BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: SB 728 Hearing Date: 4/21/2015
-----------------------------------------------------------------
|Author: |Morrell |
|-----------+-----------------------------------------------------|
|Version: |2/27/2015 As Introduced |
-----------------------------------------------------------------
------------------------------------------------------------------
|Urgency: |No |Fiscal: |Yes |
------------------------------------------------------------------
-----------------------------------------------------------------
|Consultant:|Jay Dickenson |
| | |
-----------------------------------------------------------------
SUBJECT: California Renewables Portfolio Standard Program
DIGEST: This bill requires the California Public Utilities
Commission (CPUC), before it exercises its authority in existing
law to increase renewable energy procurement requirements beyond
33 percent, to evaluate the economic impacts of the increase on
low- and middle-income individuals and families.
ANALYSIS:
Existing law requires retail sellers of electricity -
investor-owned utilities (IOU), community choice aggregators
(CCAs), and energy service providers (ESPs) - and publicly-owned
utilities (POU) to increase purchases of renewable energy such
that at least 33 percent of retail sales are procured from
renewable energy resources by December 31, 2020. This is known
as the Renewable Portfolio Standard (RPS). The CPUC establishes
the RPS for retail sellers and ensures they progress in
achieving it, and levies penalties for failure. The governing
board of each POU establishes its own RPS. The CEC may issue a
notice of violation against a POU for failure the adequately
progress in meeting RPS targets and refer the POU to the
California Air Resources Board (ARB), which may assess penalties
against it. The RPS provides numerous cost containment
provisions and exceptions to compliance obligations. Existing
law authorizes the CPUC to require retail sellers of electricity
to procure renewable energy resources in excess of the
33-percent RPS requirement. (Public Utilities Code §399.11 et
seq.)
This bill requires the CPUC, before it exercises its authority
SB 728 (Morrell) Page 2 of ?
in existing law to increase renewable energy procurement
requirements applicable to retail sellers beyond 33 percent, to
evaluate the economic impacts of the increase on low- and
middle-income individuals and families.
Background
Current law establishes the RPS, which requires retail sellers
of electricity and POUs to procure at least 33 percent of retail
electricity sales from renewable energy resources by the year
2020. Existing law establishes a compliance schedule of
increasing procurement obligations and authorizes the CPUC to
require retail sellers to procure more than 33 percent of retail
electricity sales from eligible renewable energy resources.
Consider the Costs, and the Benefits . This bill requires the
CPUC, before it exercises its authority in existing law to
increase renewable energy procurement requirements beyond 33
percent, to evaluate the economic impacts of the increase on
low- and middle-income individuals and families. This seems a
reasonable requirement. The statute that created the RPS
implicitly acknowledges that requiring retail sellers to procure
greater quantities of electricity from renewable resources than
they would otherwise procure might increase costs. The
Legislature anticipated the possibility of such cost increases
when it considered the RPS legislation. For this reason,
statute includes "off ramps" that allow retail sellers to be
excused from their RPS procurement obligations, should the CPUC
make certain findings. Additionally, existing law requires the
CPUC annually to report to the Legislature on the costs of all
electricity procurement contracts for eligible renewable energy
resources.
Presumably, pushing the RPS requirements beyond 33 percent
similarly has the potential to increase electricity costs. It
makes sense that the CPUC consider the potential for such costs
before expanding the RPS requirements pursuant to existing
statutory authority. As noted above, existing law requires the
CPUC annually to report on costs of procurement of renewable
energy resources. That report differs from this bill in that
the CPUC reports actual costs in the aggregate, not the
SB 728 (Morrell) Page 3 of ?
potential economic impacts to specific socioeconomic subsets, as
does this bill. The author and committee may wish to amend the
bill to require CPUC to consider the economic impacts of an
expanded RPS - both costs and benefits - to the California
economy in general, and to low- and middle-income individuals
and families and disadvantaged communities specifically.
Prior/Related Legislation
SB 836 (Padilla, Chapter 600, Statutes of 2011) requires the
CPUC annually to report on the costs of all electricity
procurement contracts for eligible renewable energy resources.
SB 2 x1 (Simitian, Chapter 1, Statutes of 2011) requires retail
sellers of electricity and POUs to procure at least 33 percent
of their electricity from renewable resources by 2020.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
SUPPORT:
None received
OPPOSITION:
Large-Scale Solar Association
The Utility Reform Network, unless amended
ARGUMENTS IN SUPPORT: The author contends it's important the
CPUC consider the effects of an RPS beyond the existing 33
percent requirement on low- and middle-income individuals and
families because they are particularly susceptible to cost
increases.
ARGUMENTS IN OPPOSITION: Opponents argue this bill is
redundant of existing statutory requirements that obligate the
CPUC to report on RPS costs and that it adds costs to the CPUC's
RPS-related processes.
-- END --
SB 728 (Morrell) Page 4 of ?