AB 920 Implementation

1. AB 920 Implementation • AB 920 Creates Two Options for Net Metered Customers: Compensation or Credit • Option A provides that customers may receive net surplus electricity compensation for any net surplus electricity generated during the 12-month period. • Option B allows the eligible customer-generator to apply the net surplus electricity as a credit for kWhs subsequently supplied by the electric utility.

2. AB 920 Implementation • The Statute Imposes Different Requirements for Each Option • § 2827(h)(4)(A) states that the “net surplus electricity compensation valuation” shall leave other ratepayers unaffected. This plainly applies only to the compensation option. • No similar requirement is imposed for customers who chose the credit option.

3. AB 920 Implementation • AB 920 does not set a rate for the credit option, rather it expressly requires that the credit be applied for kilowatthours. • To properly function as a credit for kilowatthours the rate applied should be the same retail rate that is currently applied on a monthly basis • A credit for kilowatthours should be applied at the same rate a customer would otherwise pay for kilowatts used.

4. AB 920 Implementation • There are Multiple Advantages to This Approach • Reduces administrative costs • Does not raise REC ownership issues • No net sale of power means avoids any FERC jurisdiction issues • It does not create taxable income for customer-generators • Customers are familiar with this process

5. AB 920 Implementation • Other States are Rolling Over at the Retail Rate • In two states, Colorado and Delaware, a customer may either opt for indefinite rollover at the retail rate, or they may chose to be compensated at the end of the accounting period. • Twelve other states plus the District of Colombia allow for indefinite rollover of credits with no annual true up