BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 2861 (Ting) - Electricity:  distribution grid interconnection  
          dispute resolution process
          
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          |Version: August 1, 2016         |Policy Vote: E., U., & C. 9 - 0 |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 1, 2016    |Consultant: Narisha Bonakdar    |
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          This bill meets the criteria for referral to the Suspense File.


          Bill  
          Summary:  AB 2861 authorizes the California Public Utilities  
          Commission (CPUC) to establish an expedited distribution grid  
          interconnection dispute resolution process to resolve disputes  
          within 60 days, unless it determines more time is needed.  The  
          bill specifies the elements to be included in the dispute  
          resolution process and requires the CPUC to establish a  
          technical advisory panel, a review panel, and a public process  
          for each dispute. 


          Fiscal  
          Impact:  
           Approximately $731,000 (Utilities Reimbursement Account) to  
            the CPUC for staff necessary to develop and implement the  
            expedited distribution grid interconnection dispute resolution  
            process.  


          Background:  







          AB 2861 (Ting)                                         Page 1 of  
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          Distribution Grid Interconnection Disputes.  Investor-owned  
          utilities (IOUs) own the utility lines that serve local areas,  
          also known as the distribution grid.   The interconnection is  
          the physical connection between a generator and the grid.   
          Disputes arise when the utility who owns, manages, and maintains  
          the grid won't connect generation projects.  A typical dispute  
          occurs when the utility requires system improvements for safety  
          purposes and the generator may object to some or all of the  
          costs of the improvements.

          CPUC's Rule 21 and the Alternative Dispute Resolution Process.   
          Electric Rule 21 is a tariff that describes the interconnection,  
          operating and metering requirements for generation facilities to  
          be connected to an IOU's distribution system, over which the  
          CPUC has jurisdiction.  Section K of Rule 21 establishes a  
          dispute resolution process that first provides a structure for  
          bilateral negotiations between representatives of a generation  
          facility and the IOU, and then directs unresolved disputes to  
          the CPUC's Alternative Dispute Resolution (ADR) process, which  
          is administered by the CPUC's Administrative Law Judge Division.  
           

          The CPUC does not have data on how many interconnection disputes  
          have gone through the ADR process.  However, the CPUC describes  
          the process as rarely, if ever, having been used by  
          interconnection applicants.  The CPUC attributes this to the  
          time and cost of the ADR process, and reports that developers  
          instead often raise complaints with CPUC's Energy Division  
          staff. The CPUC reports that in the last year, the Energy  
          Division has received 20-30 informal requests for assistance  
          with interconnection disputes.

          An expedited dispute resolution process.  This bill seeks to  
          create a forum by which interconnection disputes between a  
          generator and an IOU can be resolved quickly and fairly.  To  
          that end, this bill authorizes the CPUC to establish an  
          expedited distribution grid interconnection dispute resolution  
          process with the goal of resolving disputes over interconnection  
          applications that are within the jurisdiction of the CPUC in no  
          more than 60 days from the time the dispute is formally brought  
          to the commission.  The idea was proposed as part of last year's  
          budget act but did not appear in the final version.









          AB 2861 (Ting)                                         Page 2 of  
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          Proposed Law:  
            This bill:
          1)Authorizes the CPUC to establish an expedited distribution  
            grid interconnection dispute resolution process to resolve  
            disputes within 60 days, unless it determines more time is  
            needed.  


          2)Specifies the elements to be included in the dispute  
            resolution process.


          3)Requires the CPUC to establish a technical advisory panel, a  
            review panel, and a public process for each dispute. 


          4)Requires the CPUC to appoint a qualified electrical engineer  
            with substantial expertise to advise the Director of Energy  
            Division and provide adequate staff to assist in resolving  
            interconnection disputes.




          Staff  
          Comments:  According to the author, this bill expedites the  
          process of connecting more energy storage to a utility's  
          electric grid, which in turn means more renewable energy can be  
          obtained.






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