Governor Schwarzenegger signed AB 510 on February 26, 2010 (Click here for full text of AB 510) (Click here for press release and video). We covered the basic elements of the new law in Part 1 of our coverage last week (click here for that post). Now, we turn to some other elements of the law… some of the fine print, if you will…
The law balances the interests of utilities, customer-generators, and non-participating customers. (This balance, and the fact that there is no discernable impact to the General Fund, are likely the reasons the bill passed the Senate by a nearly unanimous vote.) In addition to lowering the proposed cap from 10% to 5%, an example of concessions to utilities is found in Section (3)(l). That section requires that customer-generators pay the Department of Water Resources for all charges that would otherwise be imposed on the customer had they not entered the net-metering arrangement.
Another significant concession is found in Section (5)(B). Under that section, the utilities can use the energy provided through net-metering arrangements toward the Renewable Portfolio Requirements (outlined in Public Utilities Code Section 399.15 and 387). Under previous net-metering law, utilities were not permitted to count net-metering toward these obligations. Now, utilities have a chance to meet the aggressive target of generating 33% of their energy from renewables by 2020. (The utilities are far from reaching the Renewable Portfolio Requirements of 20% of energy from renewables by 2010). If California residents and businesses continue to install solar and wind power generation, the utilities have a chance to meet the portfolio requirements, but the current 5% cap will have to rise again.
On the consumer side, there are very reasonable concerns that net-metering raises the energy bill for non-metering customers. To assuage those concerns, the bill establishes a rate-setting commission that will set net-metering compensation rates and provide a report detailing 1) the market effects of net-metering and co-energy metering, and 2) how the authority’s rate schedule ensures consumers who don’t enter net metering arrangements pay the same for power that customer-generators pay.
AB 510 reflects a state leading the way in establishing energy independence. It is great legislation now because it doesn’t tap into the General Fund, and it encourages private businesses (e.g. Solar City or Renewable Funding, LLC). The law is another step forward that keeps California as a leader in United States renewable energy generation.
March 4, 2010 at 12:04 am
[...] Part 2 of this post that will discuss other requirements and considerations in the bill. UPDATE: Click Here For Part 2 Possibly related posts: (automatically generated)Congratulations AB 920!“New” Bills [...]
March 8, 2010 at 3:25 pm
This is a really thoughtful look at some of the problems with solar legislation overall–as consumers, it’s pretty easy to forget that the utilities are not thrilled about having to make this shift, and that there needs to be a balance of pushing solar and other renewable energies with maintaining economic growth (and from the utility POV, profits). While of course it would be great if the net metering cap had passed at 10%, in some ways change is bound to be incremental and on an as-needed basis. It was sticky for a while there, though, thinking 510 might not pass at all…I can sympathize with the utilities, but only so far.