BILL ANALYSIS �
AB 1624
Page 1
ASSEMBLY THIRD READING
AB 1624 (Gordon)
As Amended May 7, 2014
Majority vote
UTILITIES & COMMERCE 11-0 NATURAL
RESOURCES 9-0
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|Ayes:|Bradford, Patterson, |Ayes:|Chesbro, Dahle, Bigelow, |
| |Bonilla, Ch�vez, Fong, | |Garcia, Muratsuchi, |
| |Garcia, Roger Hern�ndez, | |Patterson, Skinner, |
| |Mullin, Quirk, Rendon, | |Stone, Williams |
| |Skinner | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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APPROPRIATIONS 16-0
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|Ayes:|Gatto, Bigelow, | | |
| |Bocanegra, Bradford, Ian | | |
| |Calderon, Campos, Eggman, | | |
| |Gomez, Holden, Jones, | | |
| |Linder, Pan, Quirk, | | |
| |Ridley-Thomas, Wagner, | | |
| |Weber | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : This bill extends authorization for the California
Public Utilities Commission (PUC) to collect funds from
ratepayers for specified technologies to receive incentives
under the Self Generation Incentive Program (SGIP) until 2020
and extend administration of the SGIP until 2021. Specifically,
this bill :
1)Requires the California Public Utilities Commission (PUC) to
allocate up to $83 million per year from 2015 through 2021
from utility greenhouse gas allowance revenues that may be
allocated by the PUC for clean energy projects. Requires the
expenditure of any unused ratepayer funds before utility
allowance revenues may be used. Requires the PUC to reduce
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annual funding by 10% in each of the last four years
(2018-2021).
2)Revises eligibility requirements and in-state set-asides for
distributed energy resource (DER) technologies.
3)Requires the PUC to determine a capacity factor for each
distributed generation (DG) and energy storage system.
Requires the PUC to update its greenhouse gas (GHG) reduction
criteria.
4)Requires the PUC to evaluate SGIP based on specified
performance measures
FISCAL EFFECT :
1)By extending SGIP until 2021, there will be up to an
additional $506 million expended from AB 32 cap-and-trade
utilities allowances to support SGIP.
2)Increased PUC administrative costs of over $1 million for
additional program requirements. Currently, approximately 7%
of SGIP funds are budgeted for administration.
COMMENTS :
1)Purpose. According to the author, this bill extends a program
for incentivizing the development of distributed on-site
renewable energy facilities. These facilities are needed to
meet increasing statewide demand for electricity, to reduce
peak demand pressures on the grid and help meet California
public policy goals of reducing GHG emissions and increase the
supply of clean renewable energy.
Additionally, this bill provides a variety of performance
measures and metrics to ensure that California's utility
ratepayers benefit from continuation of the SGIP.
2)Background. In 2001, the PUC established SGIP to offer
customer rebates for renewable and DG. SGIP has been extended
and/or modified at by at least six bills since then. Over the
last 13 years, SGIP has offered rebates for installation of
solar, wind, fuel cell, and certain renewable and fossil fuel
AB 1624
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combustion projects meeting specified emissions and efficiency
standards.
AB 2778 (Lieber) of 2006, extended SGIP for wind and fuel
cells until 2012, but excluded combustion projects. SB 412
(Kehoe) of 2009, extended SGIP collection through 2011,
modified eligibility to include fossil fuel projects that
reduce GHG emissions, and required the PUC to administer the
program until 2016 (the additional time was allotted to spend
a $200 million surplus accumulated from prior years).
The program was suspended by a PUC ruling issued February 10,
2011, which froze applications received on or after January 1,
2011. The reason for the suspension was that a rush of awards
and applications, mostly from a single vendor (Bloom Energy),
had nearly exhausted both the current budget and the
accumulated surplus, leaving less funding than expected for
future awards under SB 412. Later in 2011, the PUC adopted a
decision implementing SB 412 and reinstated the program. At
the same time, the PUC made "advanced energy storage" (e.g.,
battery) systems eligible for SGIP incentives.
AB 1150 (V. Manuel P�rez) of 2011, allowed the PUC to fund
SGIP for an additional three years. Under AB 1150, the PUC
may authorize the utilities to collect up to $83 million per
year from their customers through December 31, 2014. However,
AB 1150 maintained the January 1, 2016, sunset on the program,
at which time the PUC must provide repayment of all
unallocated funds to reduce ratepayer costs.
3)Utility Allowance Revenues. Under the California Global
Warming Solutions Act (AB 32 (N��ez) Chapter 488, Statutes of
2006), the Air Resources Board (ARB) has adopted a
cap-and-trade program that applies to major sources of GHG
emissions, including electric utilities. Under the
cap-and-trade regulation, ARB allocates allowances to electric
utilities to lessen the impacts of AB 32 implementation on
ratepayers. ARB requires electric utilities to auction their
allowances each year to generate revenue for the benefit of
ratepayers. Fifteen percent of the auction revenues maybe
allocated for clean energy and energy efficiency projects.
The remaining 85% is credited directly to residential, small
business and other specified electric utility customers.
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4)Similar Legislation. AB 1499 (Skinner) of the current
Legislative Session, extends SGIP funding and administration
for three years. Unlike this bill, AB 1499 does not shift the
funding source from ratepayer funds to utility allowances or
reduce the level of funding provided in the last four years.
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083
FN: 0003674