BILL NUMBER: AB 2267 CHAPTERED
BILL TEXT
CHAPTER 537
FILED WITH SECRETARY OF STATE SEPTEMBER 28, 2008
APPROVED BY GOVERNOR SEPTEMBER 28, 2008
PASSED THE SENATE AUGUST 29, 2008
PASSED THE ASSEMBLY AUGUST 31, 2008
AMENDED IN SENATE AUGUST 22, 2008
AMENDED IN SENATE JUNE 26, 2008
AMENDED IN ASSEMBLY APRIL 23, 2008
AMENDED IN ASSEMBLY APRIL 3, 2008
INTRODUCED BY Assembly Member Fuentes
(Coauthors: Assembly Members Blakeslee, Caballero, Price, and
Salas)
FEBRUARY 21, 2008
An act to amend Sections 25620 and 25620.5 of the Public Resources
Code, and to amend Section 379.6 of the Public Utilities Code,
relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2267, Fuentes. California-based entities: self-generation
incentive program.
(1) Existing law establishes the Public Interest Research,
Development, and Demonstration Fund in the State Treasury, and
provides that the money collected by the public goods charge to
support cost-effective energy efficiency and conservation activities,
public interest research and development not adequately provided by
competitive and regulated markets, be deposited in the fund for use
by the State Energy Resources Conservation and Development Commission
(Energy Commission) to develop, implement, and administer the Public
Interest Research, Development, and Demonstration Program to develop
technologies to improve environmental quality, enhance electrical
system reliability, increase efficiency of energy-using technologies,
lower electrical system costs, or provide other tangible benefits.
This bill would state that public interest energy research,
demonstration, and development projects should provide economic
benefits for California by promoting California-based technology
firms, jobs, and businesses. The bill would require the Energy
Commission to give priority to California-based entities in making
awards pursuant to the program. The bill would define a
California-based entity.
(2) Under existing law, the Public Utilities Commission (PUC) has
regulatory authority over public utilities, including electrical
corporations and gas corporations, as defined. Existing law requires
the PUC, in consultation with the Energy Commission, to administer,
until January 1, 2012, a self-generation incentive program for
distributed generation resources. The program is applicable to all
eligible technologies, as determined by the PUC and subject to
certain air emissions and efficiency standards, until January 1,
2008, except for solar technologies, which the PUC is required to
administer separately, after January 1, 2007, pursuant to the
California Solar Initiative. Commencing January 1, 2008, until
January 1, 2012, existing law limits eligibility for nonsolar
technologies to fuel cells and wind distributed generation
technologies that meet or exceed emissions standards adopted by the
State Air Resources Board (state board). Existing law authorizes the
PUC, in administering the program, to adjust the amount of rebates,
include other ultraclean and low-emission distributed generation
technologies, as defined, and evaluate other public policy interests
and energy efficiency and environmental interests. Pursuant to
decisions of the PUC, Pacific Gas and Electric Company, Southern
California Edison, and Southern California Gas Company are the
program administrators throughout their respective service
territories and the Center for Sustainable Energy is the program
administrator for the San Diego Gas and Electric Company service
territory.
The existing California Global Warming Solutions Act of 2006
requires the State Air Resources Board (state board) to adopt a
statewide greenhouse gas emissions limit equivalent to the statewide
greenhouse gas emissions levels in 1990, to be achieved by 2020.
Existing law prohibits any load-serving entity, as defined, and any
local publicly owned electric utility, as defined, from entering into
a long-term financial commitment, as defined, unless any baseload
generation, as defined, complies with a greenhouse gases emission
performance standard. Existing law requires the commission, in
consultation with the Energy Commission and the state board, to
establish a greenhouse gases emission performance standard for all
baseload generation of load-serving entities.
This bill would require the commission to provide from existing
program funds an additional incentive of 20% for the installation of
eligible distributed generation resources from a California supplier,
as defined.
This bill would require the Energy Commission to update its
evaluation and recommendations by November 1, 2011.
(3) This bill incorporates amendments to Section 25620 of the
Public Resources Code proposed by both this bill and SB 1760, which
would only become operative if both bills are enacted and become
effective on or before January 1, 2009, each bill amends Section
25620 of the Public Resources Code, and this bill is enacted after SB
1760.
This bill would provide that no reimbursement is required by this
act for a specified reason.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) It is the intent of the Legislature that California'
s leadership in energy efficiency and greenhouse gas emission
reductions translate into economic benefits for California through
job creation, workforce training and retraining, manufacturing
retention and development, and the development of a green technology
industry in the state by using the state's existing investments,
incentives, and support for clean and greenhouse gas emission
reducing technologies and applications that assist the state in
meeting its greenhouse gas emission reduction targets.
(b) It is further the intent of the Legislature that the State Air
Resources Board, the State Energy Resources Conservation and
Development Commission, and the Public Utilities Commission provide
additional consideration, priority, or preference to projects that
result in job creation and economic benefits in California in
administering incentive programs for energy efficiency, including
renewable energy, and the reduction of greenhouse gas emissions, to
the maximum extent feasible and consistent with the provisions of law
governing these incentive programs.
SEC. 3. Section 25620 of the Public Resources Code is amended to
read:
25620. The Legislature hereby finds and declares all of the
following:
(a) It is in the best interests of the people of this state that
the quality of life of its citizens be improved by providing
environmentally sound, safe, reliable, and affordable energy services
and products.
(b) To improve the quality of life of this state's citizens, it is
proper and appropriate for the state to undertake public interest
energy research, development, and demonstration projects that are not
adequately provided for by competitive and regulated energy markets.
(c) Public interest energy research, demonstration, and
development projects should advance energy science or technologies of
value to California citizens and should be consistent with the
policies of this chapter.
(d) It is in the best interest of the people of California for the
commission to positively contribute to the overall economic climate
of the state within the roles and responsibilities of the commission
as defined by statute, regulation, and other official government
authority, including, but not limited to, providing economic benefits
to California-based entities.
SEC. 3.5. Section 25620 of the Public Resources Code is amended to
read:
25620. The Legislature hereby finds and declares all of the
following:
(a) It is in the best interests of the people of this state that
the quality of life of its citizens be improved by providing
environmentally sound, safe, reliable, and affordable energy services
and products.
(b) To improve the quality of life of this state's citizens, it is
proper and appropriate for the state to undertake public interest
energy research, development, and demonstration projects that are not
adequately provided for by competitive and regulated energy markets.
(c) Public interest energy research, demonstration, and
development projects should advance energy science or technologies of
value to California citizens and should be consistent with the
policies of this chapter.
(d) It is in the best interest of the people of California for the
commission to positively contribute to the overall economic climate
of the state within the roles and responsibilities of the commission
as defined by statute, regulation, and other official government
authority, including, but not limited to, providing economic benefits
to California-based entities.
(e) Public interest energy research, demonstration, and
development projects should be coordinated with other related state
programs and research needs to meet overall state policy objectives
related to energy efficiency, environmental protection, greenhouse
gas emission reduction, clean technology job creation, and climate
change adaptation in the most efficient manner possible.
SEC. 4. Section 25620.5 of the Public Resources Code is amended to
read:
25620.5. (a) The commission may solicit applications for awards,
using a sealed competitive bid, competitive negotiation process,
commission-issued intradepartmental master agreement, the methods for
selection of professional services firms set forth in Chapter 10
(commencing with Section 4525) of Division 5 of Title 1 of the
Government Code, interagency agreement, single source, or sole source
method. When scoring teams are convened to review and score
proposals, the scoring teams may include persons not employed by the
commission, as long as employees of the state constitute no less than
50 percent of the membership of the scoring team. A person
participating on a scoring team may not have any conflict of interest
with respect to the proposal before the scoring team.
(b) A sealed bid method may be used when goods and services to be
acquired can be described with sufficient specificity so that bids
can be evaluated against specifications and criteria set forth in the
solicitation for bids.
(c) The commission may use a competitive negotiation process in
any of the following circumstances:
(1) Whenever the desired award is not for a fixed price.
(2) Whenever project specifications cannot be drafted in
sufficient detail so as to be applicable to a sealed competitive bid.
(3) Whenever there is a need to compare the different price,
quality, and structural factors of the bids submitted.
(4) Whenever there is a need to afford bidders an opportunity to
revise their proposals.
(5) Whenever oral or written discussions with bidders concerning
the technical and price aspects of their proposals will provide
better results to the state.
(6) Whenever the price of the award is not the determining factor.
(d) The commission may establish interagency agreements.
(e) The commission may provide awards on a single source basis by
choosing from among two or more parties or by soliciting multiple
applications from parties capable of supplying or providing similar
goods or services. The cost to the state shall be reasonable and the
commission may only enter into a single source agreement with a
particular party if the commission determines that it is in the state'
s best interests.
(f) The commission, in accordance with subdivision (g) and in
consultation with the Department of General Services, may provide
awards on a sole source basis when the cost to the state is
reasonable and the commission makes any of the following
determinations:
(1) The proposal was unsolicited and meets the evaluation criteria
of this chapter.
(2) The expertise, service, or product is unique.
(3) A competitive solicitation would frustrate obtaining necessary
information, goods, or services in a timely manner.
(4) The award funds the next phase of a multiphased proposal and
the existing agreement is being satisfactorily performed.
(5) When it is determined by the commission to be in the best
interests of the state.
(g) The commission may not use a sole source basis for an award
pursuant to subdivision (f), unless both of the following conditions
are met:
(1) The commission, at least 60 days prior to taking an action
pursuant to subdivision (f), notifies the Joint Legislative Budget
Committee and the relevant policy committees in both houses of the
Legislature, in writing, of its intent to take the proposed action.
(2) The Joint Legislative Budget Committee either approves or does
not disapprove the proposed action within 60 days from the date of
notification required by paragraph (1).
(h) The commission shall give priority to California-based
entities in making awards pursuant to this chapter.
(i) The provisions of this section are severable. If any provision
of this section or its application is held to be invalid, that
invalidity does not affect other provisions or applications that can
be given effect without the invalid provision or application.
For purposes of this Section and Section 25620, "California-based
entity" means either of the following:
A corporation or other business form organized for the transaction
of business that has its headquarters in California and manufactures
in California the product that qualifies for the incentive or award,
or a corporation or other business form organized for the
transaction of business that has an office for the transaction of
business in California and substantially manufactures in California
the product that qualifies for the incentive or award, or
substantially develops within California the research that qualifies
for the incentive or award, as determined by the agency issuing the
incentive or award.
SEC. 5. Section 379.6 of the Public Utilities Code is amended to
read:
379.6. (a) (1) The commission, in consultation with the State
Energy Resources Conservation and Development Commission, shall
administer, until January 1, 2012, the self-generation incentive
program for distributed generation resources originally established
pursuant to Chapter 329 of the Statutes of 2000.
(2) Except as provided in paragraph (3), the extension of the
program pursuant to Chapter 894 of the Statutes of 2003, as amended
by Chapter 675 of the Statutes of 2004 and Chapter 22 of the Statutes
of 2005, shall apply to all eligible technologies, as determined by
the commission, until January 1, 2008.
(3) The commission shall administer solar technologies separately,
after January 1, 2007, pursuant to the California Solar Initiative
adopted by the commission in Decision 06-01-024.
(b) Commencing January 1, 2008, until January 1, 2012, eligibility
for the program pursuant to paragraphs (1) and (2) of subdivision
(a) shall be limited to fuel cells and wind distributed generation
technologies that meet or exceed the emissions standards required
under the distributed generation certification program requirements
of Article 3 (commencing with Section 94200) of Subchapter 8 of
Chapter 1 of Division 3 of Title 17 of the California Code of
Regulations.
(c) Eligibility for the self-generation incentive program's level
3 incentive category shall be subject to the following conditions:
(1) Commencing January 1, 2007, all combustion-operated
distributed generation projects using fossil fuel shall meet an
oxides of nitrogen (NOx) emissions rate standard of 0.07 pounds per
megawatthour and a minimum efficiency of 60 percent. A minimum
efficiency of 60 percent shall be measured as useful energy output
divided by fuel input. The efficiency determination shall be based on
100 percent load.
(2) Combined heat and power units that meet the 60-percent
efficiency standard may take a credit to meet the applicable NOx
emissions standard of 0.07 pounds per megawatthour. Credit shall be
at the rate of one megawatthour for each 3.4 million British thermal
units (Btus) of heat recovered.
(3) Notwithstanding paragraph (1), a project that does not meet
the applicable NOx emissions standard is eligible if it meets both of
the following requirements:
(A) The project operates solely on waste gas. The commission shall
require a customer that applies for an incentive pursuant to this
paragraph to provide an affidavit or other form of proof, that
specifies that the project shall be operated solely on waste gas.
Incentives awarded pursuant to this paragraph shall be subject to
refund and shall be refunded by the recipient to the extent the
project does not operate on waste gas. As used in this paragraph,
"waste gas" means natural gas that is generated as a byproduct of
petroleum production operations and is not eligible for delivery to
the utility pipeline system.
(B) The air quality management district or air pollution control
district, in issuing a permit to operate the project, determines that
operation of the project will produce an onsite net air emissions
benefit, compared to permitted onsite emissions if the project does
not operate. The commission shall require the customer to secure the
permit prior to receiving incentives.
(d) In determining the eligibility for the self-generation
incentive program, minimum system efficiency shall be determined
either by calculating electrical and process heat efficiency as set
forth in Section 218.5, or by calculating overall electrical
efficiency.
(e) In administering the self-generation incentive program, the
commission may adjust the amount of rebates, include other ultraclean
and low-emission distributed generation technologies, as defined in
Section 353.2, and evaluate other public policy interests, including,
but not limited to, ratepayers, and energy efficiency and
environmental interests.
(f) On or before November 1, 2008, the State Energy Resources
Conservation and Development Commission, in consultation with the
commission and the State Air Resources Board, shall evaluate the
costs and benefits, including air pollution, efficiency, and
transmission and distribution system improvements, of providing
ratepayer subsidies for renewable and fossil fuel "ultraclean and
low-emission distributed generation," as defined in Section 353.2, as
part of the integrated energy policy report adopted pursuant to
Chapter 4 (commencing with Section 25300) of Division 15 of the
Public Resources Code. The State Energy Resources Conservation and
Development Commission shall include recommendations for changes in
the eligibility of technologies and fuels under the program, and
whether the level of subsidy should be adjusted, after considering
its conclusions on costs and benefits pursuant to this subdivision.
(g) (1) In administering the self-generation incentive program,
the commission shall provide an additional incentive of 20 percent
from existing program funds for the installation of eligible
distributed generation resources from a California supplier.
(2) "California supplier" as used in this subdivision means any
sole proprietorship, partnership, joint venture, corporation, or
other business entity that manufactures eligible distributed
generation resources in California and that meets either of the
following criteria:
(A) The owners or policymaking officers are domiciled in
California and the permanent principal office, or place of business
from which the supplier's trade is directed or managed, is located in
California.
(B) A business or corporation, including those owned by, or under
common control of, a corporation, that meets all of the following
criteria continuously during the five years prior to providing
eligible distributed generation resources to a self-generation
incentive program recipient:
(i) Owns and operates a manufacturing facility located in
California that builds or manufactures eligible distributed
generation resources.
(ii) Is licensed by the state to conduct business within the
state.
(iii) Employs California residents for work within the state.
(3) For purposes of qualifying as a California supplier, a
distribution or sales management office or facility does not qualify
as a manufacturing facility.
SEC. 5.5. Section 3.5 of this bill incorporates amendments to
Section 25620 of the Public Resources Code proposed by both this bill
and SB 1760. It shall only become operative if (1) both bills are
enacted and become effective on or before January 1, 2009, (2) each
bill amends Section 25620 of the Public Resources Code, and (3) this
bill is enacted after SB 1760, in which case Section 3 of this bill
shall not become operative.
SEC. 6. 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.