BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 17|
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THIRD READING
Bill No: SB 17
Author: Padilla (D), et al
Amended: 5/5/09
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 10-0, 4/27/09
AYES: Padilla, Benoit, Corbett, Cox, Kehoe, Lowenthal,
Simitian, Strickland, Wiggins, Wright
NO VOTE RECORDED: Calderon
SENATE APPROPRIATIONS COMMITTEE : 8-0, 5/26/09
AYES: Kehoe, Cox, Corbett, DeSaulnier, Leno, Wolk, Wyland,
Yee
NO VOTE RECORDED: Denham, Hancock, Oropeza, Runner,
Walters
SUBJECT : Electricity: smart grid systems
SOURCE : Author
DIGEST : This bill establishes the smart grid policy of
the state and requires the California Public Utilities
Commission to determine the requirements for a smart grid
deployment plan no later than July 1, 2011.
ANALYSIS : Existing federal law requires each state to
consider investment in a qualified smart grid system and
directs the National Institute of Standards and Technology
to coordinate the development of smart grid standards.
(Energy Independence and Security Act of 2007) Existing
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federal law authorizes the Department of Energy to award $4
billion in grants ranging from $500,000 to $20 million for
smart grid technology deployments and grants of $100,000 to
$5 million for the deployment of grid monitoring devices.
(American Reinvestment and Recovery Act of 2009)
Existing state law requires investor owned utilities (IOUs)
to operate its electric distribution grid in a safe,
reliable, efficient, and cost-effective manner and
authorizes the California Public Utilities Commission
(CPUC) to give each IOU a reasonable opportunity to fully
recover from all customers the costs of operating the
distribution system.
This bill requires the commission, by July 1, 2010, and in
consultation with the State Energy Resources Conservation
and Development Commission (Energy Commission), the
Independent System Operator (ISO), and other key
stakeholders, to determine the requirements for a smart
grid deployment plan consistent with the policies set forth
in the bill and federal law. This bill requires that the
smart grid improve overall efficiency, reliability, and
cost-effectiveness of electrical system operations,
planning, and maintenance. The bill would require each
electrical corporation, by July 1, 2011, to develop and
submit a smart grid deployment plan to the commission for
approval.
This bill authorizes a smart grid deployment plan that is
adopted to provide for deployment of smart grid products,
technologies, and services by entities other than
electrical corporations. The bill authorizes smart grid
technologies to be deployed in an incremental manner to
maximize the benefit to ratepayers and to achieve the
benefits of smart grid technology, authorizes the
commission to modify or adjust the bill's requirements for
an electrical corporation with fewer than 100,000 service
connections as individual circumstances merit, and would
require the commission, in consultation with the Energy
Commission, the ISO, and electrical corporations, at each
step of deployment, to evaluate the impact of deployment on
major initiatives and policies. The bill requires the
commission to report, by January 1, 2011, and by January 1
of each year thereafter, to the Governor and the
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Legislature on the commission's recommendations for a smart
grid, the plans and deployment of smart grid technologies
by the state's electrical corporations, and the costs and
benefits to ratepayers.
The bill requires a local publicly owned electric utility,
as defined, to develop by July 1, 2011, a smart grid
deployment plan consistent with the policies set forth in
federal law.
Background
What is a Smart Grid ? The term smart grid refers to a
distribution system that allows for the flow of information
from a customer's meter in two directions and modernizes
the electric distribution and transmission grid with a goal
of using advanced, information-based technologies to
increase power grid efficiency, reliability, and
flexibility, and reduce the rate at which additional
electric utility infrastructure needs to be built. A smart
grid is a key element to the greening of California's grid
due to the intermittent nature of renewable electricity
resources such as wind and solar.
The most vital step in transforming California's
distribution grid into an intelligent, integrated network
enabled by modern information and control system
technologies is deployment of an advanced meter
infrastructure (AMI or smart meters).
Smart Meters . California's attempts to educate its grid
have begun with the deployment of smart meters which is one
of hundreds of possible applications that constitute a
smart grid. For the last several years, the CPUC has
encouraged the IOUs to increase demand response and
implement dynamic pricing tariffs as a means of reducing
energy demand during peak periods which cannot be done
without a smart meter. The technology also allows a
utility to:
A. Conduct remote meter reading, pinpoint
outages, remote turn off/turn on capability,
provide more accurate billing, and prevent energy
theft;
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B. Monitor electrical load on an hourly
basis to enable a utility to more accurately
forecast load and identify load centers;
C. Enable two-way communication to each
customer's meter; and
D. Offer time varying rates to customers.
Each of the three IOUs is in the process of deploying smart
meters as follows:
A. Pacific Gas & Electric, 5.1 million
electric and 4.2 million gas meters at a cost of
$2.2 billion to be completed by 2011;
B. San Diego Gas & Electric, 1.4 million
electric and 900,000 gas meters at a cost of $572
million by 2011; and
C. Southern California Edison, 5.3 million
electric meters at a cost of $1.7 billion by
2012.
Prior Legislation
In 2008, a similar bill, SB 1438 (Padilla), which was held
in the Assembly Appropriations Committee.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
PUC regulations
Absorbable within existing resources Special*
CEC consultation $50 $100 $100 Special**
* PUC Utilities Reimbursement Account
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** Public Interest Research, Development and Demonstration
Fund
SUPPORT : (Verified 5/27/09)
AT&T
California Public Utilities Commission
Clean Power Campaign
Natural Resources Defense Council
Optical Technologies
Sempra Energy
Sierra Club
Southern California Edison
Tech Net
Valley Industry and Commerce Association
OPPOSITION : (Verified 5/27/09)
Utility Services Customer Link (unless amended)
ARGUMENTS IN SUPPORT : Sempra Energy states in support,
"The future Smart Grid will allow real-time, two-way
digital communications between electric utilities and their
customers, on the electric grid. The features can greatly
improve the efficiency and reliability of electric
distribution systems through self-healing capabilities, and
facilitate conservation by enabling real-time demand
response pricing. Smart Grid systems will permit the state
to empower consumers and leverage distributed energy
resources to increase distribution efficiently; lower
customer prices; stimulate innovation and new green job
creation; and ultimately reduce emissions of greenhouse
gas."
ARGUMENTS IN OPPOSITION : The opposition states that the
bill does not define the term "smart meter" or require that
the meters to be used and installed be "smart meters." It
does not provide consumers with the ability to purchase a
remote stand alone real time information display that
communicates with the meter and provides the consumer with
the information contained in the meter's memory registers
that can be used to derive rate, energy usage, and
accumulated cost, and although there is a specific date in
which electrical corporations have to develop and submit a
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smart grid deployment play by, there is no specific
"implementation" date. That means that the companies can
provide the plan, but drag their feet with respect to
implementation. They would like to see amendments be taken
to accomplish this.
DLW:nl 5/27/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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