BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: AB 2630 Hearing Date: 6/27/2016
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|Author: |Salas |
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|Version: |6/20/2016 As Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Jay Dickenson |
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SUBJECT: San Joaquin Valley Clean Energy and Jobs Act
DIGEST: This bill requires the California Public Utilities
Commission (CPUC) and the California Energy Commission (CEC) to
recommend to the California Independent System Operator (CAISO)
an amount of electricity to be generated from resources in the
San Joaquin Valley and any associated, necessary transmission
upgrades.
ANALYSIS:
Existing law:
1)Creates CAISO and charges it with ensuring efficient use and
reliable operation of the transmission grid. (Public
Utilities Code §345 et seq.)
2)Requires the CEC, at least every two years, to conduct
assessments and forecasts of all aspects of energy industry
supply, production, transportation, delivery and distribution,
demand, and prices. The CEC shall use these assessments and
forecasts to develop and evaluate energy policies and programs
that conserve resources, protect the environment, ensure
energy reliability, enhance the state's economy, and protect
public health and safety. These assessments and forecasts
shall be done in consultation with the appropriate state and
federal agencies including, but not limited to, the CPUC and
CAISO. (Public Resources Code §25301 et seq.)
3)Directs the CEC, in consultation with the CPUC, CAISO,
transmission owners, users, and consumers, to adopt a
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strategic plan for the state's electric transmission grid
using existing resources. The strategic plan shall identify
and recommend actions required to implement investments needed
to ensure reliability, relieve congestion, and meet future
growth in load and generation, including, but not limited to,
renewable resources, energy efficiency, and other demand
reduction measures. (Public Resources Code §25324)
4)States that no electric utility shall begin the construction
of a line without having first obtained from the CPUC a
certificate that the present or future public convenience and
necessity require or will require such construction. Requires
the CPUC, in making a determination on issuance of a
certificate, to consider the following:
a. Community values.
b. Recreational and park areas.
c. Historical and aesthetic values.
d. Influence on the environment.
(Public Utilities Code §§1001 and 1002)
5)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).
(Public Utilities Code §399.11 et seq.)
6)Requires each investor-owned utility (IOU) to file with the
CPUC, and requires the CPUC to review and accept, modify or
reject, each IOU's proposed electricity procurement plan.
Among other elements, the procurement plan must include a
showing that it will achieve the IOU procuring eligible
renewable energy resources in an amount sufficient to meet its
procurement requirements pursuant to the RPS. (Public
Utilities Code §454.5)
This bill:
1)Makes numerous findings and declarations about California's
environmental and energy goals, the economic condition of the
San Joaquin Valley, and other statements, including:
a) Unlocking the renewable energy potential of the San
Joaquin Valley by providing more equitable investment in
a clean energy economy should be a key priority of
California policymakers.
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b) Given the proximity to existing transmission
corridors, solar projects in the San Joaquin Valley can
be developed in a way that minimizes the need for new
transmission by prioritizing the use of existing
transmission corridors consistent with the principles of
transmission corridor planning developed by the CEC
pursuant to the "Garamendi Principles."
c) As future clean energy investments are planned and
implemented, state officials must ensure an appropriate
share is targeted to improve environmental quality,
expand economic development, contribute to environmental
solutions, and create jobs in the San Joaquin Valley.
2)Requires the CPUC and CEC to evaluate potential eligible
renewable energy resource projects in the San Joaquin Valley,
prioritizing projects that provide the following land-use
benefits or attributes:
a) The economically viable and environmentally
beneficial reuse of drainage-impaired agricultural lands.
b) The retirement of drainage-impaired agricultural
land and facilitation of regional agricultural drainage
solutions.
c) The facilitation of surface water supply redirection
from drainage-impaired agricultural lands to other
productive agricultural land.
3)Requires CPUC and CEC, on or before January 31, 2017, to
recommend to CAISO an amount of electricity to be generated
from eligible renewable energy resources in the San Joaquin
Valley that reasonably maximizes the amount of electricity to
be generated from eligible renewable energy resources,
consistent with the state's overall need for electricity and
the requirements of this article, and that accomplishes all of
the following:
a) Takes into account the 470,000 acres identified in
the Governor's May 2016 Solar Convening Report, entitled
"A Path Forward: Identifying Least-Conflict Solar PV
Development in California's San Joaquin Valley," along
with all other lands in the Central Valley that have
entitlements for solar development.
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b) Provides eligible renewable energy resources within
the San Joaquin Valley with full capacity deliverability
status.
c) Minimizes the need for new transmission by
prioritizing the use of existing transmission corridors
consistent with the principles of transmission corridor
planning developed by the CEC pursuant to the Garamendi
Principles.
4)Requires CPUC and CEC, on or before January 31, 2017, to
recommend to CAISO any network transmission upgrades needed to
fulfill the recommendations regarding renewable energy
development in the San Joaquin Valley. This recommendation
shall seek to minimize the need for new transmission by
prioritizing the use of existing transmission corridors
consistent with the Garamendi Principles.
Background
Demand forecast, identification of need, transmission planning
and procurement: an integrated process. The transmission
planning processes of the state's energy agencies - the CEC,
CPUC, and CAISO - are independent and complimentary. The CEC
biennially develops a 10-year forecast of statewide electricity
demand, which it publishes in its Integrated Energy Policy
Report (IEPR). The CPUC, through its long-term planning process
(LTPP), reviews and approves the procurement plans of the
state's IOUs, which detail the renewable energy resources
throughout the state the IOUs will rely on to meet their RPS
requirements. The CEC and CPUC, respectively, relay the IEPR
and the LTPP portfolios to CAISO, which form key elements of its
annual transmission planning process. As a result of that
process, CAISO approves new and upgraded electricity
transmission required to meet economic need or to achieve the
state's policies, such as the requirements of the RPS.
Consistent with its obligation under its authority provided by
the Federal Energy Regulatory Commission, CAISO approves only
those transmission projects that meet specified energy needs and
ensure just and reasonable rates.
Working off CAISO's approved transmission projects, the state's
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IOUs propose construction or upgrades of specific transmission
lines. The CPUC, as the state regulator of utility rates,
reviews each project proposed by an IOU. In doing so, the CPUC
acts as the lead permitting agency and considers the
environmental effects of the proposed transmission project and,
for a larger transmission project (over 200 kilovolts), the need
for the project and its economics. If the CPUC approves an
IOU's transmission project, the IOU may recover the cost of the
project from its ratepayers.
Transmission planning: Renewable Energy Transmission Initiative
(RETI), set, go. The CEC, CPUC and CAISO have initiated the
RETI 2.0. The stakeholder process is to consider potential
renewable energy resources in California and the West, as well
as land use and environmental constraints, and identify
potential transmission opportunities to access and integrate
renewable energy with the most environmental, economic, and
community benefits. According to CEC, RETI 2.0 will frame and
inform future transmission planning proceedings to help reach
the state's energy and environmental goals.
The Garamendi Principals. In 1988, SB 2431 (Garamendi, Chapter
1457, Statutes of 1988) declared it in the best interests of the
state to accomplish the following, known as the Garamendi
Principles:
Encourage the use of existing rightsofway by upgrading
existing transmission facilities where technically and
economically justifiable.
When construction of new transmission lines is required,
encourage expansion of existing rightsofway, when
technically and economically feasible.
Provide for the creation of new rights ofway when
justified by environmental, technical, or economic reasons,
as determined by the appropriate licensing agency.
Where there is a need to construct additional
transmission, seek agreement among all interested utilities
on the efficient use of that capacity.
Outcome of the San Joaquin Valley Solar Convening - least
conflict? In 2015, at the request of the Governor's Office of
Planning and Research (OPR), the Conservation Biology Institute,
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Berkeley Law's Center for Law, Energy and the Environment, and
Terrell Watt Planning Associates undertook a stakeholder process
- known as the San Joaquin Valley Solar Convening - to explore
how multiple and diverse parties could quickly (within six
months) identify least-conflict lands for solar photovoltaic
(PV) development in the San Joaquin Valley. The process brought
together four stakeholder groups: (1) environmental
conservationists, (2) agricultural farmland conservationists,
(3) solar industry representatives, and (4) transmission groups.
The goal of the project, as described by project coordinators,
was to identify potential areas for solar PV development in the
San Joaquin Valley that each stakeholder group viewed as
least-conflict.
The results of the project were released in May of this year.<1>
The product is a series of what project coordinators call
"least-conflict maps" for each stakeholder group that led to a
final composite map.
Project coordinators acknowledge that stakeholder groups each
approached the exercise with diverse methods and outputs. They
described the effort as a "non-binding, non-regulatory planning
effort." Some stakeholder participants - notably, those
representing solar interests - remark that the project results
were a "snapshot in time," represent "combined but not consensus
results," and, "most importantly, it did not arrive at a true
conclusion regarding which lands in the San Joaquin Valley are
least conflict."
Process confused, but the outcome is clear. As described above,
much of the work of the state's energy agencies - the CEC, the
CPUC, and CAISO - are independent and complimentary. The CEC
forecasts demand; the CPUC approves the IOUs' portfolios of
renewable energy projects; CAISO, relying on the work of the CEC
and CPUC, approves transmission projects that are economic and
needed; the CPUC approves proposals by IOUs for specific
transmission line construction or upgrade that is consistent
with CAISO transmission project approval. This bill confuses
and conflates these agencies' roles in transmission planning.
First, this bill directs the CEC and CPUC to evaluate potential
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<1>
https://www.law.berkeley.edu/wp-content/uploads/2016/05/A-PATH-FO
RWARD-May-2016.pdf .
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eligible renewable energy resource projects in the San Joaquin
Valley according to specific land-use related criteria. This
bill then requires the agencies, using the results of their
evaluation, to recommend to CAISO (a) an amount of renewable
energy resources in the San Joaquin Valley and (b) any network
transmission upgrades needed to fulfill the renewable energy
recommendations. As described above, neither agency currently
recommends to CAISO either an amount of renewable energy
resources to be procured from any region in the state or
transmission upgrades needed to accommodate such procurement.
The requirements of this bill are based on several key premises.
These premises can be found in this bill's findings and
declarations.
Unlocking the renewable energy potential of the San
Joaquin Valley by providing more equitable investment in a
clean energy economy should be a key priority of California
policymakers.
The San Joaquin Valley Solar Convening project
identified land ready for solar development with the least
conflict.
Solar projects in the San Joaquin Valley can be
developed in a way that minimizes the need for new
transmission by prioritizing the use of existing
transmission corridors consistent with the principles of
transmission corridor planning known as the Garamendi
Principles.
Each premise is questionable, at least, or disputed by
participants to the convening or regulatory agencies.
First, is unclear why state policymakers should prioritize
development of renewable energy in the San Joaquin Valley over
development of those resources in other areas of the state.
This bill accurately describes economic and environmental
conditions in the San Joaquin Valley. Those conditions,
however, are not unique to the San Joaquin Valley. Other areas
of the state, too, suffer from persistent, high unemployment and
poverty, drought, and poor air quality. Many of these areas
also possess rich renewable energy resources that have not been
developed, in some cases because of a lack of transmission.
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Second, it is clear from the recent input of participants to the
San Joaquin Solar Convening that the project did not identify
lands least subject to conflict, at least not in any definitive
sense. Representatives of the solar industry describe the
process, at best, as a first step that might, after additional
work and more and broader stakeholder input, successfully
identify least-conflict lands in the San Joaquin Valley.
Despite this disagreement, this bill directs the CEC and CPUC,
in making its recommendations to the CPUC, to take into account
the 470,000 acres identified in the preceding. This requirement
seems premature, especially as it is attached to prescriptive
requirements of the state agencies.
Finally, it is true that solar projects in the San Joaquin
Valley can be developed in a way that minimizes the need for new
transmission by prioritizing the use of existing transmission
corridors. This bill references the Garamendi principles. Those
principals, as described above, include the following:
Encourage the use of existing rightsof way by upgrading
existing transmission facilities where technically and
economically justifiable.
When construction of new transmission lines is required,
encourage expansion of existing rightsofway, when
technically and economically feasible.
Provide for the creation of new rights ofway when
justified by environmental, technical, or economic reasons,
as determined by the appropriate licensing agency.
The CAISO, with encouragement of many members of the Legislature
who represent the San Joaquin Valley, has considered the
economic need of developing new or upgraded transmission lines
in the valley using existing rights of way. Recently, CAISO
determined, consistent with the Garamendi principals, that
additional transmission development in the valley using existing
rights of way is not economically justified, at least not at
this time: sufficient transmission capacity exists to meet
current and projected electricity demand. The CAISO has noted,
however, that, should renewable resources be further developed
in the San Joaquin Valley, there may be economic need to develop
new transmission lines to better connect the valley with load
centers closer to the Bay Area. Such transmission lines might
not follow existing rights of way.
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The state has progressed in meeting its renewable energy goals.
It has a well-defined process for identifying the need for
electricity transmission. This bill would not improve upon that
process. However, it is not unreasonable to require the state's
energy agencies to take into account the Solar Convening Report
when undertaking transmission-related activities. The report
may be, as some describe it, a first step. Undeniably, it
represents a tremendous amount of effort and collaboration by
multiple stakeholders. The output of that effort and
collaboration should not be dismissed. And it is a low
threshold to require the energy agencies to take the report
"into consideration;" it requires no specific outcome.
Therefore, the author may wish delete the existing provisions of
this bill entirely and amend it to read, as follows:
Section 1: findings and declarations.
It is the intent of the Legislature that the state's
processes for identifying and planning for electric
transmission shall take into account the Governor's May
2016 Solar Convening Report, entitled "A Path Forward:
Identifying Least-Conflict Solar PV Development in
California's San Joaquin Valley" and the principles of
transmission corridor planning developed by the State
Energy Resources Conservation and Development Commission in
response to Senate Bill 2431 (Chapter 1457 of the Statutes
of 1988), known as the Garamendi Principles.
Section 2: Section 399.23 is added to the Public Utilities
Code, to read:
399.23. (a) The CAISO, when undertaking transmission
planning activities, shall take into account the Governor's
May 2016 Solar Convening Report, entitled "A Path Forward:
Identifying Least-Conflict Solar PV Development in
California's San Joaquin Valley" and the principles of
transmission corridor planning developed by the State
Energy Resources Conservation and Development Commission in
response to Senate Bill 2431 (Chapter 1457 of the Statutes
of 1988), known as the Garamendi Principles.
(b) The CEC, CPUC and the CAISO, when undertaking
activities as part of the Renewable Energy Transmission
Initiative, shall take into account the Governor's May
2016 Solar Convening Report, entitled "A Path Forward:
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Identifying Least-Conflict Solar PV Development in
California's San Joaquin Valley" and the Garamendi
Principles.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
SUPPORT:
San Luis and Delta - Mendota Water Authority (Source)
Westlands Water District (Source)
Agricultural Energy Consumers Association
Audubon California
California Farm Bureau Federation
City of Hanford
Defenders of Wildlife
Natural Resources Defense Council
Westlands Solar Park
OPPOSITION:
Advanced Energy Economy
Independent Energy Producers Association
Large-scale Solar Association
ARGUMENTS IN SUPPORT: According to the author:
Last year, California enacted legislation to require that
the state reach a 50 percent RPS by 2030, creating new
demand for large utility scale solar development.
Due to the lack of reliable water supplies, drainage issues
and other challenges to agriculture in the Central Valley,
there is a lot of potential for renewable development on
unproductive farmland throughout the Central Valley and
permanently retired lands within Wetlands.
The U.S. Department of Energy's National Renewable Energy
Laboratory (NREL) publishes renewable energy potential maps
for the United States by county. NREL shows that the San
Joaquin Valley has the third highest rating on the solar
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potential scale. NREL estimates solar would produce enough
energy to power up to 1,000,000 homes in the San Joaquin
Valley.
Last year, the University of California (UC) Berkeley and
the Governor's OPR initiated the San Joaquin Valley Solar
Convening, a multi-party stakeholder effort to discuss ways
that the clean energy economy could be realized in the
Central Valley.
UC Berkeley conducted a survey that identified the major
concerns that must be addressed to increase clean energy
development in the San Joaquin Valley. Some of the major
issues found included the lack of transmission capacity in
promising areas; protection of endangered species; high
land costs and lack of available sites; and lack of a
statewide solar development plan.
AB 2630 would require the CEC and the CPUC to examine the
impact of the 50 percent RPS, while taking into
consideration ratepayer costs and benefits, to inform the
state's actions toward unlocking new renewable development
in the Central Valley.
ARGUMENTS IN OPPOSITION: Opponents contend this bill would
unnecessarily complicate the process by which renewable projects
and transmission lines are planned for and developed, all on the
basis of a report requires additional consideration that does
not represent a consensus view of all stakeholders.
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