BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
2724 (Blumenfield)
Hearing Date: 08/12/2010 Amended: 08/02/2010
Consultant: Brendan McCarthy Policy Vote: EU&C 9-0
AB 2724 (Blumenfield), Page 2
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BILL SUMMARY: AB 2724 expands the size of solar a system
controlled by a state agency that is eligible for subsidies
under the California Solar Initiative.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Regulatory oversight $100 $100 $100 Special
*
Reduced state agency Potentially up to ($1,000) per
yearVarious
energy costs
Costs to other ratepayers Potentially up to $1,000 per
year Special **
* Public Utilities Commission Utilities Reimbursement Account.
** Ratepayer funds overseen the Public Utilities Commission.
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STAFF COMMENTS: SUSPENSE FILE.
Under the California Solar Initiative (SB 1, Murray, Chapter
132, Statutes of 2006), the Public Utilities Commission is
authorized to implement a program to provide subsidies for the
installation of photovoltaic solar electricity systems,
primarily on existing buildings. The Commission is authorized to
oversee the installation of 3,000 megawatts (MW) of solar
systems by 2016 at a cost to electricity ratepayers of $3.3
billion over ten years. The Commission has authorized the
state's three main investor owned utilities to collect these
funds from ratepayers and provide the subsidies for installed
solar systems. To date, solar systems totaling about 740 MWs
have been installed or are pending. Under the California Solar
Initiative, only solar systems with a capacity of 1 MW or less
are eligible for subsidies. Government agencies are authorized
to participate in the program.
AB 2724 authorizes state agencies to receive subsidies under the
California Solar Initiative for solar systems up to 5 MW. The
AB 2724 (Blumenfield), Page 2
bill limits the payment of subsidies to state agencies for these
larger systems to an aggregate amount of 26 MW.
The Public Utilities Commission indicates that it will need one
additional position to monitor the increased state participation
in the program under the bill.
By authorizing state agencies to receive subsidies for larger
solar systems, the bill may reduce state agency energy costs.
The extent to which the bill will actually reduce state energy
costs depends on whether the current limitation of 1 MW is
impeding state agencies' ability to install solar systems that
cost-effectively meet their needs. Staff notes that the
Department of General Services has not shown that state agencies
have, in fact, been limited in their ability to effectively use
smaller solar systems to meet their energy needs.
If state agencies were able to add larger solar systems to the
full capacity of 26 MW, the Department of General Services
indicates that the total potential savings could be as high as
$1 million per year.
Because the size of the California Solar Initiative program is
limited, any gain to state agencies will reduce funds available
to other ratepayers. To the extent that state agencies add solar
capacity under the bill and receive additional subsidies, other
ratepayers will receive fewer subsidies.
Under current law and executive order, state agencies are
required to reduce their purchases of electricity 20 percent by
2017 and reduce their greenhouse gas emissions to 1990 levels by
2020.
AB 2724 states that state agencies that generate electricity and
export it to the electricity grid shall take that exported
energy into account when determining whether they are meeting
statutory and executive order requirements.
Staff recommends the bill be amended to strike the reference to
executive orders from the bill, as this would require state
agencies to consider future executive orders without legislative
input.