BILL ANALYSIS �
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THIRD READING
Bill No: SB 682
Author: Calderon (D)
Amended: 5/31/11
Vote: 21
SENATE ENERGY, UTILITIES & COMM. COMMITTEE : 9-1, 4/28/11
AYES: Padilla, Fuller, Corbett, De Le�n, DeSaulnier,
Pavley, Rubio, Simitian, Wright
NOES: Strickland
NO VOTE RECORDED: Berryhill
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Electricity generation: emissions
SOURCE : California Independent Petroleum Association
DIGEST : This bill requires that if the Air Resources
Board develops an assessment of the extent and magnitude of
potential greenhouse gas emission reductions associated
with using waste or stranded gas for electricity
generation, the state board shall provide a copy of the
assessment to the Senate Energy, Utilities and
Communications Committee, the Senate Environmental Quality
Committee, the Assembly Natural Resources Committee, and
the Assembly Utilities and Commerce Committee.
ANALYSIS :
Existing law:
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1. Directs the Public Utilities Commission (PUC) to adopt
tariffs and standard contracts (aka feed-in-tariff or
FIT) for the purchase of eligible renewable generation
for projects sized to 3 megawatts (MWs) from customers
and generators located in the territories of the state's
electrical corporations and local publicly owned
utilities.
2. Directs the PUC to establish a FIT for the purchase of
excess electricity generated from combined heat and
power units with a generating capacity of not more than
20 MWs and that meet specified emissions and efficiency
standards.
3. Requires the Air Resources Board to issue guidance to
local air districts on the permitting or certification
of electrical generation technologies that address best
available control technology determinations.
Background
Feed-In-Tariffs . These contracts present a simple
mechanism for customers and generators who generate
eligible renewable resources to sell power to a utility at
predefined terms and conditions, without contract
negotiations. The FIT operates as a "must take" contract in
a utility's renewable portfolio. That is, if the power is
generated the utility must take it at predefined terms and
prices. The PUC has implemented FITs for renewable
generation facilities sized up to 1.5 MW and is in the
process of implementing SB 32 (Negrete-McLeod, 2009) which
expanded the eligible system size up to 3 MWs for 10, 15,
or 20 year contract periods. The program is a subset of
the RPS program.
FITs were also mandated by the Legislature in 2007 for
combined heat and power (CHP) that is sometimes referred to
as cogeneration. Those tariffs are also pending
implementation by the PUC. Normally natural gas is used as
the fuel source for CHP.
Combined heat and power technologies produce both
electricity and steam from a single fuel at a facility
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located near the consumer. These efficient systems recover
heat that normally would be wasted in an electricity
generator, and save the fuel that would otherwise be used
to produce heat or steam in a separate unit. CHP not only
avoids electricity produced at remote power plants, it
displaces electricity or gas used for onsite heating or
cooling. The combined thermal efficiency benefits of CHP
at the point of use can be significant. The state's
current standard is that gas-fired CHP plants must have a
combined thermal efficiency of 60 percent.
Prior Legislation . SB 1465 (Lowenthal, 2010) established a
FIT for generation that uses a microturbine with a
generating capacity of not more than one megawatt that runs
off of waste or standard gas associated with the extraction
of oil or gas. Dropped by author.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/24/11)
California Independent Petroleum Association (source)
ARGUMENTS IN SUPPORT : According to the author's office,
in many cases throughout California, large amounts of waste
gas are produced that, when run through a turbine or fuel
cell, could provide more electricity than is needed for a
particular facility. However, because the excess
electricity generated can only be sold to the utilities,
which have not been willing to purchase the power or charge
price-deterring interconnection fees, the gas is flared.
The result of these conditions renders any capital
investment in cleaner, more efficient uses of waste gas
uneconomical. Current PUC rules allow for net metering,
but any electricity generated above that required by the
operator requires offloading the electricity. In these
cases, the producer pays the utility instead of the utility
paying the producer.
RM:rm 5/31/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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