BILL ANALYSIS                                                                                                                                                                                                    


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                                 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,  
          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  


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          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  



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          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  

          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.



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           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



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          DLW:mw  6/30/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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