BILL ANALYSIS Ó
AB 2454
Page 1
ASSEMBLY THIRD READING
AB
2454 (Williams)
As Amended May 31, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Utilities |10-3 |Gatto, Burke, Eggman, |Patterson, Chávez, |
| | | |Dahle |
| | | | |
| | | | |
| | |Cristina Garcia, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | | | |
| | | | |
| | |Roger Hernández, | |
| | |Obernolte, Quirk, | |
| | |Santiago, Williams | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |15-5 |Gonzalez, Bloom, |Bigelow, Gallagher, |
| | |Bonilla, Bonta, |Jones, Obernolte, |
| | |Calderon, Chang, |Wagner |
| | |Daly, Eggman, Eduardo | |
| | |Garcia, Roger | |
AB 2454
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| | |Hernández, Holden, | |
| | |Quirk, Santiago, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Modifies the procurement requirements an electrical
corporations regulated by the California Public Utilities
Commission (CPUC) must propose and the CPUC must approve.
Specifically, this bill:
1)Requires electrical corporations to consider the findings in
the Demand Response Potential Study, ordered by the CPUC, when
determining the availability of cost-effective, reliable, and
feasible demand response resources.
2)Requires the electrical corporation to meet any identified
resource need through available renewable energy, energy
storage, energy efficiency, and demand reductions that are
cost effective, reliable, and feasible. Requires the CPUC to
require the electrical corporation to demonstrate fulfillment
of this provision prior to approving a contract for any new or
repowered gas-fired generation facility.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, the CPUC anticipates this bill will require an
additional staff analyst to track procurement decisions across
numerous sections, including storage, self-generation incentive
program, combined heat and power, and others to demonstrate the
procurement prioritized demand reduction and energy efficiency
resources. This bill will also require an administrative law
judge to ensure the decisions contain the analysis necessary to
satisfy the requirements.
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COMMENTS:
1)Purpose: According to the author, demand response is a
valuable tool that can enhance system reliability by reducing
peak demand on the grid when it is most expensive to generate
electricity, provide economic alternatives to generation,
reduce greenhouse gas emissions, help with renewable resource
integration, and provide customers options for managing their
energy needs. This bill will ensure demand response resources
are integrated into the wholesale market as supply-side
resources to address transmission level reliability issues and
used on the distribution system to address local reliability
needs.
2)Background: Under existing law, each electrical corporation
is required to file a proposed procurement plan with the CPUC
and the CPUC is required to review and accept, modify or
reject the proposed plan based on specific requirements.
In 2014, the CPUC issued a decision indicating its intention
to adopt a firm demand response (DR) goal specific to each
utility to increase participation in DR. To that end, the
CPUC authorized the undertaking of a DR Potential Study to
determine the amount of the DR capacity in California. This
report is due to be completed in 2016.
DR refers to altering energy usage in response to an event or
a schedule. By altering demand for energy at a given time in
a specified amount, DR can help maintain reliable operation of
the electricity grid. Used correctly, it can also reduce
overall cost of energy procurement because it has been
generally true that the electricity demanded when load is
highest is always the most expensive electricity. A reduction
in demand can avoid the need for that most expensive
AB 2454
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electricity.
Analysis Prepared by:
Sue Kateley / U. & C. / (916) 319-2083 FN:
0003229