Laws, Regulations and Annotations


Business Taxes Law Guide – Revision 2023

Energy Resources Surcharge Annotations

Co-Generation by Customers

Net Energy Metering

Under the Public Utilities Code, "net energy metering" involves "measuring the difference between the electricity supplied through the electric grid and the electricity generated by an eligible customer-generator and fed back to the electric grid over a 12-month period" and means using a single meter capable of registering the flow of electricity in two directions, so that the customer is accurately billed or credited. Such customers may be net surplus generators or net consumers. The Energy Resources Surcharge is imposed on the consumption of electrical energy purchased from an electric utility, and every person consuming electrical energy in this state purchased from an electric utility is liable for the surcharge. The fact that the customer also generates electricity does not alter the fact that the customer has consumed electricity purchased from (i.e., supplied by) an electric utility. Furthermore, the amount of electricity consumed by the customer is offset by the amount of the electricity generated by the customer and fed back to the electric grid. Hence, the electricity generated by the customer is a form of consideration "paid" by the customer to the electric utility in exchange for the electricity the customer consumed.

Accordingly, the surcharge must be applied to the total amount of electricity supplied by the utility and consumed by the customer, and whether the customer is a "net consumer" or a "net generator" does not affect how the surcharge is applied. 6/7/11.