BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 886 (Pavley) - Electricity: energy storage systems
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|Version: April 26, 2016 |Policy Vote: E., U., & C. 8 - 3 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 16, 2016 |Consultant: Narisha Bonakdar |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 886 requires the California Public Utilities
Commission (CPUC) to determine energy storage system procurement
targets applicable to every load-serving entity. The bill also
requires the governing board of each local publicly owned
electric utility to determine comparable energy storage
procurement targets; requires each load-serving entity and
locally owned public electric utility to plan for the
procurement of energy storage systems before fossil-fuel-based
generation; and requires each electrical corporation to propose
measures to encourage customers to install energy storage
systems.
Fiscal Impact:
One-time cost up to $339,288 (Public Utilities Commission
Utilities Reimbursement Account) for staffing necessary to
determine cost-effective storage targets, review investor
owned utility (IOU) tariff filings, develop a policy for
prioritizing storage procurement before fossil generation,
monitor procurement filings, and to manage a new track of an
existing proceeding or to manage a new proceeding.
Background:1)
California utilities have procured increasing amounts of
electricity from renewable resources, in response to the state's
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Renewable Portfolio Standards (RPS) mandates. Much of this
electricity has come from solar and wind energy resources.
The California Energy Commission (CEC), among other things,
certifies eligible renewable resources procured by retail
sellers (investor-owned utilities, electricity service
providers, and community choice aggregators) that meet statutory
requirements, tracks and verifies renewable energy output to
ensure it is counted only once, specifies procedures for
enforcement of the RPS for publicly owned utilities (POU), and
certifies and verifies eligible renewable energy resources
procured by POUs and to monitor their compliance with the RPS.
The CPUC is charged with, among other things, determining
procurement targets and enforcing compliance, reviewing IOU's
contracts for RPS-eligible energy for rate recovery, calculating
and administering a cost limitation on renewable procurement for
investor-owned utilities, establishing the standard terms and
conditions to be used by all IOUs in contracting for eligible
renewable energy resources, implementing compliance rules with
RPS procurement quantity requirements, and reviewing and
approving each IOU's procurement plan and its process for
selecting the least cost bidders of renewable energy that best
fit that utility's resource needs. IOUs use these processes to
select winning bidders from their solicitations to procure
renewable electricity.
Technologies eligible for the RPS include photovoltaics; solar
thermal electric; wind; certain biomass resources; geothermal
electric; certain hydroelectric facilities; ocean wave, thermal
and tidal energy; fuel cells using renewable fuels; landfill
gas; and municipal solid waste conversion, not the direct
combustion of municipal solid waste. The CEC voted in March 2012
to suspend the eligibility of biomethane, but biomethane
contracts signed before March 29, 2012 are eligible for
compliance if certain conditions are met.
Investor-owned utilities may enter into a combination of
long-term and short-term contracts with renewable energy project
developers for electricity and associated renewable energy
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credits to be used for compliance with the RPS. Beginning
January 1, 2021, at least 65% of the procurements used by an
investor-owned utility must come from contracts of 10 years or
more in duration.
Proposed Law: This bill:
1)Requires the CPUC to determine, by January 1, 2018, energy
storage system procurement targets applicable to each load
serving entity (LSE), to be achieved by December 1, 2030.
2)Directs the CPUC to require each IOU, by January 1, 2017, to
propose new tariffs or programs to encourage customers to
install energy storage systems on the customer side of the
meter.
3)Requires the CPUC, by March 1, 2017, to require each LSE, in
developing its IRP, to consider the full benefits of procuring
energy storage systems.
4)Requires the CPUC, in approving an LSE's integrated resource
plan (IRP), to require the IRP to provide for the procurement
of comparably priced, equally effective energy storage systems
before fossil-fuel-based generation.
5)Requires the governing board of each POU, in planning for
future procurement of resources, to consider the benefits of
procuring energy storage systems and to procure comparably
priced, equally effective energy storage systems before
fossil-fuel-based generation.
Related Legislation:
AB 2514 (Skinner, Chapter 469, Statutes of 2010) required CPUC
to determine appropriate targets, if any, for LSEs to procure
energy storage systems. The bill required LSEs to meet any
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targets adopted by the CPUC by 2015 and 2020. The bill required
POU to set their own targets for the procurement of energy
storage and then meet those targets by 2016 and 2021.
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