BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1937 (Gomez) - Electricity: procurement
-----------------------------------------------------------------
| |
| |
| |
-----------------------------------------------------------------
|--------------------------------+--------------------------------|
| | |
|Version: June 27, 2016 |Policy Vote: E., U., & C. 7 - |
| | 3, E.Q. 5 - 2 |
| | |
|--------------------------------+--------------------------------|
| | |
|Urgency: No |Mandate: Yes |
| | |
|--------------------------------+--------------------------------|
| | |
|Hearing Date: August 1, 2016 |Consultant: Narisha Bonakdar |
| | |
-----------------------------------------------------------------
This bill does not meet the criteria for referral to the
Suspense File.
Bill
Summary: AB 1937 requires an electric investor-owned utility
(IOU) that bids for new gas-fired generation resources to
consider, and give preference to, bids for resources that are
not gas-fired generation resources located in communities that
suffer from cumulative pollution burdens.
Fiscal
Impact:
One-time costs of approximately $93,000 to the California
Public Utilities Commission (Utilities Reimbursement Account)
to conduct a rulemaking.
Background: Existing law requires electric utilities to procure 50 percent
of their retail sales of electricity from renewable energy by
2030. This is known as the Renewable Portfolio Standard (RPS).
It also requires each IOU, in soliciting and procuring eligible
AB 1937 (Gomez) Page 1 of
?
renewable energy resources for RPS-eligible California-based
projects, to give preference to renewable energy projects that
provide environmental and economic benefits to communities
afflicted with poverty or high unemployment, or that suffer from
high emission levels of toxic air contaminants, criteria air
pollutants, and greenhouse gases (GHG). The California Public
Utilities Commission (CPUC) must review and accept, modify or
reject, each IOU's proposed electricity procurement plan based
on specified criteria
Procurement plans. The CPUC describes its long-term procurement
plan (LTPP) proceedings as intended to ensure a safe, reliable,
and cost-effective electricity supply in California through
integration and refinement of a comprehensive set of procurement
policies and practices. LTPP proceedings take a 10-year-ahead
look at system, local, and flexible needs. Proceeding
assumptions are revised every two years to incorporate changes
in the resource mix and revisions to state policies.
An IOU's procurement plan-part of an LTPP proceeding-details
what and how an IOU is going to procure. These plans must
adhere to state policies, including the loading order, which
mandates that utilities seek to meet need first though
cost-effective energy efficiency and demand response, followed
by procurement of renewable energy and, lastly, procurement of
fossil-fuel-generated electricity. If an IOU's procurement plan
does not comply with state policies or adequately balance
safety, reliability, cost, and environmental goals, the CPUC
orders the IOU to modify the plan.
Proposed Law:
This bill:
1)Requires an IOU's proposed procurement plan to include a
showing that the procurement plan will achieve the following:
a) Actively seeking bids for resources that are not
gas-fired generation resources located in communities
that suffer from cumulative pollution burdens.
b) Provides greater preference to resources that are
not gas-fired generation resources located in communities
that suffer from cumulative pollution burdens.
AB 1937 (Gomez) Page 2 of
?
c) Undertakes all feasible efforts to meet any
identified resource need through available renewable
energy, energy storage, energy efficiency, and demand
reduction resources that are cost-effective, reliable,
and feasible.
2)Requires the CPUC, prior to approving a contract for any new
or repowered gas-fired generation resource, to require the IOU
to demonstrate it has complied with the IOU's approved
procurement plan.
3)States that the bill requirements are declarative of existing
law.
Related
Legislation: SB 350 (De Leon, Chapter 547, Statutes of 2015)
created, among other things, the obligation that IOUs develop
and regularly update IRPs, which the CPUC must review and
approve, and are to detail how each IOU is to meet the state's
clean energy and environmental objectives.
Staff
Comments: Purpose. According to the author, it is imperative
that when utilities solicit and procure large-scale, polluting
gas-fired power plants, they prioritize resources that are not
located near communities that have disproportionately borne the
brunt of poverty and environmental pollution for decades. This
bill requires utilities to consider other ways of meeting
resource needs prior to moving forward with a gas-fired power
plant.
-- END --