BILL ANALYSIS �
AB 1990
Page 1
Date of Hearing: May 16, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1990 (Fong) - As Amended: May 10, 2012
Policy Committee: UtilitiesVote:9-4
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill establishes a small-scale renewable generation program
in the state's "most impacted and disadvantaged communities," as
defined. Specifically, this bill:
1) Establishes a small-scale (maximum 500kW per project)
renewable generation program with the goal of installing
375 megawatts (MW) of generation capacity-distributed
statewide according to each investor-owned utility's
(IOU's) and publicly-owned utility's (POU's) share of
statewide peak demand-in the most impacted and
disadvantaged communities, as defined, by December 31,
2020.
2) Requires the Public Utilities Commission (PUC), in
consultation with others, to develop program elements that
achieve specified environmental justice objectives.
3) Requires the PUC to:
a) Allocate procurement targets for each electrical
corporation in proportion to each utility's percentage
share of the state's peak demand.
b) Establish a schedule of standard rates for electricity
that IOUs are required to purchase through clean energy
contracts with a small-scale renewable generation facility
owner or operator.
4) Limits the cost of the program to no more than 0.375% of
the total cost of each IOU's forecast retail sales for
2020.
AB 1990
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5) Requires the IOUs to file a standard tariff for
electricity purchased pursuant to a clean energy contract
with a small-scale renewable generation facility owner or
operator.
6) Requires the PUC to ensure that the IOUs begin offering
these contracts by January 1, 2014.
7) Requires POUs to establish a schedule of standard tariff
rates for electricity purchased through clean energy
contracts from small-scale renewable generation facilities
pursuant to a small-scale generation program for the
utility.
8) Requires the PUC to post maps on its website, regarding
the IOUs, and requires each POU to post on its website,
respectively, maps showing where small-scale generation
facilities may best be located on the distribution grid,
current program tariffs, and program employment and
economic development opportunities.
FISCAL EFFECT
Ongoing special fund costs to the PUC of about $370,000 for two
utility analysts and an administrative law judge to establish
program rules, including quantifying the impact of projects to
achieve the "environmental justice benefits" enumerated in the
bill; develop payment rates and a method to adjust rates to
account for the availability of tax credits and other government
subsidies; set IOU target procurement rates based on retail
sales, and develop a methodology to adjust those rates based on
the distribution of disadvantaged communities across service
territories; review and approve projects, including verifying
that each project is properly sited in an eligible disadvantaged
community; and assessing whether each project provides
"environmental justice benefits". �Public Utilities
Reimbursement Account]
All costs to POUs will be borne by POU ratepayers.
COMMENTS
1)Purpose . According to the author, "California's most
vulnerable communities - those that have suffered first and
AB 1990
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worst from pollution - have not benefited much from renewable
energy policy. This legislation will create jobs and build
cleaner, safer, and healthier neighborhoods. This bill
establishes a FIT for small scale renewable energy projects of
up to 500 kilowatts to spur rooftop solar on commercial
buildings including multifamily buildings, and residential
buildings and to create local green jobs in disadvantaged
communities with high unemployment."
2)Background . A feed-in tariff is a standard power purchase
contract, over a fixed time period, with a standard payment
for each kilowatthour of electricity produced over the life of
the contract. What makes a feed-in tariff unusual from other
types of power purchase contracts is that any project owner or
developer can use this contract to enter into an agreement
with a utility because the terms of the contract and the price
are known in advance. This standard form of the contract
allows an owner or a developer to determine the revenue stream
from the project ahead of time.
3)Opposition . The three large IOUs argue that the bill is
unnecessary and duplicative of other feed-in tariff programs.
SDG&E states that, "While the goal of AB 1990 is laudable, the
bill incorrectly presumes that the lack of applicable programs
is preventing the development of renewables in disadvantaged
areas. To the contrary, there are ample programs to support
renewables in those areas, We believe the solution is not more
programs, but a focus on community need that would prompt an
area to take advantage of these existing programs."
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081