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: 8/19/16 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 - 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 greenhouse
gases (GHG) emissions intensity of the supplier's electricity
sources.
Senate Floor Amendments of 8/19/16 deletes the more-prescriptive
methodology by which the California Energy Commission (CEC) is
to require the GHG emissions intensity reporting associated with
a load-serving entity's electricity procurement and replaces it
with more general direction to CEC to make reporting
requirements via a regulatory proceeding.
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Page 2
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
electricity they sell in California.
Senate Floor Amendments of 9/3/15 provides 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 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.)
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Page 3
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 seq.)
This bill:
1)Defines "greenhouse gas (GHG) emissions intensity as the sum
of all annual emissions of GHGs associated with an electricity
generation source divided by the annual production of
electricity from the generation source.
2)Defines a retail supplier as an electrical corporation, local
publicly owned electric utility, ESP, and CCA.
3)Requires, as of June 1, 2018, retail suppliers of electricity
to report to CEC data on GHG emissions intensity associated
with retail sales occurring December 31, 2018.
4)Modifies the existing requirement that a retail supplier
disclose its electricity sources by adding the requirement
that the retail supplier disclose the GHG emissions intensity
associated with those electricity sources.
5)Adds an additional category a retail supplier must include on
the annual disclosure-unbundled renewable energy credits, in a
format to be determined by CEC, as well as the GHG emissions
intensity of the retail supplier's electricity portfolio and
statewide GHG emissions intensity.
6)Directs CEC to:
a) Adopt, in consultation with ARB, a methodology for the
calculation of GHG emissions intensity for each purchase of
electricity by a retail supplier.
b) Calculate the GHG emissions intensity associated with
all statewide retail electricity sales.
c) Establish guidelines for adjustment to a GHG emissions
intensity factor for a reporting year any POU demonstrating
generation in electricity in previous years in excess of
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its total sales from specified sources that do not emit any
GHGs.
d) Ensure there is no double-counting of GHGs or emission
attributes.
e) Adopt guidelines, on or before January 1, 2018, for
reporting and disclosure of GHG emissions intensity
associated with retail sales of electricity.
7)Exempts a new CCA formed after January 1, 2016, from the
requirement to report to CEC data on annual emissions of GHG
associated with retail sales until at least 24 months, but no
later than 36 months, after serving its first retail customer.
8)Requires that any marketing or retail product claims relating
to the GHG emissions intensity of the electricity sources of a
retail supplier be consistent with the methodology required by
this bill, while allowing a retail supplier to provide
additional information to customers describing other actions
relating to GHG emissions.
9)Authorizes a retail supplier to make via email the required
disclosure of electricity sources and GHG emissions intensity
of those sources.
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
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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:
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-------------------------------------------------
| Pacific Gas and Electric Company |
| 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* | | |
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-------------------------------------------------
-------------------------------------------------
| TOTAL | | 100% | 100% |
| | | | |
-------------------------------------------------
-------------------------------------------------
|* "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.
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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.
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 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 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 intensity factor to the statute requiring power source
disclosure.
Prior/Related Legislation
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.
AB 162 (Ruskin, Chapter 313, Statutes of 2009) modified and
streamlined power source disclosure reporting requirements for
POUs and other electricity providers.
SB 1305 (Sher, Chapter 796, Statutes of 1997) first required
retail suppliers to disclose their power sources.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
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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: (Verified8/22/16)
The Utility Reform Network (source)
Northern California Power Agency
OPPOSITION: (Verified8/22/16)
None received
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.
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,
AB 1110
Page 10
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
8/23/16 9:48:08
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