BILL ANALYSIS Ó
AB 1150
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Date of Hearing: May 11, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1150 (V. Manuel Perez) - As Amended: May 11, 2011
Policy Committee:
UtilitiesVote:12-0
Natural Resources 6-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill extends the sunset on the Public Utility Commission's
(PUC's) Self-Generation Incentive Program (SGIP) and requires
the commission to evaluate the program to achieve specified
goals. Specifically, this bill:
1)Extends, by three years (through 2014), the PUC's authority to
collect $83 million annually from ratepayers for the SGIP
program, and requires the commission to administer the program
for an additional two years, until January 1, 2018.
2)Authorizes the PUC to increase the annual collection in an
appropriate amount consistent with, but not limited to, the
annual rate of inflation.
3)Replaces the current emission reduction criteria for SGIP
eligibility by instead requiring projects to comply with
applicable Air Resources Board certification standards or air
district permitting requirements, and requires such projects
to be maintained to continually meet those standards or
requirements.
4)Requires, rather than authorizes, the PUC to periodically
evaluate the SGIP to adjust program design elements to achieve
eight specified goals, including equitably distributing
rebates to all eligible technologies and program participants
and promoting geographic distribution of projects.
5)Requires the PUC, for any incentive payment received on the
basis of using a renewable fuel, to require confirmation of
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delivery of that fuel to the project or to the California
pipeline system for the life of the project.
6)Requires the PUC to transition the SGIP to performance-based
incentives, with payments earned based on actual electrical
output of the distributed energy resource.
FISCAL EFFECT
Extends the PUC's annual SGIP administrative costs of $230,000
(for the equivalent of two positions) for two additional years.
In addition, the commission could require up to two additional
positions ($240,000) for up to modify the program as prescribed
in the bill, including transitioning to a performance-based
incentive structure. ÝPublic Utilities Reimbursement Account]
COMMENTS
1)Purpose . According to the author, "AB 1150 will permit the
extension of a vital program for incentivizing the development
of distributive on-site renewable energy facilities. These are
needed to meet increasing statewide demand for electricity, to
reduce peak demand pressures on the grid and help meet
California public policy goals of reducing greenhouse gas
emissions and increase the supply of clean renewable energy."
2)Background . The PUC established the SGIP in 2001, pursuant to
energy crisis legislation, AB 970 (Ducheny), to offer
incentives for renewable and "super clean" distributed
generation resources. SGIP has been extended and/or modified
by at least five bills since then. Over the last 10 years, the
SGIP has offered rebates for installation of solar, wind, fuel
cell, and, until 2008, certain renewable and fossil fuel
combustion resources meeting specified emissions and
efficiency standards. As of late 2010, SGIP had committed $865
million for 1489 projects totaling 437 megawatts (MW)
capacity. In 2006, when the PUC adopted the California Solar
Initiative, which established a rebate program for
photovoltaic technologies, solar was severed from the SGIP and
annual funding for the program was reduced from $125 million
to $83 million since 2007. SGIP provides upfront payments,
varying by the particular technology, to offset the cost of
capital investment.
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3)The most recent amendments are described in (3) through (6) of
the above Summary. These amendments also reduced, from five
additional years to three additional years, the PUC's
authority to continue collecting $83 million annually in
ratepayer funds for the program.
4)Prior Legislation . SB 412 (Kehoe)/Chapter 182 of 2009,
extended the SGIP sunset date through January 1, 2016, limited
funding to $83 million annually through 2011, and expanded the
eligible resources to include all self-generation technologies
that the PUC determines will support the state's goals for the
reduction of emissions of greenhouse gases and that meet
specified efficiency standards. The PUC is in the process of
implementing SB 412, and last month released a staff proposal
outlining program eligibility and rebate levels.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081