BILL ANALYSIS Ó
AB 1779
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Date of Hearing: April 7, 2014
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 1779 (Gaines) - As Amended: March 20, 2014
SUBJECT : Energy resources: report
SUMMARY : Requires the California Energy Commission (CEC) to
prepare a report on the effect of specified policies on
electricity reliability and rates.
EXISTING LAW :
1)Requires the CEC to assess electricity infrastructure trends
and issues facing California and develop and recommend energy
policies for the state to address and resolve such issues as
part of its biennial Integrated Energy Policy Report (IEPR).
[SB 1389 (Bowen), Chapter 568, Statutes of 2002]. The IEPR
must contain an overview of major energy trends and issues
facing the state, including, but not limited to, supply,
demand, pricing, reliability, efficiency, and impacts on
public health and safety, the economy, resources, and the
environment.
2)The Renewables Portfolio Standard (RPS) requires
investor-owned utilities (IOUs), publicly-owned utilities
(POUs) and certain other retail sellers of electricity to
achieve the following renewable energy portfolio targets:
a) 20 percent on average from January 1, 2011 to December
31, 2013.
b) 25 percent by December 31, 2016.
c) 33 percent by December 31, 2020 and each year
thereafter.
3)The California Global Warming Solutions Act of 2006 (AB 32)
requires the Air Resources Board (ARB) to adopt a statewide
greenhouse gas (GHG) emissions limit equivalent to 1990 levels
by 2020 and adopt regulations to achieve maximum
technologically feasible and cost-effective GHG emission
reductions.
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4)Pursuant to the federal Clean Water Act, in 2010 the State
Water Resources Control Board (SWRCB) adopted a Policy on the
Use of Coastal and Estuarine Waters for Power Plant Cooling.
The policy applies to the 19 existing power plants that
withdraw seawater using a single-pass system, also known as
once-through cooling (OTC).
THIS BILL requires the CEC to:
1)Prepare a new, annual report to assess the effect in the
aggregate of specified policies on electricity reliability and
rates and whether these policies are achieving their stated
environmental and economic goals. The specified policies are:
a) The California Renewable Energy Resources Act of 2011
(i.e., RPS), including renewable energy plant development
costs, transmission costs, and back-up generation costs
resulting from the implementation of the act.
b) AB 32.
c) The SWRCB's OTC Policy.
d) The Governor's goal to build 12,000 megawatts of
localized electricity generation as described in the
Governor's "Clean Energy Jobs Plan" issued in 2011.
e) Additional major policies that affect electricity
reliability and rates, including the SWRCB's new flow
criteria for the Sacramento-San Joaquin Delta ecosystem.
1)Consult with the Public Utilities Commission, ARB, SWRCB, and
other appropriate executive branch organizations.
2)Identify and quantify any trade-offs involved if an aspect of
one goal conflicts with an aspect of another goal.
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's statement :
In 2012, the Little Hoover Commission published a report
entitled "Rewiring California: Integrating Agendas for
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Energy Reform" that addressed, among other things, how
recently-enacted policies (RPS, energy efficiency, AB 32,
etc.) will affect electricity rates and reliability. On
pages 61-65, the Commission put forth the recommendation of
legislation that requires the CEC, in consultation with
several energy-related agencies, to prepare a report that
addresses the question of how much, in the aggregate, will
recent major policies related to energy affect electricity
reliability and rates, and whether these policies are
achieving California's stated environmental and economic
goals.
According to the Commission's findings, "no expert, state
official or utility executive has been able to address the
cumulative costs and benefits of multiple, potentially
competing goals for reducing greenhouse gas emissions,
achieving the (RPS), implementing (OTC) regulations and
expanding distributed generation."
Also according to the Commission, "?California regulators
and stakeholders are buried under a proliferation of new
policies. The result may be greater costs and competing
policies that ultimately may thwart the state's efforts to
achieve its environmental policy goals."
2)Lofty objective. Can the CEC deliver ? The IEPR was enacted
in 2002 as part of an effort to restore the CEC's planning
functions in the wake of the energy crisis that followed
electric industry restructuring. One of the IEPR's objectives
to was to update and consolidate the dozens of statutory
reports that had accumulated over the preceding 25 years of
the CEC's existence. In the 11 years since the IEPR was
enacted, the Legislature has enacted additional reporting
requirements, but each time a report subject fits within the
broad scope of the IEPR, the Legislature has made the subject
part of the IEPR. It's not clear why the report called for by
this bill should be an exception, or why it should be prepared
every year. It's also not clear that the CEC is best suited
to evaluate rate impacts or the environmental and economic
performance of policies implemented by other agencies.
3)Double referral . This bill is double-referred to the Assembly
Utilities and Commerce Committee.
REGISTERED SUPPORT / OPPOSITION :
AB 1779
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Support
None on file
Opposition
None on file
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092