BILL ANALYSIS
AB 915
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Date of Hearing: April 13, 2009
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Felipe Fuentes, Chair
AB 915 (Logue) - As Introduced: February 26, 2009
SUBJECT : Renewable Energy Resources.
SUMMARY : Provides that when a retail seller is calculating the
amount of eligible renewable electricity it must procure to meet
its 20% of retail sales renewable portfolio standard (RPS)
obligation, the retail seller may subtract the portion of retail
sales that are met by hydroelectric facilities that are larger
than 30 megawatts (MW) from its total retail sales. This
effectively reduces the RPS obligation of any retail seller of
electricity that procures some electricity from large
hydroelectric facilities.
EXISTING LAW :
1)Requires retail sellers of electricity (investor-owned
utilities (IOUs), energy service providers (ESPs), and
Community Choice Aggregators (CCAs)) to procure at least 20%
of electricity delivered to their retail customers from
eligible renewable resources by 2010.
2)Provides that publicly owned utilities (POUs) are not subject
to the same RPS standards as IOUs, but are required to
implement and enforce their own RPS programs.
3)Defines eligible renewable technologies to include biomass,
solar thermal, photovoltaic, wind, geothermal, renewable fuel
cells, small hydroelectric (30 MW or less), digester gas,
municipal solid waste conversion, landfill gas, ocean wave,
ocean thermal, and tidal current.
THIS BILL :
1)Defines "Net program retail sales" of electricity to mean the
total retail sales of electricity by the retail seller within
California, minus those retail sales where the load is met by
noneligible hydroelectric generation.
2)Provides that each retail seller shall procure 20% of its net
program retail sales from eligible renewable resources by
AB 915
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2010.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author the purpose of this bill to
allow "communities that rely on hydroelectric energy [to be]
saved from paying disproportionately higher prices from
additional renewable energy" and "to ensure that utility
companies receive appropriate acknowledgement for their efforts
to promote clean, alternative energy sources."
1) Background : Under the RPS, retail sellers of electricity,
excluding municipal utilities, are required to increase their
renewable procurement each year by at least 1% of total sales,
so that 20% of their sales are from renewable energy sources by
December 31, 2010.
One of the main goals of the RPS is to promote the development
of renewable generation in California and decrease the state's
dependence on fossil fuel based generation. The 30 MW cap on
hydroelectricity generation was chosen to assure that the RPS
program would promote the construction of new renewable
resources. Just over 11% of the state's current electrical
demand is met by existing renewable resources. Slightly more
than 11% of the state's electricity demand is already meet by
large hydroelectric facilities. Consequently, if large
hydroelectric facilities were to directly count toward the RPS
the current RPS obligations would have already been met on a
statewide basis and very few new renewable resources would need
to be constructed.
2) Impacts on RPS procurement : This bill would potentially have
the largest impact on PG&E since it is the IOU with the largest
percentage of generation from hydroelectric facilities. Under
AB 915 PG&E would reduce PG&E's RPS obligations by approximately
2,000 gigawatthours. That is approximately a 60% decrease in its
procurement from eligible renewable resources.<1>
While this bill does not directly effect the POUs since the POUs
are not required to meet the same RPS obligations as the IOUs,
most POUs have established a 20% RPS using the same definition
---------------------------
<1> PG&E has signed contracts that will allow them to meet their
current 20% obligation by 2013; however, a significant portion
of the projects associated with those contracts will not come
online until after 2010.
AB 915
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of renewable resources that applies to the IOUs. The POUs could
choose to follow the new RPS standard in AB 915 if it were to
become law. Currently 8 POUs already procure more than 20% in
eligible renewable resources, Under AB 915 an additional 4 POUs
would already meet the 20% RPS requirement without procuring any
additional renewable resources.
According to the California Energy Commission, on a statewide
basis utilities would have to purchase 3,250 gigwatthours less
renewable power under AB 915 than under current law.
This bill would likely not impact energy service providers since
they procure little to no electricity from hydroelectric
facilities today and thus would still be obligated to procure
the same amount of renewable power.
3) Impacts on Hydroelectric Power: Hydroelectric power is one of
the most inexpensive sources of power in the state. It is also
emits almost no carbon emissions. Supporters of AB 915 believe
that by allowing hydroelectric power to be subtracted form its
total retail sales for calculating RPS goals the bill recognizes
the clean energy benefits of large hydroelectric generators
In is unlikely that this bill would result in the construction
of new hydroelectric facilities since there is minimal potential
for additional large hydroelectric facilities in the California
(the current proposals for new dams in California are for water
storage and do not have significant potential for new
electricity generation).
Given hydroelectricity's price and low greenhouse gas emissions,
utilities and their ratepayers may still benefit from
hydroelectric resources even under an RPS since they can use
these resources to lower their overall portfolio costs.
Additionally, as the California Air Resources Board (CARB)
develops the rules needed to meet California's greenhouse gas
emission goals it is possible that utilities with large
hydroelectric resources will receive some benefit from
hydroelectric facilities die to their low carbon emissions.
Related Legislation
AB 64 (Krekorian/Bass) and SB 14 (Simitian) both increase the
current RPS to 33% by 2020. AB 64 passed Utilities and Commerce
AB 915
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Committee on a vote of 8 to 5 on April 1, 2009. SB 14 as been
approved by the full Senate and is pending referral to committee
in the Assembly.
AB 1351 (Blakeslee) amends the definition of eligible renewable
resource to allow fuel cells that use renewable fuels to count
toward a retail seller's RPS obligation. AB 1351 is set for
hearing in Utilities and Commerce Committee on April 13, 2009.
REGISTERED SUPPORT / OPPOSITION :
Support
Pacific Gas & Electric
Northern California Power Authority
Opposition
Environment California
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083