Assembly Bill (AB) 920 amends Pub. Util. Code § 28273 and requires the Commission to establish a program to compensate net energy metering (NEM) customers for electricity produced in excess of on-site load at the end of a 12-month true-up period. In enacting AB 920, the Legislature stated that an NEM program combined with net surplus compensation (NSC) is one way to encourage substantial private investment in renewable energy resources, stimulate in-state economic growth, and reduce demand for electricity during peak consumption periods. (Section 2827(a).)
Specifically, the statute directs the Commission to adopt an NSC valuation to compensate a net surplus customer-generator for surplus kilowatt-hours produced over 12 months. The statute states, in pertinent part, that:
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.
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. (Sections 2827 (h)(4)(A)and (B).)
Customers may opt to receive either a payment for net surplus generation or to roll a credit for that generation into the next 12-month true-up period. (Section 2827(h)(3).) According to AB 920, the Commission shall establish an NSC rate by January 1, 2011.
In an Assigned Commissioner Ruling (ACR) dated January 15, 2010,4 in Rulemaking 08-03-008 (January 15th ACR), President Peevey directed Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E), to file applications no later than March 1 proposing an NSC rate, as well as other program implementation details pursuant to AB 920. Small and multi-jurisdictional investor-owned electric utilities were invited but not required to file applications as well. The January 15th ACR posed a series of questions regarding implementation of AB 920 and asked the utilities to respond to those questions.
On March 1, PacifiCorp, d.b.a. Pacific Power (PacifiCorp) filed the above-captioned application to implement an NSC rate. Subsequently, on March 15, Sierra Pacific Power Company5 (Sierra Pacific), PG&E, SCE, and SDG&E, each filed their above-captioned applications to establish an NSC rate. The five applications were consolidated by Chief Administrative Law Judge (ALJ) Ruling on April 1 because the applications raise similar issues of law and fact.
Responses to the five utility applications were filed by Californians for Renewable Energy Inc. (CARE), the Commission's Division of Ratepayer Advocates (DRA), the Interstate Renewable Energy Council (IREC), PG&E, and jointly by the California Solar Energy Industries Association and the Environment California Research and Policy Center (together CALSEIA/EC). Protests to the applications were filed by the Acton Town Council (Acton), the City of San Diego, CARE,6 Donald W. Ricketts, and jointly by the Solar Alliance and Vote Solar Initiative (together Joint Solar Parties).
A prehearing conference (PHC) was held on May 18 to discuss the scope and schedule of this application, and a scoping memo was issued on June 1.
On June 21, non-utility parties filed their proposals for NSC rates. Proposals were filed by Acton, CALSEIA/EC, DRA, IREC, the Joint Solar Parties, and the City of San Diego. In addition, PG&E, PacifiCorp, SCE, SDG&E and Sierra Pacific filed supplemental information regarding their applications as directed in the scoping memo.
A workshop to discuss the proposals was held on July 9. Following the workshop, comments and reply comments on the proposals were filed by Acton, CALSEIA/EC, CARE, DRA, IREC, the Joint Solar Parties, PG&E, PacifiCorp, SCE, SDG&E, the City of San Diego, Sierra Pacific, Solutions for Utilities, The Utility Reform Network (TURN), and Wal-Mart Stores, Inc. (Walmart). A PHC scheduled for August 26 was cancelled by the assigned ALJ after she determined that further proceedings were unnecessary and that the case was submitted as of the reply comments on August 6, 2010.
3 Unless otherwise specified, all further section references are to the California Public Utilities Code.
4 All dates are 2010 unless otherwise noted.
5 Sierra Pacific is now known as California Pacific Electric Company (Cal PECO). We continue to refer to Sierra Pacific in this decision as all filings were made using that name. Any orders in this decision for Sierra Pacific will apply to Cal PECO.
6 CARE responded to the applications of SDG&E and PacifiCorp and protested the applications of Sierra Pacific, PG&E and SCE.