BILL ANALYSIS
AB 1969
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Date of Hearing: April 24, 2006
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Lloyd E. Levine, Chair
AB 1969 (Chavez and Yee) - As Amended: April 6, 2006
SUBJECT : Electrical corporations: water agencies.
SUMMARY : Requires an electrical corporation to purchase
electricity from renewable electricity generation facilities
that are owned and operated by public wastewater agencies.
Specifically, this bill :
1)Requires an electrical corporation to file with the California
Public Utilities Commission (PUC) a tariff for the purchase of
renewable energy output produced by a renewable electric
generation facility owned by a public water or wastewater
agency.
2)Provides that the electrical generating facility must be less
than 1 megawatt (MW) in size, must be owned by a public water
or wastewater agency that is a customer of an electrical
corporation, must be interconnected with and operated in
parallel with the electricity distribution grid and, must be
strategically located near the electricity transmission system
in a manner that optimizes the deliverability of electricity
to load centers.
3)Provides that the tariff shall require the purchase of the
electricity at the market price referent, which is the price
the PUC determines is the market price for renewable
electricity.
4)Provides that the renewable electricity purchased by the
electrical corporation shall count toward the corporation's
Renewable Portfolio Standard. (RPS)
5)Caps the total amount of renewable electricity that can be
sold under this tariff statewide at 250 megawatts (MW).
EXISTING LAW
1)Requires retail sellers of electricity to increase their
existing level of renewable resources by 1% of sales per year
such that 20% of their retail sales are procured from eligible
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renewable resources by 2017.
2)Defines eligible renewable resources to include all generation
from a renewable electricity generation facility that uses
biomass, solar thermal, photovoltaic, wind, geothermal, fuel
cells using renewable fuels, small hydroelectric generation of
30 megawatts or less, digester gas, municipal solid waste
conversion, landfill gas, ocean wave, ocean thermal, or tidal
current, and any additions or enhancements to the facility
using one of these technologies. Requires the renewable
resource to be located in California or be directly connected
with the California transmission system.
FISCAL EFFECT : Unknown.
COMMENTS : According the author the purpose of this bill is to
promote the development of renewable electric generation by
water or wastewater agencies. The authors believe that the
current laws that are intended to promote renewable generation
in some cases actually hinder the development of small on-site
renewable generation. This bill would help this problem by
requiring the utilities to purchase power produced by these
smaller generators located on the site of waste water treatment
facilities at a set price.
1) A different solution for every technology : Current law
contains numerous provisions that allow for different types of
generators to sell their power to a utility. Large renewable
projects can bid into a utility's renewable portfolio standard
and if their costs are above the market price for electricity
(which is determined by the PUC) they will get ratepayer-funded
subsidies for the above-market costs. Large renewable projects
can also take advantage of a federal rule that requires the
utilities to purchase all of their output. Smaller on-site solar
and wind power is eligible to be net metered where the customer
is credited for all excess power he or she produces. Biogas
digesters are net metered as well but they receive a smaller
credit than solar and wind. The provision that allows for net
metering of biogas digesters was contained in AB 728 (Negrete
McLeod), Chapter 369, Statutes of 2005, and was sponsored by the
same sponsors of this bill.
According to the sponsor (Inland Empire Utility Agency), none of
these laws will allow them to develop economically viable
renewable power. Net metering laws that require a utility to buy
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back excess on-site generated power cannot be used in cases
where the generation potential is greater than annual electric
demand. The state's Renewable Portfolio Standard (RPS) promotes
the development of larger renewable projects by requiring the
utilities to sign long-term contracts for this production, but
the utilities are reluctant to sign contracts with smaller
generators because these smaller loads are hard to schedule.
2) So what happens this time : Under this bill a public water or
wastewater company will be able to sell all power generated from
renewable generation facilities that are less than 1 MW in size
and are owned and operated by the water company to an electric
utility at a rate set by the PUC. The rate the PUC sets will be
the rate they determine is the market price of renewable power
in California. Under existing law, the PUC makes this price
determination as part of the process of approving long-term
contracts the utilities sign with larger renewable power
producers.
This bill would allow water companies to build a number of
smaller renewable facilities throughout their system and sell
the power back to the utility. The sponsor of the bill states
that if this bill passes they could build biogas digesters,
conduit hydroelectric facilities, and solar panels throughout
their system. They would not do this under existing law because
the location of these facilities would not allow for net
metering and the facilities are too small to sell into a
utility's RPS.
Technical amendments: On page 4 replace the language on lines 6
and 7 with "(5) Is an eligible renewable energy resource as
define in section 399.12."
REGISTERED SUPPORT / OPPOSITION :
Support
Agricultural Energy Consumers Association (AECA)
Inland Empire Utilities Agency (IEUA)
Pacific Gas & Electric (PG&E) (if amended)
Santa Ana Watershed Project Authority (SAWPA)
Southern California Edison
AB 1969
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Opposition
>
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083