BILL ANALYSIS
AB 2514
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Date of Hearing: May 12, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2514 (Skinner) - As Amended: April 28, 2010
Policy Committee: UtilitiesVote:8-6
Natural Resources 6-3
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires the investor-owned electrical utilities
(IOUs) and local publicly-owned electric utilities (POUs) to
procure energy storage systems to meet procurement targets to be
established by the Public Utilities Commission (PUC) and by the
POU governing boards, respectively. Specifically, this bill:
1)Requires the PUC, by April 1, 2011, to open a proceeding to
establish, using specified considerations, IOU procurement
targets for energy storage systems, and by January 1, 2013, to
adopt energy storage targets for each IOU to achieve by
January 1, 2015 and again by January 1, 2020.
2)Requires the governing board of each POU to develop and
establish procurement targets using the same milestone dates
described in (1).
3)Requires the PUC and the POU governing boards to reevaluate
the determinations made per the above at least one every three
years.
4)Requires the IOUs to submit reports to the PUC and the POUs to
submit reports to the California Energy Commission (CEC) by
January 1, 2015 and by January 1, 2020 demonstrating
compliance with the energy storage system targets for each of
those dates.
5)Requires the CEC, within 60 days of receiving a report per (4)
to notify a POU if it fails to demonstrate compliance, and
requires the POU, within 60 days of receiving CEC notice, to
submit a compliance plan to the CEC, and to comply with the
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procurement target within six months following submittal of
the plan.
6)Requires the CEC, by July 1, 2011, to adopt regulations
specify procedures to enable POUs to comply with the all of
the above requirements.
FISCAL EFFECT
1)Ongoing special fund costs to the PUC of $1.7 million for 15
positions to establish a regulatory program for energy storage
through a ratemaking proceeding, monitor compliance with the
commission decisions, monitor procurement of storage services
and evaluate the cost-effectiveness of such procurement
through an annual compliance proceeding, and monitor the
impacts on ratepayers of energy storage technologies.
2)Costs to the CEC would be absorbable, except one position
might be needed in the future, at a cost of $100,000, to
review POU compliance with the 2015 and 2020 targets.
COMMENTS
1)Background . California's Renewable Portfolio Standard (RPS)
requires all retail sellers of electricity to meet at least
20% of the retail sales using electricity from renewable
resources by 2010. The Air Resources Board has identified a
33% RPS by 2020 as one of the key actions needed to meet the
greenhouse gas reduction goals of AB 32 (Nunez)/Chapter 488 of
2006. While several studies have determined that a 33% RPS is
achievable, it can only be met through heavy reliance on wind
and solar energy, which are intermittent energy sources. In
order to ensure reliability, these generation resources need
to be "firmed" to ensure electricity is dispatched when it is
scheduled to serve load demands.
2)Purpose . One way to resolve the reliability issue is to build
more peaker plants, which can be ramped up and down quickly to
complement the solar and wind energy. Most peaker plants run
on natural gas but are less efficient that some baseload
plants, and thus may cause more air emissions per each kWh of
electricity generated. The ARB has recommended finding ways to
store the electrical output of renewable facilities for use at
a later time to decrease reliance on the peaker plants.
According to the author, that is the purpose of AB 2514. The
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author quotes a Pew Center study that states that energy
storage accounts for 2.5% of the total energy generated in the
United States, while storage in Japan and Europe accounts for
15% and 10% of generated energy respectively.
3)What is Energy Storage ? The most common form of energy storage
device in use today is batteries. However, there are no
commercially available batteries that could cost-effectively
store the large amounts of electricity that can be produced by
large-scale wind farms or solar facilities. Another form of
electricity storage that is already in use in California is
pump storage, where water is pumped into a reservoir at night
and then released through turbines during the day to produce
electricity.
According to the CEC, research and development is ongoing for
all areas of energy storage. There are advanced sodium/sulfur,
zinc/bromine, and lithium/air batteries nearing commercial
readiness that offer promise for future utility application.
Flywheels continue to be developed and improved.
Superconducting magnetic energy storage systems and
supercapacitors are under development. PG&E experts assert,
however, that these are far from being available in commercial
packages. The CEC notes that while there are a vast array of
products and applications which utilize energy storage of up
to a duration of 60 minutes, there are relatively few
applications employed for peak shaving and load leveling.
4)Opposition . San Diego Gas and Electric, while agreeing with
the general principle that energy storage could benefit the
electrical system, argue the state should first conduct an
analysis of the role of different types of storage in
operating the grid and the best role for utilities in this
regard.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081