BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1247| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 1247 Author: Dutton (R), et al Amended: 6/30/10 Vote: 27 - Urgency SENATE ENERGY, U.&C. COMMITTEE : 6-0, 6/15/10 AYES: Padilla, Dutton, Kehoe, Lowenthal, Strickland, Wright NO VOTE RECORDED: Corbett, Cox, Florez, Oropeza, Simitian SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SUBJECT : Rock Creek Powerhouse generation facility SOURCE : Author DIGEST : This bill defines as Renewables Portfolio Standard eligible incremental increases gained from efficiency improvements at the Rock Creek Powerhouse as long as the efficiency improvements receive approval from the State Water Resources Control Board. ANALYSIS : Renewables Portfolio Standard (RPS) Progress California's three large investor-owned utilities (IOUs) collectively served 15 percent of 2009 retail electricity sales with renewable power. The IOUs, which provide service to about three-fourths of California utility CONTINUED SB 1247 Page 2 customers, report the following individual RPS percentages: Pacific Gas and Electric (PG&E)14.4 percent Southern California Edison (SCE)17.4 percent San Diego Gas & Electric (SDG&E) 10.5 percent In the last two years, the RPS program started to show significant gains. In 2008, more renewable generation came on line than in the entire 2003-07 time period (692 megawatts [MW]). Calendar year 2009 broke the 2008 record with more than 1,000 MW coming on-line. Since the RPS statute took affect in 2003, almost 1,600 MW of renewable capacity has come on-line. The generation mix also improved in 2009. New capacity in 2008 was almost entirely from wind and a good portion of that was from out of state. In 2009, 71 percent of new capacity was from in-state sources and included a mix of biomass, biogas, geothermal, solar photovoltaic, small hydroelectric, and wind. Bids received by the IOUs for new generation also hit a record in 2009 bringing in potential contracts for more than half of the generation needed to meet a 33 percent target in 2020. The IOUs have now contracted for more than 12,000 MW of renewable generation. To put this in context, the statewide demand in a typical January is 25,000 to 30,000 MW. A July heat storm would drive that number up over 50,000 MW. The state's local publicly owned utilities report renewable progress ranging from 1.7 percent to 61.2 percent. Compliance data for 2009 recently submitted to the committee collectively shows: Northern California Power Authority20 percent Sacramento Municipal Utility District21 percent Los Angeles Department of Water and Power14 percent Southern California Power Authority2-20 percent Hydroelectric Power Hydroelectric power is a major source of California's CONTINUED SB 1247 Page 3 electricity. In 2007, hydroelectric power plants produced 43,625 gigawatt-hours of electricity, or 14.5 percent of the total. Hydroelectric facilities are broken down into two categories larger than 30 megawatts capacity are called "large" hydro. Smaller than 30 MW capacity is considered "small" hydro and can be RPS eligible. The amount of hydroelectricity produced varies each year. It is largely dependent on rainfall. California has nearly 400 hydroelectric plants, which are mostly located in the eastern mountain ranges and have a total dependable capacity of approximately 14,000 MW. The state also imports hydro-generated electricity from the Pacific Northwest. Two types of conventional hydroelectric facilities are dams and run-of-river. Dams raise the water level of a stream or river to an elevation necessary to create a sufficient elevation difference (water pressure, or head). Dams can be constructed of earth, concrete, steel or a combination of such materials. Run-of-river, or water diversion, facilities typically divert water from its natural channel to run it through a turbine, and then usually return the water to the channel downstream of the turbine. Although hydroelectric generation is emissions-free, it was excluded from RPS eligibility because of other adverse environmental impacts associated with conventional hydroelectric power generation and typical on-stream pumped hydroelectric storage facilities: Hydro Efficiency Improvements Do Count Beginning in 2006, the Legislature passed a series of bills that allow a utility to implement efficiency improvements at a hydroelectric facility of any size and count the gain in power toward the utility's RPS requirements. A typical improvement would be the installation of new turbines that would increase output but not impact the timing or volume of streamflow. This bill addresses a unique permitting situation at the Rock Creek Powerhouse hydroelectric facility which makes it ineligible for RPS credit for efficiency improvements as are other hydroelectric facilities. CONTINUED SB 1247 Page 4 Rock Creek Powerhouse The 112 MW Rock Creek Powerhouse hydroelectric plant is located on the North Fork of the Feather River and is owned by PG&E. Under current law, this entire facility and its impacts must be assessed by the State Water Resources Control Board (SWRCB) periodically and a certification issued. That certification is one of the conditions of RPS eligibility for efficiency improvements. However, due to unique circumstances this plant last received certification from the Federal Energy Regulatory Commission (FERC). Because the Rock Creek facility does not have an SWRCB certification, efficiency improvements at Rock Creek are not eligible renewable resources under existing law. PG&E reports that obtaining an SWRCB certification for the entire Rock Creek hydroelectric generation facility at this time is not practical or feasible, as it would involve years of re-studying impacts that were already addressed in the FERC license and which are not affected in any way by the proposed efficiency improvements. Consequently this bill allows PG&E to secure and use a limited review and certification by the SWRCB to achieve RPS eligibility for its improvements. PG&E also reports that the efficiency improvements they are considering will use the same amount of water that is currently used, thus, there will be no changes in the timing or volume of streamflow. The $37 million upgrade will add about 11 MW of capacity. They estimate the rate for the power generated through this efficiency gain to be about eight cents per kilowatt hour. The California Hydropower Reform Coalition has no concerns with this bill. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 6/30/10) Regional Council of Rural Counties PG&E CONTINUED SB 1247 Page 5 DLW:mw 6/30/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED