BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 645


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          Date of Hearing:  May 13, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


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


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          No


          SUMMARY:


          This bill establishes a Renewables Portfolio Standard (RPS)  
          target of 50% by 2030, including interim targets of 38% by 2023  
          and 44% by 2026.








                                                                     AB 645


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          FISCAL EFFECT:


          1)Annual Public Utility Commission (PUC) costs of $1.5 million  
            per year over 5 years, beginning in 2017 to continue  
            consultant contracts.  Increased ongoing annual staffing costs  
             of $125,000.  (Special Funds)


          2)Ongoing annual California Energy Commission (CEC) costs of  
            $870,000 to develop regulations and data necessary to  
            implement and track the higher procurement standard.  (Special  
            Funds)


          COMMENTS:


          1)Purpose.  According to the author, California 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.  


          2)Background.  The California Renewables Portfolio Standard  
            program requires investor- owned utilities, local  
            publicly-owned utilities, and energy service providers to  
            increase purchases of renewable energy to at least 33% of  
            retail sales by December 31, 2020.


            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.  









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            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.


          3)Governor's objectives for 2030 and beyond.  In his January 5,  
            2015, Inaugural Address, Governor Brown announced the  
            following three objectives to be accomplished within the next  
            15 years:



               a)     Increase the RPS from 33% to 50%.
               b)     Reduce petroleum use in transportation fuels by up  
                 to 50%.


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





            This bill addresses the Governor's first policy goal by  
            increasing the RPS from 33% to 50% by 2030.





             1)   Work in Progress.  Many outstanding policy and  
               implementation issues remain and will need to be addressed  
               prior to enacting any legislation to increase the RPS to  








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               50% by 2030.  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.





          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)  
          319-2081