California Continues Hearings on Renewable Energy

A series of public meetings are being held in California to discuss the need to invest in renewable electricity generation in that state.

SACRAMENTO, California The California Energy Commission’s Electricity & Natural Gas Committee started consultation sessions in January on Senate Bill 1194 and Assembly Bill 995. Those bills extend the collection of a non-by-passable system benefit charge to support renewable energy and other public goods programs, until 2012. The legislation requires that $135 million per year (to start) be collected over a ten-year period from ratepayers of Southern California Edison, San Diego Gas & Electric, and Pacific Gas & Electric beginning next year, which is to be transferred to the Renewable Resource Trust Fund to support investments in renewable power. The legislation requires the Commission to create an investment plan with the long-term goal of a fully competitive and self- sustaining California renewable energy supply. The investment plan must recommend funding allocations among production incentives for new renewable energy, rebates or incentives for emerging renewable technologies, customer credits for renewables not under contract with a utility, customer education, solar thermal generating resources and existing wind-generating resources, and specified fuel cell technologies. The investment plan must also contain specific numerical targets reflecting what impact the plan would have on an increased quantity of renewable generation in California, as well as on the increased supply of renewable generation available from facilities not under utility contracts entered into prior to 1996. Allocation of the funds will be based on three objectives: to ensure the most cost-effective and efficient investments in renewable resources, to increase the quantity of California ‘s electricity generated by in-state renewable energy resources, and to identify and support emerging renewable energy technologies that have the greatest near-term commercial promise. “Over the past two decades, California has developed one of the largest and most diverse renewable generation industries in the world,” says the CEC document. Last year, the state had 7,200 MW of renewable energy capacity, which generated 33,779 Gwh or 12 percent of electricity used in California. Much of the renewable energy development resulted from the federal Public Utility Regulatory Policies Act (PURPA) of 1978, which required utilities to purchase power from non-utility generators, including renewable generators. In the last decade, renewable generation declined due partly to low energy prices and the end of the high fixed-energy price period for many contracts. One of the groups that has testified before the Commission is the small turbine committee of the American Wind Energy Association. The group strongly supported the draft plan, including the proposal to maintain the overall share of emerging technologies from RESIA funding at 10 percent ($67.5 million over ten years). Given that the Emerging Renewables fund will not need the entire 10 percent in the early years, the plan proposes to increase allocations from 5 to 15 percent over the course of the program, to result in an average of 10 percent. AWEA also asked that small wind eligibility be expanded to 50 kW, and to eliminate the block structure in favor of simplified, constant buydown rates of 50 percent of system costs, with caps of $3 per watt for small systems ( 50 kW). AWEA also supported the plan’s changes to the Consumer Education Account, and endorsed proposals to increase funding for education from 1 to 5 percent and to provide a blended message promoting either on-site renewables or the purchase of green power. The wind group did express concern with the investment plan’s proposal to include natural gas-fired fuel cells and microturbines under the program. Cogen fuel cells meet the funding criteria for emerging renewable technologies, but AWEA said that allowing natural gas fuel cells or micro-turbine generators to access the Emerging Renewables account would be a “betrayal of the fundamental underpinning of the Renewables Account” because natural gas is not a renewable resource.

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