BILL ANALYSIS AB 200 Page 1 Date of Hearing: April 4, 2005 ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE Lloyd E. Levine, Chair AB 200 (Leslie) - As Introduced: January 31, 2005 SUBJECT : Renewable energy resources: California Renewable Portfolio Standard Program. SUMMARY : Modifies the manor in which an electrical corporation with fewer than 60,000 customers in California that also serves customers in other states must meet California's Renewable Portfolio Standard (RPS). Specifically, this bill : 1) Allows those electrical corporations to meet the California RPS by using renewable power that is produced outside of California provided that: a) The electricity from the renewable facility is procured on behalf of California customers and is not used to meet renewable energy requirements in other states. b) The California Energy Commission (CEC) verifies that that the electricity generated by the facility is eligible to meet the annual procurement target of the California RPS. 1) Provides that the California Public Utilities Commission (PUC) shall determine the annual procurement target for those electrical corporations based on the percentage of total kilowatt-hours sold in California. EXISTING LAW : 1) Creates the RPS which requires an electrical corporation to increase its total procurement of renewable power from eligible renewable resources by at least 1 percent per year so that 20 percent of its retail sales are from eligible renewable energy resources no later than December 31, 2017. 2) Defines eligible renewable resource to only include specified types of generation that are located within AB 200 Page 2 California, or have their first connection to the Western Electricity Coordination Council transmission system within California. FISCAL EFFECT : Unknown. COMMENTS : According to the author, the purpose of this bill is to grant two electric utilities, PacificCorp and Sierra Pacific, more flexibility in meeting the California RPS by allowing them to count renewable power produced in parts of their service territory outside of California toward their California RPS requirements. 1)Who must meet the RPS : All retail sellers of electricity in California, excluding municipal utilities, are required to meet the state's RPS. Retail sellers include: electric corporations, Community Choice Aggregators, and Energy Service Providers. In addition to the three largest investor owned utilities (IOUs) in California - San Diego Gas & Electric( SDG&E), Southern California Edison (SCE), and Pacific Gas & Electric (PG&E) - there are also a handful of electric corporations that serve a small number of California customers. PacifiCorp serves customers in Oregon, Washington, Wyoming, Idaho, Utah and also provide service to less than 60,000 customers in Northern California near the Oregon boarder. Sierra Pacific mainly provides electricity to Nevada customers, but also serves some Californians in the Lake Tahoe and Sierra Nevada region. Because the RPS applies to all electrical corporations providing service in California, Sierra Pacific and PacifiCorp must meet the California RPS on the exact same terms as the electrical corporation that only serve California customers. 2)What's Sierra Pacific and PacifiCorp's Problem?: In order to meet the California RPS the renewable power must come from renewable electricity generation within California or which is first connected to California transmission grid. One of the reasons Sierra Pacific and PacifiCorp serve some California customers is that the geography of their service territories makes it easier for their California customers to interconnect with Oregon and Nevada based generation than it would be to interconnect with PG&E's California based generation. If these companies were to meet the current requirement that the AB 200 Page 3 renewable power come from within California, they would be forced to build the needed renewable resources within a very small portion of their service territory, even though resources in other parts of the service territory could be used to meet that load. This bill takes into account Sierra Pacific and PacifiCorp's dilemma by allowing them to include renewable resources that are first connected to their distribution grid outside of California to apply toward the California RPS as long as it is used to meet part of the utilities' California load. Previous Legislation : SB 1478 (Sher) in the 2003 - 2004 legislative session made numerous changes to the RPS and contained the same provisions as this bill. SB 1478 was vetoed by the Governor for reason unrelated to these provisions. REGISTERED SUPPORT / OPPOSITION : Support PacifiCorp (Sponsor) Sierra Pacific Power Company (Sponsor) Opposition None on file. Analysis Prepared by : Edward Randolph / U. & C. / (916) 319-2083