BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1332
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          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. 








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          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









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