HomeMy WebLinkAbout6 California Regulatory Compliance Agenda Item: #
DistrictPublic Utility
Staff Report
To: Board of Directors
From: Alan Harry
Date: March 2, 2007
Subject: Legislative and Regulatory Compliance; State of California
Why is this item before the Board?
In early February the Board received a customer request for a review of the District's
compliance with State legislation pertaining to its electric division. As such I have
prepared the following report covering California legislation affecting the District.
Background / Summary
Beginning in 1996 the California Legislature began enacting legislation requiring
various forms of compliance by Publicly Owned Utilities (POU's). It is important to
note that prior to 1996 California State agencies such as the California Energy
Commission (CEC) and California Public Utilities Commission (CPUC) focused all of
their regulatory attention on Investor Owned Utilities (IOU's). This is primarily due to
the fact that the Legislature saw POU's as being regulated by their elected bodies.
However, after receiving great pressure from the IOU's State Legislators began
enacting laws setting compliance guidelines and reporting requirements for POU's.
The chart below shows the increase in legislation requiring POU compliance.
AB2021 AB32
SB1368 AB2021
AB32
Sa11137 ''" SB 1078 SB 1078
SB 1078 SB 1078 S81 S81
AB ON
AB 1890 AB 1890 AB 1890 AB 1890 AB 1890
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2003/04 2004/05 2005/06 2006/07 2007/18 6
As members of the Northern California Power Association and the California
Municipal Utilities Association the District receives assistance in complying with State
regulations. An example of this can be seen in the annual public benefits report (AB
1890 & AB 995) submitted to the California Energy Commission, and the annual SB
1037 report.
New Information
During the 2005/2006 Legislative session 5 new pieces of legislation were signed by
the Governor and codified. They are as follows:
SB 107— Renewable Portfolio Standards
Develops a tradable credits program for renewables and accelerates the IOU target to
20%of eligible renewables by 2010. POUs such as the District are not affected by SB
107, however, our most recent RPS submitted to the Board last month shows the
District exceeding the 20% IOU requirement with a minimum of 21% of renewable
resources by 2010.
AB 2021 — Energy Efficiency
Existing law, SB 1037, currently requires POUs to invest in all cost-effective, reliable
and feasible energy efficiency. AB 2021 restates that requirement and adds
additional independent reporting requirements for POUs. The District, in conjunction
with NCPA and its member agencies, has begun gathering the data necessary to
meet the reporting deadline of mid summer 2007. An in-depth report on the District's
AB 2021 reporting requirements will be brought to the Board in the second quarter of
the year.
SB 1368— Emissions of Greenhouse Gases
This bill prohibits all utilities from investing in power plant projects or contracts that are
at least as clean as combined cycle gas turbine projects.
Last week the California Energy Commission submitted to the Office of Administrative
Law draft regulations seeking to establish a greenhouse gas emissions performance
standard for all long-term base load generation commitments made by POUs. The
draft regulations incorporate the following:
➢ The regulations apply to long-term financial commitments that are 10
megawatts or greater;
➢ The CEC proposes a GHG performance standard of 1100 pounds of carbon
dioxide per megawatt hour, similar to the level adopted by the CPUC;
➢ All facilities considered to be RPS-eligible by the CEC, as well as
hydroelectric, nuclear, and biomass, or landfill gas are determined to
automatically comply with the standard;
➢ The regulations endorse a determination of compliance with the standard at
the local level, so long as an attestation is provided to the CEC within ten
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business days of the utility entering into a commitment. The CEC is required
to confirm compliance within 30 days of receiving a utility attestation.
AB 32—California Global Warming Solutions Act of 2006
AB 32 requires the Air Resources Board to first determine the 1990 level of
greenhouse emissions statewide and then adopt any and all regulations it deems
necessary to meet that level by 2020. The bill also includes a provision for
greenhouse gas emission fees with no apparent limit on the amount of fees that can
be charged to a utility. The District, in conjunction with NCPA and CMUA are awaiting
the first set of draft regulations for comment.
SB 1 —California Solar Initiative
The bill requires POUs to initiate a public proceeding and establish a solar subsidy
program by January 1, 2008. POUs must offer a minimum of $2.80 per watt subsidy,
declining at least an average of 7% per year. The bill also requires annual reporting to
the CEC on program participation ; prohibits funds from being diverted from existing
low-income or energy efficiency and demand-response programs to pay for the solar
program; and, raises the net metering cap to 2.5%. Staff anticipates working with the
Board's conservation committee in drafting a solar subsidy program for the District
within the required timeframe.
Recommendation
In that this is an information Item staff has no recommendation at this time.
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