BILL ANALYSIS �
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THIRD READING
Bill No: SB 456
Author: Padilla (D)
Amended: 1/6/14
Vote: 21
SENATE ENERGY, UTILITIES & COMMUNICATIONS COMM. : 8-0, 1/14/14
AYES: Padilla, Cannella, De Le�n, DeSaulnier, Hill, Knight,
Pavley, Wolk
NO VOTE RECORDED: Fuller, Corbett, Wright
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Disclosure of sources of electrical generation
SOURCE : Author
DIGEST : This bill adds two categories of fuel source
information to the Power Content Label: energy storage and
out-of-state generation.
ANALYSIS : Existing 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.
This bill requires that the information disclosed on the Power
Content Label include the total electricity purchases derived
from generation sources within the state and total electricity
purchases derived from generation sources that are located
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outside the state, and the percentage of annual sales of
electricity that was dispatched from an energy storage system,
as defined.
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: (1) at least annually to the CEC;
(2) separately for each offering made by the retail supplier;
and (3) 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.
Changing Electricity Landscape . 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
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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.
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, existing 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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JG:d 1/21/14 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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