BILL ANALYSIS Ó
AB 1923
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
1923 (Wood)
As Amended August 19, 2016
Majority vote
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|ASSEMBLY: |79-0 |(May 5, 2016) |SENATE: | 39-0 |(August 23, |
| | | | | |2016) |
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Original Committee Reference: U. & C.
SUMMARY: Increases the maximum capacity of a renewable electric
generation facility allowed to enter into a must-take contract
with a local electrical corporation, as specified.
Specifically, this bill increases the maximum capacity of a
renewable electric generation from three megawatts (MWs) to five
MWs if the effective capacity is no more than three MWs net of
site load.
The Senate amendments are technical in nature and make no
substantive changes.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
AB 1923
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COMMENTS:
1)Author's Statement: "The current 3 MW restriction makes it
difficult for small biomass companies in Humboldt County to be
competitive in the renewable energy market. 3 MW generators
are expensive products and used 3 MW generators are difficult
to purchase as opposed to used 5 MW generators. These
facilities utilize organic solid waste from sawmilling
activities within the surrounding areas to produce usable
electricity. Dead and decaying trees in heavy forested areas,
such as my district, are left to rot and provide dangerous
kindling for the next wildfire, which can be prevented if
these woody matters can be taken in as biomass. AB 1923
allows a 5 MW generator to be used it if operates at a maximum
of 3 MW."
2)Background: Feed-in-tariffs (FITs) are a popular means of
rapidly growing the market for renewable energy almost
everywhere in the world. A FIT is a contract that provides a
guaranteed fixed payment for the energy produced using a
standard contract. AB 1969 (Yee), Chapter 731, Statutes of
2006, established California's first FIT program authorizing
the purchase of up to 480 MWs of renewable generating capacity
from renewable facilities smaller than 1.5 MWs. The AB 1969
FIT program set the price paid to small generators at a price
comparable to the price of electricity generated using natural
gas plus the value of some environmental attributes.
In 2009, SB 32 (Negrete-McLeod), Chapter 328, allowed FIT
contracts for small renewable generation facilities (less than
3 MWs) because the structure of RPS solicitations generally
excluded smaller projects, smaller facilities could be located
within communities close to where the electricity would be
used, and could be connected to the utilities local electric
distribution system (rather than the statewide electric
transmission system).
The California Public Utilities Commission (CPUC) established
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SB 32's price for electricity contracts based on three FIT
product types: baseload, peaking as-available, and
non-peaking as-available. The CPUC also adopted a two-month
price adjustment mechanism that may increase or decrease the
price for each product type every two months based on the
market response, and allows each accepted project to be paid a
time-of-delivery adjustment based on the generator's actual
energy delivery profile and the individual utility's
time-of-delivery factors.
3)Interconnection Rule 21: The CPUC requires the investor owned
utilities to implement a rule for how generation facilities
connect to the electric distribution system to ensure that the
electric distribution system can be operated safely and
reliably, with no adverse effects to electricity consumers or
utility workers. This rule is known as "Rule 21." The
maximum size of a generation facility that can interconnect
under Rule 21 without triggering additional study for safety
and reliability is when the aggregate Generating Facility
capacity on the Line Section is less than 15% of Line Section
peak load for all line sections bounded by automatic
sectionalizing devices.
Distribution lines generally have a capacity of 20 MWs. SB 32
set the maximum size of the generating facility at three MWs,
which is 15% of the distribution line capacity and consistent
with Rule 21 maximum allowable size without triggering
additional study.
This bill specifies that projects subject to the five MWs cap
be allocated from the 50 MWs already set aside for biomass
projects and:
a) The facility delivers no more than three MWs in any
hour.
b) The facility will follow the relevant utility's Rule 21
tariff or distribution access tariff.
c) No payment shall be made to the facility for any
AB 1923
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generation delivered to the grid in excess of three MWs at
any time.
Analysis Prepared by:
Sue Kateley / U. & C. / (916) 319-2083 FN:
0004871