BILL ANALYSIS � 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
SB 456 - Padilla
Hearing Date: January 14, 2014 S
As Amended: January 6, 2014 FISCAL B
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DESCRIPTION
Current law requires electricity suppliers to disclose fuel
source information following a format developed by the California
Energy Commission (CEC) called the Power Content Label, which
must be posted online and also mailed to customers annually.
(Public Utilities Code 398.1 et seq.)
This bill would add two categories of fuel source information to
the Power Content Label: energy storage and out-of-state
generation.
BACKGROUND
Power Content Label - Seventeen years ago, SB 1305 (Sher, 1997)
required retail suppliers of electricity to disclose fuel source
information to potential end-use customers. Utilities were
required to make disclosures: i) at least annually to the CEC;
ii) separately for each offering made by the retail supplier; and
iii) in all promotional materials, except advertisements and
media notices, distributed to potential end-use consumers through
the mail or online. However, the bill did not specify a format
for the disclosures; instead, the CEC was directed to create a
format, subject to public hearing.
In 2001, regulations were adopted to implement the Power Source
Disclosure Program, and the Power Content Label was introduced by
the CEC to serve as the standard disclosure format for utilities.
The Power Content Label requires retail suppliers to parse fuel
source information between the gross categories of "unspecified
sources of power" and "specific purchases," and also within
"specific purchases" i.e., eligible renewables, coal, large
hydroelectric, natural gas, nuclear, and other. Data for a
particular utility are shown in comparison to the power mix for
all retail electricity deliveries in California. A sample Power
Content Label is included at the end of this analysis.
Changing Electricity Landscape - As a result of the Renewables
Portfolio Standard (RPS) and other energy programs adopted by the
Legislature, there have been substantial changes in the
electricity marketplace and delivery landscape since 1997.
Changes include the movement away from fossil fuel by utilities,
the increased procurement of multiple types of power from
multiple sources (as opposed to contracting for one power type
with one plant), and the increased role of energy storage in the
electric power sector. Consequently, the Power Content Label
requirements do not generally reflect current electricity policy
and are not always a reliable source of information for
customers.
COMMENTS
1. Author's Purpose . The Power Content Label is an important
disclosure that informs utility customers about the fuel
source used to generate the electricity they use. Since the
program was originally called for in 1997, the power supply
in California has changed significantly. Utilities are now
required to procure 20% of their electricity from renewable
sources, and by 2020, that figure must reach 33%. Current
procurement policies now include energy storage and
renewable energy credits. In addition, customers are much
more interested in the sources of power generation, and
specifically "California-made" vs. out-of-state generation.
The purpose of this bill is to update utility disclosure
requirements to more accurately reflect current procurement
practices. Two areas are called out in the current bill:
energy storage and out-of-state generation. The author
reports that he will be working with the CEC and the
utilities in the coming weeks to further refine the bill to
ensure a simplified administration and accurate disclosures.
2. Disclosure Dated . The Power Content Label is a concise
resource for consumers and policy makers to identify the
source(s) of a utility's electricity generation. However,
current law does not reflect current procurement policies
and, more significantly, terminology used 17 years ago is
not being uniformly interpreted by the utilities reporting
data today. For example, some small public utilities are
purchasing all electricity through power brokers on the spot
market, but reporting a power mix that looks like the
statewide portfolio of all utilities. Consequently, one
utility reported 14% renewable power in 2011 and 7% coal.
When queried, the utility said that it had neither source in
its portfolio. It appears that a more accurate disclosure
would be "100% unspecified sources of power."
The investor-owned utilities are now under a mandate to
procure energy storage. Some utilities are using renewable
energy credits to comply with the RPS even though the
underlying generation is fossil fuel. Neither of these
procurements is specifically disclosed on the Power Content
Label. Additionally, the CEC is questioning whether the
disclosures, which are currently required on an annual
basis, should be aligned with the RPS program, which has
goals set in three- to four-year cycles ending in 2013,
2016, and 2020. The author considers this bill a starting
point and plans to work closely with the CEC and utilities
as the bill moves forward to refine the disclosure
requirements.
POSITIONS
Sponsor:
Author
Support:
None on file.
Oppose:
None on file.
Alexis Erwin
SB 456 Analysis
Hearing Date: January 14, 2014
SAMPLE POWER CONTENT LABEL