BILL ANALYSIS �
SB 1122
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Date of Hearing: July 2, 2012
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
SB 1122 (Rubio) - As Amended: June 28, 2012
SENATE VOTE : 38-0 (prior version)
SUBJECT : Energy: renewable biomass and biogas projects
SUMMARY : Expands a feed-in tariff (FIT) program for small-scale
renewable electric generation facilities to include specific
allocations for biomass and biogas projects.
EXISTING LAW requires investor-owned utilities (IOUs) to
purchase all electricity from an eligible renewable generating
facility that is no larger than 3 megawatts (MW) at a market
price determined by the Public Utilities Commission (PUC).
Publicly-owned electric utilities (POUs) that serve more than
75,000 customers are required to adopt a similar program.
Facilities are eligible until 750 MW is produced statewide.
THIS BILL :
1)Requires the PUC, by June 1, 2013, to direct the IOUs to
collectively procure at least 250 MW from startup developers
of biomass and biogas projects.
2)Authorizes the PUC to increase the 750 MW statewide in order
to allocate 250 MW to biomass and biogas projects.
3)Requires each IOU to offer annual competitive solicitations
according to specified procedures for each of the following
biogas and biomass sources:
a) Dairy digester (85 MW)
b) Wastewater treatment (50 MW)
c) Agriculture (50 MW)
d) Sustainable forest management (30 MW)
e) Landfill and organic waste diversion (35 MW)
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4)Requires the PUC to encourage gas and electric utilities, by
December 31, 2013, programs and services to facilitate the
development of in-state biogas and to facilitate the
conditioning and upgrading of biogas in order to enable biogas
to be used for a broad range of purposes, including injection
into natural gas pipelines, use for onsite power generation,
and use at compressed natural gas filling stations for
alternative fuel vehicles.
FISCAL EFFECT : According to the Senate Appropriations
Committee, one-time costs of $270,000 from the Public Utilities
Commission Utilities Reimbursement Account (special fund) in
2013 for the development of a methodology calculating benefits
from generating electricity from biogas and biomass (prior
version).
COMMENTS :
Utility customers may develop small renewable generators which
are eligible renewable energy resources under the RPS. It is
possible for customers to sell surplus electricity from these
generators to IOUs pursuant to individually negotiated
contracts, but it is more convenient to sell these small amounts
of electricity under predetermined, standard contract prices and
other terms. To facilitate this, the Legislature has enacted
several different statutes over the last several years that
apply to particular customers and technologies. For example,
various forms of "net-metering" programs have been enacted for
solar photovoltaic, wind, and manure methane generators, plus
special statutes for other renewable energy facilities,
including a FIT program for projects up to 3 MW.
AB 1969 (2006) required the PUC to establish a small renewable
generator FIT in the territories of the three largest IOUs to
provide a 10, 15, or 20-year fixed-price, non-negotiable
contract for systems sized up to 1.5 MW. SB 32 (2009) doubled
eligible project size to 3 MW, required large POUs to offer a
FIT, and increased the statewide cap to 750 MW.
On May 24, 2012 the PUC approved a decision on the SB 32 FIT
which provides price adjustments and separates the FIT into
three product types: as available, peaking, and non-peaking as
available. Stakeholders in the PUC proceeding requested a
set-aside for specific technologies, particularly biogas. The
PUC declined to adopt a technology specific set-aside because
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the Legislature did not did not provide statutory direction to
do so. However, the three categories established in the PUC do
recognize the attributes of the technologies via the three
categories of procurement.
According to the author, SB 1122 seeks to add a fourth
procurement category to the PUC's FIT program specifically for
small, community-scale renewable biomass and biogas
applications. While potential customers and biogas/biomass
developers hoped that the implementation of SB 32 would result
in a robust market for these technologies, the CPUC's recently
adopted decision refused to incorporate "general environmental
adders even in those instances, such as biogas and forest
biomass, where the environment and public safety qualities of
the renewable generation technology is promising." This crucial
element would have likely leveled the playing field between
biomass/biogas technologies and other renewable technologies
(baseload and otherwise). In the absence of consideration of
the environmental benefits of methane-capture technologies, a
new and separate procurement requirement for 250 MW of renewable
biomass and biogas is necessary.
REGISTERED SUPPORT / OPPOSITION :
Support
Agricultural Energy Consumers Association
Alliance of Western Milk Producers
California Association of Sanitation Agencies
Caterpillar, Inc.
Clean Power Campaign
Eastern Municipal Water District
Milk Producers Council
Solar Turbines Incorporated
South San Joaquin Irrigation District
Opposition
None on file
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092
SB 1122
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