BILL ANALYSIS
SB 412
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Date of Hearing: August 19, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
SB 412 (Kehoe) - As Amended: August 17, 2009
Policy Committee:
UtilitiesVote:13-0
Natural Resources 9-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill extends the time for the Public Utilities Commission
(PUC) to allocate monies collected for the self-generation
incentive program (SGIP) and authorizes the PUC to determine
which technologies are eligible for SGIP incentives.
Specifically, this bill:
1)Authorizes the collection of funds only until the current SGIP
sunset date of January 1, 2012, but requires the PUC to
administer the program until January 1, 2016, after which all
unallocated funds are to be credited to ratepayers.
2)Caps annual collection of SGIP funds at the amount collected
in 2008 ($83 million).
3)Repeals provisions limiting eligibility to fuel cell and wind
technologies, and instead provides that eligibility is limited
to technologies the PUC determines, in consultation with the
Air Resources Board, support greenhouse gas emission reduction
goals pursuant to AB 32.
4)Prohibits recovery of SGIP costs from customers participating
in the California Alternate Rates for Energy (CARE) program-a
utility discount for low-income customers.
FISCAL EFFECT
Continued annual costs for the PUC to disburse collected funds
and administer the SGIP for up to four years beyond the current
January 1, 2012 sunset date. The commission indicates that
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annual administrative costs are currently $125,000 for the
equivalent of 1.25 positions. [Public Utilities Reimbursement
Account]
COMMENTS
1)Purpose . According to the author, this bill is intended to
stimulate the installation of distributed generation (DG) as
part of a broader effort to quickly increase the supply of
electricity in California. Because current law specifies
specific technologies eligible to receive SGIP assistance, the
PUC cannot independently extend SGIP or expand the list of
eligible resources without explicit legislative authority.
This bill gives the PUC discretion to authorize subsidies for
technologies it determines support the state's greenhouse gas
(GHG) emission reduction goals.
2)Background . AB 970 (Ducheny)/Chapter 329 of 2000, required
the PUC to initiate certain load control and DG program
activities. In implementing that legislation, the PUC issued a
decision to create the Self-Generation Incentive Program
(SGIP) and funded the program through a rate increase of $125
million for the first four years. Generation technologies
supported by the SGIP included photovoltaic (solar) systems,
microturbines, fuel cells, small and large gas turbines, and
wind turbines. The SGIP provides rebates for such systems
sized up to 5 megawatts (MW). Incentives vary by technology
and fuel type.
AB 1685 (Leno)/Chapter 894 of 2003, extended the SGIP until
January 1, 2008 and required that combustion-operated DG
projects meet specific emissions targets in order to qualify
for program rebates. AB 2778 (Lieber)/Chapter 617 of 2006,
transferred the solar technologies from the SGIP to the PUC's
California Solar Initiative and extended the SGIP sunset from
January 2008 to January 2012, but only for fuel cell and wind
DG technologies. The elimination of fossil fuel technologies
from program eligibility was due in part to questions about
the ratepayer and environmental value of subsidizing the large
industrial customers for the installation of fossil-fuel
generation.
Since the program is designed with minimum size restrictions
for eligible facilities and is primarily geared to business
and large institutional customers, participation by
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residential customers is generally not practical. All energy
ratepayers are subject to the SGIP surcharge, however, and
residential customers contribute about 45% of SGIP funding.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081