BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2700


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          Date of Hearing:  April 18, 2016


                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES


                                 Das Williams, Chair


          AB 2700  
          (Salas) - As Amended March 17, 2016


          SUBJECT:  Electrical corporation:  California Renewables  
          Portfolio Standard Program:  procurement plans


          SUMMARY:  Requires the Public Utilities Commission (PUC) to  
          update the "least-cost, best-fit" (LCBF) criteria used to rank  
          contracts under the Renewables Portfolio Standard (RPS) to  
          identify the value of maintaining existing baseload resources to  
          achieve the goal of a balanced portfolio of eligible renewable  
          energy resources.


          EXISTING LAW:  


          1)Requires "retail sellers" of electricity, i.e., investor-owned  
            utilities (IOUs), energy service providers (ESPs) and  
            community choice aggregators (CCAs), as well as publicly-owned  
            utilities (POUs), to procure 50% of their retail electricity  
            sales from eligible renewable energy resources by 2030 and  
            thereafter, including interim targets of 25% by 2016, 33% by  
            2020, 40% by 2024, and 45% by 2027.

          2)Requires the PUC to direct each IOU to include in its proposed  
            procurement plan a strategy for procuring a diverse portfolio  
            of resources that provide a reliable electricity supply,  








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            including renewable energy integration needs, using zero  
            carbon-emitting resources to the maximum extent reasonable.



          3)Requires the PUC to adopt a process that provides criteria for  
            the rank ordering and selection of LCBF resources to comply  
            with the RPS obligations on a total cost and best-fit basis.   
            Among other things, the LCBF process must take into account  
            workforce recruitment, training, and retention efforts,  
            including the employment growth associated with the  
            construction and operation of eligible renewable energy  
            resources, and goals for recruitment and training of women,  
            minorities, and disabled veterans.



          4)Requires each retail seller, in soliciting and procuring RPS  
            resources, to consider the best-fit attributes of resource  
            types that ensure a balanced resource mix to maintain the  
            reliability of the electrical grid.
          THIS BILL:


          1)Requires the PUC, by July 1, 2017, to update the LCBF criteria  
            to identify the value of maintaining existing baseload  
            resources to achieve the goal of a balanced portfolio of  
            eligible renewable energy resources.


          2)Adds "jobs retained associated with contracting for existing  
            eligible renewable energy resources" to the workforce  
            considerations that the LCBF process must take into account.


          FISCAL EFFECT:  Unknown


          








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          COMMENTS:


          1)Author's statement:



          AB 2700 requires the CPUC to update the LCBF criteria so that  
          this analysis comprehensively reflects the values appropriately  
          outlined in statute of particular renewable resources.  This is  
          significant given the range of renewable procurement options  
          available to California public utilities. 





          The (RPS) states that the objective of the program is to ensure  
          that the most cost-effective and efficient investments in  
          renewable energy resources are vigorously pursued and that the  
          objectives of the program shall be to increase renewable  
          generation from facilities located in state, while protecting  
          system reliability, fostering resource diversity and obtaining  
          the greatest environmental benefits for California residents.   
          Statute further requires utilities 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.





          California has a diverse and abundant supply of new and existing  
          intermittent and baseload renewable resources.  Together, these  
          resources can and should play a significant role in meeting  








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          California's low carbon and clean energy policies.  But the  
          utilities' portfolios have become less diverse, not more.  The  
          procurement of new wind, solar thermal and solar PV has gone up  
          dramatically while the procurement of biomass and geothermal has  
          declined significantly. 





          California's renewables portfolio needs to be balanced and  
          diversified.  Diversity promotes reliability by balancing  
          intermittent resources like wind and solar with baseload and  
          balancing renewable resources such as biomass and geothermal.   
          AB 2700 is intended to correct this problem and avoid  
          unnecessary costs burdening ratepayers and negative impacts that  
          the loss of these resources will have on communities.





          2)More fit.  Certain biomass facilities have been unable to  
            secure new contracts with utilities because the utilities have  
            satisfied their RPS procurement requirements using other,  
            lower-cost resources.  The inability to secure new contracts  
            has led to the closure of several biomass plants and loss of  
            jobs in their communities.  Contracts with existing geothermal  
            plants are also at risk of not being renewed and new  
            geothermal projects have not ranked favorably in the RPS  
            selection process.



            This bill seeks balanced procurement selection by encouraging  
            the PUC to rank existing renewable projects in a more  
            favorable manner relative to existing jobs and to identify the  
            value of maintaining existing baseload resources.









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          3)Double referral.  This bill passed the Assembly Utilities and  
            Commerce Committee by a vote of 15-0 on April 6, 2016.
          








          REGISTERED SUPPORT / OPPOSITION:




          Support


          Agricultural Council of California


          Associated California Loggers


          Becerra Ag


          California Biomass Energy Alliance


          California Farm Bureau Federation


          California Forestry Association








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          DG Fairhaven Power LLC


          IHI Generation


          IHI Power Services


          Rio Bravo Fresno


          Rio Bravo Rocklin


          Tuolumne County Chamber of Commerce


          Wadham Energy LP


          Wilson Ag


          13 Individuals




          Opposition


          None on file












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          Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916)  
          319-2092