BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
32 (Negrete-McLeod)
Hearing Date: 5/18/2009 Amended: 4/29/2009
Consultant: Bob Franzoia Policy Vote: Energy 10-0
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BILL SUMMARY: SB 32 would require the Public Utilities
Commission (PUC) to increase the 1.5 megawatts feed-in tariff
(FIT) to 3 megawatts and delete the requirement that the
generation facility be located on property owned or under the
control of the generator. The PUC would be authorized to adjust
payments to reflect the value of the electricity and other
factors. This bill would make other related changes.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
FIT proceeding and $385 $294 $294 Special*
monitoring
* Utilities Reimbursement Account
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
A FIT is a process for small, renewable generators e.g., rooftop
solar, to sell power to a utility at predefined terms and
conditions, without contract negotiations. For investor owned
utilities (IOUs), the FIT operates as a "must take" contract in
its renewable portfolio. That is, if the power is generated,
the IOU must take it. FITs are available for systems sized up
to 1.5 megawatts for 10, 15, or 20 year contract periods.
This bill proposes to increase the applicable facility size of
the FIT program, from 1.5 megawatts to 3 megawatts and to allow
the PUC to adjust the price, which would require ongoing
implementation of an expanded FIT program and a cost proceeding
to determine the tariff price. This would require a new
proceeding and one half of an administrative law judge position
one time. Due to the complexity involved in such an analysis
and implementation, the PUC is estimating it will need two
senior analysts and one junior analyst for the proceeding and
for implementation ongoing.
The PUC would be required to establish a price based on the
current market price, and adjusted for other attributable of
renewable generation. Additionally, this bill requires the PUC,
in consultation with the California Energy Commission, to
establish the cost of generation values and cost for each
technology. This bill also allows the PUC to consider ratepayer
funded incentive payments previously received by the generator
when determining tariffs or standard offer contracts and
requires the PUC to consider the value for an electric
generation facility that generates electricity in a manner that
offsets peak power demand.
In addition, the PUC would be required to review and approve
FITs on an ongoing basis for the duration of the program. In
consultation with the Independent System Operator,
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SB 32 (Negrete McLeod)
the PUC would be required to examine the impact on the
transmission and distribution grid and any effects on ratepayers
resulting from electric generation facilities operating pursuant
to a tariff or contract approved by the PUC pursuant to this
bill. The PUC would also be required to establish performance
standards for any electrical facility with capacity greater than
1 megawatt to ensure those facilities generate expected annual
net production and do not impact system reliability.
The salaries for the positions are as follows:
Positions Classification
Salary Midpoint
1 Public Utilities Regulatory Analyst 5 6,768
1 Public Utilities Regulatory Analyst 4 6,160
1 Public Utilities Regulatory Analyst 3 5,610
0.5 Administrative Law Judge 8,279
3.5 $384,342