BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          AB 793 (Gray) - Renewable energy: publically owned electric  
          utility: hydroelectric generation facility.
          
          Amended: July 9, 2013           Policy Vote: EU&C 11-0
          Urgency: No                     Mandate: No
          Hearing Date: August 12, 2013                     Consultant:  
          Marie Liu     
          
          This bill meets the criteria for referral to the Suspense File.
          
          
          Bill Summary: AB 793 would prohibit Merced Irrigation District's  
          Renewable Portfolio Standard obligation from exceeding its  
          retail sales that are not supplied by the New Exchequer Dam.

          Fiscal Impact: One-time costs of $70,000 from the Energy  
          Resources Programs Account (General Fund) to update regulations  
          in FY 2013-14.

          Background: The Renewable Portfolio Standard (RPS) requires  
          invest-owned utilities, publically owned utilities, community  
          choice aggregators, and energy service providers to increase  
          purchases of renewable energy so that 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.  
          (PUC §399.11 et seq.) 

          Hydroelectric generation is only eligible as a renewable energy  
          source under RPS if the facility produces 30 megawatts or less  
          or 40 megawatts or less if the hydroelectric generation units  
          are operated as part of a water supply or conveyance system in  
          operation prior to 2005. (PRC §25741)

          Existing law allows specified publically owned utilities that  
          have ownership or long-term contracts for generation from large  
          hydroelectric generation resources, including Trinity and the  
          San Francisco Public Utilities Commission, to base its RPS  
          procurement obligations only on the electricity demands  
          unsatisfied by hydroelectric generation. (PUC §399.30)









          AB 793 (Gray)
          Page 1


          The New Exchequer Dam is part of the Merced River Hydroelectric  
          Project in Mariposa County and is operated by the Merced  
          Irrigation District, which is a publically owned utility. The  
          dam and hydroelectric facility was put into service in 1967 and  
          currently has a capacity of 94.5 megawatts. While the facility  
          is owned and operated by the Merced Irrigation District,  
          currently Pacific Gas and Electric receives all the electricity  
          under a contract which expires on July 1, 2014. 

          Proposed Law: This bill would prohibit a publically owned  
          utility that owns and operates a hydroelectric facility from  
          being required to procure eligible renewable energy resources in  
          excess of retail sales not supplied by its own generation  
          provided that the hydroelectric generation meets certain  
          requirements. The specific requirements include that the  
          hydroelectric generation must be from a facility that: is owned  
          and operated by the utility as of 1967, serves a utility with a  
          distribution system demand of less than 150 MW, and is under  
          contract but will revert to ownership and control of the utility  
          after June 2014.

          Related Legislation: SB 591(Canella) is substantially similar to  
          this bill and is currently in Asm. Natural Resources.

          Staff Comments: This bill's description of a hydroelectric  
          facility only fits the New Exchequer Dam which is owned by the  
          Merced Irrigation District.

          Proposed regulations to implement the RPS statue were released  
          by the CEC on March 1, 2013. Should this bill pass, these  
          regulations will have to be updated. The CEC estimates that such  
          an update is likely to take approximately half a PY (Energy  
          Resource Specialist) for a one-time cost of $70,000.