BILL ANALYSIS �
AB 1935
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Date of Hearing: April 28, 2014
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 1935 (Campos) - As Amended: April 22, 2014
SUBJECT : Electricity: clean distributed energy resources.
SUMMARY : This bill would require the California Public
Utilities Commission's (PUC) biennial report to the Legislature
and the Governor related to the impacts of distributed
generation (DG) on the state's distribution and transmission
grid to include clean DG resources, as specified. Specifically,
this bill :
1)Requires future DG reports to focus on "clean distributed
energy resources" rather than DG in general.
2)Defines "clean distributed energy resources" as any of the
following:
a) A clean energy generating technology that meets all
of the following criteria:
i. Produces electricity, or electricity and useful
heat.
ii. Has a greenhouse gas (GHG) emissions factor,
including, when applicable, credit for waste heat
recovery and savings on transmission and distribution
losses, that is less than or equal to an emissions factor
determined by the State Air Resources Board (ARB) that
represents the emissions of greenhouse gases that are
displaced by the electricity generated by the distributed
energy resource.
iii. Has an oxide of nitrogen (NOx) emissions rate,
including, when applicable, credit for waste heat
recovery, that is less than or equal to 0.07 pounds per
megawatthour, or a lower NOx emissions rate that the ARB
determines reflects the best performance achieved in
practice by existing electrical generation technologies.
iv. Has a nameplate rated generation capacity of 20 or
less megawatts (MW).
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b) An eligible renewable energy resource, as defined in
Public Utilities Code Section 399.12, that has a
nameplate generation capacity of 20 MW or less.
c) A "demand-side" reduction resource.
d) An energy storage technology that stores energy from
a technology or resource specified above.
EXISTING LAW
1)Requires the PUC, in consultation with the California
Independent System Operator (CAISO) and the California Energy
Commission (CEC), to study and report to the Legislature and
Governor on the impacts of DG on the state's distribution and
transmission grid. (Public Utilities Code 321.7)
2)Defines "renewable electrical generation facility" and
"eligible renewable energy resource". (Public Resources Code
25741 and Public Utilities Code 399.12)
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's statement: "Because clean technologies have never
been defined in a technology-neutral fashion, these beneficial
technologies are vulnerable to being left out of grid planning
processes and reports. AB 1935 would help solve this problem
by defining clean distributed energy resources and ensuring
that these technologies are included in an existing CPUC
report which details the impacts of distributed generation on
the California grid."
2)AB 578 report. The PUC oversees DG policies and programs on
both the customer and utility (wholesale) side of the electric
meter within the service territories of California's
investorowned utilities. Examples of DG could include
renewables such as photovoltaic solar, wind, biomass, gas
digesters, or landfill gas, and non-renewables such as natural
gas, propane gas, or waste gas.
AB 578 (Blakeslee, 2008) required the PUC, in consultation
with CAISO and CEC, to prepare a biennial report on the
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impacts of DG on the state's distribution and transmission
grid. The report must include the following:
a) Reliability/transmission issues related to
connecting DG to the local distribution networks and
regional grid.
b) Issues related to grid reliability/operation,
including interconnection, and the position of
federal/state regulators toward DG accessibility.
c) The effect on overall grid operation of various DG
sources.
d) Barriers affecting the connection of DG to the
state's grid.
e) Emerging technologies related to DG interconnection.
f) Interconnection issues that may arise for CAISO and
local distribution companies.
g) The effect on peak demand for electricity.
The PUC has hired consulting firms to prepare two "DG impacts"
reports since AB 578 was enacted. The most recent report was
prepared by Black & Veatch and published by the PUC in May
2013.<1>
The report describes Governor Brown's commitment to 12,000 MW
of renewable DG by 2020. DG has grown as the result of several
incentive programs, including:
The CEC's Emerging Renewables Program (ERP), which
provided support to emerging renewable projects on the
customerside of the meter. This program was discontinued
in June 2012.
The PUCs SelfGeneration Incentive Program (SGIP), which
offers incentives for DG projects located at utility
customer sites. SGIP supported/supports various
technologies, including solar photovoltaic (PV), wind, fuel
cells, and other conventional technologies.
The California Solar Initiative (CSI) program and
several related programs (affordable solar housing for
single or multi-family dwellings - SASH and MASH), which
began in 2007. They are the result of SB 1 (Murray, 2006),
which set a goal of 3,000 MW of distributed solar in the
--------------------------
<1> PUC. Biennial Report on Impacts of Distributed Generation.
May 2013.
http://www.cpuc.ca.gov/NR/rdonlyres/29DCF6CC-45BC-4875-9C7D-F8FD9
3B94213/0/CPUCDGImpactReportFinal2013_05_23.pdf
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state. Support for solar PV technologies was shifted from
the SGIP program to these programs.
Other programs include the SB 1 public-owned utility
programs, the New Solar Homes Partnership, and the
Renewable Energy SelfGeneration Bill Credit Transfer
(RESBCT).
Although the report is intended to examine the impacts of DG
on the distribution and transmission system, the current
impacts could not be adequately quantified. The preparers of
the report believe they are "relatively low" for various
reasons:
About 90% of connected DG capacity is on the
customer-side of the meter, and these DG systems are
usually small.
The current penetration level of DG is low; therefore
the interconnection process and requirements have mitigated
impacts before they occur.
Utilities do not have the tools to collect and evaluate
data on problems or benefits attributable to DG.
The report argues that impacts will increase as DG penetration
increases, with impacts expected to occur first on the
distribution system because of DG's direct connection to the
distribution system. As the penetration of DG increases, so
will the impacts upon the transmission system. However,
quantification of the impacts is dependent upon utilities
collecting the appropriate data.
1)Double referral. This bill was double-referred to Assembly
Natural Resources Committee, where it passed with a vote of
9-0. In the committee, amendments were taken that directly
incorporated maximum GHG and NOx emission rates into the bill.
2)"Clean distributed energy resources". This bill attempts to
define "clean distributed energy resources", mainly to specify
GHG and NOx emissions rates at which natural gas can be
considered "clean". The Natural Resources Committee Analysis
asserts that the GHG emissions rate (963 lbs/MWh) defined in
the bill is significantly less "clean" than the grid average
of the state's two largest utilities (445-705 lbs/MWh).
Additionally the point is made that it is unclear what the
purpose is of "distinguishing 'clean' DG in a report that's
about grid impacts rather than environmental impacts." Many
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claim that clean DG can increase grid reliability and
efficiency, but in this aspect it is unknown the extent to
which "clean" DG is superior to other forms of DG.
3)What is a clean distributed energy resource? Two technologies
are included in the definition of a clean distributed energy
resource: demand-side reduction resource and energy storage.
There term "demand-side reduction resource" is not defined. An
energy storage technology can store energy from a demand-side
reduction resource and be considered a clean distributed
energy resource. As written, it is unclear what a demand-side
reduction resource is and whether or not it is clean.
The author may wish to amend AB 1935 to remove demand side
resource and energy storage technologies from the definition
of clean distributed energy resources.
By so doing these technologies would still be able to be
considered as a clean distributed energy resource if it meets
the greenhouse gas, emission, and project size criteria
described in the bill.
4)Support and opposition. Supporters claim that because clean DG
technologies have never been defined in a technology neutral
fashion, these beneficial technologies are vulnerable to being
left out of grid planning processes and reports. They further
assert that this bill will ensure these technologies are
included in an existing PUC report which details the impacts
of distributed generation on the California grid. Other
supporters argue that clean distributed energy resources
reduce can increase electrical grid reliability and
efficiency, mainly by deferring and defraying the need for
distribution grid upgrades, reducing peak demand, and
decreasing line loss.
5)Proposed amendments.
321.7. (a) On or before January1st of every other year, the
commission, in consultation with the Independent System
Operator and the Energy Commission, shall study, and submit a
report to the Legislature and the Governor, on the impacts of
distributed generation, including clean distributed energy
resources on the state's distribution and transmission grid.
(b) For the purposes of this section, "clean distributed
energy resource" means any of the following:
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(1) A clean energy generating technology that meets all of the
following criteria:
(A) Produces electricity, or electricity and useful heat.
(B) Has a greenhouse gas emissions factor, including, when
applicable, credit for waste heat recovery and savings on
transmission and distribution losses, that is less than or
equal to an emissions factor determined by the State Air
Resources Board that represents the emissions of greenhouse
gases that are displaced by the electricity generated by the
distributed energy resource.
(C) Has an oxide of nitrogen (NOx) emissions rate, including,
when applicable, credit for waste heat recovery, that is less
than or equal to 0.07 pounds per megawatthour, or a lower NOx
emissions rate that the State Air Resources Board determines
reflects the best performance achieved in practice by existing
electrical generation technologies pursuant to Section 41514.9
of the Health and Safety Code.
(D) Has a nameplate rated generation capacity of 20 or less
megawatts.
(2) An eligible renewable energy resource, as defined in
Section 399.12, that has a nameplate generation capacity of 20
or less megawatts.
(3) A demandside reduction resource.
(4) An energy storage technology that stores energy from a
technology or resource specified in paragraph (1), (2), or
(3).
(c) The study shall evaluate all of the following:
(1) Reliability and transmission issues related to connecting
clean distributed energy resources to the local distribution
networks and regional grid.
(2) Issues related to grid reliability and operation,
including interconnection, and the position of federal and
state regulators toward distributed energy accessibility.
(3) The effect on overall grid operation of various clean
distributed energy resources.
(4) Barriers affecting the connection of distributed energy to
the state's grid.
(5) Emerging technologies related to clean distributed energy
resources interconnection.
(6) Interconnection issues that may arise for the Independent
System Operator and local distribution companies.
(7) The effect on peak demand for electricity.
(d) In addition, the commission shall specifically assess the
impacts of the California Solar Initiative program, specified
in Section 2851 and Section 25783 of the Public Resources
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Code, the self-generation incentive program authorized by
Section 379.6, and the net energy metering pilot program
authorized by Section 2827.9.
(e) The report submitted to the Legislature pursuant to
subdivision (a) shall be submitted in compliance with Section
9795 of the Government Code.
REGISTERED SUPPORT / OPPOSITION :
Support
Bloom Energy
Capstone Turbine Corporation
ClearEdge Power
EnerNOC, Inc.
EtaGen
Sonoma County Water Agency
TechNet
Opposition
None on file.
Analysis Prepared by : Brandon Gaytan / U. & C. / (916)
319-2083