BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 21
                                                                  Page  1

          GOVERNOR'S VETO
          AB 21 (Krekorian)
          As Amended  September 12, 2009
          2/3 vote

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          |ASSEMBLY:  |     |(June 1, 2009)  |SENATE: |21-10|(September 12, |
          |           |     |                |        |     |2009)          |
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                                  (vote note relevant)

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          |ASSEMBLY:  |50-26|(September 12,  |        |     |               |
          |           |     |2009)           |        |     |               |
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          Original Committee Reference:    AGRI.

          SUMMARY  :  Modifies provisions in SB 14 (Simitian) to provide  
          that a new Renewable Portfolio Standards (RPS) enacted into law  
          will match the analysis and mock-up version of SB14 the  
          Utilities and Commerce Committee approved on September 9, 2009,  
          and to expand the definition of delivered.   Specifically,  this  
          bill:    

          The Senate amendments delete the Assembly version of the bill,  
          and instead:

          1)Provides that retail sellers of electricity must procure at  
            least 20% of their retail load from renewable sources by 2013,  
            25% by 2016, and 33% by 2020.   

          2)Changes the definition of "delivered" electricity in SB 14  
            (Simitian) to provide that a facility that is not directly  
            interconnected to the transmission grid controlled by a  
            California grid operator is delivered into California if the  
            metered output within a 24 hour period matches the import  
            schedules into California. 
           
          EXISTING LAW  requires investor-owned utilities (IOUs) and  
          certain other retail sellers to achieve a 20% RPS by 2010 and  
          establishes a process and standards for renewable procurement.  

           FISCAL EFFECT  :  Unknown









                                                                  AB 21
                                                                  Page  2

           COMMENTS  :  The Utilities and Commerce Committee approved SB 14  
          with amendments on July 9, 2009, with a vote of 10 -5.  The  
          amendments that were presented to the Committee and the official  
          analysis both provided that SB 14 would require retail sellers  
          of electricity to procure at least 20% of electricity delivered  
          to retail customers from renewable sources by 2013.  However,  
          the final version of SB 14 provides that the retail sellers  
          shall procure 20% of their electricity from renewable resources  
          by 2012.  This bill corrects this error and provides that retail  
          sellers shall meet the 20% renewable mandate by 2013. 
          . 
          At the September 9, 2009, hearing a number of parties expressed  
          concern that requirements that to be an eligible renewable  
          resources must deliver their power into California.  Some of the  
          parties stated that the requirements in the proposed amendments  
          that in order for electricity to be "delivered" it must be  
          scheduled into California in the same hour in which it was  
          produced was too limiting and made it difficult to count some  
          wind and solar generation toward the RPS.  The amendments in AB  
          21 address these concerns by allowing renewable electricity to  
          be "delivered" if it is scheduled into California in the same 24  
          hour period in which it was produced. This will allow  
          significantly more wind and solar generation schedule its output  
          into the state. 

          The bill also contains other provisions that are identical to SB  
          14 in order to prevent AB 21 from chaptering out those  
          provisions of SB 14.  SB 14 was vetoed by the Governor.

           GOVERNOR'S VETO MESSAGE  :

                I support the intent of this and other measures to  
                increase California's Renewable Portfolio Standard  
                (RPS) target to 33% by 2020. However, as drafted  
                this measure would make it more difficult and costly  
                to achieve this very important goal.

                As a world leader in climate change and renewable  
                energy development, California needs a regional  
                approach that provides streamlined regulatory  
                processes and compliance flexibility that facilitate  
                the timely construction of in-state resources. This  
                legislative package does the opposite - adds new  
                regulatory hurdles to permitting renewable resources  
                in the state, at the same time limiting the  








                                                                  AB 21
                                                                  Page  3

                importation of cost-effective renewable energy from  
                other states in the West.

                On November 17, 2008, I issued Executive Order  
                S-14-08, which sets a target that all retail sellers  
                of electricity shall serve 33% of their load with  
                renewable energy by 2020.

                On September 15, 2009, in order to keep us moving  
                forward, I directed California Air Resources Board  
                (CARB), in Executive Order S-21-09, to adopt  
                regulations that increase procurement of renewable  
                resources in furtherance of the Global Warming  
                Solutions Act of 2006 (AB 32, Statutes of 2006) and  
                its emission reduction goals.

                The CARB's scoping document for the Global Warming  
                Solutions Act of 2006 determined that achieving 33%  
                RPS is a critical component in the fight against  
                global warming.  I expect CARB to complete the  
                regulations implementing the 33% RPS by the fall of  
                2010.

                I remain ready to sign legislation that codifies a  
                workable 33% RPS mandate.  California has a rare  
                opportunity to champion the development of renewable  
                energy and reduce greenhouse gas emissions in-state  
                and beyond. We must seize the chance to lay the  
                foundation for a regional effort that optimizes  
                resources throughout the West at a lower cost to  
                ratepayers.


           Analysis Prepared by  :    Edward Randolph / U. & C. / (916)  
          319-2083 


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