BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 645 (Williams) - Electricity: California Renewables Portfolio  
          Standard.
          
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          |Version: February 24, 2015      |Policy Vote: E., U., & C. 8 - 3 |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: August 17, 2015   |Consultant: Marie Liu           |
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          This bill meets the criteria for referral to the Suspense File. 


          Bill  
          Summary:  AB 645 would increase the Renewable Portfolio Standard  
          target to require that 50 percent of electricity come from  
          renewable energy resources by 2030. 


          Fiscal  
          Impact:  
           Annual costs of $900,000 from the Energy Resources Program  
            Account (General Fund) for the California Energy Commission  
            (CEC) for new responsibilities ensuring compliance with RPS  
            standards by publically-owned utilities (POUs).
           Ongoing staffing needs of $350,000 annually to the Public  
            Utilities Reimbursement Account (special) for CPUC staffing  
            needs for ongoing enforcement of the higher RPS standards.
           Unknown costs to the General Fund and various special funds to  
            the state as a ratepayer of electricity to the extent that  
            electricity prices may be affected by increasing the RPS  
            standard. 







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          Background:  Existing law requires all retail sellers of electricity -  
          investor-owned utilities (IOU), community choice aggregators  
          (CCAs), and energy service providers (ESPs) - and publicly-owned  
          utilities (POU) to increase purchases of renewable energy such  
          that at least 33 percent of retail sales are procured from  
          renewable energy resources by December 31, 2020. This is known  
          as the Renewable Portfolio Standard (RPS).  The CPUC is  
          explicitly authorized to require retail sellers of electricity  
          to procure renewable energy resources in excess of the  
          33-percent RPS requirement. (PUC 399.11 et seq.). The CPUC  
          oversees RPS compliance with IOUs while the CEC oversees POUs.


          Proposed Law:  
            This bill would establish a RPS target of 50% for December 31,  
          2030. To reach this goal, this bill would establish compliance  
          periods of 33% by December 31, 2020, 38% by December 31, 2023,  
          44% by December 31, 2026, and 50% by December 31, 2030. 


          Related  
          Legislation:  SB 350 (De Leon) would direct a 50% reduction in  
          petroleum use, require that 50% of electricity come from  
          renewable resources, and require a doubling of the energy  
          efficiency of existing buildings. SB 350 is awaiting hearing in  
          the Assembly Appropriations Committee.


          Staff  
          Comments:  The CEC notes that implementation of a 50% RPS  
          standard will require the management of a much larger amount of  
          data than the 33% standard. To manage this additional data, the  
          CEC anticipates needing six additional positions at an  
          approximate cost of $897,000 annually.
          The CPUC additionally anticipates it would need one position at  
          an annual cost of $123,000 annually and $1.5 million in contract  
          costs. These costs are needed for additional analysis and  
          modeling of the impact of a higher RPS standard for renewable  
          energy transmission planning, impacts of energy-only  
          transmission on resource planning, regional RPS markets, and  
          over-generation. Staff notes that these costs appear to be  
          consistent with the costs associated with raising the RPS  








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          standard in SB 350.


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