BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1979|
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THIRD READING
Bill No: AB 1979
Author: Bigelow (R)
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: 72-0, 5/27/16 - See last page for vote
SUBJECT: Renewable feed-in tariff: hydroelectric facilities
SOURCE: Utica Water and Power Authority
DIGEST: This bill makes an exception to the feed-in-tariff
program three-megawatt 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 megawatts that meets
certain conditions.
Senate Floor Amendments of 8/19/16 avoid conflict with another
bill (the budget trailer bill) that amend the same code section
as this bill would have amended.
ANALYSIS:
AB 1979
Page 2
Existing law:
1)Requires all investor-owned utilities (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 megawatts (MW). Statewide
participation is capped at 750 MW. (Public Utilities Code
§§399.20 and 387.8)
2)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)
3)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)
This bill:
1)Creates an exception to the existing FIT program eligibility
limit of three MW to allow a conduit hydroelectric facility
with a nameplate generating capacity of up to four MW if the
conduit hydroelectric facility meets the following conditions:
It delivers no more than three MW to the grid at any
time.
It complies with the electrical corporation's Electric
Rule 21 tariff or other distribution access tariff.
Payment is made pursuant to the FIT program no payment
is made for any deliveries in excess of three MW at any
time.
It was operational as of January 1, 1990, and is an
eligible renewable energy resource.
1)Prohibits the California Public Utilities Commission (CPUC)
from reducing the MW limitation for a conduit hydroelectric
facility described above.
AB 1979
Page 3
Background
Feed-in tariffs. 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.
Effective capacity versus nameplate capacity. As described
above, existing statute limits participation in the bioenergy
FIT program to electric generation facilities with and
"effective capacity" of three MW. This bill creates a
conditional exception to the existing FIT program eligibility
limit of three MW to allow a conduit hydroelectric facility with
a "nameplate generating capacity" of up to four MW. So, what's
the difference between effective capacity and nameplate
capacity? The practical answer: there is none. The CPUC
determined, in Decision 12-05-035, that he three MW
effective-capacity limitation corresponds to the nameplate
capacity of the facility, meaning the capacity stamped on the
metal nameplate attached to the generation facility by the
manufacturer.
A little bit too big. Statute, declares that small projects of
less than three MW that are otherwise eligible renewable energy
resources may face difficulties in participating in competitive
solicitations under the RPS program. Bill proponents object to
the exclusion of facilities that have a nameplate capacity of
greater than three MW but that are incapable of exporting more
than three MW to the grid. As a particular example, proponents
point to the Utica Water & Power Authority (UWPA), which owns
and operates a small conduit hydroelectric generator with a
nameplate capacity of 3.6 MW. Proponents assert that, despite
its nameplate capacity, the generator will never produce more
than three MW of electricity because of existing water system
constraints.
This bill crafts a narrow exemption to the FIT program capacity
limitation for hydroelectric facilities like that UWPA's, as
AB 1979
Page 4
characterized by bill proponents. In fact, the exemption is so
narrowly crafted that it is unlikely that any facility other
than UWPA's will qualify for the exemption. In any case, the
effect of the exemption should be minor from the perspective of
both ratepayers and grid operators.
Related/Prior Legislation
AB 1923 (Wood, 2016) increases, from three MW nameplate to five
MW, the limit on the nameplate capacity of a bioenergy electric
generation facility that may participate in the IOU's bioenergy
feed-in-tariff programs. 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 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)
AB 1979
Page 5
Utica Water and Power Authority (source)
Calaveras County Supervisor, District 3
Calaveras County Water District
City of Angels Camp
Murphys Sanitary District
NLine energy
OPPOSITION: (Verified8/19/16)
Sierra Club California
ARGUMENTS IN SUPPORT: According to the author:
Small hydroelectric generators with a nameplate of over
three MW are prohibited from participating in the FIT
even though the generator will never actually run above
the three-MW threshold. For example, the UWPA owns and
operates a small conduit hydroelectric generator with a
nameplate of 3.6 MW. However, due to the existing water
system, the generator will never run above three MW. In
fact, it will likely never run above 2.5 MW. Despite
this, the facility is ineligible to participate in this
important program aimed at promoting these exact types of
small renewable generators. This bill will allow an
existing conduit hydroelectric generation facility to be
eligible for the renewable FIT program if it has a
nameplate generating capacity of up to four MW but does
not operate above three MW, and was operational as of
January 1, 1990.
ARGUMENTS IN OPPOSITION:According to the opponents, this bill
would allow larger hydroelectric generating facilities to
qualify for the renewable FIT while starving out other more
truly renewable and environmentally sound projects. It would
also increase workload at the CPUC for projects that are barely
renewable.
ASSEMBLY FLOOR: 72-0, 5/27/16
AB 1979
Page 6
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Burke, Calderon, Campos,
Chang, Chau, Chávez, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Mullin, Nazarian,
Obernolte, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Brough, Brown, Chiu, Dodd, Grove, Hadley,
Melendez, O'Donnell
Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107
8/22/16 22:10:23
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