BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1979


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          1979 (Bigelow)


          As Amended  August 19, 2016


          Majority vote


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          |ASSEMBLY:  |72-0  |(May 27, 2016) |SENATE: |37-0  |(August 23,      |
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          Original Committee Reference:  U. & C.




          SUMMARY:  Makes an exception to the feed-in-tariff (FIT) program  
          three megawatt (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 MWs that meets  
          certain conditions


          The Senate amendments make minor, non-substantive changes and  
          relocate the content of the bill to a different section within  
          the California Public Utilities Code.


          FISCAL EFFECT:  None.  










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          COMMENTS:  


          1)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 United States states  
            and around the world. California, too, offers a FIT program.   
            State law requires all investor-owned utilities and  
            publicly-owned utilities 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. 


          2)Effective capacity versus nameplate capacity:  As described  
            above, existing statute limits participation in the bioenergy  
            FIT program to electric generation facilities with an  
            "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 the three MW  
            effective-capacity limit corresponds to the nameplate capacity  
            of the facility, meaning the capacity stamped on the metal  
            nameplate attached to the generation facility by the  
            manufacturer.


          3)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 and  
            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  








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            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 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. 


          Analysis Prepared by:                                             
                          Sue Kateley / U. & C. / (916) 319-2083  FN:  
          0004864