Article 3. Rights, Obligations, And Charges of California Public Utilities Code >> Division 1. >> Part 2. >> Chapter 7. >> Article 3.

(a) The commission shall approve and establish equitable charges to be paid by an electrical corporation which purchases electricity or electrical generating capacity, or both, from any private energy producer employing other than a conventional power source for the generation of electricity.
  (b) The commission, on its own motion or on application of an electrical corporation or a private energy producer, may also specify the prices, terms, and conditions for the purchase or sale of electricity or electrical generating capacity, or both, between an electrical corporation and a private energy producer, and these prices, terms, and conditions, so specified, shall be considered reasonable and prudent for all purposes. The commission may act to specify these prices, terms, and conditions on its own motion or on application of an electrical corporation or a private energy producer.
  (c) Every private energy producer employing hydroelectric facilities, who executes a contract with an electrical corporation on or after January 1, 1988, or prior to that date, for the purchase of electricity or electrical generating capacity, or both, shall obtain and provide proof of compliance by the private energy producer with all state laws relating to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits. The private energy producer shall also provide proof of compliance with the federal Clean Water Act.
  (d) (1) For the purpose of providing proof of compliance with all state laws relating to the control, appropriation, use, and distribution of water, the electrical corporation shall require the private energy producer to provide either of the following:
  (A) Certification from the State Water Resources Control Board that a water right permit has been issued for the operation of the hydroelectric facility.
  (B) Certification from the State Water Resources Control Board that, in the opinion of the board, the private energy producer possesses riparian rights or other water rights which authorize the operation of the hydroelectric facility.
  (2) The requirements of paragraph (1) shall apply only to contracts involving hydroelectric projects which have not been accepted by the electrical corporation for commercial operation prior to May 18, 1987.
  (3) Every contract executed by a private energy producer who is in violation of paragraph (1) is void and unenforceable on and after whichever of the following dates applies:
  (A) February 29, 1988, for contracts involving hydroelectric projects which have been accepted by the electrical corporation for commercial operation on or after May 18, 1987, and prior to January 1, 1988.
  (B) The 60th day after a project has been accepted by the electrical corporation for commercial operation, for contracts involving hydroelectric projects which are accepted by the electrical corporation for commercial operation on or after January 1, 1988.
  (4) The commission shall disallow, for purposes of establishing rates for an electrical corporation, all amounts expended for the purchase of electricity pursuant to a contract that is void and unenforceable under this subdivision.
  (e) (1) For the purposes of providing proof of compliance with the federal Clean Water Act, the electrical corporation shall require the private energy producer to provide a statement from the State Water Resources Control Board that certification pursuant to Section 401 of the federal Clean Water Act has either been granted or waived by the board for operation of the hydroelectric facility. The board shall not waive certification unless the board finds that there is reasonable assurance that the project shall comply with all applicable requirements of the federal Clean Water Act and state water quality laws. If the board cannot make this finding within the period provided for certification, the board shall either certify upon conditions that provide reasonable assurance of compliance or deny certification.
  (2) The requirements of paragraph (1) shall apply only to contracts involving hydroelectric projects which have not been accepted by the electrical corporation for commercial operation prior to January 1, 1992.
  (3) Every contract executed by a private energy producer who is in violation of paragraph (1) is void and unenforceable on and after whichever of the following dates applies:
  (A) March 1, 1993, for contracts involving hydroelectric projects which are accepted by the electrical corporation for commercial operation between January 1, 1992, and December 31, 1992.
  (B) The 60th day after having been accepted by the electrical corporation for commercial operation, for contracts involving hydroelectric projects which are accepted by the electrical corporation for commercial operation on or after January 1, 1993.
  (4) The commission shall disallow, for purposes of establishing rates for an electrical corporation, all amounts expended for the purchase of electricity pursuant to a contract that is void and unenforceable under this subdivision.
  (f) Subdivision (d) does not apply to any private energy producer if all of the following conditions are met:
  (1) The electrical corporation did not make timely written demand for the proof of compliance required by paragraph (1) of subdivision (d).
  (2) On or before the date the project was accepted by the electrical corporation for commercial operation, the private energy producer was in fact in compliance with all applicable state laws relating to the control, appropriation, use, and distribution of water, including, but not limited to, those laws that require the obtaining of all applicable entitlements.
  (3) Prior to October 14, 1991, the private energy producer has provided proof of the applicable certification from the State Water Resources Control Board pursuant to subparagraph (A) of paragraph (1) of subdivision (d), which proof contains further certification from the State Water Resources Control Board of the existence of the condition identified in paragraph (2) of subdivision (f).
  (g) For purposes of meeting the requirements of subdivision (d) or (e), or of providing certification required under Section 26013 of the Public Resources Code, the private energy producer shall furnish information as is reasonably required by the State Water Resources Control Board to document a claim of right, a certification, or a waiver. Every private energy producer requesting certification and a statement from the board pursuant to subdivisions (d) and (e), or to Section 26013 of the Public Resources Code, shall pay to the board at the time of filing the request, a fee of two hundred fifty dollars ($250) to cover the reasonable cost of the board in evaluating and processing the certification request.
  (h) As used in this section, "Federal Clean Water Act" means the federal Water Pollution Control Act (Sections 1251 et seq. of Volume 33 of the United States Code) and acts amendatory thereof or supplementary thereto.

The Legislature finds and declares all of the following:
  (a) Small power producers provide important alternative sources of electrical energy.
  (b) The commission is required to approve and establish equitable charges to be paid by electrical corporations which purchase electricity or electrical generating capacity, or both, from qualifying small power producers.
  (c) The commission recognized the importance of developing standard offer contracts based on long-run avoided costs in order to encourage the development of qualifying small power producers. On September 7, 1983, in Decision 83-09-054, the commission approved interim standard offer No. 4, which established a long-term power purchase contract.
  (d) Many pioneer small power producers operating prior to September 7, 1983, did so under power purchase contracts based on short-term energy prices and long-term capacity prices. When interim standard offer No. 4 was approved, the commission allowed its provisions to be offered to qualified facility projects which had not yet obtained construction financing or otherwise entered a contract and started construction. Pioneer small power producers with existing contracts were not allowed to switch to the new interim standard offer No. 4 until their existing contracts were no longer in effect.
  (e) On April 17, 1985, pursuant to Decision 85-04-075, the commission suspended all payment options offered under interim standard offer No. 4 due to the contrasting of excessive energy capacity, and the conclusion that prices were too high.
  (f) Many qualifying small power producers who were operating under contracts made prior to September 7, 1983, were thus precluded by the commission from adopting interim standard offer No. 4, and may be required to accept new prices and terms which provide less compensation than the suspended interim standard offer No. 4.
  (g) These financially stressed qualifying small power producers assert they were unfairly denied the opportunity to adopt interim standard offer No. 4 by the commission. They also assert that much of the capacity contracted for under the suspended interim standard offer No. 4 will never be constructed. They further allege that they are being forced to close small powerplants which are currently in operation while producers with interim standard offer No. 4 contracts are constructing new plants.

The commission shall approve and establish standby charges for electrical corporations. The commission may act in this regard on its own motion or on application of an electrical corporation or a private energy producer.

The commission shall approve and establish charges for transmission service. The commission may act in this regard on its own motion or on application of an electrical corporation or a private energy producer.

(a) The commission shall conduct a review of the charges paid by electrical corporations for electricity generated from other than conventional power sources and furnished to such corporations. Following such review, the commission shall consider adjustments in such charges to encourage the generation of electricity from other than conventional power sources.
  (b) The commission shall conduct a review of standby charges charged by electrical corporations. Following such review, the commission shall consider adjustments in such charges to encourage the utilization of electricity generated from other than conventional power sources and to enable electrical corporations to review the costs of providing standby service.
  (c) The commission shall conduct a review of charges for transmission service made by electrical corporations for the transmission of electricity generated from other than conventional power sources. Following such review, the commission shall consider adjustments in such charges to encourage the generation of electricity from other than conventional power sources.

(a) The commission shall establish requirements for the administration of power purchase contracts between electrical corporations and private energy producers. For any project which has not received all regulatory permits at the time of the commission's review of a proposed project deferral agreement, the commission shall, at a minimum, apply both of the following requirements:
  (1) Prohibit payments by an electrical corporation to a private energy producer to defer the construction of a private energy project unless the private energy producer agrees to repay all deferral payments charged to ratepayers in the event the project is not constructed and operating by the time the deferral period expires.
  (2) Require the private energy producer to provide adequate security to ensure repayment of those ratepayer charges.
  (b) Subdivision (a) does not apply to a power purchase contract between an electrical corporation and a private energy producer which is a major customer of the electrical corporation, if the contract is negotiated pursuant to procedures prescribed by the commission and for the purpose of retaining that customer.

(a) As used in this section, the following terms have the following meanings:
  (1) "Benefiting account" means an electricity account, or more than one account, mutually agreed upon by Pacific Gas and Electric Company and the City of Davis.
  (2) "Bill credit" means credits calculated based upon the electricity generation component of the rate schedule applicable to a benefiting account, as applied to the net metered quantities of electricity.
  (3) "PVUSA" means the photovoltaic electricity generation facility selected by the City of Davis, located at 24662 County Road, Davis, California, with a rated peak electricity generation capacity of 600 kilowatts, and as it may be expanded, not to exceed one megawatt of peak generation capacity.
  (4) "Net metered" means the electricity output from the PVUSA.
  (5) "Environmental attributes" associated with the PVUSA include, but are not limited to, the credits, benefits, emissions reductions, environmental air quality credits, and emissions reduction credits, offsets, and allowances, however entitled resulting from the avoidance of the emission of any gas, chemical, or other substance attributable to the PVUSA.
  (b) The City of Davis may elect to designate a benefiting account, or more than one account, to receive bill credit for the electricity generated by the PVUSA, if all of the following conditions are met:
  (1) A benefiting account receives service under a time-of-use rate schedule.
  (2) The electricity output of the PVUSA is metered for time of use to allow allocation of each bill credit to correspond to the time-of-use period of a benefiting account.
  (3) All costs associated with the metering requirements of paragraphs (1) and (2) are the responsibility of the City of Davis.
  (4) All electricity delivered to the electrical grid by the PVUSA is the property of Pacific Gas and Electric Company.
  (5) PVUSA does not sell electricity delivered to the electrical grid to a third party.
  (6) The right, title, and interest in the environmental attributes associated with the electricity delivered to the electrical grid by the PVUSA are the property of Nuon Renewable Ventures USA, LLC.
  (c) A benefiting account shall be billed on a monthly basis, as follows:
  (1) For all electricity usage, the rate schedule applicable to the benefiting account, including any surcharge, exit fee, or other cost recovery mechanism, as determined by the commission, to reimburse the Department of Water Resources for purchases of electricity, pursuant to Division 27 (commencing with Section 80000) of the Water Code.
  (2) The rate schedule for the benefiting account shall also provide credit for the generation component of the time-of-use rates for the electricity generated by the PVUSA that is delivered to the electrical grid. The generation component credited to the benefiting account may not include the surcharge, exit fee, or other cost recovery mechanism, as determined by the commission, to reimburse the Department of Water Resources for purchases of electricity, pursuant to Division 27 (commencing with Section 80000) of the Water Code.
  (3) If in any billing cycle, the charge pursuant to paragraph (1) for electricity usage exceeds the billing credit pursuant to paragraph (2), the City of Davis shall be charged for the difference.
  (4) If in any billing cycle, the billing credit pursuant to paragraph (2), exceeds the charge for electricity usage pursuant to paragraph (1), the difference shall be carried forward as a credit to the next billing cycle.
  (5) After the electricity usage charge pursuant to paragraph (1) and the credit pursuant to paragraph (2) are determined for the last billing cycle of a calendar year, any remaining credit resulting from the application of this section shall be reset to zero.
  (d) Not more frequently that once per year, and upon providing Pacific Gas and Electric Company with a minimum of 60 days notice, the City of Davis may elect to change a benefiting account. Any credit resulting from the application of this section earned prior to the change in a benefiting account that has not been used as of the date of the change in the benefit account, shall be applied, and may only be applied, to a benefiting account as changed.
  (e) Pacific Gas and Electric Company shall file an advice letter with the Public Utilities Commission, that complies with this section, not later than 10 days after the effective date of this section, proposing a rate tariff for a benefiting account. The commission, within 30 days of the date of filing, shall approve the proposed tariff, or specify conforming changes to be made by Pacific Gas and Electric Company to be filed in a new advice letter.
  (f) The City of Davis may terminate its election pursuant to subdivision (b), upon providing Pacific Gas and Electric Company with a minimum of 60 days notice. Should the City of Davis sell its interest in the PVUSA, or sell the electricity generated by the PVUSA, in a manner other than required by this section, upon the date of either event, and the earliest date if both events occur, no further bill credit pursuant to paragraph (2) of subdivision (b) may be earned. Only credit earned prior to that date shall be made to a benefiting account.
  (g) The Legislature finds and declares that credit for a benefiting account for the electricity output from the PVUSA are in the public interest in order to value the production of this unique, wholly renewable resource electricity generation facility located in, and owned in part by, the City of Davis. Because of the unique circumstances applicable only to the PVUSA a statute of general applicability cannot be enacted within the meaning of subdivision (b) of Section 16 of Article IV of the California Constitution. Therefore, this special statute is necessary.

(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, 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 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) (A) "Eligible customer-generator" means a residential customer, small commercial customer as defined in subdivision (h) of Section 331, or commercial, industrial, or agricultural customer of an electric utility, who uses a renewable electrical generation facility, or a combination of those facilities, with a total capacity of not more than one megawatt, that is located on the customer's owned, leased, or rented premises, and is interconnected and operates in parallel with the electrical grid, and is intended primarily to offset part or all of the customer's own electrical requirements.
  (B) (i) Notwithstanding subparagraph (A), "eligible customer-generator" includes the Department of Corrections and Rehabilitation using a renewable electrical generation technology, or a combination of renewable electrical generation technologies, with a total capacity of not more than eight megawatts, that is located on the department's owned, leased, or rented premises, and is interconnected and operates in parallel with the electrical grid, and is intended primarily to offset part or all of the facility's own electrical requirements. The amount of any wind generation exported to the electrical grid shall not exceed 1.35 megawatt at any time.
  (ii) Notwithstanding paragraph (2) of subdivision (e), an electrical corporation shall be afforded a prudent but necessary time, as determined by the executive director of the commission, to study the impacts of a request for interconnection of a renewable generator with a capacity of greater than one megawatt under this subparagraph. If the study reveals the need for upgrades to the transmission or distribution system arising solely from the interconnection, the electrical corporation shall be afforded the time necessary to complete those upgrades before the interconnection and those costs shall be borne by the customer-generator. Upgrade projects shall comply with applicable state and federal requirements, including requirements of the Federal Energy Regulatory Commission.
  (C) (i) For purposes of this subparagraph, a "United States Armed Forces base or facility" is an establishment under the jurisdiction of the United States Army, Navy, Air Force, Marine Corps, or Coast Guard.
  (ii) Notwithstanding subparagraph (A), a United States Armed Forces base or facility is an "eligible customer-generator" if the base or facility uses a renewable electrical generation facility, or a combination of those facilities, the renewable electrical generation facility is located on premises owned, leased, or rented by the United States Armed Forces base or facility, the renewable electrical generation facility is interconnected and operates in parallel with the electrical grid, the renewable electrical generation facility is intended primarily to offset part or all of the base or facility's own electrical requirements, and the renewable electrical generation facility has a generating capacity that does not exceed the lesser of 12 megawatts or one megawatt greater than the minimum load of the base or facility over the prior 36 months. Unless prohibited by federal law, a renewable electrical generation facility shall not be eligible for net energy metering for privatized military housing pursuant to this subparagraph if the renewable electrical generation facility was procured using a sole source process. A renewable electrical generation facility procured using best value criteria, if otherwise eligible, may be used for net energy metering for privatized military housing pursuant to this subparagraph. For these purposes, "best value criteria" means a value determined by objective criteria and may include, but is not limited to, price, features, functions, and life-cycle costs.
  (iii) A United States Armed Forces base or facility that is an eligible customer generator pursuant to this subparagraph shall not receive compensation for exported generation.
  (iv) Notwithstanding paragraph (2) of subdivision (e), an electrical corporation shall be afforded a prudent but necessary time, as determined by the executive director of the commission but not less than 60 working days, to study the impacts of a request for interconnection of a renewable electrical generation facility with a capacity of greater than one megawatt pursuant to this subparagraph. If the study reveals the need for upgrades to the transmission or distribution system arising solely from the interconnection, the electrical corporation shall be afforded the time necessary to complete those upgrades before the interconnection and the costs of those upgrades shall be borne by the eligible customer-generator. Upgrade projects shall comply with applicable state and federal requirements, including requirements of the Federal Energy Regulatory Commission. For any renewable generation facility that interconnects directly to the transmission grid or that requires transmission upgrades, the United States Armed Forces base or facility shall comply with all Federal Energy Regulatory Commission interconnection procedures and requirements.
  (v) An electrical corporation shall make a tariff, as approved by the commission, available pursuant to this subparagraph by November 1, 2015.
  (5) "Large electrical corporation" means an electrical corporation with more than 100,000 service connections in California.
  (6) "Net energy metering" means measuring the difference between the electricity supplied through the electrical grid and the electricity generated by an eligible customer-generator and fed back to the electrical grid over a 12-month period as described in subdivisions (c) and (h).
  (7) "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.
  (8) "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.
  (9) "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).
  (10) "Ratemaking authority" means, for an electrical corporation, the commission, for an electrical cooperative, its ratesetting body selected by its shareholders or members, and for a local publicly owned electric utility, the local elected body responsible for setting the rates of the local publicly owned utility.
  (11) "Renewable electrical generation facility" means a facility that generates electricity from a renewable source listed in paragraph (1) of subdivision (a) of Section 25741 of the Public Resources Code. A small hydroelectric generation facility is not an eligible renewable electrical generation facility if it will cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.
  (12) "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 electrical grid and the electricity generated by an eligible customer-generator and fed back to the electrical 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) Except as provided in paragraph (4) and in Section 2827.1, every 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 5 percent of the 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 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 generating system performance information for research purposes relative to a renewable electrical generation facility. 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) An electrical corporation shall include a provision in the net energy metering contract or tariff requiring that any customer with an existing electrical generating facility and meter who enters into a new net energy metering contract shall provide an inspection report to the electrical corporation, unless the electrical generating facility and meter have been installed or inspected within the previous three years. The inspection report shall be prepared by a California licensed contractor who is not the owner or operator of the facility and meter. A California licensed electrician shall perform the inspection of the electrical portion of the facility and meter.
  (3) (A) On an annual basis, every 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 electrical corporation, local publicly owned electrical utility, or electrical cooperative, in which the 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 electric utilities, and for using that information to determine when, pursuant to paragraphs (1) and (4), an electric utility is not obligated to provide net energy metering to additional eligible customer-generators in its service area.
  (4) (A) An electric utility that is not a large electrical corporation 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 electric utilities in that service area furnishing net energy metering to eligible customer-generators exceeds 5 percent of the aggregate customer peak demand of those electric utilities.
  (B) The commission shall require every large electrical corporation to make the standard contract or tariff available to eligible customer-generators, continuously and without interruption, until such times as the large electrical corporation reaches its net energy metering program limit or July 1, 2017, whichever is earlier. A large electrical corporation reaches its program limit when the combined total peak demand of all electricity used by eligible customer-generators served by all the electric utilities in the large electrical corporation's service area furnishing net energy metering to eligible customer-generators exceeds 5 percent of the aggregate customer peak demand of those electric utilities. For purposes of calculating a large electrical corporation's program limit, "aggregate customer peak demand" means the highest sum of the noncoincident peak demands of all of the large electrical corporation' s customers that occurs in any calendar year. To determine the aggregate customer peak demand, every large electrical corporation shall use a uniform method approved by the commission. The program limit calculated pursuant to this paragraph shall not be less than the following:
  (i) For San Diego Gas and Electric Company, when it has made 607 megawatts of nameplate generating capacity available to eligible customer-generators.
  (ii) For Southern California Edison Company, when it has made 2,240 megawatts of nameplate generating capacity available to eligible customer-generators.
  (iii) For Pacific Gas and Electric Company, when it has made 2,409 megawatts of nameplate generating capacity available to eligible customer-generators.
  (C) Every large electrical corporation shall file a monthly report with the commission detailing the progress toward the net energy metering program limit established in subparagraph (B). The report shall include separate calculations on progress toward the limits based on operating solar energy systems, cumulative numbers of interconnection requests for net energy metering eligible systems, and any other criteria required by the commission.
  (D) Beginning July 1, 2017, or upon reaching the net metering program limit of subparagraph (B), whichever is earlier, the obligation of a large electrical corporation to provide service pursuant to a standard contract or tariff shall be pursuant to Section 2827.1 and applicable state and federal requirements.
  (d) Every 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 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 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 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, or Section 365.1, with an electric service provider that does not provide distribution service for the direct transactions, the electric utility that provides distribution service for 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 or 365.1 with an electric service provider, and the customer is an eligible customer-generator, the 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 a renewable electrical generation facility, except that eligible customer-generators shall not be assessed standby charges on the electrical generating capacity or the kilowatthour production of a renewable electrical generation 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 eligible 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 a renewable electrical generation 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 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 electrical 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, at the end of each 12-month period following the date of final interconnection of the eligible customer-generator's system with an electric utility, and at each anniversary date thereafter, shall be billed for electricity used during that 12-month period. The electric utility shall determine if the eligible residential or small commercial customer-generator was a net consumer or a net surplus customer-generator during that period.
  (2) At the end of each 12-month period, where the electricity supplied during the period by the 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 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, 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 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 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, 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, 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 electric utility 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 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 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 electric utility during that same period, the eligible customer-generator is a net surplus customer-generator and the electric utility, upon an affirmative election by the net surplus customer-generator, shall either (A) provide net surplus electricity compensation for any net surplus electricity generated during the prior 12-month period, or (B) allow the net surplus customer-generator to apply the net surplus electricity as a credit for kilowatthours subsequently supplied by the electric utility to the net 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 the net surplus electricity unless the electric utility enters into a purchase agreement with the eligible customer-generator for those excess kilowatthours. Every electric utility shall 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. For an electric utility that is an electrical corporation or electrical cooperative, the commission may adopt requirements for providing notice and the manner by which eligible customer-generators may elect to receive net surplus electricity compensation.
  (4) (A) An eligible customer-generator with multiple meters may elect to aggregate the electrical load of the meters located on the property where the renewable electrical generation facility is located and on all property adjacent or contiguous to the property on which the renewable electrical generation facility is located, if those properties are solely owned, leased, or rented by the eligible customer-generator. If the eligible customer-generator elects to aggregate the electric load pursuant to this paragraph, the electric utility shall use the aggregated load for the purpose of determining whether an eligible customer-generator is a net consumer or a net surplus customer-generator during a 12-month period.

(B) If an eligible customer-generator chooses to aggregate pursuant to subparagraph (A), the eligible customer-generator shall be permanently ineligible to receive net surplus electricity compensation, and the electric utility shall retain any kilowatthours in excess of the eligible customer-generator' s aggregated electrical load generated during the 12-month period.
  (C) If an eligible customer-generator with multiple meters elects to aggregate the electrical load of those meters pursuant to subparagraph (A), and different rate schedules are applicable to service at any of those meters, the electricity generated by the renewable electrical generation facility shall be allocated to each of the meters in proportion to the electrical load served by those meters. For example, if the eligible customer-generator receives electric service through three meters, two meters being at an agricultural rate that each provide service to 25 percent of the customer's total load, and a third meter, at a commercial rate, that provides service to 50 percent of the customer's total load, then 50 percent of the electrical generation of the eligible renewable generation facility shall be allocated to the third meter that provides service at the commercial rate and 25 percent of the generation shall be allocated to each of the two meters providing service at the agricultural rate. This proportionate allocation shall be computed each billing period.
  (D) This paragraph shall not become operative for an electrical corporation unless the commission determines that allowing eligible customer-generators to aggregate their load from multiple meters will not result in an increase in the expected revenue obligations of customers who are not eligible customer-generators. The commission shall make this determination by September 30, 2013. In making this determination, the commission shall determine if there are any public purpose or other noncommodity charges that the eligible customer-generators would pay pursuant to the net energy metering program as it exists prior to aggregation, that the eligible customer-generator would not pay if permitted to aggregate the electrical load of multiple meters pursuant to this paragraph.
  (E) A local publicly owned electric utility or electrical cooperative shall only allow eligible customer-generators to aggregate their load if the utility's ratemaking authority determines that allowing eligible customer-generators to aggregate their load from multiple meters will not result in an increase in the expected revenue obligations of customers that are not eligible customer-generators. The ratemaking authority of a local publicly owned electric utility or electrical cooperative shall make this determination within 180 days of the first request made by an eligible customer-generator to aggregate their load. In making the determination, the ratemaking authority shall determine if there are any public purpose or other noncommodity charges that the eligible customer-generator would pay pursuant to the net energy metering or co-energy metering program of the utility as it exists prior to aggregation, that the eligible customer-generator would not pay if permitted to aggregate the electrical load of multiple meters pursuant to this paragraph. If the ratemaking authority determines that load aggregation will not cause an incremental rate impact on the utility's customers that are not eligible customer-generators, the local publicly owned electric utility or electrical cooperative shall permit an eligible customer-generator to elect to aggregate the electrical load of multiple meters pursuant to this paragraph. The ratemaking authority may reconsider any determination made pursuant to this subparagraph in a subsequent public proceeding.
  (F) For purposes of this paragraph, parcels that are divided by a street, highway, or public thoroughfare are considered contiguous, provided they are otherwise contiguous and under the same ownership.
  (G) An eligible customer-generator may only elect to aggregate the electrical load of multiple meters if the renewable electrical generation facility, or a combination of those facilities, has a total generating capacity of not more than one megawatt.
  (H) Notwithstanding subdivision (g), an eligible customer-generator electing to aggregate the electrical load of multiple meters pursuant to this subdivision shall remit service charges for the cost of providing billing services to the electric utility that provides service to the meters.
  (5) (A) The ratemaking authority shall 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 eligible customer-generators and other bundled service customers.
  (6) (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 399.30.
  (7) The 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 electric utility for net electricity consumed, or the net surplus electricity generated, since the last 12-month period ended. Notwithstanding this subdivision, an electric utility shall permit that customer to pay monthly for net energy consumed.
  (8) If an eligible residential or small commercial customer-generator terminates the customer relationship with the electric utility, the 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.
  (9) If an electric service provider or 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 electric utility, the 12-month period, with respect to that new electric service provider or electric utility, shall commence on the date on which the new electric service provider or electric utility first supplies electric service to the customer-generator.
  (i) Notwithstanding any other provisions of this section, paragraphs (1), (2), and (3) 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 electricity 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 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 a renewable electrical generation 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 a renewable electrical generation 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) A renewable electrical generation facility 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 Incorporated and, where applicable, rules of the commission regarding safety and reliability. A customer-generator whose renewable electrical generation facility meets those standards and rules shall not be required to install additional controls, perform or pay for additional tests, or purchase additional liability insurance.
  (k) If the commission determines that there are cost or revenue obligations for an electrical corporation 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 shall 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.
  (l) 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 (l), an eligible customer-generator shall not be required to replace its existing meter except as set forth in paragraph (1) of subdivision (c), nor shall the 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.

(a) For purposes of this section, "eligible customer-generator," "large electrical corporation," and "renewable electrical generation facility" have the same meanings as defined in Section 2827.
  (b) Notwithstanding any other law, the commission shall develop a standard contract or tariff, which may include net energy metering, for eligible customer-generators with a renewable electrical generation facility that is a customer of a large electrical corporation no later than December 31, 2015. The commission may develop the standard contract or tariff prior to December 31, 2015, and may require a large electrical corporation that has reached the net energy metering program limit of subparagraph (B) of paragraph (4) of subdivision (c) of Section 2827 to offer the standard contract or tariff to eligible customer-generators. A large electrical corporation shall offer the standard contract or tariff to an eligible customer-generator beginning July 1, 2017, or prior to that date if ordered to do so by the commission because it has reached the net energy metering program limit of subparagraph (B) of paragraph (4) of subdivision (c) of Section 2827. The commission may revise the standard contract or tariff as appropriate to achieve the objectives of this section. In developing the standard contract or tariff, the commission shall do all of the following:
  (1) Ensure that the standard contract or tariff made available to eligible customer-generators ensures that customer-sited renewable distributed generation continues to grow sustainably and include specific alternatives designed for growth among residential customers in disadvantaged communities.
  (2) Establish terms of service and billing rules for eligible customer-generators.
  (3) Ensure that the standard contract or tariff made available to eligible customer-generators is based on the costs and benefits of the renewable electrical generation facility.
  (4) Ensure that the total benefits of the standard contract or tariff to all customers and the electrical system are approximately equal to the total costs.
  (5) Allow projects greater than one megawatt that do not have significant impact on the distribution grid to be built to the size of the onsite load if the projects with a capacity of more than one megawatt are subject to reasonable interconnection charges established pursuant to the commission's Electric Rule 21 and applicable state and federal requirements.
  (6) Establish a transition period during which eligible customer-generators taking service under a net energy metering tariff or contract prior to July 1, 2017, or until the electrical corporation reaches its net energy metering program limit pursuant to subparagraph (B) of paragraph (4) of subdivision (c) of Section 2827, whichever is earlier, shall be eligible to continue service under the previously applicable net energy metering tariff for a length of time to be determined by the commission by March 31, 2014. Any rules adopted by the commission shall consider a reasonable expected payback period based on the year the customer initially took service under the tariff or contract authorized by Section 2827.
  (7) The commission shall determine which rates and tariffs are applicable to customer generators only during a rulemaking proceeding. Any fixed charges for residential customer generators that differ from the fixed charges allowed pursuant to subdivision (f) of Section 739.9 shall be authorized only in a rulemaking proceeding involving every large electrical corporation. The commission shall ensure customer generators are provided electric service at rates that are just and reasonable.
  (c) Beginning July 1, 2017, or when ordered to do so by the commission because the large electrical corporation has reached its capacity limitation of subparagraph (B) of paragraph (4) of subdivision (c) of Section 2827, all new eligible customer-generators shall be subject to the standard contract or tariff developed by the commission and any rules, terms, and rates developed pursuant to subdivision (b). There shall be no limitation on the amount of generating capacity or number of new eligible customer-generators entitled to receive service pursuant to the standard contract or tariff after July 1, 2017. An eligible customer-generator that has received service under a net energy metering standard contract or tariff pursuant to Section 2827 that is no longer eligible to receive service shall be eligible to receive service pursuant to the standard contract or tariff developed by the commission pursuant to this section.

(a) By October 1, 2013, the commission shall complete a study to determine who benefits from, and who bears the economic burden, if any, of, the net energy metering program authorized pursuant to Section 2827, and to determine the extent to which each class of ratepayers and each region of the state receiving service under the net energy metering program is paying the full cost of the services provided to them by electrical corporations, and the extent to which those customers pay their share of the costs of public purpose programs. In evaluating program costs and benefits for purposes of the study, the commission shall consider all electricity generated by renewable electric generating systems, including the electricity used onsite to reduce a customer's consumption of electricity that otherwise would be supplied through the electrical grid, as well as the electrical output that is being fed back to the electrical grid for which the customer receives credit or net surplus electricity compensation under net energy metering. The study shall quantify the costs and benefits of net energy metering to participants and nonparticipants and shall further disaggregate the results by utility, customer class, and household income groups within the residential class. The study shall further gather and present data on the income distribution of residential net energy metering participants. In order to assess the costs and benefits at various levels of net energy metering implementation, the study shall be conducted using multiple net energy metering penetration scenarios, including, at a minimum, the capacity needed to reach the solar photovoltaic goals of the California Solar Initiative pursuant to Section 25780 of the Public Resources Code, and the estimated net energy metering capacity under the 5-percent minimum requirement of paragraphs (1) and (4) of subdivision (c) of Section 2827.
  (b) (1) The commission shall report the results of the study to the Legislature within 30 days of its completion.
  (2) The report shall be submitted in compliance with Section 9795 of the Government Code.
  (3) Pursuant to Section 10231.5 of the Government Code, this section is repealed on July 1, 2017.

Generation eligible for net energy metering that has all local and state permits required to commence construction on or before December 31, 2002, and has completed construction on or before September 30, 2003, shall be entitled, regardless of any change in customer or ownership of the energy system, for the life of the installation, to the net energy metering terms in effect on the date the local and state permits were acquired.

Notwithstanding any other provisions of this article, the following provisions apply to an eligible customer-generator utilizing wind energy co-metering with a capacity of more than 50 kilowatts, but not exceeding one megawatt, unless approved by the electric service provider.
  (a) The eligible customer-generator shall be required to utilize a meter, or multiple meters, capable of separately measuring electricity flow in both directions. Nothing in this section precludes the use of advanced metering infrastructure devices. 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 is 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 agency or the electric service provider to reduce its costs for purchasing and installing a time-of-use meter.
  (b) The consumption of electricity from the electric service provider for wind energy co-metering by an eligible customer-generator shall 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 wind electrical generating facility. The generation of electricity provided to the electric service provider shall result in a credit to the eligible customer-generator and shall be priced in accordance with the generation component, excluding surcharges to cover the purchase of power by the Department of Water Resources, established under the applicable structure to which the customer would be assigned if the customer did not use an eligible wind electrical generating facility.

(a) As used in this section, the following terms have the following meanings:
  (1) "Electrical corporation" means an electrical corporation, as defined in Section 218.
  (2) "Eligible fuel cell electrical generating facility" means a facility that includes the following:
  (A) Integrated powerplant systems containing a stack, tubular array, or other functionally similar configuration used to electrochemically convert fuel to electricity.
  (B) An inverter and fuel processing system where necessary.
  (C) Other plant equipment, including heat recovery equipment, necessary to support the plant's operation or its energy conversion.
  (3) (A) "Eligible fuel cell customer-generator" means a customer of an electrical corporation that meets all the following criteria:
  (i) Uses a fuel cell 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 electrical grid while the grid is operational or in a grid independent mode when the grid is nonoperational, and is sized to offset part or all of the eligible fuel cell customer-generator's own electrical requirements.
  (ii) Is the recipient of local, state, or federal funds, or who self-finances projects designed to encourage the development of eligible fuel cell electrical generating facilities.
  (iii) Uses technology the commission has determined will achieve reductions in emissions of greenhouse gases pursuant to subdivision (b), and meets the emission requirements for eligibility for funding set forth in subdivision (c), of Section 379.6.
  (B) For purposes of this paragraph, a person or entity is a customer of the electrical corporation if the customer is physically located within the service territory of the electrical corporation and receives bundled service, distribution service, or transmission service from the electrical corporation.
  (4) "Net energy metering" means measuring the difference between the electricity supplied through the electrical grid and the difference between the electricity generated by an eligible fuel cell electrical generating facility and fed back to the electrical 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 fuel cell customer-generator is not capable of measuring the flow of electricity in two directions, the eligible fuel cell 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.
  (b) (1) Every electrical corporation, not later than March 1, 2004, shall file with the commission a standard tariff providing for net energy metering for eligible fuel cell customer-generators, consistent with this section. Subject to the limitation in subdivision (f), every electrical corporation shall make this tariff available to eligible fuel cell customer-generators upon request, on a first-come-first-served basis, until the total cumulative rated generating capacity of the eligible fuel cell electrical generating facilities receiving service pursuant to the tariff reaches a level equal to its proportionate share of a statewide limitation of 500 megawatts cumulative rated generation capacity served under this section. The proportionate share shall be calculated based on the ratio of the electrical corporation's peak demand compared to the total statewide peak demand.
  (2) To continue the growth of the market for onsite electrical generation using fuel cells, the commission may review and incrementally raise the limitation established in paragraph (1) on the total cumulative rated generating capacity of the eligible fuel cell electrical generating facilities receiving service pursuant to the tariff in paragraph (1).
  (c) In determining the eligibility for the cumulative rated generating capacity within an electrical corporation's service territory, preference shall be given to facilities that, at the time of installation, are located in a community with significant exposure to air contaminants or localized air contaminants, or both, including, but not limited to, communities of minority populations or low-income populations, or both, based on the ambient air quality standards established pursuant to Division 26 (commencing with Section 39000) of the Health and Safety Code.
  (d) (1) 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 customer would be assigned if the customer was not an eligible fuel cell customer-generator. Any new or additional demand charge, standby charge, customer charge, minimum monthly charge, interconnection charge, or other charge that would increase an eligible fuel cell customer-generator's costs beyond those of other customers in the rate class to which the eligible fuel cell customer-generator would otherwise be assigned are contrary to the intent of the Legislature in enacting this section, and shall not form a part of net energy metering tariffs.
  (2) The commission shall authorize an electrical corporation to charge a fuel cell customer-generator a fee based on the cost to the utility associated with providing interconnection inspection services for that fuel cell customer-generator.
  (e) The net metering calculation shall be made by measuring the difference between the electricity supplied to the eligible fuel cell customer-generator and the electricity generated by the eligible fuel cell customer-generator and fed back to the electrical grid over a 12-month period. The following rules shall apply to the annualized metering calculation:
  (1) The eligible fuel cell customer-generator shall, at the end of each 12-month period following the date of final interconnection of the eligible fuel cell 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 fuel cell customer-generator was a net consumer or a net producer of electricity during that period. For purposes of determining if the eligible fuel cell customer-generator was a net consumer or a net producer of electricity during that period, the electrical corporation shall aggregate the electrical load of the meters located on the property where the eligible fuel cell electrical generating facility is located and on all property adjacent or contiguous to the property on which the facility is located, if those properties are solely owned, leased, or rented by the eligible fuel cell customer-generator. 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 fuel cell customer-generator during that same period, the eligible fuel cell customer-generator is a net electricity consumer and the electrical corporation shall be owed compensation for the eligible fuel cell customer-generator's net kilowatthour consumption over that same period. The compensation owed for the eligible fuel cell 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 fuel cell customer-generator. When the eligible fuel cell customer-generator is a net generator 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 fuel cell customer-generator's time-of-use electrical meter is unable to measure the flow of electricity in two directions, paragraph (4) of subdivision (a) shall apply. All other charges, other than generation charges, shall be calculated in accordance with the eligible fuel cell customer-generator's applicable tariff and based on the total kilowatthours delivered by the electrical corporation to the eligible fuel cell 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 fuel cell customer-generator during the 12-month period exceeds the electricity supplied by the electrical corporation during that same period, the eligible fuel cell 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 fuel cell customer-generator shall not be owed any compensation for those excess kilowatthours.
  (4) If an eligible fuel cell customer-generator terminates service with the electrical corporation, the electrical corporation shall reconcile the eligible fuel cell customer-generator's consumption and production of electricity during any 12-month period.
  (f) A fuel cell electrical generating facility shall not be eligible for the tariff unless it commences operation prior to January 1, 2017, unless a later enacted statute, that is chaptered before January 1, 2017, extends this eligibility commencement date. The tariff shall remain in effect for an eligible fuel cell electrical generating facility that commences operation pursuant to the tariff prior to January 1, 2017. A fuel cell customer-generator shall be eligible for the tariff established pursuant to this section only for the operating life of the eligible fuel cell electrical generating facility.

(a) As used in this section, the following terms have the following meanings:
  (1) "Appropriate TOU tariff" means the Time-of-Use tariff that would be applicable to the City and County of San Francisco account at the renewable electricity generation facility site if the facility at the site were a Pacific Gas and Electric Company bundled customer, as determined by Pacific Gas and Electric Company.
  (2) "Environmental attributes" associated with the Hetch Hetchy Water and Power (HHWP) at-site renewable generation and HHWP remote renewable generation include, but are not limited to, the credits, benefits, emissions reductions, environmental air quality credits, and emissions reduction credits, offsets, and allowances, however entitled, resulting from the avoidance of the emissions of any gas, chemical, or other substance attributable to the Hetch Hetchy Water and Power renewable electricity generation facility owned by the City and County of San Francisco.
  (3) "HHWP at-site renewable generation" means the electricity generated by renewable electricity generation facilities designated by the City and County of San Francisco pursuant to subdivision (b).
  (4) "HHWP remote renewable generation" means the electricity generated by renewable electricity generation facilities designated by the City and County of San Francisco pursuant to subdivision (h), to provide electricity to qualifying remote load.
  (5) "Interconnection Agreement" means the 1987 agreement between Pacific Gas and Electric Company and the City and County of San Francisco, as filed with and accepted by the Federal Energy Regulatory Commission (FERC), and as amended from time to time with FERC approval, which provides for rates for transmission, distribution, and sales of supplemental electricity to the City and County of San Francisco. Nothing in this section shall waive or modify the rights of parties under the Interconnection Agreement or the jurisdiction of the FERC over rates set forth in the Interconnection Agreement.
  (6) "Qualifying remote load" means the electricity demand of the City and County of San Francisco for load served under the Interconnection Agreement, at sites that are separate from, and not adjacent to, the sites where the renewable electricity generation facility is located, and serviced through a meter or multiple meters other than those serving the sites where the renewable electricity generation facility is located. The separate or remote sites may be designated by the City and County of San Francisco, both inside and outside of the City and County of San Francisco. Where the separate or remote sites are outside the City and County of San Francisco, they shall be located within 20 miles of the City and County of San Francisco or within 20 miles of a HHWP remote renewable generation facility. There is no wattage limit on qualifying remote load.
  (7) "Renewable electricity generation facility" means a facility for the generation of electricity that satisfies both of the following requirements:
  (A) The facility uses biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric generation of 30 megawatts or less, digester gas, municipal solid waste conversion, landfill gas, ocean wave, ocean thermal, or tidal current, and any additions or enhancements to the facility using that technology.
  (B) The facility is owned, or under lease or contract to, the City and County of San Francisco for at least a five-year term and for the full output of electricity from the facility.
  (b) The City and County of San Francisco may elect to designate specific renewable electricity generation facilities as HHWP at-site renewable generation, if all of the following conditions are met:
  (1) Total peak generating capacity does not exceed 15 megawatts.
  (2) The renewable electricity generation facility utilizes a meter, or multiple meters, capable of separately measuring electricity flow in both directions. All meters shall provide "time-of-use" measurement information. If the existing meter at the site of the facility is not capable of providing time-of-use information or is not capable of separately measuring total flow of energy in both directions, the City and County of San Francisco is responsible for all expenses involved in purchasing and installing a meter or meters that are both capable of providing time-of-use information and able to separately measure total electricity flow in both directions.
  (3) The amount of all electricity delivered to the electric grid by the designated HHWP at-site renewable generation is the property of Pacific Gas and Electric Company.
  (4) The City and County of San Francisco does not sell electricity delivered to the electric grid from the designated HHWP at-site renewable generation to a third party.
  (c) For each site of a renewable electricity generation facility that comprises the HHWP at-site renewable generation, Pacific Gas and Electric Company shall identify the appropriate TOU tariff for that site. Any electricity exported to the Pacific Gas and Electric Company grid at that site that is not generated from HHWP remote renewable generation pursuant to subdivision (h) shall, for each time-of-use period, result in a monetary credit to be applied monthly as a credit or offset against the invoice created pursuant to the Interconnection Agreement and shall be valued at the generation component of the appropriate TOU tariff. The commission shall determine if it is appropriate to increase the credit to reflect any additional value derived from the location or the environmental attributes of, the designated HHWP at-site renewable generation.
  (d) Monthly charges and credit amounts for HHWP at-site renewable generation are interim and subject to an accounting true-up, consistent with commission policies and practices. The true-up shall be performed annually or upon the termination, for any reason, of the Interconnection Agreement. The true-up shall accomplish the following:
  (1) If the total electricity delivered to the site by Pacific Gas and Electric Company since the previous true-up equals or exceeds the total electricity exported to the grid by the HHWP at-site renewable generation facility at the site, the City and County of San Francisco is a net electricity consumer at that site. For any HHWP at-site renewable generation site where the City and County of San Francisco is a net electricity consumer, a credit or offset shall be applied to reduce the obligations of the City and County of San Francisco to an invoice prepared pursuant to the Interconnection Agreement. If there is no invoiced obligation to be reduced, there is no applicable credit.
  (2) If the total electricity delivered to the site by Pacific Gas and Electric Company since the previous true-up is less than the total electricity exported to the grid by the HHWP at-site renewable generation facility at the site, the City and County of San Francisco is a net electricity producer at that site. For any HHWP at-site renewable generation site where the City and County of San Francisco is a net electricity producer, the City and County of San Francisco shall receive no credit or offset for the electricity exported to the grid in excess of the electricity delivered to the site from the grid. For any site where the City and County of San Francisco is a net electricity producer, the City and County of San Francisco shall receive a credit or offset up to the amount of electricity delivered to the site from the grid. The credit or offset shall be applied to reduce the obligations of the City and County of San Francisco to an invoice prepared pursuant to the Interconnection Agreement. If there is no invoiced obligation to be reduced, there is no applicable credit or offset. Pacific Gas and Electric Company shall use the last-in, first-out method to determine what electricity delivered to the grid from the site will not earn a credit or offset.
  (e) Pursuant to this section, the offset to charges under the Interconnection Agreement is the medium to convey credits earned under this section. Nothing in this section shall be construed to affect in any way the rights and obligations of the City and County of San Francisco and Pacific Gas and Electric Company under the Interconnection Agreement. If the Interconnection Agreement terminates, the City and County of San Francisco and Pacific Gas and Electric Company shall develop an alternative mechanism to convey credits earned under this section for HHWP at-site renewable generation and for HHWP remote renewable generation, in a manner that accomplishes the same result as that accomplished pursuant to the Interconnection Agreement.
  (f) (1) Pacific Gas and Electric Company shall file an advice letter with the commission, that complies with this section, not later than 10 days after the City and County of San Francisco first designates the specific renewable electricity generation facilities that will comprise HHWP at-site renewable generation.
  (2) The commission, within 30 days of the date of filing of the advice letter, shall approve the advice letter or specify conforming changes to be made by Pacific Gas and Electric Company to be filed in an amended advice letter within 30 days.
  (g) The City and County of San Francisco may terminate its election pursuant to subdivisions (b), (c), (d), and (h), upon providing Pacific Gas and Electric Company with a minimum of 60 days' written notice.
  (h) (1) The City and County of San Francisco may elect to designate specific renewable electricity generation facilities or a portion of specific renewable electricity generation facilities as HHWP remote renewable generation and may use HHWP remote renewable generation to supply electricity to specific facilities designated as qualifying remote load up to the amount of electricity being used by the qualifying remote load.
  (2) The City and County of San Francisco shall receive no credit or offset for the electricity exported to the grid from HHWP remote renewable generation, in excess of the electricity delivered from the grid to qualifying remote load.
  (3) Pacific Gas and Electric Company shall accept any electricity exported to the grid as HHWP remote renewable generation, up to the amount of electricity being used during the corresponding time period by the qualifying remote load, and treat the electricity accepted as behind the meter generation that offsets the electrical usage of qualifying remote load. Additional rates may apply pursuant to paragraph (6).
  (4) The City and County of San Francisco shall be responsible for scheduling the electricity exported to the grid from HHWP remote renewable generation.
  (5) Both HHWP remote renewable generation sites and qualifying remote load sites shall have meters capable of measuring exports and usage of electricity that will support determination of credits or offsets pursuant to paragraph (2). The City and County of San Francisco shall be responsible for the costs of the meters required pursuant to this section.
  (6) To compensate Pacific Gas and Electric Company for the use of its facilities, the City and County of San Francisco shall pay applicable distribution rates, transmission rates, or distribution and transmission rates, at rate levels determined by the Interconnection Agreement, for all energy delivered to qualifying remote load that comes from HHWP remote renewable generation. When HHWP remote renewable generation and the qualifying remote load it serves are located within the City and County of San Francisco and are interconnected at distribution voltage, the applicable rate for delivery of energy from HHWP remote renewable generation shall be reduced as negotiated pursuant to the Interconnection Agreement.
  (7) The appropriate regulatory agency shall ensure that the delivery of electricity by HHWP remote renewable generation to qualifying remote load, and the granting of offsets to the City and County of San Francisco pursuant to this subdivision, do not result in a shifting of costs to bundled service customers, either immediately or over time.
  (i) Hetch Hetchy Water and Power shall reimburse Pacific Gas and Electric Company for its reasonable study costs associated with HHWP remote and at-site renewable generation to address interconnection, consistent with applicable regulatory rules, and impacts upon the electric system resulting from the HHWP remote and at-site renewable generation. If the studies identify improvements necessary for the protection of the Pacific Gas and Electric Company electric system, for the protection of its employees, or to ensure reliable delivery of the electricity generated by the HHWP remote and at-site renewable generation facility to qualifying remote load, Hetch Hetchy Water and Power shall pay the reasonable costs of the improvements if it elects to designate the HHWP remote and at-site renewable generation facility to provide electricity for qualifying remote load.
  (j) The interconnection of HHWP at-site renewable generation and HHWP remote renewable generation will be accomplished through one or more generator interconnection agreements pursuant to applicable regulatory rules and generator interconnection procedures.
  (k) The City and County of San Francisco shall own the environmental attributes associated with the electricity delivered to the electric grid by HHWP at-site renewable generation and HHWP remote renewable generation unless it contracts otherwise.

(a) For purposes of this section, the following terms have the following meanings:
  (1) "EBMUD" means the East Bay Municipal Utility District organized and operating pursuant to Division 6 (commencing with Section 11501).
  (2) "Environmental attributes" associated with the generation of electricity include the credits, benefits, emissions reductions, environmental air quality credits, and emissions reduction credits, offsets, and allowances, however entitled, resulting from the avoidance of the emissions of any gas, chemical, or other substance attributable to an electricity generation facility.
  (b) To ensure that no electrical corporation operates its monopoly transmission and distribution system in a manner that impedes the ability of the EBMUD to reduce its electricity costs through the delivery of electricity generated by EBMUD, an electrical corporation shall meet the requirements of this section.
  (c) An electrical corporation that owns and operates transmission and distribution facilities that deliver electricity at one or more locations to the EBMUD's system shall, upon request by EBMUD, and without discrimination or delay, use the same facilities to deliver electricity generated by EBMUD. EBMUD may elect to designate specific hydroelectric generation facilities owned by EBMUD for the generation of electricity to be delivered to EBMUD, if the following conditions are met:
  (1) The amount of all electricity delivered to the electric grid by the designated EBMUD hydroelectric generation is the property of EBMUD.
  (2) Ownership and use of the environmental attributes associated with the electricity delivered to the electric grid by EBMUD-designated hydroelectric generation is retained by EBMUD.
  (d) (1) No rule, order, or tariff of the commission implementing direct transactions is applicable to electricity generated by EBMUD, that is delivered to EBMUD for its own use that is transported over the transmission and distribution system of an electrical corporation, pursuant to an election made by EBMUD pursuant to subdivision (c).
  (2) Sections 365 and 366 are not applicable to electricity generated by EBMUD, that is delivered to EBMUD for its own use that is transported over the transmission and distribution system of an electrical corporation, pursuant to an election made by EBMUD pursuant to subdivision (c).
  (e) To compensate an electrical corporation for the use of its facilities, EBMUD shall pay applicable rates approved by the commission for distribution, or distribution and transmission, or any transmission rates as required under federal law.
  (f) On or before January 1, 2009, each electrical corporation that owns and operates transmission and distribution facilities that deliver electricity at one or more locations to the EBMUD system shall file an advice letter with the commission that complies with this section. The commission, within 150 days of the date of filing of the advice letter, shall approve the advice letter or specify conforming changes to be made by the electrical corporation, to be filed in an amended advice letter within 60 days.
  (g) The commission shall ensure that the delivery of electricity from EBMUD-designated hydroelectric generation to the EBMUD service territory pursuant to this section does not result in a shifting of costs to the bundled service customers of an electrical corporation, either immediately or over time.