BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1139|
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THIRD READING
Bill No: SB 1139
Author: Hueso (D)
Amended: 05/27/14
Vote: 21
SENATE ENERGY, UTILITIES & COMMUNICATIONS COMM : 6-2, 4/29/14
AYES: Padilla, Block, Corbett, DeSaulnier, Hill, Wolk
NOES: Fuller, Knight
NO VOTE RECORDED: Cannella, De León, Pavley
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/23/14
AYES: De León, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
SUBJECT : California Renewables Portfolio Standard Program
SOURCE : Author
DIGEST : This bill requires that retail sellers procure a
statewide total of 500 megawatts (MW) of electricity generated
by new geothermal powerplants by December 31, 2024.
ANALYSIS : Existing law:
1.Requires investor-owned utilities, community choice
aggregators, and energy service providers (collectively
defined as retail sellers), and local publicly owned electric
utilities, 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
CONTINUED
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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. This is known
as the Renewables Portfolio Standard.
2.Defines as the Renewables Portfolio Standard (RPS) eligible,
electric generation resources from biomass, solar thermal,
photovoltaic, wind, geothermal, fuel cells using renewable
fuels, small hydroelectric generation of 30 MWs or less,
digester gas, landfill gas, ocean wave, ocean thermal, tidal
current, and municipal solid waste conversion that uses a
non-combustion thermal process to convert solid waste to a
clean-burning fuel.
3.Requires investor-owned utilities to procure at least 250 MWs
of renewable generating capacity from bioenergy projects
including 110 MWs from wastewater treatment, municipal organic
waste diversion, food processing and codigestion; 90 MWs from
dairy and other agriculture bioenergy; and 50 MWs from
generation using byproducts of sustainable forest management.
4.Establishes the Geothermal Resources Development Account into
which federal revenues are deposited to fund grants to
eligible local jurisdictions and private entities for projects
and activities that promote development geothermal energy
resources, mitigate any adverse impacts caused by geothermal
development, or help local jurisdictions offset the costs of
providing public services necessitated by geothermal
development.
This bill:
1.Requires, no later than December 31, 2024, each retail seller
shall procure a proportionate share of a statewide total of
500 megawatts of electricity generated by baseload geothermal
powerplants that began being constructed after January 1,
2015.
2.Requires, no later than June 30, 2015, the Energy Commission
(Commission) determine the proportionate share of the 500
megawatts of electricity that each retail seller is required
to procure. Specifies "proportionate share" shall be based on
the forecast retail sales for the year 2018.
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3.Requires, no later than January 1, 2016, each retail seller
file with the Commission a plan for complying with this bill.
Requires those plans require each retail seller to procure at
least one-half of its proportionate share by December 31,
2019. Those plans may authorize a retail seller to aggregate
its proportionate share with the proportionate share of
another retail seller in order to minimize administrative and
contracting costs. The commission shall review and approve,
modify, or reject plans filed by retail sellers.
4.Specifies the electricity procured pursuant to this bill not
count towards meeting the requirements specified in the
California Renewables Portfolio Standard Program.
Background
Geothermal energy is defined as heat from the Earth. It is a
clean, renewable resource that provides energy in the United
States and around the world in a variety of applications and
resources. Although areas with telltale signs like hot springs
are more obvious and are often the first places geothermal
resources are used, the heat of the Earth is available
everywhere, and the industry reports that it is learning to use
it in a broader diversity of circumstances. It is considered a
renewable resource because the heat emanating from the interior
of the Earth is essentially limitless. A geothermal system
requires heat, permeability, and water. The heat from the
Earth's core continuously flows outward. Sometimes the heat, as
magma, reaches the surface as lava, but it usually remains below
the Earth's crust, heating nearby rock and water, sometimes to
levels as hot as 700?F. When water is heated by the Earth's
heat, hot water or steam can be trapped in permeable and porous
rocks under a layer of impermeable rock and a geothermal
reservoir can form. This hot geothermal water can manifest
itself on the surface as hot springs or geysers, but most of it
stays deep underground, trapped in cracks and porous rock. This
natural collection of hot water is called a geothermal
reservoir.
To develop electricity from geothermal resources, wells are
drilled into a geothermal reservoir. The wells bring the
geothermal water to the surface, where its heat energy is
converted into electricity at a geothermal power plant. The
Geysers in Lake County are typical of geothermal generation and
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are dry steam power plants where steam is produced directly from
the geothermal reservoir to run the turbines that power the
generator, and no separation is necessary because wells only
produce steam.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Ongoing costs of $155,000 annually from the Public Utilities
Commission Utilities Reimbursement Account (special) to the
California Public Utilities Commission for staff to review and
approve geothermal procurement plants for retail sellers and
to oversee compliance.
Onetime costs of $272,000 annually from the General Fund to
the California Energy Commission for at least one year for the
development of regulations to determine proportionate shares
of the procurement requirement.
Ongoing costs in the low millions of dollars from the General
Fund and various special funds for increased electricity costs
for electricity used by the state.
SUPPORT : (Verified 5/28/14)
Blue Green Alliance
Board of Supervisors - Imperial County
Board of Supervisors - Riverside County
CA State Association of Electrical Workers
Cal Energy
California State Council of Laborers
City of Imperial
City of Indio
Coachella Valley Economic Partnership
County of Imperial
Defenders of Wildlife
Desert Valleys Builders Association
Enel Green Power North America
Energy Source
Environment California
Geothermal Energy Association
Greater Palm Springs Convention & Visitors Bureau
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GreenFire Energy
Imperial County Building Construction Trades Council
Imperial County Workforce Development
Imperial Irrigation District
Imperial Valley Economic Development Corporation
Imperial Valley Regional Occupational Program
Latino Water Coalition
Light Source Renewables
MidAmerican Renewables
National Electrical Contractors Association
Ormat
Salton Sea Authority
Sierra Club California
U.S. Geothermal Inc.
OPPOSITION : (Verified 5/28/14)
Board of Supervisors - Lassen County
California Biomass Energy Alliance
California Chamber of Commerce
California Manufacturers & Technology Association
California Wind Energy Association
City of Los Angeles
City of Los Angeles Department of Water and Power
M-S-R Public Power Agency
Office of Ratepayer Advocates
Pacific Gas & Electric
Sacramento Municipal Utilities District
San Diego Gas & Electric
Southern California Edison
Southern California Public Power Authority
ARGUMENTS IN SUPPORT : According to the author's office,
California and the Western United States have uniquely high
quality solar and geothermal resources. California utilities
are dramatically increasing their utilization of solar
resources, but not effectively increasing utilization of
geothermal resources. In fact, only a fraction of the geothermal
resources that could be supplying California consumers are
currently being tapped, and there has been very little increase
in geothermal generation capacity during the past decade. For
example, the Salton Sea Known Geothermal Resource Area, which
provides one of the greatest opportunities for geothermal energy
development in the United States, is currently producing less
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than 500 MWs of power. The remaining untapped generation
capacity at this resource is estimated to be at 1,700 MWs. This
is a wasted opportunity of such a valuable resource. The long
term electric supply portfolio serving California consumers
should include much greater reliance on geothermal resources so
that we have a balanced portfolio as we move toward a
carbon-free generation supply.
ARGUMENTS IN OPPOSITION : The California Chamber of Commerce
states in opposition that, "Creating an additional mandate of
500 MW of geothermal resources, in addition to the RPS is not a
sound method for creating an affordable and reliable energy
supply. When generation from an individual resource does not
have to compete against other resources, the result will likely
be a higher cost, which will increase rates throughout the
state."
JG:nl 5/28/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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