BILL ANALYSIS Ó
SB 919
Page 1
Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 919
(Hertzberg) - As Amended August 1, 2016
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|Policy |Utilities and Commerce |Vote:|15 - 0 |
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| |Water, Parks and Wildlife | |15 - 0 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill requires the California Public Utilities Commission
(PUC), in consultation with the California Independent System
Operator (CAISO), to address, by January 1, 2018, the oversupply
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of renewable energy resources through the development of a
tariff or other economic incentive for the electricity purchased
by customers operating facilities that create or augment local
water supplies.
This bill defines "facilities that create or augment local water
supplies" to include desalination, brackish water desalting,
water recycling, water reuse, stormwater and dry weather runoff
capture and use, and groundwater recharge facilities.
FISCAL EFFECT:
According to the PUC, the requirements of this bill can be
addressed through existing proceedings including the Long Term
Procurement Planning, the Water-Energy Nexus Order Instituting
Rulemaking, and the Time-of-Use Order Instituting Rulemaking.
However, the deadline in this bill may require staff to shift
from working on long term over-supply mitigation to focusing on
meeting the requirements of the bill.
COMMENTS:
1)Rationale. California remains in a historic drought.
Scientists predict our changing climate will increase the
frequency, length, and severity of future droughts. The
solution will require new sustainable, local water supplies,
such as water recycling, ocean desalination, stormwater
capture, and brackish desalting (i.e., cleaning up water that
is too salty to drink, but not as salty as seawater).
According to wastewater agencies, most of the demand for
recycled water is for irrigation, and due to nighttime
watering rules, there is no way to avoid daytime production
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when retail costs are highest.
Due to California's successful renewable energy programs,
regulators have identified an "oversupply" of power during the
day. The result is low (or negative) wholesale prices for
renewable energy, a trend that is increasing in frequency but
is not reflected in retail prices. Oversupply increases costs
to ratepayers and represents a failure of the regulatory
system to send proper price signals.
According to the author, there is a solution to this mismatch
in demand for power at water facilities in the daytime and the
cost of electricity. This bill encourages the development
and diversification of local water supplies by directing
renewable energy 'oversupply' to those water suppliers.
2)Renewable Energy Oversupply. In 2013, the CAISO published the
"duck chart," which shows a significant drop in mid-day net
load on a spring day as solar photovoltaics (PV) are added to
the state's electric grid. The chart raised concerns that the
state's electric grid will not be able to maintain
reliability, particularly on days characterized by the duck
shape. This could result in "overgeneration" and curtailed
renewable energy, increasing its costs and reducing its
environmental benefits.
This bill provides for the use of such mechanisms as
time-of-use rates, demand response, or dynamic pricing, to
help create demand for electricity at times when it would be
helpful for electric grid management.
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Analysis Prepared by: Jennifer Galehouse / APPR. / (916)
319-2081