BILL ANALYSIS
SB 581
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Date of Hearing: July 6, 2009
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Nancy Skinner, Chair
SB 581 (Leno) - As Amended: June 25, 2009
SENATE VOTE : 25-14
SUBJECT : Hetch Hetchy Water and Power: renewable generation
SUMMARY : Expands an existing program governing delivery and
payment by Pacific Gas and Electric Company (PG&E) for solar
photovoltaic (PV) electricity generated by facilities owned by
the City and County of San Francisco (City) to permit
electricity generated from any renewable resource, whether or
not the facility is owned by the City, and provides that the
City owns the environmental attributes associated with that
electricity.
EXISTING LAW requires PG&E to credit the City for any excess
electricity exported to the PG&E grid from (1) up to 15
megawatts of PV generation facilities owned by the City that
serve on-site municipal load and (2) remote PV generation
facilities owned by the City that serve municipal load within or
outside the City, as long as the generation facilities are
located within 20 miles of the load.
THIS BILL :
1)Expands facilities eligible for the program to include any
renewable resource as defined in current law for purposes of
the Renewables Portfolio Standard [i.e. biomass, solar
thermal, wind, geothermal, renewable fuel cells, small
hydroelectric (30 megawatts or less), digester gas, limited
municipal solid waste conversion, landfill gas, ocean wave,
ocean thermal, and tidal current], whether the facility is
owned by the City or under lease or contract for at least a
five-year term.
2)Provides that the City owns the environmental attributes
associated with electricity delivered under the program unless
the City contracts otherwise.
FISCAL EFFECT : Non-fiscal
SB 581
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COMMENTS :
Since 1996, state law has required electric utilities to buy
back electricity generated by a customer-owned PV or wind system
used to meet the customer's own load. This buy-back program is
known as "net metering" because the electricity delivered to the
customer is netted against the electricity generated by the
customer's own solar or wind electric system. The generated
electricity spins the meter backward, making it financially
equivalent to using less electricity for the customer.
Because most municipal load in the City is served by electricity
from Hetch Hetchy Water and Power (delivered via PG&E's
transmission and distribution system), the load is not eligible
for net metering. Current law creates a surrogate program
designed for City municipal load, allowing PV facilities to get
credit for excess electricity production under a limited form of
net-metering, in which PG&E pays for excess electricity at the
time-of-use generation rate, rather than the full retail rate.
The program was initially enacted in 2004 by AB 594 (Leno) and
was limited to a total of five megawatts of PV owned by the City
and serving City load on-site. In 2006, AB 2573 (Leno),
expanded the program to allow larger PV facilities, up to a
total of 15 megawatts, in the City and allow remote facilities
with no cap, but retained the PV and ownership limitations.
This bill expands the program further by eliminating the PV and
ownership limitations.
According to the author, the San Francisco Public Utilities
Commission is currently working on a variety of renewable energy
projects including in-line hydro, ocean wave power, and small
wind which are not included in the current statute. This bill
would expand the mechanism of benefits and credits beyond just
PV to apply to all types of eligible renewable generation. The
bill clarifies that "renewable electricity generation
facilities" may be owned, or under lease or contract to the City
for at least a five-year term and for the full output of the
facility. This provision ensures that financing through power
purchase agreements is allowable (which allows tax-exempt public
agencies to capture federal tax benefits by contracting with a
private facility owner). The bill affirms that the
environmental attributes assigned to renewable generation are
owned by the City in keeping with a recent ruling by the
California Public Utilities Commission.
SB 581
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REGISTERED SUPPORT / OPPOSITION :
Support
Association of California Water Agencies
San Francisco Public Utilities Commission (sponsor)
Opposition
None on file
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092