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