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 Page 2 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