HomeMy WebLinkAboutRESO 9409Resolution No. 9409
Resolution of the Council of the City of Palo Alto Determining that Net
Energy Metering Aggregation Will Not Result in Increased
Cost-Shifting to Non-Participants
RECITALS
A. Section 2827 ofthe California Public Utilities Code requires electric utilities in
California to allow consumers to install distributed generation up to 1 Megawatt {1 MW) in size
to offset load at a single customer meter, and to offer its customers a standard contract or tariff
for Net Energy Metering {NEM) until such systems represent 5% of the utility's peak demand.
B. Senate Bill 595 {Wolk, 2012) {SB 595) authorizes utilities, including CPAU, to
allow eligible customers to install larger renewable generation systems, not to exceed 1MW in
total, that are sized to offset separately metered electric loads on adjacent properties
belonging to the customer {NEM Aggregation).
C. Under SB 595, CPAU may only allow NEM Aggregation if its ratemaking authority
{the City Council) determines that allowing eligible customers to aggregate their load from
multiple meters will not result in an increase in the expected revenue obligations of customers
that do not participate.
D. In making its determination, the City Council must specifically determine if there
are any public purposes or other non-commodity charges that customers would pay pursuant
to the existing NEM program that the customer would not pay if NEM Aggregation were
permitted.
E. lfthe City Council determines that NEM Aggregation will not cause an
incremental rate impact on non-participating customers, NEM Aggregation shall be permitted.
F. Staff has evaluated whether NEM Aggregation would increase cost obligations
for non-participating customers, including whether there are any public purpose or other non-
commodity charges that customers would pay under the existing NEM program that would be
avoided by an NEM Aggregation customer.
G. Based on that evaluation, staff found that NEM Aggregation will not increase
costs for customers that do not participate or allow NEM Aggregators to bypass public purpose
or other non-commodity charges those customer would otherwise have paid under the existing
NEM program because, amongst other findings:
{1} Non-NEM customer cost obligations will not increase with NEM Aggregations
beyond those costs already borne by the same customers under the existing NEM
program;
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{2) NEM Aggregation is subject to the same restrictions imposed on the existing NEM
program, including the 5% cap and the 1MW system limitation; and
{3) NEM Aggregation provides some opportunities for cost-recovery and potential
savings that are unavailable under the existing NEM program, including the
authority to collect billing charges that are unique to NEM aggregation.
H. At its March 26, 2014 meeting, the UAC recommended that the City Council
make the requisite findings to allow for NEM Aggregation.
I. The Council has reviewed staff's analysis, the resulting staff report, and the
UAC's recommendation.
J. Based on that review, Council determines that it can make the requisite findings
to allow CPAU customers to participate in NEM Aggregation.
The Council ofthe City of Palo Alto RESOLVES as follows:
SECTION 1. Allowing eligible customers to aggregate their load from multiple meters
will not result in an increase in the expected revenue requirement obligations of non-
participating customers beyond the cost-shift that already occurs under the existing NEM
program, for all the reasons set forth herein, including the fact that NEM Aggregation will occur
within the current NEM cap set at 5% of peak electric demand.
SECTION 2. There are no public purposes or other non-commodity charges that
customers would pay pursuant to the existing NEM program that the customer would not pay if
NEM Aggregation were permitted.
SECTION 3. There is no incremental rate impact on non-participating customers
associated with NEM Aggregation relative to the existing NEM program.
SECTION 4. The approval of NEM Aggregation is subject to adoption of a rate
schedule to collect from NEM aggregation customers the incremental costs of billing and other
special charges that may be associated with NEM aggregation.
SECTION 5. In the event that NEM Aggregation results in an unanticipated cost-shift
beyond what would occur under the existing NEM program, the Council will reconsider its
determination in a subsequent public proceeding, pursuant to the authority vested in the
Council to do so by Section 2827(h)(4)(E) of the California Public Utilities Code.
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SECTION 6. The Council fi.nds that the adoption of this resolution does not constitute
a project under Section 21065 of the California Environmental Quality Act {CEQA) and the CEQA
Guidelines, and therefore, no environmental assessment is required.
INTRODUCED AND PASSED: May 5, 2014
AYES: BERMAN, BURT, HOLMAN, KLEIN, KNISS, PRICE, SCHARFF, SCHMID, SHEPHERD
NOES:
ABSENT:
ABSTENTIONS:
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City Clerk 9-Mayor
APPROVED AS TO FORM:
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