BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1332
                                                                  Page  1

          Date of Hearing:   August 8, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                SB 1332 (Negrete-McLeod) - As Amended:  June 7, 2012 

          Policy Committee:                              UtilitiesVote:9-4

          Urgency:     No                   State Mandated Local Program: 
          Yes    Reimbursable:              No

           SUMMARY  

          This bill requires publicly-owned utilities (POUs) serving more 
          than 75,000 customers to:

          1)Adopt a feed-in-tariff (FIT) for renewable generation 
            facilities, as required under current law, no later than July 
            1, 2013.

          2)Ensure that the FIT considers the avoided costs for 
            transmission and distribution upgrades, whether the renewable 
            generation facility offsets peak demand, and environmental and 
            greenhouse gas reduction compliance costs.

           FISCAL EFFECT  

          Any costs for each of the POUs to meet the additional mandates 
          of this bill will be recovered from their ratepayers.

           COMMENTS  

           1)Background  . A FIT is an obligation that utilities purchase all 
            the electrical output from specified generators under a 
            standard contract with the price and terms determined by 
            statute or a regulatory agency. Renewable FITs can help 
            promote the development of renewable generation by reducing 
            transaction costs and financing costs for renewable 
            developers, since the terms of an agreement are known ahead of 
            time and will not change over the life the project.

            SB 32 (Negrete-McLeod)/Chapter 328 of 2009, in part required 
            POUs serve more than 75,000 customers to adopt a FIT for 
            eligible renewable generation less than 3 MW (megawatts), with 








                                                                  SB 1332
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            a statewide cap of 250 MW. SB 32 contained no implementation 
            deadline.

           2)Purpose  . According to the author's staff, to date only four of 
            the eight POUs required to adopt a FIT under SB 32 have done 
            so, thus SB 1332 contains a firm deadline of July 1, 2013. In 
            addition, SB 32 did not provide clear direction regarding what 
            attributes of the renewable generation should be considered in 
            establishing the FIT, which according to the author's office 
            has led to uneven results, with the price adopted by two POUs 
            (Riverside and Anaheim) apparently being set too low to 
            attract any renewable development. The effected POUs are: 
            Anaheim, Glendale, Imperial, Los Angeles, Modesto, Riverside, 
            Turlock, and Sacramento.
           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081