BILL ANALYSIS �
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 1414|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: SB 1414
Author: Wolk (D), et al.
Amended: 5/5/14
Vote: 21
SENATE ENERGY, UTIL. & COMMUNIC. COMM. : 10-0, 4/29/14
AYES: Padilla, Fuller, Block, Cannella, Corbett, DeSaulnier,
Hill, Knight, Pavley, Wolk
NO VOTE RECORDED: De Le�n
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Electricity: resources adequacy requirements
SOURCE : Environmental Defense Fund
DIGEST : This bill requires utilities and regulators to
include demand response (DR) in resource adequacy plans, as
specified.
ANALYSIS :
Existing law:
1.Requires the Public Utilities Commission (PUC), in
consultation with the Independent System Operators, to
establish resource adequacy requirements for all load-serving
entities in accordance with specified objectives.
2.Requires each load-serving entity to maintain physical
CONTINUED
SB 1414
Page
2
generating capacity adequate to meet its load requirements to
provide reliable electric service and requires the PUC to
determine the most efficient and equitable means for achieving
prescribed objectives.
3.Requires each electrical corporation (IOU) to file with the
PUC a proposed procurement plan with specified information,
including, among other things, a procurement process under
which the electric corporation may request bids for
procurement-related services, a showing that the procurement
plan will achieve, among other objectives, the creation or
maintenance of a diversified procurement portfolio, and the
IOU's risk management policy, strategy, and practices.
This bill:
1.Includes maximizing the cost-effective use of DR as an
objective for the resource adequacy requirements, as
specified.
2.Requires each load-serving entity to maintain either
electrical demand reductions or physical generating capacity
adequate to meet its load requirements.
3.Requires the PUC to determine the most efficient and equitable
means to ensure the inclusion of DR that is reliable and cost
effective in achieving environmental or demand reduction goals
or grid reliability.
4.Requires the proposed procurement plan to include a
competitive procurement process that will allow the IOU to
request bids for demandside response services.
5.Requires that the plan's diversified procurement portfolio
include DR that is reliable and cost effective in achieving
environmental goals and electrical grid reliability.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 5/19/14)
Environmental Defense Fund (source)
Alarm.com
CONTINUED
SB 1414
Page
3
Breathe California
Clean Coalition
Clean Power Campaign
Comverge
EnergyHub
EnerNOC
Environment California
Natural Resources Defense Council
Sierra Club California
OPPOSITION : (Verified 5/19/14)
Southern California Edison
ARGUMENTS IN SUPPORT : According to the author:
SB 1414 will help ensure that regulators and utilities utilize
cost-effective Demand Response (DR) programs to change their
demand for electricity during key times. With DR, in exchange
for changing their electricity use, participating customers
receive incentives for providing a clean resource to the
system. Their reductions in demand (consumption) mean there
can be less supply (generation), providing clean energy,
reducing the need for 'peaker' power plants and helping to
integrate renewables. California currently lags behind other
parts of the nation in utilizing DR.
ARGUMENTS IN OPPOSITION : Southern California Edison (SCE)
states in part:
Although the May 5 amendments incorporate language that
requires demand response as "cost-effective" and "reliable,"
SCE remains concerned that the difference between
"cost-effective" and "economic" demand response is still not
addressed. Also, this bill continues to require demand
response resources be maximized in a manner that is not
necessarily economic, nor is it consistent with the CAISO's
[California Independent System Operator] responsibility to
maintain reliability.
Another concern with this bill is that it continues to
consider demand "response" only as a "reduction," whereas
demand responsiveness may be an increase of demand. The
increased integration of intermittent renewables such as solar
CONTINUED
SB 1414
Page
4
and wind generation has created the possibility of excess
generation in the late afternoon peak hours. However, under
this bill we could not use that excess generation for energy
storage, for example, since it only allows for
reductions in demand. It is important that as the technology
used for demand response improves, that these resources will
be able to provide additional ancillary services.
JG:k 5/20/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED