BILL ANALYSIS
AB 1106
Page 1
Date of Hearing: April 27, 2009
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Nancy Skinner, Chair
AB 1106 (Fuentes) - As Introduced: February 27, 2009
SUBJECT : Renewable electric generation facilities: feed-in
tariffs
SUMMARY : Revises and expands a feed-in tariff program for
eligible renewable electric generation to make it available to
facilities up to 20 megawatts in size.
EXISTING LAW requires investor-owned utilities (IOUs) to
purchase all electricity from an eligible renewable generating
facility that is no larger than 1.5 megawatts at a market price
determined by the Public Utilities Commission (PUC) pursuant to
the RPS. Facilities are eligible until 500 megawatts is
produced statewide.
THIS BILL :
1)Revises the existing program to eliminate the statewide cap
and increase the individual facility size limit to 20
megawatts.
2)Requires the PUC, in consultation with the California Energy
Commission (CEC), to develop feed-in tariffs for eligible
renewable energy resources of more than 20 megawatts that
value a diverse mix of sources of renewable energy based upon
the most successful feed-in tariffs utilized in Europe.
FISCAL EFFECT : Unknown
COMMENTS :
1)Background. Utility customers may develop small renewable
generators which are eligible renewable energy resources under
the RPS. It is possible for customers to sell surplus
electricity from these generators to IOUs pursuant to
individually negotiated contracts, but it is more convenient
to sell these small amounts of electricity under
predetermined, standard contract prices and other terms. To
facilitate this, the Legislature has enacted several different
statutes over the last several years that apply to particular
AB 1106
Page 2
customers and technologies. For example, various forms of
"net-metering" programs have been enacted for solar
photovoltaic, wind, and manure methane generators, plus
special statutes for other renewable energy facilities.
Currently, IOUs are required to purchase qualifying renewable
energy from facilities up to 1.5 megawatts at a PUC-determined
market price and assured these purchases count toward their
RPS obligations. The total amount of energy that may
participate in this "feed-in tariff" program is capped at 500
megawatts. The PUC is considering expanding the feed-in
tariff program to facilities up to 10 megawatts and creating a
standard offer contract for facilities between 10 and 20
megawatts. This bill substantially expands the existing
statutory program by eliminating the statewide and project
size limits.
2)No limit? In addition to creating a feed-in tariff program
for projects up to 20 megawatts based on the existing program,
this bill also includes an ambitious, if somewhat vague,
requirement that the PUC to develop a feed-in tariff for
generation units larger than 20 MWs "based upon the most
successful feed-in tariffs utilized in Europe." European
feed-in tariff programs generally don't have size limits, but
they are used as an alternative to an RPS program. Through
its RPS program, California already provides an alternative
for larger scale renewable energy projects. The author and
the committee may wish to consider whether the program
established by this bill should be limited in its application
to projects under 20 megawatts.
3)Related Legislation. AB 1023 (Ruskin), pending in this
Committee, also expands the existing feed-in tariff program.
The two bills contain similar conditions, but AB 1023 retains
the 500 megawatt statewide cap and increases the individual
facility size limit to 10 megawatts, although it authorizes
the PUC to increase it to 15 megawatts.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
AB 1106
Page 3
Sempra Energy
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092