BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 793|
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THIRD READING
Bill No: SB 793
Author: Wolk (D), et al.
Amended: 5/5/15
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE: 8-3, 4/21/15
AYES: Hueso, Hertzberg, Hill, Lara, Leyva, McGuire, Pavley,
Wolk
NOES: Fuller, Cannella, Morrell
SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/11/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates, Nielsen
SUBJECT: Green Tariff Shared Renewables Program
SOURCE: Author
DIGEST: This bill requires an investor-owned utility (IOU)
that offers a Green Tariff Shared Renewables (GTSR) Program to
permit a participating customer to subscribe to the program and
receive a reasonably estimated bill credit and bill charge for a
period of up to 20 years. This bill also deletes a January 2019
program sunset.
ANALYSIS:
Existing law:
1)Requires the electrical IOUs to permit customers to subscribe
to the GTSR Program until there is statewide 600 megawatts
(MW) of customer participation, with each utility responsible
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for its proportionate share of GTSR participation. Statute
also sets aside the following GTSR Program components: (a) 100
MW for facilities 1 MW or less located in areas identified by
the California Environmental Protection Agency as the most
impacted and disadvantaged communities; (b) 100 MW for
residential customers; and (c) 20 MW for the City of Davis.
Statute declares the intent of the Legislature that
implementation of the GTSR Program not affect nonparticipating
ratepayers. Statute further requires the California Public
Utilities Commission (CPUC), by July 1, 2014, to issue a
decision to approve or disapprove each IOU's GTSR Program,
with or without modification. (Public Utilities Code §2831 et
seq.)
The California Constitution grants CPUC authority to fix rates
charged by public utilities under its jurisdiction. (Article
XII, Section 6, California Constitution.)
2)Requires retail sellers of electricity - IOUs, community
choice aggregators, and energy service providers - and
publicly-owned utilities 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. (Public
Utilities Code §399.11 et seq.)
This bill requires an IOU to allow a customer participating in
its GTSR Program to subscribe to the program and receive a
predictable bill credit and bill charge for a period of up to 20
years.
Background
Growing demand for access to renewable energy. Distributed
electricity generation is not for everyone. For example, not
every home or business can install solar panels on its roof, for
a variety of reasons - structural limitations, directional
alignment and ownership limitations, to name a few. Yet, as the
state's distributed generation incentives - such as the
California Solar Initiative - led to increasing installation of
renewable energy resources in the close of last decade, interest
in expanding access to renewable resources grew.
By 2012, the state's largest electrical IOUs - Pacific Gas and
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Electric (PG&E), Southern California Edison (SCE), and San Diego
Gas and Electric (SDG&E) - had proposed to offer their customers
"green" options that would provide greater access to renewable
energy. Many individuals and organizations supported the
proposal that "green" energy become more available to IOU
customers. Several parties, however, expressed criticisms and
concerns with the IOU proposals while they were under
consideration at the CPUC.
SB 43 and the GTSR Program. In 2013, the Legislature approved a
bill - SB 43 (Wolk) - that required the IOUs to allow customers
to subscribe to a GTSR Program, which was to expand access to
renewable energy resources to all ratepayers who are unable to
access the benefits of onsite generation. The IOUs implemented
the 600 MW program proportionately. The bill also set aside
portions of the program for specific customer classes, including
disadvantaged communities, residential customers and the City of
Davis, which had operated a community solar pilot project prior
to introduction of SB 43.
The bill codified numerous findings and statements of intent.
Among those statements was that IOU ratepayers not participating
in the GTSR Program be unaffected by implementation of the
program.
The bill directed the IOUs each to submit a GTSR Program plan to
the CPUC. The bill required the CPUC, by July 1, 2014, to issue
a decision to approve each of the plans if it determines the
plan is reasonable and meets the bill's declarations and
statements of intent. The bill also gave the CPUC the power to
modify the IOUs' GTSR Program plans.
CPUC proposes GTSR Program plan decision, limits contracts to
one year. On January 29 of this year, the CPUC released a
decision to approve the GTSR Program plans. (A.12-01-008 et al
(http://docs.cpuc.ca.gov/PublishedDocs/
Published/G000/M145/K819/145819809.PDF). The CPUC decision, in
interpreting SB 43, understands the bill to require
implementation of two, distinct programs: (a) a Green Tariff
option, in which customers may purchase energy with a greater
share of renewables, and (b) an enhanced community renewables
(ECR) option, which allows customers to purchase renewable
energy from community-based projects.
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Among the decision's provisions was a discussion of customer
subscription terms for both components of the GTSR Program. As
described in the decision, the IOUs had submitted plans that
offered various subscription terms. SDG&E had proposed that
customers be able to participate with a one-year minimum
commitment or with long-term commitments of two, three, five, or
10 years. PG&E proposed customers commit to a one-year
contract, moving to month-to-month participation thereafter.
SCE, in contrast, proposed month-to-month participation.
The CPUC's proposed decision, in discussing the IOUs' proposals,
declared a number of benefits to one-year GTSR Program
contracts. First, the CPUC opined, one-year contracts provide
the IOUs some certainty around program participation in the
coming year. Second, the CPUC continued, a one-year commitment
was long enough to allow participants to test the program
without being locked in to the program for a longer duration.
The proposed decision also offered a number of drawbacks to
longer-term contracts, such as those proposed by SDG&E, calling
such contract terms "not viable." As support for its position,
CPUC noted that program rates would automatically adjust to
match changes in commodity prices; therefore, long-term
contracts provided no value as a hedge against future cost
increases.
In the end, the proposed decision required GTSR Program (both
Green Tariff and ECR) subscription terms of one year.
Bill requires terms, and reasonably estimated credits, for up to
20 years. As described above, this bill requires the IOUs to
offer GTSR Program subscription of 20 years duration. This bill
also requires the subscriber to receive a reasonably estimated
bill credit and bill charge, as determined by the CPUC, for a
period of up to 20 years.
Over so soon? This bill also deletes the program sunset of
January 1, 2019. The sunset would end the statutory requirement
that the IOUs offer the GTSR Program to customers.
It is not clear what has changed since passage, in 2013, of SB
43, which included the sunset. In any case, the CPUC would be
free to continue the GTSR Program, even with the sunset in
statute. The sunset also allowed for an evaluation of the
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program, which the CPUC could continue if successful and still
needed, or modify if warranted. Or, the Legislature could pass
new legislation extending the program, should it wish.
Prior Legislation
SB 43 (Wolk, Chapter 88, Statutes of 2013) required the IOUs to
offer the GTSR Program to ratepayers.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee, ongoing costs
of approximately $130,000 from the Public Utilities
Reimbursement Account (special) to estimate costs and credits
over 20 years.
SUPPORT: (Verified5/12/15)
Borrego Solar
California Environmental Justice Alliance
California Solar Energy Industries Association
Environmental Defense Fund
Large-Scale Solar Association
Recurrent Energy
Sierra Club California
Solar Energy Industries Association
SolarCity
Vote Solar
OPPOSITION: (Verified5/12/15)
The Utility Reform Network
ARGUMENTS IN SUPPORT: The author and proponents contend
this bill removes a barrier to participation in the GTSR Program
by allowing longer-term contracts and providing, reasonably
estimated, stable rates to those participating in it.
ARGUMENTS IN OPPOSITION: Opponents argue that this bill
results in a cost shift to ratepayers who do not participate in
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the program.
Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107
5/13/15 16:37:40
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