BILL ANALYSIS 1
1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
AB 1685 - Leno Hearing Date:
July 8, 2003 A
As Amended: May 13, 2003 FISCAL B
1
6
8
5
DESCRIPTION
Existing law requires the California Public Utilities Commission
(CPUC) to offer differential incentives for renewable and super
clean distributed generation (AB 970 (Ducheny), Chapter 329,
Statutes of 2000).
This bill requires the CPUC, in consultation with the California
Energy Commission, to administer, until January 1, 2008, the
incentive program adopted pursuant to AB 970 in the same forms
as exists on January 1, 2004.
BACKGROUND
Pursuant to AB 970's direction to offer incentives for renewable
and super clean distributed generation resources, the CPUC
established the Self-Generation Incentive Program (SGIP) in
March 2001. The SGIP offers $125 million of financial
assistance per year through 2004 for installation of
photo-voltaics, fuel cells, and certain gas-fired resources up
to one megawatt in size. The SGIP offers incentives of $4.50
per watt of installed on-site renewable generation capacity, up
to a maximum of 50% of total installation costs (Level 1).
Certain non-renewable self-generation is also eligible under the
category of "super clean," but with lower incentives. Fuel
cells using non-renewable fuel and waste heat recovery are
eligible for $2.50 per watt, up to 40% of total costs (Level 2).
Internal combustion engines and micro-turbines using waste heat
recovery (i.e. co-generation) are eligible for $1.00 per watt,
up to 30% of total costs (Level 3). "Super clean" is not
defined in statute. The SGIP doesn't require projects to meet
any exceptional environmental standards.
Last year, SB 1038 (Sher), Chapter 515, Statutes of 2002,
authorized the CPUC to offer special rate treatment to
"ultra-clean and low-emission" distributed generation in order
to encourage early compliance with emissions standards
established by the ARB pursuant to SB 1298 (Bowen), Chapter 741,
Statutes of 2000. SB 1038 defined "ultra-clean and
low-emission" as distributed generation meeting 2007 ARB
emission limits, plus an efficiency standard, and commencing
operation by December 31, 2005.
In March 2003, the CPUC issued Decision 03-04-030, which defined
distributed generation customers' responsibility for unrecovered
electricity procurement costs incurred by the investor-owned
utilities and the Department of Water Resources. Among other
things, the decision grants a complete exemption from any such
charges for distributed generation that's eligible for financial
incentives under the SGIP, and only requires projects to meet
existing emissions standards. The same decision grants a lesser
exemption for self-generation that meets the more stringent
"ultra-clean and low-emission" criteria.
COMMENTS
1.Recent amendments expand scope beyond solar. This bill was
originally intended to extend existing incentives for solar
generation project indefinitely. It was subsequently amended
to sunset solar incentives in 2017, then in 2006. The May 13
amendments (current version) expanded the bill to require the
CPUC to continue the entire SGIP in its current form and
changed the sunset again, to 2008.
2.Conflict with SB 107. SB 107 (Bowen), pending in the
Assembly, requires the CPUC to replace the SGIP with an
incentive program for renewable and ultra-clean distributed
generation resources, requires a performance report to the
Legislature in 2006, and sunsets in 2007.
ASSEMBLY VOTES
Assembly Floor (54-25)
Assembly Appropriations Committee (17-7)
Assembly Natural Resources Committee
(9-1)
Assembly Utilities and Commerce Committee
(11-0)
POSITIONS
Sponsor:
The Planning and Conservation League
Support:
California Public Utilities Commission (if amended)
City and County of San Francisco
Pacific Gas and Electric Company
Prior version:
AMECO
Bay Solar Power Design
Borrego Solar Systems, Inc.
California Solar Energy Industries Association
City of San Diego
East Bay Municipal Utility District
EcoEnergies
International Energy Systems Corporation
Light Energy Systems
Ocean Beach Organic Food Co-op
Owens Electric Inc.
Support (continued):
Prior version:
Pacific Energy Company
Performance Solar Inc.
POCO Solar Energy
R.A. Energy International, Inc.
Sacramento Municipal Utility District
San Diego Regional Energy Office
Shell Solar Industries
Short Electric
Six Rivers Solar, Inc.
SoCal Solar Energy
Solar Integrated Technologies
SOLutions in Solar Electricity
Solar Wind Works
SUN Utility Network, Inc.
Tri-Power Group
25 individuals
Oppose:
Southern California Edison Company
Lawrence Lingbloom
AB 1685 Analysis
Hearing Date: July 8, 2003