BILL ANALYSIS
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THIRD READING
Bill No: AB 26XX
Author: Calderon (D)
Amended: 9/14/01 in Senate
Vote: 27
SENATE ENERGY, U.&C. COMMITTEE : 9-0, 8/29/01
AYES: Bowen, Morrow, Alarcon, Battin, Dunn, Murray,
Poochigian, Sher, Vincent
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 40-0, 9/14/01
AYES: Ackerman, Alarcon, Alpert, Battin, Bowen, Brulte,
Burton, Chesbro, Costa, Dunn, Escutia, Figueroa, Haynes,
Johannessen, Johnson, Karnette, Knight, Kuehl, Machado,
Margett, McClintock, McPherson, Monteith, Morrow, Murray,
O'Connell, Oller, Ortiz, Peace, Perata, Polanco,
Poochigian, Romero, Scott, Sher, Soto, Speier, Torlakson,
Vasconcellos, Vincent
ASSEMBLY FLOOR : 56-11, 9/15/01 - See last page for vote
SUBJECT : Electrical energy: electrical corporations:
tariffs
SOURCE : Author
DIGEST : This bill requires the Public Utilities
Commission (PUC), when establishing new tariffs for
customers using distributed energy resources, to consider
specified factors so that customers with more efficient
CONTINUED
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units pay a lower cost.
Extends the operation date of the State Assistance Fund for
Energy until 7/1/11 and requires interest rates on energy
loans to be not less than 3% per annum.
ANALYSIS : Existing law provides five- and ten-year
waivers of "standby charges" for specified distributed
generation (DG) installations and requires PUC to require
investor-owned utilities to establish new, cost-based
tariffs applicable to customers using DG.
This bill requires the PUC, in establishing these new
tariffs, to consider coincident peak load and the
reliability of a customer's DG, so that customers with more
reliable DG and those that reduce peak demand pay lower
rates.
DG is typically considered to be a site-specific generation
resource which is owned by the customer and used to meet
some or all of that customer's energy needs, including
electricity and, in many applications, heating.
Examples of DG units range from a residential rooftop solar
array to an collection of large combustion turbines at a
commercial office building or industrial facility. DG can
be used for reliability back-up (standby or emergency
generation), to meet base load requirements, to meet
peaking requirements, or to meet all on-site requirements,
and sell power to adjacent sites ("over the fence"
transactions).
For a customer that owns a DG unit that is connected to the
utility distribution system, on-site generation is
complemented by power purchased through, and delivered by,
the utility. Depending on the reliability, capacity and
purpose of the DG unit, the customer may, at various times,
buy some or all of its power from the utility, or "sell"
power back to the utility through a net-metering
arrangement.
SB 28X (Sher), Chapter 12, Statutes of 2001, included
provisions establishing five- and ten-year waivers of
"standby charges" for specified DG installations and
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requiring investor-owned utilities to establish new,
cost-based tariffs applicable to customers using DG.
Comments
SB 28X was constructed to reward the most efficient,
reliable, peak demand-reducing DG installations by offering
a longer waiver for more efficient units and requiring
customers to pay real-time rates to qualify for the waiver.
This bill applies a similar principle to the cost-based
tariffs that will be in effect after the waivers
established by SB 28X expire.
The existing State Assistance Fund for Enterprise Act of
1989 establishes the State Assistance Fund for Energy,
California Business and Industrial Development Corporation.
Under the act, the corporation, until July 1, 2001, is
authorized to make energy efficiency improvement loans to
small businesses for a fixed rate of interest for a term
not exceeding five years.
This bill would extend the operative date of the act until
July 1, 2011.
Under existing law, a school, hospital, public care
institution, or a unit of local government may submit an
application to the State Energy Resources Conservation and
Development Commission for an allocation for the purposes
of financing projects such as energy audits, energy
conservation and operating procedures, energy conservation
measures, energy conservation projects, and technical
assistance programs. Existing law requires each eligible
institution to which an allocation has been made to repay
the principal amount of the allocation, plus interest, as
specified. Under existing law, the commission, except as
specified, must periodically set interest rates on the
loans based on surveys of existing financial markets and at
rates not lower than the Pooled Money Investment Account.
This bill would instead require the interest rates to be
not less than 3% per annum.
Existing law requires the commission to provide loans to
local jurisdictions for purposes that include purchase,
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maintenance, and evaluation of both energy efficient
equipment for existing and new facilities and small power
production systems, and to improve the operating efficiency
of existing local transportation systems. Existing law
requires the commission, except as specified, to
periodically set interest rates on the loans based on
surveys of existing financial markets and at rates not
lower than the Pooled Money Investment Account.
This bill would instead require the interest rates to be
not less than 3% per annum.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/29/01)
Pacific Gas and Electric Company
ASSEMBLY FLOOR :
AYES: Alquist, Aroner, Ashburn, Bates, Bogh, Calderon,
Bill Campbell, Cardoza, Cedillo, Chavez, Cogdill, Cohn,
Corbett, Correa, Daucher, Diaz, Dutra, Firebaugh, Florez,
Frommer, Goldberg, Harman, Havice, Hollingsworth, Horton,
Keeley, Kehoe, Kelley, Koretz, Leach, Longville,
Lowenthal, Maddox, Maldonado, Matthews, Migden, Nakano,
Negrete McLeod, Oropeza, Rod Pacheco, Pescetti, Reyes,
Salinas, Shelley, Simitian, Steinberg, Strom-Martin,
Thomson, Vargas, Washington, Wesson, Wiggins, Wright,
Wyman, Zettel, Hertzberg
NOES: Aanestad, Briggs, John Campbell, Cox, Dickerson,
Leonard, Leslie, Mountjoy, Runner, Strickland, Wyland
NC:sl 9/18/01 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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