BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2514|
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THIRD READING
Bill No: AB 2514
Author: Skinner (D)
Amended: 8/23/10 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 8-2, 6/29/10
AYES: Padilla, Corbett, Florez, Kehoe, Lowenthal,
DeSaulnier, Simitian, Wright
NOES: Dutton, Strickland
NO VOTE RECORDED: Cox
ASSEMBLY FLOOR : 41-28, 6/3/10 - See last page for vote
SUBJECT : Energy storage systems
SOURCE : Attorney General
California Labor Federation
DIGEST : This bill requires the Public Utilities
Commission (PUC) to determine appropriate targets, if any,
for load serving entities to procure energy storage
systems. This bill requires load serving entities to meet
any targets adopted by the Commission by 2015 and 2020.
This bill requires publicly owned utilities to set their
own targets for the procurement of energy storage and then
meet those targets by 2016 and 2021.
Senate Floor Amendments of 8/20/10 clarify that the PUC may
approve investor-owned utility contracts for energy storage
projects before during and after the proceeding required by
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this bill which mandates that the PUC consider a
procurement mandate for energy storage, and clarify the
issues that the PUC must consider in determining energy
storage procurement targets. These amendments address the
concerns of any remaining opposition.
ANALYSIS : Under current law, load serving entities
(including both investor owned utilities and energy service
providers) are regulated by the Public Utilities Commission
(PUC). Current law requires load serving entities to
increase their procurement of renewable energy by one
percent per year, such that renewable energy sources make
up twenty percent of a load serving entity's electricity
supply by December 31, 2011. This requirement is referred
to as the Renewable Portfolio Standard. Current law
exempts publicly owned utilities from the Renewable
Portfolio Standard and instead requires publicly owned
utilities to implement their own renewable energy plans.
This bill requires the PUC to determine the appropriate
targets, if any, for load serving entities to procure
energy storage systems. The Commission is required to
develop the targets by October 1, 2013. Load serving
entities are required to meet those targets, if any, by
2015 and 2020.
This bill requires publicly owned utilities to establish
their own targets for procurement of energy storage systems
by October 1, 2014 and meet those targets, if any, by 2016
and 2021. Publicly owned utilities are required to report
their progress in meeting their targets to the Energy
Commission.
This bill requires investor owned utilities to integrate
the energy storage system targets into their renewable
energy procurement plans.
This bill's requirements do not apply to investor owned
utilities that provide electric service to customers
outside California and have 60,000 or fewer customers
inside California.
What is Energy Storage ? One of the distinctive
characteristics of the electric power sector is that the
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amount of electricity that can be generated is relatively
fixed over short periods of time, although demand for
electricity fluctuates throughout the day. Developing
technology to store electrical energy so it can be
available to meet demand whenever needed would represent a
major breakthrough in electricity distribution. Helping to
try and meet this goal, electricity storage devices can
manage the amount of power required to supply customers at
times when need is greatest, which is during peak load.
These devices can also help make renewable energy, the
output of which cannot be controlled by grid operators,
smooth and dispatchable. Storage devices can provide
frequency regulation to maintain the balance between the
network's load and power generated. Thus, energy storage
holds substantial promise for transforming the electric
power industry.
Types of Energy Storage . Battery storage and pump hydro
storage systems have been around for many years, so the
concept of energy storage is not new. Large pump storage
facilities have been proven to be very effective in
shifting large quantities of low-cost, off-peak energy
production to delivery during high cost on-peak energy
periods by using excess electricity to pump water uphill
into a reservoir. When power is needed, the water can run
down through turbines, much like a traditional
hydroelectric dam. However, large pump hydro storage
facilities are quite costly, and there are very few
locations where they can be built.
California has a number of pump storage facilities. One of
the largest facilities is the Helms Pump Storage Facility
that was built in the early 1980s with three units. Each
unit is rated at 400 MW in generation mode and 310 MW in
pumping mode for a total of 1,200 MW generating mode and
-930 MW pumping mode. The facility is owned and operated
by PG&E.
Pump hydro storage is the largest and most viable storage
technology available with nearly 123,000 MW deployed around
the world. Excluding pump hydro storage only 2,128 of
installed energy storage technologies exist worldwide which
include:
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Batteries - electrical energy is stored for
later use in chemical form.
Thermal Storage - air conditioners create ice
at night then power rates are low. This stored
ice then runs a cooling system during the
afternoon, when power costs are highest and the
power grid is most stressed;
Flywheels - convert electrical energy to
kinetic energy then back again very rapidly; and
Compressed Air - electricity is used to compress
air into storage tanks or a large underground
cavern. The compressed air is used to spin turbines
when electricity is needed.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
The PUC indicates that in order to develop targets and
oversee the implementation of those targets by load serving
entities, it will need about $1,000,000 per year in
additional staff resources.
SUPPORT : (Verified 8/31/10)
Attorney General (co-source)
California Labor Federation (co-source)
Mayor Antonio Villaragosa
A123 Systems
AIC Labs
Altairnano
Applied Intellectual Council
Balanced Clean Energy Solutions
Beacon Power
Breathe California
CALMAC
California Energy Storage Alliance
CAREBS
Clean Power Campaign
Debenham Energy, LLC
Dow Kokam
ElectronVault
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Enersys
EnerVault
Evapco, Inc.
Fafco
Fluidic Energy
HDR-DTA
Green California
Ice Energy
Independent Energy Producers
Large-scale Solar Association
LightSail Energy
MegaWatt Storage Farm
Mohr Davidow Ventures
Natgun
NGK-Locke
Pacific Housing Inc.
Panasonic
Pearl Street Liquidity Advisors
Polaris Venture Partners
PowerGenix
Primus Power
Prudent Energy
Public Utilities Commission
PVT Solar
ReStore Energy Systems
Rockport Capital Partners
Sail Venture Partners
Samsung SDI America, Inc.
Sanyo
Seeo, Inc.
Sierra Club
The Solar Alliance
South Coast Air Quality Management District
Suntech
Sunverge
SustainX
Velkess Inc.
The Vote Solar Initiative
Union of Concerned Scientists
Wallrich Landi
Xtreme Power
OPPOSITION : (Verified 8/31/10)
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California Manufacturers and Technology Association.
ARGUMENTS IN SUPPORT : California often experiences peak
electricity demand growth that increases at a rate faster
than electricity can be generated. Currently, backup
fossil fuel electricity generation is frequently used to
keep up with the demand. The California Energy Commission
predicts that this peak electricity demand will increase by
15 percent by the year 2020.
This bill encourages California to incorporate energy
storage to the energy grid thereby decreasing our reliance
on fossil fuels, coping with increasing energy demand, and
advancing California toward its renewable energy goals.
Renewable energy sources such as solar-generated
photo-voltaic power and wind-generated power are widely
used globally, but these renewable resources generate power
intermittently. This energy is not used efficiently due to
California's electricity grid design which does not utilize
storage. This bill will help integrate energy storage into
utility planning and procurement which will help California
reach the renewable energy goals it has committed to.
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Bass, Beall, Blumenfield,
Bradford, Brownley, Caballero, Charles Calderon, Carter,
Chesbro, Coto, Davis, De La Torre, De Leon, Eng, Evans,
Feuer, Fong, Fuentes, Furutani, Galgiani, Hall, Hill,
Huber, Huffman, Jones, Lieu, Bonnie Lowenthal, Ma,
Monning, Nava, V. Manuel Perez, Ruskin, Saldana, Skinner,
Swanson, Torlakson, Torres, Yamada, John A. Perez
NOES: Adams, Anderson, Bill Berryhill, Blakeslee, Conway,
Cook, DeVore, Emmerson, Fletcher, Fuller, Gaines,
Garrick, Gilmore, Hagman, Harkey, Hayashi, Jeffries,
Knight, Logue, Miller, Nestande, Niello, Nielsen, Norby,
Silva, Smyth, Tran, Villines
NO VOTE RECORDED: Tom Berryhill, Block, Buchanan,
Hernandez, Mendoza, Portantino, Salas, Solorio, Audra
Strickland, Torrico, Vacancy
DLW:do:kc 8/31/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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