential
or small commercial customer-generator is a net electricity consumer
and the electric utility shall be owed compensation for the eligible
customer-generator's net kilowatthour consumption over that 12-month
period. The compensation owed for the eligible residential or small
commercial customer-generator's consumption shall be calculated as
follows:
   (A) For all eligible customer-generators taking service under
contracts or tariffs employing "baseline" and "over baseline" rates,
any net monthly consumption of electricity shall be calculated
according to the terms of the contract or tariff to which the same
customer would be assigned to, or be eligible for, if the customer
was not an eligible customer-generator. If those same
customer-generators are net generators over a billing period, the net
kilowatthours generated shall be valued at the same price per
kilowatthour as the electric utility would charge for the baseline
quantity of electricity during that billing period, and if the number
of kilowatthours generated exceeds the baseline quantity, the excess
shall be valued at the same price per kilowatthour as the electric
utility would charge for electricity over the baseline quantity
during that billing period.
   (B) For all eligible customer-generators taking service under
contracts or tariffs employing time-of-use rates, any net monthly
consumption of electricity shall be calculated according to the terms
of the contract or tariff to which the same customer would be
assigned, or be eligible for, if the customer was not an eligible
customer-generator. When those same customer-generators are net
generators during any discrete time-of-use period, the net
kilowatthours produced shall be valued at the same price per
kilowatthour as the electric utility would charge for retail
kilowatthour sales during that same time-of-use period. If the
eligible customer-generator's time-of-use electrical meter is unable
to measure the flow of electricity in two directions, paragraph (1)
of subdivision (c) shall apply.
   (C) For all eligible residential and small commercial
customer-generators and for each billing period, the net balance of
moneys owed to the electric utility for net consumption of
electricity or credits owed to the eligible customer-generator for
net generation of electricity shall be carried forward as a monetary
value until the end of each 12-month period. For all eligible
commercial, industrial, and agricultural customer-generators, the net
balance of moneys owed shall be paid in accordance with the electric
utility's normal billing cycle, except that if the eligible
commercial, industrial, or agricultural customer-generator is a net
electricity producer over a normal billing cycle, any excess
kilowatthours generated during the billing cycle shall be carried
over to the following billing period as a monetary value, calculated
according to the procedures set forth in this section, and appear as
a credit on the eligible commercial, industrial, or agricultural
customer-generator's account, until the end of the annual period when
paragraph (3) shall apply.
   (3) At the end of each 12-month period, where the electricity
generated by the eligible customer-generator during the 12-month
period exceeds the electricity supplied by the electric utility
during that same period, the eligible customer-generator is a net
surplus customer-generator and the electric utility, upon an
affirmative election by the net surplus customer-generator, shall
either (A) provide net surplus electricity compensation for any net
surplus electricity generated during the prior 12-month period, or
(B) allow the net surplus customer-generator to apply the net surplus
electricity as a credit for kilowatthours subsequently supplied by
the electric utility to the net surplus customer-generator. For an
eligible customer-generator that does not affirmatively elect to
receive service pursuant to net surplus electricity compensation, the
electric utility shall retain any excess kilowatthours generated
during the prior 12-month period. The eligible customer-generator not
affirmatively electing to receive service pursuant to net surplus
electricity compensation shall not be owed any compensation for the
net surplus electricity unless the electric utility enters into a
purchase agreement with the eligible customer-generator for those
excess kilowatthours. Every electric utility shall provide notice to
eligible customer-generators that they are eligible to receive net
surplus electricity compensation for net surplus electricity, that
they must elect to receive net surplus electricity compensation, and
that the 12-month period commences when the electric utility receives
the eligible customer-generator's election. For an electric utility
that is an electrical corporation or electrical cooperative, the
commission may adopt requirements for providing notice and the manner
by which eligible customer-generators may elect to receive net
surplus electricity compensation.

   (4) (A) An eligible customer-generator with multiple meters may
elect to aggregate the electrical load of the meters located on the
property where the generation facility is located and on all property
adjacent or contiguous to the property on which the generation
facility is located, if those properties are solely owned  ,
leased, or rented  by the eligible customer-generator. If the
eligible customer-generator elects to aggregate the electric load
pursuant to this paragraph, the electric utility shall use the
aggregated load for the purpose of determining whether an eligible
customer-generator is a net consumer or a net surplus
customer-generator during a 12-month period.
   (B) If an eligible customer-generator chooses to aggregate
pursuant to subparagraph (A), the eligible customer-generator shall
be permanently ineligible to receive net surplus electricity
compensation, and the electric utility shall retain any kilowatthours
in excess of the eligible customer-generator's aggregated electrical
load generated during the 12-month period.
   (5) (A) The ratemaking authority shall establish a net surplus
electricity compensation valuation to compensate the net surplus
customer-generator for the value of net surplus electricity generated
by the net surplus customer-generator. The commission shall
establish the valuation in a ratemaking proceeding. The ratemaking
authority for a local publicly owned electric utility shall establish
the valuation in a public proceeding. The net surplus electricity
compensation valuation shall be established so as to provide the net
surplus customer-generator just and reasonable compensation for the
value of net surplus electricity, while leaving other ratepayers
unaffected. The ratemaking authority shall determine whether the
compensation will include, where appropriate justification exists,
either or both of the following components:
   (i) The value of the electricity itself.
   (ii) The value of the renewable attributes of the electricity.
   (B) In establishing the rate pursuant to subparagraph (A), the
ratemaking authority shall ensure that the rate does not result in a
shifting of costs between eligible customer-generators and other
bundled service customers.
   (6) (A) Upon adoption of the net surplus electricity compensation
rate by the ratemaking authority, any renewable energy credit, as
defined in Section 399.12, for net surplus electricity purchased by
the electric utility shall belong to the electric utility. Any
renewable energy credit associated with electricity generated by the
eligible customer-generator that is utilized by the eligible
customer-generator shall remain the property of the eligible
customer-generator.
   (B) Upon adoption of the net surplus electricity compensation rate
by the ratemaking authority, the net surplus electricity purchased
by the electric utility shall count toward the electric utility's
renewables portfolio standard annual procurement targets for the
purposes of paragraph (1) of subdivision (b) of Section 399.15, or
for a local publicly owned electric utility, the renewables portfolio
standard annual procurement targets established pursuant to Section
387.
   (7) The electric utility shall provide every eligible residential
or small commercial customer-generator with net electricity
consumption and net surplus electricity generation information with
each regular bill. That information shall include the current
monetary balance owed the electric utility for net electricity
consumed, or the net surplus electricity generated, since the last
12-month period ended. Notwithstanding this subdivision, an electric
utility shall permit that customer to pay monthly for net energy
consumed.
   (8) If an eligible residential or small commercial
customer-generator terminates the customer relationship with the
electric utility, the electric utility shall reconcile the eligible
customer-generator's consumption and production of electricity during
any part of a 12-month period following the last reconciliation,
according to the requirements set forth in this subdivision, except
that those requirements shall apply only to the months since the most
recent 12-month bill.
   (9) If an electric service provider or electric utility providing
net energy metering to a residential or small commercial
customer-generator ceases providing that electric service to that
customer during any 12-month period, and the customer-generator
enters into a new net energy metering contract or tariff with a new
electric service provider or electric utility, the 12-month period,
with respect to that new electric service provider or electric
utility, shall commence on the date on which the new electric service
provider or electric utility first supplies electric service to the
customer-generator.
   (i) Notwithstanding any other provisions of this section,
paragraphs (1), (2), and (3) shall apply to an eligible
customer-generator with a capacity of more than 10 kilowatts, but not
exceeding one megawatt, that receives electric service from a local
publicly owned electric utility that has elected to utilize a
co-energy metering program unless the local publicly owned electric
utility chooses to provide service for eligible customer-generators
with a capacity of more than 10 kilowatts in accordance with
subdivisions (g) and (h):
   (1) The eligible customer-generator shall be required to utilize a
meter, or multiple meters, capable of separately measuring
electricity flow in both directions. All meters shall provide
time-of-use measurements of electricity flow, and the customer shall
take service on a time-of-use rate schedule. If the existing meter of
the eligible customer-generator is not a time-of-use meter or is not
capable of measuring total flow of electricity in both directions,
the eligible customer-generator shall be responsible for all expenses
involved in purchasing and installing a meter that is both
time-of-use and able to measure total electricity flow in both
directions. This subdivision shall not restrict the ability of an
eligible customer-generator to utilize any economic incentives
provided by a governmental agency or an electric utility to reduce
its costs for purchasing and installing a time-of-use meter.
   (2) The consumption of electricity from the local publicly owned
electric utility shall result in a cost to the eligible
customer-generator to be priced in accordance with the standard rate
charged to the eligible customer-generator in accordance with the
rate structure to which the customer would be assigned if the
customer did not use a renewable electrical generation facility. The
generation of electricity provided to the local publicly owned
electric utility shall result in a credit to the eligible
customer-generator and shall be priced in accordance with the
generation component, established under the applicable structure to
which the customer would be assigned if the customer did not use a
renewable electrical generation facility.
   (3) All costs and credits shall be shown on the eligible
customer-generator's bill for each billing period. In any months in
which the eligible customer-generator has been a net consumer of
electricity calculated on the basis of value determined pursuant to
paragraph (2), the customer-generator shall owe to the local publicly
owned electric utility the balance of electricity costs and credits
during that billing period. In any billing period in which the
eligible customer-generator has been a net producer of electricity
calculated on the basis of value determined pursuant to paragraph
(2), the local publicly owned electric utility shall owe to the
eligible customer-generator the balance of electricity costs and
credits during that billing period. Any net credit to the eligible
customer-generator of electricity costs may be carried
                               forward to subsequent billing periods,
provided that a local publicly owned electric utility may choose to
carry the credit over as a kilowatthour credit consistent with the
provisions of any applicable contract or tariff, including any
differences attributable to the time of generation of the
electricity. At the end of each 12-month period, the local publicly
owned electric utility may reduce any net credit due to the eligible
customer-generator to zero.
   (j) A renewable electrical generation facility used by an eligible
customer-generator shall meet all applicable safety and performance
standards established by the National Electrical Code, the Institute
of Electrical and Electronics Engineers, and accredited testing
laboratories, including Underwriters Laboratories Incorporated and,
where applicable, rules of the commission regarding safety and
reliability. A customer-generator whose renewable electrical
generation facility meets those standards and rules shall not be
required to install additional controls, perform or pay for
additional tests, or purchase additional liability insurance.
   (k) If the commission determines that there are cost or revenue
obligations for an electrical corporation that may not be recovered
from customer-generators acting pursuant to this section, those
obligations shall remain within the customer class from which any
shortfall occurred and shall not be shifted to any other customer
class. Net energy metering and co-energy metering customers shall not
be exempt from the public goods charges imposed pursuant to Article
7 (commencing with Section 381), Article 8 (commencing with Section
385), or Article 15 (commencing with Section 399) of Chapter 2.3 of
Part 1.
   (l) A net energy metering, co-energy metering, or wind energy
co-metering customer shall reimburse the Department of Water
Resources for all charges that would otherwise be imposed on the
customer by the commission to recover bond-related costs pursuant to
an agreement between the commission and the Department of Water
Resources pursuant to Section 80110 of the Water Code, as well as the
costs of the department equal to the share of the department's
estimated net unavoidable power purchase contract costs attributable
to the customer. The commission shall incorporate the determination
into an existing proceeding before the commission, and shall ensure
that the charges are nonbypassable. Until the commission has made a
determination regarding the nonbypassable charges, net energy
metering, co-energy metering, and wind energy co-metering shall
continue under the same rules, procedures, terms, and conditions as
were applicable on December 31, 2002.
   (m) In implementing the requirements of subdivisions (k) and (
 l  ), an eligible customer-generator shall not be required
to replace its existing meter except as set forth in paragraph (1) of
subdivision (c), nor shall the electric utility require additional
measurement of usage beyond that which is necessary for customers in
the same rate class as the eligible customer-generator.
   (n) It is the intent of the Legislature that the Treasurer
incorporate net energy metering, including net surplus electricity
compensation, co-energy metering, and wind energy co-metering
projects undertaken pursuant to this section as sustainable building
methods or distributive energy technologies for purposes of
evaluating low-income housing projects.
   SEC. 2.    Section 2827.10 of the   Public
Utilities Code   is amended to read: 
   2827.10.  (a) As used in this section, the following terms have
the following meanings:
   (1) "Electrical corporation" means an electrical corporation, as
defined in Section 218.
   (2) "Eligible fuel cell electrical generating facility" means a
facility that includes the following:
   (A) Integrated powerplant systems containing a stack, tubular
array, or other functionally similar configuration used to
electrochemically convert fuel to electric energy.
   (B) An inverter and fuel processing system where necessary.
   (C) Other plant equipment, including heat recovery equipment,
necessary to support the plant's operation or its energy conversion.
   (3) "Eligible fuel cell customer-generator" means a customer of an
electrical corporation that meets all the following criteria:
   (A) Uses a fuel cell electrical generating facility with a
capacity of not more than one megawatt that is located on or adjacent
to the customer's owned, leased, or rented premises, is
interconnected and operates in parallel with the  electric
  electrical  grid while the grid is operational or
in a grid independent mode when the grid is nonoperational, and is
sized to offset part or all of the eligible fuel cell
customer-generator's own electrical requirements.
   (B) Is the recipient of local, state, or federal funds, or who
self-finances projects designed to encourage the development of
eligible fuel cell electrical generating facilities.
   (C) Uses technology the commission has determined will achieve
reductions in emissions of greenhouse gases pursuant to subdivision
(b), and meets the emission requirements for eligibility for funding
set forth in subdivision (c), of Section 379.6.
   (4) "Net energy metering" means measuring the difference between
the electricity supplied through the electrical grid and the
difference between the electricity generated by an eligible fuel cell
electrical generating facility and fed back to the  electric
  electrical  grid over a 12-month period as
described in subdivision (e). Net energy metering shall be
accomplished using a time-of-use meter capable of registering the
flow of electricity in two directions. If the existing electrical
meter of an eligible fuel cell customer-generator is not capable of
measuring the flow of electricity in two directions, the eligible
fuel cell 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 time-of-use meter.
   (b) Every electrical corporation shall, not later than March 1,
2004, file with the commission a standard tariff providing for net
energy metering for eligible fuel cell customer-generators,
consistent with this section. Every electrical corporation shall make
this tariff available to eligible fuel cell customer-generators upon
request, on a first-come-first-served basis, until the total
cumulative rated generating capacity used by the eligible fuel cell
customer-generators equals 45 megawatts within the service territory
of the electrical corporation for an electrical corporation with a
peak demand above 10,000 megawatts, or equals 22.5 megawatts within
the service territory of the electrical corporation for an electrical
corporation with a peak demand of 10,000 megawatts or below. The
combined statewide cumulative rated generating capacity used by the
eligible fuel cell customer-generators in the service territories of
all electrical corporations in the state may not exceed 112.5
megawatts.
   (c) In determining the eligibility for the cumulative rated
generating capacity within an electrical service area, preference
shall be given to facilities which, at the time of installation, are
located in a community with significant exposure to air contaminants
or localized air contaminants, or both, including, but not limited
to, communities of minority populations or low-income populations, or
both, based on the ambient air quality standards established
pursuant to Section 39607 of the Health and Safety Code.
   (d) 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 customer would be assigned if the customer was not an
eligible fuel cell customer-generator. Any new or additional demand
charge, standby charge, customer charge, minimum monthly charge,
interconnection charge, or other charge that would increase an
eligible fuel cell customer-generator's costs beyond those of other
customers in the rate class to which the eligible fuel cell
customer-generator would otherwise be assigned are contrary to the
intent of the Legislature in enacting the act adding this section,
and may not form a part of net energy metering tariffs.
   (e) The net 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  electric 
 electrical  grid over a 12-month period. The following
rules shall apply to the annualized metering calculation:
   (1) The eligible fuel cell customer-generator shall, at the end of
each 12-month period following the date of final interconnection of
the eligible fuel cell electrical generating facility with an
electrical corporation, and at each anniversary date thereafter, be
billed for electricity used during that period. The electrical
corporation shall determine if the eligible fuel cell
customer-generator was a net consumer or a net producer of
electricity during that period. For purposes of determining if the
eligible fuel cell customer-generator was a net consumer or a net
producer of electricity during that period, the electrical
corporation shall aggregate the electrical load of the  meters
located on the property   where the eligible fuel cell
electrical generation facility is located and on all property
adjacent or contiguous to the property on which the facility is
located, if those properties are solely owned, leased, or rented by
the  eligible fuel cell customer-generator  under the
same ownership  . Each aggregated account shall be billed
and measured according to a time-of-use rate schedule.
   (2) At the end of each 12-month period, where the electricity
supplied during the period by the electrical corporation exceeds the
electricity generated by the eligible fuel cell customer-generator
during that same period, the eligible fuel cell customer-generator is
a net electricity consumer and the electrical corporation shall be
owed compensation for the eligible fuel cell customer-generator's net
kilowatthour consumption over that same period. The compensation
owed for the eligible fuel cell customer-generator's consumption
shall be calculated as follows:
   (A) The generation charges for any net monthly consumption of
electricity shall be calculated according to the terms of the tariff
to which the same customer would be assigned to or be eligible for if
the customer was not an eligible fuel cell customer-generator. When
the eligible fuel cell customer-generators is a net generator during
any discrete time-of-use period, the net kilowatthours produced shall
be valued at the same price per kilowatthour as the electrical
corporation would charge for retail kilowatthour sales for
generation, exclusive of any surcharges, during that same time-of-use
period. If the eligible fuel cell customer-generator's time-of-use
electrical meter is unable to measure the flow of electricity in two
directions, paragraph (4) of subdivision (a) shall apply. All other
charges, other than generation charges, shall be calculated in
accordance with the eligible fuel cell customer-generator's
applicable tariff and based on the total kilowatthours delivered by
the electrical corporation to the eligible fuel cell
customer-generator. To the extent that charges for transmission and
distribution services are recovered through demand charges in any
particular month, no standby reservation charges shall apply in that
monthly billing cycle.
   (B) The net balance of moneys owed shall be paid in accordance
with the electrical corporation's normal billing cycle.
   (3) At the end of each 12-month period, where the electricity
generated by the eligible fuel cell customer-generator during the
12-month period exceeds the electricity supplied by the electrical
corporation during that same period, the eligible fuel cell
customer-generator is a net electricity producer and the electrical
corporation shall retain any excess kilowatthours generated during
the prior 12-month period. The eligible fuel cell customer-generator
shall not be owed any compensation for those excess kilowatthours.
   (4) If an eligible fuel cell customer-generator terminates service
with the electrical corporation, the electrical corporation shall
reconcile the eligible fuel cell customer-generator's consumption and
production of electricity during any 12-month period.
   (f) A fuel cell electrical generating facility shall not be
eligible for participation in the tariff established pursuant to this
section unless it commenced operation before January 1, 2014. A fuel
cell customer-generator shall be eligible for the tariff established
pursuant to this section only for the operating life of the eligible
fuel cell electrical generating facility.
   SEC. 3.    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.