BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 32|
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THIRD READING
Bill No: SB 32
Author: Negrete McLeod (D)
Amended: 6/2/09
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 10-0, 4/21/09
AYES: Padilla, Calderon, Corbett, Cox, Kehoe, Lowenthal,
Simitian, Strickland, Wiggins, Wright
NO VOTE RECORDED: Benoit
SENATE APPROPRIATIONS COMMITTEE : 11-0, 5/28/09
AYES: Kehoe, Cox, Corbett, Denham, DeSaulnier, Hancock,
Leno, Oropeza, Runner, Wyland, Yee
NO VOTE RECORDED: Walters, Wolk
SUBJECT : Renewable electric generation facilities
SOURCE : California Solar Energy Industries Association
DIGEST : This bill requires the Public Utilities
Commission (PUC) to increase the 1.5 megawatts feed-in
tariff to three megawatts and delete the requirement that
the generation facility be located on property owned or
under the control of the generator. The PUC is authorized
to adjust payments to reflect the value of the electricity
and other factors. This bill makes other related changes.
ANALYSIS : A feed-in tariff (FIT) is a process for small,
renewable generators e.g., rooftop solar, to sell power to
a utility at predefined terms and conditions, without
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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 three megawatts
and to allow the PUC to adjust the price, which required
ongoing implementation of an expanded FIT program and a
cost proceeding to determine the tariff price. This
requires 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 is 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.
Requires the PUC to annually establish maximum cost
limitations for purchases of electricity pursuant to this
bill that are applicable to an electric generation facility
that commences service pursuant to the tariff during the
12-month period following its establishment. Separate cost
limitations shall be established for each renewable
generation technology. The cost limitations shall be
established at the average price paid for electricity
generated by eligible renewable energy resources, utilizing
that technology, pursuant to contracts with the state's
three largest electrical corporations that are approved by
the PUC during the 12-month period preceding establishment
of the cost limitation. If the PUC determines that an
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insufficient number of contracts are approved by the PUC
during the 12-month period preceding establishment of the
cost limitation to yield a representative average price for
additional generation from a specific renewable generation
technology, the cost limitation for that technology shall
be established at the average price paid for electricity
generated pursuant to all contracts with the state's three
largest electrical corporations, for that technology, that
are approved by the PUC. If the PUC has not approved any
contract for a specific renewable generation technology,
the cost limitation shall be the average price paid for
electricity generated by all eligible renewable energy
resources pursuant to contracts with the state's three
largest electrical corporations that are approved by the
PUC during the 12-month period preceding establishment of
the cost limitation.
In addition, the PUC is required to review and approve FITs
on an ongoing basis for the duration of the program. In
consultation with the Independent System Operator, the PUC
will 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 will 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.
Requires the PUC to not order or otherwise require an
electrical corporation to implement a must-buy renewable
feed-in tariff except as required by this bill or as
otherwise expressly authorized by statute. It will not
limit the authority of an electrical corporation to enter
into bilateral contracts for the purchase of electricity to
meet its renewables portfolio standard procurement
requirements pursuant to law or limit the authority of the
PUC to approve a voluntary renewables standard contract
program for an electrical corporation.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
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According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
FIT proceeding $385 $294 $294 Special*
and monitoring
*Utilities Reimbursement Account
The salaries are 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
SUPPORT : (Verified 6/2/09)
California Solar Energy Industries Association (source)
Agricultural Energy Consumers Association
Pacific Gas and Electric Company (if amended)
Sempra Energy (if amended)
OPPOSITION : (Verified 6/2/09)
State Association of Electrical Workers (unless amended)
ARGUMENTS IN SUPPORT : The author's office opines that
California is missing opportunities to expand the use of
solar PV because excellent sites (e.g. warehouses, public
storage, agricultural sites) with space and interest in
installing solar energy equipment cannot use solar because
they cannot participate in either the CSI incentive program
or the RPS solicitation program. This is particularly
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important because it means missed opportunities to develop
distributed generation within the communities where
electricity is needed. This further increases the State's
reliance on an electricity transmission and distribution
system that is already congested. The author's office
further opines that current law does not recognize the
value that these sites can contribute to increasing
renewable energy generation in state, reducing transmission
congestion, peak electricity demand, and greenhouse gas
emissions or development of the market for renewable energy
technologies.
DLW:do 6/2/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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