BILL ANALYSIS                                                                                                                                                                                                    Ó






                                                                     SB 793


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          Date of Hearing:  June 22, 2015


                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE


                                Anthony Rendon, Chair


          SB  
          793 (Wolk) - As Amended May 5, 2015


          SENATE VOTE:  23-13


          SUBJECT:  Green Tariff Shared Renewables Program.


          SUMMARY:  Permits a participating customer to subscribe to a  
          Green Tariff Shared Renewables (GTSR) Program and receive a  
          reasonably estimated bill credit and bill charge, as determined  
          by the California Public Utilities Commission (CPUC), for a  
          period of up to 20 years.  Specifically, this bill:  


          EXISTING LAW:   


          a)Requires participating Investor Owned Utilities (IOUs) to file  
            applications to establish a voluntary GTSR Program in their  
            service area.  (Public Utilities Code Section 2831)


          b)Requires the CPUC to issue a decision on the IOU's voluntary  
            GTSR Program applications by July 1, 2014.  (Public Utilities  
            Code Section 2831)













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          c)Specifies GTSR program criteria related maximum statewide  
            program size, size of qualified facilities, location of  
            facilities near customers, restrictions on market  
            concentration, inclusion of disadvantaged communities, a 20-MW  
            set aside within the GTSR program for the City of Davis, and  
            restrictions to ensure that the costs of the program are not  
            borne by non-participants.  (Public Utilities Code Section  
            2833)


          d)Sunsets the statute January 1, 2019.  (Public Utilities Code  
            Section 2834)


          FISCAL EFFECT:  Unknown.


          COMMENTS:  


           1)Author's Statement:   "The CPUC issued a decision implementing  
            parts of SB 43 (Wolk, Chapter 413, Statutes of 2013) in  
            January 2015 that lays out the program design for the three  
            IOU's GTSR programs.  Unfortunately, the CPUC rules currently  
            prevent customers from subscribing to their utility's GTSR  
            program for a term of more than one year, a limitation that  
            was not required nor contemplated in SB 43.  Because the bill  
            credits and charges can fluctuate year to year, this one-year  
            maximum limitation prevents a customer from reasonably  
            predicting their rate associated with subscribing to GTSR  
            beyond the current year.  This limitation is likely to  
            significantly reduce program uptake, especially for customers  
            who are considering making a long-term agreement with a  
            specific renewable energy developer within the Enhanced  
            Community Renewables portion of the GTSR programs."


            "SB 793 would have no effect on the overall customer costs or  
            rates of the three IOUs in California.  SB 43 requires that  











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            all costs of an IOU's green tariff shared renewables program  
            be covered by participants of the program and that no costs be  
            paid by ratepayers that are not participants of an IOU's green  
            tariff shared renewables program.  However, SB 793 may lessen  
            the costs to participants that sign up for an IOU's green  
            tariff shared renewables program."


           2)What's a Green Tariff Shared Renewable Program?   While rooftop  
            solar is a strong and growing business in California, as much  
            as 75% of households cannot participate because they are  
            renters and don't own their roofs, they do not have strong  
            enough credit, or their roof is too small or doesn't receive  
            enough sunlight.  The same is true of most businesses, 70% of  
            whom rent or lease their facilities.  Despite their inability  
            to utilize renewable energy, these utility customers continue  
            to pay into solar and renewable programs that fail to benefit  
            them.  Additionally, programs (MASH, SASH, Solar Share, etc.)  
            designed to benefit low-income or rental utility customers by  
            providing them the opportunity to utilize renewable energy  
            either have no room for new participants or fail to provide  
            consumers with access to affordable renewable energy.
            A GTSR allows a utility customer to voluntarily subscribe to a  
            rate plan that provides renewable energy to that customer from  
            a local renewable energy facility.  The customer pays the  
            costs for participating in this program, and other ratepayers  
            who are not participating in this program do not bear the cost  
            of the program.


           3)Status of CPUC Proceeding  . There is an ongoing proceeding to  
            implement SB 43 (A.12-01-008 et al).  The CPUC rendered a  
            decision at the end of January 2015 to begin implementing SB  
            43.  However, there are a host of other issues that remain to  
            be determined by the CPUC in a later phase of the proceeding.   
            The later phase is expected to begin in August or September  
            2015.
            This bill would not delay the current proceeding at the CPUC.












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           4)Need for this bill.   According to the author, customers need  
            to be able to enroll in the GTSR program for more than one  
            year so that they can predict the billing rate associated with  
            subscribing to GTSR beyond the current year.  Having  
            information that estimates bill credits and bill charges over  
            a longer period of time can help a customer decide whether to  
            enroll in this program.  
             The CPUC decision (D15-01-051<1>) on GTSR, the CPUC notes that  
            in this decision: 


               We have eliminated the requirement that an IOU require a  
               one-year enrollment minimum and early termination fee,  
               provided that the IOU can demonstrate that ratepayer  
               indifference can still be achieved. Longer terms and  
               locked-in rates are slated for Phase IV.


            The decision goes on to state that:


               The GTSR Program may require up to a one-year enrollment  
               term, with the option of continuing on a month-to-month  
               basis at the end of the year.  (Ordering Paragraph 46). 


            Even though the CPUC has provided flexibility with respect to  
            the enrollment period, the other issue relates to pricing.   
            One stakeholder in the CPUC proceeding put it this way:  "? in  
            order to offer participants fair compensation for the  
            long-term value of GTSR resources and pricing certainty for  
            the term of their participation, which, for ECR projects, is  
            --------------------------


          <1>


            
           http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M146/K250/146250314.PDF  









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            going to be much longer than one year if projects are to be  
            successfully developed.


            The CPUC issued a ruling on April 15, 2015, which will, among  
            other things, consider options for customers to lock-in rates  
            and have long-term contracts. The CPUC estimates a decision by  
            November 2015.


            The CPUC's decision must set the GTSR rates "in a manner that  
            ensures nonparticipant ratepayer indifference for the  
            remaining bundled service, direct access, and community choice  
            aggregation customers and ensures that no costs are shifted  
            from participating customers to nonparticipating ratepayers,"  
            as specified in Public Utilities Code Section 2833(q). 


            If SB 793 is enacted, the CPUC may need to consider directing  
            the IOUs to include a disclosure to customers that choose to  
            enroll for 20 years that the estimate of credits and charges  
            are not a guarantee to those credits and charges.




           5)20-year commitment:   Current IOU rate plans are one-year  
            commitments for customers and are terminated when a customer's  
            life circumstance causes them to move, even if it occurs  
            within the one-year commitment.  As written, it is not clear  
            whether a 20-year enrollment in GTSR would result in a debt  
            obligation to the customer.  This can impact whether or not a  
            customer can continue to participate in the program (the  
            duration of this commitment is a life-cycle generation -  
            Yuppies, Generation X, Millenials, etc.), during which much  
            can change in a person's life.  For example, how would GTSR  
            address changes that prevent a customer from meeting a 20-year  
            enrollment commitment because of unexpected events (job  
            change, a significant change in family circumstances such as  











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            death or divorce, moving to another utility service area, or  
            change of residence).  Commercial and government customers may  
            be in a better position to make a 20-year commitment as their  
            site ownership may not change as frequently as residential  
            site ownership. 





             The author may wish to consider clarifying this language:


             
            (o) A participating utility shall permit a participating  
            customer to subscribe to the program and  receive a reasonably  
            estimated   be provided with a non-binding estimate of  
            reasonably anticipated  bill  credit   credits  and bill  charge   
             charges,  as determined by the commission, for a period of up  
            to 20 years.





           6)Support and Opposition: 
             Supporters state that SB 793 would give greater flexibility  
            for customers and greater predictability for utilities,  
            customers, and renewable energy financing entities because  
            customers will receive a reasonably estimated bill credit and  
            bill charge for a period of up to 20 years.


            Opponents state that there is no comparable rationale for  
            allowing customers to receive a fixed bill credit for a period  
            of two decades.  They point out that the GTSR rate will adjust  
            to reflect the actual cost of generation used to serve  
            customers and is tied to actual market prices for electricity,  
            natural gas costs, and the costs of a changing mix of  











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            generation in the utility portfolio.  They point out it is not  
            possible to realistically forecast these costs over a 20-year  
            time horizon for the purposes of fixed bill credits for the  
            entire period.


           7)Related Legislation:
             SB 43 (Chapter 413, Statutes of 2013):  Established, until  
            January 1, 2019, a Shared Renewable Self Generation Program  
            allowing IOU customers to purchase an interest in a "community  
            renewable energy facility" and receive a bill credit for the  
            generation component of the customer's electrical service.

            SB 843 (Wolk 2012):  Would have established a new business  
            model that would allow developers of renewable projects to  
            sell electricity to customers of IOUs.  Failed in Assembly  
            Utilities Committee.


            SB 383 (Wolk 2012) was amended to deal with a different  
            subject in the Assembly
          


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Borrego Solar


          California Environmental Justice Coalition


          California Public Utilities Commission











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          California Solar Energy Industries Association


          Environmental Defense Fund


          Sierra Club


          Solar Energy Industries Association


          Vote Solar




          Opposition


          TURN (unless amended)




          Analysis Prepared by:Sue Kateley / U. & C. / (916)  
          319-2083