BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 286 (Hertzberg) - Electricity: direct transactions.
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|Version: April 29, 2015 |Policy Vote: E., U., & C. 11 - |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 28, 2015 |Consultant: Marie Liu |
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SUSPENSE FILE. AS AMENDED.
Bill
Summary: SB 286 would expand the limit on Direct Access (DA)
service for nonresidential customers of electrical
investor-owned utilities (IOUs).
Fiscal Impact (as approved on May 28,
2015): Initial costs of at least $400,000 annually for 1.5
years, then $250,000 annually ongoing, from the Public Utilities
Reimbursement Account (special) for increased oversight and
management of a larger DA service program.
Background: In the past, through the passage of AB 1890 (Brulte) Chapter
854, Statutes of 1996, the Legislature allowed IOU customers to
elect to receive electric service from a provider other than the
IOU, a service known as DA, in an effort to provide more
competition. The other providers of electrical service are
known as Electric Service Providers (ESPs). In reaction to the
SB 286 (Hertzberg) Page 1 of
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California electricity crisis in 2000 and 2001, the Legislature
suspended DA, though existing DA contracts were allowed to
continue.
In 2009, the Legislature passed SB 695 (Kehoe, Chapter 337,
Statutes of 2009), which reopened DA. More specifically, SB 695
directed the CPUC to allow nonresidential end-use customers to
acquire electric service from ESPs in each IOUs service
territory, up to a specified limit. SB 695 set the limit for
each IOU equal to the maximum total KWh supplied by all ESPs to
DA customers of the IOU during any sequential 12-month period
between April 1, 1998, and October 11, 2009. After accounting
for existing DA contracts, SB 695 opened up an additional 8,354
gigawatt hours (GWh) of DA service. The additional DA service
made available by SB 695 was quickly acquired.
No new customer may contract with an ESP for DA service unless
an existing customer drops out of DA. As of 2014, there was a
queue for DA service by 845 customers for 6,131 GWh of load.
Existing law subjects ESPs to the same requirements that are
applicable to the state's three largest IOUs for resource
adequacy, the renewables portfolio standard (RPS), and the
requirements for the electricity sector adopted by the
California Air Resources Board pursuant to the California Global
Warming Solutions Act of 2006. (PUC §356.1 et seq.)
Proposed Law:
This bill would open up 8,000 GWh of additional DA load over
the SB 695 limits for each IOU. This additional DA service would
be phased in over a period adopted by the CPUC, but not to
exceed three years, and beginning in January 1, 2016.
Of the new DA service, at least 51% of the electricity purchases
must be from eligible renewable energy resources as defined in
the RPS program.
Staff
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Comments: This bill would require the CPUC to conduct a
proceeding to implement the phase-in of the additional DA
service availability. The CPUC anticipates needing approximately
$400,000 for three positions annually for 1.5 years. Once the
proceeding is completed, the CPUC would require two of the
positions to be ongoing to manage the compliance, monitoring,
and ongoing implementation with the phase-in for an ongoing
annual cost of $250,000.
Staff notes that the intent of the author and the policy
committee is that the DA program be expanded for a total of
8,000 GWh statewide, not 8,000 GWh per IOU. Staff recommends
that the bill be amended to reflect this intent.
Author amendments (as adopted on May 28, 2015): Amend to:
Specify that the 8 GWh is a statewide total to be distributed
amongst the IOUs based on their proportionate share of retail
sales
Require that all additional DA service be from renewable
sources as defined in the RPS program.
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