BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1790|
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THIRD READING
Bill No: SB 1790
Author: Bowen (D)
Amended: 4/17/02
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 6-2, 4/23/02
AYES: Bowen, Alarcon, Sher, Speier, Vasconcellos, Vincent
NOES: Morrow, Battin
SENATE APPROPRIATIONS COMMITTEE : 9-2, 5/13/02
AYES: Alpert, Bowen, Burton, Escutia, Karnette, McPherson,
Murray, Perata, Speier
NOES: Battin, Poochigian
SUBJECT : Electrical corporations: air-conditioning:
load control
SOURCE : Author
DIGEST : This bill requires the State Public Utilities
Commission to develop a program for residential and
commercial customer air conditioning load control.
ANALYSIS : Current law requires public utilities to
provide adequate and efficient service.
Current regulations establish a number of programs to help
customers reduce their electric usage.
This bill requires the State Public Utilities Commission
(PUC) to develop, in consultation with the California
CONTINUED
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Energy (CEC), a program for residential and commercial
customer air conditioning load control.
Background
California avoided blackouts last summer through a
combination of new generation projects, state-sponsored
energy efficiency programs, and an incredible response by
people to the State's call to conserve as much energy as
possible. The actions reduced energy demand by 5,570
megawatts, the equivalent of building 11 large powerplants,
according to a February report by the CEC. These actions
contributed to a 10 percent reduction in peak demand and a
6.7 percent reduction in overall electricity consumption in
the state compared to the year earlier.
The largest single component of electric demand is air
conditioning, comprising 14,000 MW or 28 percent of
California's summertime peak demand. The PUC has observed
this is "a potentially vast, untapped source of
interruptible electricity."
Some air conditioning load control programs are currently
in place. Southern California Edison (SCE) has an existing
air conditioning cycling program for residential and small
commercial customers. This program, like other
interruptible programs, was created to improve system
reliability, not to help reduce overall energy costs. San
Diego Gas & Electric Company (SDG&E) is conducting a pilot
program which utilizes Internet technology to adjust
residential air conditioning thermostats, and it hopes to
have this program fully operational by this summer. The
California Power Authority is considering a program to
allow third parties to aggregate air conditioning load and
pay those aggregators to reduce that load. This program is
geared toward reducing overall energy costs.
Comments
Investing In Conservation . While the electric supply and
demand look to be balanced for this summer, the uncertainty
of the financial health of the major electric generators
makes the prospects for longer-term electric supply
adequacy more problematic. This increases the need for
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conservation and demand management programs, which
inevitably leads to an additional focus on air conditioning
loads, since air conditioning accounts for a
disproportional amount of the demand for electricity.
This bill requires the PUC, in consultation with the CEC,
to develop a program for residential and commercial
customer air conditioning load control. The goal of the
program is to contribute to supply adequacy and to give
customers a cost-effective means to reduce their electric
bills. The current air conditioning programs are useful
but too limited in that they are either pilot programs or
they're focused solely on reliability. Furthermore, these
programs don't apply to all utilities.
CEC Working Already . Recognizing the potential
contribution of conservation and demand reduction programs
to electric system reliability and cost reductions, the CEC
convened a workshop this March to begin trying to
coordinate demand response programs run by different
California entities. A follow-up meeting will be held to
draft policy recommendations and action plans.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
Fiscal Impact (in thousands)
Major Provisions 2002-03 2003-04 2004-05 Fund
PUC Unknown costs, potentially underSpecial*
$250. Costs should be offset by
fee revenues.
CEC Minor, absorbable costs General
*Public Utilities' Reimbursement Account (PURA)
SUPPORT : (Verified 5/14/02)
Sierra Club
NC:kb 5/15/02 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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