BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 43 (Wolk) - Shared renewable energy self-generation program.
Amended: May 15, 2013 Policy Vote: EU&C 6-4
Urgency: No Mandate: No
Hearing Date: May 23, 2013 Consultant: Marie Liu
SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Bill Summary: SB 43 establishes a new program allowing
investor-owned utility (IOU) customers to purchase an interest
in a "community renewable energy facility" and receive a bill
credit for the generation component of the customer's electrical
service.
Fiscal Impact:
Ongoing costs of approximately $250,000 from the Public
Utilities Reimbursement Account (special fund) for two PYs for
program implementation.
One-time costs of $150,000 annually for two years from the
Public Utilities Reimbursement Account for an administrative
law judge for the development of necessary regulations.
Unknown costs to the state as a ratepayer for nonparticipant
support of the program.
Background: Existing law allows individual retail,
non-residential, end-use customers to acquire electric service
from other providers in each electrical corporation's (IOU)
distribution service territory, up to a specified cap. The
program is commonly referred to as "direct access." (DA)
(Public Utilities Code �365 et seq.) DA customers pay a power
charge indifference amount that is designed so that other
ratepayers of that IOU are held indifferent as to the financial
impacts of DA customers.
Existing law establishes a general exception to the cap on
direct access for community choice aggregation (CCA) undertaken
by cities and counties serving their own residents and
businesses, with electricity secured from the market or energy
producers under contract with the CCA to provide service to IOU
customers choosing to enroll. (Public Utilities Code �366.2) CCA
is a form of direct access where a city or county may act as a
SB 43 (Wolk)
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purchasing agent on behalf of its residents.
Proposed Law: This bill would establish the Shared Renewable
Self Generation Program to allow developers of renewable energy
(aka providers) are exempted from the definition of a public
utility, to sell renewable electricity directly to customers of
the three largest IOUs. This program would initially be limited
to 500 megawatts (MW).
Under this bill, customers would pay a provider directly for the
costs of electricity generated by a shared renewable energy
facility. The customer would then receive a credit on their IOU
bill in an amount based a "facility rate," which is set by the
CPUC. The customer would pay the IOU for the costs of providing
transmission and distribution services for electricity bought
directly from the shared facility.
Related Legislation: AB 1014 (Williams) would create a new
renewable energy program available to customers through the
IOUs. AB 1014 is currently before the Asm. Appropriations
Committee.
AB 383 (Wolk) 2011 would have created a renewable energy
procurement program available to consumers directly. AB 383
failed passage in the Senate EU&C Committee and was later
amended to address an unrelated issue.
SB 843 (Wolk) 2012 was substantially similar to this bill. SB
843 failed passage in the Assembly Utilities and Commerce
Committee.
Staff Comments: To implement this bill the PUC would have
numerous responsibilities including establishing a facility
rate, a valuation methodology used help establish a facility
rate, reviewing IOU's proposals on how to allocate the initial
available capacity for this program, approve contracts between
the IOUs and providers, and maintain a public database of
participating providers. There are also numerous ongoing
activities, including an evaluation of the program in 2016 to
determine if the goals of the program are being met without an
impact on nonparticipants. To accomplish these duties, the PUC
believes that it will have initial costs of one administrative
law judge for two years at $150,000 per year and ongoing costs
of $250,000 for two regulatory analysts.
SB 43 (Wolk)
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Staff notes that the state itself is a substantial electricity
consumer using approximately 1.4% of the state's electricity. In
some renewable energy programs, such as the California Solar
Initiative, there are concerns that participants of the program
are not paying the full cost of being connected to the IOUs
system, such as the cost of transmission and distribution, as
well as the cost to the IOU to ensure that sufficient electric
resources are maintained to serve all customers. This bill
attempts to address the cost shift of program participants onto
nonparticipants in the IOUs jurisdiction, however not all
aspects of potential cost shifting have yet been addressed. For
example, this bill would prohibit participants from being assess
standby charges. How much the state as a ratepayer would pay to
subsidize this program is unknown.
Proposed Author Amendments: Make technical corrections, delete
restriction for shared renewable energy facilities built on
prime farm land, and delete legislative intent regarding
allocation of costs.