BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 43|
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THIRD READING
Bill No: SB 43
Author: Wolk (D), et al.
Amended: 5/24/13
Vote: 21
SENATE ENERGY, UTILITIES & COMMUNIC. COMM. : 6-4, 4/30/13
AYES: Corbett, De Le�n, DeSaulnier, Hill, Pavley, Wolk
NOES: Padilla, Cannella, Knight, Wright
NO VOTE RECORDED: Fuller
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/23/13
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
SUBJECT : Shared Renewable Energy Self-Generation Program
SOURCE : City of Davis
DIGEST : This bill establishes the Shared Renewable Self
Generation Program (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.
ANALYSIS :
Existing law:
1. Authorizes individual retail, non-residential, end-use
customers to acquire electric service from other providers in
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each electrical corporation's (IOU) distribution service
territory, up to the historically highest amount of
kilowatt-hours (kWh) of annual sales for each utility.
Increases authorized in 2009 require a phase-in period for
new customer enrollments of not less than three years and not
more than five years. The program is commonly referred to as
"direct access" (DA).
2. Establishes a general exception to the cap on DA 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.
3. Requires an electric service provider (ESP) that is a
non-utility entity that offers electric service to customers
within the service territory of an IOU to register with, and
be subject to, the jurisdiction of the Public Utilities
Commission (PUC). The ESP is required to undergo background
checks and provide proof of financial viability and technical
and operational ability in addition to other fees, bonds, and
reporting requirements to the PUC and to the customer's
served.
This bill:
1. Establishes the Shared Renewable Self Generation Program to
allow developers of renewable energy, referred to as
providers (aka. developers), which are exempted from the
definition of a public utility, to sell renewable electricity
directly to customers of the state's three largest IOUs. The
total capacity cap of interconnected resources would be 500
megawatts (MWs), with 100 MWs set aside for residential
customers and 100 MWs reserved for 1 MW facilities located in
the state's most impacted and disadvantaged communities.
2. Permits any customer of any one of the state's three largest
IOUs, identified as "participants" (aka customers) to:
A. Pay a provider (developer) directly for the costs of
electricity generated by a shared renewable energy
facility;
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B. Receive a credit on the customer's IOU bill for
electricity, at an amount to be calculated by the PUC,
referred to as the facility rate;
C. Acquire an interest of up to 2 MWs of capacity of a
shared renewable energy facility, except for specified
government entities for which there is no cap;
D. Pay the IOU for only transmission and distribution
services for the portion of electricity the customer
purchases directly from a developer (the net result based
on a credit the customer would receive equal to the energy
component of the IOU bill); and
E. Provide a disclosure to any potential Program customer
to which the customer intends to sell his/her facility
interest.
3. Requires the state's three largest IOUs to:
A. Contract with any shared renewable energy facility that
intends to sell electricity directly to the IOU's
customers if the facility is:
(1) A new eligible renewable resource;
(2) The 2 MWs Photovoltaics for Utility Scale
Applications facility in the City of Davis;
(3) Less than 20 MWs in size; and
(4) Located in the service territory of the IOU and
its customer;
B. Credit a customer's bill for the energy component of
the customer's applicable electric rate should the
customer choose to purchase electricity from a shared
renewable energy facility;
C. Credit a customer's bill, on a kWh basis, at an amount
to be calculated by the PUC, equal to the volume of
electricity that the customer purchases directly from a
shared renewable energy facility, referred to as the
facility rate;
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D. Purchase excess generation from a developer, for which
they were unable to secure subscribers, at a rate to be
determined by the PUC equal to the day-ahead price for
electricity. The IOU would receive the renewable energy
credit; and
E. Provide to the PUC maps indicating locations where the
addition of capacity would reduce lines loss, lower
transmission-capacity constraints, and defer or avoid
transmission and distribution network upgrades and
construction.
4. Requires the PUC to:
A. Establish a facility rate for each shared renewable
energy facility under the Program to be used to provide a
credit on the customer's IOU bill so that a customer can
continue to receive distribution and transmission service
from the IOU, but purchase their electricity directly from
a developer;
B. Base the initial facility rate on the PUC's cumulative
weighted average time-of-delivery adjusted cost of
electricity reported annually to the Legislature. After a
comprehensive analysis of the costs and benefits
associated with shared renewable energy generation,
establish a new facility rate based on the full value that
the renewable generation provides to non-participating
customers;
C. Revise the facility rate methodology at any time it
concludes that the rate does not provide Program
participants with the fair value of electricity and other
benefits produced by the facility or overvalues the
benefits to nonparticipating customers;
D. Expand the Program beyond the 500 MWs cap after an
evaluation and revise the Program if goals are not being
met;
E. Develop and enforce disclosures required to subscribers
of a shared renewable energy facility and other rules to
ensure consumer protection. The PUC would be strictly
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prohibited from regulating the prices paid by customers to
the shared renewable energy facility;
F. Determine whether DA customers should participate in
the Program; and
G. By September 1, 2014, and annually thereafter, the PUC
shall review the progress toward meeting the Program goals
for the most impacted and disadvantaged communities, and
may adjust the facility rate, if it determines that an
adjustment is necessary to achieve the goals.
5. Prohibits:
A. Charging any participating customer standby or
departing load charges;
B. The PUC from regulating the prices paid by a customer
to a developer of a shared renewable energy facility; and
6. Expresses the intent of the Legislature to preserve a
thriving natural environment and to ensure that projects
developed under the Shared Renewable Energy Self-Generation
Program are subject to environmental protection best
practices afforded under California law and policies.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
Ongoing costs of approximately $250,000 from the Public
Utilities Reimbursement Account (special fund) for two prior
years 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.
SUPPORT : (Verified 5/23/13)
City of Davis (source)
Superintendent of Public Instruction, Tom Torlakson
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American Lung Association
Asian Pacific Environmental Network
California Apartment Association
California Environmental Justice Alliance
California Interfaith Power and Light
California Native Plant Society
California Rural Legal Assistance Foundation
California State Association of Counties
City of San Diego
Clean Tech San Diego
Cleanpath
Coalition for Adequate School Housing
Community Environmental Council
Davis Joint Unified School District
Ecoplexus
EnFinus
Environment California
Environmental Defense Fund
K&L Gates
League of California Cities
Mainstream Energy/REC Solar/AEE Solar
Octus Energy
Recurrent Energy
Redwood Coast Energy Authority
Renewable Funding
Ritual Coffee Roasters
School Energy Coalition
Sierra Club California
Small Business California
Solar Gardens Community Power
Solar Training Institute
SolarCity
Sonoma County Board of Supervisors
Sullivan Solar Power
Sunible
The Vote Solar Initiative
The Western Center on Law and Poverty
UltraSystems Environmental
Yolo County Board of Supervisors
OPPOSITION : (Verified 5/23/13)
California Farm Bureau Federation
Coalition of California Utility Employees
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Pacific Gas and Electric Company
San Diego Gas and Electric Company
Southern California Edison
The Utility Reform Network
ARGUMENTS IN SUPPORT : The California Environmental Justice
Alliance writes:
SB 43, by Senator Wolk, expands consumer access to renewable
energy self-generation programs, providing all customers of
SCE [Southern California Edison], SDG&E [San Diego Gas &
Electric] and PG&E [Pacific Gas and Electric Company] with the
ability to invest in offsite renewable energy projects and
receive utility bill credits in return. It extends the
economic and environmental benefits of renewable energy self
generation to the large percentage of Californians who
currently have no access: renters, people whose homes are
shaded or poorly oriented, small businesses who lease, space
limited public entities, and consumers who lack sufficient
credit.
The California Environmental Justice Alliance is a strong
proponent of ensuring our state's most vulnerable communities
have access to clean energy. Particularly, we need to direct
more local renewable energy into low-income communities of
color that are impacted first and worst from climate change,
while creating sustainable long-term clean energy careers in
these communities.
ARGUMENTS IN OPPOSITION : Southern California Edison (SCE)
writes:
The goal of SB 43, allowing utility customers the ability to
opt into an interest in larger renewable energy facilities,
enjoying economies of scale and pooling resources, is
laudable. However, SCE has concern with many areas of this
proposal, and even as amended it the proposal: 1) conflicts
with federal and state law; 2) creates cost shift onto
nonparticipating customers; and 3) creates unnecessary
complexity and uncertainty in implementation, among other
things.
In addition to the conflicts with state and federal law, SB 43
will result in cost shifts from participating to
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non-participating customers. Although the bill credits are
described as netting against the generation portion of the
bill, credits can offset "any other portion of the customer's
charges" as determined by the CPUC. Thus, not only will the
price for power be inflated, the bill allows this inflated
credit to reduce portions of a customer's bill beyond the
generation component.
JG:k 5/25/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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