BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1110| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1110 Author: Ting (D) Amended: 8/18/15 in Senate Vote: 21 SENATE ENERGY, U. & C. COMMITTEE: 9-0, 7/13/15 AYES: Hueso, Cannella, Hertzberg, Hill, Lara, Leyva, McGuire, Pavley, Wolk NO VOTE RECORDED: Fuller, Morrell SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/27/15 AYES: Lara, Beall, Hill, Leyva, Mendoza NOES: Bates, Nielsen ASSEMBLY FLOOR: 79-0, 5/11/15 (Consent) - See last page for vote SUBJECT: Greenhouse gases emissions intensity reporting: retail electricity suppliers SOURCE: The Utility Reform Network DIGEST: This bill requires every retail supplier of electricity in California annually to report to its customers the emissions of greenhouse gases associated with the supplier's electricity sources. ANALYSIS: Existing law: 1)Requires every retail supplier of electricity to disclose the sources of the supplier's electricity for the previous calendar year. Each supplier is to make the disclosure AB 1110 Page 2 annually and in all product-specific written promotional material. Statute directs the California Energy Commission (CEC) to specify guidelines for the annual disclosure. The disclosure is to be reliable, accurate, timely and simple to understand. (Public Utilities Code §§398.1-398.5) 2)Requires retail sellers of electricity - investor-owned utilities (IOU), community choice aggregators (CCAs), and energy service providers (ESPs) - and publicly-owned utilities (POUs) 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). (Public Utilities Code §399.11 et seq.) 3)Requires all renewable electricity products to meet the requirements of a "loading order" that mandates minimum and maximum quantities of three product categories (or "buckets"), which includes (a) renewable resources directly connected to a California balancing authority or provided in real time without substitution from another energy source, (b) energy not connected or delivered in real time yet still delivering electricity, and (c) unbundled renewable energy credits (RECs). (Public Utilities Code §399.16.) 4)Requires the reduction of statewide emissions of greenhouse gases (GHGs) to 1990 levels by 2020. This is known as the Global Warming Solutions Act of 2006. (Health and Safety Code §38500 et seq.) This bill: 1)Defines a retail supplier as an electrical corporation, local publicly owned electric utility, ESP, and CCA. 2)Requires a retail supplier to disclose RPS-eligible energy resources according to the three product content categories defined in the RPS statute, commonly known as bucket one, bucket two, and bucket three. 3)Adds to the disclosure requirement the emission of GHGs associated with the electricity sources, calculated as the sum of all annual emissions of GHGs divided by annual retail AB 1110 Page 3 electric sales, and consistent with the California Air Resources Board's (ARB) GHG emissions reporting requirements. 4)Disallows adjustment to GHG emissions reporting resulting from: (1) RECs, (2) offset credits, or (3) other attributes acquired from any facility not providing the actual delivered electricity used to serve a retail customer. Background Suppliers of electricity must disclose power sources. Existing statute requires retail suppliers - IOUs, POUs, CCAs, and ESPs - to disclose fuel source information to potential end-use customers in a way that is accurate, reliable, and simple to understand. The disclosure is governed by the CEC's Power Source Disclosure Program, by which the CEC specifies a standard format the retail suppliers are to use. That format is known as the Power Content Label. The Power Content Label presents retail supplier fuel source information in two broad categories: (1) specific purchases and (2) unspecified sources of power. The label breaks out the first category - specific purchases - into several subcategories: eligible renewables (meaning eligible for RPS credit), coal, large hydroelectric, natural gas, nuclear, and other. The label provides no additional detail to the second category - unspecified sources of power - because such electricity, by definition, is not traceable to a specific generation source. In addition, the label presents comparison data on the power mix for all retail electricity deliveries in California. See PG&E's current Power Content Label below, as an illustration of the Power Content Label: ------------------------------------------------- | Pacific Gas and Electric Company | | POWER CONTENT LABEL | ------------------------------------------------- |-----------------------+-----------+-------------| | | 2013 | 2013 CA | |-----------------------+-----------+-------------| AB 1110 Page 4 | ENERGY | POWER MIX | POWER MIX** | |-----------------------+-----------+-------------| | RESOURCES | (Actual) | | |-----------------------+-----------+-------------| | Eligible Renewable | 22% | 19% | |-----------------------+-----------+-------------| | -- Biomass & | 4%| 3%| |waste | | | |-----------------------+-----------+-------------| | -- Geothermal | 5%| 4%| ------------------------------------------------- ------------------------------------------------- | -- Small | | 2%| 1%| |hydroelectric | | | | ------------------------------------------------- ------------------------------------------------- | -- Solar | 5%| 2%| ------------------------------------------------- | -- Wind | 6%| 9%| ------------------------------------------------- | Coal | 0% | 8% | ------------------------------------------------- | Large | 10% | 8% | |Hydroelectric | | | ------------------------------------------------- | Natural Gas | 28% | 44% | ------------------------------------------------- | Nuclear | 22% | 9% | ------------------------------------------------- | Other | 0% | 0% | |-----------------------+-----------+-------------| |Unspecified sources of | 18% | 12% | |power* | | | ------------------------------------------------- ------------------------------------------------- | TOTAL | | 100% | 100% | | | | | | ------------------------------------------------- ------------------------------------------------- |* "Unspecified sources of power" means | |electricity from transactions that are not | |traceable to specific generation sources. | AB 1110 Page 5 ------------------------------------------------- | | ------------------------------------------------- |** Percentages are estimated annually by the | |California Energy Commission based on the | |electricity sold to California consumers during | |the previous year. | ------------------------------------------------- | | ------------------------------------------------- |For specific information about this electricity | |product, contact Pacific Gas and Electric | |Company. For general information about the | |Power Content Label, contact the California | |Energy Commission at 1-800-555-7794 or | |www.energy.ca.gov/consumer. | ------------------------------------------------- | | ------------------------------------------------- | | |-------------------------------------------------| | | | | ------------------------------------------------- It is important to note that the Power Content Label is not meant to show a retail supplier's progress on meeting the requirements of the RPS, which entails multi-year compliance periods. Rather, the label shows a retail supplier's electricity sources for the previous calendar year. In this way, the label provides customers a snapshot of how "green" a retail supplier's power was for a given period. The Power Content Label is not without controversy. Some parties contend the bill potentially confuses customers, despite the statutory direction that the label be accurate, reliable, and simple to understand. For example, some parties have complained that the reporting periods and reporting specifications required of retail suppliers of electricity differ from the reporting periods and reporting specifications of other state programs. Others contend the label misleads customers on the supplier's progress in meeting the RPS. AB 1110 Page 6 Still others contend that the Power Content Label, first created nearly two decades ago, needs updating to reflect the state's current environmental policies and priorities. Specifically, bill proponents argue the current Power Content Label should be modified to include a single number - a GHG emissions factor - that allows customers to easily and reliably understand the effect of their energy use on the environment. Further, this bill's proponents argue that the prescriptions that apply to calculation of a GHG emissions factor to be included on the Power Content Label should govern all such disclosures made by a retail seller, including printed and electronic promotional material. This bill would achieve these ends, by adding a GHG emissions factor to the statute requiring power source disclosure. Prior/Related Legislation SB 1305 (Sher, Chapter 796, Statutes of 1997) first required retail suppliers to disclose their power sources. AB 162 (Ruskin, Chapter 313, Statutes of 2009) modified and streamlined power source disclosure reporting requirements for POUs and other electricity providers. SB 456 (Padilla, 2014) would have added two categories of fuel source information to the Power Content Label: energy storage and out-of-state generation. The bill passed the Senate on a vote of 35-0 but was never heard in the Assembly. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes According to the Senate Appropriations Committee, Annual on-going costs of approximately $130,000 from the Energy Resources Program Account (General Fund) for additional workload associated with expanding the information on the Power Content Label. SUPPORT: (Verified8/28/15) AB 1110 Page 7 The Utility Reform Network (source) California Clean Power California Labor Federation California State Association of Electrical Workers California State Pipe Trades Council Coalition of California Utility Employees North Valley Labor Federation Sierra Club California Sonoma County Conservation Action Vote Solar Western States Council of Sheet Metal Workers OPPOSITION: (Verified8/28/15) California Municipal Utilities Association Cities Association of Santa Clara County City of Brisbane LEAN Energy US Marin Clean Energy Northern California Power Agency San Francisco Local Agency Formation Commission Sonoma Clean Power ARGUMENTS IN SUPPORT: The author contends the disclosure of GHG emissions associated with end-use electricity consumption is entirely unregulated. Currently, a provider of electricity to end users can make any GHG emissions claim using any calculation methodology. Consumers are subjected to either no GHG emission information or potentially unsubstantiated or conflicting GHG emission information. California's electricity consumers need easy-to-understand and reliable GHG emissions disclosures so they can make informed decisions about their electricity usage in order to reduce their carbon footprint. ARGUMENTS IN OPPOSITION:Opponents argue the requirements of this bill conflict with reporting requirements established by the RPS program and AB 32 (Nuńez/Pavley, Chapter 488, Statutes of 2006). ASSEMBLY FLOOR: 79-0, 5/11/15 AB 1110 Page 8 AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood NO VOTE RECORDED: Atkins Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107 8/31/15 16:39:38 **** END ****