BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 2187 (Bradford) - Renewable energy resources.
Amended: May 1, 2012 Policy Vote: EU&C 11-1
Urgency: No Mandate: No
Hearing Date: July 2, 2012 Consultant: Marie Liu
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 2187 would allow all contracts for renewable
generation made through January 13, 2011 by electrical service
providers (ESPs) to be counted as eligible procurement for any
of the three compliance periods under the state's Renewables
Portfolio Standard (RPS) and for any product category.
Fiscal Impact: One-time costs of approximately $80,000 from the
Public Utilities Reimbursement Account (special fund), to modify
existing PUC rules relating to RPS.
Background: In 2011, through the passage of SBx1 2 (Simitian)
Chapter 1/2011, the Legislature expanded the state's RPS program
to require that investor owned utilities, publically owned
utilities, and ESPs procure 33% of their electricity from
renewable resources by 2020 and further delineated interim
procurement obligations. Specifically, the new RPS program
establishes three product content categories ("buckets") and
sets limitations on the quantity of electricity products for
each of the three buckets. The three buckets are for renewable
resources directly connected to a California balancing authority
or provided in real time without substitution from another
energy source, energy not connected or delivered in real time
yet still delivering electricity, and unbundled renewable energy
credits. Essentially the buckets place the highest value on
renewable energy that is directly delivered into California
because it has the greatest economic, environmental, and
reliability benefits.
SBx1 2 "grandfathered" in all contracts entered into prior to
June 1, 2010 by allowing these contracts to count towards
compliance for any bucket. Even though SBx1 2 was approved by
the Legislature in March 2011, the June 1, 2010 was
AB 2187 (Bradford)
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intentionally chosen as the cutoff date since this was the date
that had been used in RPS discussions that begun in the previous
session (SB 722(Simitian)). While RPS discussions in the
Legislature were pending, however, entities, especially ESPs,
continued to secure renewable energy contracts, presumably
knowing that these contracts did not comply with the pending
legislation.
Proposed Law: AB 2187 would expand the contracts "grandfathered"
in, and thereby exempt from the bucket limits, to include all
contracts made through January 13, 2011 by ESPs.
Staff Comments: Which contracts are grandfathered in effects how
the RPS program may affect ratepayers (including the state).
However, as the PUC does not approve contracts for ESPs, it is
unclear how many contracts, and the value of those contracts,
would be affected by this bill.
Passage of this bill would require the PUC to make relatively
minor modifications to their existing rules regarding the RPS
program. The PUC estimates incurring the workload equivalent of
one administrative law judge for six months for a one-time cost
of approximately $80,000.