BILL ANALYSIS Ó AB 2187 Page 1 Date of Hearing: May 16, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 2187 (Bradford) - As Amended: May 1, 2012 Policy Committee: UtilitiesVote:13-0 Natural Resources 8-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill exempts renewable energy contracts entered into by electric service providers (ESPs) before January 14, 2011, rather than before June 1, 2010, from product content restrictions for purposes of meeting the state's Renewable Portfolio Standard (RPS) requirements. FISCAL EFFECT Minor absorbable costs to the Public Utilities Commission to modify an existing commission decision. COMMENTS Background and Purpose . The 2011 legislation (SBX1 2) which codified the current 33% by 2020 RPS goal also established three product content categories (or "buckets"), which place the highest value on renewable energy that is directly delivered into California, because it has the greatest economic, environmental and reliability benefits. Though SBX1 2 was approved by the Legislature in March 2011, the bill was identical to SB 722 from the prior session, which established the June 1, 2010 deadline for contracts to be exempt from the proposed balanced portfolio requirements. Several ESPs, however, executed contracts between June 1, 2010 and January 14, 2011 that do not meet the criteria of the first (highest priority) bucket and are instead subject to the limitations of the third (lowest priority) bucket, making the contracts less valuable and potentially unusable for RPS AB 2187 Page 2 compliance. AB 2187 grandfathers these ESP contracts, i.e. exempts them from the RPS' balanced portfolio requirements. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081