BILL ANALYSIS �
AB 762
Page 1
Date of Hearing: April 8, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 762 (Patterson) - As Amended: February 21, 2013
SUBJECT : Renewable energy resources: hydroelectric generation
SUMMARY : This bill would revise the definition of an eligible
renewable energy resource for the purposes of the California
Renewables Portfolio Standard (RPS) to include a hydroelectric
generation facility of any size. Specifically, this bill :
Would allow a hydroelectric facility to be counted toward RPS
compliance goals if the facility is:
a)Located in the state or near the border of the state with the
first point of connection to the transmission network of a
balancing authority area primarily located within the state,
or
b)Has its first point of interconnection to the transmission
network outside the state, within the Western Electricity
Coordinating Council (WECC) service area, and satisfies all of
the following requirements:
1. It commences initial commercial operation after
January 1, 2005.
2. It will not cause or contribute to any violation of
a California environmental quality standard or
requirement.
3. It participates in the California Energy Commissions
(CEC's) accounting system to verify compliance with the
RPS
EXISTING LAW
1)States the California's RPS program requires all investor
owned utilities (IOUs), local publicly owned utilities (POUs)
and energy service providers (ESPs) to increase purchases of
renewable energy such that at least 33% of retail sales are
procured from an eligible renewable energy resource by 2020.
2)Requires all retail sellers of electricity and all POUs to
procure renewable energy resources using the following RPS
eligibility targets: 20% by December 31, 2013; 25% by
December 31, 2016; and, 33% by December 31, 2020, and each
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year thereafter.
3)States under the RPS program, an eligible renewable energy
resource includes:
a) An existing small hydroelectric generation facility of
30 megawatts or less if a retail seller or local publicly
owned electric utility procured the electricity from the
facility as of December 31, 2005.
b) A small hydroelectric generation unit with a nameplate
capacity not exceeding 40 megawatts that is operated as
part of a water supply or conveyance system if the retail
seller or local publicly owned electric utility procured
the electricity from the facility as of December 31, 2005.
c) A new hydroelectric facility that commences generation
of electricity after December 31, 2005, is not an eligible
renewable energy resource if it will cause an adverse
impact on instream beneficial uses or cause a change in the
volume or timing of streamflow.
d) A conduit hydroelectric facility of 30 megawatts or less
that commenced operation before January 1, 2006.
e) A conduit hydroelectric facility of 30 megawatts or less
that commences operation after December 31, 2005, so long
as it does not cause an adverse impact on instream
beneficial uses or cause a change in the volume or timing
of streamflow
4)Requires the CEC, by June 30, 2011, to study and provide a
report to the Legislature that analyzes run-of-river
hydroelectric generating facilities, as defined, in British
Columbia, including whether these facilities are, or should
be, included as renewable electrical generation facilities
should be eligible renewable energy resources for purposes of
the RPS program.
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5)Deems eligible for the RPS those renewable projects that are
located in California or near the border with a first point of
interconnection to a California balancing authority area or
have the first point of interconnection to the transmission
system network outside the state, but within the WECC service
area.
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's Statement. "There is no more cost-effective source of
environmentally-friendly energy than emission-free hydropower.
AB 762 will ensure that we are procuring more renewable energy
in California; not setting arbitrary limitation to meeting
these standards."
2)RPS Limits Eligible Hydroelectric . SB 2 X1 (Simitian, Chapter
1, Statutes of 2011-12 First Extraordinary Session) was the
culmination of many years of meetings, hearings, versions of
draft language and negotiations. Fundamental precepts included
saving and or improving the environment as well as developing
new renewable energy sources. While the legislation had to be
limited to the borders of California, concern for damaging the
environment outside California was also considered and
weighed. Setting such standards for California to the
detriment of others was not a preferred option.
Many environmental groups expressed their concerns that states
other than California did not have stringent laws on
protecting river flow and that significant damage would be
done to the region's rivers and watershed to maximize the
amount of hydroelectricity that could be sold to California.
These concerns in part led to the RPS language that
electricity generated from hydropower would be limited to
small (30 MW or less) hydroelectric generators and to exclude
large out of state hydropower where California had no control
over the damage to the environment. These concerns also led
to a requirement that the CEC study and provide a report to
the Legislature that analyzes run-of-river hydroelectric
generating facilities, as defined, in British Columbia,
including whether these facilities are, or should be, included
as renewable electrical generation eligible for purposes of
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the RPS program.
3)WECC regions. WECC is geographically the largest and most
diverse of the eight Regional Entities that have Delegation
Agreements with the North American Electric Reliability
Corporation (NERC). WECC's service territory extends from
Canada to Mexico. It includes the provinces of Alberta and
British Columbia, the northern portion of Baja California,
Mexico, and all or portions of the 14 Western states between.
4)Types of Hydroelectric facilities. Two types of hydroelectric
facilities are dams and run-of-river. Dams raise the water
level of a stream or river to an elevation necessary to create
a sufficient elevation difference (water pressure). Dams can
be constructed of earth, concrete, steel or a combination of
such materials. Dams may create secondary benefits such as
flood control, recreation opportunities and water storage.
Run-of-river facilities typically divert water from its
natural channel to run through a turbine and then return the
water to the channel downstream of the turbine.
5)Qualifies New Hydroelectric facilities? AB 762 allows
hydroelectric facilities to qualify for the RPS under two
options in the referenced statute (Public Resources Code 25741
(a)(2)):
a. As an in-state facility. New hydroelectric
facilities could also qualify although they might have
difficulties in the permitting process due to local
objects or other state laws regarding the environment.
b. An out of state facility within WECC that began
operation after January 1, 2005. Permitting a new
hydroelectric facility in one of the other regions may be
possible. These regions include Washington, Idaho,
Wyoming, Colorado as well as the Canadian provinces of
Alberta and British Columbia.
6)CEC Analysis: "Analysis of Regulatory Requirements For
Including British Columbia RunOfRiver Facilities In The
California Renewables Portfolio Standard. " According to the
CEC's analysis:
"Runofriver hydroelectric facilities in British Columbia may
have the potential to bring additional environmental benefits
to California; however, those benefits do not warrant changing
existing statutory requirements to categorically allow all
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runofriver hydroelectric projects in British Columbia to
become eligible for Californias Renewables Portfolio
Standard."
The CEC is considering the following requirements for a
British Columbia runofriver project requesting eligibility:
a) The project must be less than 30 MW.
b) The project must complete an environmental assessment or
development plan with a cumulative impact assessment based
on the Canadian Environmental Assessment Agency's
Cumulative Effects Assessment Practitioners Guide.
c) Instream flow requirements must be sufficient to not
compromise the river ecosystem based on volume or timing of
streamflow.
d) The project should obtain an EcoLogo certification
(EcoLogo is a Canadian thirdparty certifier of
environmentally preferable products).
e) Documentation (which may or may not be EcoLogo) to show
the project was analyzed, constructed, and operated to
protect the environment in a similar manner as a California
project.
f) Transparency during the environmental review and
monitoring process comparable with Federal Energy
Regulatory Commission standards.
In addition, the CEC report noted that there are 35 runofriver
hydro projects under development in British Columbia. Of
those, 25 projects would be less than 30 MW in size, and 10
would be greater than 30 MW in size. The total capacity of
these projects are, respectively, 275 MW and 994 MWs.
1)Qualifies Existing Hydroelectric facilities in state?
a) PG&E: PG&E finished 2012 at about 19% renewable. On an
average basis PG&E receives about 18% of its power needs
from large hydroelectric facilities. Significant swings
occur in wet or dry years. In 2012 if large hydroelectric
facilities counted PG&E would be at 32.25%. In 2011 with
19.3% renewable plus 21.6% hydroelectric facilities, PG&E
would have been at 40.9%.
b) SCE: SCE finished 2011 at about 19% renewable. If SCE
had been allowed to include hydroelectric facilities it
would be at 24%.
c) SDG&E: No change to current RPS requirements (does not
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have hydroelectric resources)
d) Publicly owned utilities in Northern California:
Alameda would go from 66% to 98% renewable;
Biggs would from 12% to 82% renewable;
Gridley would go from 9% to 68% renewable;
Healdsburg would go from 41% to 69% renewable;
Lodi would go from 20% to 44% renewable;
Lompoc would go from 24% to 47% renewable;
Palo Alto would go from 20% to 84% renewable;
Plumas would go from 5% to 50% renewable;
Port of Oakland would go from 2% to 32% renewable;
Redding would go from 5% to 47% renewable;
Roseville would go from 14% to 54% renewable;
Santa Clara/Silicon Valley Power would go from 25% to 41%
renewable;
Truckee would stay at their current level of 33% (no large
hydroelectric facilities), and;
Ukiah would go from 47% to 71% renewable.
1)Undermining the RPS? According to a coalition of interested
parties who oppose AB 762, "The impact of such an amendment
would allow thousands of megawatts of existing hydropower to
qualify for the RPS, which would greatly reduce the demand to
develop new clean energy resources."
In 2002, the California State Legislature adopted
groundbreaking legislation (SB 1078 Sher, Chapter 516,
Statutes of 2002) to require the state's investor-owned
utilities and the private companies that compete with the
utilities to increase their annual purchases of electricity
from renewable resources by at least 1% per year so that 20%
of their sales would come from renewable sources by 2017. In
2006, legislation accelerated the 20% requirement to the end
of 2010 (SB 107 Simitian, Chapter 464, Statutes of 2006). In
2011, SB 2 X1 (Simitian, Chapter 1, Statutes of 2011-12 First
Extraordinary Session) was enacted and increased the RPS to
33% while also expanding its applicability to include publicly
owned utilities.
The CEC analysis also noted significant variability in the
cost of the runofriver electricity $66 to $600 per megawatt
hour (in 2011 Canadian dollars). According to the PUC's most
recent report on the RPS, the weighted average
time-of-delivery (TOD) adjusted price was less than
$0.10/kilowatt-hour. It is unclear how AB 762 would impact new
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renewable procurement as it would presumably be bidding
against other renewable developers.
Additionally, investor-owned utilities have indicated they
have procured sufficient contracts to meet the 33% RPS with a
margin of safety for project drop-outs. Therefore it is
unlikely this bill will have any impact on current RPS
contracts.
If enacted, AB 762 could impact the RPS procurement for
publicly-owned utilities who have not yet signed contracts to
procure current RPS-eligible technologies.
2)Similar Legislation
a) AB 1771 (Valadao, 2011-2012 session), had it been
enacted, would have allowed hydroelectric generation to
count toward the RPS.
b) AB 793 (Gray, 2013-2014) allows RPS eligibility of a
certain specified hydroelectric facility.
c) SB 591 (Cannella, 2013-2014 session) allows RPS
eligibility of a legacy hydroelectric facility operated by
Merced Irrigation District without absolving the District
of its obligation to meet its June 2014 RPS compliance
requirements. SB 591 passed out of Senate Energy Utilities
and Communications Committee on April 2, 2013. (8-1)
REGISTERED SUPPORT / OPPOSITION :
Support
Association of California Water Agencies (ACWA)
California Chamber of Commerce
California Farm Bureau Federation
Northern California Power Agency (NCPA)
Pacific Gas and Electric (PG&E)
Opposition
American Rivers
American Whitewater
California Hydropower Reform Coalition
California Outdoors
California Public Utilities Commission (CPUC)
California Sportfishing Protection Alliance
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California Trout
California Wind Energy Association
Clean Power Campaign
Foothills Conservancy
Friends of the River
Independent Energy Producers Association (IEP)
Large-Scale Solar Association
Natural Resources Defense Council
Sierra Club
South Yuba River Citizens League
The Utility Reform Network (TURN)
Trout Unlimited
Union of Concerned Scientists
Water and Power Law Group
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083