BILL ANALYSIS Ó
AB 197
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Date of Hearing: April 20, 2015
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Rendon, Chair
AB
197 (Eduardo Garcia) - As Amended March 26, 2015
SUBJECT: Public utilities: renewable resources
SUMMARY: This bill would revise electricity procurement
requirements under the State's Renewable Portfolio Standard
(RPS). Specifically, this bill:
a)Requires the California Public Utilities Commission (CPUC) to
adopt a process that includes "best-fit" basis along with
total cost for rank ordering renewable energy bids to comply
with the RPS.
b)Requires the CPUC and the governing board of a local publicly
owned electric utility to consider greenhouse gas emissions
when considering renewable energy bids to comply with the RPS.
c)Requires the CPUC to consider capacity and essential
reliability services when considering renewable energy bids to
comply with the RPS.
d)Requires each electrical corporation to consider the best-fit
attributes of resource types that ensure a balanced resource
mix to maintain the reliability of the electrical grid in
their solicitations and procurement of eligible renewable
energy resources.
e)Allows costs to exceed cost containment provisions if the
procurement is not part of the RPS procurement requirements
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and is instead procured to meet the CPUC's long-term
procurement plan.
EXISTING LAW:
1)States the California Renewables Portfolio Standard program
requires investor owned utilities, local publicly owned
utilities and energy service providers to increase purchases
of renewable energy such that at least 33% of retail sales are
procured from a renewable energy resource by December 31,
2020. (Public Utilities Code §399.11)
2)Authorizes the CPUC to require the procurement of eligible
renewable energy resources in excess of the quantities
specified in the RPS. (Public Utilities Code §399.15 (a)(3))
3)Requires the CPUC specify the allocation of electricity,
including quantity, characteristics, and duration of
electricity delivery that the Department of Water Resources
shall provide under its power purchase agreements to the
customers of each electrical corporation, which shall be
reflected in the electrical corporation's proposed procurement
plan. (Public Utilities Code §454.5)
4)Requires each electrical corporation shall file a proposed
procurement plan with the CPUC not later than 60 days after
the commission specifies the allocation of electricity. After
the commission's adoption of a procurement plan, the
commission shall allow not less than 60 days before the
electrical corporation resumes procurement pursuant to this
section. (Public Utilities Code §454.5)
5)Requires long-term plans adopted by electrical corporations or
procurement plans adopted by a locally publicly owned
electricity utility to adopt a strategy in both new and
refurbished generation owned and procured to achieve
efficiency in fossil fuel use to address carbon emissions.
(Public Utilities Code §635).
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FISCAL EFFECT: Unknown.
COMMENTS:
1)Author's Statement . "In achieving the Governor's goal of 50%
renewables by 2030, California will need a diverse and
balanced renewable energy portfolio to ensure a low-carbon and
reliable grid. As California moves in this direction,
best-fit attributes of renewable energy resources, in addition
to their total costs, should be taken into consideration.
This will help ensure that California's future is cleaner by
meeting the state's GHG reduction goals, and Renewable
Portfolio Standard, as well as ensuring a stable and reliable
grid."
2)Considerations in RPS Procurement. AB 197 adds provisions to
an existing list of criteria for ranking and selection of
renewable energy bids submitted to comply with the RPS:
a. Greenhouse gas emissions. AB 197 does not authorize
the PUC to enact greenhouse gas (GHG) requirements,
merely to consider the GHG emission limits established in
existing law.
b. C apacity and essential reliability. AB 197 does not
specify capacity or reliability services to ensure grid
reliability but it does ask that these characteristics be
considered in the ranking and selection of renewable
energy bids.
3)Consideration of "Best Fit." This bill requires electrical
corporations to consider the best-fit attributes of resource
types that ensure a balanced resource mix to maintain the
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reliability of the electrical grid. Best fit refers to the
selection of electric generation resources that produce
electricity in a manner that fits with current and projected
electrical load.
4)Clarifies application of RPS cost containment provisions.
This bill clarifies that cost containment provisions in the
RPS do not apply to procurement made outside of the RPS.
5)Suggested Amendments.
The author may wish to consider an amendment to replace
"electrical corporations" with "retail sellers of electricity"
in Section 399.13(a)(8) of the bill to conform to the RPS
statute that requires retail sellers of electricity to meet
its requirements:
399.13(a)(8) In soliciting and procuring eligible renewable
energy resources, each electrical corporation retail sellers
of electricity shall consider the best-fit attributes of
resource types that ensure a balanced resource mix to maintain
the reliability of the electrical grid.
The author may wish to consider an amendment to enact AB 197
contingent on the enactment of AB 645 (Williams).
Specifically:
AB 197
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SEC. 4. This bill shall only become operative if both this
bill and Assembly Bill 645 of the 2015-16 Regular Session are
enacted.
SEC. 5
6)Support and Opposition.
Supporters state that AB 197 will ensure that resources are
procured based on their value to the grid and the residents of
California and, by taking into account GHG emissions, would
allow the state to plan carbon-reducing procurement.
TURN expresses concern that while they support AB 197, it may
not be compatible with changes included in other bills.
7)Related Legislation.
AB 645 (Williams, 2015) increases the RPS to 50%.
SB 32 (Pavley, 2015) establishes 2050 GHG standards.
SB 350 (De León, 2015) increases the RPS to 50%.
8)Double referred . This bill is double-referred to the Assembly
Committee on Natural Resources.
REGISTERED SUPPORT / OPPOSITION:
Support
AB 197
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California Biomass Energy Alliance
Clean Power Campaign
Energy Source
Imperial Irrigation District
Large Scale Solar Association
TURN
Opposition
None on file.
Analysis Prepared
by: Sue Kateley/U. & C./(916) 319-2083