BILL ANALYSIS Ó
AB 1990
Page 1
Date of Hearing: April 23, 2012
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 1990 (Fong) - As Amended: March 29, 2012
SUBJECT : Renewable energy resources: small-scale renewable
generation program.
SUMMARY : Establishes a small-scale renewable generation
program in the state's most impacted and disadvantaged
communities. Specifically, this bill :
1)Establishes a small-scale renewable generation program with
the goal of installing 375 megawatts of electrical in most
impacted and disadvantaged communities in the state.
2)Limits per project size to 500 kW.
3)Requires the California Public Utilities Commission (PUC), in
consultation with interested stakeholders, to develop program
elements that achieve certain environmental justice
objectives.
4)Requires investor-owned utilities (IOUs) to file a standard
tariff for electricity purchased pursuant to a clean energy
contract with a small-scale renewable generation facility
owner or operator.
5)Requires the PUC to establish a schedule of standard rates for
electricity that IOUs are required to purchase through clean
energy contracts with a small-scale renewable generation
facility owner or operator.
6)Requires the PUC to establish a rate of $0.02/kilowatt-hour
for the value of environmental justice and set various rates
for specific project attributes: type of service provided
(peaking, base load, as available), size range, and benefits
of the program.
7)Allows the PUC to provide separate rates for developers who
cannot use federal tax credit benefits.
8)Requires local publicly owned electric utilities to establish
a schedule of standard tariff rates for electricity purchased
AB 1990
Page 2
through clean energy contracts from small-scale renewable
generation facilities pursuant to a small-scale generation
program for the utility.
9)Requires the PUC to allocate procurement targets for each
electrical corporation and local publicly owned electric
utility in proportion to each utility's percentage share of
the state's total electricity sales.
10)Limits the cost of the program to no more than 0.375 percent
of the total cost of each IOUs forecast retail sales for 2020.
11)Requires the PUC to require IOUs to begin offering these
contracts by January 1, 2014.
12)Requires the PUC to post maps of publicly owned utility's
EXISTING LAW :
1)Requires all investor-owned utilities (IOUs) and
publicly-owned utilities (POUs), that serve more than 75,000
retail customers, to develop a standard contract or tariff
(aka feed-in-tariff or FIT) available for renewable energy
facilities up to three megawatts (MWs). Statewide
participation is capped at 750 MWs.
2)Requires the FIT contract price for IOUs to include all
current and anticipated environmental compliance costs,
including but not limited to, mitigation of emissions of
greenhouse gases and air pollution offsets associated with the
operation of new generating facilities in the local air
pollution control or air quality management district where the
electric generation facility is located.
3)Requires the contract price for electricity purchased through
a FIT, adopted by specified POUs, include the value of avoided
costs of distribution and transmission upgrades, the offset of
peak demand and all current and anticipated environmental and
greenhouse gas reduction compliance costs and avoided costs.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, "California's most
vulnerable communities - those that have suffered first and
worst from pollution - have not benefited much from renewable
AB 1990
Page 3
energy policy. This legislation will create jobs and build
cleaner, safer, and healthier neighborhoods. This bill
establishes a FIT for small scale renewable energy projects of
up to 500 kilowatts to spur rooftop solar on commercial
buildings including multifamily buildings, and residential
buildings and to create local green jobs in disadvantaged
communities with high unemployment.
This bill also fills a gap in the green economy where the most
impacted and disadvantaged communities rarely see renewable
energy systems in local communities and who undergo green jobs
training programs, yet often cannot access green jobs."
1)Background: A feed in tariff is jargon that means a standard
power purchase
contract, over a standard period of time, with a standard
payment for each kilowatthour of electricity produced over the
life of the contract. What makes a feed in tariff unusual from
other types of power purchase contracts is that any project
owner or developer can use this contract to enter into an
agreement with a utility because the terms of the contract and
the price are known in advance. This standard form of the
contract allows an owner or a developer to determine the revenue
stream from the project ahead of time. Most power contracts
negotiate the terms and the price or have limiting criteria that
prevent owners or developers from placing bids to provide power.
2)Distributed generation programs : The PUC is currently in
charge of several programs to
encourage greater levels of distributed generation. These
include the 3MW FIT that was authorized by SB 32
(Negrete-McLeod, Chapter 328, Statutes of 2009) which is not yet
available, the Reverse Auction Mechanism (RAM), the California
Solar Initiative, Self Generation Incentive Program (SGIP), Net
Metering, Virtual Net Metering, Solar PV programs at SCE and
PG&E, and the interconnection rule known as Rule 21.
The SB 32 FIT may preclude small generator projects due to the
complexity of the proposed contract. Small generators may not
have the possible revenue associated with a small project to
afford the extensive requirements associated with this FIT. As
a result, the SB 32 FIT may be easier for larger developers who
cannot effectively compete to build projects through the other
programs. The RAM is a low-bid wins auction that is administered
by the IOUs. Restrictions on eligibility limit the number of
AB 1990
Page 4
bidders. The California Solar Initiative and the SGIP is for
self-generation only that is not wholesale sale of electricity.
Both of these programs have restrictions on the size of the
project.
As a result, there may be limitations on the structure of the
available programs that prevent these projects from being
constructed. Yet, small projects in a load center are also
recognized to have a potential to have a higher value, as
described in a recently published PUC consultant report:
"Local distributed photovoltaics (LDPV) is defined as
photovoltaics (PV) sized such that its output will be
consumed by load on the feeder or substation where it is
interconnected. This distinguishes LDPV from other
characterizations of "distributed PV," which has typically
been defined as 20 MW or less. We focus the study on local
distributed PV because compared to distributed PV that is
located remotely from load, local PV has the potential for
less expensive and faster interconnection. In addition, it
may target higher value locations on the grid, and may
better achieve other policy goals such as reducing
environmental impact, creating local jobs, enhancing energy
awareness, and promoting redevelopment. In contrast, some
distributed systems of 20 MW or less that are not "local"
may export power to serve remote loads without providing
these advantages."
3)Suggested amendments : This bill requires the PUC to authorize
a $0.02/kilowatthour rate for
environmental justice. It is not clear how this rate was
determined. The author may wish to consider amending the bill to
remove this provision.
This bill requires the PUC to determine allocation of the 375
MWs for this FIT among both IOUs and POUs. The author may wish
to modify this to allocate the MWs proportionally among the IOUs
and POUs to base the allocation on statewide total peak demand,
as follows:
The proportionate share shall be calculated based on the ratio
of the electrical corporation's peak demand compared to the
total statewide peak demand.
REGISTERED SUPPORT / OPPOSITION :
AB 1990
Page 5
Support
Asian & Pacific Islanders California Action Network (APIsCAN)
Asian and Pacific Islander Obesity Prevention Alliance (APIOPA)
Asian Communities for Reproductive Justice (ACRJ)
Asian Immigrant Women Advocates (AIWA)
Asian Law Caucus
Asian Neighborhood Design
Asian Pacific American Legal Center (APALC)
Asian Pacific Environmental Network (APEN)
Asian Pacific Policy & Planning Council (A3PCON)
Association of Irritated Residents (AIR)
Bus Riders Union
California Environmental Justice Alliance (CEJA)
California Healthy Nail salon Collaborative (Collaborative)
California Rural Legal Assistance Foundation (CRLAF)
Californians for Renewable Energy, Inc. (CARE)
Center for Biological Diversity
Center for Community Action and Environmental Justice (CCAEJ)
Center on Race, Poverty & the Environment
Chinese for Affirmative Action (CAA)
Chinese Progressive Association (CPA)
City Heights Community Development Corporation (CHCDC)
Clean Coalition
Comite Rosas
Committee For a Better Arvin
Committee For a Better Shafter
Communities for a Better Environment (CBE)
Communities for Clean Ports
Community Health for Asian Americans
Ella Baker Center for Human Rights, Green-Collar Jobs Campaign
EndOil
Environment California
Environmental Health Coalition
Environmental Justice Task Force of A3PCON
Equal Action
Filipino Advocates for Justice
Filipino/American Coalition for Environmental Solidarity (FACES)
Fresno Center for New Americans
Fresno Metro Ministry
Global Alliance for Incinerator Alternatives
Global Green USA
Great Leap, Inc.
Helping Hand Tools
AB 1990
Page 6
Khmer Girls in Action
Korean Resource Center (KRC)
Koreatown Immigrant Workers Alliance
Lao Iu Mien Culture Association, Inc. (LIMCA)
Lao Khmu Association, Inc. (LKA)
Little Tokyo Service Center
Los Angeles Business Council (LABC)
Merced Lao Family Community, Inc.
Movement Generation: Justice & Ecology Project
Natural Resources Defense Council (NRDC)
P "
Pacific Asian Consortium in Employment (PACE)
Pacific Environment
Pacific Isle Environment Reserve (PIER)
People Organizing to demand Environmental and Economic Rights
(PODER)
People's Community Organization for Reform and Empowerment
(People's CORE)
RYSE Youth Center
San Diego Coastkeeper
San Francisco Baykeeper
Search To Involve Pilipino Americans (SIPA)
Sierra Club California
Silicon Valley Toxics Coalition (SVPC)
Solaria
Southeast Asian Assistance Center (SAAC)
Students for Economic and Environmental Justice, UC Berkeley
School of Law
To'utupu 'oe 'Otu Felenite (TOFA, Inc.)
Union of Concerned Scientists (UCS)
Vote Solar Initiative
Opposition
Southern California Edison (SCE)
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083