BILL ANALYSIS �
SB 760
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SENATE THIRD READING
SB 760 (Wright)
As Amended August 30, 2013
Majority vote
SENATE VOTE : Vote not relevant
NATURAL RESOURCES APPROPRIATIONS
(vote not relevant) (vote not relevant)
SUMMARY : Revises several sections of the Renewables Portfolio
Standard (RPS) to emphasize reliability and favor procurement of
geothermal energy. Specifically, this bill :
1)Requires each retail seller subject to the RPS to submit to
the Public Utilities Commission (PUC), in the retail seller's
annual compliance report, "(t)he current status of the retail
seller's procurement to ensure a balanced mix of eligible
renewable energy resources required to maintain the
reliability of the electrical grid without increasing fossil
fuel consumption."
2)Requires the PUC's RPS procurement process to take into
account the following new factors:
a) Procurement of specific types of eligible renewable
energy resources necessary to maintain the reliability of
the electrical grid to meet electrical demand on a 24-hour
basis, including identifying the eligible renewable energy
resources by type and operating characteristics.
b) Consideration of the attributes of utilizing geothermal
resources, including their system inertia, small footprint
in terms of surface land requirements, habitat and other
environmental impacts, their ability to provide baseload
generation while reducing emissions resulting from the
burning of fossil fuels in an air basin designated as
including a federal extreme nonattainment area, and their
ability to act as a hedge against fuel price increases to
ensure a balanced portfolio.
c) Consideration of eligible renewable energy resources in
the area of the Salton Sea that provide additional
environmental benefits that should be encouraged to meet
the state's mitigation requirements for the region.
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3)Requires the PUC to adopt an appropriate minimum margin of
procurement above the RPS "to achieve the required balanced
mix of eligible renewable energy resources."
4)Requires renewable energy procurement plans submitted by
electrical corporations to identify "each source of supply by
resource type and detail how the mix of resources will
maintain the reliability of the electrical grid throughout
each 24-hour period."
5)Requires each electrical corporation to "give preference to
resource types that will contribute toward ensuring a balanced
resource mix that maintains reliability of the electrical grid
throughout each 24-hour period without increasing consumption
of fossil fuels."
6)Authorizes the PUC to require the procurement of eligible
renewable energy resources in excess of the statutory RPS
targets "to the extent necessary to ensure a balanced mix of
eligible renewable energy resources with attributes necessary
to ensure an adequate and reliable supply of electrical
generation from eligible renewable energy resources that best
matches the demand for electricity and maintains the
reliability of the electrical grid."
7)Adds the following as a third alternative to qualify resources
for "bucket 1" RPS eligibility, which is currently limited to
resources located in, or deliverable to, California:
Have characteristics that are capable of providing a
diverse and balanced mix of eligible renewable energy
resources that can contribute to maintaining
reliability of the electrical grid to meet the demand
for electricity in every 24-hour period and can
include electrical generation produced on an
as-available, firm, dispatchable, or ramping basis,
providing system inertia benefits, whether from the
generating facility alone or in combination with
additional technologies, including energy storage.
EXISTING LAW :
1)The RPS requires investor-owned utilities (IOUs),
publicly-owned utilities (POUs) and certain other retail
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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% on average from January 1, 2011, to December 31,
2013.
b) 25% by December 31, 2016.
c) 33% by December 31, 2020 and each year thereafter.
2)Provides that eligible renewable generation facilities must
use biomass, solar thermal, photovoltaic, wind, geothermal,
renewable fuel cells, small hydroelectric, digester gas,
limited non-combustion municipal solid waste conversion,
landfill gas, ocean wave, ocean thermal or tidal current.
3)Establishes "balanced portfolio" requirements for procurement
based on the following three categories (or "buckets") of
renewable energy products:
a) Bucket 1 - Renewable energy interconnected to the grid
within, scheduled for direct delivery into, or dynamically
transferred to, a California balancing authority (i.e.,
real renewable energy supplied to the California grid,
located within or directly proximate to the state). Of the
total renewable energy contracts executed after June 1,
2010, the following percentages must fall into this
category:
i) At least 50% for the 2011-2013 compliance period.
ii) At least 65% for the 2014-2016 compliance period.
iii) At least 75% thereafter.
b) Bucket 2 - Renewable energy where substitute
non-renewable energy is used to provide a reliable delivery
schedule into a California balancing authority (i.e.,
firmed and shaped energy where substitute energy is used to
compensate for delivery problems due to intermittent
generation or inadequate transmission capacity from a
remote renewable resource).
c) Bucket 3 - Renewable energy products not meeting either
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condition above, including unbundled renewable energy
credits (RECs) (i.e., the original source of renewable
energy must be located within the western grid, but
otherwise need not have a physical connection to
California). Of the total renewable energy contracts
executed after June 1, 2010, the following percentages may
fall into this category:
i) Not more than 25% for the 2011-2013 compliance
period.
ii) Not more than 15% for the 2014-2016 compliance
period.
iii) Not more than 10% thereafter.
4)Excuses retailer sellers and POUs from enforcement for failure
to meet targets if the retail seller or 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 (e.g., the
Independent System Operator).
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.
FISCAL EFFECT : Unknown
COMMENTS : This bill revises several sections of the RPS in a
manner intended to favor procurement of geothermal energy. The
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bill also authorizes the PUC to increase the statutory RPS
targets under certain circumstances and creates an alternative
to the delivery requirement for bucket 1.
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092
FN: 0002080