BILL ANALYSIS Ó 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
SB 836 - Padilla Hearing Date:
May 3, 2011 S
As Amended: March 24, 2011 FISCAL B
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DESCRIPTION
Current law , effective upon the adjournment of the first
extraordinary session, requires investor-owned utilities (IOUs),
publicly owned utilities (POUs), community choice aggregators
(CCAs), and energy service providers (ESPs) to increase
purchases of renewable energy such that at least 33% of retail
sales are procured from renewable energy resources by December
31, 2020. In the interim each entity would be required to
procure an average of 20% of renewable energy for the period of
January 1, 2011 through December 31, 2013; 25% by December 31,
2016, and 33% by 2020. This is known as the Renewable Portfolio
Standard (RPS).
Current law requires the California Public Utilities Commission
(CPUC) to adopt procedures to ensure the confidentiality of any
market sensitive information submitted in an IOU's proposed
procurement plan or resulting contracts for generation.
Current law prohibits the release of information provided to the
CPUC by an IOU except those matters specifically required to be
open to public inspection under law.
This bill requires the CPUC to release the costs of all
contracts, in aggregate form, submitted by IOUs to meet the
state's RPS goal, which are approved by the CPUC. The first
data release would be required in January, 2012 and every six
months thereafter.
BACKGROUND
To meet the goals of the state's RPS program, the IOUs have
entered into hundreds of contracts with independent producers of
eligible renewable energy resources and also built utility-owned
generation. The costs of those contracts and utility-owned
generation have been submitted to the CPUC for review and
approval but are not made public for several years after they
are approved.
Reports have been made by the CPUC and the Division of
Ratepayers Advocates which analyze the cost impacts of the RPS.
One specific report noted billions of dollars in costs and
opined that RPS contract prices are 15% higher than those for
natural gas plants. Reports of individual contracts are
periodically specified in media reports. A February, 2011
article reported that in recent contract filings by Southern
California Edison the cost of solar photovoltaics was less than
the "market price referent" (a measure of the cost of new
natural gas fired generation).
COMMENTS
1. Author's Purpose . In order to ensure that the public
and the Legislature are aware of the costs of the RPS
program, the intent of this measure is that the CPUC
release those costs, in the aggregate, to the Legislature
on a regular basis. Under current CPUC practices there is
no data available to the Legislature on the actual costs of
approved contracts under the RPS program. There are
conflicting studies and media reports on those costs as
well. Yet those costs are directly passed through to the
ratepayers of IOUs and the Legislature is expected to
analyze the effectiveness of the program without any real
cost data.
2. CPUC Data Policy . In prior proceedings the CPUC has
expressed support for policies that call for greater public
access for procurement documents relating to the RPS
program because of the public interest aspects of that
program. But they also opine that confidentiality
protections of the terms of contracts for electric
procurement are essential to avoid electricity market
manipulation. As a consequence the CPUC has adopted a
policy that precludes the release of the cost of individual
RPS contracts for three years to provide the parties with a
window of confidentiality.
3. Striking a Balance . Concern has been expressed by a few
parties (The Utility Reform Network ÝTURN], Sempra
Utilities, CPUC, and PG&E), not with the release of the
data, but with the form in which it is released. They want
to ensure that the data releases do not inadvertently
result in the release of individual contract data which
might occur, for instance, if only one contract were to be
approved by the CPUC in the specified time frame. Although
not likely for solar and wind projects (which comprise the
bulk of contracts submitted) this could occur, for example,
in the case of a contract for biomass of which there are
few. That is not the author's intent and he has committed
to working with the parties to strike the right balance.
POSITIONS
Sponsor:
Author
Support:
California Large Energy Consumers Association
California Public Utilities Commission (with technical
amendments)
Division of Ratepayer Advocates
Pacific Gas and Electric Company (if amended)
Oppose:
None on file
Kellie Smith
SB 836 Analysis
Hearing Date: May 3, 2011