BILL ANALYSIS Ó
AB 2868
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ASSEMBLY THIRD READING
AB
2868 (Gatto)
As Amended March 17, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Utilities |9-2 |Gatto, Burke, Eggman, |Dahle, Obernolte |
| | | | |
| | | | |
| | | | |
| | |Cristina Garcia, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | | | |
| | | | |
| | |Roger Hernández, | |
| | |Quirk, Santiago, | |
| | |Williams | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |14-6 |Gonzalez, Bloom, |Bigelow, Chang, |
| | |Bonilla, Bonta, |Gallagher, Jones, |
| | |Calderon, Daly, |Obernolte, Wagner |
| | |Eggman, Eduardo | |
| | |Garcia, Roger | |
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| | |Hernández, Holden, | |
| | |Quirk, Santiago, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Requires the California Public Utilities Commission
(CPUC) to direct electrical corporations to file applications
for programs and investments to accelerate widespread deployment
of distributed energy storage systems. Specifically, this bill:
1)Requires the CPUC, in consultation with the State Air
Resources Board (ARB) and the California Energy Commission
(CEC), to direct electrical corporations to file applications
for programs and investments to accelerate widespread
deployment of distributed energy storage systems.
2)Requires the CPUC to initially approve programs and
investments to provide distributed energy storage systems to
industrial, commercial, and low-income customers, and
beginning January 1, 2019, authorizes the CPUC to approve
programs and investments for residential customers who enroll
in time-variant pricing.
3)Sunsets January 1, 2020.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
1)This bill requires one consolidated or three separate
application approval proceedings estimated to take up to two
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years plus an implementation phase.
2)Minor and absorbable ARB and CEC costs.
COMMENTS:
1)Purpose: According to the author, this bill will encourage
energy storage as a means to achieve ratepayer benefits, air
quality standards, and the state's climate change goals.
2)Background: On October 17, 2013, the CPUC approved Decision
13-10-040 to establish storage procurement targets and
policies for load-serving entities (investor-owned utility
(IOU) and non-utility. The CPUC divided the targets into
three "storage grid domains": Transmission-connected,
Distribution-level and Customer-Side of the Meter
applications.
For customer-side of the meter applications, the CPUC included
bill management/permanent load shifting, power quality, and
electric vehicle charging within energy storage.
3)Neither an Incentive Program or a Procurement Program:
Current programs to develop energy storage are limited to the
ratepayer-funded incentives provided by the Self-Generation
Incentive Program and utility procurement solicitations.
This bill does not require either an incentive or a
procurement solicitation. It allows a utility to design a
program that benefits ratepayers and provides utility
customers a way to better manage their energy bills.
This bill does not specify the structure of the program, or
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the size of the program, which would allow the utilities to
develop a program that tailored to meet customer needs and
ratepayer benefits. This bill allows the utilities to design
the program and requires costs to be in the interest of
ratepayers in order for a utility to qualify for cost
recovery.
4)Time of Use Rates: In an attempt to reduce peak loads and/or
shift loads from peak to off-peak periods, utilities have
implemented "time-of-use" (TOU) rate structures that charge
for energy depending on the time of day and season of the year
in which the energy is used. Industrial and commercial
customers are subject to the TOU tariffs of the load-serving
entity providing electric services, some of which also include
demand charges. Similarly, the CPUC is authorized to require,
or authorize, an electrical corporation to employ default
time-of-use pricing for residential customers.
Although TOU structures are effective, because of the nature
of their operations, industrial and commercial customers often
have challenges modifying their businesses to manage their
electricity consumption and costs. More common, however, are
responsive changes in customer electricity usage, which modify
the peak time for electricity demand and effect demand charges
in rate design.
Properly designed and dispatched energy storage systems will
help customers manage energy costs, help reduce overall system
peak energy demands, improve public health, and assist in
achieving greenhouse gas emissions goals.
The CPUC is not required to implement residential customer
time of use rates until 2018.
Analysis Prepared by:
Sue Kateley / U. & C. / (916) 319-2083, FN:
0003116
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