BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 581|
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THIRD READING
Bill No: SB 581
Author: Leno (D)
Amended: 5/14/09
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 7-3, 5/5/09
AYES: Padilla, Corbett, Kehoe, Lowenthal, Simitian,
Wiggins, Wright
NOES: Benoit, Cox, Strickland
NO VOTE RECORDED: Calderon
SUBJECT : Hetch Hetchy Water and Power: renewable
generation
SOURCE : San Francisco Public Utilities Commission
DIGEST : This bill expands a state statute relating to
San Francisco which limits their ability for having
electrical energy projects limited only to photovoltaic
solar, by giving them the ability to have more of a variety
of renewable energy projects such as ocean power, in-line
hydro, small urban wind, geothermal, and large and small
scale solar projects.
ANALYSIS : Existing law requires PG&E to credit the City
and County of San Francisco (City) for any excess
electricity exported to the PG&E grid from up to 15
megawatts of solar generation facilities owned by the City
that would serve its municipal facilities. The required
credit is equivalent to the generation component of the
CONTINUED
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appropriate time-of-use rate for the electricity.
Facilities must be located within 20 miles of the Hetch
Hetchy Water and Power electric generation facility or in,
or within 20 miles of, the City which operates as the San
Francisco Public Utilities Commission (SFPUC).
Background
For nearly 100 years federal law (The Raker Act of 1913)
has granted the City water and power resource rights-of-way
in Yosemite National Park and Stanislaus National Forest
and permitted the City to generate hydroelectric power
through the Hetch Hetchy system. The City is also required
to sell excess Hetch Hetchy power at cost, when available
above the City's own municipal needs, to Modesto and
Turlock Irrigation Districts for agricultural pumping and
municipal needs. The SFPUC sells Hetch Hetchy power, in
excess of its Raker Act obligation to Modesto and Turlock
Irrigation Districts and its own municipal needs, to public
agencies and/or private commercial users.
The power system delivers an average of 1.7 billion
kilowatt hours of electricity annually to the City and
County of San Francisco, the Modesto and Turlock Irrigation
Districts and tenants at the San Francisco International
Airport.
As a result of legislation in 2004 and 2006 the SFPUC has
been authorized under state law to build solar generation
at remote sites, deliver the power to PG&E, and net that
generation out against its municipal load at a generation
rate. The result is a surrogate net metering program
designed only for San Francisco's municipal load in which
the generation from City owned solar facilities is credited
for excess electricity production under a limited form of
net-metering, in which PG&E pays for excess electricity at
the time-of-use generation rate, rather than the full
retail rate.
Because of AB 2573 (Leno), Chapter 786, Statutes of 2006,
the SFPUC and PG&E were finally able to resolve years of
heated negotiations concerning the interconnection of solar
facilities and related costs and obligations. The 184 page
agreement was finalized in October 2007 and remains in
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effect until July 1, 2015. According to the parties, this
bill does not directly affect any provision of that
agreement. It could however result in pressures to reopen
the negotiations.
This bill requires PG&E to accept any electricity from any
renewable resource owned, leased, or under contract with
the San Francisco Public Utilities Commission that is
located within the electric service territory of PG&E. It
specifies that a renewable electricity generation facility
as used in the bill meet the requirements for in-state
renewable electricity generation facilities for the state's
Renewable Portfolio Standard in the Public Resources Code
Section 25741 (b) and located under the electric service
territory of PG&E.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/14/09)
San Francisco Public Utilities Commission (source)
American Federation of State, County and Municipal
Employees, AFL-CIO
Association of California Water Agencies
The Solar Alliance
Vote Solar Initiative
OPPOSITION : (Verified 5/14/09)
Pacific Gas & Electric
ARGUMENTS IN SUPPORT : San Francisco is aggressively
pursuing a variety of renewable energy projects including
ocean power, in-line hydro, small urban wind, geothermal,
and large and small scale solar projects. The San
Francisco Public Utilities Commission would like to expand
a San Francisco specific statue, limited only to
photovoltaic solar, to include all types of renewable
distributed generation. The bill will update state law to
reflect the fact that renewable generation takes many forms
and the mechanisms available to provide clean energy to
serve San Francisco's municipal load should endorse all
renewables not just photovoltaic solar.
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There will be no impact to PG&E and its ratepayers. The
current statute prohibits the shifting costs to PG&E's
bundling service customers and requires San Francisco to
pay PG&E for use of its transmission and distribution
facilities. Renewable energy generation projects
authorized under this bill would be subject to Federal
Energy Regulatory Commission and California Public
Utilities Commission regulations and San Francisco would
compensate PG&E for any impacts from interconnection or
distributions.
DLW:nl 5/15/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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