BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
SB 1389 - Bowen and Sher
Hearing Date: April 9, 2002 S
As Introduced: February 12, 2002 FISCAL B
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DESCRIPTION
Under existing law (Chapter 4 of the Warren-Alquist Act),
the California Energy Commission (CEC) has various energy
planning and forecasting duties, including the preparation
of periodic reports on electricity and natural gas demand,
energy efficiency, renewable technologies, public interest
energy research, climate change, environmental performance
of power plants, and the use, availability and price of
transportation fuels.
This bill consolidates and updates the various planning and
forecasting reports into a single, biennial Integrated
Energy Policy Report, consisting of three volumes:
1.Electricity and natural gas markets.
2.Transportation fuels, technologies and infrastructure.
3.Public interest energy strategies.
This bill repeals obsolete or duplicative reports regarding
alternative fuel vehicle infrastructure, energy
conservation and energy technology development.
This bill establishes processes for the CEC to collect data
from energy market participants to support its planning and
forecasting duties, to maintain the confidentiality of
data, and to impose penalties for noncompliance.
BACKGROUND
In 1974, the Warren-Alquist Act established the CEC and
required it to develop long-term forecasts of state energy
needs, which formerly served as the basis for planning and
certification of individual power plants. Since the advent
of electrical restructuring, the link between the CEC's
planning and siting functions has been severed.
The Act gives the CEC broad authority to undertake a
continuing assessment of trends in the consumption and
supply of electricity and other forms of energy and to
analyze the social, economic, and environmental
consequences of these trends. The CEC is also required to
prepare several policy reports on a biennial cycle,
including the Biennial Report, Electricity Report, Fuels
Report, Energy Efficiency Report, and Energy Development
Report.
Circumstances in energy markets have changed dramatically
since original passage of the Act, but the Act itself
hasn't been updated to reflect these changes. As a
consequence, the existing planning and forecasting
requirements are not well suited to support analysis of
current energy issues.
For example, the CEC is required to conduct its forecasting
and assessment of the electricity industry in the context
of the Electricity Report (ER), which is based on forecasts
submitted by the investor-owned utilities (IOUs). One of
the primary purposes of the ER was to assess the need for
new generating facilities (the Integrated Assessment of
Need). The ER established policies and criteria for
determining whether power plant applications before the CEC
were in conformance with that assessment of need. SB 110
(Peace), Chapter 581, Statutes of 1999, eliminated the
requirement that every power plant licensing decision
determine that the need for the facility conformed to the
CEC's integrated assessment of need.
While the role of IOUs has diminished in the restructured
market, the current data collection provisions remain
targeted solely at IOUs. This fails to provide for data
collection from new participants in the electricity market,
such as merchant generators, wholesale marketers and energy
service providers. According to the CEC, it is in the
process of revising its data collection regulations to
bring them into conformance with changes in the
restructured market. However, statutory revisions are
needed to eliminate obsolete data collection authority and
clarify the CEC's authority to collect necessary data from
new market participants. In addition, revisions are
necessary to ensure that new data collection regulations
can adequately be enforced and to ensure the CEC is able to
provide appropriate confidentiality protections to protect
customer privacy and commercially sensitive data.
The purpose of this bill is to consolidate the CEC's
reporting requirements into one timely, integrated report,
to require the reporting of the energy data necessary to
support this report from new market participants, and to
develop and maintain the capability to produce the required
analyses.
COMMENTS
1.Data collection. In addition to consolidating and
updating existing CEC reports, this bill specifies the
CEC's authority to collect data from energy market
participants to support its planning and forecasting
duties (Proposed Section 25320 on pages 9-11). These
provisions are intended to be consistent with regulations
recently adopted by the CEC pursuant to its existing data
collection authority.
Some market participants have expressed concerns that the
data collection provisions may expand the CEC's authority
to collect data it isn't currently allowed to collect.
According to the author, these provisions simply define a
process for data collection that is consistent with
existing CEC practice and does not amount to an expansion
of CEC authority.
Another concern is that Section 25320, which requires the
CEC to adopt a data collection system, will compel the
CEC to start a new data collection rulemaking from
scratch when it has recently adopted data collection
regulations which are sufficient to support the reporting
requirements of this bill. To address this concern, the
author and the committee may wish to consider amending
the bill to clarify that the CEC can administer its
existing data collection rules as long as they meet the
requirements of the bill, and isn't required to adopt new
rules.
2.Generation vs. conservation. This bill carries over a
provision in existing law which prevents the CEC from
considering conservation, load management or other demand
reducing measures as alternatives to a proposed facility
during the siting process (Proposed Section 25521.5 on
page 14, existing Section 25305(c)). This provision
dates to the time when certification of power plants was
dependent on conformance with the CEC's needs assessment,
which took conservation measures into account prior to
determining the need for additional power plants. Since
siting decisions are no longer contingent on the needs
assessment, the basis for excluding consideration of
conservation measures as an alternative to a proposed
power plant in the siting process is uncertain. The
author and the committee may wish to consider whether
this provision of existing law is still justified and
whether it should be maintained.
3.Double referral. This bill has been referred to this
committee and the Rules Committee.
POSITIONS
Sponsor:
Author
Support:
California Energy Commission
Oppose:
Western States Petroleum Association
Lawrence Lingbloom
SB 1389 Analysis
Hearing Date: April 9, 2002