Bill Text: CA AB2547 | 2019-2020 | Regular Session | Introduced
Bill Title: California Renewables Portfolio Standard Program: portfolio content: unbundled renewable energy credits.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced - Dead) 2020-03-12 - Referred to Coms. on U. & E. and NAT. RES. [AB2547 Detail]
Download: California-2019-AB2547-Introduced.html
CALIFORNIA LEGISLATURE—
2019–2020 REGULAR SESSION
Assembly Bill
No. 2547
| Introduced by Assembly Member Gonzalez |
February 19, 2020 |
An act to amend Section 399.16 of the Public Utilities Code, relating to renewable energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2547, as introduced, Gonzalez.
California Renewables Portfolio Standard Program: portfolio content: unbundled renewable energy credits.
The California Renewables Portfolio Standard Program requires the Public Utilities Commission to establish a renewables portfolio standard requiring all retail sellers, defined as electrical corporations, electric service providers, and community choice aggregators, to procure a minimum quantity of electricity products from eligible renewable energy resources, as defined, at specified percentages of the total kilowatthours sold to their retail end-use customers during specified compliance periods. The program additionally requires each local publicly owned electric utility to procure a minimum quantity of electricity products from eligible renewable energy resources to achieve the targets established by the program. The program, consistent with the goals of procuring the least-cost and best-fit eligible renewable energy resources that meet project viability principles, requires that all
retail sellers procure a balanced portfolio of electricity products from eligible renewable energy resources, in 3 specified categories referred to as the portfolio content requirements. Existing law requires retailer sellers to meet renewable energy procurement obligations by at least 75% of the electricity product that is from a renewable energy resource that meets various requirements, including the requirement on the first point of interconnection of the resource with the state or has an agreement to dynamically transfer electricity to a California balancing authority (category 1 products), for compliance periods after December 31, 2016. Existing law authorizes retailer sellers to meet up to 10% of their renewable energy procurement obligations through the purchase of electricity products, including unbundled renewable energy credits (category 3 products) for compliance periods after December 31, 2016.
This bill would increase the
requirement for the purchase of category 1 products in meeting the retailers sellers renewable energy procurement obligations to 85% for compliance periods after December 31, 2020. The bill would, except as provided, prohibit the purchase of category 3 products in meeting the retailer sellers’ renewable energy procurement obligations for compliance periods after December 31, 2020.
Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
The Legislature finds and declares as follows:(a) The California Renewables Portfolio Standard (RPS) Program has been highly successful.
(b) Electrical corporations and local publicly owned electric utilities are meeting and exceeding their portfolio content category requirements under the program.
(c) In the past 10 years, substantially more than 10,000 megawatts of new utility-scale renewable electric generation facilities have been constructed and this new generation is supplying Californians with clean, greenhouse-gas-free electricity.
(d) The Independent System Operator data shows that on more than one-half of the days in 2019, there were times when renewable generation supplied more than 50 percent of all demand. In 2019, there were several times where renewable generation supplied more than 70 percent of all demand.
(e) The cost of new wind and solar generation has dropped dramatically. The Legislative Analyst’s Office issued a report on January 6, 2020, stating that the costs for utility scale solar photovoltaic electricity declined by nearly 90 percent from 2009 to 2019, and that it is now less costly than other sources of generation.
(f) The report states that emissions of greenhouse gases from electric generation were reduced by 38 percent from 2009 to 2017. During this same period, there was a net increase from other sources of emissions. Clearly, the RPS Program has been California’s most
significant program to reduce emissions of greenhouse gases.
(g) This success story has been achieved with a small and diminishing cost to retail customers. According to the report, retail rates have been increased only by about 5 percent to pay for the RPS Program. Most importantly, the higher costs are primarily from long-term contracts signed in the early years of the program when the costs for solar and wind generation were much higher. Costs for future RPS compliance will be much lower, and, in many cases, less than the alternatives.
(h) Building new renewable generating plants has created tens of thousands of construction jobs each year. Most of these jobs have been good union jobs providing the middle class wages and benefits. According to a study by the University of California, Berkeley, Labor Center, 60 percent of people entering apprenticeship programs as result of this
new construction have been people of color, 43 percent of entry-level workers lived in disadvantaged communities, and 47 percent lived in communities with unemployment rates of at least 13 percent.
(i) The current RPS Program requires that only 75 percent of compliance by retail sellers come from portfolio content category 1, which is actual generation delivered to customers in real time. The program allows up to 10 percent of compliance to come from portfolio content category 3, generally described as unbundled Renewable Energy Credits (RECs).
(j) Both the Public Utilities Commission and the State Energy Resources Conservation and Development Commission have found that unbundled RECs do not provide actual reductions in emissions of greenhouse gases. Instead, they are merely compliance instruments. The market prices for unbundled RECs are very low, reflecting their very low
value.
(k) In contrast, all the benefits of the RPS Program have come from portfolio content category 1, bundled generation and RECs.
(l) Many community choice aggregators have independently decided that they will not rely on any unbundled RECs for their compliance with the RPS Program. Many community choice aggregators have also set targets for their renewable content that are higher than those required by the RPS Program. The community choice aggregators will soon serve a majority of California customers.
(m) Given the maturation of the RPS Program, the low cost of new renewable generation, the effectiveness of category 1 generation in reducing emissions of greenhouse gases, the good jobs it is creating, and the policy choices made by many community choice aggregators, it is time to increase the proportion of the
program based on portfolio content category 1, while eliminating compliance based on unbundled RECs.
SEC. 2.
Section 399.16 of the Public Utilities Code is amended to read:399.16.
(a) Various electricity products from eligible renewable energy resources located within the WECC transmission network service area shall be eligible to comply with the renewables portfolio standard procurement requirements in Section 399.15. These electricity products may be differentiated by their impacts on the operation of the grid in supplying electricity, as well as meeting the requirements of this article.(b) Consistent with the goals of procuring the least-cost and best-fit electricity products from eligible renewable energy resources that meet project viability principles adopted by the commission pursuant to paragraph (5) of subdivision (a) of Section 399.13 and that provide the benefits set forth in Section 399.11, a balanced portfolio of eligible
renewable energy resources shall be procured consisting of the following portfolio content categories:
(1) Eligible renewable energy resource electricity products that meet either of the following criteria:
(A) Have a first point of interconnection with a California balancing authority, have a first point of interconnection with distribution facilities used to serve end users within a California balancing authority area, or are scheduled from the eligible renewable energy resource into a California balancing authority without substituting electricity from another source. The use of another source to provide real-time ancillary services required to maintain an hourly or subhourly import schedule into a California balancing authority shall be permitted, but only the fraction of the schedule actually generated by the eligible renewable energy resource shall count toward this
portfolio content category.
(B) Have an agreement to dynamically transfer electricity to a California balancing authority.
(2) Firmed and shaped eligible renewable energy resource electricity products providing incremental electricity and scheduled into a California balancing authority.
(3) Eligible renewable energy resource electricity products, or any fraction of the electricity generated, including unbundled renewable energy credits, that do not qualify under the criteria of paragraph (1) or (2).
(c) In order to achieve a balanced portfolio, all retail sellers shall meet the following requirements for all procurement credited toward each compliance period:
(1) Not less than 50 percent
for the compliance period ending December 31, 2013, 65 percent for the compliance period ending December 31, 2016, and 75 percent for the compliance period ending December 31, 2020, and 85 percent for each compliance period thereafter, of the eligible renewable energy resource electricity products associated with contracts executed after June 1, 2010, shall meet the product content requirements of paragraph (1) of subdivision (b).
(2) Not more than 25 percent for the compliance period ending December 31, 2013, 15 percent for the compliance period ending December 31, 2016, and 10 percent for each compliance period thereafter,
compliance period until December 31, 2020,
of the eligible renewable energy resource electricity products associated with contracts executed after June 1, 2010, shall meet the product content requirements of paragraph (3) of subdivision (b). Except as provided in subdivision (e), the electricity product content requirements of paragraph (3) of subdivision (b) shall not be credited towards any compliance period after December 31, 2020.
(3) Any renewable energy resources contracts executed on or after June 1, 2010, not subject to the limitations of paragraph (1) or (2), shall meet the product content requirements of paragraph (2) of subdivision (b).
(4) For purposes of electric service providers only, the restrictions in this subdivision on crediting eligible renewable energy resource electricity products
to each compliance period shall apply to contracts executed after January 13, 2011.
(d) Any contract or ownership agreement originally executed prior to June 1, 2010, shall count in full toward the procurement requirements established pursuant to this article, if all of the following conditions are met:
(1) The renewable energy resource was eligible under the rules in place as of the date when the contract was executed.
(2) For an electrical corporation, the contract has been approved by the commission, even if that approval occurs after June 1, 2010.
(3) Any contract amendments or modifications occurring after June 1, 2010, do not increase the nameplate capacity or expected quantities of annual generation, or substitute a different renewable energy
resource. The duration of the contract may be extended if the original contract specified a procurement commitment of 15 or more years.
(e) A contract for electricity products meeting the product content requirement of paragraph (3) of subdivision (b) may count towards the procurement requirements applicable after January 1, 2021, if all of the following conditions are met:
(1) The contract was originally executed before January 1, 2020.
(2) A contract amendment or modification occurring after January 1, 2020, does not
increase the quantities of electricity products, substitute a different renewable energy resource, or increase the duration of the contract.
(3) Not more than 10 percent of all procurement credited toward any compliance period beginning no earlier than January 1, 2021, may be supplied by the contracts satisfying the requirements of this subdivision.
(e)
(f) A retail seller may apply to the commission for a reduction of a procurement content requirement of subdivision (c). The
commission may reduce a procurement content requirement of subdivision (c) to the extent the retail seller demonstrates that it cannot comply with that subdivision because of conditions beyond the control of the retail seller as provided in paragraph (5) of subdivision (b) of Section 399.15. The commission shall not, under any circumstance, reduce the obligation specified in paragraph (1) of subdivision (c) below 65 percent for any compliance period obligation after December 31, 2016.
