BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1106
                                                                  Page  1

          Date of Hearing:  April 27, 2009

                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES
                                Nancy Skinner, Chair
                AB 1106 (Fuentes) - As Introduced:  February 27, 2009
           
          SUBJECT  :  Renewable electric generation facilities:  feed-in  
          tariffs

           SUMMARY  :  Revises and expands a feed-in tariff program for  
          eligible renewable electric generation to make it available to  
          facilities up to 20 megawatts in size.

           EXISTING LAW  requires investor-owned utilities (IOUs) to  
          purchase all electricity from an eligible renewable generating  
          facility that is no larger than 1.5 megawatts at a market price  
          determined by the Public Utilities Commission (PUC) pursuant to  
          the RPS.  Facilities are eligible until 500 megawatts is  
          produced statewide.

           THIS BILL  :  

          1)Revises the existing program to eliminate the statewide cap  
            and increase the individual facility size limit to 20  
            megawatts. 

          2)Requires the PUC, in consultation with the California Energy  
            Commission (CEC), to develop feed-in tariffs for eligible  
            renewable energy resources of more than 20 megawatts that  
            value a diverse mix of sources of renewable energy based upon  
            the most successful feed-in tariffs utilized in Europe.

           FISCAL EFFECT  :  Unknown

           COMMENTS  :   

           1)Background.   Utility customers may develop small renewable  
            generators which are eligible renewable energy resources under  
            the RPS.  It is possible for customers to sell surplus  
            electricity from these generators to IOUs pursuant to  
            individually negotiated contracts, but it is more convenient  
            to sell these small amounts of electricity under  
            predetermined, standard contract prices and other terms.  To  
            facilitate this, the Legislature has enacted several different  
            statutes over the last several years that apply to particular  








                                                                  AB 1106
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            customers and technologies.  For example, various forms of  
            "net-metering" programs have been enacted for solar  
            photovoltaic, wind, and manure methane generators, plus  
            special statutes for other renewable energy facilities.

            Currently, IOUs are required to purchase qualifying renewable  
            energy from facilities up to 1.5 megawatts at a PUC-determined  
            market price and assured these purchases count toward their  
            RPS obligations.  The total amount of energy that may  
            participate in this "feed-in tariff" program is capped at 500  
            megawatts.  The PUC is considering expanding the feed-in  
            tariff program to facilities up to 10 megawatts and creating a  
            standard offer contract for facilities between 10 and 20  
            megawatts.  This bill substantially expands the existing  
            statutory program by eliminating the statewide and project  
            size limits.

           2)No limit?   In addition to creating a feed-in tariff program  
            for projects up to 20 megawatts based on the existing program,  
            this bill also includes an ambitious, if somewhat vague,  
            requirement that the PUC to develop a feed-in tariff for  
            generation units larger than 20 MWs "based upon the most  
            successful feed-in tariffs utilized in Europe."  European  
            feed-in tariff programs generally don't have size limits, but  
            they are used as an alternative to an RPS program.  Through  
            its RPS program, California already provides an alternative  
            for larger scale renewable energy projects.   The author and  
            the committee may wish to consider  whether the program  
            established by this bill should be limited in its application  
            to projects under 20 megawatts.

           3)Related Legislation.   AB 1023 (Ruskin), pending in this  
            Committee, also expands the existing feed-in tariff program.   
            The two bills contain similar conditions, but AB 1023 retains  
            the 500 megawatt statewide cap and increases the individual  
            facility size limit to 10 megawatts, although it authorizes  
            the PUC to increase it to 15 megawatts.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          None on file

           Opposition 








                                                                 AB 1106
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          Sempra Energy

           
          Analysis Prepared by  :  Lawrence Lingbloom / NAT. RES. / (916)  
          319-2092