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
AB 2700
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Analysis Prepared by:Lawrence Lingbloom / NAT. RES. / (916)
319-2092