BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1923|
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THIRD READING
Bill No: AB 1923
Author: Wood (D)
Amended: 8/19/16 in Senate
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE: 10-0, 6/21/16
AYES: Hueso, Morrell, Cannella, Gaines, Hertzberg, Lara,
Leyva, McGuire, Pavley, Wolk
NO VOTE RECORDED: Hill
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 79-0, 5/5/16 (Consent) - See last page for
vote
SUBJECT: Bioenergy feed-in tariff
SOURCE: Humboldt County Board of Supervisors
DIGEST: This bill increases, from three megawatts (MW) to five
MW, the limit on the nameplate capacity of a bioenergy electric
generation facility that may participate in the investor-owned
utilities' (IOU) bioenergy feed-in-tariff programs, so long as
the generation facility delivers no more than three MW to the
grid at any time.
Senate Floor Amendments of 8/19/16 clarify that the modification
to the 250 MW bioenergy feed-in tariff (FIT) program apply only
to that program, and not to the larger 750 MW FIT program; and
also make technical amendments to avoid chaptering conflicts.
AB 1923
Page 2
ANALYSIS:
Existing law:
1)Requires all IOUs and publicly owned utilities (POUs) that
serve more than 75,000 retail customers to develop a standard
contract or tariff (aka feed-in-tariff or FIT) available for
renewable energy facilities up to three MW. Statewide
participation is capped at 750 MW. (Public Utilities Code
§§399.20 and 387.8)
2)Requires IOUs to offer FITs for facilities up to three MW,
capped at 250 MW statewide and allocated as follows:
a) For biogas from wastewater treatment, municipal organic
waste diversion, food processing, and codigestion, 110 MW.
b) For dairy and other agricultural bioenergy, 90 MW.
c) For bioenergy using byproducts of sustainable forest
management, 50 MW. Allocations under this category shall be
determined based on the proportion of bioenergy that
sustainable forest management providers derive from
sustainable forest management in fire threat treatment
areas, as designated by the Department of Forestry and Fire
Protection. (Public Utilities Code §399.20)
3)Directs the electrical corporations to develop standard
contract terms and conditions that reflect the operational
characteristics of the projects, and to provide a streamlined
contracting process. (Public Utilities Code §399.20)
4)Counts renewable energy generation FIT contracts to qualify
for credit toward and IOUs Renewable Portfolio Standard (RPS)
goals and resource adequacy requirements. (Public Utilities
Code §399.20)
AB 1923
Page 3
This bill:
1)Increases, from three MW to five MW, the limit on the
nameplate capacity of a bioenergy electric generation facility
that may participate in the IOU's bioenergy FIT programs.
2)Conditions the exception described in 1), as follows:
a) The bioenergy electric generation facility delivers no
more than three MW to the grid at any time.
b) It complies with the IOU's Electric Rule 21 tariff or
other distribution access tariff.
c) Payment is made pursuant to FIT program rules and no
payment is made for any electricity delivered to the grid
in excess of three MW at any time.
d) The facility is strategically located and interconnected
to the electrical transmission and distribution grid in a
manner that optimizes the deliverability of electricity
generated at the facility to load centers or is
interconnected to an existing transmission line.
Background
Feed-in tariffs and California's bioenergy feed-in tariff, in
particular. According to the National Renewable Energy
Laboratory (NREL), a FIT offers a guarantee of payments to
renewable energy developers for the electricity they produce.
NREL reports that FITs are used in many U.S. states and around
the world.
California, too, offers a FIT program. State law requires all
IOUs and POUs that serve more than 75,000 retail customers to
develop a standard FIT contract available to renewable energy
facilities up to three MW. Statewide participation is capped at
750 MW.
In addition, state law requires the IOUs to procure another 250
MW of renewable FIT electricity from small-scale bioenergy
projects from each of three categories of bioenergy:
AB 1923
Page 4
Biogas from wastewater treatment, municipal organic
waste diversion, food processing, and codigestion - 110 MW.
Dairy and other agricultural bioenergy - 90 MW.
Bioenergy using byproducts of sustainable forest
management - 50 MW.
This is known as the bioenergy FIT program. While the bioenergy
FIT program is new, program participation to date has been
anemic: the CPUC reports that, to date, only one bioenergy FIT
contract has been signed, it for two MW of power generated from
an eligible facility using biogas.
This bill proposes a minor modification to the bioenergy FIT
program. Specifically, it increases, from three MW to five MW,
the limit on the nameplate capacity of a bioenergy electric
generation facility that may participate in the IOU's bioenergy
FIT programs, so long as it delivers no more than three MW to
the grid at any time. It is questionable how much this will
help the bioenergy FIT program.
Related/Prior Legislation
AB 1979 (Bigelow, 2016) makes an exception to the FIT program
three-MW limit on the generating capacity of an eligible
electric generation facility to newly allow participation by a
conduit hydroelectric facility with a nameplate generating
capacity of up to four MW that meets certain conditions. The
bill is pending consideration by the full Senate.
SB 1112 (Rubio, Chapter 612, Statutes of 2012) required an
additional 250 MW of renewable FIT procurement from small-scale
bioenergy projects that commence operation on or after June 1,
2013.
SB 32 (Negrete-McLeod, Chapter 328, Statutes of 2009) increased
the FIT program limit from 480 MW to 750 MW and increased from
1.5 MW effective capacity to three MW effective capacity the
limit on electric generating facilities eligible to participate
in the FIT program.
AB 1923
Page 5
AB 1969 (Yee, Chapter 731, Statutes of 2006) authorized the
state's first FIT program, which authorized the state's largest
IOU's to purchase up to 480 MW of renewable generating capacity
from renewable facilities with an effective capacity of not more
than 1.5 MW.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified8/19/16)
Humboldt County Board of Supervisors (source)
Association of California Water Agencies
Calaveras County Water District
City of Fortuna
League of California Cities Redwood Empire Division
NLine Energy, Inc.
Placer Land Trust
Sierra Business Council
Sierra Foothill Conservancy
Sierra Institute for Community and Environment
The Watershed Research and Training Center
Truckee Land Trust
Several Individual
OPPOSITION: (Verified8/19/16)
Pacific Gas and Electric Company
West Biofuels
ARGUMENTS IN SUPPORT: According to the author:
Current regulations make it cost-prohibitive to invest in
this renewable energy [biomass energy]. Generators under
five MW, in particular three-MW generators, are not common
AB 1923
Page 6
and extremely expensive to purchase. AB 1923 allows
electric generation facilities to be eligible for the
renewable feed-in tariff if it has a nameplate generating
capacity of up to five MWs, if it runs at a maximum of three
MW. This will allow small sawmill investors to purchase
affordable, used five MW generators and export energy at
three MW.
ARGUMENTS IN OPPOSITION:According to the opponents, this bill is
intended to expand the Biomass Market Adjusting Tariff program
to allow for more projects to participate and to lower the
overall cost of the program, but as written, will not accomplish
these goals and will actively hinder the success of the program.
ASSEMBLY FLOOR: 79-0, 5/5/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger
Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,
Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes,
McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Beth Gaines
Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107
8/22/16 22:10:21
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