BILL ANALYSIS Ó
AB 645
Page 1
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
AB 645
Page 2
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
AB 645
Page 3
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.
AB 645
Page 4
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%.
AB 645
Page 5
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
AB 645
Page 6
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
AB 645
Page 7
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
AB 645
Page 8