BILL ANALYSIS
SB 1247
Page 1
Date of Hearing: August 9, 2010
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
SB 1247 (Dutton) - As Amended: August 5, 2010
SENATE VOTE : (vote not relevant)
SUBJECT : Renewable energy resources: hydroelectric generation
facilities.
SUMMARY : Allows additional capacity of the Rock Creek
Powerhouse to be an eligible renewable resource if efficiency
improvements undertaken cause the generating capacity to exceed
30 megawatts (MW). In addition, allows a project to affect
changes in streamflow pursuant to a specific Federal Energy
Regulatory Commission (FERC) license. This bill contains an
urgency clause.
EXISTING LAW :
1)States legislative intent of a Renewable Portfolio Standard
(RPS) to increase the amount of electricity generated from
eligible renewable energy resources per year, so that it
equals at least 20 percent of total retail sales of
electricity by December 31, 2010.
2)Includes a small hydroelectric generation of 30 megawatts or
less, as an eligible "in-state renewable electricity
generation facility" for purposes of the RPS.
3)Provides that a hydroelectric generation facility is an
eligible renewable facility if it has, within the immediately
preceding 15 years, received certification from the Water
Board or a regional board.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, the purpose of this bill is
intended to address two hydroelectric facilities. This bill
will allow incremental improvements on the Rock Creek Powerhouse
to be eligible for RPS compliance. Current law allows
incremental increases to be eligible for RPS compliance if the
facility received certification from the Water Board or regional
board. The Rock Creek Powerhouse received certification from
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the Federal Energy Regulatory Commission (FERC) through a
settlement agreement.
This bill will also allow a Sacramento Municipal Utility
District (SMUD) project, that was licensed by a settlement
agreement from FERC, to qualify as an eligible resource for RPS
compliance pursuant to its FERC license. The author states that
the SMUD relicense will change streamflow in a positive manner.
However, current law precludes RPS eligibility if the project
changes streamflow in any way. This bill is proposing to modify
current law to clarify that any adverse impact or streamflow
change is to be measured against the environmental conditions
mandated by the FERC license currently in effect. This change
to the law will ensure that any FERC license requirements
stemming from a relicensing process, such as those at SMUD's
smaller facilities, will not be interpreted by the California
Energy Commission as an adverse impact or streamflow change that
alters their eligibility to count toward the SMUD's renewable
portfolio standard.
In addition, the author states that this bill is intended to
address rising electricity rates by increasing the supply of
eligible renewable resources. The author cites the Southern
California Public Power Authority, which forecasts that
California's electricity rates, which are already among the
highest in the nation, could climb as much as 60% higher as a
result of the state's efforts to fight global warming.
Background : California's RPS program requires electric
corporations to increase procurement from eligible renewable
energy resources by at least 1% of their retail sales annually,
until they reach 20% by December 31, 2010. Last year, SB 14
(Simitian) attempted to increase the RPS to 33% by 2020. The
Governor vetoed the bill and instead directed the Air Resources
Board to adopt regulations for a 33% RPS under its
greenhouse-gas emission reduction authority. SB 722 (Simitian)
increases the RPS to 33% by 2020. SB 722 passed out of this
committee on June 24, 2010, and out of Assembly Natural
Resources committee on June 30, 2010. SB 722 is currently held
in Assembly Appropriations committee.
Rock Creek : The Rock Creek facility is located on the North
Fork of the Feather River. PG&E notes that efficiency
improvements will use the same amount of water that is currently
used thus there will be no changes in the timing or volume of
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streamflow. The $37 million upgrade will add about 11 MW of
capacity. PG&E estimates the rate for the power generated
through this efficiency gain to be about $0.08 per kWh.
Existing law provides that efficiency improvements to an
existing hydroelectric generation facility can be considered an
eligible renewable resource if the hydroelectric generation
facility received water quality certification from the Water
Board within the immediately preceding 15 years. The Rock Creek
facility did not receive its certification from the Water Board.
According to PG&E, the Rock Creek facility received its
certification from the FERC through a settlement agreement. In
1979, PG&E had originally applied to the Water Board for
certification of its existing Rock Creek hydroelectric
generation facility and the Water Board failed to act on the
application within the prescribed time allotted, which was
possibly a year. PG&E states that the Water Board did not pose
any objections to the application. PG&E claims that the Water
Board failed to act on the application because it did not have
the resources to process it.
If the Water Board does not act, certification defaults to FERC.
In 2001, PG&E entered into a multi-party settlement agreement,
and FERC issued a new operating license for the Rock Creek
facility. PG&E states that it performed extensive evaluation of
potential project impacts, including impacts to water quality.
The multi-party settlement agreement that FERC used to support
issuance of a new Rock Creek operating license, addressed
project impacts and recommended protection, mitigation and
enhancement measures which were incorporated into the license.
PG&E claims that the settlement was supported by the Water
Board, U.S. Department of Agriculture Forest Service, U.S.
Department of Fish and Wildlife Services, the Natural Heritage
Institute, American Whitewater, Friends of the River, CA
Outdoors, CA Trout, and others.
PG&E states that it reached agreement with the California
Hydropower Reform Coalition (CHRC) in 2009 on the RPS
eligibility of the Rock Creek efficiency improvements.
According to PG&E, CHRC supports the eligibility of the
efficiency improvements, and this bill. (This committee notes
that it has not received a letter from CHRC in support of SB
1247.)
Why single out Rock Creek : The author states that this bill
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narrowly identifies Rock Creek and does not intend to expand it
to allow all hydroelectric projects licensed by FERC to be an
eligible renewable resource if efficiency improvements
undertaken cause the generating capacity to exceed 30 megawatts
(MW). The author is concerned that the expanded scope of the
bill might inadvertently capture controversial projects.
Water Board certification vs. legislation : If the Rock Creek
facility obtains a Water Board certification, efficiency
improvements at Rock Creek would qualify as eligible renewable
resources under existing law. PG&E states that it does not wish
to obtain a Water Board certification and would prefer SB 1247.
PG&E states that "? obtaining a Water Board 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."
Upper American River Project : SMUD owns and operates the Upper
American River Project, located on the western slope of the
Sierra Nevada. The Upper American River Project recently went
through a relicensing process and is currently awaiting final
FERC approval. The project is a large hydroelectric development
composed of several reservoirs and powerhouses including three
small facilities under 30 MW (Slab Creek, Jones Fork, and
Robbs).
Pursuant to SMUD's relicensing settlement agreement and the
expected Water Board water quality certification, SMUD will
increase the volume of water released into the natural stream
channel from dams that also deliver water to the three
aforementioned powerhouses. The author states that these
increased releases to the stream channel will benefit the
environment by increasing aquatic resource habitat and
recreation. Nevertheless, SMUD is concerned that because the
streamflow is changed (even if it is changed to be more
environmentally beneficial), the California Energy Commission
may have grounds to disqualify SMUD's small powerhouses from the
RPS on the basis that the new federal license requirements will
change the volume or timing of streamflow.
REGISTERED SUPPORT / OPPOSITION :
Support
SB 1247
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None on file.
Opposition
None on file.
Analysis Prepared by : Gina Adams / U. & C. / (916) 319-2083