BILL ANALYSIS Ó
SB 836
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Date of Hearing: July 5, 2011
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
SB 836 (Padilla) - As Amended: June 29, 2011
SENATE VOTE : 39-0
SUBJECT : Renewable energy resources: cost reporting.
SUMMARY : Requires the California Public Utilities Commission
(PUC) to release the costs of all contracts, in aggregate form,
submitted by the investor-owned utilities (IOUs) to meet the
state's renewable portfolio standard (RPS) goals, which are
approved by the PUC. The first data release would be required
in February 1, 2012, and annually thereafter. Specifically,
this bill :
1)Requires the PUC to release to the Legislature by February 1,
2012, and annually thereafter, the costs of all electricity
procurement contracts for eligible renewable energy resources,
including unbundled renewable energy credits, and all costs
for the utility-owned generation approved by the PUC.
2)Specifies the report shall include all costs commencing
January 1, 2003. Subsequent reports shall include only costs
for the preceding calendar year.
3)Specifies that for power purchase contracts, the PUC shall
release costs in an aggregated form categorized according to
the year the procurement transaction was approved by the PUC,
the eligible renewable energy resource type, including
renewable energy credits, the average executed contract price,
and average actual recorded costs for each kilowatthour of
production. Within each renewable energy resource type, the
PUC shall provide aggregated costs for different project size
thresholds.
4)Specifies that for each utility-owned renewable generation
project, the PUC shall release the costs forecast by the
electrical corporation at the time of initial approval and the
actual recorded costs for each kilowatthour of production
during the preceding calendar year.
5)States the PUC shall aggregate data to the extent required to
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ensure protection of the confidentiality of individual
contract costs even if this aggregation requires grouping
contracts of different energy resource type. The PUC shall
not be required to release the date in any year when there are
fewer than three contracts approved.
EXISTING LAW :
1)Specifies the PUC has regulatory authority over public
utilities, including electrical corporations, as defined.
2)Effective upon the adjournment of the first extraordinary
session, requires the IOUs, publicly owned utilities,
community choice aggregators, and energy service providers 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% renewable energy for the
period of January 1, 2011 through December 31, 2013; 25% by
December 31, 2016, and 33% by 2020.
3)Requires the PUC to adopt procedures to ensure confidentiality
of any market sensitive information submitted in an IOUs
proposed procurement plan or resulting contracts for
generation.
4)Prohibits the release of information provided to the PUC by an
IOU except those matters specifically required to be open to
public inspection under law.
FISCAL EFFECT : Unknown.
COMMENTS : In order to ensure that the public and the
Legislature are aware of the costs of the RPS program, the
intent of SB 836 is that the PUC release those costs, in the
aggregate, to the Legislature on a regular basis. Under current
PUC 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 costs.
1)Background : To meet the goals of the state's RPS program, the
IOUs have entered into
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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 PUC for review and
approval but are not made public for several years after they
are approved.
The PUC and the Division of Ratepayer Advocates (DRA) have
released reports which analyze the cost impacts of the RPS.
According to a PUC report from June 2009, it would cost billions
of dollars to meet a 33% RPS by 2020. A February 2011 report by
DRA states its concerns that the perceived urgency to comply
with the RPS and continuing CPUC approval of highpriced
contracts has created an inelastic demand and subsequently
driven the renewable market to yield very high prices. These
costs are generally attributed to the cost of the renewable
generation, however, it is important to understand that
transmission and distribution upgrades will also add to
ratepayer costs. Transmission and distribution systems must
continue to improve to accept new generation from a variety of
sources and location as well as ensure safe and reliable service
for customers. The California Independent System Operator
(CAISO) released a report that estimates a total cost of $7.2
billion of transmission underway to meet 33% RPS in 2020.
2)Issues resolved : This bill was amended to address concerns
raised by several parties.
Specifically, the author amended the bill to: 1) require data
release annually rather than semiannually; 2) clarify that
REC-only contracts are also to be included; 3) allow data to be
aggregated to prevent disclosure of individual contract terms;
4) allow the PUC to combine this release of data with the annual
RPS report required under Public Utilities Codes Section 910
(added by SB x1 2 (Simitian, 2011).
3)Technical amendments : The author and this committee may wish
to consider the following
technical amendments :
1)Page 2, line 7, strike "mandate to" and insert "goal"
2)Page 2, between lines 9 and 10, insert:
In 2011, the Legislature extended Renewables Portfolio Standard
target in 2010 to a 33% standard by December 31, 2020.
3)Page 2, line 28, strike "454" and insert "454.5".
4)Page 3, line 8, after "including" insert "unbundled".
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REGISTERED SUPPORT / OPPOSITION :
Support
California Public Utilities Commission (CPUC)
Pacific Gas and Electric Company (PG&E)
Opposition
None on file.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083