BILL ANALYSIS Ó
AB 1773
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Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Susan Talamantes Eggman, Chair
AB 1773
(Obernolte) - As Amended April 13, 2016
SUBJECT: Local government renewable energy self-generation
program.
SUMMARY: Allows specified joint powers authorities to
participate in the Renewable Energy Self-Generation Bill Credit
Transfer program. Specifically, this bill:
1)Expands the definition of "local government" for purposes of
the Renewable Energy Self-Generation Bill Credit Transfer
(RES-BCT) program to include a joint powers authority (JPA)
that has as members public agencies located within the same
county and same electrical corporation service territory.
2)Excludes a JPA from participating in the RES-BCT program, if
it has as members public agencies located in different
counties or different electrical corporation service
territories, or, if the JPA has as a member the federal
government, any federal department or agency, this or another
state, or any department or agency of this state or another
state.
3)Expands the definition of "benefitting account" for purposes
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of the RES-BCT program to include an account or accounts that
belong to members of a JPA and are located within the
geographical boundaries of the group of public agencies that
formed the JPA, if the eligible renewable generating facility
and electricity account or accounts are wholly located within
the confines of a single county within which the JPA is
located and electric service is provided by a single
electrical corporation, with the account or accounts being
mutually agreed upon by the JPA and the electrical
corporation.
EXISTING LAW:
1)Established the RES-BCT program, which allows a city, county,
city and county, special district, school district, political
subdivision, other local public agency, or an individual
community college campus, individual California State
University Campus, or individual University of California
campus to designate another account or accounts controlled by
the governmental entity to receive bill credits for
electricity generated by a renewable generating facility
located within the boundaries of the governmental entity.
2)Excludes JPAs from participating in the RES-BCT program.
3)Defines an eligible "benefitting account" under the RES-BCT
program to mean an electricity account, or more than one
account, located within the geographical boundaries of a local
government or, for a campus, within the geographical boundary
of the city, county, or city and county in which the campus is
located, that is mutually agreed upon by the local government
or campus and an electrical corporation.
4)Requires the three largest electrical corporations to offer
contracts to local governments under the RES-BCT program until
the combined statewide cumulative generating capacity of all
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eligible renewable facilities within their service territories
reaches 250 megawatts (MW).
5)Requires the California Public Utilities Commission (CPUC) to
ensure the transfer of a bill credit to a benefiting account
does not result in a shifting of costs onto bundled service
subscribers.
6)Allows, pursuant to the Joint Exercise of Powers Act, two or
more public agencies by agreement to jointly exercise any
power common to the contracting parties, as specified, if
authorized by their legislative or other governing bodies.
7)Defines public agency for the purposes of JPAs to include the
federal government or any federal department or agency, this
state, another state or any state department or agency, a
county, county board of education, county superintendent of
schools, city, public corporation, public district, regional
transportation commission of this state or another state, a
federally recognized Indian tribe, or any JPA formed, pursuant
to the Joint Exercise of Powers Act,
by any of these agencies.
FISCAL EFFECT: This bill is keyed fiscal.
COMMENTS:
1)Bill Summary. This bill authorizes a very limited expansion
of the RES-BCT program to allow specified JPAs to participate
in the program. The JPA's members must be public agencies
that are located within the same county and within same
electrical corporation service territory. The JPA must not
have any of the following as members:
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a) Public agencies that are located in different counties;
b) Public agencies that are located in different electrical
corporation service territories;
c) The federal government;
d) Any federal department or agency;
e) California or any other state; or,
f) Any department or agency of this state or another state.
The bill also specifies the following requirements:
a) The benefitting account or accounts must belong to
members of the JPA and be located within the geographical
boundaries of the group of public agencies that formed the
JPA;
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b) The eligible renewable generating facility and the
electricity account or accounts must be wholly located
within the confines of a single county within which the JPA
is located;
c) Electric service must be provided by a single electrical
corporation; and,
d) The account or accounts must be mutually agreed upon by
the JPA and the electrical corporation.
This bill is sponsored by the Victor Valley Wastewater
Reclamation Authority.
2)Author's Statement. According to the author, "In 2008, AB
2466 (Laird) established the Renewable Energy Self-Generation
Bill Credit Transfer (RES-BCT) program to provide local
governments with an avenue to maximize their utilization of
self-generated renewable energy, which would be otherwise
economically infeasible under previously existing programs.
The RES-BCT program allows local government entities to credit
energy generated from renewable sources against electricity
used at more than just the facility where the renewable energy
is generated.
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"Joint powers authorities were explicitly prohibited from
participating in the program, regardless of their geographic
scope. Organizations like the Victor Valley Wastewater
Reclamation Authority that may still operate within the bounds
of a local government entity are prohibited from participating
based on their status as a JPA. While participation in the
program has grown, there is still a fair amount of room
available under the cap of the program.
"AB 1773 would expand the program to allow certain JPAs to
participate in the program. The bill would limit the JPAs that
could participate to those that are operating with the
geographic bounds of the local entities that created them. AB
1773 would promote the adoption of more renewable energy
sources while still limiting the program to local entity
participation."
3)Background. AB 2466 (Laird), Chapter 540, Statutes of 2008,
allowed a local governmental entity to operate a small
renewable electricity generating facility in one location and
have the utility credit the output of that facility against
electricity the local government consumes at another location.
This program is now known as the RES-BCT program or the Laird
program. The basic concept of the program was to allow
governmental entities that had many different electricity
meters (and thus many accounts with a utility) to produce
renewable power at a location where they had very little
demand and then use the electricity to benefit another
building where demand is high but may not be a suitable
location to build renewable generation. For example, a city
could locate solar panels over the parking lot at a public
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park, but use the electricity to benefit city hall.
Under the RES-BCT program, local governments such as cities
and counties, school districts, special districts, political
subdivisions, and public agencies may participate, as well as
individual college campuses. In addition, the program
requires that the transfer of a bill credit to a benefiting
account does not result in a shifting of costs to bundled
service subscribers.
According to the CPUC, in 2011 no local governments were
participating in the RES-BCT program in any of the three
investor-owned utility (IOU) territories. To increase
participation in the RES-BCT program, the Legislature passed
AB 512 (Gordon), Chapter 478, Statutes of 2011, which
increased the maximum size for renewable energy generating
systems eligible for the program from 1 MW to 5 MW. In
addition to supporting AB 512, the CPUC recommended that the
program be expanded further so that all customers could be
eligible to participate, not just local governments and
college campuses. According to the
most recent available data, the statewide cumulative amount of
energy generated within the RES-BCT program is now 50 MW,
which leaves 200 MW available under the total statewide
program capacity.
4)RES-BCT Program and JPAs. JPAs were explicitly excluded from
the program when it was created. The territory of a JPA
depends on its members. A JPA can include the federal
government or any federal department or agency, this state,
another state or any state department or agency, a county,
county board of education, county superintendent of schools,
city, public corporation, public district, regional
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transportation commission of this state or another state, a
federally recognized Indian tribe, or any JPA formed, pursuant
to the Joint Exercise of Powers Act, by any of these agencies.
JPAs across the state are extremely diverse in their goals,
size, members, and locations. Had JPAs been included in AB
2466, contracts between JPAs and IOUs could have included
benefitting accounts and generation facilities spread out
across large geographical areas, crossing county and even
state lines and utility territories.
AB 1031 (Blumenfield), Chapter 380, Statutes of 2009, raised
these concerns when it attempted to expand the RES-BCT program
to allow the participation of public colleges and
universities, which exist in large statewide systems similar
to JPAs. To address this geographical concern, AB 1031
limited eligibility for the program to individual campuses.
This bill is similarly narrow as to geography, allowing
participation only by JPAs whose members are in the same
county and are served by the same electrical corporation, and
whose benefitting accounts must belong to members of the JPA
and be located within the geographical boundaries of the group
of public agencies that formed the JPA. In addition, the
eligible renewable generating facility and the electricity
account or accounts must be wholly located within the confines
of a single county within which the JPA is located, and the
account or accounts must be mutually agreed upon by the JPA
and the electrical corporation.
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5)Previous Legislation. AB 512 (Gordon), Chapter 478, Statutes
of 2011, increased the maximum size for renewable energy
generating systems eligible under the RES-BCT program from 1
MW to 5 MW.
AB 2693 (Blumenfield) of 2010, would have expanded the RES-BCT
program to allow participation by any JPAs, without the
restrictions contained in this bill. AB 2693 was held in the
Assembly Utilities and Commerce Committee.
AB 1031 (Blumenfield), Chapter 380, Statutes of 2009, expanded
the RES-BCT program to allow individual public college and
university campuses to participate.
AB 2466 (Laird), Chapter 540, Statutes of 2008, created the
RES-BCT program, which allowed a local governmental entity to
operate a small renewable electricity generating facility in
one location and have the utility credit the output of that
facility against electricity the local government consumes at
another location.
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6)Arguments in Support. The Victor Valley Wastewater
Reclamation Authority, sponsor of this measure, writes,
"Current law explicitly excludes joint powers authorities from
eligibility to participate in the RES-BCT Program, even if
they operate (within) the geographic bounds of a local
government entity. The Victor Valley Wastewater Reclamation
Authority resides in the geographic boundary of the city of
Victorville. VVWRA's Waste to Energy program is a leader in
the wastewater industry with the capability of producing
enough green energy to power our entire plant with electricity
left over. VVWRA is also in the position to expand the
program and generate even more sustainable energy. But
current law does not allow VVWRA, as a JPA, to export that
power to the grid. AB 1773 would eliminate the barriers VVWRA
is facing and allow a new green, environmentally friendly
power source for our region."
7)Arguments in Opposition. None on file.
8)Double-Referral. This bill was heard by the Utilities and
Commerce Committee on April 6, 2016, where it passed with a
15-0 vote.
REGISTERED SUPPORT / OPPOSITION:
Support
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Victor Valley Wastewater Reclamation Authority [SPONSOR]
Association of California Water Agencies
Opposition
None on file
Analysis Prepared by:Angela Mapp / L. GOV. / (916) 319-3958