BILL ANALYSIS �
AB 1771
Page 1
Date of Hearing: April 26, 2012
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 1771 (Valadao) - As Amended: April 19, 2012
SUBJECT : Renewable energy resources: hydroelectric generation
SUMMARY : Eliminates existing limitations applicable to
hydroelectric facilities for purposes of eligibility for the
Renewables Portfolio Standard (RPS), making any hydroelectric
facility in the Western Electricity Coordinating Council
(Western U.S., British Colombia, Alberta and Baja California)
eligible without regard to size.
EXISTING LAW :
1)The RPS requires investor-owned utilities (IOUs),
publicly-owned utilities (POUs) and certain other retail
sellers of electricity, in order to fulfill unmet long-term
resource needs, to procure eligible renewable energy resources
to meet the following portfolio targets:
a) 20 percent on average from January 1, 2011 to December
31, 2013.
b) 25 percent by December 31, 2016.
c) 33 percent by December 31, 2020 and each year
thereafter.
2)Provides that eligible renewable generation facilities must
use biomass, solar thermal, photovoltaic, wind, geothermal,
renewable fuel cells, small hydroelectric , digester gas,
limited non-combustion municipal solid waste conversion,
landfill gas, ocean wave, ocean thermal or tidal current.
3)Generally limits hydroelectric eligibility to facilities 30
megawatts (MW) or less, with specified exceptions for
facilities that are operated as part of a water supply system
and for efficiency improvements which increase the capacity of
a 30 MW facility.
4)Provides that new hydroelectric facilities (those that
commence operation after December 31, 2005) are eligible only
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if the facility does not cause an adverse impact on instream
beneficial uses or change the volume or timing of streamflow.
5)Requires the CEC to study, and report to the Legislature by
June 30, 2011, "run-of-river" hydroelectric facilities in
British Columbia to consider specified environmental impacts
and determine whether the facilities are, or should be,
eligible for RPS compliance.
THIS BILL :
1)Repeals the size limitations on hydroelectric facilities for
purposes of RPS eligibility, instead providing that a facility
of any size is eligible if it produces no discharges of air
contaminants or emissions, including greenhouse gases.
2)Provides that the bill will be operative six months after the
CEC report referenced above is submitted to the Legislature.
The reported is expected in June 2012. Regardless, if enacted
this year, the bill would not take effect before January 1,
2013.
FISCAL EFFECT : Unknown
COMMENTS :
1)Background. The RPS is the centerpiece of California's effort
to develop a clean energy system and reduce pollution and
greenhouse gas emissions associated with electricity
consumption. Over the past 10 years, the RPS statutes have
evolved to include very specific eligibility conditions and
limits for various renewable electricity technologies and
products. Generally, hydroelectric facilities must be 30MW or
less to be eligible for the RPS. There are exceptions for
specific facilities and for efficiency improvements, as well
as conditions to assure that any new hydroelectric facilities
are not environmentally destructive. The 30MW limit dates
back to renewable energy definitions enacted in state and
federal law in the 1970's.
2)Author's statement :
The existing definition of an eligible renewable energy
resource to count toward the 2020 required standard of 33%
only includes small hydroelectric generation facilities of
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30 megawatts or less that meet specific criteria. A large
hydroelectric facility produces the identical type of
energy except on a larger scale. If a facility of any size
is efficient-why not look to a clean, renewable energy
source that we already have available and functioning and
include it in the program to allow California to meet these
ambitious renewable standards?
3)Shuffling resources. Given the abundance of large
hydroelectric resources in the existing portfolios of IOUs and
POUs, as well as the potential to purchase energy from new
hydroelectric facilities throughout the WECC that may not meet
California, or even U.S., environmental standards, the
practical effect of this bill would be to eliminate the
requirement for utilities to procure any incremental renewable
energy from other sources under the RPS - i.e., a de facto
repeal of the RPS. For example, if the following utilities'
own large hydro counted toward their RPS: PG&E would
currently be at about 36%, Redding would be at about 35% and
SMUD would be at about 44%. Under this bill, these and other
hydro-long utilities could sell their excess hydro at a
premium to other hydro-short utilities, shuffling resources to
achieve paper compliance and little else.
4)Related legislation. SB 971 (Cannella) excludes generation
from hydroelectric facilities that are not eligible renewable
resources from the calculation of total retail sales which
would result in a "net retail sales" factor to serve as the
denominator in calculating compliance with the RPS (in effect
reducing most utilities' RPS obligations). SB 971 failed 5-7
on April 24 in the Senate Energy, Utilities and Communications
Committee.
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REGISTERED SUPPORT / OPPOSITION :
Support
Metropolitan Water District of Southern California
Opposition
American Whitewater
American Rivers
British Columbia Creeks Protection Society
California Hydropower Reform Coalition
California Outdoors
California Sportfishing Protection Society
California State Association of Electrical Workers
California State Pipe Trades Council
California Trout
California Wind Energy Association
Coalition of California Utility Employees
Environment California
Foothills Conservancy
Friends of the Bute Inlet
Friends of the River
Independent Energy Producers
Large-Scale Solar Association
Natural Resources Defense Council
Sierra Club California
South Yuba River Citizens League
The Utility Reform Network (TURN)
Trout Unlimited
Union of Concerned Scientists
Water and Power Law Group
Watershed Watch Salmon Society
Western Canada Wilderness Committee
Western States Council of Sheet Metal Workers
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092