BILL ANALYSIS
SB 32
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Date of Hearing: July 8, 2009
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Nancy Skinner, Chair
SB 32 (Negrete McLeod) - As Amended: July 1, 2009
SENATE VOTE : 34-0
SUBJECT : Renewable electric generation facilities
SUMMARY : Revises and expands a feed-in tariff (FIT) program for
eligible renewable electric generation facilities.
EXISTING LAW requires investor-owned utilities (IOUs) to
purchase all electricity from an eligible renewable generating
facility that is no larger than 1.5 megawatts (MW) at a market
price determined by the Public Utilities Commission (PUC)
pursuant to the Renewables Portfolio Standard (RPS). Facilities
are eligible until 500 MW is produced statewide.
THIS BILL :
1)Expands the current FIT program by requiring IOUs to purchase
all electricity produced by eligible renewable generation that
is less than 3 MW in size and is located within the service
territory of that IOU.
2)Provides that the price paid by the IOU for electricity
purchased under this program shall be a price determined by
PUC that reflects the cost of fossil fuel generation in the
state; and authorizes the PUC to adjust the price to reflect:
a) The value of electricity generated on a
time-of-delivery basis.
b) The value of other environmental attributes of the
renewable generation.
c) The value of an electric generation facility located
on a distribution circuit that generates electricity at a
time and in a manner to offset the peak demand on that
distribution circuit.
3)Requires the PUC, in consultation with the California Energy
Commission (CEC), to establish the cost of generation values
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and costs for each technology that is an eligible renewable
resource.
4)Provides that the price paid by IOUs for electricity from an
eligible facility shall be set so that ratepayers that do not
receive the payments under this program are indifferent to the
tariff rate paid to the generators.
5)Requires an IOU to provide expedited interconnection
procedures to eligible generation facilities that are located
on a distribution circuit that generates electricity at a time
and in a manner so as to offset peak demand on the
distribution circuit.
6)Provides that no electric utility is required to offer
additional FITs once the cumulative state wide capacity served
under the FIT program exceeds 500 MW or until each IOU has
reached the caps on above market cost under the California
RPS.
7)Provides that electricity purchased from the electric
generation facility shall count toward the IOUs RPS
obligations.
8)Authorizes the PUC to reduce the maximize size of eligible
resources in this program if the PUC finds that the reduction
is necessary to maintain system reliability.
9)Provides that a customer who receives a ratepayer-funded
incentive for the renewable generation facility prior to
January 1, 2010, shall be eligible to participate in the FIT
program.
10)Requires all publicly owned electric utilities (POUs) that
serve more than 75,000 customers to create a program to
purchase all electricity produced by eligible renewable
generation that is less than 3 MW.
11)Provides that the PUC cannot create or expand a FIT program
beyond the program authorized in statute.
12)Makes related legislative findings.
FISCAL EFFECT : According to the Senate Appropriations
Committee, costs of $385,000 in 2009-10 and $294,000 in 2010-11
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and 2011-12 for the PUC FIT proceeding and monitoring.
COMMENTS :
1)Background. Utility customers may develop small renewable
generators which are eligible renewable energy resources under
the RPS. It is possible for customers to sell surplus
electricity from these generators to IOUs pursuant to
individually negotiated contracts, but it is more convenient
to sell these small amounts of electricity under
predetermined, standard contract prices and other terms. To
facilitate this, the Legislature has enacted several different
statutes over the last several years that apply to particular
customers and technologies. For example, various forms of
"net-metering" programs have been enacted for solar
photovoltaic, wind, and manure methane generators, plus
special statutes for other renewable energy facilities.
Currently, IOUs are required to purchase qualifying renewable
energy from facilities up to 1.5 megawatts at a PUC-determined
market price and assured these purchases count toward their
RPS obligations. The total amount of energy that may
participate in this "feed-in tariff" program is capped at 500
megawatts. The PUC is considering expanding the feed-in
tariff program to facilities up to 10 megawatts and creating a
standard offer contract for facilities between 10 and 20
megawatts. This bill expands the existing statutory program
by doubling the project size limit to 3 MW and requiring large
POUs to offer a similar program within their service
territories.
2)Amendments recommended by Utilities and Commerce Committee.
When this bill was approved by the Utilities and Commerce
Committee July 6, the author and committee agreed to
amendments, with adoption deferred to this committee. The U&C
amendments revise how the total statewide cap of 750 MW is
applied proportionally to each IOU and POU and require
generators participating in this bill's FIT program to
reimburse specified ratepayer rebate funds collected prior to
participation.
REGISTERED SUPPORT / OPPOSITION :
Support
SB 32
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Sempra Energy
Opposition
None on file
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092