BILL ANALYSIS Ó
AB 1014
Page 1
Date of Hearing: April 29, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 1014 (Williams) - As Amended: April 24, 2013
SUBJECT : Energy: electrical corporations: Renewable Energy
Self-Generation Program
SUMMARY : This bill creates a new renewable energy program
substantially similar to a settlement agreement filed at the
California Public Utilities Commission (PUC). Specifically,
this bill :
a)Requires the PUC to authorize electrical corporations to
provide participating customers' with rate credits for avoided
generation costs and pay charges to fully cover the cost of
procuring Green Option resources to serve their needs.
b)States intent to further the Governor's Clean Energy Jobs
Plan.
c)States intent to preserve a thriving, sustainable agricultural
industry and to ensure that renewable energy development does
not remove prime farmland from productive use without a
comprehensive public review process.
d)Exempts small electrical corporations.
e)Repeals a bill credit mechanism authorized for the City of
Davis to receive a bill credit for generation from the
photovoltaic generating facility known as PVUSA.
EXISTING LAW
1)Existing law authorizes the PUC to fix the rates and charges
for every public utility, and requires that those rates and
charges be just and reasonable. (Public Utilities Code 451)
2)Existing law authorizes the City of Davis to assign a bill
credit to a benefit account, for electricity supplied to the
electrical grid by PVUSA, at the retail time-of-use rate for
that electricity. (Public Utilities Code 2826.5)
3)Existing law authorizes a local government benefit account
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which, similar to the City of Davis provides a bill credit, at
the retail time-of-use rate for electricity supplies from a
renewable generating facility for local governments and
campuses. (Public Utilities Code 2830)
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's Comment . "California accounts for more than 70% of
solar photovoltaic installations for residential and
commercial electricity production in the United States.
Despite its substantial lead, California is missing an
opportunity to speed the deployment of renewable energy
technology to meet the electricity needs of its residents.
Programs like the California Solar Initiative (CSI), are
sunsetting soon and don't meet the needs of everyone who wants
renewables. Specifically, CSI has primarily benefitted people
who both own their homes and businesses and are oriented
properly toward the sun. However, the overwhelming majority
of California residents, businesses and other organizations
can't utilize solar power due to obstructed or shaded roofs,
renting their property, or other resource issues. That leaves
a huge portion of solar opportunity on the table.
"The state's Renewable Portfolio Standard (RPS), which
requires investor-owned utilities (IOUs) to procure 33% of
their electricity from renewable sources by 2020, will
increase the proportion of IOU customers' overall power mix
being served by renewables. However, without a Shared
Renewables program, customers without suitable roofs do not
have the option to invest in more clean energy than is
required by the RPS and to receive a corresponding credit on
their power bills.
"Off-site renewables arrangements allowing ratepayers to
purchase shares in renewable facilities and receive generation
credits on their utility bills can enable low-income
Californians and those who don't own their roofs or who aren't
oriented toward the sun to participate in the market for
renewable energy."
1)The Governor's Goal. The bill includes a finding that the
Governor has proposed the Clean Energy Jobs Plan calling for
development of 20,000 megawatts of generation from renewable
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energy by 2020.
In 2009, then-candidate Jerry Brown included this as part of
his campaign goal, which he has also advocated for as
Governor, to:
"Build 12,000 Megawatts of Localized Electricity Generation
California should develop 12,000 megawatts of localized
energy by 2020. Localized energy is onsite or small energy
systems located close to where energy is consumed that can
be constructed quickly (without new transmission lines) and
typically without any environmental impact.
Solar systems of up to 2 megawatts should be installed
on the roofs of warehouses, parking lot structures,
schools, and other commercial buildings throughout the
state.
Solar energy projects of up to 20 megawatts in size
should be built on public and private property throughout
the state. For example, we should create the California
Solar Highway by placing solar panels along the banks of
state highways.
The PUC or Legislature should implement a system of
carefully calibrated power payments (commonly called feed
in tariffs) for distributed generation projects up to 20
megawatts in size. Holding down overall rates must be part
of the design.
"Build 8,000 Megawatts of Large Scale Renewables & Necessary
Transmission Lines
The Legislature should codify a requirement that 33% of
the state's electricity be derived from renewable sources.
This will create market certainty and drive investment in
renewable technologies."
AB 2014 does not propose to address the large scale renewable
goal and proposes to address a subset of the 12,000 MW goal
(12,000 megawatts of localized energy and projects of up to 20
megawatts should be built on public and private property
throughout the state).
1)Intent language clean up. Several of the statements appearing
in the uncodified intent language express various policies or
make statements that have not yet been fully considered by the
Legislature. The author may wish to amend the bill to remove
those provisions to ensure that the Legislature is afforded an
opportunity to fully deliberate on those matters separately
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from the program proposed by this bill. Specifically:
2832. (c) The Governor has proposed the Clean Energy Jobs
Plan calling for the development of 20,000 12,000 megawatts of
generation from renewable energy resources localized
electricity generation by 2020. There is widespread interest
from many large institutional customers, including schools,
colleges, universities, local governments, businesses, and the
military, for development of renewable generation facilities
to serve more than 33 percent of their energy needs. For these
reasons, the Legislature agrees that the Governor's Clean
Energy Jobs Plan represents a desired policy direction for the
state. It is the intent of the Legislature that renewable
generation that comes online as part of the Green Tariff and
Shared Renewable Generation Program is counted toward an
electrical corporation's voluntary efforts to implement the
Governor's Clean Energy Jobs Plan.
(d) Properly designed, shared renewable energy programs can
provide access and long-term cost savings to underserved
communities, such as low- to moderate-income residents, and
residential and commercial renters, while not shifting costs
to nonbeneficiaries.
(e) While municipal utilities already have the authority to
create their own shared renewable energy programs, only an act
of the Legislature can empower the vast majority of California
residents to be able to enjoy the significant benefits of
shared renewable energy systems while the state benefits from
avoided transmission and distribution upgrades, avoided line
loss, and cleaner air and water.
(f) (d) Public institutions will benefit from the Green Tariff
and Shared Renewable Generation Program's a green tariff
shared renewable program's enhanced flexibility to participate
in shared renewable energy facilities. Electricity usage is
one of the most significant cost pressures facing public
institutions at a time when they have been forced to cut
essential programs, increase classroom sizes, and lay off
teachers. Schools may use the long-term savings for restoring
funds for salaries, facility maintenance, and other budgetary
needs.
(g) (e) Renewable generation creates jobs, reduces emissions
of greenhouse gases, and promotes energy independence.
(h) (f) Many large energy users in California have pursued
onsite renewable energy generation, but cannot achieve their
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goals due to rooftop or land space limitations, or size limits
on net metering. The enactment of this chapter will create a
mechanism whereby institutional customers such as military
installations, universities, and local governments, as well as
commercial customers and groups of individuals, can
efficiently invest in generating electricity from renewable
generation.
(i) (g) It is the intent of the Legislature that the Green
Tariff and Shared Renewable Generation Program's a green
tariff shared renewable program be implemented in such a
manner as to create facilitate a large, sustainable market for
the purchase of an interest in offsite renewable generation,
while fairly compensating electrical corporations for the
services they provide, without affecting non-participating
ratepayers .
(j) (h) It is the further intent of the Legislature to
preserve a thriving, sustainable agricultural industry, and to
ensure that the development of renewable energy does not
remove prime farmland from productive use without a
comprehensive public review process.
2)Clarifications needed. In order to ensure that the bill will
meet the author's intent, the author may wish to consider
amending the bill to add clarifying provisions to give the
commission specific guidance on the design of a green tariff
shared renewable program, specific to the following subject
areas:
a) Clarify that this is a single program. The Chapter is
titled Green Tariff and Shared Renewable Generation
Program. It is the intent to consider a single program. The
inclusion of the word "and" could create unnecessary
confusion. No other program will be created by this bill
but some stakeholders have expressed concern that this bill
could be an attempt to create an expansion of direct
access. This bill does not expand or create a direct access
program. Removing the word "and" would help to address
those concerns and verify that this bill has no connection
to direct access. In addition, to avoid referring to any
other program with a similar name, the language referring
to the program should be modified to use lower case
letters.
b) Clarify distributed generation is the goal. In order to
ensure that the program is implemented expeditiously and
enhances procurement of distributed generation, the author
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may wish to specify that existing mechanisms (such as
standard contracts) be used and that the utilities procure
additional renewable facilities no larger than 20 megawatts
so that it is more likely that the projects can be located
closer to load.
c) Establish a 600 megawatt program and allocate megawatts
on an annual basis. In order to ensure that the program has
a means to assess the outcomes, the author may wish to
allocate 600 megawatts to this program, divided
proportionally among the electrical corporation and
allocated in equal increments over a five year period.
d) Incorporate Diverse Procurement and General Order 156.
In order to continue to increase diversity within the
various renewable energy programs authorized by the
commission, the author may wish to include a requirement
that this new program incorporate diverse procurement and
General Order 156 goals.
e) Proximity. In order to ensure that this program focuses
its efforts on local projects and projects, the author may
wish to specify that the utilities shall seek to procure
renewable energy projects that are close to the
participating customers' load.
f) Limit subscriptions . In order to ensure that megawatts
are available to a variety of participants, the author may
wish to limit any single participant to no more than 2
megawatts, except for public entities such as schools,
colleges, universities, local governments, and the
military. At the same time, the author may wish to ensure
that the entire allotment of megawatts cannot be taken by a
few large participants.
g) Disadvantaged and minority community and customer
inclusion. The author may wish to specify that the
utilities should actively market to low income customers
and minority communities and customers.
h) Protect non-participants from green option costs. The
author may wish to specify that participating customers are
to pay for the cost of participating in and administration
of this program. The author may also wish to include a
provision to allow electrical corporations may provide
support for enhanced community renewable programs to
facilitate development of additional renewable projects
closer to load.
i) Participant Attrition. To the extent that some
participants may elect to discontinue their participation,
the author may wish to specify that, in the event of
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participant attrition, the utility will apply any
additional resources procured for this program to the
utilities renewable portfolio standard obligation or banked
for future compliance purposes .
j) Tracking and accounting. The author may wish to ensure
that the accounting for this program is executed in
transparent manner to ensure that all costs and revenues
are properly accounted for.
aa) Disposition of Renewable Energy Certificates (REC). T he
author may wish to specify that any REC associated with
this program are retired on behalf of the participant so
that it cannot be used to count toward a utility's
renewable portfolio standard compliance goal; specify the
disposition of the REC in the event of attrition, and
specify the treatment of the procurement for purposes of
RPS procurement.
bb) Sunset this tariff in January 1, 2019 unless
reauthorized by the Legislature.
The amendments to address these clarifications are as
follows.
2833. (a) On or before March 1, 2014, an electrical
corporation with at least 100,000 customers shall file with
the commission an advice letter requesting approval of a
Green Tariff and Shared Renewable Generation Program that
it determines is consistent with the findings specified in
Section 2832.
(b) On or before July 1, 2014, the commission shall issue a
resolution on the electrical corporation's advice letter
for a the Green Tariff and Shared Renewable Generation
Program's green tariff shared renewable program ,
determining whether to approve or disprove it, with or
without modifications.
(c) After notice and an opportunity for public comment, the
commission shall approve an advice letter by an electrical
corporation for a Green Tariff and Shared Renewable
Generation Program if the commission determines that the
program is reasonable and consistent with the findings
specified in Section 2832.
(d) This section does not apply to applications by
electrical corporations for a Green Tariff and Shared
Renewable Generation Program a green tariff shared
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renewable program's that are filed at the commission prior
to May 1, 2013, and does not change the existing authority
of the commission to approve those applications in
accordance with its existing authority under the Public
Utilities Code.
2834. In implementing this section, the commission shall
require that a green tariff shared renewable program's to
be administered in accordance with this section.
(a) Electrical corporations shall use existing
commission-approved tools and mechanisms to procure
additional renewable energy resources from incremental,
additional renewable generation facilities, primarily sized
20 MW and below.
(b) The megawatts to be procured under this section are
limited to an allocation of 600 megawatts to this program,
divided proportionally among the electrical corporation and
allocated in equal increments over a five year period.
(c) To the extent possible, electrical corporations shall
seek to procure renewable energy supplies that are located
within a reasonable proximity to enrolled participants.
(d) Electrical corporations shall ensure that the program
complies with diverse procurement and General Order 156
Goals.
(e) Electrical corporations shall not subscribe a
participant to more than two megawatts of generating
capacity or the equivalent amount. This limitation does not
apply to a federal, state, or local government, school,
school district, county office of education, the California
Community Colleges, the California State University, or the
University of California. Electrical corporation shall
ensure that no single entity or its affiliates or
subsidiaries is awarded more than 20 percent of any single
calendar year's total cumulative rated generating capacity
made available pursuant to this program.
(f) To the extent possible the electrical corporation shall
actively market the program to low income and minority
communities and customers.
(g) Participating customers are to receive bill credits for
the generation using the class average retail generation
rate as established in the electrical corporation's
approved tariff for the class to which the subscriber
belongs plus a renewable adjustment value representing the
difference between the time of day profile of the renewable
resource used to serve the subscriber and the class average
time of day profile and the resource adequacy value, if
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any, of the resource contained in this program.
(h) Participating customers shall pay the administrative
costs of the electrical corporation and pay charges to
fully cover the cost of procuring a green tariff shared
renewable program's resources to serve their needs,
consistent with other existing similar voluntary, optional
rate schedules. Electrical corporations may provide support
for enhanced community renewable programs to facilitate
development of additional renewable projects closer to
load.
(i) The commission shall ensure that the charges and
credits associated with this program shall be structured to
ensure non-participant ratepayer indifference for the
remaining, bundled service, direct access and community
choice aggregation customers and no costs are shifted from
participating customers to nonparticipating ratepayers.
(j) Electrical corporations shall track and account for
all revenues and costs to ensure that the electrical
corporation recovers the actual costs of the program and
that all costs and revenues are fully transparent and
auditable.
(k) Electrical corporations shall, in the event of
participant attrition or related factors, apply the
additional resources procured through this program to the
electrical corporation's renewable portfolio standard
procurement obligations or banked for future use to benefit
all customers in accordance with renewable portfolio
standard banking and procurement rules.
(l) Any renewable energy credits associated with an
interest shall be retired by either the provider or
electrical corporation, as they may agree, on behalf of the
participant or transferred to the Western Renewable Energy
Generation Information System account of that participant,
for the purpose of demonstrating the purchase of renewable
energy. Those renewable energy credits shall not be further
sold, transferred, or otherwise monetized by a party for
any purpose. Any renewable energy credits associated with
electricity paid for by the electrical corporation shall be
counted toward meeting that electrical corporation's
renewables portfolio standard. For purposes of this
subdivision, "renewable energy credit" and "renewables
portfolio standard" have the same meanings as defined in
Section 399.12.
(m) Electrical corporations shall, in the event of
participant attrition or related factors, apply the
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additional resources procured through this program to the
electrical corporation's renewable portfolio standard
procurement obligations or banked for future use to benefit
all customers in accordance with renewable portfolio
standard banking and procurement rules.
(n) In calculating its procurement requirements to meet the
requirements of the California Renewables Portfolio
Standard Program (Article 16 (commencing with Section
399.11) of Chapter 72.3 of Part 1), an electrical
corporation may exclude from total retail sales the
kilowatthours generated by a shared renewable energy
facility commencing with the point in time at which the
facility achieves commercial operation.
(o) This section shall sunset on January 1, 2019 unless
reauthorized.
REGISTERED SUPPORT / OPPOSITION :
Support
Advanced Energy Economy (AEE)
AEE Solar, Inc
American Lung Association in California
Asian Pacific Environmental Network (APEN)
Clean Power Group
CleanPath Ventures
Coalition for Adequate School Housing (C.A.S.H.)
Community Environmental Council
Davis Joint Unified School District
Department of Defense (if amended)
Ecoplexus
El Peco Energy, LLC
Everybody Solar, Inc.
League of Women Voters of California
Mainstream Energy Corp.
Octus Energy
REC Solar, Inc.
Recurrent Energy
Solar Energy Industries Association (SEIA)
Sonoma County Board of Supervisors
Sullivan Solar Power
The Vote Solar Initiative (Vote Solar)
Opposition
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California Farm Bureau (unless amended)
Coalition of California Utility Employees (CCUE)
San Diego Gas & Electric Company (SDG&E)
Southern California Edison (SCE)
The Utility Reform Network (TURN) (unless amended)
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083