Renewable Energy Bill AB 327 Signed into Law

Posted on Wednesday, October 16th, 2013 by Adam Kotin

bi-directional-meter1-620x250On Monday, October 7th, Governor Brown signed AB 327 into law, capping a controversial bill’s long journey through the Legislature and onto the books.

CalCAN watched closely as this bill made its way to the Governor’s desk. As written, AB 327 could impact the implementation of the CalCAN-supported Net Energy Metering bill SB 594, which was passed in 2012 and validated last month by the California Public Utilities Commission.

Indeed, in its final form, AB 327 holds major ramifications for the future of renewable energy production in the state. But exactly what the bill’s impact on small-scale distributed renewable energy generation will be – particularly in the area of on-farm production – remains to be seen.

The bill, sponsored by Assemblyman Perea (D – Fresno), includes a number of provisions to address the state’s renewable energy future:

First, the amended bill offers a much-needed clarification on the state’s goal of obtaining 33% of its electricity from renewable sources by 2020. As Governor Brown emphasized in his signing statement, 33% renewable electricity is a minimum standard, not the end goal; “a floor, not a ceiling”.

Second, the bill guarantees a path forward for the Net Energy Metering (NEM) program, which provides major incentives for agricultural producers to adopt on-farm renewable energy systems.

That program, which allows for a streamlined process to connect small-scale renewable energy projects to the grid and receive financial credit for the electricity they produce, was already on somewhat tenuous ground. Before AB 327, NEM was set to end once 5% of electricity generated from the participating Investor Owned Utilities (e.g PG&E, Southern California Edison, San Diego Gas & Electric) was produced through this process.

The new legislation mandates a way forward following that cap, requiring that a new system for ‘uncapped’ Net Metering be developed and implemented by 2017. This will provide some level of reassurance to those farmers currently considering renewable energy as a wise investment.

The Governor used his signing statement to address a concern raised by CalCAN, California Farm Bureau and others, writing that he expects the new system to ‘grandfather in’ those generating renewable electricity before the 2017 program comes into effect. This is a crucial issue for those farmers and ranchers who have already made the commitment to renewable energy projects currently under NEM.

Finally, AB 327 gives the California Public Utilities Commission (CPUC) expanded authorization to restructure electricity rates and regulations. Most importantly for renewable energy producers, the CPUC will be in charge of crafting the post-5%-cap Net Energy Metering program over the next two years.

CalCAN intends to participate in the PUC  process, advocating with our allies in the agriculture, renewable energy and environmental communities that the needs of on-farm renewable energy producers be fully addressed. Having worked in coalitions on renewable energy legislation SB 594 (2012) and SB 489 (2011), we are fully committed to making NEM work as an economic, environmental, and climate ‘win’ for California agriculture.

AB 327 represents a path forward for small-scale distributed renewable energy, but with little clarity on where that road will lead. We look forward to being a part of this conversation moving forward, and welcome your comments and support along the way.


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