BILL ANALYSIS                                                                                                                                                                                                    Ó

                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair

           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: May 23, 2013      Consultant: Marie Liu
          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  

          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  
          San Francisco Public Utilities Commission, to base its RPS  


          SB 591 (Cannella)
          Page 1

          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.