BILL ANALYSIS �
AB 793
Page 1
Date of Hearing: April 15, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 793 (Gray) - As Amended: March 21, 2013
SUBJECT : Renewable energy: publicly owned electric utility:
hydroelectric generation facility
SUMMARY : Requires Renewable Portfolio Standard (RPS)
eligibility of a specific local publicly owned electric utility
(POU) to meet electricity demands unsatisfied by hydroelectric
generation to satisfy RPS obligations. Specifically, this bill :
1)Requires a POU that receives 50% or greater of its consumption
load demand from hydroelectric generation and other renewable
energy resources to procure eligible renewable resources to
meet electricity demands unsatisfied by its hydroelectric
generation in any given year to satisfy RPS requirements.
2)Specifies that a hydroelectric generation facility must be
solely owned and operated by the POU as of 1967 in order to
qualify.
EXISTING LAW :
1)States the California's RPS program requires all investor
owned utilities (IOUs), 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)Defines as RPS eligible, specified electric generation
resources including small hydroelectric generation of 30
megawatts or less and hydroelectric generation units sized
below 40 megawatts, if operated as part of a water supply or
conveyance system and operative prior to 2005.
3)Permits specified POUs that have ownership or long-term
contracts for generation from large hydroelectric generation
resources including Trinity and the San Francisco Public
Utilities Commission (SFPUC) to meet only the electricity
demands unsatisfied by hydroelectric generation.
AB 793
Page 2
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, "the Merced Irrigation
District (MID) customer base is one of the smallest in the
state. In addition, MID serves one of the most economically
depressed regions in the United States. Merced County had an
unemployment rate of 17.8% in February, ranking the 500th
highest unemployment rate of California's 58 counties. With
almost 27% of all people living below the federal poverty line,
Merced has the highest poverty rate of any county in California.
AB 793 recognizes MID's unique position. It is a narrowly
drafted provision that allows the 33% RPS requirement to be
applied only to energy that must be purchased to meet its
customer load demand beyond the generation output of the
District's community-owned hydroelectric generation project."
1)Overview : The Merced Irrigation District owns and operates
the Merced River
Hydroelectric Project located in Mariposa County. The New
Exchequer Dam, which is part of the Merced River Hydroelectric
Project, is about 23 miles northeast of the City of Merced. The
dam and hydroelectric facility were originally constructed in
1926, and began service in 1967. The project is a water
supply/flood control/recreation/power project under the
jurisdiction of the Federal Energy Regulatory Commission (FERC)
and occupies nearly 3,000 acres of federal land under the
jurisdiction of the Bureau of Land Management. The project has a
capacity of 95 megawatts and supplies irrigation water to more
than 2,000 independently owned farms in the San Joaquin Valley.
An existing contract between MID and Pacific Gas & Electric
(PG&E) Company allows PG&E to receive the benefit of the
electricity produced at the project since 1967 which expires
mid-2014. Upon expiration of the contract MID will begin to
receive the full benefit of this electricity which could account
for approximately 60% of MIDs electricity demand.
2)CEC RPS rules : On March 1st the California Energy Commission
(CEC) released proposed
Regulations for enforcement rules and procedures for the RPS for
POUs pursuant to SB 2 x1 (Simitian, Chapter 1, Statutes of
2011/2012 First Extraordinary Session). The proposed
regulations establish the rules and procedures that the CEC will
use to assess a POUs procurement actions and determine
compliance with the RPS. The CEC also has the authority to issue
AB 793
Page 3
a notice of violation and correction for a POUs failure to
comply and refer the violation to the State Air Resources Board
for potential penalties. According to the CEC if the bill were
enacted, the proposed RPS regulations would need to be updated.
The CEC's proposed regulations do not address the issues raised
by this bill or unmet need. The proposed regulations require
renewable procurement strictly based on total retail sales.
3)Unmet need provision in RPS : Existing law requires the
utilities to procure renewable
resources "in order to fulfill unmet long-term resource needs".
The provision was intended to ensure that a utility is not
obligated to procure renewable resources beyond its retail
electricity needs and generation contracted for or owned by a
utility. AB 793 allows MID to meet its electricity demands
unsatisfied by hydroelectric generation to satisfy RPS
obligations. PG&E opposes this provision noting it would allow
MID to take their hydroelectric generation resources out of the
equation of determining their RPS requirement and thus
significantly reduce their RPS obligation and associated costs.
4)Proposed amendment : The author and this committee may wish to
amend the bill to ensure
that the hydroelectric facility to which the bill applies is
clear and that the generation does not reduce or eliminate the
utility from its RPS requirement for the compliance period
ending prior to January 1, 2014 .
5)Technical amendment : Add Senator Cannella as principal
co-author.
6)Related legislation : SB 591 (Cannella) 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 periods. SB 571 passed out of Senate Energy
Utilities and Communications Committee on April 2, 2013. (8-1)
REGISTERED SUPPORT / OPPOSITION :
Support
Modesto Irrigation District (MID)
Opposition
AB 793
Page 4
Large Scale Solar (LSA)
Pacific Gas and Electric Company (PG&E) (unless amended)
The Clean Power Campaign (CPC)
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083