BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2187|
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THIRD READING
Bill No: AB 2187
Author: Bradford (D)
Amended: 5/1/12 in Assembly
Vote: 21
SENATE ENERGY, UTIL. & COMMUNIC. COMMITTEE : 11-1, 6/19/12
AYES: Padilla, Fuller, Berryhill, Corbett, De Le�n,
DeSaulnier, Emmerson, Kehoe, Pavley, Rubio, Wright
NOES: Simitian
NO VOTE RECORDED: Strickland
SENATE APPROPRIATIONS COMMITTEE : 7-0, 7/2/12
AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price,
Steinberg
ASSEMBLY FLOOR : 77-0, 5/29/12 - See last page for vote
SUBJECT : Renewable energy resources
SOURCE : Noble Americas Energy Solutions, LLC
DIGEST : This bill allows an electrical service provider
(ESP) to count the generation from any and all contracts
entered into through January 13, 2011 as eligible
procurement for any of the three compliance periods and for
any of the three product categories or bucket requirements.
ANALYSIS :
Existing law:
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1. Authorizes the non-residential, retail end-use customers
of an electric corporation (IOU) to purchase electric
service directly from non-utility providers (electric
service providers or ESPs), a program commonly referred
to as direct access. Participation is capped as a
percentage of total electric load based on a specified
formula.
2. Requires IOUs, publicly owned utilities (POUs),
community choice aggregators (CCAs), and ESPs to
increase purchases of renewable energy such that at
least 33 percent of total retail sales are procured from
renewable energy resources by December 31, 2020. In the
interim each entity would be required to procure an
average of 20 percent of renewable energy for the period
of January 1, 2011 through December 31, 2013 and 25
percent by December 31, 2016. This is known as the
Renewables Portfolio Standard (RPS).
3. Requires all renewable electricity products to meet the
requirements of a "loading order" that mandates minimum
and maximum quantities of three product categories (or
"buckets") which includes 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.
4. Permits procurement from contracts for renewable
generation executed prior to June 1, 2010 to "count in
full" toward a retail seller's or POU's RPS requirements
and further exempts those contracts from the three
product categories or "bucket" requirements.
This bill allows an ESP to count the generation from any
and all contracts entered into through January 13, 2011, as
eligible procurement for any of the three compliance
periods and for any of the three product categories or
bucket requirements.
Background
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RPS Purpose & Program . The California State Legislature
adopted groundbreaking legislation (SB 1078 (Sher), Chapter
516, Statutes of 2002) to require the state's
investor-owned utilities (e.g. Pacific Gas & Electric,
Southern California Edison, San Diego Gas and Electric
Company, collectively referred to as IOUs) and the private
companies that compete with the ESPs to increase their
annual purchases of electricity from renewable resources by
at least one percent per year so that 20 percent of their
sales would come from renewable sources by 2017. In 2006,
legislation accelerated the deadline for utilities to reach
20 percent to the end of 2010 (SB 107 (Simitian), Chapter
464, Statutes of 2006). Flexible compliance provisions of
the program could have extended the deadline to 2013. The
POUs were called upon in those bills to implement and
enforce an RPS program that "recognizes the intent of the
Legislature to encourage renewable resources, while taking
into consideration the effect of the standard on rates,
reliability, and financial resources and the goal of
environmental improvement." In 2011, the Legislature
expanded the RPS program to 33 percent by 2020 and more
clearly delineated the RPS requirements for the POUs.
Renewable Loading Order . Critical new features required
for compliance in the RPS program are that the retail
sellers and POUs have interim obligations procurement
obligations leading up to 33 percent by 2020. The program
defines three product categories, the "buckets", and sets
limitations on the quantity of electricity products for
each of the three buckets in each compliance period, as
follows:
Bucket #1 - Energy from generators either (1) directly
connected to a California balancing authority (CBA), or,
(2) connected to another balancing authority and
providing power to a CBA via dynamic transfers or by
scheduling power from the facility into a CBA on an
hourly basis. The most important fact about this product
category is that CBAs, like the CAISO and LADWP, have
many interconnection points outside of California.
Compliance targets require at least 50 percent of the
generation to meet this category through 2013; 65 percent
through 2016, and 75 percent thereafter.
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Bucket #2 - Unbundled renewable energy credits (RECs)
from generators not directly connected to a CBA. Retail
sellers and POUs can secure no more than 25 percent
through 2013; 15 percent through 2016, and 10 percent
thereafter.
Bucket #3 - Energy not directly connected to a California
Balancing Authority or delivered in real time yet still
providing electricity to the state. If unbundled RECs
from Bucket #2 are not used then as much as 50 percent of
generation can fill this bucket through 2013; 35 percent
through 2016 and 25 percent thereafter. If Bucket #2 is
full then the remaining generation needed to comply with
the RPS could be applied to the criteria in this bucket.
Prior Legislation
SB 2X1 (Simitian), Chapter 1, Statutes of 2011-12 First
Extraordinary Session, recast the state's annual renewable
energy goal from 20 percent to 33 percent of a retail
energy service provider's retail sales. It also
conditioned certain eligibility requirements upon whether
the contract for electricity products from eligible
renewable energy resources was executed after June 1, 2010.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 7/5/12)
Noble Americas Energy Solutions, LLC (source)
California Manufacturers & Technology association
ASSEMBLY FLOOR : 77-0, 5/29/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Furutani, Beth
Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Grove,
Hagman, Halderman, Harkey, Hayashi, Roger Hern�ndez,
Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight,
Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza,
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Miller, Mitchell, Monning, Morrell, Nestande, Nielsen,
Norby, Olsen, Pan, Perea, V. Manuel P�rez, Portantino,
Silva, Skinner, Smyth, Solorio, Swanson, Torres, Valadao,
Wagner, Wieckowski, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Cedillo, Fletcher, Hall
RM:d 7/5/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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