BILL ANALYSIS Ó SB 919 Page 1 SENATE THIRD READING SB 919 (Hertzberg) As Amended August 11, 2016 Majority vote SENATE VOTE: 35-0 -------------------------------------------------------------------- |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+-----------------------+---------------------| |Utilities |15-0 |Gatto, Patterson, |> | | | |Burke, Chávez, Dahle, | | | | |Eggman, Cristina | | | | |Garcia, Eduardo | | | | |Garcia, Hadley, | | | | | | | | | | | | | | |Roger Hernández, | | | | |Obernolte, Quirk, | | | | |Santiago, Ting, | | | | |Williams | | | | | | | |----------------+-----+-----------------------+---------------------| |Water |15-0 |Levine, Gallagher, |> | | | |Bigelow, Dodd, Eggman, | | | | |Cristina Garcia, | | | | |Eduardo Garcia, Gomez, | | SB 919 Page 2 | | |Harper, Lopez, Mathis, | | | | |Nazarian, Olsen, | | | | |Salas, Williams | | | | | | | |----------------+-----+-----------------------+---------------------| |Appropriations |20-0 |Gonzalez, Bigelow, |> | | | |Bloom, Bonilla, Bonta, | | | | |Calderon, Chang, Daly, | | | | |Eggman, Gallagher, | | | | |Eduardo Garcia, | | | | |Holden, Jones, | | | | |Obernolte, Quirk, | | | | |Santiago, Wagner, | | | | |Weber, Wood, Chau | | | | | | | | | | | | -------------------------------------------------------------------- SUMMARY: Requires the California Public Utilities Commission (CPUC), in consultation with the California Independent System Operator (CAISO), to address, by January 1, 2018, the oversupply of renewable energy resources through the development of a tariff or other economic incentive for the electricity purchased by customers operating facilities that create or augment local water supplies. This bill 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, groundwater recharge facilities, and groundwater treatment and remediation activities. FISCAL EFFECT: According to the Assembly Appropriations Committee, the requirements of this bill can be addressed through existing proceedings including the Long Term Procurement Planning, the Water-Energy Nexus Order Instituting Rulemaking, SB 919 Page 3 and the Time-of-Use Order Instituting Rulemaking. However, the deadline in this bill may require staff to shift from working on long term over-supply mitigation to focusing on meeting the requirements of the bill. COMMENTS: 1)Rationale: Scientists predict California's changing climate will increase the frequency, length, and severity of future droughts. The solution will require new sustainable, local water supplies, such as water recycling, ocean desalination, stormwater capture, and brackish desalting (i.e., cleaning up water that is too salty to drink, but not as salty as seawater). Due to California's successful renewable energy programs, regulators have identified an "oversupply" of power during the day. The result is low (or negative) wholesale prices for renewable energy, a trend that is increasing in frequency but is not reflected in retail prices. Oversupply increases costs to ratepayers and represents a failure of the regulatory system to send proper price signals. According to the author, there is a solution to this mismatch in demand for power at water facilities in the daytime and the cost of electricity. This bill encourages the development and diversification of local water supplies by directing renewable energy 'oversupply' to those water suppliers. 2)Renewable Energy Oversupply: In 2013, the CAISO published the "duck chart," which shows a significant drop in mid-day net load on a spring day as solar photovoltaics are added to the state's electric grid. The chart raised concerns that the state's electric grid will not be able to maintain SB 919 Page 4 reliability, particularly on days characterized by the duck shape. This could result in "overgeneration" and curtailed renewable energy, increasing its costs and reducing its environmental benefits. This bill provides for the use of such mechanisms as time variant rates, demand response, or dynamic pricing, to help create demand for electricity at times when it would be helpful for electric grid management. Analysis Prepared by: Sue Kateley / U. & C. / (916) 319-2083 FN: 0003969