BILL ANALYSIS
AB 1684
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Date of Hearing: January 12, 2004
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Sarah Reyes, Chair
AB 1684 (Leno) - As Amended: January 5, 2004
SUBJECT : Distributed generation resources.
SUMMARY : Requires all combustion operated fossil fuel
distributed generation projects to meet specified air quality
standards to be eligible for rebates under the self-generation
incentive program at the California Public Utilities Commission
(CPUC). Specifically, this bill :
1)Requires CPUC to administer, until January 1, 2008, a
self-generation incentive program for distributed generation
in the same form as exists on January 1, 2004.
2)Requires by January 1, 2005 that all combustion operated
distributed generation projects using fossil fuels to meet
oxides of nitrogen (NOx) emissions rate standards of .14
pounds per megawatt hour and by January 1, 2007 to meet
emission rate standards of .07 pounds per megawatt hour or
operate solely on natural gas that is not eligible for
delivery to the utility pipeline system to be eligible for
rebates under CPUC self generation incentive program.
EXISTING LAW :
1)Requires CPUC to offer differential incentives for renewable
and super clean distributed generation.
2)Requires the Air Resources Board (ARB) to adopt emissions
standards for distributed generation technologies beginning in
2003.
FISCAL EFFECT : Unknown.
COMMENTS :
Background: Distributed generation (DG) is electric generation
connected to the distribution level of the transmission and
distribution grid usually located at or near the intended place
of use. There are many applications for DG like as backup power
for customers during emergencies, standby generation for end
AB 1684
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users that require an interruptible power supply or as a primary
source of electricity eliminating the reliance on the grid.
CPUC administers the Self-Generation Incentive Program that
provides differential rebates to qualified DG technologies. The
highest rebates go towards "clean" and "ultra-clean"
technologies and the lowest rebate go towards fossil fuel
technologies. CPUC decision 01-03-073 established the level of
the rebates to different DG technologies pursuant to AB 970
Ducheny (Chapter 329, Statutes of 2000). AB 970 required CPUC
to identify and take action to reduce or remove constraints on
the state's existing electrical transmission and distribution
system by creating incentives for load control and distributed
generation.
In 2003 the Legislature passed AB 1685 Leno (Chapter 894,
Statutes of 2003) that required CPUC to continue to administer a
Self-Generation Incentive Program until January 1, 2008. AB
1685 established that combustion operated DG technologies must
meet specified oxides of nitrogen (NOx) emission standards for
2005 and 2007. The 2007 NOx emission standards were set
according to ARB pursuant to SB 1298 Bowen (Chapter 741,
Statutes of 2000) that required ARB to develop emission
standards equivalent to the Best Available Control Technology
(BACT) for permitted central station power plants in California.
This bill allows DG technologies that operate solely on natural
gas that is not eligible for delivery to the utility pipeline
system and demonstrates that it will provide a net air emissions
benefit to the facilities operation to qualify for differential
rebates under CPUC Self-Generation Incentive Program.
REGISTERED SUPPORT / OPPOSITION :
Support
California Independent Petroleum Association (sponsor)
Opposition
None on file.
Analysis Prepared by : Daniel Kim / U. & C. / (916) 319-2083
AB 1684
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