2827.9.

 (a) (1) The Legislature finds and declares that a pilot program to provide net energy metering for eligible biogas digester and manure-fueled customer-generators would enhance the continued diversification of California’s energy resource mix and would encourage the installation of livestock air emission controls that the State Air Resources Board believes may produce multiple environmental benefits.

(2) The Legislature further finds and declares that the net energy metering pilot program authorized pursuant to this section for eligible biogas digester and manure-fueled customer-generators, which nets out generation charges against generation charges on a time-of-use basis, furthers the intent of Chapter 7 of the Statutes of 2001, First Extraordinary Session, by facilitating the implementation of energy efficiency programs in order to reduce consumption of energy, reduce the costs associated with energy demand, and achieve a reduction in peak electricity demand.

(b) As used in this section, the following definitions apply:

(1) “Electrical corporation” means an electrical corporation, as defined in Section 218.

(2) (A) “Eligible customer-generator” means a customer of an electrical corporation that meets both of the following criteria:

(i) Uses an eligible electrical generating facility with a capacity of not more than one megawatt that is located on or adjacent to the customer’s owned, leased, or rented premises, is interconnected and operates in parallel with the electric grid, and is sized to offset part or all of the eligible customer-generator’s own electrical requirements.

(ii) Is the recipient of local, state, or federal funds, or who self-finances pilot projects designed to encourage the development of eligible electrical generating facilities.

(B) Notwithstanding subparagraph (A), up to three large biogas digester electrical generating facilities with a generating capacity of more than one megawatt and not more than 10 megawatts, otherwise meeting the criteria of this section, shall be eligible for participation in the pilot program.

(3) “Eligible electrical generating facility” means either of the following: any facility that produces electricity using (A) agricultural residues, including orchard trimmings and rice straw, (B) animal wastes, including manure and poultry litter, or (C) animal renderings, that does not use municipal solid waste and produces no hazardous waste or discharge to surface or ground waters of the state.

(4) “Net energy metering” means measuring the difference between the electricity supplied through the electric grid and the difference between the electricity generated by an eligible customer-generator and fed back to the electric grid over a 12-month period as described in subdivision (e). Net energy metering shall be accomplished using a time-of-use meter capable of registering the flow of electricity in two directions. 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 time-of-use meter.

(c) Every electrical corporation shall file with the commission a standard tariff providing for net energy metering for eligible customer-generators, consistent with this section. Every electrical corporation shall make this tariff available to eligible customer-generators upon request, on a first-come-first-served basis, until the combined statewide cumulative rated generating capacity used by the eligible customer-generators in the service territories of the three largest electrical corporations in the state reaches 50 megawatts for eligible biogas digester facilities and 20 megawatts for any other eligible manure-fueled reaches 70 megawatts for eligible electrical generating facilities. An eligible customer-generator shall be eligible for the tariff for the life of the eligible electrical generating facility.

(d) 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 was not an eligible customer-generator, except as set forth in subdivision (e). Any new or additional demand charge, standby charge, customer charge, minimum monthly charge, interconnection charge, or other charge that would increase an eligible customer-generator’s costs beyond those of other customers in the rate class to which the eligible customer-generator would otherwise be assigned are contrary to the intent of this legislation, and shall not form a part of net energy metering tariffs.

(e) 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 metering calculation:

(1) The eligible customer-generator shall, at the end of each 12-month period following the date of final interconnection of the eligible electrical generating facility with an electrical corporation, and at each anniversary date thereafter, be billed for electricity used during that period. The electrical corporation shall determine if the eligible customer-generator was a net consumer or a net producer of electricity during that period. For purposes of determining if the eligible customer-generator was a net consumer or a net producer of electricity during that period, the electrical corporation shall aggregate the electrical load of an agricultural operation under the same ownership, including, but not limited to, the electrical load attributable to operating the agricultural production facility, and water pumping located on property adjacent or contiguous to the property on which the eligible electrical generating facility is located. Each aggregated account shall be billed and measured according to a time-of-use rate schedule.

(2) At the end of each 12-month period, where the electricity supplied during the period by the electrical corporation exceeds the electricity generated by the eligible customer-generator during that same period, the eligible customer-generator is a net electricity consumer and the electrical corporation shall be owed compensation for the eligible customer-generator’s net kilowatthour consumption over that same period. The compensation owed for the eligible customer-generator’s consumption shall be calculated as follows:

(A) The generation charges for any net monthly consumption of electricity shall be calculated according to the terms of the 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 eligible 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 electrical corporation would charge for retail kilowatthour sales for generation, exclusive of any surcharges, 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 (4) of subdivision (b) shall apply. All other charges, other than generation charges, shall be calculated in accordance with the eligible customer-generator’s applicable tariff and based on the total killowatthours delivered by the electrical corporation to the eligible customer-generator. To the extent that charges for transmission and distribution services are recovered through demand charges in any particular month, no standby reservation charges shall apply in that monthly billing cycle.

(B) The net balance of moneys owed shall be paid in accordance with the electrical corporation’s normal billing cycle.

(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 electrical corporation during that same period, the eligible customer-generator is a net electricity producer and the electrical corporation 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.

(4) If an eligible customer-generator terminates service with the electrical corporation, the electrical corporation shall reconcile the eligible customer-generator’s consumption and production of electricity during any 12-month period.

(f) No eligible electrical generating facility shall be eligible for participation in the tariff established pursuant to this section, that has not commenced operation by December 31, 2009. An eligible customer-generator shall be eligible for the tariff established pursuant to this section, only for the operating life of the eligible electrical generating facility.

(g) No electrical generating facility that is subject to the best available control technology (BACT) requirements shall be eligible for participation in the tariff pursuant to this section unless the electrical generating facility has installed the best available control technology as required by the applicable air pollution control district or air quality management district at the time of installation to ensure the maximum feasible reductions in toxic and criteria pollutants.

(h) On or before December 31, 2008, the commission, in collaboration with the State Air Resources Board, shall report to the Legislature all of the following information:

(1) The impact of the pilot program on emissions of air pollutants.

(2) The impact of the pilot program on the reliability of the transmission and distribution grid.

(3) The impact of the pilot program on ratepayers.