Local Government Renewable Energy Self Generation Program (AB 2466)
AB 2466, codified as Section 2830 of the Public Utilities Code, was signed into law by Governor Schwarzenegger in September 2008 and became effective on January 1, 2009. The law allows a local government to install renewable generation of up to 1 MW at one location within its geographic boundary and generate credits that can be used to offset charges at one or more other locations within the same geographic boundary.
Link to Legislation
AB 2466 Frequently Asked Questions
- What does AB 2466 do?
AB 2466 (Laird, Huffman) allows a local government to install renewable generation at one location within its geographic boundary and generate credits that can be used to offset charges at one or more other locations within the same geographic boundary. PG&E worked very closely with the authors of this bill, and submitted a letter of support, in order to help our local government customers develop additional supplies of renewable power.
- How will it work?
A local government (or third party) can install an eligible renewable generator on property that is owned or under the control of the local government and located within its geographic boundary.
PG&E will meter the electricity the generator exports to the utility grid (beyond whatever on-site needs it may have), and calculate the credits as described below.
The local government will identify a “benefiting account” or “benefiting accounts” that will receive the credits. The benefiting accounts must be within the local government’s geographic boundaries, and on property that it owns, operates, or controls.
- How will the energy be credited?
Each of the accounts (benefiting and generation) must be on a time-of-use (TOU) rate.
The value of the credit for the exports to the grid from the renewable generator will be established using the generation component of the energy charge of the rate schedule of the local government account where the generator is located, as provided by the Legislature.1
The credit will be allocated to the benefiting accounts on a TOU period basis. The export credits can only be applied to the generation portion of the energy charges of the benefiting accounts (ie, they cannot offset non-generation charges, nor can they offset the generation portion of the demand charge, if applicable).
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- How will the accounts be billed?
Customer bills are calculated and paid monthly. If there is more credit earned from the generator than the customer needs at the benefiting account(s), the net credit will be carried forward to the next month. Once a year, any remaining credits are zeroed out.
- When will this service be available?
The bill became effective on January 1, 2009. Any local government can provide PG&E with no less than 60 days notice that it intends to energize a qualifying renewable generator. PG&E would then have up to 30 days to file tariffs with the CPUC, which would then have 30 days to approve such tariffs (or specify changes).
PG&E requests that any interested local government contact PG&E first to discuss the program and ensure that there is a clear understanding of its terms.
- When can the benefiting accounts be changed?
The local government can change benefiting accounts once a year.
- Who can participate (what is a “local government”)?
“Local government” is defined by the legislature to include cities, counties, school districts, special districts, political subdivisions or other local public agencies that are authorized to generate electricity. The legislature decided that the tariff would not be available for the state, any agency or department of the state, or any joint powers authority.
- What type of generator qualifies?
The generator must be renewable and must be no more than one (1) MW. “Renewable” is in accordance with the definition in the Renewable Portfolio Standard; this means certified by the CEC as a renewable generator.
- Who pays if the distribution system needs to be upgraded?
The local government is responsible for any system upgrades necessary to interconnect the generator to PG&E’s distribution grid. (See PUC Section 2830(b)(6).)
- Is the interconnection governed by FERC rules or CPUC rules?
Interconnections will be CPUC jurisdictional under Rule 21.
- Is there any limit to program participation?
The legislature determined that the Local Government Remote Renewable Energy Program would only be available until 250 MW of remote renewable generation has interconnected statewide. (See PUC Section 2830(h).)
- Can the local government also receive a rebate from the California Solar Initiative (CSI) or Self- Generation Incentive Program (SGIP)?
It is unclear at this time whether a local government participating in the 2466 program can also receive a CSI or SGIP rebate. This is certainly one of the questions the CPUC will answer as it resolves utility tariffs implementing AB 2466. In particular, AB 2466 itself did not explicitly modify the CSI requirement in Senate Bill 1 that states: "The solar energy system is located on the same premises of the end-use consumer where the consumer's own electricity demand is located." Public Resources Code Section 25782(a)(5).
- Who owns the electricity?
PG&E owns the electricity that is exported at the generation site.
- Who owns the Renewable Energy Credits?
The statute says that ownership of the renewable energy credits will be the same as for net metering. This generally means the local government retains the renewable energy credits, or RECs.
Kim Ngo: kxn8@pge.com
