Bill Text: CA AB560 | 2009-2010 | Regular Session | Amended

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Bill Title: Net energy metering.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Engrossed - Dead) 2009-09-10 - In committee: Testimony taken. Hearing postponed by committee. [AB560 Detail]

Download: California-2009-AB560-Amended.html

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BILL NUMBER: AB 560	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 4, 2009
	AMENDED IN SENATE  SEPTEMBER 1, 2009
	AMENDED IN SENATE  JULY 16, 2009
	AMENDED IN ASSEMBLY  APRIL 16, 2009

INTRODUCED BY   Assembly Member Skinner
    (   Coauthors:   Assembly Members 
 Beall,   Blumenfield,   Chesbro,  
and Salas   ) 
    (   Coauthors:   Senators   Kehoe,
  Pavley,   and Wiggins   ) 

                        FEBRUARY 25, 2009

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


	LEGISLATIVE COUNSEL'S DIGEST


   AB 560, as amended, Skinner. Net energy metering.
   Existing law relative to private energy producers requires every
electric distribution utility or cooperative, 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 2.5%
of the electric distribution utility or cooperative's aggregate
customer peak demand.
   This bill would require that the standard contract or tariff for
net energy metering be offered on a first-come-first-served basis
until the time that the total rated generating capacity used by
eligible customer-generators exceeds  3.5%   5%
 of the  electric   electricity 
distribution utility or cooperative's aggregate customer peak demand.
 The bill would prohibit, on and after July 1, 2010, a
contractor holding a class C-46 license issued by the Contractors'
State License Board from constructing, altering, or installing, for
an eligible customer-generator generating electricity under a tariff
or contract pursuant to these provisions, a solar photovoltaic
electrical generating facility with the capacity to generate greater
than 250 kilowatts of electricity. This bill would incorporate
additional changes in Section 2827 of the Public Utilities Code,
proposed by A   B   920 or S   B 
 7, to be operative only if either A   B   920
or S   B   7 and this bill are chaptered and become
effective on or before January 1, 2010, and this bill is chaptered
last. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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, 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, and reduce interconnection and
administrative costs for electricity suppliers.
   (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   "Electricity 
distribution utility or cooperative" 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, small
commercial customer as defined in subdivision (h) of Section 331,
commercial, industrial, or agricultural customer of an electricity
distribution utility or cooperative, who uses a solar or a wind
turbine electrical generating facility, or a hybrid system of both,
with a capacity of not more than one megawatt that is located on the
customer's owned, leased, or rented premises, is interconnected and
operates in parallel with the electric grid, and is intended
primarily to offset part or all of the customer's own electrical
requirements.
   (5) "Net energy metering" means measuring 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 grid over a 12-month period as described in
subdivision (h). An eligible customer-generator who already owns an
existing solar or wind turbine electrical generating facility, or a
hybrid system of both, is eligible to receive net energy metering
service in accordance with this section.
   (6) "Ratemaking authority" means, for an electrical corporation,
electrical cooperative, or electric service provider, the commission,
and for a local publicly owned electric utility, the local elected
body responsible for setting the rates of the local publicly owned
utility.
   (7) "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 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 electricity distribution utility or cooperative
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
 3.5  5  percent of the electricity
distribution utility or cooperative'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
customer-generator, at the expense of the electricity distribution
utility or cooperative, and the additional metering shall be used
only to provide the information necessary to accurately bill or
credit the customer-generator pursuant to subdivision (h), or to
collect solar or wind electric generating system performance
information for research purposes. If the existing electrical meter
of an eligible customer-generator is not capable of measuring the
flow of electricity in two directions, the 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.
   (2) (A) On an annual basis, beginning in 2003, every electricity
distribution utility or cooperative 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.
   (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 electric corporation,
local publicly owned electric utility, or electrical cooperative, in
which the customer has net energy metering.
   (C) The ratemaking authority shall develop a process for making
the information required by this paragraph available to electricity
distribution utilities and cooperatives, and for using that
information to determine when, pursuant to paragraphs (1) and (3), an
electricity distribution utility or cooperative is not obligated to
provide net energy metering to additional customer-generators in its
service area.
   (3) An electricity distribution utility or cooperative is not
obligated to provide net energy metering to additional
customer-generators in its service area when the combined total peak
demand of all customer-generators served by all the electricity
distribution utilities or cooperatives in that service area
furnishing net energy metering to eligible customer-generators
exceeds  3.5   5  percent of the aggregate
customer peak demand of those electricity distribution utilities or
cooperatives.
   (4) By January 1, 2010, the commission, in consultation with the
Energy Commission, shall submit a report to the Governor and the
Legislature on the costs and benefits of net energy metering, wind
energy co-metering, and co-energy metering to participating customers
and nonparticipating customers and with options to replace the
economic costs and benefits of net energy metering, wind energy
co-metering, and co-energy metering with a mechanism that more
equitably balances the interests of participating and
nonparticipating customers, and that incorporates the findings of the
report on economic and environmental costs and benefits of net
metering required by subdivision (n).
   (d) Every electricity distribution utility or cooperative shall
make all necessary forms and contracts for net energy metering
service available for download from the Internet.
   (e) (1) Every electricity distribution utility or cooperative
shall ensure that requests for establishment of net energy metering
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, including a signed
interconnection agreement from an eligible customer-generator and the
electric inspection clearance from the governmental authority having
jurisdiction.
   (2) Every electricity distribution utility or cooperative 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 electricity distribution utility or cooperative 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 with an electric
service provider that does not provide distribution service for the
direct transactions, the electricity distribution utility or
cooperative that provides distribution service for an eligible
customer-generator is not obligated to provide net energy metering 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 electricity distribution utility or cooperative 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 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 an eligible solar or wind electrical generating facility,
except that eligible customer-generators shall not be assessed
standby charges on the electrical generating capacity or the
kilowatthour production of an eligible solar or wind electrical
generating 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 customer-generator's choice as to 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 an eligible solar or wind electrical generating 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 residential and small commercial
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 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 shall, at the end of each 12-month period
following the date of final interconnection of the eligible
customer-generator's system with an electricity distribution utility
or cooperative, and at each anniversary date thereafter, be billed
for electricity used during that 12-month period. The electricity
distribution utility or cooperative shall determine if the eligible
residential or small commercial customer-generator was a net consumer
or a net producer of electricity during that period.
   (2) At the end of each 12-month period, where the electricity
supplied during the period by the electricity distribution utility or
cooperative 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 electricity
distribution utility or cooperative 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
or charges, 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 electricity distribution utility or cooperative
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 electricity distribution utility or
cooperative 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 or charges, 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. 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 electricity distribution utility or cooperative
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 electricity distribution utility or cooperative
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 electricity distribution utility or cooperative'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 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 electricity
distribution utility or cooperative during that same period, the
eligible customer-generator is a net electricity producer and the
electricity distribution utility or cooperative shall retain any
excess kilowatthours generated during the prior 12-month period. The
eligible customer-generator shall not be owed any compensation for
those excess kilowatthours unless the electricity distribution
utility or cooperative enters into a purchase agreement with the
eligible customer-generator for those excess kilowatthours.
   (4) The electricity distribution utility or cooperative shall
provide every eligible residential or small commercial
customer-generator with net electricity consumption information with
each regular bill. That information shall include the current
monetary balance owed the electricity distribution utility or
cooperative for net electricity consumed, or the current amount of
excess electricity produced, since the last 12-month period ended.
Notwithstanding this subdivision, an electricity distribution utility
or cooperative shall permit that customer to pay monthly for net
energy consumed.
   (5) If an eligible residential or small commercial
customer-generator terminates the customer relationship with the
electricity distribution utility or cooperative, the electricity
distribution utility or cooperative 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.
   (6) If an electric service provider or electricity distribution
utility or cooperative 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 electricity
distribution utility or cooperative, the 12-month period, with
respect to that new electric service provider or electricity
distribution utility or cooperative, shall commence on the date on
which the new electric service provider or electricity distribution
utility or cooperative first supplies electric service to the
customer-generator.
   (i) Notwithstanding any other provisions of this section, the
following provisions 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 energy 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 electricity distribution
utility or cooperative 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 an eligible solar or wind electrical generating
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
an eligible solar or wind electrical generating 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)  (1)    A solar or wind turbine electrical
generating system, or a hybrid system of both, 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 and, where
applicable, rules of the commission regarding safety and reliability.
A customer-generator whose solar or wind turbine electrical
generating system, or a hybrid system of both, meets those standards
and rules shall not be required to install additional controls,
perform or pay for additional tests, or purchase additional liability
insurance. 
   (2) On and after July 1, 2010, a contractor holding a class C-46
license issued by the Contractors' State License Board shall not
construct, alter, or install, for an eligible customer-generator
generating electricity under a tariff or contract pursuant to this
section, a solar photovoltaic electrical generating facility with the
capacity to generate greater than 250 kilowatts of electricity.
Contractors holding class C-46 licenses as of January 1, 2010, shall
be deemed qualified to take the class C-10 license examination. 

   (k) If the commission determines that there are cost or revenue
obligations for an electric corporation, as defined in Section 218,
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 may 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. In its report to the Legislature, the
commission shall examine different methods to ensure that the public
goods charges remain nonbypassable.
   () 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 (), a
customer-generator shall not be required to replace its existing
meter except as set forth in paragraph (1) of subdivision (c), nor
shall the electricity distribution utility or cooperative 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, 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 of the   Public
Utilities Code   is amended to read: 
   2827.  (a) The Legislature finds and declares that a program to
provide net energy metering, 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, and reduce interconnection and
administrative costs for electricity suppliers.
   (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   "Electricity 
distribution utility or cooperative" 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, small
commercial customer as defined in subdivision (h) of Section 331,
commercial, industrial, or agricultural customer of an electricity
distribution utility or cooperative, who uses a solar or a wind
turbine electrical generating facility, or a hybrid system of both,
with a capacity of not more than one megawatt that is located on the
customer's owned, leased, or rented premises, is interconnected and
operates in parallel with the electric grid, and is intended
primarily to offset part or all of the customer's own electrical
requirements.
   (5) "Net energy metering" means measuring 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 grid over a 12-month period as described in
subdivision (h). An eligible customer-generator who already owns an
existing solar or wind turbine electrical generating facility, or a
hybrid system of both, is eligible to receive net energy metering
service in accordance with this section. 
   (6) "Net surplus customer-generator" means an eligible
customer-generator that, during a 12-month period, generates more
electricity than is supplied by the electricity distribution utility
or cooperative to the eligible customer-generator during the same
12-month period.  
   (7) "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.  
   (6) 
    (8)  "Ratemaking authority" means, for an electrical
corporation, electrical cooperative, or electric service provider,
the commission, and for a local publicly owned electric utility, the
local elected body responsible for setting the rates of the local
publicly owned utility. 
   (7) 
    (9)  "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 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 electricity distribution utility or cooperative
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
 2.5   5  percent of the electricity
distribution utility or cooperative'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
customer-generator, at the expense of the electricity distribution
utility or cooperative, and the additional metering shall be used
only to provide the information necessary to accurately bill or
credit the customer-generator pursuant to subdivision (h), or to
collect solar or wind electric generating system performance
information for research purposes. If the existing electrical meter
of an eligible customer-generator is not capable of measuring the
flow of electricity in two directions, the 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.
   (2) (A) On an annual basis, beginning in 2003, every electricity
distribution utility or cooperative 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.
   (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 electric corporation,
local publicly owned electric utility, or electrical cooperative, in
which the  customer   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 electricity
distribution utilities and cooperatives, and for using that
information to determine when, pursuant to paragraphs (1) and (3), an
electricity distribution utility or cooperative is not obligated to
provide net energy metering to additional customer-generators in its
service area.
   (3) An electricity distribution utility or cooperative 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 electricity distribution
utilities or cooperatives in that service area furnishing net energy
metering to eligible customer-generators exceeds  2.5
  5  percent of the aggregate customer peak demand
of those electricity distribution utilities or cooperatives.
   (4) By January 1, 2010, the commission, in consultation with the
Energy Commission, shall submit a report to the Governor and the
Legislature on the costs and benefits of net energy metering, wind
energy co-metering, and co-energy metering to participating customers
and nonparticipating customers and with options to replace the
economic costs and benefits of net energy metering, wind energy
co-metering, and co-energy metering with a mechanism that more
equitably balances the interests of participating and
nonparticipating customers, and that incorporates the findings of the
report on economic and environmental costs and benefits of net
metering required by subdivision (n).
   (d) Every electricity distribution utility or cooperative shall
make all necessary forms and contracts for net energy metering
service available for download from the Internet.
   (e) (1) Every electricity distribution utility or cooperative
shall ensure that requests for establishment of net energy metering
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, including a signed
interconnection agreement from an eligible customer-generator and the
electric inspection clearance from the governmental authority having
jurisdiction.
   (2) Every electricity distribution utility or cooperative 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 electricity distribution utility or cooperative 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 with an electric
service provider that does not provide distribution service for the
direct transactions, the electricity distribution utility or
cooperative that provides distribution service for an eligible
customer-generator is not obligated to provide net energy metering 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 electricity distribution utility or cooperative 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 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 an eligible solar or wind electrical generating facility,
except that eligible customer-generators shall not be assessed
standby charges on the electrical generating capacity or the
kilowatthour production of an eligible solar or wind electrical
generating 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 customer-generator's choice as to 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 an eligible solar or wind electrical generating facility
 are   is  contrary to the intent of this
section, and shall not form a part of net energy metering contracts
or tariffs.
   (h) For eligible residential and small commercial
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 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 shall, at the end of each 12-month period
following the date of final interconnection of the eligible
customer-generator's system with an electricity distribution utility
or cooperative, and at each anniversary date thereafter, be billed
for electricity used during that 12-month period. The electricity
distribution utility or cooperative shall determine if the eligible
residential or small commercial customer-generator was a net consumer
or a net  producer of electricity  
electricity used by eligible   surplus
customer-generator  during that period.
   (2) At the end of each 12-month period, where the electricity
supplied during the period by the electricity distribution utility or
cooperative 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 electricity
distribution utility or cooperative 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
or charges, 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 electricity distribution utility or cooperative
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 electricity distribution utility or
cooperative 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 or charges, 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. 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 electricity distribution utility or cooperative
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,  subparagraph (A) of 
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 electricity distribution utility or cooperative
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 electricity distribution utility or cooperative'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 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 electricity
distribution utility or cooperative during that same period, the
eligible customer-generator is a net  electricity producer
  surplus customer-generator  and the electricity
distribution utility or cooperative shall  retain any excess
kilowatthours generated during the prior 12-month period. The
eligible customer-generator shall not be owed any compensation for
those excess kilowatthours unless the electricity distribution
utility or cooperative enters into a purchase agreement with the
eligible customer-generator for those excess kilowatthours 
 allow the eligible customer-generator to apply the net surplus
electricity as a credit for kilowatthours consumed during one, or
both, of the two following 12-month periods  .
   (4) The electricity distribution utility or cooperative 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 electricity distribution utility or cooperative for net
electricity consumed, or the  current amount of excess
electricity produced   net surplus electricity generated
 , since the last 12-month period ended. Notwithstanding this
subdivision, an electricity distribution utility or cooperative shall
permit that customer to pay monthly for net energy consumed.
   (5) If an eligible residential or small commercial
customer-generator terminates the customer relationship with the
electricity distribution utility or cooperative, the electricity
distribution utility or cooperative 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.
   (6) If an electric service provider or electricity distribution
utility or cooperative 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 electricity
distribution utility or cooperative, the 12-month period, with
respect to that new electric service provider or electricity
distribution utility or cooperative, shall commence on the date on
which the new electric service provider or electricity distribution
utility or cooperative first supplies electric service to the
customer-generator.
   (i) Notwithstanding any other provisions of this section, the
following provisions 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 energy 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  government   governmental 
agency or an electricity distribution utility or cooperative 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 an eligible solar or wind electrical generating
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
an eligible solar or wind electrical generating 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)  (1)    A solar or wind turbine electrical
generating system, or a hybrid system of both, 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 and, where
applicable, rules of the commission regarding safety and reliability.
A customer-generator whose solar or wind turbine electrical
generating system, or a hybrid system of both, meets those standards
and rules shall not be required to install additional controls,
perform or pay for additional tests, or purchase additional liability
insurance. 
   (2) On and after July 1, 2010, a contractor holding a class C-46
license issued by the Contractors' State License Board shall not
construct, alter, or install, for an eligible customer-generator
generating electricity under a tariff or contract pursuant to this
section, a solar photovoltaic electrical generating facility with the
capacity to generate greater than 250 kilowatts of electricity.
Contractors holding class C-46 licenses as of January 1, 2010, shall
be deemed qualified to take the class C-10 license examination. 

   (k) If the commission determines that there are cost or revenue
obligations for an electric corporation, as defined in Section 218,
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 may 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. In its report to the Legislature, the
commission shall examine different methods to ensure that the public
goods charges remain nonbypassable.
   () 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 (), a
customer-generator shall not be required to replace its existing
meter except as set forth in  subparagraph (A) of 
paragraph (1) of subdivision (c), nor shall the electricity
distribution utility or cooperative 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, 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. 3.    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,  and  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  distribution utility or cooperative
  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, small
commercial customer as defined in subdivision (h) of Section 331,
commercial, industrial, or agricultural customer of an 
electricity distribution utility or cooperative  
electric utility  , who uses a solar or a wind turbine
electrical generating facility, or a hybrid system of both, with a
capacity of not more than one megawatt that is located on the
customer's owned, leased, or rented premises, is interconnected and
operates in parallel with the electric grid, and is intended
primarily to offset part or all of the customer's own electrical
requirements.
   (5) "Net energy metering" means measuring 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 grid over a 12-month period as described in 
subdivision (h). An eligible customer-generator who already owns an
existing solar or wind turbine electrical generating facility, or a
hybrid system of both, is eligible to receive net energy metering
service in accordance with this section   subdivisions
(c) and (h)  . 
   (6) "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.  
   (7) "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.  
   (8) "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).  
   (6) 
    (9)  "Ratemaking authority" means, for an electrical
corporation ,   or  electrical cooperative,
 or electric service provider,  the commission, and
for a local publicly owned electric utility, the local elected body
responsible for setting the rates of the local publicly owned
utility. 
   (7) 
    (10)  "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 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  electricity distribution utility or
cooperative   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  2.5   5
 percent of the  electricity distribution utility or
cooperative's   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  electricity distribution utility or
cooperative   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 solar
or wind electric generating system performance information for
research purposes. 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) (A) On an annual basis, beginning in 2003, every 
electricity distribution utility or cooperative  
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 electric corporation,
local publicly owned electric utility, or electrical cooperative, in
which the  customer   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 
electricity distribution utilities and cooperatives  
electric utilities  , and for using that information to
determine when, pursuant to paragraphs (1) and (3), an 
electricity distribution utility or cooperative  
electric utility  is not obligated to provide net energy
metering to additional  eligible  customer-generators in its
service area.
   (3) An  electricity distribution utility or cooperative
  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  electricity
distribution utilities or cooperatives   electric
utilities  in that service area furnishing net energy metering
to eligible customer-generators exceeds  2.5   5
 percent of the aggregate customer peak demand of those
 electricity distribution utilities or cooperatives 
 electric utilities  .
   (4) By January 1, 2010, the commission, in consultation with the
Energy Commission, shall submit a report to the Governor and the
Legislature on the costs and benefits of net energy metering, wind
energy co-metering, and co-energy metering to participating customers
and nonparticipating customers and with options to replace the
economic costs and benefits of net energy metering, wind energy
co-metering, and co-energy metering with a mechanism that more
equitably balances the interests of participating and
nonparticipating customers, and that incorporates the findings of the
report on economic and environmental costs and benefits of net
metering required by subdivision (n).
   (d) Every  electricity distribution utility or cooperative
  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  electricity distribution utility or
cooperative   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  electricity distribution utility or cooperative
  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  electricity distribution utility or cooperative
  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 with an electric
service provider that does not provide distribution service for the
direct transactions, the  electricity distribution utility or
cooperative   electric utility  that provides
distribution service for  an   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  electricity distribution utility or cooperative
  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 an eligible solar or wind electrical generating facility,
except that eligible customer-generators shall not be assessed
standby charges on the electrical generating capacity or the
kilowatthour production of an eligible solar or wind electrical
generating facility. The charges for all retail rate components for
eligible customer-generators shall be based exclusively on the 
eligible  customer-generator's net kilowatthour consumption over
a 12-month period, without regard to the 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 an eligible solar or wind
electrical generating facility  are   is 
contrary to the intent of this section, and shall not form a part of
net energy metering contracts or tariffs.
   (h) For eligible  residential and small commercial
 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 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 shall, at the end of each 12-month period
following the date of final interconnection of the eligible
customer-generator's system with an  electricity distribution
utility or cooperative   electric utility  , and
at each anniversary date thereafter, be billed for electricity used
during that 12-month period. The  electricity distribution
utility or cooperative   electric utility  shall
determine if the eligible residential or small commercial
customer-generator was a net consumer or a net  producer of
electricity   surplus customer-generator  during
that period.
   (2) At the end of each 12-month period, where the electricity
supplied during the period by the  electricity distribution
utility or cooperative   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  electricity distribution
utility or cooperative   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
 or charges  , 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 
electricity distribution utility or cooperative  
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 
electricity distribution utility or cooperative  
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 or
charges   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  to  , 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  electricity
distribution utility or cooperative   electric utility
 would charge for retail kilowatthour sales during that same
 "time-of-use"   time-of-use  period. If
the eligible customer-generator's  "time-of-use" 
 time-of-use  electrical meter is unable to measure the flow
of electricity in two directions,  subparagraph (A) of
 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  electricity distribution utility or
cooperative   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  electricity distribution utility or
cooperative's   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  electricity
distribution utility or cooperative   electric utility
 during that same period, the eligible customer-generator is a
net  electricity producer and the electricity distribution
utility or cooperative   surplus customer-generator and
the electric utility shall, upon an affirmative election by the
eligible customer-generator, either (A) provide net surplus
electricity compensation for any net surplus electricity generated
during the prior 12-month period, or (B) 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. 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 
those excess kilowatthours   the net surplus electricity
 unless the  electricity distribution utility or
cooperative   electric utility  enters into a
purchase agreement with the eligible customer-generator for those
excess kilowatthours.  Every electric utility shall, by January
31, 2010, 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. The commission may, for an electric utility that is an
electrical corporation or electrical cooperative, adopt  
requirements for providing notice and the manner by which eligible
customer-generators may elect to receive net surplus electricity
compensation.  
   (4) (A) The ratemaking authority shall, by January 1, 2011,
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 solar customer-generators and other bundled
service customers.  
   (5) (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.  
   (4) 
    (6)  The  electricity distribution utility or
cooperative   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  electricity
distribution utility or cooperative   electric utility
 for net electricity consumed, or the  current amount of
excess electricity produced   net surplus electricity
generated  , since the last 12-month period ended.
Notwithstanding this subdivision, an  electricity
distribution utility or cooperative   electric utility
 shall permit that customer to pay monthly for net energy
consumed. 
   (5)
    (7)  If an eligible residential or small commercial
customer-generator terminates the customer relationship with the
 electricity distribution utility or cooperative 
 electric utility  , the  electricity distribution
utility or cooperative   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. 
   (6) 
    (8)  If an electric service provider or 
electricity distribution utility or cooperative  
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  electricity
distribution utility or cooperative   electric utility
 , the 12-month period, with respect to that new electric
service provider or  electricity distribution utility or
cooperative   electric utility  , shall commence on
the date on which the new electric service provider or 
electricity distribution utility or cooperative  
electric utility  first supplies electric service to the
customer-generator.
   (i) Notwithstanding any other provisions of this section, the
following provisions 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"   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 energy 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
 government   governmental  agency or an
 electricity distribution utility or cooperative 
 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 an eligible solar or wind electrical generating
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 an eligible solar or
wind electrical generating 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)  (1)    A solar or wind turbine electrical
generating system, or a hybrid system of both, 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 and, where
applicable, rules of the commission regarding safety and reliability.
A customer-generator whose solar or wind turbine electrical
generating system, or a hybrid system of both, meets those standards
and rules shall not be required to install additional controls,
perform or pay for additional tests, or purchase additional liability
insurance. 
   (2) On and after July 1, 2010, a contractor holding a class C-46
license issued by the Contractors' State License Board shall not
construct, alter, or install, for an eligible customer-generator
generating electricity under a tariff or contract pursuant to this
section, a solar photovoltaic electrical generating facility with the
capacity to generate greater than 250 kilowatts of electricity.
Contractors holding class C-46 licenses as of January 1, 2010, shall
be deemed qualified to take the class C-10 license examination. 

   (k) If the commission determines that there are cost or revenue
obligations for an electric corporation, as defined in Section 218,
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 may 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. In its report to the Legislature, the
commission shall examine different methods to ensure that the public
goods charges remain nonbypassable.
   () 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 (),
 a   an eligible  customer-generator shall
not be required to replace its existing meter except as set forth in
 subparagraph (A) of  paragraph (1) of subdivision
(c), nor shall the  electricity distribution utility or
cooperative   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. 4.    (a) Section 2 of this bill incorporates
amendments to Section 2827 of the Public Utilities Code proposed by
both this bill and SB 7. It shall only become operative if (1) both
bills are enacted and become effective on or before January 1, 2010,
(2) each bill amends Section 2827 of the Public Utilities Code, and
(3) this bill is enacted after SB 7, in which case Sections 1 and 3
of this bill shall not become operative.  
   (b) Section 3 of this bill incorporates amendments to Section 2827
of the Public Utilities Code proposed by both this bill and AB 920.
It shall only become operative if (1) both bills are enacted and
become effective on or before January 1, 2010, (2) each bill amends
Section 2827 of the Public Utilities Code, and (3) this bill is
enacted after AB 920, in which case Sections 1 and 2 of this bill
shall not become operative.