BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: AB 1773 Hearing Date: 6/21/2016
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|Author: |Obernolte |
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|Version: |4/13/2016 As Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Aaron Brieno, Jay Dickenson |
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SUBJECT: Local government renewable energy self-generation
program
DIGEST: This bill expands the Renewable Energy
Self-Generation Bill Credit Transfer (RES-BCT) program, which
provides that a city, county, city and county, special district,
school district, political subdivision, or other local public
agency may elect 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.
ANALYSIS:
Existing law:
1)Established the RES-BCT program, which provides that a city,
county, city and county, special district, school district,
political subdivision, or other local public agency may elect
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. (Public Utilities
Code §2830)
2)Excludes joint powers authority (JPA) from participating in
the RES-BCT program. (Public Utilities Code §2830)
3)Defines an eligible "benefitting account" under the RES-BCT
AB 1773 (Obernolte) Page 2 of ?
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. (Public Utilities
Code §2830)
4)Requires benefitting accounts under the RES-BCT program to
receive service under a time-of-use rate schedule and
calculates the BCT amount based on when the electricity was
exported to the grid. (Public Utilities Code §2830)
5)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
eligible renewable facilities within their service territories
reaches 250 megawatts (MW). (Public Utilities Code §2830)
6)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. (Public Utilities Code §2830)
7)Enables two or more public agencies by contractual agreement
to jointly exercise any power common to the contracting
agencies, thus creating a JPA. (Government Code §6500)
This bill:
1)Authorizes a limited expansion of the RES-BCT program to allow
specified JPAs to participate in the program. The JPAs'
members must be public agencies that are located within the
same county and within same electrical corporation service
territory. Specifically, this bill:
a) Expands the definition of "local government" for
purposes of the RES-BCT program to include a JPA that has
as members public agencies located within the same county
and same electrical corporation service territory.
AB 1773 (Obernolte) Page 3 of ?
b) 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.
c) Expands the definition of "benefitting account" for
purposes 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.
1)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;
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.
AB 1773 (Obernolte) Page 4 of ?
Background
The RES-BCT program was established by the passage of AB 2466
(Laird, Chapter 540, Statutes of 2008) effective January 1, 2009
and is codified in Section 2830 of the Public Utilities Code.
RES-BCT allows 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.
AB 1031 (Blumenfield, Chapter 380, Statutes of 2009), expanded
the RES-BCT program to local universities and AB 512 (Gordon,
Chapter 478, Statutes of 2011), effective on January 1, 2012,
further modified this program to increase the generator size
limit to five MW per generation account.
The RES-BCT allows a local governmental entities to install up
to five MW of renewable generation per location (generating
account) within its geographic boundary, offset any coincident
usage at the generator site, and convert excess electricity
exported to the utility grid to credits that can be used to
offset generation component charges at one or more other
locations (benefitting accounts) within the same geographic
boundary
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.
How does the RES-BCT work? A local government entity (or third
party) can install an eligible renewable generator on property
that is owned or under the control of the local governmental
entity and located within its geographic boundary, which is
called the "generating account". The generator account may or
may not have electrical usage (load) on it.
The utility service provider will install a generator account
AB 1773 (Obernolte) Page 5 of ?
meter that separately measures both the electricity drawn from
the utility grid and that exported to the grid; the metered
exports to the grid are used to calculate the generation
credits.
The local governmental entity will identify and provide the
allocation percent among the designated "benefiting account(s)";
up to 50 accounts per "arrangement" may be designated to receive
these generation credits. Under existing law, the benefiting
accounts must be within the local government entity's geographic
boundaries, and on property that it owns, operates, or controls.
RES-BCT Expansions. 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, which increased the maximum size for renewable energy
generating systems eligible for the program from one MW to five
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.
RES-BCT Program and JPAs. At the RES-BCT programs formation
under AB 2466, JPAs were explicitly excluded because of
geographical concerns. These concerns were raised because JPAs
across the state are extremely diverse in their goals, size,
members, and locations. The territory of a JPA varies and
depends on the makeup of its members.
A JPA as defined 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 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.
Had JPAs been included in AB 2466, contracts between JPAs and
AB 1773 (Obernolte) Page 6 of ?
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 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.
RES-BCT Program Cap
At noted above, existing law requires the three largest IOU's to
offer contracts to local governments under the RES-BCT program
until the combined statewide cumulative generating capacity of
all eligible renewable facilities within their service
territories reaches 250 MW. (Public Utilities Code §2830)
Based on information provided to this committee by the
California Public Utilities Commission (CPUC), the state's three
largest IOU's existing contracts with local governments are well
under the program statutory cap of 250 MW.
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| Utility | Cap (MW) | Installed (MW) |
|---------------------+---------------------+---------------------|
| SCE | 123.8 | 29.8567 |
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| PG&E | 105.25 | 22.3 |
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| SDG&E | 20 |6.81 |
| | | |
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Committee Findings. This bill seeks a limited expansion of the
RES-BCT program to allow certain JPAs to participate. AB 1773
attempts to address many of the initial concerns which excluded
JPA's from the RES-BCT program at the program's inception.
Specifically, this bill attempts to limit the geographical size
of participating JPAs by allowing participation only by JPAs
whose members are in the same county and are served by the same
electrical corporation. Furthermore, AB 1773 limits
participating JPAs by allowing only JPAs whose benefitting
AB 1773 (Obernolte) Page 7 of ?
accounts belong to members of the JPA and are 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.
While participation in the RES-BCT program has grown, as the
data provided by the CPUC indicates, there is still a fair
amount of room available under the program's statutory cap for
growth.
Prior/Related 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 one MW to five MW.
AB 2693 (Blumenfield, 2010) would have attempted to expand the
RES-BCT program to allow the participation of JPAs. Died in the
Assembly Committee on Utilities and Commerce.
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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: Yes
SUPPORT:
Victor Valley Wastewater Reclamation Authority (Source)
Association of California Water Agencies
California Association of Sanitation Agencies
OPPOSITION:
AB 1773 (Obernolte) Page 8 of ?
None received
ARGUMENTS IN SUPPORT: According to the author, "In 2008, AB
2466 established the 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.
Joint powers authorities were explicitly prohibited from
participating in the program, regardless of their geographic
scope. Organizations like the Victor Valley Wastewater
Reclamation Authority (VVWRA) 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. This 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."
The VVWRA, the sponsor of this bill, asserts that "Current law
explicitly excludes joint powers authorities from eligibility to
participate in the RES-BCT Program, even if they operate with
the geographic bounds of a local government entity. The VVWRA
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."
AB 1773 (Obernolte) Page 9 of ?
Additionally, the Association of California Water Agencies
(ACWA) notes that "Energy efficiency is a fundamental operating
mission for ACWA's member agencies, and the RES-BCT program
incentivizes this by authorizing a local government entity to
receive a credit on their electric bill for power generated from
a renewable energy facility that generates more energy than is
needed to serve the electrical load of that entity. ACWA
believes that the expansion of this program to utilization by
JPA's would continue to promote smart energy policy and the
increased generation of renewable energy."
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