BILL ANALYSIS Ó
AB 793
Page 1
ASSEMBLY THIRD READING
AB 793 (Gray)
As Amended May 13, 2013
Majority vote
UTILITIES & COMMERCE 12-0 NATURAL
RESOURCES 7-0
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|Ayes:|Bradford, Patterson, |Ayes:|Chesbro, Grove, Bigelow, |
| |Bonilla, Buchanan, | |Muratsuchi, Patterson, |
| |Chávez, Beth Gaines, | |Stone, Williams |
| |Garcia, Gorell, Roger | | |
| |Hernández, Jones, Rendon, | | |
| |Williams | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Provides that a local publicly owned electric utility
(POU) is not required to procure additional eligible renewable
energy resources in excess of specified levels, if it receives
50% or greater of its annual retail sales from its own
hydroelectric generation meeting as specified. Specifically,
this bill :
1)States that a local POU that receives greater than 50% of its
annual retail sales from its own hydroelectric generation that
is not an eligible renewable energy resource shall not be
required to procure additional eligible renewable energy
resources in excess of either of the following:
a) The portion of its retail sales not supplied by its own
hydroelectric generation.
b) The cost limitation adopted pursuant to this section.
2)Specifies that a hydroelectric generation facility must be
solely owned and operated by POU as of 1967 in order to
qualify.
FISCAL EFFECT : None
COMMENTS : According to the author, "the Merced Irrigation
District (MID) customer base is one of the smallest in the
AB 793
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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 500h 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 [Renewable Portfolio
Standard] 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 RPS for POUs pursuant to SB 2 (Simitian),
Chapter 1, Statutes of 2011-12 First Extraordinary Session).
The proposed regulations establish the rules and procedures
that CEC will use to assess a POUs procurement actions and
determine compliance with RPS. CEC also has the authority to
issue 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 CEC if the bill
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were enacted, the proposed RPS regulations would need to be
updated. 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. This bill 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)Related legislation : SB 591 (Cannella) allows RPS eligibility
of a legacy hydroelectric facility operated by MID without
absolving the district of its obligation to meet its June 2014
RPS compliance periods. SB 591 passed out of Senate Energy
Utilities and Communications Committee on an 8-1 vote on April
2, 2013.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083
FN: 0000563