BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1453 (De León) - Electrical generation: greenhouse gases
emission performance standard
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|Version: February 19, 2016 |Policy Vote: E., U., & C. 7 - |
| | 0, E.Q. 5 - 1 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 16, 2016 |Consultant: Narisha Bonakdar |
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This bill does not meet the criteria for referral to the
Suspense File.
Bill
Summary: SB 1453 repeals from statute the authorization for an investor
owned utility (IOU) that provides electric service to 75,000 or
fewer customers in California to file with the CPUC a proposal
for alternative compliance with the state's emission performance
standard (EPS). The bill also requires the CPUC to review any
capital expenditure proposed by an IOU for baseload generation
that does not comply with the Greenhouse Gas (GHG) emission
performance standard and prohibits the CPUC from allowing those
costs to be recovered in rates if certain findings are made.
Fiscal Impact:
Approximately $131,000 (Public Utilities Commission Utilities
Reimbursement Account to the CPUC) for staffing costs.
Minor and absorbable costs to the Air Resources Board (ARB).
Background:1) Alternative compliance under SB 1368. SB 1368 allows an IOU
SB 1453 (De León) Page 1 of
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that meets certain criteria to file a proposal for alternative
compliance with the EPS. The law permits PUC to accept the
proposal if a majority of the IOU's customers are located
outside of California and the emissions of GHGs to generate
electricity for the IOU customers are subject to review by the
utility regulatory commission of at least one other state in
which the IOU provides regulated retail electric service. This
alternative compliance option applies to any IOU that serves
75,000 or fewer customers in California.
PacifiCorp. PacifiCorp is a large electric utility serving 1.8
million customers in six states in the Pacific Northwest and
Rocky Mountain regions. However, PacifiCorp serves
approximately only 45,000 customers in Northern California.
Thus, PacifiCorp is the only IOU that qualifies for the
alternative compliance provisions of SB 1386. The rationale for
the PacifiCorp's special treatment is that the IOU has a much
smaller customer base over which PacifiCorp could spread the
costs of compliance than do the state's larger IOUs. In
addition, a large portion of PacifiCorp's California customers
are low income.
SB 1453 would eliminate the alternative compliance option, and
require all IOUs operating in California to comply with PUC's
established emissions performance standard for GHG emissions.
This has the result of prohibiting PacifiCorp from extending or
renewing contracts for coal-fired electricity.
Additionally SB 1453 ensures costs associated with extending the
life of coal-fired powerplants are not born by the ratepayers.
Specifically, the bill requires that any proposed capital
expenditures for baseload generation that do not comply with the
emissions performance standard for GHGs (i.e., coal powerplants)
be reviewed by PUC, and prohibits PUC from allowing costs
associated with the capital expenditure be recoverable by rates
if the proposal will extend the life of the noncompliant
baseload generation, there are other viable options that comply
with the GHG emission performance standard, or retirement of the
baseload generation would advance state and regional GHG goals.
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Proposed Law:
This bill:
1) Repeals from statute the authorization for an IOU that
provides electric service to 75,000 or fewer customers in
California to file with CPUC a proposal for alternative
compliance with the state's emission performance standard.
2) Requires PUC to review any capital expenditure proposed by an
IOU for baseload generation that does not comply with the GHG
emission performance standard and directs PUC to not allow
those costs to be recovered in rates if any of the following
are true:
a) The proposed capital expenditure will materially extend
the service life of the baseload generation.
b) Cost-effective alternative resources not already owned
or contracted for by the IOU would provide superior
long-term value to customers and satisfy the GHG emission
performance standard.
c) The accelerated retirement of the baseload generation
unit would promote state and regional goals for the
reduction of emissions of GHGs.
Related Legislation:
SB 180 (Jackson, 2015) would have defined "peaking" and
"nonpeaking" electricity generation, required establishment of
GHG emission performance standards for each type of generation
and prohibited long-term financial commitments with generating
sources that do not meet the emission standards. The bill
passed this committee on a vote of eight to three and ultimately
was held on suspense by Senate Committee on Appropriations.
SB 1368 (Perata, Chapter 598, Statutes of 2006) required CPUC
and CEC, respectively, to establish a GHG emission performance
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standard applicable to new long-term financial commitments for
baseload electricity generation of load-serving entities and
POUs.
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