BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 2378 - Tran Hearing Date: June
15, 2010 A
As Amended: May 11, 2010
NON-FISCAL B
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DESCRIPTION
Current law requires investor-owned utilities (IOUs) and energy
service providers (ESPs) to increase existing purchases of
renewable energy by 1% of sales per year such that 20% of retail
sales, as measured by usage, are procured from eligible
renewable resources by December 31, 2010. This is known as the
Renewable Portfolio Standard (RPS).
Current law defines as RPS eligible, electric generation
resources biomass, solar thermal, photovoltaic, wind,
geothermal, fuel cells using renewable fuels, small
hydroelectric generation of 30 megawatts or less, digester gas,
landfill gas, ocean wave, ocean thermal, tidal current, and
municipal solid waste conversion that uses a noncombustion
thermal process to convert solid waste to a clean-burning fuel.
Current law authorizes the California Energy Commission (CEC) to
provide funding in the form of production incentives for
eligible renewable generation facilities for each kilowatt hour
of eligible electricity generated.
This bill expands the definition of eligible renewable resources
to include any combination of the currently eligible renewable
resource technologies.
BACKGROUND
RPS Progress - California's three large IOUs collectively served
15% of 2009 retail electricity sales with renewable power. The
IOUs, which provide service to about three-fourths of California
utility customers, report the following individual RPS
percentages:
Pacific Gas and Electric (PG&E) 14.4%
Southern California Edison (SCE) 17.4%
San Diego Gas & Electric (SDG&E) 10.5%
In the last two years the RPS program started to show
significant gains. In 2008 more renewable generation came on
line than in the entire 2003 - 2007 time period (692 MW).
Calendar year 2009 broke the 2008 record with more than 1,000 MW
coming on line. Since the RPS statute took affect in 2003,
almost 1,600 MW of renewable capacity has come online.
The generation mix also improved in 2009. New capacity in 2008
was almost entirely from wind and a good portion of that was
from out of state. In 2009, 71% of new capacity was from
in-state sources and included a mix of biomass, biogas,
geothermal, solar PV, small hydro, and wind.
Bids received by the IOUs for new generation also hit a record
in 2009 bringing in potential contracts for more than half of
the generation needed to meet a 33% target in 2020. The IOUs
have now contracted for more than 12,000 MW of renewable
generation. To put this in context the statewide demand in a
typical January is 25,000 to 30,000 MW. A July heat storm would
drive that number up over 50,000 MW.
The state's local publicly owned utilities report renewable
progress ranging from 1.7% to 61.2%. Compliance data for 2009
recently submitted to this committee collectively shows:
Northern California Power Authority20%
Sacramento Municipal Utility District21%
L.A. Department of Water & Power14%
Southern California Power Authority2% - 20%
COMMENTS
1) Author's Purpose . The author reports that "existing law
is silent on the use of multiple renewable energy devices.
Therefore, existing subsidies for renewable energy projects
are silent on multiple energy devices, and the California
Energy Commission has been conservative insofar as which
devices qualify for these rebates. There is no current
definition for a multiple renewable energy device, and the
traditional stringent application of existing standards
strongly suggests against multiple technology devices
qualifying. Therefore, absent the codification of a
definition, it is expected that current programs would
exclude such devices."
2) Rebates ? The author reports that the bill is necessary
to ensure that projects which use two renewable
technologies at the same site qualify for rebates. The CEC
does administer one rebate program for which biomass and
solar thermal projects are currently eligible. The purpose
of the Existing Renewable Facilities Program (ERFP) is to
allocate state funds to increase the competitiveness and
self-sustainability of existing in-state renewable
generating facilities. For the purpose of the ERFP,
self-sustainability refers to the ability of these
facilities to continue operation without public funding by
no later than December 31, 2011 at which time the program
sunsets.
The committee is aware of no restriction on the rebates if
both currently eligible technologies are located at the
same site. The program primarily funds biomass plants.
3) Necessity ? The committee is not aware of any
restriction in current law that would preclude a utility
from entering into a RPS contract for generation that
utilizes more than one renewable technology on the same
site. There are hybrid generation facilities under
contract that utilize solar and natural gas plants at the
same site. No special legislation was necessary to
facilitate those contracts.
4) Related Legislation . The following bills have been
introduced in 2010 which affect the RPS program:
SB 722 (Simitian) increases the RPS mandate to 33%
by 2020 and makes other program changes. Status:
Amended on Assembly Floor; pending re-referral to policy
committee.
SB 1247 (Dutton) expands the definition of eligible
renewable resources to include all hydroelectric, nuclear
and municipal solid waste conversion technologies.
Status: Referred the Senate Committee on Energy,
Utilities & Communications; set for hearing June 29,
2010.
SB 1367 (Wyland) extends the RPS compliance timeline
to 20% by 2020. Status: Referred to but not heard in the
Senate Committee on Energy, Utilities & Communications.
AB 1954 (Skinner) modifies the de minimus standard
for the use of fossil fueled sources to assist RPS
generation and addresses back-stop cost recovery of
renewable transmission facilities. Status: Referred to
Senate Committee on Energy, Utilities & Communications;
set for hearing June 29, 2010.
AB 2514 (Skinner) requires the adoption of energy
storage procurement targets. Status: Referred to Senate
Committee on Energy, Utilities & Communications; set for
hearing June 29, 2010.
ASSEMBLY VOTES
Assembly Utilities & Commerce (8-2)
Assembly Floor (69-0)
POSITIONS
Sponsor:
STS Ventures, LLC
Support:
STS Ventures, LLC
Oppose:
None on file.
Kellie Smith
AB 2378 Analysis
Hearing Date: June 15, 2010