BILL ANALYSIS
AB 2573
Page 1
Date of Hearing: April 24, 2006
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Loni Hancock, Chair
AB 2573 (Leno) - As Amended: April 25, 2006
SUBJECT : Electricity: Hetch Hetchy Water and Power solar
generation.
SUMMARY : Increases the amount of solar generation permissible
for the City and County of San Francisco's (City's) net-metering
facilities, and permits the City to generate photovoltaic
(solar) power at one location and have that electricity be used
at another City-designated remote location.
EXISTING LAW :
1)Defines a customer generator who would be eligible to
participate in net metering to generate no more than 1
megawatt (MW); be located on the customer's owned, leased, or
rented premises; and whose electricity produced is primarily
to offset part or all of the customer's own electrical needs.
A customer generator can be a residential, commercial,
industrial, or agricultural customer of an electric service
provider that uses solar or wind.
2)Requires the total amount of electricity generated by
City-owned solar generators to not exceed 5 MW of peak
generation capacity and requires that no single solar
generation project exceed 1 MW of peak generation capacity.
3)Requires Pacific Gas and Electric (PG&E) to identify the
appropriate tariff for energy generated at the City-owned
solar sites, and apply a monetary credit to offset amounts
invoiced by PG&E pursuant to the Interconnection Agreement
between PG&E and the City.
4)Specifies that if the City is a net energy producer, the City
shall receive no credit or offset for the electricity exported
to the grid in excess of the electricity delivered to the site
from the grid.
THIS BILL :
1)Increases the amount of power that the City can generate from
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solar electric generation facilities, from 5 MW to 15 MW.
2)Defines "qualifying remote new load" (QRNL), permits the City
to designate the QRNL site both inside and outside of the
City, requires the QRNL to begin operations after January 1,
2006, and exempts this load from the 15 MW cap.
3)Defines "Hetch Hetchy remote solar generation" as the
electricity generated by Hetch Hetchy Water and Power (HHWP)
photovoltaic electricity generation facilities owned by the
City and designated by the City to provide electricity to the
QRNL.
4)Deletes the 1 MW cap on how much electricity a single solar
generation facility can generate.
5)Excludes the amount of electricity provided for QRNL from the
monthly true-up between City-generated electricity provided to
Pacific Gas and Electric Company (PG&E), and PG&E electricity
provided to the City.
6)Deletes a provision that states that if the City engages in
retail sales to PG&E customers as a result of becoming a
community choice aggregator or municipalization, the section
that defines the City's on-site solar production and
Interconnection Agreement offsets would become inoperative.
7)Permits the City to use its solar generation to serve the QRNL
sites and requires PG&E to treat any electricity exported to
the grid by the City's solar generation as "behind the meter"
generation that offsets the electrical usage of the QRNL
sites.
8)Provides that there will be no cost shifts to PG&E
bundled-service ratepayers as a result of the City using HHWP
solar generation to supply electricity to the QRNL.
FISCAL EFFECT : Unknown.
COMMENTS :
1)Background
The City owns HHWP, which provides water from the Tuolumne River
to the City and its residents. The federal Raker Act (1913)
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permitted the City to dam the Tuolumne River, build a 167-mile
aqueduct, and construct powerhouses and transmission lines below
Hetch Hetchy Reservoir for generation, sale, and distribution of
electric energy. The Act also established priorities for the
use of Hetch Hetchy hydropower: first to drive the system's
waterworks, next to supply the City's municipal government
agencies, and then to farmers and municipal governments within
the Modesto and Turlock irrigation districts. Any remaining
hydropower could be sold to the City's residential and business
users but never to a corporation, such as PG&E.
At that time, PG&E was the sole provider of gas and electricity
in the City. Although the City built a transmission line from
the Hetch Hetchy hydroelectric plant to Newark (across the bay,
south of Oakland), it was unable to obtain funding for the last
stretch into the City. PG&E retained the transmission lines and
distribution system to and throughout the City. Over the years,
the City and PG&E negotiated a federally approved
Interconnection Agreement that identifies the terms and
conditions under which PG&E will "wheel" the City's Hetch Hetchy
power to the City's municipal locations.
In recent years, San Francisco voters passed local Propositions
B and H that potentially provide over $100 million in revenue
bond financing for municipal and private solar projects.
According to the author's office, the City is seeking to develop
large scale solar facilities to serve the new City load
resulting from redevelopment projects. This legislation would
require PG&E to accept power at one location in San Francisco
and deliver equivalent power at another location. However,
because PG&E controls the local distribution grid in the City
and because under existing law PG&E is allowed to absorb surplus
solar power without compensating the City for power generated at
municipal facilities legislation is being sought by the City to
modify current law to allow for additional solar generation.
2)Renewable Power and the RPS
Over the last several years the California Legislature and the
Administration have pushed for additional sources of renewable
power in an attempt to reduce California's dependence on fossil
fuels. The RPS requires Investor Owned Utilities (IOUs) to
increase their renewable procurement each year by at least 1
percent of total sales, so that 20 percent of their sales are
from renewable energy sources by December 31, 2017. A recent PUC
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decision has accelerated the 2017 date to 2010.
The goal of the RPS is to promote the development of renewable
generation in California and decrease our dependence on fossil
fuel based generation. Increasing the total amount of renewable
generation not only improves California's environment, it also
helps diversify the state's fuel sources and leaves the state
less susceptible to spikes in natural gas prices.
This bill allows the City to greatly enhance its portfolio of
renewable energy by adding an additional 10 megawatts of solar
photovoltaic energy while decreasing California's dependence on
fossil fuels and helping the environment.
REGISTERED SUPPORT / OPPOSITION :
Support
CAL SEIA
Clean Power Campaign.
Environment California
League of California Cities
Planning and Conservation League
PV Manufacturers Alliance
PV Now
San Francisco Public Utilities Commission
The Vote Solar Initiative
Opposition
None on file.
Analysis Prepared by : Kyra Emanuels Ross / NAT. RES. / (916)
319-2092