BILL ANALYSIS Ó 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 793 - Gray Hearing Date: July 2, 2013
A
As Amended: June 25, 2013 Non-FISCAL
B
7
9
3
DESCRIPTION
Current law requires investor-owned utilities, publicly owned
utilities (POUs), community choice aggregators, and energy
service providers to increase purchases of renewable energy such
that at least 33% of total retail sales are procured from
renewable energy resources by December 31, 2020. In the interim
each entity would be required to procure an average of 20% of
renewable energy for the period of January 1, 2011 through
December 31, 2013 and 25% by December 31, 2016. This is known
as the Renewables Portfolio Standard (RPS). (Public Utilities
Codes 399.11 et seq.)
Current law defines as RPS eligible, specified electric
generation resources including small hydroelectric generation of
30 megawatts (MWs) or less and hydroelectric generation units
sized below 40 MWs, if operated as part of a water supply or
conveyance system and operative prior to 2005. (Public Resources
Code 25741)
Current law 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 to meet only the electricity demands
unsatisfied by hydroelectric generation. (Public Utilities Code
399.30)
This bill limits the RPS procurement obligation for a POU that
owns and operates a hydroelectric facility that came into
service in 1967, and for which the POU will take the generation
rights in 2014, to the electricity demands unsatisfied by that
hydroelectric generation.
BACKGROUND
The New Exchequer Dam - This bill would only apply to one POU,
Merced Irrigation District (MID), and one hydroelectric
facility, the New Exchequer Dam, which is part of the Merced
River Hydroelectric Project in Mariposa County, about 23 miles
northeast of the City of Merced. The dam and hydroelectric
facility were originally constructed in 1926, enlarged in the
mid-1960s, and put into service in 1967. The project is a water
supply/flood control/recreation/power project under the
jurisdiction of the Federal Energy Regulatory Commission and
occupies 2,942 acres of federal land under the jurisdiction of
the Bureau of Land Management. The plant capacity is 94.5
megawatts and produces approximately 250,000 megawatt hours of
electricity each year. Although the hydroelectric facility was
constructed by, and is owned and operated by the MID, PG&E has
had a contractual right to the generation since 1967 which
expires on July 1, 2014.
Implementing Regulations - On March 1st the California Energy
Commission (CEC) released proposed regulations for enforcement
rules and procedures for the RPS for POUs as required by SB x1 2
(Simitian, Stats. 2011, 1st Ex. Sess., ch. 1). The regulations
were adopted in June and establish the rules and procedures that
the CEC will use to assess a POU's procurement actions and
determine compliance with the RPS. If appropriate, the CEC will
issue a notice of violation and correction for a POU's failure
to comply and refer the violation to the State Air Resources
Board for potential penalties.
COMMENTS
1. Author's Purpose . Although the RPS statute specifies
that the renewable procurement obligation extends to
electricity demand not met by long-term resource needs, the
law does not provide a clear definition of unmet need. The
MID is in the unique position of having owned and operated
a 95 megawatt hydroelectric facility since the 1960s but
when the facility was built MID entered into a contract
with PG&E to sell it the electricity. That contract
terminates on July 1, 2014 at which time the electricity
supply will revert to MID. The author argues that MID
should only have to procure renewables for the generation
needs not met by the hydroelectric facility that it owns.
2. Unmet Need . Current law requires the utilities to
procure renewable resources "in order to fulfill unmet
long-term resource needs." This 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. In
application this would mean if a utility has no load growth
or expiring contracts in its portfolio, compliance with the
RPS would not be required or would be reduced.
3. CEC Implementation . The CEC's regulations to establish
POU enforcement rules and procedures for the RPS do not
address the issue raised by this bill or unmet need. The
regulations require renewable procurement strictly based on
total retail sales. The CEC opines that the unmet need
referenced in statute conflicts with several provisions
that reference total retail sales as part of the metric for
determining procurement targets.
4. Facility Expansion . The sponsor has pursued changes in
federal law to expand the dam that supplies this facility
which could increase its electricity production. The
intent of this bill and the unmet need provision in current
law is that the utility would not have to procure renewable
generation that is not needed to serve the utility's
electric load. However, unmet need was not intended to
permit existing non-renewable generation in a utility's
portfolio to expand or a contract for the same to be
extended thereby reducing the long-term RPS requirements.
Consequently, the committee may wish to consider amending
this bill to exclude generation as a result of reservoir
expansion from reducing the utility's procurement
obligation under the RPS.
ASSEMBLY VOTES
Assembly Floor (65-4)
Assembly Natural Resources Committee
(7-0)
Assembly Utilities and Commerce Committee
(12-0)
POSITIONS
Sponsor:
Merced Irrigation District
Support:
Association of California Water Agencies
California Farm Bureau Federation
Modesto Irrigation District
Oppose:
California Hydropower Reform Coalition
California Wind Energy Association
Clean Power Campaign
Large-Scale Solar Association
Pacific Gas and Electric Company
Union of Concerned Scientists
Kellie Smith
AB 793 Analysis
Hearing Date: July 2, 2013