BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Carole Migden, Chair
107 (Simitian)
Hearing Date: 5/23/05 Amended: 5/4/05
Consultant: Lisa Matocq Policy Vote: E, U & C 7-3
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BILL SUMMARY: SB 107 accelerates the Renewables Portfolio
Standard (RPS) requirement, from 2017 to 2010. The RPS is a
program that requires investor-owned utilities (IOUs) to, among
other things, achieve a 20% renewable electricity portfolio.
The bill also makes several other changes.
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Fiscal Impact (in thousands)
Major Provisions 2005-06 2006-07 2007-08 Fund
PUC $ 279 $ 558
$ 558 Special*
Costs should be
offset by fee revenues.
CEC $ 42 $ 84
$ 84 Special**
*Public Utilities' Reimbursement Account (PURA)
**Energy Resources Programs Account (ERPA)
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STAFF COMMENTS:
Current law establishes the RPS program, administered by the
Public Utilities Commission (PUC), which requires IOUs to, among
other things, achieve a 20% renewable electricity portfolio by
2017. The Energy Action Plan, adopted by the state's energy
agencies, proposes to accelerate the RPS 20% goal to 2010. This
bill accelerates the deadline to 2010. It also requires the
California Energy Commission (CEC) to review the feasibility of
increasing the RPS target to 33 percent by 2020.
Under current law, local publicly-owned electric utilities are
not subject to the same RPS standards and process as the IOUs,
but are required to implement and enforce their own RPS
programs. This bill requires the CEC to, using existing
resources, recommend ways to encourage local publicly-owned
electric utilities to implement RPS programs that meet certain
criteria.
Under existing law, IOUs must purchase renewable electricity
from eligible resources in order to satisfy their RPS
obligations (they may not purchase unbundled renewable energy
credits to meet their obligations). This bill requires the CEC
to establish a system for tracking renewable energy credits.
This generally codifies current practice.
Current law also establishes the public goods charge (PGC),
which is a surcharge imposed on electricity bills to fund
various programs, including the Renewable Energy Program (REP).
$135 million is collected annually, of which 10%, or $13.5
million, is
SB 107
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required to be used for credits to customers that entered into a
direct transaction, by a
specified date, for the purchase of renewable electricity. In
2003, the CEC suspended the customer credits program and
reallocated the funds to other programs. This bill repeals the
direct access customer credits program.
The bill also makes a number of other changes.
STAFF NOTES that Engrossing and Enrolling recommends a number of
technical amendments.
Increased costs to the PUC are estimated at $558,000 annually
for four personnel years (1 PURA V at $104,070 per year, 2 PURA
IVs at $189,480 per year, 1 PU Counsel II at $130,000 per year,
and 1 Administrative Law Judge at $134, 580 per year). PURA
revenues are derived from an annual fee imposed on utilities.
Therefore, any increased costs should be recovered from fee
revenues.
ERPA revenues are derived from a surcharge on electricity bills.
It is the primary funding source of the CEC's contract and
operating expenses.
AB 1362 (Levine), pending in the Assembly, permits unlimited
renewable energy credit trading for RPS compliance.
AB 1585 (Blakeslee), pending in the Assembly, requires the CEC
to study the feasibility of attaining a 33% RPS standard.
SB 1478 (Sher) of 2004 was similar to this bill and was vetoed
by Governor Schwarzenegger. In his veto message, the Governor
stated, among other things, that he appreciated the effort to
attempt to codify his goal of accelerating the renewable energy
portfolio standard however, the bill contained an onerous
provision related to energy credit trading. This bill does not
limit the number of energy credit trades.