BILL NUMBER: SB 1714	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Negrete McLeod

                        FEBRUARY 22, 2008

   An act to add Sections 387.6 and 399.22 to the Public Utilities
Code, relating to energy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1714, as introduced, Negrete McLeod. Renewable electric
generation facilities.
   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). Under existing law the governing board of a local publicly
owned electric utility is responsible for implementing and enforcing
a renewables portfolio standard for the utility that recognizes the
intent of the Legislature to encourage renewable resources, while
taking into consideration the effect of the standard on rates,
reliability, and financial resources and the goal of environmental
improvement.
   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.
   Existing law relative to private energy producers defines an
"electric service provider" as an electrical corporation, electrical
cooperative, or local publicly owned electric utility, as defined,
excluding a local publicly owned electric utility that serves more
than 750,000 customers and that also conveys water to its customers.
Existing law relative to private energy producers requires every
electric service provider, upon request, to make available to an
eligible customer-generator, as defined, a standard contract or
tariff for net energy metering on a first-come-first-served basis
until the time that the total rated generating capacity used by
eligible customer-generators exceeds a specified amount. Existing law
provides that where the electricity generated by the eligible
customer-generator exceeds the electricity supplied by the electric
service provider during a 12-month period, the eligible
customer-generator is a net electricity producer and the electric
service provider retains any excess kilowatthours generated and the
customer-generator is not owed compensation for those excess
kilowatthours unless the electric service provider enters into a
purchase agreement with the eligible customer-generator for those
excess kilowatthours. Existing law authorizes an electric service
provider that is a local publicly owned electric utility to elect to
utilize coenergy metering, which is the same in all respects as a net
energy metering program except that it utilizes a
generation-to-generation energy and time-of-use credit formula.
   This bill would require every electrical corporation to file with
the commission a standard tariff, meeting certain requirements, for
the renewable energy output produced by a renewable electric
generation facility, as defined. The bill would require the governing
board of a local publicly owned electric utility that sells
electricity at retail, to adopt and implement a tariff, meeting
certain requirements, for excess electricity generated by a renewable
electric generation facility based upon a renewable energy market
price determined by the commission pursuant to the renewables
portfolio standard program. The bill would authorize a customer
receiving electrical service pursuant to an alternative net metering
program, as defined, to elect to receive service pursuant to the
tariff filed by an electrical corporation or implemented by the
governing board of a local publicly owned electric utility and would
provide that a customer electing to receive service pursuant to the
tariffs waives any right the customer otherwise has to thereafter
receive service pursuant to an alternative net metering program. The
bill would require the commission, in consultation with the
Independent System Operator, to establish tariff provisions that
facilitate these programs 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. By placing requirements upon local publicly
owned electric utilities, which are entities of local government, the
bill would impose a state-mandated local program.
   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 specified reasons.
   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.  The Legislature finds and declares all of the
following:
   (a) The state needs to reduce electricity demand at the customer
site and increase capacity of electricity production in order to meet
the demand for electricity.
   (b) Tariff structures are currently a barrier to meeting the
requirements and goals of the California Renewables Portfolio
Standard Program (Article 16 (commencing with Section 399.11) of
Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code).
   (c) Small projects of less than 20 kilowatts that are eligible
renewable energy resources are unable to compete in competitive
solicitations under the renewables portfolio standard program.
   (d) New renewable technologies cannot compete in competitive
solicitations under the renewables portfolio standard program because
these projects have not yet achieved competitive market costs and
economies of scale.
   (e) A tariff that allows customers of electrical corporations to
sell excess electricity production generated by renewable energy
technologies would address these barriers and should be established
to accelerate the deployment of eligible renewable energy resources.
   (f) A tariff for excess electricity generated by eligible
renewable energy resources should be based on the cost of generation,
the environmental attributes of the renewable technologies, the
characteristics of the renewable technology that contribute to peak
electricity demand reduction, and in a manner that accelerates the
deployment of eligible renewable energy resources.
   (g) It is the policy of this state and the intent of the
Legislature to encourage the generation of electricity from eligible
renewable energy resources at the sites where the electricity will be
utilized.
   (h) It is also the policy of this state and the intent of the
Legislature to generate at least 1,000 megawatts of electricity from
distributed eligible renewable energy resources to facilitate meeting
the renewables portfolio standard.
  SEC. 2.  Section 387.6 is added to the Public Utilities Code, to
read:
   387.6.  (a) For purposes of 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) "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) Uses solar photovoltaics, solar thermal, wind energy, or
biomass technologies to produce electricity.
   (B) Has an effective generating capacity of not more than 20
megawatts and is located on property owned or under the control of
the customer.
   (C) Is interconnected and operates in parallel with the electrical
transmission and distribution grid.
   (D) Is strategically located and interconnected to the electrical
transmission system in a manner that optimizes the deliverability of
electricity generated at the facility to load centers.
   (b) (1) The governing body of a local publicly owned electric
utility that sells electricity at retail, shall adopt and implement a
tariff for excess electricity generated by a renewable electric
generation facility based upon the market price as determined by the
commission pursuant to Section 399.15, adjusted to include an
additional premium for reducing emissions of greenhouse gases,
producing electricity during periods of peak demand, and reducing
volatility of natural gas prices, adjusted for the cost to generate
electricity for the specific technologies, and a reasonable return on
investment.
   (2) A renewable electric generation facility shall remain on the
tariff for not less than 20 years and the facility shall be
maintained to ensure electricity output.
   (3) The tariff payment rate shall be adjusted annually for
inflation.
   (4) The governing board shall reduce the tariff payment rate for a
renewable electric generation facility that is eligible for a
ratepayer funded incentive by the amount of the incentive received on
a per kilowatt basis up to the full amount of the incentive.
   (c) Each local publicly owned electric utility that sells
electricity at retail shall make the tariff available to customers
that own and operate a renewable electric generation facility within
the service territory of the utility, upon request, on a
first-come-first-served basis. The utility may make the terms of the
tariff available to customers in the form of a standard contract
subject to commission approval.
   (d) Each kilowatthour of the renewable energy output produced by
the renewable electric generation facility, excluding generation used
to offset the customer's own usage of electricity, shall count
toward the utility's renewables portfolio standard annual procurement
targets for purposes of Section 387.
   (e) Any tariff or contract authorized by this section may be made
available to a customer that employs a facility for the generation of
electricity that is an eligible renewable energy resource, as
defined in Section 399.12, and that has an effective capacity of not
more than 20 megawatts, if that electric generation facility
otherwise complies with this section.
  SEC. 3.  Section 399.22 is added to the Public Utilities Code, to
read:
   399.22.  (a) For purposes of 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) "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) Uses solar photovoltaics, solar thermal, wind energy, or
biomass technologies to produce electricity.
   (B) Has an effective generating capacity of not more than 20
megawatts and is located on property owned or under the control of
the customer.
   (C) Is interconnected and operates in parallel with the electrical
transmission and distribution grid.
   (D) Is strategically located and interconnected to the electrical
transmission system in a manner that optimizes the deliverability of
electricity generated at the facility to load centers.
   (b) (1) Each electrical corporation shall file with the commission
a standard tariff for the renewable energy output produced by a
renewable electric generation facility.
   (2) A renewable electric generation facility shall remain on the
tariff for not less than 20 years and the facility shall be
maintained to ensure electricity output.
   (3) Each electrical corporation shall make the 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 combined
statewide cumulative rated generating capacity of those renewable
electric generation facilities equals 1,000 megawatts. An electrical
corporation may make the terms of the tariff available to customers
in the form of a standard contract subject to commission approval.
Each electrical corporation shall only be required to offer service
or contracts under this section until that electrical corporation
meets its proportionate share of the 1,000 megawatts based on the
ratio of its peak demand to the total statewide peak demand of all
electrical corporations.
   (4) Each electrical corporation shall make the 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 tariff available to
customers in the form of a standard contract subject to commission
approval.
   (5) Each electrical corporation shall, by July 1, 2009, file with
the commission a tariff that allows all subscribers to make a
charitable contribution to a renewable energy resource fund to offset
the costs to support the tariff.
   (c) Commencing July 1, 2009, the tariff shall provide for payment
for every kilowatthour of renewable energy output produced at a
renewable electric generation facility as follows:
   (1) Thirty-five cents per kilowatthour of electricity generated by
a renewable electric generation facility with a capacity of less
than five megawatts.
   (2) Twelve cents per kilowatthour for electricity generated by a
renewable electric generation facility with a capacity of five
megawatts or more.
   (3) The commission shall adjust the tariff payment rates to
reflect the greater value of electricity generated during peak demand
periods.
   (4) The commission shall adjust the tariff payment rates for
inflation.
   (5) The commission shall reduce the tariff payment rate for a
renewable electric generation facility that is eligible for an award
of monetary incentives pursuant to the California Solar Initiative by
the amount of the incentive received on a per kilowatt basis up to
the full amount of the incentive.
   (d) (1) Commencing January 1, 2012, the commission shall establish
the tariff payment rate for excess electricity generated by a
renewable electric generation facility based upon the market price as
determined by the commission pursuant to Section 399.15, adjusted to
include an additional premium for reducing emissions of greenhouse
gases, producing electricity during periods of peak demand, and
reducing volatility of natural gas prices, adjusted for the cost to
generate electricity for the specific technologies, and a reasonable
return on investment.
   (2) Commencing January 1, 2013, the commission shall adjust the
tariff payment rate biennially to accelerate the rate at which
electrical corporations are meeting the renewables portfolio standard
purchasing requirements and to adjust for market development of
technologies that have resulted in lower costs, to increase the
utilization of renewable technologies, and to incentivize the
development and marketability of new renewables technologies.
   (3) The commission shall reduce the tariff payment rate for a
renewable electric generation facility that is eligible for an award
of monetary incentives pursuant to the California Solar Initiative,
or other ratepayer funded incentive, by the amount of the incentive
received on a per kilowatt basis up to the full amount of the
incentive.
   (4) Electrical corporations shall administer the tariff and be
compensated as program administrators for data collection and
monitoring. Program administrators shall provide periodic performance
and progress reporting to the commission as to the amount of
eligible renewable energy resources added within the electrical
corporation's service territory, the cost of each technology, and the
interest in program participation.
   (5) The commission shall establish an adjustable rate cap to cover
reasonable utility expenses incurred by electrical corporations
related to customer participation in the tariff program.
   (e) Each kilowatthour of the renewable energy output produced by
the renewable electric generation facility, excluding 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.
   (f) 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.
   (g) Upon approval by the commission, any tariff or contract
authorized by this section may be made available to a customer that
employs a facility for the generation of electricity that is an
eligible renewable energy resource, as defined in Section 399.12, and
that has an effective capacity of not more than 20 megawatts, if
that electric generation facility otherwise complies with this
section.
   (h) (1) A customer receiving electrical service pursuant to an
alternative net metering program may elect to receive service
pursuant to the tariff filed by an electrical corporation pursuant to
this section.
   (2) A customer that elects to receive electrical service pursuant
to the 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.
   (i) The commission shall establish a shareholder incentive program
to encourage electrical corporations to accelerate adoption of
renewable energy technologies for the generation of electricity, with
emphasis on accelerating the adoption of renewable distributed
generation technologies.
   (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. 4.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
certain 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.
   With respect to certain other costs, no reimbursement is required
by this act pursuant to Section 6 of Article XIII B of the California
Constitution because a local agency or school district has the
authority to levy service charges, fees, or assessments sufficient to
pay for the program or level of service mandated by this act, within
the meaning of Section 17556 of the Government Code.