BILL ANALYSIS                                                                                                                                                                                                    



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          Date of Hearing:  April 27, 2015


                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES


                                 Das Williams, Chair


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


          SUBJECT:  Electricity:  California Renewables Portfolio Standard


          SUMMARY:  Establishes a Renewables Portfolio Standard (RPS)  
          target of 50% by 2030, including interim targets of 38% by 2023  
          and 44% by 2026.


          EXISTING LAW:  


          1)The RPS requires "retail sellers" of electricity [i.e.,  
            investor-owned utilities (IOUs), energy service providers  
            (ESPs) and community choice aggregators (CCAs)], as well as  
            publicly owned utilities (POUs), to procure eligible renewable  
            energy resources to meet the following portfolio targets:

             a)   20 percent on average from January 1, 2011 to December  
               31, 2013.

             b)   25 percent by December 31, 2016.

             c)   33 percent by December 31, 2020 and each year  
               thereafter.

          2)Authorizes the Public Utilities Commission (PUC) require  








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            retail sellers to procure eligible renewable energy resources  
            in excess of these targets.

          3)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.

          THIS BILL establishes a RPS target of 50% by December 31, 2030  
          for retail sellers and POUs, including interim targets of 38% by  
          the end of the 2021-2023 compliance period, 44% by the end of  
          the 2024-2026 compliance period, and 50% by the end of the  
          2027-2030 compliance period.

          FISCAL EFFECT:  Unknown


          COMMENTS:  


          1)Background.  The RPS is the centerpiece of California's effort  
            to develop a clean energy system and reduce pollution and  
            greenhouse gas emissions associated with electricity  
            consumption.  The original RPS bill, SB 1078 (Sher), Chapter  
            516, Statutes of 2002, set a goal of 20 percent by 2017.  SB  
            107 (Simitian), Chapter 464, Statutes of 2006, accelerated the  
            deadline for 20 percent to 2010.  SBX1 2 (Simitian), Chapter  
            1, Statutes of 2011-12 First Extraordinary Session, codified  
            the current 33 percent by 2020 RPS target and also established  
            product content categories (or "buckets"), which place the  
            highest value (Bucket 1) on renewable energy that is directly  
            delivered into California because it has the greatest  
            economic, environmental and reliability benefits.


            Since the RPS was enacted, IOUs have advanced beyond their  
            2002 average starting point of 12% renewables.  According to  
            the PUC's RPS reports, IOUs' actual RPS procurement in 2013  








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            was 23.8% for Pacific Gas and Electric (PG&E), 21.6% for  
            Southern California Edison (SCE), and 23.6% for San Diego Gas  
            & Electric (SDG&E).  The PUC reports also show that the IOUs  
            are on track to meet the RPS requirement of 25% renewables by  
            2016 and are well-positioned to meet the 33% requirement by  
            2020.  RPS procurement currently under contract for 2020 is  
            31.3% for PG&E, 23.5% for SCE, and 38.8% for SDG&E.


          2)Governor's goals.  In his January 5, 2015 Inaugural Address,  
            Governor Brown announced the following "objectives for 2030  
            and beyond":
            


               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.





               We must also reduce the relentless release of methane,  
               black carbon and other potent pollutants across industries.  
                And we must manage farm and rangelands, forests and  
               wetlands so they can store carbon.  All of this is a very  
               tall order.  It means that we continue to transform our  
               electrical grid, our transportation system and even our  
               communities.








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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.  How we  
               achieve these goals and at what pace will take great  
               thought and imagination mixed with pragmatic caution.  It  
               will require enormous innovation, research and investment.   
               And we will need active collaboration at every stage with  
               our scientists, engineers, entrepreneurs, businesses and  
               officials at all levels.

               Taking significant amounts of carbon out of our economy  
               without harming its vibrancy is exactly the sort of  
               challenge at which California excels.  This is exciting, it  
               is bold and it is absolutely necessary if we are to have  
               any chance of stopping potentially catastrophic changes to  
               our climate system.



          1)Author's statement:


               California is well on its way to meeting its near term  
               climate change goals as the state currently uses renewable  
               resources for about 25% of its electricity use and is on a  
               trajectory to use 33% by 2020.  However, in order to meet  
               long term climate change goals, we must derive 50% of the  
               state's electricity from renewable resources by 2030.   
               Currently, most energy utilities have bought or built  
               enough energy resources to meet the 33% RPS before the  
               target year and without revising the state's existing RPS  
               requirement, there isn't a driving force for utilities to  
               procure beyond 33%.









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          2)Issues to consider.  Moving to 50% renewable energy presents a  
            number of implementation issues which may need to be addressed  
            by the Legislature to assure the policy is successful and not  
            only meets its own objectives, but is consistent with other  
            climate and energy policies.  These include:


               a)     Enabling the procurement and integration of the  
                 broad range of renewable resources necessary to assure  
                 balanced, reliable portfolios and maximize environmental  
                 benefits.


               b)     Determining the manner in which electricity from  
                 small-scale and distributed renewable energy resources is  
                 counted toward the RPS to assure these resources are  
                 properly valued, but not double-counted.


               c)     Reconciling the RPS with other programs that are  
                 part of the state's overall climate and energy goals,  
                 such as energy efficiency and electrification of the  
                 transportation sector.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Advanced Energy Economy


          American Lung Association in California









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          California Biomass Energy Alliance


          California Hydropower Reform Coalition


          California League of Conservation Voters


          California Wind Energy Association


          Energy Source


          Environment California


          Environmental Action Committee West Marin


          Environmental Defense Fund


          Independent Energy Producers Association


          Large-Scale Solar Association


          Natural Resources Defense Council


          Nextgen Climate


          Office of Ratepayer Advocates









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          Sierra Club California


          Solar Energy Industries Association


          State Building and Construction Trades Council


          The Utility Reform Network


          Union of Concerned Scientists


          Vote Solar




          Opposition


          California Chamber of Commerce


          California Manufacturers & Technology Association







          Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916)  
          319-2092










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