BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1110|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: AB 1110
Author: Ting (D)
Amended: 8/4/16 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 retail suppliers of electricity to
disclose the greenhouse gas (GHG) emissions intensity of the
electricity portfolio the supplier offers to its customers.
This bill establishes a methodology for the calculation of GHG
emissions intensity and makes certain exceptions to the
disclosure requirement.
Senate Floor Amendments of 8/4/16 significantly alter the GHG
emissions methodology and add certain exceptions but do not
alter the effect of the bill - to require retail suppliers of
electricity to disclose GHG emissions intensity of the
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Page 2
electricity they sell in California.
Senate Floor Amendments 9/3/15 provide additional direction on
the calculation and reporting of a retail electricity supplier's
GHG emissions.
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
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 GHGs to
1990 levels by 2020. This is known as the Global Warming
Solutions Act of 2006. (Health and Safety Code §38500 et
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seq.)
This bill:
1) Defines a retail supplier as an electrical corporation,
local publicly owned electric utility, ESP, and CCA.
2) Defines GHG emissions intensity to mean the sum of all
annual emissions of GHGs associated with a generation source
divided by the annual production of electricity from the
generation source.
3) Requires the CEC to calculate the GHG emissions intensity
for a variety of energy products and to calculate the GHG
emissions intensity associated with statewide retail
electricity sales.
4) Requires every retail supplier that makes an offering to
sell electricity that is consumed in California to disclose
the associated GHG emissions intensity for the previous
calendar year.
5) Directs CEC to prohibit a retail supplier from adjusting the
calculation of its GHG emissions intensity beyond adjustments
permitted under the market-based compliance mechanism adopted
by California Air Resource Boards (ARB).
6) Prohibits a retail supplier from adjusting the calculation
of its GHG emissions intensity for the use of offset credits,
credits associated with the any GHG reductions unrelated to
the production of electricity, or unbundled RECs.
7) Allows CEC to authorize an adjustment to a GHG emissions
intensity factor for any local publicly owned electric
utility demonstrating procurement quantities of electricity
in a single year in excess of it total retail sales from
purchases of unspecified sources that do not emit any GHGs.
8) Requires CEC, by January 1, 2018, to adopt guidelines to
require every retail suppliers to disclose the GHG intensity
associated with its retail sales.
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9) Requires retail suppliers, as of June 1, 2020, to report
data on GHG emissions intensity associated with retail sales.
10)Specifies that any new CCA formed after January 1, 2016,
shall not be required to report data on GHG emissions
intensity associated with retail sales until at least 24
months, but no later than 36 months, after serving its first
retail customer.
11)Requires any marketing material or retail product clams
relating to the GHG emissions intensity of the electric
supply portfolio a retail supplier to be consistent with the
methodology required by this bill.
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 |
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| POWER CONTENT LABEL |
-------------------------------------------------
|-----------------------+-----------+-------------|
| | 2013 | 2013 CA |
|-----------------------+-----------+-------------|
| 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% |
| | | | |
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|---------------------+-+-----------+-------------|
| | | | |
| | | | |
-------------------------------------------------
-------------------------------------------------
|* "Unspecified sources of power" means |
|electricity from transactions that are not |
|traceable to specific generation sources. |
-------------------------------------------------
| |
-------------------------------------------------
|** 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.
Bill proponents contend that the Power Content Label, first
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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 GHG emissions intensity
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 intensity to be included on the
Power Content Label should govern all such disclosures made by a
retail seller, including marketing or retail product claims.
This bill would achieve these ends by requiring the CEC to adopt
guidelines for the reporting and disclosure of the GHG emissions
intensity associated with retail sales.
Key to proponents' concerns is that the current Power Source
Disclosure Program does not, in the proponents' opinion,
accurately represent the environmental effects of the energy
products that make up a retail supplier energy portfolio. For
example, oftentimes, the energy resources described by a retail
supplier as "eligible renewables" represent two-part
transactions by which the supplier (1) procures electricity
generated by conventional energy resources, such as natural gas
and coal, and (2) buys unbundled RECs [A REC is a market
instrument that represents the renewable and environmental
attributes of a unit of energy production. An unbundled REC is
one for which the underlying energy has been separated from the
renewable and environmental attributes of a unit of energy
production.] in an amount equivalent to the electricity
produced, thereby allowing the supplier to characterize the
electricity as renewable and GHG emissions free (or nearly
free), its underlying generation source notwithstanding. Bill
proponents contend it is appropriate to report electricity
sources based on the source of that electricity, not based upon
a subsequent contractual transaction that, consistent with
existing law, allows the retail supplier to count the
electricity towards its RPS procurement obligation.
Opponents to this bill - specifically, CCAs - object that this
bill prescribes a methodology that will lead to the reporting of
inaccurate information to customers and imprecise accounting,
and discourage retail suppliers from aggressively meeting or
exceeding the requirements of the RPS. The CCAs report they
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would welcome a bill that, in contrast to this bill, generally
directs the CEC to begin a proceeding to identify a uniform
standard for the reporting of GHG emissions intensity by retail
suppliers of electricity.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Committee on Appropriations, 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: (Verified8/10/16)
The Utility Reform Network (source)
Northern California Power Agency
OPPOSITION: (Verified8/10/16)
California Municipal Utilities Association
Marin Clean Energy
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.
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ARGUMENTS IN OPPOSITION: Several CCAs write in opposition to
this bill, contending it will lead to inaccurate or misleading
reporting of GHG emissions intensity and discourage aggressive
attainment or surpassing of the state's RPS requirements.
ASSEMBLY FLOOR: 79-0, 5/11/15
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
8/10/16 15:35:03
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