BILL ANALYSIS                                                                                                                                                                                                    
                                                                  SB 17
                                                                  Page  1
          Date of Hearing:   July 15, 2009
                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair
                     SB 17 (Padilla) - As Amended:  July 8, 2009 
          Policy Committee:                               
          UtilitiesVote:14-0
          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No
           SUMMARY  
          This bill requires the Public Utilities Commission (PUC) to  
          determine the requirements for a "smart grid" deployment plan  
          and to require each electrical corporation to submit a smart  
          grid plan to the PUC for approval. Specifically, this bill:
          1)Requires the PUC, in consultation with the California Energy  
            Commission (CEC) and the California Independent System  
            Operator (CAISO), to determine the requirements for a "smart  
            grid" deployment plan and adopt standards and protocols,  
            consistent with the federal Energy Act, by July 1, 2010.
          2)Permits any adopted plan to provide for deployment of  
            cost-effective smart grid products, technologies, and services  
            by entities other than electrical corporations.
          3)Requires each electrical corporation to develop and submit a  
            smart grid deployment plan to the PUC for approval by July 1,  
            2011.
          4)Permits smart grid technology to be deployed in a manner that  
            maximizes benefits and minimizes costs to ratepayers, and  
            requires the PUC, in consultation with the CEC and CAISO, to  
            evaluate, at each step of deployment, the impact of deployment  
            on specified initiatives and policies, including meeting the  
            renewable portfolio standard program goals and AB 32  
            greenhouse gas emission goals.
          5)Requires the PUC, by January 1, 2011 and annually thereafter,  
            to report on its recommendations for a smart grid, the  
            utilities' deployment of this technology, and the benefits and  
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            costs to ratepayers.
          6)Requires each local publicly owned electric utility to  
            develop, by July 1, 2011, a smart grid deployment plan  
            consistent with the federal Energy Act.
           FISCAL EFFECT  
          1)Absorbable costs to the PUC, as the commission indicates it  
            has already commenced a proceeding on this issue.
          2)The CEC will incur $200,000 annually for two positions for  
            ongoing consultation with PUC on the impact of deploying smart  
            grid technology on related programs and policies. [Energy  
            Resources Programs Account].
          3)Any costs to local publicly owned utilities to adopt smart  
            grid plans will be recovered in rates charges to utility  
            customers.
           COMMENTS  
           1)Purpose  . According to the author, this bill is intended to  
            help electrical utilities manage their electricity usage,  
            deliver more efficient, reliable, and secure energy by  
            allowing utilities to monitor and diagnose problems in real  
            time throughout the grid while also reducing greenhouse gas  
            emissions.
           2)Background  . The term "smart grid" refers to an electrical  
            distribution system that allows for the flow of information  
            from a customer's meter in two directions and modernizes the  
            electrical transmission and distribution grid with a goal of  
            using advanced, information-based technologies to increase  
            grid efficiency, reliability, and flexibility, and reduce the  
            rate at which additional electric utility infrastructure must  
            be built.
            The federal Energy Act requires the PUC to initiate within one  
            year, and complete within two years, consideration of whether  
            to allow utilities cost recovery from "nonadvanced grid  
            technologies," "deployment of a qualified smart grid system"  
            and implementation of the provision of price information to  
            customers on a no-less-than daily basis. The PUC commenced the  
            proceeding by December 2008, and expects completion by  
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            December 2009.
            The federal American Reinvestment and Recovery Act of 2009  
            (ARRA) authorizes the Department of Energy to award $4 billion  
            in grants, including $615 million for smart grid regional  
            demonstration projects, utility-scale storage, and monitoring  
            projects, and another $600 million in grants to cover up to  
            50% of grid technology deployment project costs.
           3)Prior Legislation  .  Last year, SB 1438 (Padilla), which was  
            substantially similar to this bill, was held on this  
            committee's Suspense file.
           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081