BILL ANALYSIS
AB 1536
Page 1
Date of Hearing: April 27, 2009
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Nancy Skinner, Chair
AB 1536 (Blakeslee) - As Amended: April 14, 2009
SUBJECT : Clean technology incentive program
SUMMARY : Renames and expands the purpose of the Public
Utilities Commission (PUC) self-generation incentive program
(SGIP) to include energy storage facilities.
EXISTING LAW requires the PUC to administer the SGIP program
until 2012 and limits eligibility to fuel cell and wind
generation technologies. Under the SGIP, utilities provide
ratepayer-funded rebates for distributed generation projects up
to five megawatts in size.
THIS BILL :
1)Renames the SGIP the clean technology incentive program
(CTIP).
2)Expands eligibility to include energy storage facilities that
meet any of the following requirements:
a) The facility stores energy generated from a
renewable energy resource.
b) The facility is capable of responding to commands
from the California Independent System Operator (ISO) to
absorb or dispatch electricity.
c) The facility is capable of providing frequency
control to integrate intermittent eligible renewable
resources.
d) The facility stores energy during off-peak periods
and dispatches electricity during peak periods.
FISCAL EFFECT : Unknown
COMMENTS :
1)Background. Energy storage devices take electricity and
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convert the electricity into some other form of energy so it
can be stored and converted back to electricity at some later
point. The most common form of energy storage device in use
today is the battery. However, there are no commercially
available batteries that could cost-effectively store the
large amounts of electricity that can be produced by
large-scale wind farms or solar facilities. Another form of
electricity storage that is already in use in California is
pumped storage, where water is pumped into a reservoir at
night and then released through turbines during the day to
produce electricity. Additionally, there is research taking
place to develop other storage devices using compressed air,
flywheels, fuel cells, and other innovative technologies.
According to the author, the purpose of this bill is to create
incentives for merchant-owned energy storage facilities. The
author believes these energy storage facilities will be
necessary for California to meet its renewable energy goals
since they can store energy produced by wind and solar
facilities at times that electricity is not needed to be used
at peak periods when demand for electricity is high.
2)If subsidies are required, should there be clearer standards
and definitions? This bill adds energy storage to the SGIP,
an existing PUC program with a reputation for spending
hundreds of millions of dollars on subsidies for distributed
generation projects without much discipline or attention to
providing commensurate ratepayer benefits. It's not clear the
SGIP is the right program to adapt for the purpose of a new
program to promote energy storage. Regardless, any program
that grants the PUC authority to spend unlimited sums of
ratepayer funds should be accompanied by clear definitions of
its purposes and mechanisms for accountability. The four
alternative eligibility conditions in this bill appear to
permit a wide variety of existing and potential "energy
storage" technologies to receive subsidies. For example, a
pumped-storage hydroelectric project would be eligible,
although incentives aren't necessary for this technology,
which has been in use for decades.
3)Related legislation. AB 44 (Blakeslee), pending the Assembly
Appropriations Committee, establishes an alternative set of
incentives for energy storage facilities. AB 44 allows
investor owned utilities (IOUs) to earn a higher rate-of
return on storage facilities and creates an incentive for
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customer-owned storage facilities by requiring the PUC to
develop a time-of-use tariff that allows storage facilities
operators to "buy" the electricity from the utility when it is
at the lower rate and then "sell" the electricity back to the
utility when it is more expensive.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092