BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1362| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1362 Author: Levine (D) Amended: 7/12/05 in Senate Vote: 21 SENATE ENERGY, U.&C. COMMITTEE : 7-3, 6/30/05 AYES: Escutia, Alarcon, Bowen, Dunn, Kehoe, Murray, Simitian NOES: Morrow, Battin, Cox NO VOTE RECORDED: Campbell SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 ASSEMBLY FLOOR : 50-29, 6/01/05 - See last page for vote SUBJECT : Renewable energy SOURCE : Author DIGEST : This bill accelerates the California Renewables Portfolio Standard (RPS) to require retail sellers of electricity to procure at least 20 percent of their retail sales from renewable power by 2010 instead of 2017. This bill only becomes operative if SB 107 (Simitian) is enacted by January 1, 2006. ANALYSIS : Existing Law CONTINUED AB 1362 Page 2 1.Requires each investor-owned utility (IOU) to increase its existing level of renewable resources by one percent of sales per year until renewable resources account for 20 percent of its generation portfolio, provided sufficient Public Goods Charge (PGC) funds are available to cover any above-market costs. (AB 57 [Wright], Chapter 835, Statutes of 2002) 2.The RPS requires IOUs and certain other retail sellers to meet essentially the same renewable procurement goals as AB 57, but sets a deadline of 2017 for achieving a 20 percent renewable portfolio and establishes a detailed process and standards for renewable procurement, as follows: A. IOUs and other retail sellers must buy renewable electricity from eligible resources to meet their RPS obligations. Buying unbundled renewable energy credits (RECs) rather than electricity won't satisfy RPS obligations. B. To be eligible, renewable resources must be located in or delivered to California. Delivery to a retail seller or the Independent System Operator is required, but there is no explicit requirement for delivery to the purchasing retail seller. C. Local publicly-owned electric utilities are not subject to the same detailed process and standards as IOUs, but are required to implement and enforce their own RPS programs. (SB 1078 [Sher], Chapter 516, Statutes of 2002) This bill: 1.Advances the deadline for achieving a 20 percent RPS from 2017 to 2010. 2.Conforms legislative intent language to this target. 3.Provides that the bill becomes operative only if SB 107 (Simitian) is enacted by January 1, 2006. Related Legislation AB 1362 Page 3 SB 107 (Simitian) also advances the 20 percent RPS deadline from 2017 to 2010 and contains other related provisions. The bill is currently in the Senate Appropriations Committee. Background The RPS requires IOUs and certain other retail energy providers, collectively referred to as "retail sellers," to buy renewable electricity to the extent PGC funds are available to pay for any costs exceeding a market price set by the PUC. Each IOU is required to increase its renewable procurement each year by at least one percent of total sales, so that 20 percent of its sales are renewable energy sources by December 31, 2017. Once a 20 percent portfolio is achieved, no further increase is required. The PUC is required to adopt comparable requirements for direct access energy service providers and community choice aggregators. The RPS requires the PUC to adopt processes for determining market prices, ranking renewable bids according to cost and fit, flexible compliance rules and standard contract terms. The RPS requires IOUs to offer contracts of at least 10 years, unless the PUC approves shorter contracts. This is intended to support the development of new renewable resources. The "Energy Action Plan" adopted by the PUC, the CEC and the California Power Authority pledges that the agencies will accelerate RPS implementation to meet the 20 percent goal by 2010, instead of 2017. In his statements on energy, the Governor has endorsed "20 percent by 2010" and proposed an additional goal of 33 percent by 2020. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes SUPPORT : (Verified 8/17/05) American Federation of State, County and Municipal Employees AB 1362 Page 4 East Bay Municipal Utility District Pacific Gas and Electric Company Sempra Energy Southern California Edison The Utility Reform Network ASSEMBLY FLOOR : AYES: Arambula, Baca, Bass, Berg, Bermudez, Blakeslee, Calderon, Canciamilla, Chan, Chavez, Chu, Cohn, Coto, De La Torre, Dymally, Evans, Frommer, Goldberg, Hancock, Jerome Horton, Shirley Horton, Jones, Karnette, Klehs, Koretz, Laird, Leno, Levine, Lieber, Liu, Matthews, Montanez, Mullin, Nation, Nava, Negrete McLeod, Oropeza, Parra, Pavley, Richman, Ridley-Thomas, Ruskin, Saldana, Salinas, Torrico, Umberg, Vargas, Wolk, Yee, Nunez NOES: Aghazarian, Benoit, Bogh, Cogdill, Daucher, DeVore, Emmerson, Garcia, Harman, Haynes, Houston, Huff, Keene, La Malfa, La Suer, Leslie, Maze, McCarthy, Mountjoy, Nakanishi, Niello, Plescia, Sharon Runner, Spitzer, Strickland, Tran, Villines, Walters, Wyland NO VOTE RECORDED: Gordon NC:cm 8/17/05 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****