BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 796| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 796 Author: Muratsuchi (D), et al. Amended: 8/26/13 in Senate Vote: 27 - Urgency PRIOR VOTES NOT RELEVANT SENATE ENERGY, UTILITIES & COMMUNICATIONS COMM. : 8-0, 8/30/13 AYES: Padilla, Fuller, Cannella, Corbett, De León, Hill, Knight, Wright NO VOTE RECORDED: DeSaulnier, Pavley, Wolk SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SUBJECT : Advanced electrical distributed generation technology SOURCE : Author DIGEST : This bill extends the sunset date two years for a program that qualifies customer-side fuel cell technology for the same rates for natural gas as cogeneration technology. ANALYSIS : Existing law: 1. States that the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations (IOUs), as defined. CONTINUED AB 796 Page 2 2. States that an IOU excludes a corporation or person employing cogeneration, as defined, technology or producing electricity from other than a conventional power source for certain purposes. 3. Places certain limitations upon gas rates and surcharges charged cogenerators. 4. Prohibits placing alternative fuel capability requirements upon gas customers that use gas for purposes of cogeneration. 5. Authorizes the PUC and the Air Resources Board to treat advanced electrical distributed generation technology, as defined, as cogeneration, and makes certain existing limitations upon gas rates and surcharges charged cogenerators applicable to an advanced electrical distributed generation technology. 6. Makes the prohibition upon placing alternative fuel capability requirements upon gas customers that use gas for purposes of cogeneration applicable to a generator using advanced electrical distributed generation technology. These provisions do not apply to an advanced electrical distributed generation technology that is first operational at a site on and after January 1, 2014. This bill: 1. Extends by two years, from January 1, 2014 to January 1, 2016, the program that qualifies an "advanced electrical distributed generation technology" for the same rates for natural gas as those given to cogeneration technology. 2. States that this is an urgency measure necessary for the health and safety of the state and will take effect immediately. Comments According to the author's office, customers that use natural gas, to generate on-site electricity, are eligible for a particular gas rate. Ensuring that this rate is available for all technologies that generate electricity on-site and that meet CONTINUED AB 796 Page 3 the intent of the law, allows for customer choice and fair markets. In 2009, AB 1110 (Fuentes) was passed and signed into law to ensure that this policy applies to new, clean electric generation technologies, such as fuel cells. AB 1110 contained provisions to guarantee that the types of technologies that qualify for the gas rate meet strict greenhouse gas, particulate, and efficiency standards. AB 1110 also included a sunset date of January 1, 2014 for these new, clean electric generation technologies. There is an interest and need to extend that sunset date in order to make it consistent with all other on-site generation technologies such as combined heat and power and co-generation, which currently are not subject to a sunset date on the rate. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 8/26/13) National Fuel Cell Research Center The Technology Network JG:d 8/30/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED