Bill > AB1408

This bill amends existing law to update how tariffs, or rates, are set for customers who use distributed energy resources, which are small-scale power generation systems like solar panels or small generators located at or near the point of consumption. The key change is that after January 1, 2003, new tariffs will be established for distributed energy resources, ensuring that the costs associated with serving each customer class, considering the actual costs and benefits of these resources, are fully recovered from that class. The bill also specifies that customers with similar usage patterns within a class should generally face the same rates, regardless of whether they use distributed energy resources for their own needs or for "over-the-fence" transactions, which involve selling power to a neighboring facility. Importantly, the bill removes a requirement for the commission to submit a report to the Legislature by June 1, 2002, detailing its proposed rate-setting methodology. Instead, it adds a provision that when setting these tariffs, the commission must consider factors like coincident peak load (when a customer's demand coincides with the highest overall demand on the grid) and the reliability of onsite generation, meaning customers with more dependable systems and those who help reduce peak demand will pay lower rates.