BILL ANALYSIS �
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 591|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
UNFINISHED BUSINESS
Bill No: SB 591
Author: Cannella (R), et al.
Amended: 8/20/13
Vote: 21
SENATE ENERGY, UTIL. & COMMUNIC. COMM. : 8-1, 4/2/13
AYES: Padilla, Fuller, Cannella, Hill, Knight, Pavley, Wolk,
Wright
NOES: Corbett
NO VOTE RECORDED: De Le�n, DeSaulnier
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/13
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SENATE FLOOR : 39-0, 5/29/13
AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella,
Corbett, Correa, De Le�n, DeSaulnier, Emmerson, Evans, Fuller,
Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff,
Jackson, Knight, Lara, Leno, Lieu, Liu, Monning, Nielsen,
Padilla, Pavley, Price, Roth, Steinberg, Torres, Walters,
Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Vacancy
ASSEMBLY FLOOR : 68-0, 8/26/13 - See last page for vote
SUBJECT : Renewable energy resources: local publicly owned
electric utility: hydroelectric generation facility
SOURCE : Merced Irrigation District
CONTINUED
SB 591
Page
2
DIGEST : This bill limits the Merced Irrigation Districts
Renewables Portfolio Standard (RPS) obligation to the
electricity demands that are unsatisfied by the New Exchequer
Dam.
Assembly Amendments add guidelines for penstock flow capacity as
it pertains to defining "hydroelectric generation" generated
from a hydroelectric facility, and add clarifying language
pertaining to retail sales requirements, as specified.
ANALYSIS :
Existing law:
1. Requires investor-owned utilities, publicly owned utilities
(POUs), community choice aggregators, and energy service
providers to increase purchases of renewable energy such that
at least 33% of total retail sales are procured from
renewable energy resources by December 31, 2020. In the
interim each entity is 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. This is
known as the RPS.
2. Defines as RPS eligible, specified electric generation
resources including small hydroelectric generation of 30
megawatts (MWs) or less and hydroelectric generation units
sized below 40 MWs, if operated as part of a water supply or
conveyance system and operative prior to 2005.
3. Permits specified POUs that have ownership or long-term
contracts for generation from large hydroelectric generation
resources including Trinity and the San Francisco Public
Utilities Commission to meet only the electricity demands
unsatisfied by hydroelectric generation.
This bill:
1. Provides that a local POU that receives greater than 50% of
its annual retail sales from its own hydroelectric generation
that is not an eligible renewable energy resource will not be
required to procure additional eligible renewable energy
resources in excess of either of the following:
SB 591
Page
3
A. The portion of its retail sales not supplied by its own
hydroelectric generation. For these purposes, retail
sales supplied by an increase in 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, will not count as being retail
sales supplied by the utility's own hydroelectric
generation.
B. The cost limitations, as specified.
2. Defines "hydroelectric generation" to mean electricity
generated from a hydroelectric facility that satisfies all of
the following:
A. Is owned solely and operated by the local publicly
owned electric utility as of 1967.
B. Serves a local publicly owned electric utility with a
distribution system demand of less than 150 MWs.
C. Involves a contract in which an electrical corporation
receives the benefit of the electric generation through
June of 2014, at which time the benefit reverts back to
the ownership and control of the local publicly owned
electric utility.
D. Has a maximum penstock flow capacity of no more than
3,200 cubic feet per second and includes a regulating
reservoir with a small hydroelectric generation facility
producing fewer than 20 MWs with a maximum penstock flow
capacity of no more than 3,000 cubic feet per second.
Background
The New Exchequer Dam . This bill only applies to one POU,
Merced Irrigation District (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
SB 591
Page
4
occupies 2,942 acres of federal land under the jurisdiction of
the Bureau of Land Management. The plant capacity is 94.5 MWs
and produces approximately 250,000 MW 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.
On March 1 the California Energy Commission (CEC) released
proposed regulations for enforcement rules and procedures for
the RPS for POUs as required by SB 2X1 (Simitian, Chapter 1,
Statutes of 2011, 1st Extraordinary Session). The proposed
regulations establish the rules and procedures that the CEC will
use to assess a POU's procurement actions and determine
compliance with the RPS. If appropriate, the CEC will issue a
notice of violation and correction for a POU's failure to comply
and refer the violation to the Air Resources Board for potential
penalties.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
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 in fiscal year 2013-14.
Minor and absorbable costs to CEC to report to the
Legislature as required.
SUPPORT : (Verified 8/27/13)
Merced Irrigation District (source)
California Farm Bureau Federation
Modesto Irrigation District
OPPOSITION : (Verified 8/27/13)
California Wind Energy Association
Large-Scale Solar Association
Sierra Club California
The Utility Reform Network
Union of Concerned Scientist
SB 591
Page
5
ARGUMENTS IN SUPPORT : According to the Merced Irrigation
District, this bill recognizes the unique situation of the MID
as the power generated at New Exchequer Hydroelectric Project
will begin to benefit MID, starting in 2014, instead of
benefitting PG&E as it has done under contract since 1967. The
greenhouse gas-free power generated at the dam is forecasted to
be enough in many years to meet all of MID's energy customers'
needs. However, under existing law, it appears MID will be
required to purchase additional and unneeded power that is no
friendlier to the environment that what we will already be
producing. This bill allows the MID to save ratepayers
significant money by granting the same accommodations that were
given to the San Francisco Municipal Utilities District and the
Trinity Public Utilities District who found themselves in very
similar situations.
ARGUMENTS IN OPPOSITION : According to The Utility Reform
Network (TURN), this bill significantly reduces the RPS program
obligations for any POU that receives at least 50% of its
"consumption load demand" from "hydroelectric generation and
other renewable energy resources." Other provisions in this
bill suggest that the sole beneficiary of this treatment would
be the MID.
As a long-standing supporter of board-based renewable energy
policies, TURN generally opposed special treatment for
individual load-serving entities and believes that all
utilities, whether public or private, should contribute equally
to meeting California's renewable energy goals. The RPS program
was enacted to address a variety of concerns including reducing
reliance on fossil fuels, minimizing local air pollution,
stabilizing electric rates, curtailing the impact of natural gas
price volatility and mitigating climate change. Since all
Californians are intended to benefit, TURN believes that the
Legislature should require all utilities to participate on equal
footing. Unfortunately, this bill allows MID to meet
significantly lower RPS targets without sufficient
justification.
ASSEMBLY FLOOR : 68-0, 8/26/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
SB 591
Page
6
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fox, Frazier, Beth
Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Holden, Jones,
Jones-Sawyer, Linder, Logue, Maienschein, Mansoor, Medina,
Melendez, Morrell, Nazarian, Nestande, Olsen, Pan, Patterson,
Perea, V. Manuel P�rez, Quirk-Silva, Rendon, Salas, Stone,
Ting, Wagner, Waldron, Weber, Wilk, Yamada, John A. P�rez
NO VOTE RECORDED: Fong, Levine, Lowenthal, Mitchell, Mullin,
Muratsuchi, Quirk, Skinner, Wieckowski, Williams, Vacancy,
Vacancy
JG:k 8/27/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****