BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       AB 1110|
          |Office of Senate Floor Analyses   |                              |
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                                   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  








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            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  
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            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   |
          |-----------------------+-----------+-------------|








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          | 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.        |








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           ------------------------------------------------- 
          |                                                 |
           ------------------------------------------------- 
          |** 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.  








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          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)









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          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








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          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


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