BILL ANALYSIS
AB 44
Page 1
Date of Hearing: April 22, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 44 (Blakeslee) - As Amended: March 31, 2009
Policy Committee:
UtilitiesVote:14-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill:
1)Requires the Public Utilities Commission (PUC) to develop a
time-variant tariff providing incentives for the application
of "energy storage facilities," as defined, that are
cost-beneficial to ratepayers.
2)Authorizes the PUC to approve an increase of 0.5% to 1% in the
rate-of-return otherwise allowed an investor-owned utility
(IOU) for investment in energy storage facilities meeting
specified requirements.
FISCAL EFFECT
Ongoing special fund costs of about $160,000 annually for 1.5
positions associated with conducting a ratemaking proceeding to
design and establish the incentive-based tariff and monitor
implementation, including the impacts on ratepayers. [Public
Utilities Reimbursement Account.]
COMMENTS
1)Background . Current law requires all retail sellers of
electricity, by 2010, to meet at least 20% of the retail sales
using electricity from renewable resources-the Renewable
Portfolio Standard (RPS). Legislation has been introduced to
increase RPS goal to 33% by 2020. It is believed this higher
goal can only be met through heavy reliance on wind and solar
energy, however, both of these energy sources are
intermittent, producing electricity when the wind is blowing
AB 44
Page 2
or the sun is out. This intermittency could create
reliability problems for the electricity grid, since solar and
wind energy cannot be counted on to be available at the same
time there is demand for electricity.
One way to resolve this reliability issue would be energy
storage devices, which convert electricity into some other
form of energy so it can be stored and converted back to
electricity at a later point. Batteries are the most common
form of energy storage device currently in use, however, there
are no commercially available batteries that can
cost-effectively store the large amounts of electricity
produced by large scale wind farms or solar facilities.
Another form of electricity storage already in use in
California is pumped storage, where water is pumped up into a
reservoir at night and then released through turbines during
the daytime to produce electricity. Additionally, research is
underway to develop storage devices using compressed air,
flywheels, and fuel cells.
2)Purpose . The author is seeking to provide incentives to
expand the use of energy storage devices while ensuring that
allowances for such deploying such devices will be
cost-effective for ratepayers. The author envisions the
development of storage devices that are owned and operated by
the IOUs and owned by private parties that could buy renewable
power from developers or the utility and then sell that power
back to the utility at a later time.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081