BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
SB 1247 - Dutton Hearing Date: June 15,
2010 S
As Amended: May 25, 2010 FISCAL B
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DESCRIPTION
Current law requires investor-owned utilities (IOUs) and energy
service providers (ESPs) to increase existing purchases of
renewable energy by 1% of sales per year such that 20% of retail
sales, as measured by usage, are procured from eligible
renewable resources by December 31, 2010. This is known as the
Renewable Portfolio Standard (RPS).
Current law exempts publicly owned utilities (POUs) from the
state RPS program and instead requires these utilities to
implement and enforce their own renewable energy purchase
programs that recognize the intent of the Legislature to
encourage increasing use of renewable resources.
Current law defines as RPS eligible, electric generation
resources from biomass, solar thermal, photovoltaic, wind,
geothermal, fuel cells using renewable fuels, small
hydroelectric generation of 30 megawatts or less, digester gas,
landfill gas, ocean wave, ocean thermal, tidal current, and
municipal solid waste conversion that uses a noncombustion
thermal process to convert solid waste to a clean-burning fuel.
This bill expands the definition of eligible renewable resources
to include all hydroelectric generation of any size which
commences operation after January 1, 2006 as along as that
facility does not cause an adverse impact on instream beneficial
uses or cause a change in the volume or timing of streamflow.
Current law defines as RPS eligible any incremental generation
gained from efficiency improvements in hydroelectric facilities
of any size under specified conditions.
This bill defines as RPS eligible incremental increases gained
from efficiency improvements at the Rock Creek Powerhouse as
long as the efficiency improvements receive approvals from the
State Water Resources Control Board (SWRCB).
BACKGROUND
RPS Progress - California's three large IOUs collectively served
15% of 2009 retail electricity sales with renewable power. The
IOUs, which provide service to about three-fourths of California
utility customers, report the following individual RPS
percentages:
Pacific Gas and Electric (PG&E) 14.4%
Southern California Edison (SCE) 17.4%
San Diego Gas & Electric (SDG&E) 10.5%
In the last two years the RPS program started to show
significant gains. In 2008 more renewable generation came on
line than in the entire 2003 - 2007 time period (692 MW).
Calendar year 2009 broke the 2008 record with more than 1,000 MW
coming on line. Since the RPS statute took affect in 2003,
almost 1,600 MW of renewable capacity has come online.
The generation mix also improved in 2009. New capacity in 2008
was almost entirely from wind and a good portion of that was
from out of state. In 2009, 71% of new capacity was from
in-state sources and included a mix of biomass, biogas,
geothermal, solar PV, small hydro, and wind.
Bids received by the IOUs for new generation also hit a record
in 2009 bringing in potential contracts for more than half of
the generation needed to meet a 33% target in 2020. The IOUs
have now contracted for more than 12,000 MW of renewable
generation. To put this in context the statewide demand in a
typical January is 25,000 to 30,000 MW. A July heat storm would
drive that number up over 50,000 MW.
The state's local publicly owned utilities report renewable
progress ranging from 1.7% to 61.2%. Compliance data for 2009
recently submitted to the committee collectively shows:
Northern California Power Authority20%
Sacramento Municipal Utility District21%
L.A. Department of Water & Power14%
Southern California Power Authority2% - 20%
Hydroelectric Power - Hydroelectric power is a major source of
California's electricity. In 2007, hydroelectric power plants
produced 43,625 gigawatt-hours of electricity, or 14.5 percent
of the total. Hydro facilities are broken down into two
categories larger than 30 megawatts capacity are called "large"
hydro. Smaller than 30 MW capacity is considered "small" hydro
and can be RPS eligible. The amount of hydroelectricity produced
varies each year. It is largely dependent on rainfall.
California has nearly 400 hydro plants, which are mostly located
in the eastern mountain ranges and have a total dependable
capacity of about 14,000 MW. The state also imports
hydro-generated electricity from the Pacific Northwest. Two
types of conventional hydroelectric facilities are dams and
run-of-river. Dams raise the water level of a stream or river to
an elevation necessary to create a sufficient elevation
difference (water pressure, or head). Dams can be constructed of
earth, concrete, steel or a combination of such materials.
Run-of-river, or water diversion, facilities typically divert
water from its natural channel to run it through a turbine, and
then usually return the water to the channel downstream of the
turbine.
Although hydroelectric generation is emissions-free, it was
excluded from RPS eligibility because of other adverse
environmental impacts associated with conventional hydroelectric
power generation and typical on-stream pumped hydroelectric
storage facilities:
Water resources impacts such as a change in stream
flows, reservoir surface area, the amount of groundwater
recharge, and water temperature, turbidity (the amount of
sediment in the water) and oxygen content;
Biological impacts such as the possible displacement of
terrestrial habitat with a new lake environment, alteration
of fish migration patterns, and other impacts on aquatic
life due to changes in water quality and quantity;
Possible damage to, or inundation of, archaeological,
cultural or historic sites (primarily if a reservoir is
created);
Changes in visual quality;
Possible loss of scenic or wilderness resources; and
Increase in potential for land-slides and erosion.
Hydro Efficiency Improvements Do Count - Beginning in 2006 the
Legislature passed a series of bills that allow a utility to
implement efficiency improvements at a hydroelectric facility of
any size and count the gain in power toward the utility's RPS
requirements. A typical improvement would be the installation
of new turbines that would increase output but not impact the
timing or volume of streamflow.
COMMENTS
1) Author's Purpose . The author's purpose is two-fold.
First he considers hydroelectric power as a low-cost, clean
energy resource which should be RPS eligible. Second, the
bill addresses a unique permitting situation at the Rock
Creek Powerhouse hydroelectric facility which makes it
ineligible for RPS credit for efficiency improvements as
are other hydroelectric facilities.
2) Removing the Hydro Cap . The effect of this provision of
this bill is not clear. The author's intent is to
encourage the development of new large hydroelectric
generation to help achieve compliance with the RPS program.
However, it is not clear whether any hydroelectric facility
could meet the requirement that the facility would not
create an adverse impact on instream beneficial uses or
cause a change in the volume or timing of streamflow.
3) Rock Creek Powerhouse . The 112 megawatt Rock Creek
Powerhouse hydroelectric plant is located on the North Fork
of the Feather River and is owned by PG&E. Under current
law this entire facility and its impacts must be assessed
by the SWRCB periodically and a certification issued. That
certification is one of the conditions of RPS eligibility
for efficiency improvements. However, due to unique
circumstances this plant last received certification from
the Federal Energy Regulatory Commission.
Because the Rock Creek facility does not have a SWRCB
certification, efficiency improvements at Rock Creek are
not eligible renewable resources under existing law. PG&E
reports that obtaining a SWRCB certification for the entire
Rock Creek hydroelectric generation facility at this time
is not practical or feasible, as it would involve years of
re-studying impacts that were already addressed in the FERC
license and which are not affected in any way by the
proposed efficiency improvements. Consequently this bill
allows PG&E to secure and use a limited review and
certification by the SWRCB to achieve RPS eligibility for
its improvements.
PG&E also reports that the efficiency improvements they are
considering will use the same amount of water that is
currently used thus there will be no changes in the timing
or volume of streamflow. The $37 million upgrade will add
about 11 MW of capacity. They estimate the rate for the
power generated through this efficiency gain to be about 8
cents per kWh. The California Hydropower Reform Coalition
has no concerns with this provision of this bill.
4) Related Legislation . The following bills have been
introduced in 2010 which affect the RPS program:
SB 722 (Simitian) increases the RPS mandate to 33%
by 2020 and makes other program changes. Status: Amended
on Assembly Floor; pending re-referral to policy
committee. Status: Amended on Assembly Floor; pending
re-referral to policy committee.
SB 1367 (Wyland) extends the RPS compliance timeline
to 20% by 2020. Status: Referred to but not heard in the
Senate Committee on Energy, Utilities & Communications.
Status: Dropped by author.
AB 1954 (Skinner) modifies the de minimus standard
for the use of fossil fueled sources to assist RPS
generation and addresses back-stop cost recovery of
renewable transmission facilities. Status: Referred to
Senate Committee on Energy, Utilities & Communications;
set for hearing June 29, 2010.
AB 2378 (Tran) expands the definition of eligible
renewable resources to include any combination of the
currently eligible renewable resource technologies.
Status: Referred to Senate Committee on Energy, Utilities
& Communications; set for hearing June 15, 2010.
AB 2514 (Skinner) requires the adoption of energy
storage procurement targets. Status: Referred to Senate
Committee on Energy, Utilities & Communications; set for
hearing June 29, 2010.
POSITIONS
Sponsor:
Author
Support:
Regional Council of Rural Counties
Oppose:
California Hydropower Reform Coalition
Solar Alliance
Kellie Smith
SB 1247 Analysis
Hearing Date: June 15, 2010