BILL NUMBER: AB 1807 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 28, 2008
INTRODUCED BY Assembly Member Fuentes
JANUARY 16, 2008
An act to add Section Sections 387.2 and
399.21 to the Public Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1807, as amended, Fuentes. Renewable electric generation
facilities: feed-in tariffs.
Under existing law, the Public Utilities Commission is vested with
regulatory authority over public utilities, including electrical
corporations. The Public Utilities Act imposes various duties and
responsibilities on the commission with respect to the purchase of
electricity by electrical corporations and requires the commission to
review and adopt a procurement plan and a renewable energy
procurement plan for each electrical corporation pursuant to the
California Renewables Portfolio Standard Program. The program
requires that a retail seller of electricity, including electrical
corporations, purchase a specified minimum percentage of electricity
generated by eligible renewable energy resources, as defined, in any
given year as a specified percentage of total kilowatthours sold to
retail end-use customers each calendar year (renewables portfolio
standard).
Existing law requires every electrical corporation to file with
the commission a standard tariff for renewable energy output produced
at an electric generation facility, as defined, that is an eligible
renewable energy resource and meets other size, deliverability, and
interconnection requirements. Existing law requires the electrical
corporation to make this tariff available to public water or
wastewater agencies that own and operate an electric generation
facility within the service territory of the electrical corporation,
upon request, on a first-come, first-served basis, until the combined
statewide cumulative rated generating capacity of those electric
generation facilities equals 250 megawatts. Existing law requires
that the electric generation facility be located on property owned or
under the control of the public water or wastewater agency and be
sized to offset part or all of the generator's electricity demand.
Existing law provides that the renewable energy output of an electric
generation facility counts toward the electrical corporation's
renewables portfolio standard and resource adequacy requirements.
This bill would require every electrical corporation to file with
the commission a standard feed-in tariff , as
defined, for the electricity delivered to the grid that
is generated by a renewable electric generation facility, as
defined, that is an eligible renewable energy resource and meets
other size, deliverability, and interconnection requirements. The
bill would require the commission to consult with the Energy
Commission and the Independent System Operator in approving feed-in
tariffs develop a methodology for determining a base
rate to be paid for electricity that is generated by a renewable
electric generation facility and to adjust the base rate
to be paid in future years so that the base rate declines over time
to reflect improvements in technology and operational practices. The
bill would authorize an electrical corporation to make adjustments to
the base rate to incentivize the generation of electricity to meet
load within the electrical corporation ' s
individual service territory, including generation of electricity to
match peak demand and regional adjustments to match deliverability of
electricity to load centers. The bill would require the commission
to reduce the tariff rate to reflect federal and state tax
and other credits, subsidies, or other incentives receive
d for a renewable electric generation facility . The bill would
require the electrical corporation to make the feed-in tariff
available to any customer of the electrical corporation, upon
request, on a first-come, first-served basis, until the electrical
corporation meets its renewables portfolio standard. The
The bill would require the commission to ensure that a
customer's eligibility to receive service pursuant to the feed-in
tariff is determined in advance so that a customer can invest in a
renewable electric generation facility knowing that the customer will
be eligible to receive service pursuant to the feed-in tariff and
the market tariff price that will be
applicable to that customer. The bill would authorize the commission
to place time limitations upon a customer for completion of the
renewable electric generation facility to remain eligible for the
feed-in tariff at the applicable market
tariff price and to establish reasonable operation and
reliability standards for a renewable electric generation facility to
remain eligible for the feed-in tariff at the applicable
market tariff price. The
The bill would provide that any renewable energy
credit, as defined, for electricity delivered to the grid and
purchased by the electrical corporation belongs to the electrical
corporation, and that any renewable energy credit associated with
electricity generated by the customer that is utilized by the
customer and not delivered to the grid remains the property of the
customer. The bill would provide that the electricity generated
by the renewable electric generation facility, including generation
used to offset the customer's own usage of electricity, counts toward
the electrical corporation's renewables portfolio standard and
resource adequacy requirements. The bill would authorize
prohibit a customer receiving electrical service
pursuant to an alternative net metering program, as defined,
to elect from electing to receive
service pursuant to the feed-in tariff filed by an electrical
corporation pursuant to the bill's requirements and would provide
that a customer electing to receive receiving
service pursuant to the feed-in tariff waives any right the
customer otherwise has to thereafter receive service pursuant to an
alternative net metering program.
This bill would require the commission, in consultation
with the Energy Commission, to develop feed-in tariffs for eligible
renewable energy resources of more than 20 megawatts that value a
diverse mix of sources of renewable energy based upon the most
successful feed-in tariffs utilized in Europe. The bill
would require the commission, in consultation with the Independent
System Operator, to establish tariff provisions that facilitate both
the renewables portfolio standard program and the reliable operation
of the grid.
Under existing law, a violation of the Public Utilities Act or an
order or direction of the commission is a crime. Because this bill
would require an order or other action of the commission to implement
its provisions and a violation of that order or action would be a
crime, the bill would impose a state-mandated local program by
creating a new crime.
Existing law requires the State Energy Resources Conservation and
Development Commission (Energy Commission), beginning November 1,
2003, and every 2 years thereafter, to adopt an integrated energy
policy report which includes an assessment and forecast of system
reliability and the need for resource additions, efficiency, and
conservation.
This bill would require the Energy Commission to study the
feasibility and desirability of implementing a feed-in tariff for
eligible renewable energy resources of more than 20 megawatts, based
upon the most successful feed-in tariffs utilized in Europe, in order
to advance the state's energy goals and needs and to report its
findings to the Legislature in the next integrated energy policy
report.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 387.2 is added to the
Public Utilities Code , to read:
387.2. (a) It is the policy of this state and the intent of the
Legislature to encourage energy production from renewable resources
in an amount commensurate with electricity demand. Utilization of
feed-in tariffs for electricity generated by renewable energy
resources can help the state achieve its goals and assist the utility
in achieving its renewables portfolio standard.
(b) The governing board of each local publicly owned electric
utility is encouraged to develop and implement a feed-in tariff for
the utility that provides for payment for every kilowatthour of
electricity generated by a renewable electric generation facility at
the tariff price approved by the governing board for a period of 10,
15, or 20 years.
SECTION 1. SEC. 2. Section 399.21 is
added to the Public Utilities Code, to read:
399.21. (a) It is the policy of this state and the intent of the
Legislature to encourage energy production from renewable
resources in an amount commensurate with electricity demand.
Legislature, through implementation of a feed-in
tariff for electricity generated by renewable electric generation
facilities, to achieve all of the following:
(1) The generation of electricity from eligible renewable energy
resources in an amount and location commensurate with the growth of
electrical load within each load area.
(2) The deployment of eligible renewable energy resources in a
timely manner in order to eliminate, to the greatest extent possible,
the need for additional powerplants using fossil fuels to generate
electricity.
(3) The growth of green-collar jobs in California by developing
industries that build and deploy eligible renewable energy resources.
(4) The lending of capital for eligible renewable electric
generation facilities by ensuring a stable revenue stream for project
developers.
(5) The adoption of just and reasonable payments for electricity
generated by renewable electric generation facilities that protect
electrical corporations and ratepayers from inflated generation costs
resulting from the exercise of market power arising from future
renewable energy attainment targets and that protect electrical
corporations from receiving insufficient bids through the competitive
bidding process to meet their renewables portfolio standard
purchasing requirements.
(6) To increase the diversity of technologies that are eligible
renewable energy resources.
(b) As used in this section the following terms have the following
meanings:
(1) "Alternative net metering program" means any program that
requires an electrical corporation to purchase or credit electricity
generated by a subscriber pursuant to Article 3 (commencing with
Section 2821) of Chapter 7 of Part 2.
(2) "Eligible renewable energy resource" has the same meaning as
defined in Section 399.12.
(3) "Feed-in tariff" means the schedule detailing the rates,
rules, and terms of service that is filed by an electrical
corporation and approved by the commission that is applicable to the
purchase of electricity generated by a renewable electric generation
facility by the electrical corporation pursuant to this section.
(2)
(4) "Renewable electric generation facility" means a
facility for the generation of electricity that is owned and operated
by a customer of an electrical corporation and that meets all of the
following criteria:
(A) Has an effective generating capacity of more than one and
one-half and not more than 20 megawatts and is located on
property owned or under the control of the customer.
(B) Is interconnected and operates in parallel with the electric
transmission and distribution grid.
(C) Is strategically located and interconnected to the electric
transmission system in a manner that optimizes the deliverability of
electricity generated at the facility to load centers.
(D) Is an eligible renewable energy resource , as defined
in Section 399.12 .
(c) Every electrical corporation shall file with the commission a
standard feed-in tariff for the electricity generated by a renewable
electric generation facility. The commission shall consult with the
Energy Commission and the Independent System Operator in approving
feed-in tariffs.
(d) The feed-in tariff shall provide for payment for every
kilowatthour of electricity generated at a renewable electric
generation facility at the market price as determined by the
commission pursuant to Section 399.15 for a period of 10, 15, or 20
years, as authorized by the commission.
(c) (1) The commission shall develop and approve a feed-in tariff
for each electrical corporation that provides for payment for every
kilowatthour of electricity generated by a renewable electric
generation facility that is delivered to the grid, at the tariff
price approved by the commission for a period of 10, 15, or 20 years.
(2) By June 1, 2010, the commission shall develop both of the
following for each eligible renewable energy resource:
(A) A methodology for determining a base rate to be paid for
electricity that is generated by a renewable electric generation
facility. A separate base rate shall apply for each technology that
is an eligible renewable energy resource. The base rate shall be
calculated based upon the cost of generation, using best available
practices for the individual technology, plus a reasonable profit as
determined by the commission.
(B) A methodology for adjusting the base rate to be paid for
electricity generated by renewable electric generation facilities in
future years so that the base rate declines over time to reflect
improvements in technology and operational practices.
(3) The commission shall, upon development of the methodology
pursuant to paragraph (2), require each electrical corporation to
file a feed-in tariff for approval by the commission. An electrical
corporation may adjust the base rate of its feed-in tariff to
incentivize the generation of electricity to meet load within the
electrical corporation's individual service territory, including
generation of electricity to match peak demand and regional
adjustments to match deliverability of electricity to load areas. Any
adjustment to the base rate shall be based upon future projections
of electricity demand within its service territory or a load area.
(4) The commission shall reduce the tariff rate to reflect federal
and state tax and other credits, subsidies, or other incentives
received for a renewable electric generation facility. The commission
shall review tariff rates at least annually to ensure that the rate
is reduced to reflect federal and state tax and other credits,
subsidies, or other incentives received for a renewable electric
generation facility.
(5) The commission shall annually adjust the feed-in tariff rates
paid for electricity generated by a renewable electric generation
facility for inflation and component price in light of current market
conditions.
(d) Upon adoption of the feed-in tariff by the commission, any
renewable energy credit, as defined in Section 399.12, for
electricity delivered to the grid and purchased by the electrical
corporation shall belong to the electrical corporation. Any renewable
energy credit associated with electricity generated by the customer
that is utilized by the customer and not delivered to the grid shall
remain the property of the customer.
(e) Every electrical corporation shall make the feed-in tariff
available to customers that own and operate a renewable electric
generation facility within the service territory of the electrical
corporation, upon request, on a first-come, first-served basis, until
the electrical corporation meets its renewables portfolio standard.
An electrical corporation may make the terms of the feed-in tariff
available to customers in the form of a standard contract subject to
commission approval. An electrical corporation shall only be required
to offer service or contracts under this section until that
electrical corporation meets its renewables portfolio standard, as
determined by the commission.
(f) The commission shall ensure that a customer's eligibility to
receive service pursuant to the feed-in tariff is determined in
advance so that a customer can invest in a renewable electric
generation facility knowing that the customer will be eligible to
receive service pursuant to the feed-in tariff and the
market tariff price that will be applicable to
that customer. The commission may place time limitations upon a
customer for completion of the renewable electric generation facility
to remain eligible for the feed-in tariff at the applicable
market tariff price. The commission may
establish reasonable operation and reliability standards for a
renewable electric generation facility to remain eligible for the
feed-in tariff at the applicable market
tariff price.
(g) Every kilowatthour of the electricity generated by the
renewable electric generation facility, including generation used to
offset the customer's own usage of electricity, shall count toward
the electrical corporation's renewables portfolio standard annual
procurement targets for purposes of paragraph (1) of subdivision (b)
of Section 399.15.
(h) The physical generating capacity of a renewable electric
generation facility shall count toward the electrical corporation's
resource adequacy requirement for purposes of Section 380.
(i) (1) A customer receiving electrical service pursuant to an
alternative net metering program may not elect to receive
service pursuant to the feed-in tariff filed by an electrical
corporation pursuant to this section.
(2) A customer that elects to receive
receives electrical service pursuant to the feed-in tariff
filed by an electrical corporation pursuant to this section waives
any right that the customer otherwise has to thereafter receive
service pursuant to an alternative net metering program.
(j) The commission, in consultation with the Energy Commission,
shall develop feed-in tariffs for eligible renewable energy resources
of more than 20 megawatts that value a diverse mix of sources of
renewable energy based upon the most successful feed-in tariffs
utilized in Europe.
(k)
(j) The commission shall, in consultation with the
Independent System Operator, establish tariff provisions that
facilitate both the provisions of this chapter and the reliable
operation of the grid.
SEC. 2. The State Energy Resources Conservation
and Development Commission shall study the feasibility and
desirability of implementing a feed-in tariff for eligible renewable
energy resources of more than 20 megawatts, based upon the most
successful feed-in tariffs utilized in Europe, in order to advance
the state's energy goals and needs. The commission shall report its
findings to the Legislature in the next integrated energy policy
report prepared pursuant to Section 25302 of the Public Resources
Code.
SEC. 2. SEC. 3. No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution because the only costs that may be incurred
by a local agency or school district will be incurred because this
act creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction, within
the meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article XIII
B of the California Constitution.