BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 591 (Canella) - Renewable energy: publicaly owned electric utility: hydroelectric generation facility and enforcement. Amended: April 10, 2013 Policy Vote: EU&C 8-1 Urgency: No Mandate: No Hearing Date: April 22, 2013 Consultant: Marie Liu This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 591 would limit the Merced Irrigation District's Renewable Portfolio Standard obligation to the electricity demands that are unsatisfied by the New Exchequer Dam. Fiscal Impact: One-time costs of $75,000 to $150,000 from the Energy Resources Programs Account (General Fund) to update regulations in FY 2013-14. Minor and absorbable costs to the California Energy Commission (CEC) to report to the Legislature as required. Background: The Renewable Portfolio Standard (RPS) requires invest-owned utilities, publically owned utilities, community choice aggregators, and energy service providers to increase purchases of renewable energy so that 33% of total retail sales are procured from renewable energy resources by December 31, 2020. In the interim, each entity would be required to procure an average of 20% of renewable energy for the period of January 1, 2011 through December 31, 2013 and 25% by December 31, 2016. (PUC §399.11 et seq) Hydroelectric generation is only eligible as a renewable energy source under RPS if the facility produces 30 megawatts or less or 40 megawats or less if the hydroelectric generation units are operated as part of a water supply or conveyance system in operation prior to 2005. (PRC §25741) Existing law allows specified publically owned utilities that have ownership or long-term contracts for generation from large hydroelectric generation resources, including Trinity and the SB 591 (Cannella) Page 1 San Francisco Public Utilities Commission, to base its RPS procurement obligations only on the electricity demands unsatisfied by hydroelectric generation. (PUC §399.30) The New Exchequer Dam is part of the Merced River Hydroelectric Project in Mariposa County and is operated by the Merced Irrigation District, which is a publically owned utility. The dam and hydroelectric facility was put into service in 1967 and currently has a capacity of 94.5 megawatts. While the facility is owned and operated by the Merced Irrigation District, currently Pacific Gas and Electric receives all the electricity under a contract which expires on July 1, 2014. Proposed Law: This bill limits the RPS procurement obligation for a publically owned utility that owns and operates a hydroelectric facility that came into service in 1967, and for which the utility will take the generation rights in 2014, to the electricity demands unsatisfied by that hydroelectric generation. This bill further requires the CEC to report to the Legislature by July 1, 2014 regarding whether the implantation of this bill will result in surplus electricity sales. Staff Comments: This bills description of a hydroelectric facility only fits the New Exchequer Dam which is owned by the Merced Irrigation District. Proposed regulations to implement the RPS statue were released by the CEC on March 1, 2013. Should this bill pass, these regulations will have to be updated. The CEC estimates that such an update is likely to take half to one full PY (Energy Resource Specialists) for a one-time cost of $75,000 to $150,000. The CEC estimates that the cost to comply with this bill's reporting requirement will be minor and absorbable.