BILL ANALYSIS Ó
AB 1295
Page 1
Date of Hearing: April 15, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 1295 (Hernandez) - As Amended: April 9, 2013
SUBJECT : Public utilities: renewable energy: community
renewables option
SUMMARY : This bill would require an electrical corporation to
participate in a community renewables option a renewable
facility to assign a payment from an electrical corporation to a
subscribing customer in the form of a bill credit.
Specifically, this bill :
a)Provides an option for certain existing and new renewable
energy developments to be designated as community renewable
facilities.
b)Establishes a bill payment mechanism where participants will
receive a credit on their monthly utility bill if they elect
to participate in the program.
c)Requires that this program be made available in areas served
by both Investor Owned Utilities (IOU) and Publicly Owned
Utilities (POUs).
EXISTING LAW
a)States the California's Renewable Portfolio Standard (RPS)
program requires all IOUs, POUs, and energy service providers
(ESPs) to increase purchases of renewable energy such that at
least 33% of retail sales are procured from an eligible
renewable energy resource by 2020. (Public Utilities Code
399.11)
b)Requires the California Public Utilities Commission (PUC) to
implement a standard contract for renewable energy projects of
3 megawatts (MW) or less. The standard contract rate is to be
based on the sum of the market rate for electricity and the
value of environmental attributes. The total MWs authorized
for this program is 750 MW, divided among the IOUs and large
POUs. (Public Utilities Code 399.20)
FISCAL EFFECT : Unknown
AB 1295
Page 2
COMMENTS :
1)Author's Statement. The purpose of AB 1295 is to provide
electric customers who want to serve their energy needs with a
greater proportion of renewable energy the option to subscribe
to a portion of output from a renewable facility and receive a
credit on their bill related to that subscription, without
requiring other customers to pay more.
2)33% Renewable electric generation. All customers of
electricity sellers in California are already receiving
electricity from renewable energy. Currently the investor
owned utilities (IOUs) are at about 20% renewable and have
signed contracts to procure at least 33% renewables by 2020,
plus a contingency for project drop outs.
Renewable generation resulting from this bill would count
toward the RPS procurement requirements.
Southern California Edison (SCE) states that it is currently
delivering more renewable energy in its portfolio than any
other company in the U.S., with 6,744 megawatts (MW) of
contracts through a variety of existing procurement
mechanisms.
3)Designated electricity. AB 1295 would create a program where a
utility customer could elect to receive their electricity from
an independent renewable developer, presumably to use
renewable energy beyond that which is already currently
available through the IOUs resource mix. The transaction would
be implemented on the customer's electricity bill. Qualified
projects under contract to the utility can be designated as a
community renewable facility. Once designated, payments for
electricity generation that would otherwise be remitted to the
developer would instead be remitted to the utility customer,
per the direction of the developer. The payments would appear
as a bill credit on the customer's monthly utility bill.
The bill specifies that the IOUs would not be obligated to
allow direct access customers who receive distribution service
from the IOU to participate in this program. Direct access
customers do not procure their electricity from the IOUs.
4)Other Electricity Providers Included . This bill provides that
AB 1295
Page 3
other electricity service providers and community choice
aggregators also offer similar services to their electricity
customers. This would ensure that the communities who are not
served by the investor owned utilities could also elect to
participate in such as program.
This bill provides that publicly owned utilities would also
offer this program through their currently authorized standard
contract program.
5)No Cost-Shifting. AB 1295 would not result in a shift in costs
to non-participating ratepayers. Customers electing to receive
designated electricity would continue to also contribute to
all other costs of receiving electricity service and all other
charges established by the Legislature or PUC (such as
low-income assistance programs, public purpose programs, and
charges established during the electricity crisis of
2000-2001).
6)Allows for Projects or Only Existing? This bill would use
programs already approved by the Legislature or PUC from which
to draw MWs for this program, specifically the Renewable
Market Adjusting Tariff (ReMat) authorized by SB 32
(Negrete-McLeod, 2009), the Renewable Auction Mechanism (RAM)
authorized by the PUC, the PV programs authorized by the PUC,
and the Renewable Standard Tariff (CREST) authorized by AB
1969 (Yee, 2006).
According to the most recent PUC report on RPS implementation
and information received from the IOUs, the total MWs
authorized for this program would be:
--------------------------------------------------------------
| Total Authorized |
--------------------------------------------------------------
|------------------------------+---------+------+------+-------|
| | Project | PG&E | SCE | SDG&E |
| | size | | | |
|------------------------------+---------+------+------+-------|
|RAM (total 1225 MW) | 3-20 MW | 421 | 723 | 81 |
|------------------------------+---------+------+------+-------|
|ReMAT | <3MW | 219 | 226 | 49 |
|------------------------------+---------+------+------+-------|
|ReMAT Biomethane (250 MW | <3MW | -- | -- | -- |
|unallocated) | | | | |
AB 1295
Page 4
|------------------------------+---------+------+------+-------|
|PV program | | 500 | 200 | 100 |
|------------------------------+---------+------+------+-------|
|CREST (SCE only) | | | 230 | -- |
|------------------------------+---------+------+------+-------|
| Total MW Authorized| | 1070 | 1449 | 230 |
--------------------------------------------------------------
Of these MWs, new projects would be eligible through the MWs
remaining to be awarded:
--------------------------------------------------------------
| Total Remaining MWs available |
--------------------------------------------------------------
|----------------------------------------+------+------+-------|
| | PG&E | SCE | SDG&E |
|----------------------------------------+------+------+-------|
|RAM | 238 | 410 | 29 |
|----------------------------------------+------+------+-------|
|ReMAT (* pending authorization from the | 110 | 11 | 25 |
|CPUC) | | | |
|----------------------------------------+------+------+-------|
|ReMAT Biomethane (**pending allocation) | ** | ** | ** |
|----------------------------------------+------+------+-------|
|PV program (MWs moved to RAM program) | 352 | 79 | -- |
|----------------------------------------+------+------+-------|
|CREST (SCE only) | n/a | -0- | n/a |
|----------------------------------------+------+------+-------|
| Total MW available| 700 | 554 | 54 |
| | | | |
--------------------------------------------------------------
7)Evaluate participation . AB 1295 requires the PUC to evaluate
the community renewable program by January 1, 2016 to
determine whether the program should continue.
8)Concerns about the details.
a) The Large Scale Solar Association is concerned that the
program will duplicate and confuse existing programs;
create the risk of double-counting MWs for the RPS, and
restricts facility size in a manner that will adversely
impact economies of scale. If the value of the renewable
and environmental attributes were retained by the
participant, these attributes cannot be sold into the
AB 1295
Page 5
compliance markets for RPS or GHG.
The author may wish to amend AB 1295 to allow the renewable
attribute to remain with the participant so that the MWs in
this program do not affect MWs procured for compliance with
the RPS. This will also ensure that the customers are truly
"renewably powered."
b) The Southern California Public Power Authority (SCPPA),
whose members include 12 POUs, is concerned that AB 1295
undermines the authority of POU governing boards, creates
unnecessary complexity and costs, and requires them to add
an option that their customers have not expressed an
interest in having. They add that their members have or
currently offer standard renewable contract opportunities
or green tariffs and customers and customer interest has
not been uniform.
The author may wish to amend AB 1295 to make the POU
provision permissive. This would not change current
statutory requirements for POUs to offer standard renewable
contracts and would allow POUs to offer a community
renewable program if customers express interest.
c) The bill requires the PUC to evaluate the community
renewable program by January 1, 2016. ReMAT is not yet
authorized while RAM might be fully subscribed before AB
1295 is enacted (depending on the results of the RAM
auctions scheduled in 2013 and early 2014).
The author may wish to add a provision stating that the
community renewable program shall be made available no
later than July 1, 2014.
Suggested amendments:
2832. (a) An electrical corporation shall include
provisions in its tariff and an addendum to a standard
contract developed pursuant to Section 399.20 to provide
for a community renewables option allowing a community
renewables facility to assign the payment of electricity,
adjusted to remove the value of any renewable attributes if
the customer elects to retain the renewable attributes, by
the electrical corporation due to that facility to a
AB 1295
Page 6
subscribing customer in the form of a bill credit.
2832. (d) The commission shall not authorize the community
renewables option until it has adopted the tariff
consistent with this section no later than July 1, 2014.
2832.5. On or before July 1, 2015, a local publicly owned
electric utility required to comply with Section 399.32
shall may offer a comparable community renewables option
for an electric generation facility as defined in Section
399.32. The governing board of the local publicly owned
electric utility shall review and approve the community
renewables option.
REGISTERED SUPPORT / OPPOSITION :
Support
Southern California Edison (SCE) (sponsor)
Opposition
California Municipal Utilities Association (CMUA)
Large Scale Solar Association (LSA)
Sacramento Municipal Utility District (SMUD)
Southern California Public Power Authority (SCPPA)
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083