BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 512
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 512 (Gordon)
          As Amended  August 25, 2011
          Majority vote
           
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          |ASSEMBLY:  |70-0 |(May 12, 2011)  |SENATE: |37-0 |(August 30,    |
          |           |     |                |        |     |2011)          |
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           Original Committee Reference:    U. & C.  

           SUMMARY  :  Increases the capacity of a powerplant from 1 megawatt 
          (MW) to 5 MW that would be eligible for a local government 
          program that allows a municipality to generate electricity at 
          one location to offset electricity usage at another municipal 
          location.

           The Senate amendments
           
          1)Prohibit an electrical corporation from being required to 
            compensate a local government for electricity generated from a 
            facility in excess of the bill credits applied to the 
            designated benefitting account.

          2)Prohibit a local government from being eligible for any other 
            tariff program that requires an electrical corporation to 
            purchase generation from an eligible renewable generating 
            facility participating in the program.

          3)Exempt an electrical corporation with 60,000 or fewer customer 
            accounts from the program.

           AS PASSED BY THE ASSEMBLY  , this bill was substantially similar 
          to the version passed by the Senate.

           FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee, negligible fiscal impact to the PUC.

           COMMENTS  :  A 1-MW generation facility can serve about 750 
          single-family homes.  A 5-MW facility can serve almost 4,000 
          homes.  

          According to the author, the purpose of this bill is to 
          implement a recommendation from a November 2010 State Assembly 








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          Select Committee on California's Green Economy report titled, 
          "How to Grow Jobs and Investment in California's Green Economy." 
           The report noted that the City of Fresno as well as other local 
          governments in the state expressed frustration at the 
          limitations placed on their ability to produce their own 
          renewable energy.  In particular, the report states that the 
          City of Fresno had considered generating more of their own 
          energy through renewable projects, but found that they did not 
          work financially due to the 1 MW limit of the existing local 
          government net-energy metering program.  The report recommended 
          to increase renewable energy generation by local governmental 
          entities, and to also increase the capacity of an eligible local 
          government generation facility from 1 MW to 5 MW.  That 
          suggestion is the basis for this bill.  Another suggestion was 
          to increase the geographic boundary restrictions; however, this 
          bill does not address the boundaries.

          Existing law requires electric corporations 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 investor-owned 
          utilities (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.

          There are many existing programs in statute that allow a 
          municipality or public entity to generate electricity in one 
          location and receive a bill credit, or a net-metered tariff, for 
          a meter in another location(s).   Each has been added in a 
          piecemeal fashion.  For example, in 2002, SB 1038 (Sher) Chapter 
          515, Statutes of 2002, allowed the City of Davis to use 
          electricity generated from Photovoltaics for Utility Systems 
          Applications (PVUSA) to receive a bill credit at a benefiting 
          account or accounts designated by the City of Davis.  The same 
          bill allowed California State University (CSU), Fresno to 
          receive a bill credit for the electricity generated at a biomass 
          facility owned by CSU Fresno known as the Dinuba Facility.  CSU 
          Fresno net-energy metering allowance sunsetted on January 1, 
          2008. 








                                                                  AB 512
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          In 2008, AB 2466 (Laird), Chapter 540, Statutes of 2008, created 
          a comprehensive "Local Government Renewable Energy 
          Self-Generation Program."  AB 2466 allowed an eligible facility 
          to not exceed 1 MW, and it limited the statewide capacity for 
          the three largest investor-owned utilities (IOUs) to 250 MW.  
          After IOUs offer service or contracts to its proportionate share 
          of the 250-MW limitation, it does not need to provide 
          net-metering allowances to additional local government 
          generation facilities.  PUC concluded its implementation of the 
          bill in early 2010.  To date there are no customers 
          participating in the program.  
           

          Analysis Prepared by  :    DaVina Flemings / U. & C. / (916) 
          319-2083 


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