BILL ANALYSIS
SB 67
Page 1
SENATE THIRD READING
SB 67 (Bowen)
As Amended September 8, 2003
Majority vote
SENATE VOTE :29-11
UTILITIES AND COMMERCE 9-4 NATURAL RESOURCES 8-3
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|Ayes:|Reyes, Calderon, |Ayes:|Jackson, Hancock, Koretz, |
| |Canciamilla, Diaz, Jerome | |Laird, Lieber, Lowenthal, |
| |Horton, Levine, Nunez, | |Montanez, Wolk |
| |Ridley-Thomas, Wolk | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Richman, Campbell, La |Nays:|La Malfa, Harman, Haynes |
| |Suer, Maddox | | |
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APPROPRIATIONS 15-7
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|Ayes:|Steinberg, Berg, | | |
| |Calderon, Corbett, Diaz, | | |
| |Goldberg, Leno, Nation, | | |
| |Negrete McLeod, Nunez, | | |
| |Pavley, Ridley-Thomas, | | |
| |Simitian, Wiggins, Yee | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Bates, Correa, Daucher, | | |
| |Haynes, Pacheco, Runner, | | |
| |Samuelian | | |
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SUMMARY :
1)Permits the California Public Utilities Commission (PUC) to
require the investor owned utilities (IOUs) to begin meeting
the procurement requirements of the Renewable Portfolio
Standard (RPS) when either:
a) IOU has obtained an investment grade credit rating as
determined by at least two major rating agencies; or,
SB 67
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b) IOU is able to procure eligible renewable energy
resources on reasonable terms and the procurement will not
impair the restoration IOU's creditworthiness.
Applicability of this second provision is delayed until
after April 1, 2004, for any IOU that, as of June 30, 2003,
was in federal bankruptcy court. [This provision applies
to Pacific Gas and Electric (PG&E).]
2)Allows PUC to consider renewable energy purchased by an IOU
from a facility located outside the state which complies with
specified requirements as meeting RPS.
EXISTING LAW :
1)Creates a RPS that requires IOUs to buy renewable resources to
increase their existing level of renewable power by 1% per
year with 20% of their total portfolio coming from eligible
renewable resources by 2017.
2)Exempts IOUs from RPS renewable resources procurement
requirements until IOU obtains an investment grade credit
rating as determined by at least two major rating agencies.
3)Defines eligible renewable resources to only include in-state
renewable electricity generation technology.
FISCAL EFFECT : Minor absorbable special fund costs to PUC.
COMMENTS : SB 1078 (Sher), Chapter 516, Statutes of 2002,
creates RPS, requiring IOUs to buy renewable resources with the
goal of increasing their existing level of renewable resources
by 1% per year until a 20% renewable resources portfolio is
achieved.
Under provisions of SB 1078, PUC is prohibited from requiring an
IOU to buy renewable resources to fulfill RPS until IOU has
attained an investment grade credit rating as determined by at
least two major rating agencies. PG&E and Southern California
Edison (SCE) do not meet this condition currently. This bill
establishes an alternative credit test that permits PUC to
require RPS procurement when an IOU is able to buy renewable
resources on reasonable terms and the procurement will not
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impair the restoration of IOU's creditworthiness.
SB 1078 limits the renewable resources that could be counted
toward RPS to in-state renewable resources. This prohibition
against out-of-state production may violate the Commerce Clause
in the United States Constitution and may act to limit
competition to provide low cost renewable power. SB 67
addresses these concerns by allowing out-of-state renewable
resources to count toward RPS if they meet specified
requirements.
PG&E's Bankruptcy Status: A settlement agreement in PG&E's
bankruptcy proceeding was recently announced, which still must
be approved by PUC, PG&E's Board of Directors and the Bankruptcy
Court. If the process goes according to plan, the agreement
should be approved by January 2004, with investment grade credit
ratings following shortly thereafter.
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083
FN: 0003664