BILL ANALYSIS
SB 722
Page 1
SENATE THIRD READING
SB 722 (Simitian)
As Amended August 31, 2010
Majority vote
SENATE VOTE :Vote not relevant
UTILITIES & COMMERCE 9-2 NATURAL
RESOURCES 5-3
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|Ayes:|Buchanan, Carter, Fong, |Ayes:|Chesbro, De Leon, Hill, |
| |Fuentes, Huffman, Ma, | |Huffman, Skinner |
| |Skinner, Swanson, | | |
| |Bradford | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Tran, Villines |Nays:|Gilmore, Knight, Logue |
| | | | |
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APPROPRIATIONS 12-5 RULES 7-2
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|Ayes:|Fuentes, Bradford, |Ayes:|Skinner, Caballero, |
| |Huffman, Coto, Davis, De | |Gatto, Lieu, Mendoza, |
| |Leon, Gatto, Hall, | |Torlakson, Coto |
| |Skinner, Solorio, | | |
| |Torlakson, Torrico | | |
| | | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Conway, Harkey, Miller, |Nays:|Gaines, Silva |
| |Nielsen, Norby | | |
| | | | |
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SUMMARY : Increases California's renewables portfolio standard
(RPS) to require all retail sellers of electricity and all
publicly owned utilities (POUs) to procure at least 33% of
electricity delivered to their retail customers from renewable
resources by 2020. Specifically, this bill :
1)Requires all retail sellers of electricity and all POUs to
procure renewable energy resources with the following targets:
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a) 20 percent by December 31, 2013;
b) 25 percent by December 31, 2016; and,
c) 33 percent by December 31, 2020 and each year
thereafter.
2)Authorizes PUC to waive enforcement and allow retail sellers
to delay compliance with the renewable procurement requirement
if the retail seller demonstrates that any of the following
conditions are beyond its control and will prevent timely
compliance:
a) Inadequate transmission capacity for delivery of
sufficient renewable energy;
b) Unanticipated permitting, interconnection or other
related delays for renewable energy projects or an
insufficient supply of eligible renewable energy resources
available to the retail seller; or,
c) Unanticipated curtailment of renewable energy necessary
to address the needs of a balancing authority.
3)Revises eligibility conditions to allow various electricity
products from eligible renewable energy resources located
within the Western Electricity Coordinating Council
transmission network service territory and differentiates the
products based on the following three categories of renewable
energy products:
a) Products that have the first point of interconnection
with a California balancing authority or other criteria
primarily scheduled to serve California load;
b) Firmed and shaped renewable energy products providing
incremental electricity and scheduled into a California
balancing authority; or,
c) Renewable energy products that do not meet either
condition above, including unbundled renewable energy
credits.
4)Requires the PUC to establish a cost limit for each
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investor-owned utility (IOU) according to specified criteria.
5)Sets aside 25 percent of the 33 percent renewable market for
IOU-owned generation by requiring the California Public
Utilities Commission (PUC) to approve an application by an IOU
to construct, own and operate a renewable energy facility
until IOU-owned renewable facilities equal 8.25 percent of the
IOU's anticipated 2020 retail sales.
6)Requires the California Energy Commission (CEC) to refer the
failure of a POU to comply with the RPS to the Air Resources
Board, which may impose penalties and requires the penalties
to be expended for reducing emissions of air pollution or
greenhouse gases within the same geographic area as the local
publicly owned electric utility.
7)Appropriates $322,000 from the PUC Utilities Reimbursement
Account to the PUC for additional staffing related to
transmission lines.
EXISTING LAW requires IOUs and certain other retail sellers to
achieve a 20% RPS by 2010 and establishes a process and
standards for renewable procurement.
FISCAL EFFECT : Between $3.9 million and $4.2 million ongoing
annual costs, and $300,000 one-time costs comprised of the
following:
1)PUC:
a) Ongoing annual costs of approximately $650,000,
equivalent to 5.0 positions, to implement the RPS
provisions for IOUs, including developing new interim
goals, developing cost limitations on renewable electricity
procurement, communicating with IOUs regarding new
requirements, developing requirements for approval of
IOU-owned electricity generating facilities, and reporting
to the Legislature. (PUC Utilities Reimbursement Account
(PURA));
b) Ongoing annual costs of approximately $650,000,
equivalent to 5.0 positions, for transmission planning and
expedited review of applications to construct new
transmission lines. (PURA);
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c) Ongoing annual costs of approximately $1 million for
contracts for program evaluation and technical assistance,
such as analysis of program implementation options.
(PURA);
d) Appropriation of $322,000 from PURA for additional staff
for transmission line applications that facilitate RPS
compliance; and,
e) Potential revenue of an unknown amount from fines levied
against IOUs that fail to meet RPS targets.
2)CEC:
a) Ongoing annual costs of approximately $600,000,
equivalent to 4.0 positions, to the CEC to adopt
regulations and monitor RPS compliance among POUs. (ERPA);
b) One-time costs of approximately $300,000, equivalent to
1.0 position and contract expenses, to the Energy
Commission to update its studies on the capacity of the
electricity grid to carry wind and solar energy resources.
(ERPA);
c) Minor, absorbable costs to CEC to prepare, in
consultation with PUC, its biennial report to the
Legislature on progress toward meeting RPS. (ERPA); and,
3)California Department of Fish and Game, ongoing annual costs
of $350,000 to $600,000 to establish an internal division to
conduct planning and environmental compliance services.
(General Fund or Fish and Game Preservation Fund).
4)ARB:
a) Ongoing annual costs of approximately $340,000 for 2.0
positions to enforce POU compliance with RPS requirements.
(Air Pollution Control Fund (APCF)); and,
b) Potential revenue of an unknown amount from fines levied
against POUs that fail to meet RPS targets. (APCF)
COMMENTS : Over the past few years, there have been a few
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attempts to increase RPS. The author and members of the
Assembly have convened numerous stakeholder meetings to try to
reconcile divergent concerns over some significant barriers.
Some of the most unsurpassable impediments have included cost
containment, transmission and siting constraints, in-state
versus out-of-state eligibility, and whether there will be equal
rules imposed on IOUs and POUs.
Last year, SB 14 (Simitian) and AB 64 (Krekorian) proposed to
increase the RPS to 33% by 2020. Each bill took a different
approach, but was similar in overarching goals. AB 64 was
dropped, and the Governor vetoed SB 14 and stated that, although
he supports the intent of increasing RPS to 33% by 2020, he
directed ARB to try to impose a 33% RPS through uncodified
regulations.
SB 722 designates that not less than 50% of new renewable energy
resources products from June 1, 2010, through December 31, 2013;
65% through December 31, 2016, and 75% going forward, must meet
the strongest reliability criteria and targets in-state
development. This category allows eligibility to products that
have a first point of interconnection with a California
balancing authority and prescribes the criteria to be used to
determine compliance.
SB 722 permits PUC to allow a retail seller to delay compliance
with a RPS procurement requirement if it finds that the retail
seller has demonstrated that specific conditions have been
encountered that are beyond the control of the retail seller.
Some allowable delays include inadequate transmission capacity,
unanticipated permitting or interconnection delays, insufficient
supply of renewable electricity, or unanticipated curtailment of
renewable resources by the balancing authority. If a retail
seller fails to procure sufficient renewable resources to comply
with RPS and IOU has failed to obtain an order from PUC
authorizing a compliance delay, SB 722 requires PUC to exercise
its authority to impose enforcement mechanisms in the same
manner and to the same extent as contempt is punished by courts
of record. With regard to POUs, the bill requires that any
penalties paid by the POU be reinvested in its service
territory.
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Analysis Prepared by : Gina Adams / U. & C. / (916) 319-2083
FN: 0006888