BILL ANALYSIS �
AB 796
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 796 (Muratsuchi)
As Amended August 26, 2013
2/3 vote. Urgency
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|ASSEMBLY: | |(May 23, 2013) |SENATE: |38-0 |(September 6, |
| | | | | |2013) |
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(vote not relevant)
Original Committee Reference: U. & C.
SUMMARY : Requires the California Energy Commission (CEC) to
consider the effects of sea level rise on the proposed site and
related facility during the certification process.
The Senate amendments delete the Assembly version of this bill,
and instead extend eligibility for cogeneration natural gas
rates to fuel cells that become operational before January 1,
2016.
EXISTING LAW extends eligibility for a specified natural gas
rate to qualified fuel cells generation facilities that become
operational before January 1, 2014. (Public Utilities Code
379.8)
FISCAL EFFECT : Unknown
COMMENTS :
1)Background . Current law requires that gas corporations
provide a rate for natural gas purchases for customers who
operate a fuel cell for on-site electricity generation if that
fuel cell meets certain criteria related to greenhouse gas and
pollution emissions. The rate is the same rate that merchant
natural gas generation facilities and cogeneration facilities
receive.
2)Should fuel cells receive this rate ? The Legislature mandated
(AB 1110 (Fuentes), Chapter 508, Statutes of 2009) that
certain fuel cell models be eligible for natural gas at rates
available to cogeneration and electrical generation
facilities. The original argument to allow fuel cells to
qualify for this gas rate was based on the reasoning that fuel
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cells are an efficient method of electrical production, but
certain models do not qualify as cogeneration technologies,
also known as combined-heat-and-power (CHP). The original
intent for the statute was to balance the market for all
models and manufacturers of fuel cells by granting them all
the same rates for natural gas.
Specifically, utility customers that purchase CHP fuel cell
models receive the benefit of this gas rate, but these same
rates were not offered to customers with non-CHP fuel cells.
By qualifying the non-CHP fuel cells for the same rate, the
playing field was leveled.
3)Fuel cell emissions . This bill primarily impacts stationary
fuel cell technologies that generate power for large
institutions or facilities and use natural gas for fuel. In
comparison to natural gas plants, fuel cells generate lower
amounts of criteria pollutants including nitrogen oxide (NOx),
sulfur oxide (SOx), and particulate matter. However, all fuel
cells that run on natural gas continue to produce CO2
emissions at levels similar to a natural gas plant. The
benefits from an emissions standpoint of non-CHP fuel cells
are the de minimis NOx, SOx, and particulate matter emissions,
not the carbon dioxide (CO2) emissions.
An analysis from the National Fuel Cell Research Center
(NFCRC) at University of California, Irvine found that fuel
cells produce 980-1080 pounds (lbs) CO2 per megawatt-hour
(MWh). The fuel cell emission rate can be compared to that of
the average natural gas-fired generator in California, which
produces 960-980 lbs CO2/MWh, according to the NFCRC analysis.
4)Is there a cost-shift ? Pacific Gas and Electric (PG&E)
estimates that approximately $4.7 million per year is shifted
to other ratepayers as a result of providing this rate to fuel
cell facilities.
In addition to this discount on natural gas purchases, fuel
cell facilities are eligible for net metering credits as a
result of their electricity generation. A report on the costs
and benefits of net energy metering is due by October 1, 2013,
from the Public Utilities Commission.
5)Additional support for fuel cells . In addition to the natural
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gas rate and the net metering credits, fuel cells customers
are also exempted from responsibility to contribute to
"nonbypassable charges." Nonbypassable charges include
contributions to support discounts for low income customers
and incentives for customers who make certain energy
efficiency expenditures or acquire fuel cells or renewable
energy facilities.
Fuel cells customers are eligible for a ratepayer funded
incentive called the Self Generation Incentive Program. One
fuel cell manufacturer has benefitted from approximately
$250 million in incentives through this program since 2009.
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083
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