BILL ANALYSIS �
AB 1302
Page 1
Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 1302 (Williams) - As Amended: April 27, 2011
SUBJECT : Electricity system distribution planning
SUMMARY : This bill requires the California Energy Commission
(CEC) to develop guidelines for large investor owned and
publicly owned utilities to use for creating maps and
identifying optimal zones for distributed generation and
requires those electric utilities to submit those maps to the
CEC for review and approval. Additionally, the bill requires
the maps to be made publicly available. Specifically, this
bill :
1)Requires the CEC, in consultation with the Public Utilities
Commission (PUC), to develop guidelines for creating maps
which identify and designate zones for distributed generation.
2)Specifies information that must be included in the distributed
generation maps.
3)Requires large utilities (investor owned and public) to submit
distributed generation maps to the CEC, the PUC, and the
California Independent System Operator no later than December,
31, 2012.
4)Requires the CEC to review and approve or disapprove the
designation of optimal distributed generation zones identified
by the utilities.
5)Requires utilities to make this information available on their
websites and periodically update them.
6)Allows the CEC to assess a fee on a utility if a utility has
failed to produce a map. The CEC would then produce the map
for that utility and recoup reasonable costs.
7)Exempts small utilities (both investor owned and public) from
these requirements.
8)Requires state agencies to give priority for the approval of
distributed generation projects located within optimal
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distributed generation zones.
FISCAL EFFECT : Unknown
COMMENTS :
The author argues that the State must have an understanding of
the optimal areas for distributed generation in California
within areas served by investor owned utilities and public
utilities.
Distributed generation (DG) refers to electric generation
facilities that are located close to where the electricity will
be consumed. Distributed generation can take the form of
renewable power (such as solar or wind), fuel cells powered by
natural gas or biogas. These projects do not usually require
large amounts of land and most can be co-located on existing
developed property (such as a parking lot or building roof).
Distributed generation systems connect to the electricity grid
via the local transmission or distribution system (the developer
and the utility enter into an 'interconnection agreement').
They can be constructed in a manner that allows all of the power
to be sent to the electricity grid or constructed in a manner to
first serve on-site electricity needs and send only excess
electricity to the grid. Electricity that is sent to the grid
is purchased by the local serving utility as a result of a
contract between the utility and the project developer. The
contract to sell power is known by a variety of names: standard
contract, feed in tariff, wholesale power purchase agreement.
California has a number of initiatives underway to increase the
use of distributed generation, including but not limited to:
Governor Brown 12,000 MW Localized Energy Initiative
Sacramento Municipal Utility District (SMUD) 100MW Feed in
Tariff
City of Los Angeles Feed in Tariff (pending)
California Public Utilities Commission 1,000 MW Reverse
Auction Mechanism
Pacific Gas and Electric (PG&E) 500 MW Photovoltaic
Procurement Program (for projects from 1 MW up to 20 MW; half
utility owned, half private developers)
Southern California Edison (SCE) 500 MW Photovoltaic
Procurement Program (for projects between 1 and 2 MW; half
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utility owned, half private developers)
San Diego Gas and Electric (SDG&E) 100 MW Photovoltaic
Procurement Program (for projects between 1 and 5 MW; 26 MW
utility owned, 76 MW private developers)
The CPUC has established the Renewable Distributed Energy
Collaborative (Re-DEC) to address a number of challenges that
have been identified by stakeholders, including utility system
maps (Re-DEC brings together utility grid operators, renewable
DG project developers, and renewable DG technology experts to
better understand the challenges associated with interconnecting
renewable energy at the distribution grid).
One of the major barriers to DG has been lack of data available
on where DG can provide the most value to ratepayers and/or
where DG can be most easily connected to the electricity grid.
Mapping will provide this data. Investor owned utilities have
presented information on maps that they are voluntarily
developing to provide more information and data to renewable DG
project developers. Some early versions of these maps are
already available on utility websites.
As DG deployment accelerates utility maps will need to be
regularly updated . As one area is developed it may no longer be
optimal to develop DG projects in that area. In addition,
utilities regularly perform maintenance and provide distribution
system upgrades in response to changes in customer electricity
needs. A DG project may be under review which is not yet
indicated on the map. As a result, a map might inadvertently
provide an indication to a developer that a designated optimal
zone is pre-approved for their DG project.
The bill provides that state agencies shall give priority to
approve DG projects. Not all DG projects will be approved by
state agencies. Some DG projects may require approval by local
governments through a construction-building permit or
conditional use permit. In addition, interconnection agreements
would be approved by either the distribution system owner
(typically the owner of a distribution system is the utility
within the service area) or the CAISO. The process for reviewing
and approving interconnection agreements are primarily governed
by the Federal Energy Regulatory Commission (FERC).
Some terms in the current bill are not clearly defined,
including: 'optimal' and 'zones.' PG&E points this lack of
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clarity out in their letter opposing AB 1302. The author may
wish to consider an amendment to direct the CEC to define those
terms.
PG&E points out in its letter that distribution systems are
dynamic, i.e., �distribution] systems change, new devices are
added, new loads are added; different types and sizes of DG are
incorporated. In addition, they point out that DG technologies
themselves are create unknown variables, such as whether they
are mechanical or inverter based systems, how they potentially
interact with each other and the existing electrical system.
They note that the electric grid is an 'ever changing' system.
Thus, PG&E is not certain that the maps will ultimately be
useful.
The California Municipal Utilities Association expresses
opposition to this bill because it would undermine the Public
Utility's local governing board's authority because this bill
asserts CEC jurisdiction and allows the CEC to review and
approve their DG maps.
The author may wish to consider an amendment to clarify that a
designated optimal zone on a utility system map is not a
pre-approval for a DG facility.
REGISTERED SUPPORT / OPPOSITION :
Support
Pacific Power (if amended)
Opposition
California Municipal Utilities Association (CMUA)
Pacific Gas and Electric (PG&E)
Sacramento Municipal Utility District (SMUD)
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083