BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2441|
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THIRD READING
Bill No: AB 2441
Author: Mullin (D)
Amended: 8/20/14 in Senate
Vote: 21
PRIOR VOTES NOT RELEVANT
SUBJECT : Electricity: distributed generation
SOURCE : Author
DIGEST : This bill establishes a 500 MW program under which
electric generation technologies on the customers side of the
electric meter fueled with natural gas are exempted from
nonbypassable and departing load charges.
Senate Floor Amendments of 8/20/14 delete the prior version of
the bill that dealt with outdoor advertising, and insert the
current language.
ANALYSIS : Existing law:
1.Defines as eligible under the Renewables Portfolio Standard
electric generation including the following technologies and
fuel sources: biomass, solar thermal, photovoltaic, wind,
geothermal, fuel cells using renewable fuels, small
hydroelectric generation, digester gas, municipal solid waste
conversion, landfill gas, ocean wave, ocean thermal, biomass,
wind solar, and geothermal.
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2.Creates four different standards for distributed generation
(DG) that utilize natural gas as a fuel source for stand-alone
and combined heat and power applications. Each generally has
a capacity limit in MW, limits on greenhouse gas emissions as
well as sulfur oxides and nitrogen oxides, an electrical
efficiency rate, and requires compliance with standards of the
State Air Resources Board. Those include:
A. "Distributed energy resource."
B. "Advanced electrical distributed generation technology."
C. "Distributed energy resources" funded under the
Self-Generation Incentive Program (SGIP).
D. "Combined heat and power system."
1.Requires any customer with a distributed energy resource sized
less than five megawatts to pay reasonable interconnection
charges, public purpose program charges, and bond repayments
from the energy crisis.
2.Requires every investor-owned utilities (IOU) customer to pay
nonbypassable system benefits charges to fund programs
including California Alternate Rates for Energy, SGIP, energy
efficiency, and the Electric Program Investment Charge. Those
charges also include the costs of bond repayments from the
energy crisis and nuclear decommissioning costs.
3.Establishes rates and tariffs to ensure that an adequate
supply of electricity is available (reliability) to serve
customer load through demand and standby charges.
4.Required customers who generate a significant amount or all of
their own power to pay departing load charges to cover past
under collections for forward power procured on behalf of
these customers.
This bill:
1.Requires the PUC, by July 1, 2015, to establish a pilot
program to do both of the following for those IOU customers
that have operational clean distributed energy resources, as
defined:
A. Require each IOU to collect all applicable nonbypassable
charges fixed or imposed by the PUC based only on the
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actual metered consumption of electricity delivered to the
customer through the IOU's transmission or distribution
system.
B. Calculate a reservation capacity for standby service, if
applicable, based on the capacity needed by an IOU to serve
a customer's electrical demand during an outage of the
clean distributed energy resource providing electric
service for that customer.
C. Require the PUC to suspend the eligibility of additional
customers to participate in the pilot program when 500 MW
of nameplate generating capacity from clean distributed
energy resources has become operational statewide pursuant
to the pilot program.
1.Require the State Energy Resources Conservation and
Development Commission to report to the Legislature on the
impact of the pilot program upon specified matter by July 1,
2020, or when 450 MW of nameplate generating capacity from
clean distributed energy resources has become operational
pursuant to the pilot program, whichever comes sooner.
2.Defines "clean distributed energy resource" as a technology
that generates electricity or, electricity and useful heat,
sized to 20 MWs or less, and that is renewable or has
greenhouse gas or other emissions at a rate determined by the
California Energy Commission. Excluded from the definition is
renewable DG included in another tariff.
Background
According to the author, "Clean onsite generation technologies
provide multiple benefits to the environment, electric grid, and
ratepayers. These technologies reduce or eliminate greenhouse
gas and criteria pollution emissions compared to the grid. They
also provide much needed grid reliability and resiliency by
reducing overall demand and providing back-up for when the grid
goes down. Furthermore, since onsite generation reduces demand
on the grid, it reduces the need for electricity generated by
inefficient, dirty, and expensive 'peaker' plants.
"A recent study shows that all ratepayers would see a net cost
savings from an increased deployment of onsite generation at
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customer sites that pay NBCs only on their grid electricity
purchases. This ratepayer savings arises because onsite
generation reduces demand on the grid, which lowers market
electricity prices, and avoids transmission and distribution
costs and energy losses. According to the study, on average,
ratepayers in all utility service areas would see an energy rate
savings of $0.17-0.39 per megawatt hour, which translates to an
average household savings of $0.09-0.19 per month."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/21/14)
Bloom Energy
Brightline Welding
BT Laser
California Clean DG Coalition
California Large Energy Consumers Association
Capstone Turbines Corp.
Diamond Tool and Die
ElectraTherm
Environmental Defense Fund
Etagen
Fourte Design and Development
Lazar Machining
Qualcomm
SEIA
Technet
Western Energy Systems
OPPOSITION : (Verified 8/21/14)
PE&E
San Diego Gas and Electric
Southern California Edison
JG:nl 8/21/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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