BILL ANALYSIS SB183 Page 1 Date of Hearing: June 30, 2003 ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE Sarah Reyes, Chair SB 183 (Sher) - As Amended: June 27, 2003 SENATE VOTE : 35-1 SUBJECT : Energy: renewable technologies. SUMMARY : Makes substantive and non-substantive changes to the provisions governing renewable energy programs. Specifically, this bill : 1)Repeals two code sections in the Public Utilities Code relating to the funding and administration of renewable energy programs at the California Energy Commission (CEC) and recast the same language in multiple code sections in the Public Resources Code. 2)Requires CEC to annually publish the balance of consumer incentive programs funds available to emerging renewable energy resources. 3)Eliminates CEC discretion to award grants for the development of new renewable electrical generation facilities to out-of-state renewable electricity generators. 4)Eliminates a requirement that CEC obtain Legislative approval before spending money collected and deposited in the Renewable Resources Trust Fund for renewable energy programs. 5)Allows out-of-state renewable energy facilities to qualify as eligible renewable energy resources for procurement under the Renewable Portfolio Standard (RPS) if: a) It will be connected to the Western Electricity Coordinating Council transmission system, and b) It participates in a renewable energy certificate based tracking system. EXISTING LAW : 1)Imposes a separate rate component on utility bills to fund SB183 Page 2 programs to promote, develop and operate renewable energy resources. 2)Requires CEC to grant specified percentages of these funds to these programs. 3)Requires IOUs to buy renewable resources from statutorily defined eligible renewable energy resources to increase their existing level of renewable power by one percent per year with twenty percent of their total portfolio coming from renewable resources by 2017. FISCAL EFFECT : Unknown. COMMENTS : AB 1890 (Brulte), Chapter 854, Statutes of 1996, required ratepayers to fund a variety of system reliability, in-state benefit and low-income customer programs at specified levels from 1998 through 2001. This funding was intended to ensure that programs administered by the investor owned utilities would continue in the restructured electric industry. Among these programs are grants to promote operation and development of existing, new, and emerging renewable energy sources. The programs were original codified by SB 90 (Sher), Chapter 905, Statutes of 1997 and were extended by SB 1194 (Sher), Chapter 1050, Statutes of 2000, and SB 1038 (Sher), Chapter 515, Statutes of 2002. Under the programs CEC distributes grant and rebate money to develop renewable energy. The code section that creates these programs is unwieldy and difficult to follow. This bill recast this section as a series of short sections that are easier to apply. The requirement in this bill that CEC publish the balance of the funds available to use for consumer incentive programs is intended to ensure that companies that provide renewable technologies can keep tabs on the availability of funding. Under SB 1038, CEC is allowed to grant awards to out of state renewable energy providers if those providers are under contract to sell electricity to California utility customers. This bill eliminates that discretion out of concerns that California SB183 Page 3 ratepayer money should not be used to subsidizes out of state generators. SB 1078 (Sher), Chapter 516, Statutes of 2002 created the RPS, requiring IOUs to buy renewable resources with the goal of increasing their existing level of renewable resources by one percent per year to achieved a twenty percent renewable resources portfolio by 2017. Under SB 1078 IOUs are required to buy all qualifying renewable power from generation located within California. The prohibition against purchasing renewable generation from out-of-state providers has raised concerns that RPS may violate the Commerce Clause of the U.S. Constitution by interfering with interstate commerce. The provision to allow out-of-state- renewable generation to count toward RPS standard is intended to assure that RPS does not violate the U.S. Constitution. Other Legislation This bill deletes a requirement that CEC obtain Legislative approval before spending money in the Renewable Resources Trust Fund. Allowing CEC to make ongoing appropriations from this fund eliminates an important oversight tool and reduces the ability of the Legislature review CEC actions. The Committee may want to consider deleting this section . Technical Amendments In recasting existing codes into new sections, this bill contains language requiring CEC to file a report to the Legislature by March 31, 2003. This report has already been completed. The committee and the author may wish to consider deleting this outdated section. REGISTERED SUPPORT / OPPOSITION : Support None on File. Opposition Sempra Energy SB183 Page 4 Analysis Prepared by : Edward Randolph / U. & C. / (916) 319-2083