BILL ANALYSIS Ó SB 1332 Page 1 SENATE THIRD READING SB 1332 (Negrete McLeod) As Amended June 7, 2012 Majority vote SENATE VOTE :21-12 UTILITIES & COMMERCE 9-4 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Bradford, Fletcher , |Ayes:|Fuentes, Blumenfield, | | |Fong, Fuentes, Furutani, | |Bradford, Charles | | |Roger Hernández, Huffman, | |Calderon, Campos, Davis, | | |Ma, Swanson | |Gatto, Hall, Hill, Lara, | | | | |Mitchell, Solorio | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Gorell, Knight, Nestande, |Nays:|Harkey, Donnelly, | | |Valadao | |Nielsen, Norby, Wagner | | | | | | ----------------------------------------------------------------- SUMMARY : Modifies current law with regard to Feed in Tariffs (FIT) contracts offered by publicly owned utilities (POUs). Specifically, this bill : 1)Establishes that POUs shall implement their FIT program by no later than July 1, 2013. 2)Modifies the calculation of the tariff to consider avoided costs for distribution and transmission system upgrades, the value of offsetting peak electricity demand, and environmental and greenhouse gas reduction values. FISCAL EFFECT : According to the Assembly Appropriations Committee, any costs for each of POUs to meet the additional mandates of this bill will be recovered from their ratepayers. COMMENTS : Author's Statement . To date only four of the nine POUs have implemented FIT required by current law. Without a clear timeframe for program implementation POUs may continue to delay program development. SB 1332 Page 2 Further, of the three POUs that have implemented the program, participation has varied widely. The Sacramento Municipal Utility District implemented their FIT in a manner that fully subscribed their program on the day it became available. However, Anaheim and Riverside have yet to attract developer interest. This is likely due to the fact that the original bill, SB 32 (Negrete McLeod), Chapter 328, Statutes of 2009, did not provide sufficient direction in what should be considered when developing the rate to be paid under FIT contracts. What is a Feed-in-Tariff ? A FIT should be a simplified contracting mechanism for small renewable generators to sell power to a utility at predefined terms and conditions, without contract negotiations. For investor owned utilities (IOUs), FIT operates as a "must-take" contract in its portfolio. If the participant generates the power, IOU must take it and pay for generation from the facility according to the terms of FIT contract. Small renewable generator FITs are available in the territories of the three largest IOUs and provide a 10, 15, or 20-year fixed-price, non-negotiable contract for systems sized up to 1.5 megawatts (MWs). The California Public Utilities Commission (PUC) has a rulemaking open to implement the terms of SB 32 (Negrete McLeod) and expand IOU FIT to three MWs. The total program allocation between the three IOUs, is approximately 500 MWs. Applicable POUs . Existing law requires that only the largest POUs adopt a FIT and specifies that those serving a population of 75,000 customers or more make a FIT available to renewable developers in those territories. The affected POUs are: Anaheim, Glendale, Imperial, Los Angeles, Modesto, Riverside, Turlock, and Sacramento. The total program allocation between the nine POUs is approximately 250 MWs. Analysis Prepared by : Susan Kateley / U. & C. / (916) 319-2083 FN: 0004853 SB 1332 Page 3