BILL ANALYSIS Ó
AB 2187
Page 1
ASSEMBLY THIRD READING
AB 2187 (Bradford)
As Amended May 1, 2012
Majority vote
UTILITIES & COMMERCE 13-0 NATURAL
RESOURCES 8-0
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|Ayes:|Bradford, Buchanan, Fong, |Ayes:|Chesbro, Knight, |
| |Fuentes, Furutani, | |Dickinson, Grove, |
| |Gorell, Roger Hernández, | |Halderman, Huffman, |
| |Huffman, Ma, Nestande, | |Monning, Skinner |
| |Skinner, Swanson, Valadao | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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APPROPRIATIONS 17-0
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|Ayes:|Fuentes, Harkey, | | |
| |Blumenfield, Bradford, | | |
| |Charles Calderon, Campos, | | |
| |Davis, Donnelly, Gatto, | | |
| |Hall, Hill, Lara, | | |
| |Mitchell, Nielsen, Norby, | | |
| |Solorio, Wagner | | |
| | | | |
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SUMMARY : Allows renewable energy contracts executed after
January 13, 2011, to fully count towards the Renewable Portfolio
Standard (RPS) mandate.
EXISTING LAW :
1)States the California Renewables Portfolio Standard program
requires investor owned utilities, local publicly owned
utilities and energy service providers to increase purchases
of renewable energy such that at least 33% of retail sales are
procured from a renewable energy resource by December 31,
2020.
2)States RPS eligibility requirements are in part determined
AB 2187
Page 2
upon whether the contract for eligible renewable energy
resources was executed after June 1, 2010.
FISCAL EFFECT : Minor absorbable costs to California Public
Utilities Commission (PUC) to modify an existing commission
decision.
COMMENTS : According to the author, this bill seeks to change
the renewable energy contract "grandfathering" date to coincide
with PUC rules that governed RPS program that were in effect
through January 13, 2011.
Background : In April 2012, the Legislature passed SB 2 X1
(Simitian), Chapter 1, Statutes of
2011-12 First Extraordinary Session, which recast the state's
annual renewable energy goal from 20% to 33% of a retail energy
service provider's retail sales.
It also conditioned certain eligibility requirements upon
whether the contract for electricity products from eligible
renewable energy resources was executed after June 1, 2010.
Compliance gap : Prior to the enactment of SB 2 X1, the state
set an annual renewable energy
goal of 20% by December 31, 2010, of a retail energy service
provider's retail sales. Certain energy service providers made
a number of renewable energy purchases between October 2010 and
January 13, 2011, in an effort to comply with the 20% annual
procurement target.
Under current law, SB 2 X1 renewable energy contract
"grandfathering" date creates a RPS compliance gap whereby
retail energy service providers that purchased renewable energy
under PUC rules at the time of the contract are now in a
situation whereby these purchases may be "stranded" for
compliance purposes. This situation potentially exposes the
retail energy service provider to market losses for those
purchases and/or the probability for penalties from PUC for RPS
noncompliance. This may be perceived as retail energy service
providers being penalized for making renewable energy purchases
between June 2010 and January 13, 2011, to meet the state's
energy goals which were in accordance with PUC policy at that
time.
AB 2187
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This bill modifies the "grandfathering" date for electric
service providers only and would require specified restrictions
on crediting eligible renewable energy resource electricity
products to each compliance period to apply to contracts
executed after January 13, 2011.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083
FN: 0003961