Assembly Panel Passes Net Metering and Feed-In Tariff Bills

By Published On: April 24, 2009

The cap on utility bill credits for energy sent back to the grid from rooftop solar and other small renewable systems would increase fourfold under legislation the Assembly Utilities & Commerce Committee passed April 20. AB 560 by Assemblymember Nancy Skinner (D-Oakland) would raise the net metering cap from 2.5 percent of a utility’s aggregate peak demand to 10 percent. “It is necessary to continue our success” with the Million Solar Homes initiative, Skinner said. AB 560 passed on a 10-3 vote. (The Million Solar plan was an effort by the governor to subsidize, in part, rooftop photovoltaics and strengthen the industry. The California Public Utilities Commission administers the plan.) The expansion for net metering, which makes small solar and other alternative power installations more economically viable, is largely aimed at Pacific Gas & Electric. PG&E may hit its 2.5 percent net metering cap next year. That could halt the state’s subsidized solar initiative in its territory, undermining California’s Million Solar Roofs 3,000 MW goal. That is because the loss of the financial incentive of net metering may slow down the purchase and installation of PV and other solar systems at homes and small businesses. The state’s three major investor-owned utilities, as well as The Utility Reform Network, oppose the bill. They say it raises the cap too high and shifts costs to other ratepayers. A report on the success of the California Solar Initiative (the current iteration of Million Solar) should be released before raising the net metering cap, opponents insisted. Skinner noted that 19 other states have net metering programs that are not capped. She added that failing to raise the net metering bar by next year would also impact the state’s 33 percent renewable energy target and efforts to curb carbon emissions under the state climate protection law. Solar developers, the building industry, and a number of environmentalists support the measure. Debate continues on the role of “feed-in tariffs” that pay renewable energy facilities’ owners a set price for renewable supplies over several years. This tariff also includes public, standard contract terms, avoiding closed-door negotiations between utilities and renewable energy developers. A bill by Assembly Utilities and Commerce Committee chair Felipe Fuentes (D-Sylmar) allows the pricing scheme to apply to systems up to a 20 MW capacity. The California Energy Commission recommended that capacity threshold last year following workshops on the optimum use of feed-in tariffs to advance renewable energy development in the state. According to a committee bill analysis, 42 percent of alternative power contracts utilities signed to meet their 20 percent Renewable Portfolio Standard are under 20 MW. Developers of smaller renewable systems struggle to get financing for their projects, hindering expansion of renewable energy. A feed-in tariff is expected to provide financial security and ease developer access to loans. Fuentes’ AB 1106 passed the committee on a 10-4 vote. A bill by Assemblymember Ira Ruskin (D-Redwood City) allows systems up to 10 MW of capacity to qualify for feed-in tariffs, with the price determined by the California Public Utilities Commission. It passed 10-4. Legislation by Sam Blakeslee (R-San Luis Obispo), approved on a 15-0 vote, allows batteries and other technologies that store off peak wind and solar energy to qualify for Self Generation Incentive Program rebates. AB 1536 seeks to provide incentives to invest in storage devices by independent operators. Currently, rebates under the self-generation program are limited to certain renewable and fuel cell technologies. AB 758 would require energy efficiency audits in existing homes. The measure by Skinner passed 11-4. Audits are the considered an effective way to decide how best to address the issue. “There is nothing more sexy than negawatts,” Skinner said. Regardless, controversy over when they occur and who pays continues. (“Negawatts” are the reverse of power production--they’re what’s counted when conservation and efficiency allow power plants not to be built or fuel for them consumed.) Other bills approved by the utilities committee this week include: -AB 40, which reintroduces a measure from last year that may allow utilities to rate base property set aside for transmission for longer than five years. The measure by Fuentes passed 15-0. -AB 234 by Assemblymember Jared Huffman (D-Marin) requires the California Energy Commission to apply federal stimulus dollars to efforts to integrate water and energy efficiency actions in tandem with the State Water Resources Control Board. It passed 15-0. -AB 920, also by Huffman, requires utilities to pay for solar and wind energy fed into the grid by units less than 1 MW. It keeps the existing 2.5 percent cap on net metering. It passed on an 11-3 vote.

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