BILL ANALYSIS Ó
SB 843
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Date of Hearing: August 8, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 843 (Wolk) - As Amended: August 6, 2012
Policy Committee:
UtilitiesVote:10-2
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill establishes a new program allowing investor-owned
utility (IOU) customers to purchase an interest in a "community
renewable energy facility" and receive a bill credit for the
generation component of the customer's electrical service.
Specifically, this bill:
1)Limits a community renewable energy facility to 20 megawatts
(MW) capacity and requires the facility to be located in the
service territory of an IOU with more than 100,000 customers
and be an eligible renewable facility pursuant to the state's
Renewable Portfolio Standard (RPS) program.
2)Limits the statewide capacity of community renewable energy
facilities to 2,000 MW, and requires the Public Utilities
Commission (PUC), when statewide capacity reaches 1,500 MW to
determine whether the 2,000 MW limit is necessary or can be
raised or eliminated based on the commission's determination
of the impacts on IOU ratepayers.
3)Requires the PUC to establish a facility rate, as specified,
for each community renewable energy facility and, by December
31, 2014, to determine a methodology for calculating an "added
value," as specified, of the community renewable energy
facility, in order to determine the participant's bill credit,
which shall be applied to the generation component of the
participant's electricity service charges from their IOU.
(Once the added value is determined, the higher of the
facility rate or added value shall be used to determine the
participant's bill credit.)
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4)Requires the PUC to reevaluate the added value methodology
every three years in order to maintain the program goals,
including indifference of ratepayers not benefiting from the
program.
5)Limits the interest of non-public entities participating in a
community renewable generation facility to 2 MW of generating
capacity.
6)Stipulates that interconnection process and cost allocation
for facilities under this program are to be determined under
rules established by the PUC.
FISCAL EFFECT
To implement and monitor the new program described above, the
PUC will incur ongoing costs of around $250,000 for two
regulatory analysts plus an administrative law judge for the
first two years at an annual cost of $150,000 per year ÝPublic
Utilities Reimbursement Account].
COMMENTS
1)Purpose . According to the author, SB 843 establishes a new
program to allow any IOU customer to pursue off-site renewable
energy. Based on the successful model established between PG &
E, the City of Davis and the PVUSA solar facility, this bill
allows all participating customers to receive a credit on
their electricity bills for the clean power they purchase at
an off-site renewable energy facility. Allowing customers to
opt into larger energy facilities and pool their resources
will reduce the price they pay for clean energy, and access to
this renewable energy will be increased.
The author indicates that "?only a small percentage of
California homes and businesses are appropriate sites for
renewable energy. Many customers are interested in using solar
energy, but the arrangement at their home or business is not a
good match for installing solar. For example, some customer
sites - both businesses and residences are overly shaded or
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not oriented in the proper direction; in many cases customers
are renters who do not own the property at which they live.
"The bill allows for Californians to access an optimally
located renewable energy facility, shared by multiple
customers, rather than being limited to renewable energy
options on their own property."
2)Amendments . This analysis reflects substantial amendments
adopted by the policy committee. Since that time, the author
has been meeting with stakeholders regarding further
amendments, including substantially reducing the initial
program generation cap, considering participation by direct
access customers, clarifying program definitions, creating an
allocating process, and enhancing PUC oversight.
3)Opposition . Southern California Edison (SCE) opposes the bill
for numerous reasons. According to SCE, "the core transaction
in the program is essentially a wholesale sale of electricity
at an administratively determined price, under a mandatory
purchase obligation, with payment made in the form of a retail
bill credit to participants in the program. Viewed in this
manner, the program conflicts with federal law?SB 843 also
raises the specter of unregulated entities participating in
the retail energy market.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081