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California Departing Load Charge Exemption

Date Last Updated5/16/2013
Policy TypeState Utility Rate Policy
State/FederalCA
Policy Administrator/Contact OfficeCalifornia Public Utilities Commission (CPUC)
Policy Initiation Date4/1/2001
Policy SummaryOn April 3, 2003, the CPUC issued Decision 03-04-030, outlining a mechanism for granting a range of distributed generation customers from paying power surcharges known as "exit fees" or "cost responsibility surcharges" (CRS). A customer with departing load generally refers to utility customers that leave the utility system in part or entirely to self-generate electricity. The California Energy Commission was tasked by the CPUC to determine exemptions from exit fee requirements. The following systems are exempt from the exit fee rules:
  • Systems <1 MW that are net metered and/or eligible for CPUC or Energy Commission incentives for being clean and super clean are fully exempt from any surcharge; including solar, wind, and fuel cells.
  • Ultra-clean and low-emission systems (defined as generation technologies which produce zero emissions or emissions that meet or exceed 2007 Air Resources Board (ARB) emission limits) >1 MW that meet Senate Bill 1038 requirements to comply with CARB 2007 air emission standards will pay 100% of the bond charge, but no future Department of Water Resources (DWR) charges or utility undercollection surcharges.
All other customers will pay all components of the surcharge except the DWR ongoing power charges. When the combined total of installed generation reaches 3000 MW (1500 MW for renewables), any additional customer generation installed will pay all surcharges.

The State utilities have provided further direction on customer generation, for example, PG&E defines customer generation as "cogeneration, renewable technologies or any other type of generation that is dedicated wholly or in part to serve all of a portion of a specific customer's load or relies on non-PG&E or dedicated PG&E distribution wires rather than PG&E's utility grid. Reductions in load are classified as customer generation departing load only to the extent that such load is subsequently served with electricity from a source other than PG&E."
CHP Eligibility RequirementsDoes Not Specify
Eligible Project Size (MW)Does Not Specify
Minimum Efficiency Required/
Other Performance Requirements
Does Not Specify
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