RECOMMENDATION TO COUNCIL
The following report provides the Law and Regulation (L&R) Committee with an update on the key energy-related legislation that staff has been monitoring.
| BACKGROUND
Staff has been reviewing key energy-related legislation to determine potential impacts to the Electric Department. Several energy-related bills could have ramifications on the operations the city’s electric department. Below is a list of key bills that staff has been monitoring:
Procurement Mandates
• AB 2208 (Aguiar-Curry) Geothermal, Biogas or Biomass requirements. (Oppose) This bill would require electric utilities procure an unspecified percentage of geothermal, biogas, or biomass energy resources. The City is opposed to this bill because the procurement of higher-cost resources will likely lead to higher costs for customers.
• AB 893 (Garcia) Renewable geothermal requirement. (Oppose) Requires electric retail sellers to procure a proportionate share, based on forecasted retail sales, of 2,500 megawatts (MW) of electricity generated by geothermal power plants no later than December 31, 2021. While the bill appears to apply only to current retail sellers, it’s our understanding that the intent is for the bill to be applicable to publicly owned utilities (POUs) as well. The City is opposed to this bill because our electric utility should continue to maintain the flexibility to choose which resources best meet our local needs.
Regionalization
• AB 813 (Holden) Multistate Regional Transmission System. (Watch)
The Clean Energy and Pollution Reduction Act of 2015 provides for the transformation of the California Independent System Operator (CAISO) into a multistate regional organization, with the approval of the legislature. This bill prohibits an electrical transmission facility owner, a retail seller of electricity, or a local publicly owned electric utility from participating in a multistate regional transmission system organization unless the bylaws meet certain requirements. If approved, this proposal would lay the groundwork for potential expansion of the CAISO into a larger regional entity. The City continues to monitor this bill and is mindful of any impending cost increases that could impact our customers.
Protecting Public Investments
• SB 1110 (Bradford) Natural Gas-Fired Power Plants. (Support) State renewable portfolio standard mandates may have long-term impacts to the operations of natural-gas generation facilities throughout California. This bill would allow a local publicly owned electric utility, upon notifying and submitting specified findings to the California Energy Commission, to additionally adopt conditions that mitigate against the loss of public revenues if the applicable procurement and related requirements would lead to decreased generation from a power plant with outstanding public indebtedness. The City supports this bill because it addresses potential future challenges for utilities that made prudent investments in high-efficiency gas-fired power plants. This bill may provide some cost relief if generation operations are reduced.
• AB 2693 (Quirk) Natural Gas-Fired Power Plants. (Watch) The bill would require the California Public Utilities Commission (CPUC) to analyze and determine which natural gas-fired electric-generation power plants in existence at the time of the analysis are needed to ensure long-term electric reliability in the state. Requires the commission to direct electrical corporations to contract for those electrical services with those power plants determined to be necessary and to authorize the electrical corporations to recover the costs.
The City is watching this bill to determine any potential impacts to the city’s natural gas power plant. With Roseville’s power plant located outside CAISO territory, there are concerns that the intent of the CPUC may be to favor power plants located within the California Independent System Operator (CAISO) territory.
Federal Issues
• Privatization of the Power Marketing Administration Assets (PMA). There are proposals by the federal government to privatize transmission assets of the PMA. The government’s PMA assets include the Bonneville Power Administration, Southeastern Power Administration, Southwestern Power Administration, and the Western Area Power Administration. There are concerns that privatizing these assets will increase costs to customers.
• Congress continues hearings on “Powering America.” These hearings review the activities of the electric transmission sector, including challenges associated with the planning and construction of new transmission lines, the impacts of existing federal laws and regulations, while also exploring non-transmission alternatives and innovative technologies.
• Wireless Communication Deployment on Public Infrastructure. There are plans at the federal level to preempt municipal pole-attachment regulations with the goal to deploy small-cell equipment on public infrastructure without local participation. The department is adamant that local agencies, which bear responsibility for infrastructure, costs, and revenues, retain local control over pole-attachment regulations to ensure these issues are properly addressed.
Conclusion
Staff is aggressively advocating on key legislation with its coalition partners. Staff will continue to apprise the committee on these important legislative proposals and request any direction as needed.
| FISCAL IMPACT
The costs of these activities are contained within the City's current budget.
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ECONOMIC DEVELOPMENT / JOBS CREATED
The activities detained in this report will not result in job development or creation.
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ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment (CEQA Guidelines §1506(b) (3). The action of reviewing proposed CEQA legislation does not include the potential for a significant environmental effect, therefore is not subject to CEQA.
| Respectfully Submitted,
Chris Romero, Government Relations Analyst
Michelle Bertolino, Electric Utility Director | | | 
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Dominick Casey, Acting City Manager
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