BILL ANALYSIS � 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 1935 - Campos Hearing Date:
June 23, 2014 A
As Amended: May 6, 2014 FISCAL B
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DESCRIPTION
Current law defines "advanced electrical distributed generation
technology" as any electric distributed generation technology
that generates useful electricity and meets all of the following
conditions:
(1) The emissions standards adopted by the State Air
Resources Board pursuant to the distributed generation
certification program requirements of Article 3 (commencing
with Section 94200) of Subchapter 8 of Chapter 1 of
Division 3 of Title 17 of the California Code of
Regulations;
(2) Produces de minimis emissions of sulfur oxides and
nitrogen oxides;
(3) Meets the greenhouse gases emission performance standard
established by the commission pursuant to Section 8341;
(4) Has a total electrical efficiency of not less than 45
percent.
(5) Is sized to meet the generator's onsite electrical
demand;
(6) Has parallel operation to the electrical distribution
grid; and
(7) Utilizes renewable or nonrenewable fuel.
(Public Utilities Code � 379.8)
Current law requires the California Public Utilities Commission
(CPUC), in consultation with the California Independent System
Operator (CAISO) and the California Energy Commission (CEC), to
submit to the Legislature and the Governor a biennial report on
the impacts of distributed generation (DG) on the state's
transmission and distribution systems. The report shall
specifically assess the impacts of the California Solar
Initiative (CSI) program, the self-generation incentive program
(SGIP), and the net energy metering (NEM) pilot program. (Public
Utilities Code � 321.7)
This bill would define "clean distributed energy resources" and
require such resources be included in the biennial report,
referenced above.
This bill would require the State Air Resources Board (ARB) to
develop a new emissions factor that "represents the emissions of
greenhouse gasses that are displaced by the electricity
generated by the distributed energy resource."
BACKGROUND
Distributed Generation (DG)<1> - Examples of DG include
renewables, such as photovoltaic solar, wind, biomass, gas
digesters, or landfill gas as well as non-renewables, such as
natural gas, propane gas, or waste gas. What distinguishes DG
is its use either on the retail or wholesale side of the meter
but always located close to load and small in capacity.
According to the Federal Energy Regulatory Commission (FERC), DG
is not a new phenomenon. During the initial phase of the
electric power industry in the early 20th century, all energy
requirements (heating, cooling, lighting, and motive power,
etc.) were supplied at or near their point of use. Technical
advances, economies of scale in power production and delivery,
the expanding role of electricity and its concomitant regulation
as a public utility, gradually converged to build toady's
network of gigawatt-scale thermal power plants located far from
urban centers.
At the same time this system of central generation was
developing, some customers, particularly in the industrial
sector, found it economically advantageous to install and
operate their own electric generation systems. These
"traditional" forms of DG, while not assets under the control of
electric utilities, nonetheless produced benefits to the
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<1> This section is adapted from:
http://www.ferc.gov/legal/fed-sta/exp-study.pdf
electric system by providing services to consumers that the
utility no longer needed to provide, thereby freeing up assets
to extend the reach of utility services and promote more
extensive electrification.
Technology for both central generation and DG has become more
efficient and less costly. Today, advances in new materials and
designs for photovoltaic panels, microturbines, reciprocating
engines, thermally-activated devices, fuel cells, digital
controls, etc., have expanded the range of applications for
"modern" DG, and have made it possible to tailor energy systems
to the specific needs of consumers and electric utilities.
California Support for DG According to the 2013 Biennial Report
on Impacts of Distributed Generation<2> (the Report), Governor
Brown has established a highlevel goal for California to achieve
12,000 MW of renewable DG by 2020. California has encouraged the
development of smaller generation facilities that connect
directly at the distribution level of the electricity system.
Several incentive programs support the expansion of DG. These
include the CPUCs SelfGeneration Incentive Program (SGIP), and
the California Solar Initiative (CSI) and net energy metering
tariffs (NEM).
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. Existing DG Report . AB 578 (Blakeslee, 2008) required
the CPUC, in consultation with CAISO and CEC, to prepare a
biennial report on the impacts of DG on the state's
distribution and transmission grid. The report must include
the following:
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<2>
http://www.cpuc.ca.gov/NR/rdonlyres/29DCF6CC-45BC-4875-9C7D-F8FD9
3B94213/0/CPUCDGImpactReportFinal2013_05_23.pdf
Reliability/transmission issues related to
connecting DG to the local distribution networks and
regional grid;
Issues related to grid reliability/operation,
including interconnection, and the position of
federal/state regulators toward DG accessibility;
The effect on overall grid operation of
various DG sources;
Barriers affecting the connection of DG to
the state's grid;
Emerging technologies related to DG
interconnection;
Interconnection issues that may arise for
CAISO and local distribution companies;
The effect on peak demand for electricity;
and
Impacts of the CSI program, the SGIP, and
the NEM pilot program.
1. Something New ? The DG report that this bill modifies is
specifically designed to include technologies that are
approved and funded through the Self Generation Incentive
Program, the California Solar Initiative, and
interconnected under the net energy metering tariffs.
Those programs comprise the supported technologies that can
meet California's DG goals. The author defines the
parameters of a technology to include in the study without
specifying what it is (e.g. microturbine or fuel cell) or
what fuel source is used (e.g. natural gas or biogas) the
purpose of which is not clear nor is it clear that this
technology is supported by any of the DG programs upon
which the report is based.
If the newly defined "clean distributed energy resource" is
funded in the SGIP program or eligible for interconnection
under a NEM tariff, it is already in the study. If the
"clean distributed energy resource" is not included in any
of the DG programs then the study shouldn't include it
because it would skew the results.
In order to ensure that the study continues to evaluate the
benefits and impacts of ratepayer support for the SGIP,
CSI, and NEM programs, the author and committee may want to
consider striking the reference to "clean distributed
energy resource."
2. Is the Report Working as Intended ? The preparers<3> of
the 2013 report state that utilities do not have the tools
to collect and evaluate data on the operating
characteristics, costs, and benefits of various DG systems.
This information is necessary to compare, on an equal and
consistent basis, DG technologies with central generation
and other conventional electric resource options, among
other applications.
Regardless of why the data were not available or analyzed,
and notwithstanding mandated objectives of the report, the
impacts of DG on the distribution and transmission system
were not adequately quantified in the 2013 report. The
continued value of the report is not apparent.
3. Demand Response (DR) Does Not Equal DG . The Federal
Energy Regulatory Commission defines DR as "changes in
electric usage by end-use customers from their normal
consumption patterns in response to changes in the price of
electricity over time, or to incentive payments designed to
induce lower electricity use at times of high wholesale
market prices or when system reliability is jeopardized."
In other words, DR is a behavior rather than a DG
technology that may comply (or not) with emissions
standards. Thus, the relevance of demand response to a
report on the impacts of technologies on the distribution
grid is not apparent. The author and committee may want to
consider striking the inclusion of DR in the report.
6. Clarifying Amendment . This bill includes a code section
that no longer applies to the study of DG. The committee
and author may want to consider striking this reference to
Public Resources Code � 25783.
ASSEMBLY VOTES
Assembly Floor (77-0)
Assembly Appropriations Committee (17-0)
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<3> The CPUC has hired consulting firms to prepare the two
reports published since AB 578 was enacted. The most recent
report was prepared by Black & Veatch and published by the CPUC
in May 2013.
Assembly Utilities and Commerce Committee
(13-0)
Assembly Natural Resources Committee
(9-0)
POSITIONS
Sponsor:
Author
Support:
Bloom Energy
Capstone Turbine Corporation
ClearEdgePower
EnerNOC, Inc.
EtaGen
Sonoma County Water Agency
TechNet
Oppose:
None on file
Alexis Erwin
AB 1935 Analysis
Hearing Date: June 23, 2014