BILL ANALYSIS
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THIRD READING
Bill No: AB 2593
Author: Calderon (D)
Amended: 6/15/04 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 6-0, 6/8/04
AYES: Morrow, Alarcon, Battin, Dunn, Murray, Sher
NO VOTE RECORDED: Bowen, McClintock, Vasconcellos
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 77-0, 5/10/04 (Passed on Consent) - See
last page for vote
SUBJECT : Self-generation incentive program
SOURCE : Southern California Edison
DIGEST : This bill allows the Public Utilities
Commission, if it determines that funds available for the
Self-Generation Incentive Program are sufficient to meet
the year's program demands, to suspend for a year the
utility surcharge collection for the program.
ANALYSIS : Previous law required the Public Utilities
Commission (PUC) to offer differential incentives for
renewable and super clean distributed generation (AB 970
(Ducheny), Chapter 329, Statutes of 2000). Pursuant to AB
970, the PUC established the Self-Generation Incentive
Program (SGIP) in March 2001.
CONTINUED
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Existing law (AB 1685 (Leno), Chapter 894, Statutes of
2003) repealed the above provision, requires the PUC to
administer the SGIP until 2008, and prescribes eligibility
for gas-fired distributed generation as follows:
1.In 2005 and 2006, projects must meet an oxides of
nitrogen (NOx) emissions rate of 0.14 pounds per
megawatthour.
2.In 2007, projects must meet a NOx emissions rate of 0.07
pounds per megawatthour and have a minimum efficiency of
60 percent.
This bill authorizes the PUC to suspend collection of funds
from ratepayers to support SGIP incentives if the PUC
determines sufficient funds are available to meet the
reasonable anticipated demand for incentives for that year.
Background
Pursuant to AB 970's direction to offer incentives for
renewable and super clean distributed generation resources,
the PUC established the SGIP in March 2001. The current
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 percent 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
percent 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
percent of total costs (Level 3).
Last year, AB 1685 required the PUC to continue the SGIP
until 2008 "in the same form as it exists," except
eligibility standards for gas-fired distributed generation
were raised. AB 1685 established a two-stage emissions
standard which, in 2005 and 2006, requires projects to
exceed current emissions standards to be eligible for SGIP
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rebates. In 2007, projects must meet the emission standard
slated for implementation by the Air Resources Board in
2007.
The sponsor of this bill, Southern California Edison (SCE),
collects $26 million per year for its SGIP. However, it
has awarded incentives totaling just $15 million since
2001.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 6/29/04)
Southern California Edison (source)
ARGUMENTS IN SUPPORT : This bill is sponsored by SCE,
which indicates that the total amount of incentives it has
paid to eligible participants since the program's inception
is approximately $15 million, even though a total of $104
million has been collected for incentives. SCE indicates
that it expects to approve over 60 additional projects with
incentives totaling about $30 million, leaving a year-end
balance of $60 million for 2004. To reduce the program's
impact on ratepayers, Edison argues that the SGIP should be
funded, and the surcharge collected, based on a forecasted
need. This bill provides that option pursuant to a
determination by the PUC.
ASSEMBLY FLOOR :
AYES: Aghazarian, Bates, Benoit, Berg, Bermudez, Bogh,
Calderon, Campbell, Canciamilla, Chan, Chavez, Chu,
Cogdill, Cohn, Corbett, Correa, Cox, Daucher, Diaz,
Dutra, Dutton, Dymally, Firebaugh, Frommer, Garcia,
Goldberg, Hancock, Harman, Haynes, Jerome Horton, Shirley
Horton, Houston, Jackson, Keene, Kehoe, Koretz, La Malfa,
La Suer, Laird, Leno, Leslie, Levine, Lieber, Longville,
Lowenthal, Maddox, Maldonado, Matthews, Maze, McCarthy,
Mountjoy, Mullin, Nakanishi, Nakano, Nation, Negrete
McLeod, Oropeza, Pacheco, Parra, Pavley, Plescia, Reyes,
Richman, Ridley-Thomas, Runner, Salinas, Samuelian,
Simitian, Spitzer, Steinberg, Strickland, Vargas,
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Wiggins, Wolk, Wyland, Yee, Nunez
NO VOTE RECORDED: Liu, Montanez, Wesson
NC:nl 6/30/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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