BILL ANALYSIS �
SB 591
Page 1
Date of Hearing: August 12, 2013
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
SB 591 (Cannella) - As Amended: August 6, 2013
SENATE VOTE : 39-0
SUBJECT : Renewable energy resources: publicly owned electric
utility: hydroelectric generation facility
SUMMARY : Limits the Renewables Portfolio Standard (RPS)
procurement obligations of the Merced Irrigation District (MID)
to the portion of MID's electricity demands unsatisfied by its
own hydroelectric generation.
EXISTING LAW :
1)The RPS requires investor-owned utilities (IOUs),
publicly-owned utilities (POUs) and certain other retail
sellers of electricity, in order to fulfill unmet long-term
resource needs, to procure eligible renewable energy resources
to meet the following portfolio targets:
a) 20 percent on average from January 1, 2011 to December
31, 2013.
b) 25 percent by December 31, 2016.
c) 33 percent by December 31, 2020 and each year
thereafter.
2)Provides that eligible renewable generation facilities may
include small hydroelectric (generally 30 megawatts or less),
as well as biomass, solar thermal, photovoltaic, wind,
geothermal, renewable fuel cells, digester gas, limited
non-combustion municipal solid waste conversion, landfill gas,
ocean wave, ocean thermal or tidal current.
3)Requires the California Energy Commission (CEC), in
consultation with the Air Resources Board (ARB), to adopt
regulations for enforcement of the RPS on POUs, including
providing for the imposition of penalties by ARB pursuant to
AB 32, upon referral by the CEC, for failure to comply with
the RPS. Requires penalties imposed on POUs to be comparable
SB 591
Page 2
to penalties imposed by the Public Utilities Commission (PUC)
on IOUs and other retail sellers.
4)Excuses a POU from enforcement for failure to meet RPS targets
if the POU demonstrates that any of the following conditions
are beyond its control and will prevent compliance:
a) Inadequate transmission capacity for delivery of
sufficient renewable energy.
b) Permitting, interconnection or other delays for
renewable energy projects, or an insufficient supply of
available renewable energy.
c) Unanticipated curtailment of renewable energy necessary
to address the needs of a balancing authority.
5)Requires the PUC to establish a cost limit for each IOU
according to specified criteria, requires the PUC to report to
the Legislature by 2016 regarding whether IOUs can achieve 33
percent within the adopted cost limit, authorizes the PUC to
revise the cost limit once after 2016 if necessary, and
authorizes IOUs to stop procuring renewable energy beyond the
cost limit, unless additional renewable energy can be procured
without exceeding a de minimis increase in rates. Authorizes
POU governing boards to adopt consistent cost limits.
THIS BILL :
1)Provides that a POU that receives greater than 50 percent of
its annual retail sales from its own non-eligible
hydroelectric generation is not required to procure eligible
renewable energy in excess of either (a) the portion of the
POU's retail sales not supplied by its own hydroelectric
generation or (b) its adopted RPS cost limit.
2)Applies only to MID, through the definition of "hydroelectric
generation" that only MID's New Exchequer hydroelectric
facility meets. (MID's own hydroelectric generation is not
RPS-eligible because the facility exceeds the RPS 30 megawatt
limit - New Exchequer's capacity is 95 megawatts.)
FISCAL EFFECT : According to the Senate Appropriations
Committee, one-time costs of $75,000 to $150,000 from the Energy
Resources Programs Account (General Fund) to update regulations
SB 591
Page 3
in FY 2013-14.
COMMENTS :
1)Background. This bill would only apply to MID and one
hydroelectric facility, the New Exchequer Dam, which is part
of the Merced River Hydroelectric Project in Mariposa County,
about 23 miles northeast of the City of Merced. The dam and
hydroelectric facility were originally constructed in 1926,
enlarged in the mid-1960s, and put into service in 1967. The
project is a water supply/flood control/recreation/power
project under the jurisdiction of the Federal Energy
Regulatory Commission and occupies 2,942 acres of federal land
under the jurisdiction of the Bureau of Land Management. The
plant capacity is 94.5 megawatts and produces approximately
250,000 megawatt hours of electricity each year. Although the
hydroelectric facility was constructed by, and is owned and
operated by the MID, PG&E has had a contractual right to the
generation since 1967 which expires on July 1, 2014.
2)Related legislation. AB 793 (Gray) was approved with
amendments by this committee in May and is now pending in the
Senate Appropriations Committee. SB 591 now reflects most of
the amendments to AB 793. The author and the committee may
wish to consider amending SB 591 to be consistent with AB 793
by adding the following amendments:
On page 5, line 25, after "generation." insert:
For these purposes, retail sales supplied by increased
hydroelectric generation resulting from an increase in the
amount of water stored by a dam because the dam is enlarged
or otherwise modified after December 31, 2012, shall not
count as being retail sales supplied by the utility's own
hydroelectric generation.
On page 6, line 6, insert:
(4) This subdivision does not require a local publicly
owned electric utility to purchase additional renewable
energy resources in excess of the renewable procurement
requirements set forth in subdivision (c).
3)Double referral. This bill was approved by the Assembly
Utilities and Commerce Committee on July 1 by a vote of 11-0.
SB 591
Page 4
REGISTERED SUPPORT / OPPOSITION :
Support
California Farm Bureau Federation
Merced Irrigation District
Modesto Irrigation District
Opposition
California Wind Energy Association (unless amended)
Large-Scale Solar Association (unless amended)
Sierra Club California
TURN
Union of Concerned Scientists
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092