BILL ANALYSIS Ó 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 2584 - Nestande Hearing Date:
June 23, 2014 A
As Amended: June 16, 2014 FISCAL B
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DESCRIPTION
Current law requires the state's investor-owned utilities
(IOUs), publicly-owned utilities (POUs) (except the Los Angeles
Department of Water and Power), and other entities offering
retail electric service, to credit all electricity generated by
a customer-owned renewable electric generation facility against
the customer's usage of electricity sold by the utility, on a
kilowatt hour basis (kWh), a procedure known as "net energy
metering" (NEM). Participation by all utilities is capped at
five percent of each utility's aggregate peak electricity demand
and the size of individual renewable electric generation
facilities is limited to those that will offset all or part of
the customer's own electrical requirements to a maximum of 1
megawatt (MW). This program also exempts the customer from
paying transmission and distribution costs and requires the
utility to expedite interconnection at no less than 30 days.
This is commonly referred to as full retail NEM. (Public
Utilities Code § 2827)
Current law defines "wind energy co-metering" as any wind energy
project greater than 50 kWh, but not exceeding one MW, where
electricity generated by the eligible customer-generator and fed
back to the grid is credited, over a 12-month period, against
the electricity supplied to the eligible customer-generator by
the grid. (Public Utilities Code §§ 2827, 2827.8)
Current decisions of the California Public Utilities Commission
(CPUC) establish parameters for any IOU customer to interconnect
generation to an IOU's distribution system, renewable or
fossil-fueled, to offset their electrical load if they do not
export power to the grid. (Rule 21)
This bill requires Southern California Edison (Edison) to
interconnect a 1.5 MW wind turbine located at the United States
Marine Corp Logistics Base, Barstow.
BACKGROUND
Marine Corp Logistics Base, Barstow (MCLBB, the Base) - The base
is a United States Marine Corp supply and maintenance
installation located four miles east of the City of Barstow in
San Bernardino County. Its mission is to enable operational
readiness through infrastructure, logistics, and services to
support the Marine Corps, the Army, and other government
components.
Congressional legislation, Presidential directives, and military
policies require all military bases to diversify supply, update
energy infrastructure, and reduce energy costs. The military's
overall goal is procuring or producing 25% renewable energy by
2025.
Peak demand at the base is about 7.2 MW and average demand is
about 3.2 MW. Although Edison was involved in the purchase and
interconnection of the wind turbine (see below), the base is a
direct access (DA) customer of the Western Area Power
Administration (WAPA), which means that it has a bilateral
contract for the purchase and sale of energy - the vast majority
of which is greenhouse gas (GHG)-free hydroelectric power.
A wind turbine was acquired through a federal Utility Energy
Service Contract (UESC) whereby, Edison provided analysis,
design, installation, and financing for the federal entity,
MCLBB. Edison facilitated the purchase of a 1.5 MW wind turbine
because not 1 MW turbine was available. The turbine became
operational in March 2009 and was interconnected through the NEM
tariff. Following a short trial period during which the turbine
operated at 1.5 MW, Edison required MCLBB to de-rate the turbine
to 1 MW to prevent export and to comply with a statutory cap on
systems operating under the NEM tariff. De-rating the turbine
resulted in technical operational challenges initially, but
Edison and the base agree that these challenges largely have
been resolved.
Interconnection Challenges - Project developers and grid
operators face challenges as increasing volumes of renewable
distributed generation attempt to interconnect. Even small-scale
renewable systems can trigger in-depth engineering studies and
expensive grid upgrades if they occur in locations with limited
capacity.
COMMENTS
1. Author's Statement . "According to the USMC, de-rating of
the turbine has forced them to under-utilize [their]
renewable energy assets? [and] raising the NEM cap for
MCLBB would allow its wind turbine to operate at full
capacity. Edison has replied that state law prohibits the
base from operating the wind turbine at full capacity."
2. This is Not a New Dispute . This bill would provide for
wind energy co-metering for MCLBB, not to exceed 1.5 MW.
The base has spent a great deal of time working with Edison
on a remedy to this issue. Edison argues, and the
California Independent System Operator (CAISO) has
confirmed, that the area in which the base is located has
congestion and there is not sufficient capacity on the
distribution/transmission system to accommodate additional
generation.
The CAISO advises that a transmission upgrade is planned
for the Coolwater/Lugo line and that there are 100
interconnection requests, between Edison and the CAISO,
waiting for additional capacity in that vicinity. The
additional capacity will be available in 2018. In the
meantime Edison can and will interconnect the turbine under
Rule 21 as non-exporting generator. This option would
require the base to submit an application, pay associated
application and study fees, install equipment to prevent
export, and be subject to Edison's standby and departing
load tariffs. The base currently opposes (non-legislative)
approaches that would incur additional costs.
Given that the base has an average baseload of 3.2 MW, it's
not clear why the base cannot utilize all of the generation
onsite without export. However, trying to stay within a
NEM tariff does suggest that the base would be exempt from
some customer charges if they could move the additional
capacity into NEM and above the 1.0 MW program cap.
3. Related Legislation .
AB 2649 (Mullin) would support the development of
independent generation facilities on military bases and
privatized military housing by exempting these facilities
from interconnection agreements, associated interconnection
fees, and departing load charges, as specified. Status:
Pending consideration by the Senate Committee on Energy,
Utilities, and Communications June 23.
AB 2229 (Bradford) require the CPUC to establish an energy
efficiency program specifically for military bases and
facilities. Status: Pending consideration by the Senate
Committee on Energy, Utilities, and Communications June 23.
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ASSEMBLY VOTES
Assembly Floor (77-0)
Assembly Appropriations Committee (17-0)
Assembly Utilities and Commerce Committee
(12-0)
POSITIONS
Sponsor:
United States Marine Corps
Support:
None on file
Neutral:
Southern California Public Power Authority
Oppose:
California State Association of Electrical Workers
Coalition of California Utility Employees
Southern California Edison
Alexis Erwin
AB 2584 Analysis
Hearing Date: June 23, 2014