BILL ANALYSIS                                                                                                                                                                                                    






                                                                     AB 645


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          Date of Hearing:  April 20, 2015


                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE


                                Anthony Rendon, Chair


          AB 645  
          (Williams) - As Introduced February 24, 2015


          SUBJECT:  Electricity:  California Renewables Portfolio Standard


          SUMMARY:  This bill would increase the State's Renewable  
          Portfolio Standard (RPS) from 33% to 50%.  Specifically, this  
          bill:  


          a)Requires retail electricity sellers to procure renewable  
            energy resources sufficient to achieve 50% of retail sales by  
            December 31, 2030, and 50% of retail sales thereafter.


          b)Requires the California Public Utilities Commission (CPUC) to  
            establish the quantity of eligible resources to be procured by  
            each retail electricity seller for the compliance periods  
            specified.


          c)Requires the governing boards of local public owned utilities  
            to procure renewable energy resources sufficient to achieve  
            50% of retail sales by December 31, 2030, and 50% of retail  
            sales thereafter.


          EXISTING LAW:  











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          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)

          FISCAL EFFECT:  Unknown.


          COMMENTS:  


           1)Author's Statement  .  "California is a leader in reducing  
            greenhouse gases from electricity generation while maintaining  
            an affordable and reliable electricity system.  The Renewable  
            Portfolio Standard has been a resounding success and a prime  
            example of California's work on climate change and utilities  
            are well on-track to achieving 33% renewable energy by 2020.   
            The RPS has led to the development of new solar, wind, and  
            geothermal power plants, as well as related manufacturing and  
            services.  These investments have created hundreds of  
            thousands of new jobs, millions of new investment and tax  
            dollars, and significant clean air and climate benefits.   
            However, all the scenarios for achieving long-term climate  
            change goals rely on further increasing zero-carbon energy  
            resources and replacing fossil fuel as an energy source.   
            Significantly boosting the requirement to procure renewable  
            electricity is a key component of this strategy, and AB 645  
            does this by increasing the RPS to 50% by 2030."



           2)History of RPS.   Established in 2002 under SB 1078 (Sher,  
            Chapter 516, Statutes of 2002), California's RPS was  
            accelerated in 2006 under SB 107 (Simitian, Chapter 464,  
            Statutes of 2006) by requiring that 20% of electricity retail  











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            sales be served by renewable energy resources by 2010.   
            Finally, SB X1-2 (Simitian, Chapter 1, Statutes of 2011)  
            established a 33% by 2020 goal and was signed by Governor  
            Brown in 2011. 

           3)Additional Procurement Goals and Timelines to reach 50%.   AB  
            645 adds additional procurement goals and timelines to the  
            RPS. 


            Specifically, the bill requires all electricity retailers in  
            the state, including publicly owned utilities, investor-owned  
            utilities, electricity service providers, and community choice  
            aggregators to procure 50% renewable energy by 2030.  All of  
            these entities must adopt new RPS goals of 38% of retail sales  
            from renewables by the end of 2023, 44% by the end of 2026,  
            and 50% by the end of 2030.


           4)Governor's Inaugural Address.   In the Governor's January 5,  
            2015 Inaugural Address, he stated the following with respect  
            to renewables:


               "Toward that end, I propose three ambitious goals to be  
               accomplished within the next 15 years:


                     Increase from one-third to 50 percent our  
                 electricity derived from renewable sources;
                     Reduce today's petroleum use in cars and trucks by  
                 up to 50 percent;


                     Double the efficiency of existing buildings and make  
                 heating fuels cleaner.














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               I envision a wide range of initiatives: more distributed  
               power, expanded rooftop solar, micro-grids, an energy  
               imbalance market, battery storage, the full integration of  
               information technology and electrical distribution and  
               millions of electric and low-carbon vehicles."





           1)Distributed Energy Resources.   For the most part, the  
            procurement process for the RPS favors large scale renewable  
            projects.  Other programs, such as the California Solar  
            Initiative, the Self-Generation Incentive Program, the Feed in  
            Tariff for Small Renewable Generators, and the Combined Heat  
            and Power Tariff have focused on increasing the use of  
            distributed power, expanded rooftop solar, microgrids, and  
            battery storage. 



            The CPUC recognized that RPS presented barriers to smaller  
            renewable projects and authorized a program called the  
            "Renewable Auction Mechanism" to facilitate an increase in  
            projects sized below 20 megawatts (MWs).  In addition, the  
            Legislature enacted a small generator feed in tariff for  
            projects sized below 3 MWs.  Many of these smaller projects  
            are located in the Central Valley (Kern County) and sell power  
            to retail sellers of electricity throughout the state. 





           2)Addressing Greenhouse Gas Emissions.   Stabilizing greenhouse  
            gas (GHG) emission at 450 parts per mission will reduce the  
            likelihood of catastrophic climate change, according to the  











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            recently updated Scoping Plan<1> by the California Air  
            Resources Board:



          "While the path to limit emissions to 1990 levels by 2020 is  
          transformative in its own right, reducing emissions to meet the  
          State's long-range objectives will require continued progress  
          toward efficient clean energy in every sector of the economy and  
          new opportunities to value and integrate agricultural, natural,  
          and working lands into a comprehensive climate policy framework.  
           The State's 2050 objective of reducing emissions to 80 percent  
          below 1990 levels, as reflected in Executive Order S-3-05 and  
          Governor Brown's Executive Order B-16-2012 (which is specific to  
          the transportation sector), is consistent with an  
          Intergovernmental Panel on Climate Change (IPCC) analysis of the  
          emissions trajectory that would stabilize the atmospheric GHG  
          concentrations at 450 parts per million carbon dioxide  
          equivalent and reduce the likelihood of catastrophic climate  
          change  ." [emphasis added]





          "Scientific research indicates that an increase in the global  
          average temperature of 2?C (3.6?F) above pre-industrial levels,  
          which is only 1.1?C (2.0?F) above present levels, poses severe  
          risks to natural systems and human health and well-being.  
          Considering knowledge from the paleo-climate record with changes  
          currently observed in the Greenland and Antarctic ice sheets, we  
          can expect substantial sea level rise, 0.4 to 0.8 meters, with  
          upper end uncertainties approaching one meter above present day  
          during the 21st Century and continued substantial increase after  
          2100 even with stringent mitigation of emissions to achieve 2?C  
          ---------------------------


          <1>  
           http://www.arb.ca.gov/cc/scopingplan/2013_update/first_update_cli 
          mate_change_scoping_plan.pdf  









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          stabilization. Increased climate extremes, already apparent at  
          present day climate warming (~0.9?C), will no doubt be more  
          severe. To have a good chance (not a guarantee) of avoiding  
          temperatures above those levels, studies focused on a goal of  
          stabilizing the concentration of heat-trapping gases in the  
          atmosphere at or below the 450 parts per million (ppm)  
          CO2-equivalent (CO2e, a metric that combines the climate impact  
          of all well- mixed GHGs, such as methane and nitrous oxide, in  
          terms of CO2)." 


           3)Related Legislation.
           


             Current Legislation:





             AB 197 (Garcia, 2015)


            SB 350 (de Leon, 2015) referred to Senate Energy.

             Prior:
             AB 177 (V.M. Perez, 2013 died on the Assembly Floor.)
            AB 327 (Perea, Statutes of 2013, Chapter 611.)
            SB 760 (Wright, 2013, died in Assembly Utilities & Commerce  
            Committee.)
            SB 1139 (Hueso, 2014, died on the Assembly Floor.) 



           4)Double Referred.   This bill is double-referred to Natural  
            Resources.













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           5)Support and Opposition. 
           


            Supporters state that AB 645 will advance California's efforts  
            to reduce GHG emissions from the electricity sector.





            The California Municipal Utilities Association neither  
            supports nor opposes AB 645, but instead expresses concern  
            that any renewable energy goals post-2020 should allow options  
            for locally elected governing boards to innovate and tailor  
            solutions to local community needs and minimize cost to  
            consumers while increasing renewable energy in their service  
            areas.





            The California Manufacturers and Technology Association states  
            that manufacturers currently pay a high premium for  
            electricity rates, and that increasing the RPS arbitrarily  
            risks higher rates.





          REGISTERED SUPPORT / OPPOSITION:




          Support











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          California Hydropower Reform Coalition
          California League of Conservation Voters
          California Wind Energy Association
          California Biomass Energy Alliance
          Clean Power Campaign
          Energy Source
          Environmental Action Committee West Marin
          Environment California
          Environmental Defense Fund
          Independent Energy Producers
          Large Scale Solar
          Natural Resources Defense Counsel
          NextGen Climate
          Office of Ratepayer Advocates
          Sierra Club California
          State Building and Construction Trades Council
          TURN 
          Union of Concerned Scientists
          Vote Solar

          Opposition


          


          California Manufacturers and Technology Association




          Analysis Prepared by:Sue Kateley / U. & C. / (916) 319-2083
















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