BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  AB 1362|
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                                 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
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          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

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