BILL ANALYSIS Ó 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 512 - Gordon Hearing Date:
June 21, 2011 A
As Introduced: February 15, 2011 FISCAL B
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DESCRIPTION
Current law requires electric corporations (investor-owned
utilities or IOUs) to allow local governments and public college
and university campuses to generate electricity from an eligible
renewable facility at one site and transfer any available
excess bill credits (in dollars) to another account owned by the
same local government, college or university. The program is
capped at 250 MW and divided proportionally between the state's
largest IOUs. The facility size is capped at 1 MW per account.
The program is commonly referred to as the Renewable Energy
Self-Generation Bill Credit Transfer Program (RES-BCT). The
renewable energy does not count toward the state's Renewable
Portfolio Standard (RPS) which requires electric utilities to
obtain 33% of generation from renewable resources by 2020.
This bill increases the size of an eligible facility from 1 MW
to 5 MWs.
BACKGROUND
Under existing law there are several programs which encourage
customers to meet their own generation needs. Each legislative
year brings additional proposals to facilitate different types
of distributed generation and/or different rate structures.
There is a common theme with these programs - each generally
involves a customer installing small scale renewable power on
the customer's side of the meter to offset their load and in
some instances generate excess power. The distinction between
measures is usually the type of customer (e.g. local government,
agriculture, residential), the type of renewable generation
(e.g. solar, fuel cells, wind), the size of the generation, and
the regulated rate structure under which the generation is
valued.
This program was implemented as a result of AB 2466 (Laird,
2008) and designed to allow local government entities that could
not fit or site solar photovoltaic systems on their side of the
meter to site them in a nearby location but still receive credit
for the generation. Because the generation is not on the
customer's side of the meter (and therefore not offsetting the
customer's own load) customers are not eligible for full retail
net metering and receive credit at the generation rate. The
California Public Utilities Commission (CPUC) concluded its
implementation of the bill in early 2010. To date there are no
customers participating in the program.
COMMENTS
1. Author's Purpose . The author opines that this bill
"satisfies the suggested change in eligibility proposed by
the 2010 Report from the Assembly's Select Committee on the
Green Economy. This suggested change was made in order to
foster growth in renewable energy development as part of a
diverse and integrated statewide strategy in reaching
renewable portfolio standards. An increasing number of
local government entities are exploring the potential of,
or are currently developing renewable generation projects
with generation capacities in excess of 1 MW. This bill
further incentivizes the development of those renewable
energy projects."
2. Necessity ? This program is in search of a participant.
This bill is the fourth in as many years to revise a
program that still has no participating customers which
raises an issue of whether this bill is really needed. The
CPUC would once again be required to revisit a program for
which there is no interest and expend time and resources to
develop guidelines. However, the CPUC reports that
"increasing the eligible system-size cap to 5 MW may help
create more interest from larger renewable projects that
are precluded from receiving California Solar Initiative
Program or Self-Generation Incentive Program incentives,
but where the economics of a single larger system might
make the overall project economics more attractive for
government entities with significant electric loads.
3. Ratepayer Impact . The CPUC notes in their analysis of
this bill that that because "the current statute already
provides that the amount of the bill credit be set at the
generation rate and not the retail rate, the program does
not result in any direct cost shift from other ratepayers
to the customers receiving the bill credit." However,
Sempra writes in opposition to the bill that there would be
cost impacts because it permits a participating customer to
use the distribution system to store energy without paying
the "full cost of integrating the distribution unit into
the distribution system."
Current law for this program does require the program
participant to pay all costs of interconnection and
restricts cost shifting to other bundled service
subscribers which allows the CPUC to adjust costs and rates
accordingly.
However, as referenced in the Background section above, at
the end of the day multiple programs and rate structures
have been developed to serve a common purpose - allowing
customers to generate electricity to offset their own load.
Are multiple programs really necessary to meet the same
basic purpose? Does this lead to efficient management of
an aging and outdated distribution grid?
ASSEMBLY VOTES
Assembly Floor (70-0)
Assembly Appropriations Committee (17-0)
Assembly Utilities and Commerce Committee
(15-0)
POSITIONS
Sponsor:
Author
Support:
Association of California Water Agencies
California Public Utilities Commission
California State Association of Counties
City of Fresno
City of San Jose
City of Santa Rosa
Nanosolar
Regional Council of Rural Counties
Santa Clara Valley Water District
Sonoma County Board of Supervisors
Oppose:
San Diego Gas and Electric
Kellie Smith
AB 512 Analysis
Hearing Date: June 21, 2011