BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1330|
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THIRD READING
Bill No: AB 1330
Author: Bloom (D)
Amended: 9/1/15 in Senate
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE: 7-3, 7/13/15
AYES: Hueso, Hertzberg, Hill, Lara, Leyva, Pavley, Wolk
NOES: Fuller, Cannella, Morrell
NO VOTE RECORDED: McGuire
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/27/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates, Nielsen
ASSEMBLY FLOOR: 46-29, 6/4/15 - See last page for vote
SUBJECT: Demand response
SOURCE: California Energy Efficiency Industry Council
DIGEST: This bill requires the California Public Utilities
Commission (CPUC), by November 1, 2017, in consultation with the
California Energy Commission (CEC), electrical corporations,
local publicly owned electric utilities and community choice
aggregators, to establish an annual procurement goal for demand
response designed to lower peak demand of each utility.
ANALYSIS:
Existing law:
1)Establishes a charge on electricity and natural gas
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consumption to fund cost-effective energy efficiency and
conservation activities. (Public Utilities Code §§381 and
890)
2)Requires the CPUC to establish policies and procedures by
which an entity, including a community choice aggregator
(CCA), may apply to become administrators for cost-effective
energy efficiency and conservation programs pursuant to §381.
(Public Utilities Code §381.1)
3)Requires electric corporation procurement plans to first meet
unmet resource needs through all available energy efficiency,
and demand reduction resources that are cost effective,
reliable, and feasible. (Public Utilities Code §454.5)
4)Requires each local publicly owned electric utility, in
procuring energy to serve the load of its retail end-use
customers, to first acquire all available energy efficiency
and demand reduction resources that are cost effective,
reliable, and feasible. (Public Utilities Code §961.5)
5)Requires the CEC to, every two years, adopt an integrated
energy policy report containing an overview of major energy
trends and issues facing the state, including, but not limited
to, supply, demand, pricing, reliability, efficiency, and
impacts on public health and safety, the economy, resources
and the environment. (Public Resources Code §25302)
6)Requires the CEC to develop a statewide estimate of all
potentially achievable cost-effective electricity and natural
gas savings, and establish targets for statewide annual energy
efficiency savings and demand reduction for the next 10-year
period. (Public Resources Code §25310)
This bill:
1)Requires the CPUC, by November 1, 2017, in consultation with
the CEC, electrical corporations, local publicly owned
electric utilities, and CCAs, to establish in a public process
an annual procurement goal for demand response designed to
lower peak demand, with a timetable for achieving that goal.
2)Requires that the demand response procurement goal support
renewable energy resources integration, greenhouse gas
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reductions, and grid reliability and that shall be achieved by
each electrical utility through supply-side demand response
and types of load-modifying demand response, including
nonevent-based demand response.
3)Requires the CPUC in establishing the demand response
procurement goal to consider the role of clean technologies,
such as consumer-sited energy storage, electric vehicle
charging, and distributed generation resources.
4)Requires the CPUC to require electrical corporations to
achieve the annual procurement goal.
5)Specifies that the governing boards of local publicly owned
electric utilities and CCAs who elect to administer energy
efficiency programs for its customers are responsible for
achieving the annual procurement goal.
Background
Energy loading order. Following the 2001 energy crisis, the
Legislature codified a "loading order" of preferred energy
resources, requiring the investor-owned utilities' electricity
procurement plans to first meet unmet resources needs through
all cost-effective, reliable, and feasible energy efficiency and
demand response. The energy loading order was subsequently
adopted by the state's energy agencies and guides the state's
energy policies and decisions according to the following order
of priority: (1) decreasing electricity demand by increasing
energy efficiency; (2) responding to energy demand by reducing
energy usage during peak hours; (3) meeting new energy
generation needs with renewable resources; and (4) meeting new
energy generation needs with clean fossil-fueled generation.
Demand response. Demand response is end-use electric customers
reducing their electricity usage in a given time period, or
shifting that usage to another time period. The need for demand
response as flexible and available resources continues to grow
as an important piece of the electric grid integration puzzle.
However, demand response need not be limited to peak demand
incidents. Ultimately, a flexible and dynamic grid will require
demand response to be available even during non-peak times,
particularly with the need to better integrate renewable energy
resources and provide greater grid reliability. In fact, the
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CPUC has opened a proceeding to examine integrated demand side
management to more effectively coordinate certain activities,
including the timing and use of electric vehicle charging,
distributed generation, energy storage, and others.
Prior Legislation
SB 1414 (Wolk, Chapter 627, Statutes of 2014) required utilities
and regulators to include demand response in resource adequacy
plans.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee:
Ongoing costs of $700,000 annually to the Energy Resources
Program Account (General Fund) for the CEC to adopt cost
limitations for each utility.
Ongoing cost pressures of $850,000 to the Energy Resources
Program Account (General Fund) for the CEC to collect, review,
and verify utility reports.
Annual costs of $700,000 for two years to the Energy Resources
Program Account (General Fund) for the CEC to establish peak
demand reduction procurement goals.
Ongoing costs of approximately $420,000 annually to the Public
Utilities Reimbursement Account (special) for overseeing IOU
and CCA compliance with energy efficiency standard
requirements.
SUPPORT: (Verified8/31/15)
California Energy Efficiency Industry Council (source)
California Energy Storage Alliance
Energy Solutions
EnerNOC, Inc.
Environmental Defense Fund
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Proteus, Inc.
Small Business California
TELACU
The Utility Reform Network
OPPOSITION: (Verified8/31/15)
California Municipal Utilities Association
City of Burbank Water and Power
City of Pasadena Water and Power
City of Riverside Public Utilities Department
Imperial Irrigation District
Northern California Power Agency
Pacific Gas and Electric Company
Sacramento Municipal Utility District
San Diego Gas and Electric
Sempra Energy Utilities
Southern California Gas
Southern California Edison
Southern California Public Power Authority
ARGUMENTS IN SUPPORT: The author argues that though broad
targets have been set via the state's current efforts there
currently are no specific requirements that would drive and
ensure the adoption of demand side energy resources, such as
energy efficiency and demand response, at a level that would
provide certainty for energy resource planning and achievement
of AB 32 (Nunez/Pavley, Chapter 488, Statutes of 2006) and
potential future greenhouse gas reduction goals.
ARGUMENTS IN OPPOSITION:Opposition based on pre-Senate
Appropriations Committee language regarding energy efficiency
goals which is no longer included in this bill.
ASSEMBLY FLOOR: 46-29, 6/4/15
AYES: Alejo, Bloom, Bonilla, Bonta, Burke, Calderon, Campos,
Chau, Chiu, Chu, Cooley, Dababneh, Daly, Dodd, Eggman,
Frazier, Cristina Garcia, Eduardo Garcia, Gipson, Gomez,
Gonzalez, Gordon, Holden, Irwin, Jones-Sawyer, Levine, Lopez,
Low, McCarty, Mullin, Nazarian, O'Donnell, Perea, Quirk,
Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone,
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Thurmond, Ting, Weber, Williams, Wood, Atkins
NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang,
Chávez, Beth Gaines, Gallagher, Gatto, Gray, Grove, Hadley,
Harper, Jones, Kim, Lackey, Linder, Maienschein, Mathis,
Mayes, Melendez, Obernolte, Olsen, Patterson, Steinorth,
Wagner, Waldron, Wilk
NO VOTE RECORDED: Brown, Cooper, Dahle, Roger Hernández, Medina
Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107
9/1/15 22:15:11
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