BILL ANALYSIS Ó
AB 1637
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Date of Hearing: August 31, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1637 (Low) - As Amended August 18, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill doubles the annual funding authorization for the
Self-Generation Incentive Program (SGIP) and extends and revises
the net energy metering program for fuel cells (NEMFC) for five
years. Specifically, this bill:
AB 1637
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1)Doubles the funding authorized for SGIP for the program's
remaining three years, which permits the Public Utilities
Commission (PUC) to collect an additional $83 million per year
from utility customers to fund payments to distributed energy
resources (DER) until 2019 ($249 million total).
2)Extends the NEMFC program for five years, including fuel cells
that commence operation on or before December 31, 2021.
Revises the NEMFC program as follows:
a) Increases the individual project cap from one to five
MW.
b) Increases the statewide cap of 500MW by subtracting
projects installed as of January 1, 2017 (approximately 76
MW).
c) Requires eligible projects to comply with the Air
Resources Board (ARB) distributed generation certification
standards (establishing emission limits for oxides of
nitrogen and other criteria pollutants).
d) Requires ARB to establish and update greenhouse gas
(GHG) standards applicable each year to assure that each
eligible fuel cell reduces GHG emissions compared to the
electrical grid. Fuel cells must continue to meet the
applicable annual standard during operation to maintain
eligibility for NEMFC.
FISCAL EFFECT:
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1)Up to $249 million in nonbypassable cost shifts among
ratepayers to fund SGIP incentives.
2)Potential unknown nonbypassable cost shifts among ratepayers
to fund NEMFC.
Cost shifts for both programs may or may not be offset by
electrical system benefits.
3)Absorbable PUC administrative costs.
COMMENTS:
1)Purpose. According to the author, continuing programs such as
SGIP and NEMFC will help achieve the state's clean energy
goals by reducing GHG emissions and supporting renewable
energy integration and technological innovation.
2)SGIP. The PUC is authorized to allow investor-owned electric
utilities (IOUs) to collect up to $83 million per year,
through 2019, from their customers through distribution rates
to fund SGIP. Under SGIP, utilities provide ratepayer-funded
incentives for eligible distributed energy resources (DER),
including advanced energy storage and generation technologies
that the PUC, in consultation with ARB, determines will
achieve reductions in GHG emissions. Under a PUC decision
adopted earlier this year, 75% of SGIP funds are allocated to
storage technologies
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3)NEMFC. Each IOU is required, until January 1, 2017, to offer
a NEM tariff for a customer who generates electricity using an
onsite fuel cell electrical generating facility not greater
than one MW until total installed fuel cell electrical
generation resources reaches the IOU's proportional share of
500 MW.
4)Similar Legislation. AB 1530 (Levine) established a similar
NEM tariff program for clean DER, however, this bill was
technology neutral rather than focusing on fuel cells. This
bill died in the Senate Environmental Quality Committee.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081