BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 919|
|Office of Senate Floor Analyses | |
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UNFINISHED BUSINESS
Bill No: SB 919
Author: Hertzberg (D), et al.
Amended: 8/11/16
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE: 9-0, 4/5/16
AYES: Hueso, Morrell, Cannella, Hertzberg, Hill, Lara, Leyva,
McGuire, Pavley
NO VOTE RECORDED: Gaines, Wolk
SENATE NATURAL RES. & WATER COMMITTEE: 8-0, 4/12/16
AYES: Pavley, Allen, Hertzberg, Hueso, Jackson, Monning,
Vidak, Wolk
NO VOTE RECORDED: Stone
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SENATE FLOOR: 35-0, 5/9/16
AYES: Allen, Anderson, Berryhill, Block, Cannella, De León,
Fuller, Galgiani, Glazer, Hall, Hancock, Hernandez, Hertzberg,
Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire,
Mendoza, Mitchell, Monning, Moorlach, Morrell, Nguyen, Pan,
Pavley, Roth, Stone, Vidak, Wieckowski, Wolk
NO VOTE RECORDED: Bates, Beall, Gaines, Nielsen, Runner
ASSEMBLY FLOOR: 78-0, 8/18/16 - See last page for vote
SUBJECT: Water supply: creation or augmentation of local
water supplies
SOURCE: Independent Energy Producers Association
DIGEST: This bill requires the California Public Utilities
Commission (CPUC) to address the oversupply of renewable energy
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Page 2
resources through development of a tariff or other economic
incentive available to facilities that create or augment local
water supplies.
Assembly Amendments (1) modify the types of tariffs or economic
incentives available to the CPUC to replace the term
"time-of-use" with the term "time-variant rates" and to add
dynamic pricing, (2) add to the types of facilities entailed by
the term "facilities that create or augment local water
supplies" to include groundwater treatment and remediation
activities, and (3) authorize the CPUC to consider implementing
the requirements of this bill in an existing proceeding.
ANALYSIS:
Existing law:
1)Authorizes the CPUC to fix rates, establish rules, examine
records, issue subpoenas, administer oaths, take testimony,
punish for contempt, and prescribe a uniform system of
accounts for all public utilities, including electrical and
gas corporations, subject to its jurisdiction. (Article 12 of
the California Constitution)
2)Requires that all charges demanded or received by any public
utility for any product, commodity or service be just and
reasonable, and that every unjust or unreasonable charge is
unlawful. (Public Utilities Code §451)
3)Requires retail sellers of electricity - investor-owned
utilities (IOU), community choice aggregators, and energy
service providers - and publicly-owned utilities (POU) to
increase purchases of renewable energy such that at least 50
percent of retail sales are procured from renewable energy
resources by December 31, 2030. This is known as the
Renewable Portfolio Standard (RPS). (Public Utilities Code
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Page 3
§399.11 et seq.)
4)Requires the CPUC to adopt a process for each IOU to file an
integrated resource plan to ensure IOUs meet the greenhouse
gas (GHG) emissions reduction targets for the electricity
sector; procure at least 50 percent eligible renewable energy
resources by December 31, 2030; enable each IOU to fulfill its
obligation to serve its customers at just and reasonable
rates; minimize impacts on ratepayers' bills; ensure system
and local reliability; strengthen the diversity,
sustainability, and resilience of the bulk transmission and
distribution systems, and local communities; enhance
distribution systems and demand-side energy management; and
minimize localized air pollutants and other GHG emissions,
with early priority on disadvantaged communities. (Public
Resources Code §454.52)
This bill:
1)Requires the CPUC, by January 1, 2018, in consultation with
the California Independent System Operator (CAISO), to address
the oversupply of renewable energy resources through a tariff
or other economic incentive for the electricity purchased by
customers operating facilities that create or augment local
water supplies to reduce the cost of electricity to those
facilities.
2)States the intent of the Legislature to expedite funding made
available by the Water Quality, Supply, and Infrastructure
Improvement Act of 2014.
Background
An embarrassment of riches. California utilities have procured
increasing amounts of electricity from renewable resources, in
response to the state's RPS mandates. Much of this electricity
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Page 4
has come from solar and wind energy resources. Such resources
can be described as intermittent, meaning that they are not
available at all times of the day and can experience
difficult-to-predict upward or downward swings in electricity
production. This intermittency creates challenges for
management of the electric grid, one of which is the oversupply
of electricity during some times of the day under certain
conditions.
The CAISO reports that, to reliably manage the electricity grid
with greater amount of electricity supplied by intermittent
resources, it needs flexible resources that can:
Sustain upward or downward ramp.
Respond for a defined period of time.
Change ramp directions quickly.
Store energy or modify use.
React quickly and meet expected operating levels.
Start with short notice from a zero or low-electricity
operating level.
Start and stop multiple times per day.
Accurately forecast operating capability.
This bill requires the CPUC to take actions that the author and
bill proponents conclude will, in limited cases, create some of
the flexible conditions the CAISO says it needs. This bill seeks
to take advantage of one of those opportunities - the
availability, at some times, of cheap electric power.
In many areas of the state, local water supplies are
constrained. Many processes to augment local water supplies,
such as desalination and water recycling, are expensive, partly
because of their energy intensity. This bill seeks to balance
the oversupply of electricity caused by increasing amounts of
intermittent renewable energy against energy-intensive local
water supply augmentation. A tariff or other economic
incentive, developed by the CPUC, is the balancing mechanism.
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Prior Legislation
SB 350 (De Leon, Chapter 547, Statutes of 2015) required, among
other things, that IOUs and local POUs develop integrated
resource plans to ensure each utility meets the GHGs reduction
targets for the electricity sector; procures at least 50 percent
eligible renewable energy resources by December 31, 2030;
enables each IOU to fulfill its obligation to serve its
customers at just and reasonable rates; minimizes impacts on
ratepayers' bills; ensures system and local reliability;
strengthens the diversity, sustainability, and resilience of the
bulk transmission and distribution systems, and local
communities; enhances distribution systems and demand-side
energy management; and minimizes localized air pollutants and
other GHG emissions, with early priority on disadvantaged
communities. The bill passed the Senate 26-14.
AB 2363 (Dahle, Chapter 610, Statutes of 2014) directed the CPUC
to adopt estimates of expenses resulting from integrating and
operating eligible renewable energy resources.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal:Yes
According to the Assembly Appropriations Committee, CPUC
indicates 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.
SUPPORT: (Verified8/18/16)
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Independent Energy Producers Association (source)
Association of California Water Agencies
California Association of Sanitation Agencies
California Manufacturers & Technology Association
California Municipal Utilities Association
City of Santa Monica
Orange County Water District
San Diego County Water Authority
San Gabriel Basin Water Quality Authority
OPPOSITION: (Verified8/18/16)
None received
ARGUMENTS IN SUPPORT: According to the author, SB 919
encourages the development and diversification of local water
supplies through water recycling, reclamation, and desalination
by directing renewable energy "oversupply" to those water
suppliers. An ancillary benefit, the author continues, is that
this bill requires better coordination of California's renewable
energy resources and demand for power and enables better, more
cost-effective utilization of renewable power as it is
generated.
ASSEMBLY FLOOR: 78-0, 8/18/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Beth Gaines, Roger Hernández
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Page 7
Prepared by: Jay Dickenson / E., U., & C. / (916) 651-4107
8/19/16 19:25:06
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