AB 510 (full text here) passed both the Senate and Assembly, and Governor Schwarzenegger says he will sign the bill into law. The bill raises the cap set on the number of homes and businesses that can take advantage of net energy metering. Yes, there’s a cap! The utilities don’t want “customer-generators” producing power without limit, and the government appears concerned the customers will somehow tip the “balance of power” between customer-generators and utilities (yes, that’s an energy pun).
At its core, the bill states utilities are not required to issue permits and enter agreements with “customer-generators” (residential and commercial solar and wind power producers) beyond 5% of the utilities’ aggregate customer peak power demand. The previous cap was 2.5%.
The legislation also addresses co-energy metering. Co-energy metering is an arrangement between publicly owned utilities and customer-generators who produce between 10kw (50kw for wind) and 1MW. These generators are compensated based on the time of energy use and generation.
On the other hand, standard net-metering arrangements are for customer-generators who produce 3 -10kw. The rate at which net-metering customers are compensated is either a “time of use” model such as that with the co-energy metering producers, or a “baseline” model.
A ratemaking authority (also described in the bill) sets the rates for compensating customer-generators who have an energy surplus at the end of the year and follow the baseline model. The primary goal for the rate-making authority is to set a price that ensures non-participating customers pay the same for energy they would have otherwise paid had no net-metering been used.
To its credit, the bill allows the ratemaking authority to compensate net energy producers for the value of the electricity itself, AND the value of the renewable attributes of the electricity. This little nod allows net energy producers to receive a bonus if the renewable attributes of the energy production add indefinite or unforeseen benefits (Cap and Trade anyone?)
Congratulations (I hope not premature) to AB 510 sponsor, Assembly Member Nancy Skinner (14th District). The bill was proposed last year as AB 560 (click here for more of that story), but it died in committee. We’re glad to see it is on its way to the finish line this time!
Editor’s Note: Stay tuned for Part 2 of this post that will discuss other requirements and considerations in the bill. UPDATE: Click Here For Part 2
Steve Sacks
Sarah Grilli