BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 33|
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THIRD READING
Bill No: AB 33
Author: Quirk (D), et al.
Amended: 8/19/16 in Senate
Vote: 21
PRIOR VOTES NOT RELEVANT
SENATE ENERGY, U. & C. COMMITTEE: 11-0, 6/13/16
AYES: Hueso, Morrell, Cannella, Gaines, Hertzberg, Hill, Lara,
Leyva, McGuire, Pavley, Wolk
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: Electrical corporations: energy storage systems
SOURCE: Author
DIGEST: This bill obligates the CPUC, in consultation with the
California Energy Commission (CEC), to evaluate and analyze the
potential for all types of long-duration bulk energy storage
resources to help integrate renewables into the electric grid.
Senate Floor Amendments of 8/19/16 delete the prior contents of
this bill in its entirety and replace it with the provisions
described above.
ANALYSIS:
Existing law:
1)Defines "load-serving entity" (LSE) as an electrical
corporation (investor-owned utility, or IOU), energy service
providers or community choice aggregators. (Public Utilities
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Code §380(k))
2)Requires the CPUC to determine appropriate targets, if any,
for LSEs to procure energy storage systems. Requires LSEs to
meet any targets adopted by the CPUC by 2015 and 2020.
Requires publicly owned utilities (POUs) to set their own
targets for the procurement of energy storage and then meet
those targets by 2016 and 2021. (Public Utilities Code §2835
et seq.)
3)Directs the CEC and the CPUC, where feasible, to authorize
procurement of resources to provide grid reliability services
that minimize reliance on system power and fossil fuel
resources and, where feasible, cost effective, and consistent
with other state policy objectives, increase the use of large-
and small-scale energy storage. (Public Utilities Code §400)
This bill:
1)Obligates the CPUC, in coordination with the CEC, as part of a
new or existing proceeding, to evaluate and analyze the
potential for all types of long-duration bulk energy storage
resources to help integrate renewable generation into the
electrical grid.
2)Requires that CPUC, as part of the evaluation, assess the
potential costs and benefits of all types of long-duration
bulk energy storage resources, including impacts to the
transmission and distribution systems of location-specific
long-duration bulk energy storage resources.
Background
Law requires procurement of energy storage systems. AB 2514
(Skinner, 2010) required the CPUC to determine appropriate
targets, if any, for LSEs to procure energy storage systems by
2015 and 2020. The bill also directed POUs to set their own
comparable energy storage system procurement targets.
In October of 2013, the CPUC determined energy storage system
procurement targets applicable to the IOUs. The CPUC set
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interim and final targets for the state's largest IOUs - Pacific
Gas and Electric (PG&E), San Diego Gas and Electric (SDG&E) and
Southern California Edison (SCE) - that, in 2020, require the
three IOUs, together, to procure 1,325 megawatts of energy
storage. [See CPUC Decision 13-10-040.] The CPUC decision,
while acknowledging that large pumped hydroelectric facilities
(one type of long-duration bulk storage) meet the statutory
criteria provided AB 2514, explicitly excluded pumped
hydroelectric storage facilities greater than 50 megawatts. The
CPUC justified this exclusion as follows:
The sheer size of pumped storage projects would dwarf other
smaller, emerging technologies; and as such, would inhibit
the fulfillment of market transformation goals. The
majority of pumped storage projects are 500 MW and over,
which means a single project could be used to reach each
target within a utility territory.
The CPUC, not unreasonably, concluded that an IOU could meet its
storage obligation through procurement of a single, large
pumped-storage project, thereby crowding out smaller, emerging
storage technologies. Such an outcome, the CPUC concluded,
would contradict the goal of energy storage market
transformation.
Many purposes of energy storage procurement targets. The CPUC
did not act unreasonably in concluding the energy storage goals
of AB 2514 included market transformation: implicit in the
imposition of procurement targets is the goal of altering market
outcomes from what they would otherwise be. However, whatever
its implicit goals, AB 2514 stated a number of explicit goals to
be achieved by the energy storage procurement program. Those
explicit statutory goals include:
Integration of intermittent generation from eligible renewable
energy resources into the reliable operation of the
transmission and distribution grid.
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Allowing intermittent generation from eligible renewable
energy resources to operate at or near full capacity.
Reducing the need for new fossil-fuel powered peaking
generation facilities by using stored electricity to meet peak
demand.
Reducing purchases of electricity generation sources with
higher emissions of greenhouse gases.
Eliminating or reducing transmission and distribution losses,
including increased losses during periods of congestion on the
grid.
Reducing the demand for electricity during peak periods and
achieve permanent load-shifting by using thermal storage to
meet air-conditioning needs.
Avoiding or delaying investments in transmission and
distribution system upgrades.
Using energy storage systems to provide the ancillary services
otherwise provided by fossil-fueled generating facilities.
Long-duration bulk storage, such as large-scale pumped
hydroelectric facilities, has the potential to meet these
statutory goals. For this reason, the California Independent
System Operator (CAISO) - always preoccupied with the management
of intermittent renewable energy resources - recently urged the
CPUC to consider (1) increasing current energy storage system
procurement targets to allow for large storage resources while
not undermining support for smaller and newer technologies, and
(2) earmarking capacity within those procurement targets
specifically for pumped storage. [Comments of the California
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Independent System Operator Corporation on track 2 issues, filed
February 2, 2016.]
CPUC/CEC staff paper recommends investigations of the value of
pumped storage. In November 2015, Chair Weisenmiller of the CEC
and President Picker of the CPUC conducted a workshop to discuss
bulk energy storage in California. The staff of the two
agencies released a paper that summarized the presentations and
public comments from the bulk energy storage workshop, as well
as the written comments submitted after the workshop. The staff
paper also recommended that the CEC, CPUC, and CAISO undertake
investigations to better understand and quantify the value of
pumped storage. This bill forces the hand of the agencies by
obligating the CPUC, in coordination with the CEC, to evaluate
and analyze the potential for bulk energy storage to help
integrate renewable generation into the electric system, such an
evaluation and analysis would be consistent with the
recommendations of the CEC/CPUC staff paper.
Despite this consistency, the staff of the CPUC expressed
concern with the requirements of this bill. While the CPUC as
yet has no formal position on this bill, CPUC staff indicates
they view this bill as of a kind with several other bills to
which the CPUC is formally opposed. In the view of the CPUC,
those bills - AB 33 included - try to inappropriately influence
the CPUC resources planning process in favor of one technology
or resource type or another.
Related/Prior Legislation
SB 886 (Pavley, 2015) requires the CPUC to adopt energy storage
system procurement targets applicable to every LSE and the
governing board of each local publicly owned electric utility to
adopt comparable energy storage procurement targets; requires
each LSE and locally owned public electric utility to plan for
the procurement of energy storage systems before
fossil-fuel-based generation; and requires each electrical
corporation to propose measures to encourage customers to
install energy storage systems. The bill passed the Senate
25-14 and was held in the Assembly Committee on Appropriations.
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AB 1258 (Skinner, 2013) would have required the CEC to perform a
technical analysis of the potential uses of existing
hydro-electric and pumped storage facilities to provide
additional operational flexibility to integrate eligible
renewable energy sources into the grid. The bill was held in
the Assembly Committee on Appropriations.
AB 2514 (Skinner, Chapter 469, Statutes of 2010) required CPUC
to determine appropriate targets, if any, for LSEs to procure
energy storage systems. The bill required LSEs to meet any
targets adopted by the CPUC by 2015 and 2020. The bill required
POUs to set their own targets for the procurement of energy
storage and then meet those targets by 2016 and 2021.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified8/19/16)
Brookfield Renewable
Clean Power Campaign
EDF Renewable Energy
Eagle Crest Energy, Inc.
San Diego County Water Authority
OPPOSITION: (Verified8/19/16)
None received
Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107
8/22/16 22:32:16
**** END ****
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