BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 919


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          Date of Hearing:  June 28, 2016


                  ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE


                                 Marc Levine, Chair


          SB  
          919 (Hertzberg) - As Amended May 31, 2016


          SENATE VOTE:  35-0


          SUBJECT:  Water supply:  creation or augmentation of local water  
          supplies


          SUMMARY: Requires the Public Utilities Commission (PUC) to,  
          before January 1, 2018, address the oversupply of renewable  
          energy resources through a tariff or other economic incentive  
          for electricity purchased for the operation of facilities that  
          create or augment local water supplies. Specifically, this bill:  
           


             1)   Requires the tariff or economic incentive to reduce the  
               cost of electricity for facilities that create or augment  
               local water supplies.


             2)   Defines facilities that create or augment local water  
               supplies to include desalination, brackish water desalting,  
               water recycling, water reuse, stormwater and dry weather  
               runoff capture and use, and groundwater recharge  
               facilities.









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          EXISTING LAW:   


             1)   Gives the PUC regulatory authority over public  
               utilities, including electrical corporations.





             2)   Requires through the California Renewables Portfolio  
               Standard (RPS) Program a retail seller of electricity and  
               local publicly owned electric utilities to increase  
               purchase of renewable energy such that 50% of retail sales  
               come from renewable sources by December 31, 2030.
          FISCAL EFFECT:  Unknown.


          COMMENTS:  Requires the PUC to, before January 1, 2018, address  
          the oversupply of renewable energy resources through a tariff or  
          other economic incentive for electricity purchased for the  
          operation of facilities that create or augment local water  
          supplies.


          1)Author's Statement: This bill encourages the development and  
            diversification of local water supplies through water  
            recycling, reclamation, and desalination by directing  
            renewable energy 'oversupply' to those water suppliers. An  
            ancillary benefit is that the bill requires better  
            coordination of California's renewable energy resources and  
            demand for power and enables better, more cost-effective  
            utilization of renewable power as it is generated.
          2)Background:  Water supply reliability across much of the state  
            will be an ongoing challenge for the foreseeable future.   
            There are questions and uncertainty about water moving from  
            the Colorado River and from Northern California through the  
            Sacramento-San Joaquin Delta.  It seems certain that a more  








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            diversified water portfolio that places greater emphasis on  
            local water supplies will be more adaptable to changing water  
            conditions.


            The big challenge to diversifying the water supply portfolio  
            is cost.  Depending on the water source, energy can be a  
            significant portion of the cost.  This bill seeks to reduce  
            the cost of energy for local water supplies while  
            simultaneously limiting curtailment of renewable energy  
            generation.   


          3)Supporting Arguments:  This bill creates a mechanism to  
            harness clean, low-cost renewable energy as a power source to  
            expand California's water supply.  This will create an  
            opportunity to use renewable energy that might otherwise be  
            curtailed or sold at a loss due to oversupply conditions.  The  
            nexus between the state's water and power needs are clear and  
            this bill provides a beneficial approach to address both those  
            needs. 
          4)Support if Amended: Two entities have submitted "support if  
            amended" positions, requesting that the PUC be given more time  
            beyond January 1, 2018, or to be allowed to consider active  
            proceedings before having to meet the deadline currently in  
            this bill to develop economic incentives.  There are further  
            requests to acknowledged water agencies' energy efficiency and  
            provide for incorporating the opportunities this bill would  
            present in a cost-effective manner.  Additionally, there is a  
            request to remove the intent to expedite Proposition 1 as  
            placed on the ballot by AB 1471 (Rendon), Chapter 188,  
            Statutes of 2014, funding for local water supplies.


          REGISTERED SUPPORT / OPPOSITION:












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          Support


          Independent Energy Producers Association (Sponsor)


          Association of California Water Agencies (If Amended)


          California Association of Sanitation Agencies


          California Manufacturers & Technology


          California Municipal Utilities Association (If Amended)


          San Diego County Water Authority




          Opposition


          None on file.




          Analysis Prepared by:Ryan Ojakian / W., P., & W. / (916)  
          319-2096














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