By Jason Fordney

A California Senate committee on Tuesday approved a bill that would allow publicly owned utilities (POUs) that meet certain criteria to run their gas-fired plants at a minimal level to ensure related bond debt is paid off and not passed to taxpayers.

Bill sponsor Steven Bradford (D) said that SB 1110 “protects individual customers of a public utility from extraordinary cost shifts” stemming from POUs’ outstanding debt for natural gas plants built in response to the Western Energy Crisis of 2000/01. Supported by the Northern California Power Agency, the bill was passed unanimously by the Energy, Utility and Communications committee and now goes to the Appropriations Committee for consideration.

Under existing law, POUs are subject to California’s ambitious renewable portfolio standard (RPS) that requires them to meet 50% of their electricity needs with renewable generation by 2030 (escalating from 33% by 2020, 40% by 2024, and 45% by 2027). But unlike the state’s investor-owned utilities, POUs are authorized to adopt measures allowing for delay of timely compliance and set cost limitations for procuring renewables.

SB 1110 would expand those exceptions by allowing a POU to amend its renewable procurement plan to mitigate against the loss of public revenues if complying with the RPS would lead to decreased output from a power plant with outstanding public debt. The proposed rule change, which would not apply to peaker plants, applies only to plants planned and built after Jan. 1, 2000, with financing secured before 2017. To be eligible, a plant must be expected to operate below a 20% capacity factor for an upcoming year based on the POU’s forecast, risking employment of a power plant employee who receives a prevailing wage.

The legislation does not apply to independently owned gas plants that are not financed by taxpayers.

POUs would notify the California Energy Commission by Jan. 31, 2019, that they might have power plants eligible for the provision. The measure is most likely to affect Silicon Valley Power’s Donald Von Raesfeld Plant, Roseville Electric’s Roseville Energy Park, and Redding Electric’s Redding gas plant units 5 and 6, according to a bill analysis.

The Assembly Utilities and Energy Committee is due to consider several energy bills Wednesday. A major piece of energy legislation, AB 813, which would regionalize CAISO, is not on the agenda. (See CAISO Presses Law makers on RTO Conversion.)