BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
SB 107 - Bowen Hearing Date:
April 22, 2003 S
As Amended: April 9, 2003 FISCAL/URGENCY
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DESCRIPTION
Existing law (AB 970 (Ducheny), Chapter 329, Statutes of 2000)
requires the California Public Utilities Commission (CPUC) to
offer differential incentives for renewable and super clean
distributed generation.
Existing law (SB 1038 (Sher), Chapter 515, Statutes of 2002)
authorizes the CPUC, when setting rates or fees, to encourage
installation of ultra-clean and low-emission distributed
generation, which is defined as generation technologies which
produce zero emissions or emissions that meet or exceed 2007 Air
Resources Board (ARB) emission limits.
This bill directs the AB 970 incentives to ultra-clean and
low-emission , rather than super clean , distributed generation
resources.
Existing law requires the Independent System Operator (ISO),
within six months of its approval by the Federal Energy
Regulatory Commission (i.e. in 1998), to issue a report
regarding reliability.
This bill repeals this obsolete requirement.
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 emissions standards.
Last year, SB 1038 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.
This bill conforms the CPUC's distributed generation incentives
with the Legislature's intent, reflected in SB 1038, to ensure
only the cleanest, most environmentally sound distributed
generation resources are eligible for the substantial combined
ratepayer subsidies offered by the CPUC under the SGIP and
Decision 03-04-030.
COMMENTS
1.What's the difference between "super clean" and "ultra-clean
and low-emission?" "Super clean," the term used in AB 970,
does not have any statutory definition. Although "super
clean" implies cleaner than the typical, permitted distributed
generation, the CPUC has not required distributed generation
to exceed existing emissions standards to be eligible for
incentives.
In contrast, "ultra-clean and low-emission" has a specific
statutory definition - meeting the stringent 2007 ARB
emissions standards, which approximate the emissions of an
advanced central station power plant, plus an efficiency
standard, and operating by December 31, 2005.
2.Are other provisions of Section 379.5 still relevant? The
section amended by this bill contains a number of provisions
requiring the CPUC and others to take actions related to
reliability and energy efficiency. To the extent these
provisions require one-time actions which have been taken by
the CPUC and others, they may not be necessary any longer.
The author and the committee may wish to consider repealing
these obsolete provisions of Section 379.5.
POSITIONS
Sponsor:
Author
Support:
None on file
Oppose:
None on file
Lawrence Lingbloom
SB 107 Analysis
Hearing Date: April 22, 2003