BILL NUMBER: AB 64 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 23, 2009
AMENDED IN ASSEMBLY MAY 6, 2009
AMENDED IN ASSEMBLY APRIL 15, 2009
AMENDED IN ASSEMBLY MARCH 24, 2009
AMENDED IN ASSEMBLY MARCH 18, 2009
INTRODUCED BY Assembly Members Krekorian and Bass
DECEMBER 9, 2008
An act to add Article 7.3 (commencing with Section 12078) to
Chapter 1 of Part 2 of Division 3 of Title 2 of the Government Code,
to amend Sections 25107, 25123, 25324, 25333, 25500, 25501, 25502,
25503, 25516, 25517, 25531, 25540.6, 25740, 25740.5, 25741, and 25742
of, and to add Section 25108.5 to, the Public Resources Code, and to
amend Sections 454.5 and 1002 of, to amend and repeal Section 387
of, to add Sections 399.23 and 1004.5 to, to add Chapter 4.5
(commencing with Section 950) to Part 1 of Division 1 of, and to
repeal Article 16 (commencing with Section 399.11) of Chapter 2.3 of
Part 1 of Division 1 of, the Public Utilities Code, relating to
energy, and making an appropriation therefor.
energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 64, as amended, Krekorian. Energy: renewable energy resources:
generation and transmission.
(1) The Public Utilities Act imposes various duties and
responsibilities on the Public Utilities Commission (PUC) with
respect to the purchase of electricity and requires the PUC 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 (RPS program) . The
RPS program requires that a retail seller of electricity,
including electrical corporations, community choice aggregators, and
electric service providers, but not including local publicly owned
electric utilities, 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). The renewables portfolio standard
requires the PUC to implement annual procurement targets for each
retail seller to increase its total procurement of eligible renewable
energy resources by at least an additional 1% of retail sales per
year so that 20% of its retail sales are procured from eligible
renewable energy resources no later than December 31, 2010. Existing
law requires the State Energy Resources Conservation and Development
Commission (Energy Commission) to certify eligible renewable energy
resources and to design and implement an accounting system to verify
compliance with the renewables portfolio standard by retail sellers.
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.
This bill would recast the renewables portfolio standard
RPS program, to be operative on January 1, 2011,
to and which the commission would
enforce with respect to a retail seller once that retail seller
procures 20% of its retail sales from eligible renewable energy
resources. Upon the recast RPS program becoming operative, the bill
would require that a retail seller and a local publicly owned
electric utility: (1) procure at least 20%
23% of the electricity delivered to its retail customers from
eligible renewable energy resources by December 31, 2010
2014 , (2) procure at least 25%
27% of the electricity delivered to its retail
customers from eligible renewable energy resources by December 31,
2015 2017 , and (3) procure at least
33% of the electricity delivered to its retail customers from
eligible renewable energy resources by December 31, 2020. The PUC
would be responsible for implementing these requirements for retail
sellers, while the governing board would be responsible for
implementing these requirements for a local publicly owned electric
utility. The bill would require the PUC to establish procurement
targets for retail sellers that are sufficient to reach the
above-stated requirements. The bill would require that an electrical
corporation's renewable energy procurement plan include a process
that provides criteria for the rank ordering and selection of
eligible renewable energy resources to comply with the above-stated
procurement requirements so that each the
corporation's total renewables portfolio benefits ratepayers.
The bill would require the PUC to annually establish and adopt a
benchmark price for electricity generated by an eligible renewable
energy resource, for terms corresponding to the length of contracts,
in consideration of specified matter, and for each
electrical corporation, to establish a limitation on the total costs
expended above the benchmark prices for procurement of electricity
pursuant to the renewables portfolio standard and would prohibit the
limitation from exceeding 5% of the electrical corporation's revenue
requirements. The bill would require the PUC to allow an electrical
corporation or other retail seller to limit its procurement to the
quantity of eligible renewable energy resources that can be purchased
at or below the cost limitation if insufficient to support the total
costs expended above the benchmark price would
prohibit the PUC from requiring a retail seller to procure additional
electricity from eligible renewable energy resources if the net
annualized costs, as specified, expended above the benchmark price
exceeds 5% of the retail seller's total system annual revenue
requirements, as defined. The bill would require the governing board
of a local publicly owned electric utility to implement a similar
limitation for the utility . The bill would revise existing law
with respect to the use of renewable energy credits to meet the
renewables portfolio standard procurement requirements. The bill
would authorize the PUC to modify certain requirements for an
electrical corporation with 60,000 or fewer customer accounts in the
state that serves retail end-use customers outside the state and
provides that a public utility district that receives all of its
electricity from hydroelectric generation pursuant to a preference
right created by a specified federal law is in compliance with the
renewables portfolio standard.
(2) Existing law requires the PUC to require the state's 3 largest
electrical corporations, Pacific Gas and Electric Company, San Diego
Gas and Electric, and Southern California Edison, to identify a
separate electrical rate component to fund programs that enhance
system reliability and provide in-state benefits. This rate component
is a nonbypassable element of local distribution and collected on
the basis of usage. Existing PUC resolutions refer to the
nonbypassable rate component as a "public goods charge." The public
goods charge moneys are collected to support cost-effective energy
efficiency and conservation activities, public interest research and
development not adequately provided by competitive and regulated
markets, and renewable energy resources. Existing law establishes the
Renewable Resource Trust Fund in the State Treasury and requires
that certain moneys collected to support renewable energy resources
through the public goods charge are deposited into the fund and
authorizes the Energy Commission to expend the moneys pursuant to the
Renewable Energy Resources Program. The program states the intent of
the Legislature to increase the amount of electricity generated from
eligible renewable energy resources per year so that amount equals
at least 20% of total retail sales of electricity in California per
year by December 31, 2010.
This bill would revise the Renewable Energy Resources Program to
state the intent of the Legislature to increase the amount of
electricity generated from eligible renewable energy resources per
year, so that it equals at least 20% of total retail sales of
electricity in California per year by December 31, 2010, 25%
23% of total retail sales of electricity in
California per year by December 31, 2015
2014, 27% of total retail sales of electricity in California per year
by December 31, 2017 , and 33% of total retail sales of
electricity in California per year by December 31, 2020. The bill
would revise the definitions applicable to the Renewable Energy
Resources Program to incorporate the definition of an eligible
renewable energy resource from the renewables portfolio
standard RPS program, would define what is a
"new" and "existing" eligible renewable energy resource, would delete
certain unneeded defined terms, and would make other conforming
changes.
(3) This bill would establish the Energy Planning and
Infrastructure Coordinating Committee (EPIC committee), composed of
specified members, that would be required to use existing resources
and the authority of the state entities represented by the voting
members to coordinate the actions of the state, make policy
recommendations, and develop a strategic plan to achieve a
25% 23% renewables portfolio standard by
December 31, 2015 2014, a 27% renewables
portfolio standard by December 31, 2017 , and a 33% renewables
portfolio standard by December 31, 2020. The bill would require that
the strategic plan, among other things, designate and rank renewable
energy development (RED) zones with high concentrations of
high-quality renewable energy resources, to designate and rank
transmission corridors needed to deliver electricity generated in RED
zones to load and any additional electrical transmission and
distribution upgrades that are prudent and desirable in order to
ensure system reliability, and include a timeline of stages required
to meet the 25% and 33% renewables portfolio standard requirements.
The bill would authorize the EPIC committee to incorporate in the
strategic plan the results reached as a result of the Renewable
Energy Transmission Initiative (RETI) collaborative stakeholder
planning process initiated as a joint effort among the PUC, Energy
Commission, and the Independent Systems
System Operator. The bill would require the EPIC committee to
facilitate coordinated permit and certification review agreements
between the PUC, Energy Commission, Department of Fish and Game,
State Air Resources Board, State Water Resources Control Board, and
other agencies responsible for environmental reviews, including, to
the extent feasible, local and federal governmental entities. The
bill would require the EPIC committee to direct the Energy Commission
to prepare a program environment impact report (PEIR) pursuant to
the California Environmental Quality Act (CEQA) for each RED zone and
require that the EPIC committee approve the PEIR before the Energy
Commission may certify completion of the PEIR.
(4) Existing law requires the Energy Commission to adopt a
strategic plan for the state's electrical transmission grid using
existing resources, to be included in the integrated energy policy
report adopted on November 1, 2005, which identifies and recommends
actions required to implement investments needed to ensure
reliability, relieve congestion, and to meet future growth in
electrical load and generation, including renewable resources, energy
efficiency, and other demand reduction measures. Existing law
authorizes the Energy Commission to designate a transmission corridor
zone on its own motion or by application of a person who plans to
construct a high-voltage electric transmission line within the state.
Existing law provides that the designation of a transmission
corridor shall serve to identify a feasible corridor where a future
transmission line can be built that is consistent with the state's
needs and objectives as set forth in the strategic plan adopted by
the Energy Commission. Existing law provides that the designation of
a transmission corridor zone is subject to the requirements of the
CEQA and prescribes procedures for the designation of a transmission
corridor zone, including publication of the request for designation
and request for comments, coordination with federal agencies and
California Native American tribes, informational hearings, and
requirements for a proposed decision.
This bill would require the Energy Commission to adopt, and, as
needed, update a strategic plan for the state's electrical
transmission grid using existing resources, to be included in the
next integrated energy policy report, which identifies and recommends
actions required to implement investments needed to ensure
reliability, relieve congestion, and to meet future growth in
electrical load and generation, including achieving the renewables
portfolio standard procurement requirements, energy efficiency, and
other demand reduction measures. The bill would authorize the Energy
Commission to separately adopt a strategic plan to facilitate
achieving the renewables portfolio standard requirements. The bill
would require that any strategic plan adopted by the Energy
Commission be consistent with the strategic plan adopted by the EPIC
committee. The bill would make conforming changes to the transmission
corridor designations statutes.
(5) The existing federal Energy Policy Act of 2005 requires the
federal Secretaries of Agriculture, Commerce, Defense, Energy, and
the Interior, in consultation with the Federal Energy Regulatory
Commission (FERC), states, and tribal or local units of interested
persons, to designate corridors for oil, gas, and hydrogen pipelines
and electricity transmission and distribution facilities on federal
land in the 11 contiguous western states, including California, to
perform any environmental reviews that may be required to complete
the designation of corridors, and to incorporate the designated
corridors into the relevant agency land use and resource management
plans or equivalent plans. The Energy Policy Act of 2005 additionally
requires the federal secretaries, in consultation with the FERC,
affected utility industries, and other interest parties, to establish
procedures that ensure that additional corridors for oil, gas, and
hydrogen pipelines and electricity transmission and distribution
facilities on federal land are promptly identified and designated as
necessary and to expedite applications to construct or modify oil,
gas, and hydrogen pipelines and electricity transmission and
distribution facilities within corridors, taking into account prior
analysis and environmental reviews.
This bill would require the Energy Commission to confer with the
federal secretaries and the FERC to ensure that the transmission
corridors designated by the Energy Commission are identified and
designated as necessary pursuant to the federal Energy Policy Act of
2005.
(6) The existing Warren-Alquist State Energy Resources
Conservation and Development Act grants the Energy Commission the
exclusive authority to certify any stationary or floating electrical
generating facility using any source of thermal energy, with a
generating capacity of 50 megawatts or more, and any facilities
appurtenant thereto. This authority extends to any alteration,
replacement, or improvement of equipment that results in a
50-megawatt or more increase in the electric generating capacity of
an existing thermal powerplant or an increase of 25% in the peak
operating voltage or peak kilowatt capacity of an existing electric
transmission line. Existing law prohibits the construction of any
thermal powerplant or facilities appurtenant thereto or modification
of any existing thermal powerplant and appurtenant facility without
first obtaining certification from the Energy Commission.
This bill would grant the Energy Commission the exclusive
authority to certify an eligible renewable energy resource, as
defined, with a generating capacity of 5 megawatts or more, except
for a facility for which a building permit application or other
request for governmental approval was filed on or before December 31,
2009. The bill would make other conforming changes to the act.
(7) The existing Public Utilities Act prohibits any electrical
corporation from beginning the construction of, among other things, a
line, plant, or system, or of any extension thereof, without having
first obtained from the PUC a certificate that the present or future
public convenience and necessity require or will require that
construction (certificate of public convenience and necessity). The
act requires that the PUC consider certain factors in determining
whether to issue a certificate of convenience and necessity,
including community values, recreational and park areas, historical
and aesthetic values, and influence on the environment, but requires
that the issuance of a certificate by the Energy Commission for a
thermal powerplant and facilities appurtenant thereto, pursuant to
the above-described provisions, is conclusive as to all matters
determined thereby when the PUC is determining whether to issue a
certificate of public convenience and necessity.
The bill would make the issuance of a certificate by the Energy
Commission for an eligible renewable energy resource, pursuant to the
above-described provisions, conclusive as to all matters determined
thereby when the PUC is determining whether to issue a certificate of
public convenience and necessity. The bill would authorize the PUC,
with the concurrence of the Division of Ratepayer Advocates, to
accept as a rebuttable presumption, a determination of the ISO, made
as part of its transmission planning process, that a transmission
project is needed to connect to renewable generation. For any
application for a certificate of public convenience and necessity to
construct or modify an electrical transmission line, a substantial
purpose of which is to access electricity generated by eligible
renewable energy resources, the bill would require the PUC to
establish a schedule for review of the application and to employ
staffing and other resources sufficient to produce a decision on
whether to issue the certificate, or refuse to issue it, within 12
months of receiving the completed application.
(8) Under existing law, a violation of the Public Utilities Act or
an order or direction of the PUC is a crime. Because some of the
provisions of this bill would require an order or other action of the
PUC 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 additional requirements
upon local publicly owned electric utilities, which are entities of
local government, and new requirements upon city and county
governments, 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 a specified reason.
Vote: majority. Appropriation: yes no
. Fiscal committee: yes. State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Article 7.3 (commencing with Section 12078) is added to
Chapter 1 of Part 2 of Division 3 of the Government Code, to read:
Article 7.3. Energy Planning and Infrastructure Coordinating
Committee
12078. (a) There is hereby established the Energy Planning and
Infrastructure Coordinating Committee (EPIC committee), which shall
consist of the following members:
(1) The President of the Public Utilities Commission (PUC), or a
designee of the PUC, as one chairperson.
(2) The Chair of the State Energy Resources Conservation and
Development Commission (Energy Commission), or a designee of the
Energy Commission, as one chairperson.
(3) The Secretary of the Resources Agency, or his or her designee.
(4) The Secretary for Environmental Protection, or his or her
designee.
(5) The Chair of the Independent System Operator (ISO), or his or
her designee.
(6) A designee of the Senate Committee on Rules, who shall be a
nonvoting member.
(7) A designee of the Speaker of the Assembly, who shall be a
nonvoting member.
(8) Additional ex officio representatives from local and federal
government designated by the EPIC committee.
(b) (1) The EPIC committee, using the
existing resources and authority of the state entities represented by
the voting members, shall coordinate the actions of the state, make
policy recommendations, and develop a strategic plan to achieve
both all of the following:
(1) A 25
(A) A 23 percent renewables
portfolio standard by December 31, 2015, pursuant to Chapter 4.5
(commencing with Section 950) of Part 1 of Division 1 of the Public
Utilities Code.
(B) A 27 percent renewables portfolio standard by December 31,
2017, pursuant to Chapter 4.5 (commencing with Section 950) of Part 1
of Division 1 of the Public Utilities Code.
(2)
(C) A 33 percent renewables portfolio standard by
December 31, 2020, pursuant to Chapter 4.5 (commencing with Section
950) of Part 1 of Division 1 of the Public Utilities Code.
(3)
(2) This subdivision does not supersede, nor shall its
implementation impair, the administration and oversight of energy
efficiency, demand reduction, and conservation programs of, or
supervised by, the PUC or the programs of the Energy Commission.
(c) (1) In developing the strategic plan pursuant to subdivision
(b), the EPIC committee shall evaluate renewable energy resources
existing within the state and the needs of the electrical
transmission and distribution grid to develop and integrate those
resources.
(2) The strategic plan shall designate and rank renewable energy
development (RED) zones with high concentrations of high-quality
renewable energy resources.
(3) The strategic plan shall designate and rank transmission
corridors needed to deliver electricity generated in RED zones to
load as well as any additional electrical transmission and
distribution upgrades that are prudent and desirable in order to
ensure system reliability.
(4) The strategic plan shall include a timeline of stages required
to meet the renewables portfolio standard requirements of
subdivision (b).
(5) The EPIC committee may, where determined to be appropriate,
incorporate into the strategic plan the results reached as a result
of the Renewable Energy Transmission Initiative (RETI) collaborative
stakeholder planning process initiated as a joint effort among the
PUC, Energy Commission, and the ISO.
(d) In making policy recommendations pursuant to subdivision (b),
the EPIC committee shall do all the following:
(1) Identify and suggest resolutions to regulatory challenges.
(2) Identify and suggest changes to statutes that impede progress
in achieving the renewables portfolio standard requirements of
subdivision (b).
(3) Identify redundant or duplicative steps in siting and the
environmental review process.
(e) The EPIC committee shall facilitate coordinated permit and
certificate review agreements between the PUC, Energy Commission,
Department of Fish and Game, State Air Resources Board, State Water
Resources Control Board, and other agencies responsible for
environmental reviews, including, to the extent feasible, local and
federal governmental entities.
(f) The EPIC committee shall direct the Energy Commission to
prepare a program environmental impact report for each RED zone
designated in the strategic plan. The EPIC committee shall approve
the program environmental impact report before the Energy Commission
may certify the completion of the report.
SEC. 2. Section 25107 of the Public Resources Code is amended to
read:
25107. With respect to certification of a site by the commission,
"electric transmission line" means any electric powerline carrying
electricity from a thermal powerplant, or eligible renewable energy
resource with a generating capacity of five megawatts or more,
located within the state to a point of junction with any
interconnected transmission system. "Electric transmission line" does
not include any replacement on the existing site of existing
electric powerlines with electric powerlines equivalent to those
existing electric powerlines or the placement of new or additional
conductors, insulators, or accessories related to those electric
powerlines on supporting structures in existence on the effective
date of this division or certified pursuant to this division.
SEC. 3. Section 25108.5 is added to the Public Resources Code, to
read:
25108.5. "Eligible renewable energy resource" has the same
meaning as defined in Section 952 of the Public Utilities Code,
except that the commission's certification authority pursuant to
Chapter 6 (commencing with Section 25500) extends to those eligible
renewable energy resources with a generating capacity of five
megawatts or more and does not include those eligible renewable
energy resources located within the coastal zone or projects
subject to the federal Coastal Zone Management Act of 1972 (16 U.S.C.
Sec. 1451 et seq.) .
SEC. 4. Section 25123 of the Public Resources Code is amended to
read:
25123. "Modification of an existing facility" means any
alteration, replacement, or improvement of equipment that results in
a 50-megawatt or more increase in the electric generating capacity of
an existing thermal powerplant or an increase of 25 percent in the
peak operating voltage or peak kilowatt capacity of an existing
electric transmission line or eligible renewable energy resource with
a generating capacity of five megawatts or more.
SEC. 5. Section 25324 of the Public Resources Code is amended to
read:
25324. The commission, in consultation with the Public Utilities
Commission, the California Independent System Operator, transmission
owners, users, and consumers, shall adopt, and, as needed, update, a
strategic plan for the state's electric transmission grid using
existing resources. The strategic plan shall identify and recommend
actions required to implement investments needed to ensure
reliability, relieve congestion, and meet future growth in load and
generation, including, but not limited to, achieving the renewables
portfolio standard requirements adopted pursuant to Chapter 4.5
(commencing with Section 950) of Part 1 of Division 1 of the Public
Utilities Code, energy efficiency, and other demand reduction
measures. The plan, and any update to the plan, shall be included in
the next integrated energy policy report adopted pursuant to
subdivision (a) of Section 25302, except that the commission may
separately adopt a strategic plan to facilitate achieving the
renewables portfolio standard requirements. Any strategic plan, and
any separate strategic plan to facilitate achieving the renewables
portfolio standard requirements, adopted by the commission, shall be
consistent with the strategic plan adopted by the Energy Planning and
Infrastructure Coordinating Committee pursuant to Article 7.3
(commencing with Section 12078) of Chapter 1 of Part 2 of Division 3
of Title 2 of the Government Code.
SEC. 6. Section 25333 of the Public Resources Code is amended to
read:
25333. (a) In developing a strategic plan or separate strategic
plan to facilitate achieving the renewables portfolio standard
requirements pursuant to Section 25324 or considering an application
for designation pursuant to this chapter, the commission shall confer
with cities and counties, federal agencies, and California Native
American tribes to identify appropriate areas within their
jurisdictions that may be suitable for a transmission corridor zone.
The commission shall, to the extent feasible, coordinate efforts to
identify long-term transmission needs of the state with the land use
plans of cities, counties, federal agencies, and California Native
American tribes.
(b) The commission, pursuant to Section 368 of the Energy Policy
Act of 2005 (42 U.S.C. Sec. 15926), shall confer with the Secretaries
and the Federal Energy Regulatory Commission, to ensure that the
transmission corridors designated by the commission are identified
and designated as necessary pursuant to that section.
(c) The commission shall not designate a transmission corridor
zone within the jurisdiction of a California Native American tribe
without the approval of the California Native American tribe.
SEC. 7. Section 25500 of the Public Resources Code is amended to
read:
25500. (a) In accordance with the provisions of this division,
and except as otherwise provided in Article 7 (commencing with
Section 990) of Chapter 4.5 of Part 1 of Division 1 of the Public
Utilities Code, the commission shall have the exclusive power to
certify all sites and related facilities in the state, whether a new
site and related facility or a change or addition to an existing
facility. The issuance of a certificate by the commission shall be in
lieu of any permit, certificate, or similar document required by any
state, local or regional agency, or federal agency to the extent
permitted by federal law, for such use of the site and related
facilities, and shall supersede any applicable statute, ordinance, or
regulation of any state, local, or regional agency, or federal
agency to the extent permitted by federal law.
(b) After the effective date of this division, no construction of
any facility or modification of any existing facility shall be
commenced without first obtaining certification for any such site and
related facility by the commission, as prescribed in this division.
SEC. 8. Section 25501 of the Public Resources Code is amended to
read:
25501. (a) This chapter does not apply to any site or related
facility for which the Public Utilities Commission has issued a
certificate of public convenience and necessity or which any
municipal utility has approved before January 7, 1975.
(b) This chapter does not apply to an eligible renewable energy
resource with a generating capacity of five megawatts or more for
which a building permit application or other request for governmental
approval was filed on or before December 31, 2009.
SEC. 9. Section 25502 of the Public Resources Code is amended to
read:
25502. Each person proposing to construct a thermal powerplant,
or an eligible renewable energy resource with a generating capacity
of five megawatts or more, or electric transmission line on a site
shall submit to the commission a notice of intention to file an
application for the certification of the site and related facility or
facilities. The notice shall be an attempt primarily to determine
the suitability of the proposed sites to accommodate the facilities
and to determine the general conformity of the proposed sites and
related facilities with standards of the commission and assessments
of need adopted pursuant to Sections 25305 to 25308, inclusive. The
notice shall be in the form prescribed by the commission and shall be
supported by such information as the commission may require.
Any site and related facility once found to be acceptable pursuant
to Section 25516 is, and shall continue to be, eligible for
consideration in an application for certification without further
proceedings required for a notice under this chapter.
SEC. 10. Section 25503 of the Public Resources Code is amended to
read:
25503. Each notice of intention to file an application for a
thermal powerplant shall contain at least three alternative sites and
related facilities, at least one of which shall not be located in
whole or in part in the coastal zone. In addition, the alternative
sites and related electrical facilities may be proposed from an
inventory of sites which have previously been approved by the
commission in a notice of intent or may be proposed from sites
previously examined. The requirements of this section are not
applicable to an application for certification of an eligible
renewable energy resource unless specifically required by the
commission. An application for certification of an eligible renewable
energy resource may include alternative sites and related facilities
as part of the application.
SEC. 11. Section 25516 of the Public Resources Code is amended to
read:
25516. The approval of the notice by the commission shall be
based upon findings pursuant to Section 25514. For a thermal
powerplant, the notice shall not be approved unless the commission
finds at least two alternative site and related facility proposals
considered in the commission's final report as acceptable. If the
commission does not find at least two sites and related facilities
acceptable, additional sites and related facilities may be proposed
by the applicant which shall be considered in the same manner as
those proposed in the original notice.
If the commission finds that a good faith effort has been made by
the person submitting the notice to find an acceptable alternative
site and related facility and that there is only one acceptable site
and related facility among those submitted, the commission may
approve the notice based on the one site and related facility. If a
notice is approved based on one site and related facility, the
commission may require a new notice to be filed to identify
acceptable alternative sites and related facilities for the one site
and related facility approved unless suitable alternative sites and
related facilities have been approved by the commission in previous
notice of intention proceedings.
If the commission finds that additional electric generating
capacity is needed to accommodate the electric power demand forecast
pursuant to subdivision (e) of Section 25305 and, after the
commission finds that a good faith effort was made by the person
submitting the notice to propose an acceptable site and related
facility, it fails to find any proposed site and related facility to
be acceptable, the commission shall designate, at the request of and
at the expense of the person submitting the notice, a feasible site
and related facility for providing the needed electric generating
capacity.
SEC. 12. Section 25517 of the Public Resources Code is amended to
read:
25517. Except as provided in Section 25501, no construction of
any thermal powerplant, eligible renewable energy resource with a
generating capacity of five megawatts or more, or electric
transmission line shall be commenced by any electric utility without
first obtaining certification as prescribed in this division. Any
onsite improvements not qualifying as construction may be required to
be restored as determined by the commission to be necessary to
protect the environment, if certification is denied.
SEC. 13. Section 25531 of the Public Resources Code is amended to
read:
25531. (a) The decisions of the commission on any application for
certification of a site and related facility are subject to judicial
review by the Supreme Court of California.
(b) No new or additional evidence may be introduced upon review
and the cause shall be heard on the record of the commission as
certified to by it. The review shall not be extended further than to
determine whether the commission has regularly pursued its authority,
including a determination of whether the order or decision under
review violates any right of the petitioner under the United States
Constitution or the California Constitution. The findings and
conclusions of the commission on questions of fact are final and are
not subject to review, except as provided in this article. These
questions of fact shall include ultimate facts and the findings and
conclusions of the commission. A report prepared by, or an approval
of, the commission pursuant to Section 25510, 25514, 25516, or
25516.5, or subdivision (b) of Section 25520.5, shall not constitute
a decision of the commission subject to judicial review.
(c) Subject to the right of judicial review of decisions of the
commission, no court in this state has jurisdiction to hear or
determine any case or controversy concerning any matter that was, or
could have been, determined in a proceeding before the commission, or
to stop or delay the construction or operation of any thermal
powerplant, or eligible renewable energy resource with a generating
capacity of five megawatts or more, except to enforce compliance with
the provisions of a decision of the commission.
(d) Notwithstanding Section 1250.370 of the Code of Civil
Procedure:
(1) If the commission requires, pursuant to subdivision (a) of
Section 25528, as a condition of certification of any site and
related facility, that the applicant acquire development rights, that
requirement conclusively establishes the matters referred to in
Sections 1240.030 and 1240.220 of the Code of Civil Procedure in any
eminent domain proceeding brought by the applicant to acquire the
development rights.
(2) If the commission certifies any site and related facility,
that certification conclusively establishes the matters referred to
in Sections 1240.030 and 1240.220 of the Code of Civil Procedure in
any eminent domain proceeding brought to acquire the site and related
facility.
(e) No decision of the commission pursuant to Section 25516,
25522, or 25523 shall be found to mandate a specific supply plan for
any utility as prohibited by Section 25323.
SEC. 14. Section 25540.6 of the Public Resources Code is amended
to read:
25540.6. (a) Notwithstanding any other provision of law, no
notice of intention is required, and the commission shall issue its
final decision on the application, as specified in Section 25523,
within 12 months after the filing of the application for
certification of the powerplant and related facility or facilities,
or at any later time as is mutually agreed by the commission and the
applicant, for any of the following:
(1) A thermal powerplant which will employ cogeneration
technology, a thermal powerplant that will employ natural gas-fired
technology, or a solar thermal powerplant.
(2) A modification of an existing facility.
(3) A thermal powerplant, or eligible renewable energy resource
with a generating capacity of five megawatts or more, that it is only
technologically or economically feasible to site at or near the
energy source.
(4) A thermal powerplant with a generating capacity of up to 100
megawatts.
(5) A thermal powerplant, or eligible renewable energy resource
with a generating capacity of five megawatts or more, that is
designed to develop or demonstrate technologies that have not
previously been built or operated on a commercial scale. Such a
research, development, or commercial demonstration project may
include, but is not limited to, the use of renewable or alternative
fuels, improvements in energy conversion efficiency, or the use of
advanced pollution control systems. Such a facility may not exceed
300 megawatts unless the commission, by regulation, authorizes a
greater capacity. Section 25524 does not apply to such a powerplant
and related facility or facilities.
(b) Projects exempted from the notice of intention requirement
pursuant to paragraph (1), (4), or (5) of subdivision (a) shall
include, in the application for certification, a discussion of the
applicant's site selection criteria, any alternative sites that the
applicant considered for the project, and the reasons why the
applicant chose the proposed site. That discussion shall not be
required for cogeneration projects at existing industrial sites. The
commission may also accept an application for a noncogeneration
project at an existing industrial site without requiring a discussion
of site alternatives if the commission finds that the project has a
strong relationship to the existing industrial site and that it is
therefore reasonable not to analyze alternative sites for the
project.
SEC. 15. Section 25740 of the Public Resources Code is amended to
read:
25740. It is the intent of the Legislature in establishing this
program, to increase the amount of electricity generated from
eligible renewable energy resources per year, so that it equals at
least 20 percent of total retail sales of electricity in California
per year by December 31, 2010, 25 23
percent of total retail sales of electricity in California per year
by December 31, 2015, 2014, 27 percent of
total retail sales of electricity in California per year by
December 31, 2017, and 33 percent of total retail sales of
electricity in California per year by December 31, 2020.
SEC. 16. Section 25740.5 of the Public Resources Code is amended
to read:
25740.5. (a) The commission shall optimize public investment and
ensure that the most cost-effective and efficient investments in
renewable energy resources are vigorously pursued.
(b) The commission's long-term goal shall be a fully competitive
and self-sustaining supply of electricity generated from renewable
sources.
(c) The program objective shall be to increase, in the near term,
the quantity of California's electricity generated by eligible
renewable energy resources, while protecting system reliability,
fostering resource diversity, and obtaining the greatest
environmental benefits for California residents.
(d) An additional objective of the program shall be to identify
and support emerging renewable technologies in distributed generation
applications that have the greatest near-term commercial promise and
that merit targeted assistance.
(e) The Legislature recommends allocations among all of the
following:
(1) Rebates, buydowns, or equivalent incentives for emerging
renewable technologies.
(2) Customer education.
(3) Production incentives for reducing fuel costs, that are
confirmed to the satisfaction of the commission, at solid fuel
biomass energy facilities in order to provide demonstrable
environmental and public benefits, including improved air quality.
(4) Solar thermal generating resources that enhance the
environmental value or reliability of the electrical system and that
require financial assistance to remain economically viable, as
determined by the commission. The commission may require financial
disclosure from applicants for purposes of this paragraph.
(5) Specified fuel cell technologies, if the commission makes all
of the following findings:
(A) The specified technologies have similar or better air
pollutant characteristics than renewable technologies in the report
made pursuant to Section 25748.
(B) The specified technologies require financial assistance to
become commercially viable by reference to wholesale generation
prices.
(C) The specified technologies could contribute significantly to
the infrastructure development or other innovation required to meet
the long-term objective of a self-sustaining, competitive supply of
electricity generated from renewable sources.
(6) Existing wind-generating resources, if the commission finds
that the existing wind-generating resources are a cost-effective
source of reliable energy and environmental benefits compared with
other eligible renewable energy resources, and that the existing
wind-generating resources require financial assistance to remain
economically viable. The commission may require financial disclosure
from applicants for the purposes of this paragraph.
(f) Notwithstanding any other provision of law, moneys collected
for renewable energy pursuant to Article 15 (commencing with Section
399) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities
Code shall be transferred to the Renewable Resource Trust Fund.
Moneys collected between January 1, 2007, and January 1, 2012, shall
be used for the purposes specified in this chapter.
SEC. 17. Section 25741 of the Public Resources Code is amended to
read:
25741. As used in this chapter, the following terms have the
following meaning:
(a) "Eligible renewable energy resource" means an eligible
renewable energy resource as defined in Section 399.12 of the Public
Utilities Code.
(b) "Existing" in reference to an eligible renewable energy
resource means a facility that had obtained any necessary permits to
operate and was able to generate electricity prior to January 1,
2005.
(c) "New" in reference to an eligible renewable energy resource
means a facility that either had not obtained all of the necessary
permits to operate or was not able to generate electricity prior to
January 1, 2005.
(d) "Renewable energy public goods charge" means that portion of
the nonbypassable system benefits charge authorized to be collected
and to be transferred to the Renewable Resource Trust Fund pursuant
to the Reliable Electric Service Investments Act (Article 15
(commencing with Section 399) of Chapter 2.3 of Part 1 of Division 1
of the Public Utilities Code).
(e) "Retail seller" means a "retail seller" as defined in Section
399.12 of the Public Utilities Code.
SEC. 18. Section 25742 of the Public Resources Code is amended to
read:
25742. (a) Twenty percent of the funds collected pursuant to the
renewable energy public goods charge shall be used for programs that
are designed to achieve fully competitive and self-sustaining
existing eligible renewable energy resources, and to secure for the
state the environmental, economic, and reliability benefits that
continued operation of those facilities will provide during the
2007-2011 investment cycle. Eligibility for production incentives
under this section shall be limited to those technologies found
eligible for funds by the commission pursuant to paragraphs (3), (4),
and (6) of subdivision (e) of Section 25740.5.
(b) Any funds used to support eligible renewable energy resources
pursuant to this section shall be expended in accordance with the
provisions of this chapter.
(c) Facilities that
are eligible to receive funding pursuant to this section shall be
registered in accordance with criteria developed by the commission
and those facilities shall not receive payments for any electricity
produced that has any of the following characteristics:
(1) Is sold at monthly average rates equal to, or greater than,
the applicable target price, as determined by the commission.
(2) Is used onsite.
(d) (1) Existing facilities generating electricity from biomass
energy shall be eligible for funding and otherwise considered an
eligible renewable energy resource only if they report to the
commission the types and quantities of biomass fuels used.
(2) The commission shall report the types and quantities of
biomass fuels used by each facility to the Legislature in the reports
prepared pursuant to Section 25748.
(e) Each existing facility seeking an award pursuant to this
section shall be evaluated by the commission to determine the amount
of the funds being sought, the cumulative amount of funds the
facility has received previously from the commission and other state
sources, the value of any past and current federal or state tax
credits, the facility's contract price for energy and capacity, the
prices received by similar facilities, the market value of the
facility, and the likelihood that the award will make the facility
competitive and self-sustaining within the 2007-2011 investment
cycle. The commission shall use this evaluation to determine the
value of an award to the public relative to other renewable energy
investment alternatives. The commission shall compile its findings
and report them to the Legislature in the reports prepared pursuant
to Section 25748.
SEC. 19. Section 387 of the Public Utilities Code is amended to
read:
387. (a) Each governing body of a local publicly owned electric
utility shall be responsible for implementing and enforcing a
renewables portfolio standard that accomplishes all of the following:
(1) Procures at least 20 percent of the electricity delivered to
its retail customers from eligible renewable energy resources, as
defined in Section 952, by December 31, 2010.
(2) Procures at least 25 23 percent
of the electricity delivered to its retail customers from eligible
renewable energy resources, as defined in Section 952, by December
31, 2015 2014 .
(3) Procures at least 27 percent of the electricity delivered to
its retail customers from eligible renewable energy resources, as
defined in Section 952, by December 31, 2017.
(3)
(4) Procures at least 33 percent of the electricity
delivered to its retail customers from eligible renewable energy
resources, as defined in Section 952, by December 31, 2020.
(b) Each local publicly owned electric utility shall report, on an
annual basis, to its customers and to the State Energy Resources
Conservation and Development Commission, all of the following:
(1) Expenditures of public goods funds collected pursuant to
Section 385 for eligible renewable energy resource development.
Reports shall contain a description of programs, expenditures, and
expected or actual results.
(2) The resource mix used to serve its customers by fuel type.
Reports shall contain the contribution of each type of renewable
energy resource with separate categories for those fuels that are
eligible renewable energy resources as defined in Section 399.12,
except that the electricity is delivered to the local publicly owned
electric utility and not a retail seller. Electricity shall be
reported as having been delivered to the local publicly owned
electric utility from an eligible renewable energy resource when the
electricity would qualify for compliance with the renewables
portfolio standard if it were delivered to a retail seller.
(3) The utility's status in implementing a renewables portfolio
standard pursuant to subdivision (a) and the utility's progress
toward attaining the standard following implementation.
(c) This section shall remain in effect only until January 1,
2011, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2011, deletes or extends
that date.
SEC. 20. Section 399.23 is added to the Public Utilities Code, to
read:
399.23. This article shall remain in effect only until January 1,
2011, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2011, deletes or extends
that date.
399.23. The commission shall enforce the requirements
of this article until the retail seller procures 20 percent of its
retail sales from eligible renewable energy resources. Upon
determining that the retail seller is procuring 20 percent of its
retail sales from eligible renewable energy resources, the commission
shall enforce the requirements of Chapter 4.5 (commencing with
Section 950) with respect to that retail seller.
SEC. 21. Section 454.5 of the Public Utilities Code is amended to
read:
454.5. (a) The commission shall specify the allocation of
electricity, including quantity, characteristics, and duration of
electricity delivery, that the Department of Water Resources shall
provide under its power purchase agreements to the customers of each
electrical corporation, which shall be reflected in the electrical
corporation's proposed procurement plan. Each electrical corporation
shall file a proposed procurement plan with the commission not later
than 60 days after the commission specifies the allocation of
electricity. The proposed procurement plan shall specify the date
that the electrical corporation intends to resume procurement of
electricity for its retail customers, consistent with its obligation
to serve. After the commission's adoption of a procurement plan, the
commission shall allow not less than 60 days before the electrical
corporation resumes procurement pursuant to this section.
(b) An electrical corporation's proposed procurement plan shall
include, but not be limited to, all of the following:
(1) An assessment of the price risk associated with the electrical
corporation's portfolio, including any utility-retained generation,
existing power purchase and exchange contracts, and proposed
contracts or purchases under which an electrical corporation will
procure electricity, electricity demand reductions, and
electricity-related products and the remaining open position to be
served by spot market transactions.
(2) A definition of each electricity product, electricity-related
product, and procurement related financial product, including support
and justification for the product type and amount to be procured
under the plan.
(3) The duration of the plan.
(4) The duration, timing, and range of quantities of each product
to be procured.
(5) A competitive procurement process under which the electrical
corporation may request bids for procurement-related services,
including the format and criteria of that procurement process.
(6) An incentive mechanism, if any incentive mechanism is
proposed, including the type of transactions to be covered by that
mechanism, their respective procurement benchmarks, and other
parameters needed to determine the sharing of risks and benefits.
(7) The upfront standards and criteria by which the acceptability
and eligibility for rate recovery of a proposed procurement
transaction will be known by the electrical corporation prior to
execution of the transaction. This shall include an expedited
approval process for the commission's review of proposed contracts
and subsequent approval or rejection thereof. The electrical
corporation shall propose alternative procurement choices in the
event a contract is rejected.
(8) Procedures for updating the procurement plan.
(9) A showing that the procurement plan will achieve the
following:
(A) The electrical corporation will, in order to fulfill its unmet
resource needs, procure resources from eligible renewable energy
resources in an amount sufficient to meet its procurement
requirements and goals pursuant to the renewables portfolio standard.
(B) The electrical corporation will create or maintain a
diversified procurement portfolio consisting of both short-term and
long-term electricity and electricity-related and demand reduction
products.
(C) The electrical corporation will first meet its unmet resource
needs through all available energy efficiency and demand reduction
resources that are cost effective, reliable, and feasible.
(10) The electrical corporation's risk management policy,
strategy, and practices, including specific measures of price
stability.
(11) A plan to achieve appropriate increases in diversity of
ownership and diversity of fuel supply of nonutility electrical
generation.
(12) A mechanism for recovery of reasonable administrative costs
related to procurement in the generation component of rates.
(c) The commission shall review and accept, modify, or reject each
electrical corporation's procurement plan. The commission's review
shall consider each electrical corporation's individual procurement
situation, and shall give strong consideration to that situation in
determining which one or more of the features set forth in this
subdivision shall apply to that electrical corporation. A procurement
plan approved by the commission shall contain one or more of the
following features, provided that the commission may not approve a
feature or mechanism for an electrical corporation if it finds that
the feature or mechanism would impair the restoration of an
electrical corporation's creditworthiness or would lead to a
deterioration of an electrical corporation's creditworthiness:
(1) A competitive procurement process under which the electrical
corporation may request bids for procurement-related services. The
commission shall specify the format of that procurement process, as
well as criteria to ensure that the auction process is open and
adequately subscribed. Any purchases made in compliance with the
commission-authorized process shall be recovered in the generation
component of rates.
(2) An incentive mechanism that establishes a procurement
benchmark or benchmarks and authorizes the electrical corporation to
procure from the market, subject to comparing the electrical
corporation's performance to the commission-authorized benchmark or
benchmarks. The incentive mechanism shall be clear, achievable, and
contain quantifiable objectives and standards. The incentive
mechanism shall contain balanced risk and reward incentives that
limit the risk and reward of an electrical corporation.
(3) Upfront achievable standards and criteria by which the
acceptability and eligibility for rate recovery of a proposed
procurement transaction will be known by the electrical corporation
prior to the execution of the bilateral contract for the transaction.
The commission shall provide for expedited review and either approve
or reject the individual contracts submitted by the electrical
corporation to ensure compliance with its procurement plan. To the
extent the commission rejects a proposed contract pursuant to this
criteria, the commission shall designate alternative procurement
choices obtained in the procurement plan that will be recoverable for
ratemaking purposes.
(d) A procurement plan approved by the commission shall accomplish
each of the following objectives:
(1) Enable the electrical corporation to fulfill its obligation to
serve its customers at just and reasonable rates.
(2) Eliminate the need for after-the-fact reasonableness reviews
of an electrical corporation's actions in compliance with an approved
procurement plan, including resulting electricity procurement
contracts, practices, and related expenses. However, the commission
may establish a regulatory process to verify and assure that each
contract was administered in accordance with the terms of the
contract, and contract disputes which may arise are reasonably
resolved.
(3) Ensure timely recovery of prospective procurement costs
incurred pursuant to an approved procurement plan. The commission
shall establish rates based on forecasts of procurement costs adopted
by the commission, actual procurement costs incurred, or combination
thereof, as determined by the commission. The commission shall
establish power procurement balancing accounts to track the
differences between recorded revenues and costs incurred pursuant to
an approved procurement plan. The commission shall review the power
procurement balancing accounts, not less than semiannually, and shall
adjust rates or order refunds, as necessary, to promptly amortize a
balancing account, according to a schedule determined by the
commission. Until January 1, 2006, the commission shall ensure that
any overcollection or undercollection in the power procurement
balancing account does not exceed 5 percent of the electrical
corporation's actual recorded generation revenues for the prior
calendar year excluding revenues collected for the Department of
Water Resources. The commission shall determine the schedule for
amortizing the overcollection or undercollection in the balancing
account to ensure that the 5 percent threshold is not exceeded. After
January 1, 2006, this adjustment shall occur when deemed appropriate
by the commission consistent with the objectives of this section.
(4) Moderate the price risk associated with serving its retail
customers, including the price risk embedded in its long-term supply
contracts, by authorizing an electrical corporation to enter into
financial and other electricity-related product contracts.
(5) Provide for just and reasonable rates, with an appropriate
balancing of price stability and price level in the electrical
corporation's procurement plan.
(e) The commission shall provide for the periodic review and
prospective modification of an electrical corporation's procurement
plan.
(f) The commission may engage an independent consultant or
advisory service to evaluate risk management and strategy. The
reasonable costs of any consultant or advisory service is a
reimbursable expense and eligible for funding pursuant to Section
631.
(g) The commission shall adopt appropriate procedures to ensure
the confidentiality of any market sensitive information submitted in
an electrical corporation's proposed procurement plan or resulting
from or related to its approved procurement plan, including, but not
limited to, proposed or executed power purchase agreements, data
request responses, or consultant reports, or any combination,
provided that the Division of Ratepayer Advocates and other consumer
groups that are nonmarket participants shall be provided access to
this information under confidentiality procedures authorized by the
commission.
(h) Nothing in this section alters, modifies, or amends the
commission's oversight of affiliate transactions under its rules and
decisions or the commission's existing authority to investigate and
penalize an electrical corporation's alleged fraudulent activities,
or to disallow costs incurred as a result of gross incompetence,
fraud, abuse, or similar grounds. Nothing in this section expands,
modifies, or limits the State Energy Resources Conservation and
Development Commission's existing authority and responsibilities as
set forth in Sections 25216, 25216.5, and 25323 of the Public
Resources Code.
(i) An electrical corporation that serves less than 500,000
electric retail customers within the state may file with the
commission a request for exemption from this section, which the
commission shall grant upon a showing of good cause.
(j) (1) Prior to its approval pursuant to Section 851 of any
divestiture of generation assets owned by an electrical corporation
on or after September 24, 2002, the commission shall determine the
impact of the proposed divestiture on the electrical corporation's
procurement rates and shall approve a divestiture only to the extent
it finds, taking into account the effect of the divestiture on
procurement rates, that the divestiture is in the public interest and
will result in net ratepayer benefits.
(2) Any electrical corporation's procurement necessitated as a
result of the divestiture of generation assets on or after September
24, 2002, shall be subject to the mechanisms and procedures set forth
in this section only if its actual cost is less than the recent
historical cost of the divested generation assets.
(3) Notwithstanding paragraph (2), the commission may deem
proposed procurement eligible to use the procedures in this section
upon its approval of asset divestiture pursuant to Section 851.
SEC. 22. Chapter 4.5 (commencing with Section 950) is added to
Part 1 of Division 1 of the Public Utilities Code, to read:
CHAPTER 4.5. CALIFORNIA RENEWABLES PORTFOLIO STANDARD PROGRAM
Article 1. General Provisions and Definitions
950. The Legislature finds and declares all of the following:
(a) California has plentiful and robust natural resources that it
has yet to utilize and from which it can derive a sustainable way of
life. At the same time, California faces challenges unlike those that
it has ever faced. At present, pollution in California's cities
threatens human health and despoils the natural beauty of the state.
Recent environmental trends portend a future of dramatic change to
the state's landscape, with effects on the state's species, habitats,
and population centers that are not yet fully understood.
(b) The California Renewables Portfolio Standard Program is
established to address those challenges and, with the instruments of
policy set forth in this chapter, seeks to accomplish the following
statewide policy objectives:
(1) Reducing emissions of greenhouse gases and California's
contribution to global warming.
(2) Reducing in-state consumption of nonrenewable fuels in order
to improve the public health and air quality throughout the state.
(3) Stimulating sustainable economic development, encouraging
innovation in energy technologies, and creating new employment
opportunities.
(4) Decreasing California's reliance on imported sources of
energy.
(5) Increasing fuel diversity and promoting greater stability and
predictability in electricity prices for consumers.
(c) In order to achieve the ambitious targets set forth in this
chapter, it will be necessary to facilitate investments in California'
s electrical transmission infrastructure to ensure system
reliability, relieve transmission congestion, and meet future growth
in load with eligible renewable energy resources.
(d) California must meet its renewable energy goals while
simultaneously ensuring that no interruptions in electrical service
occur because of intermittent renewable energy procurement and that
future growth in load can be met by procuring renewables long after
the goals of this renewables portfolio standard are met.
(e) It is the policy of this state and the intent of the
Legislature that the California Renewables Portfolio Standard Program
not adversely impact the ability of an electrical corporation to
pursue other measures recognized by the State Air Resources Board as
necessary to achieve the greenhouse gases emissions reduction targets
established by the California Global Warming Solutions Act of 2006.
952. For purposes of this chapter, the following terms have the
following meanings:
(a) (1) "Above-market costs" means the cost of procuring
electricity from eligible renewable energy resources that are above
the benchmark price adopted by the commission pursuant to Section
963.
(2) "Above-market costs" shall include the costs of all
procurement of electricity from all eligible renewable energy
resources that the retail seller or local publicly owned electric
utility applies toward the renewables portfolio standard procurement
requirements, including the costs of contracts approved through the
procurement process established pursuant to this chapter, the cost of
bilateral contacts for electricity from eligible renewable energy
resources, the cost of eligible renewable energy resources owned by
the retail seller or local publicly owned electric utility, the cost
of procurement of electricity from an eligible renewable energy
resource that is a qualifying facility pursuant to the federal Public
Utility and Regulatory Policy Act, as amended (16 U.S.C. Sec. 824a-3
et seq.), the cost of any must take obligations under a feed-in
tariff with an eligible renewable energy resource for which the
retail seller or local publicly owned electric utility obtains the
renewable energy credits, and the cost of any unbundled renewable
energy credits the retail seller or local publicly owned electric
utility purchases to comply with the renewables portfolio standard.
(3) "Above-market costs" shall not include indirect expenses,
including imbalance energy charges, sale of excess energy, decreased
generation from existing resources, or transmission upgrades.
(b) "Below-market costs" means the difference between the
benchmark price adopted by the commission pursuant to Section 963 and
the cost of procuring electricity from eligible renewable energy
resources that is priced below the benchmark price.
(a)
(c) "Conduit hydroelectric facility" means a facility
for the generation of electricity that uses only the hydroelectric
potential of an existing pipe, ditch, flume, siphon, tunnel, canal,
or other manmade conduit that is operated to distribute water for a
beneficial use and that meets the eligibility requirements of Section
953 and subdivision (c) of Section 954.
(b)
(d) "Delivered" and "delivery," in reference to the
electricity generated by an eligible renewable energy resource, mean
that the electricity is used to serve end-use retail customers
located within the state or is simultaneously scheduled to meet
anticipated in-state load.
(c)
(e) "Eligible renewable energy resource" means an
electric generating facility that uses biomass, solar energy, wind,
geothermal, fuel cells using renewable fuels, small hydroelectric
generation of 30 megawatts or less, digester gas, municipal solid
waste conversion, landfill gas, ocean wave, ocean thermal, or tidal
current, and any additions or enhancements to the facility using that
technology, and that meets the general eligibility requirements of
Section 953 and, when applicable, the requirements for specific
renewable energy sources of Section 954.
(d)
(f) "Procure" means that a retail seller receives
delivered electricity generated by an eligible renewable energy
resource that it owns or for which it has entered into an electricity
purchase agreement. Nothing in this chapter is intended to imply
that the purchase of electricity from third parties in a wholesale
transaction is the preferred method of fulfilling a retail seller's
obligation to comply with this chapter.
(e)
(g) (1) "Renewable energy credit" means a certificate
of proof, issued through the accounting system established by the
Energy Commission pursuant to Section 975 980
, that either one unit of electricity was
generated and delivered by an eligible renewable energy resource.
(2) "Renewable energy credit" includes all renewable and
environmental attributes associated with the production of
electricity from the eligible renewable energy resource or
nondeliverable renewable energy resource, except for an
emissions reduction credit issued pursuant to Section 40709 of the
Health and Safety Code and any credits or payments associated with
the reduction of solid waste and treatment benefits created by the
utilization of biomass or biogas fuels.
(f)
(h) "Renewable generator" means the owner or operator
of an eligible renewable energy resource with the authority to
contract for the electricity generated by the facility.
(g)
(i) "Renewables portfolio standard" means the specified
percentage of electricity generated by eligible renewable energy
resources that a retail seller or local publicly owned electric
utility is required to procure pursuant to this chapter.
(h)
(j) (1) "Retail seller" means an entity engaged in the
retail sale of electricity to end-use customers located within the
state, including any of the following:
(A) An electrical corporation.
(B) A community choice aggregator. The commission shall institute
a rulemaking to determine the manner in which a community choice
aggregator will participate in the renewables portfolio standard
program subject to the same terms and conditions applicable to an
electrical corporation.
(C) An electric service provider, as defined in Section 218.3. The
commission shall determine the manner in which electric service
providers will participate in the renewables portfolio standard
program. The electric service provider shall be subject to the same
terms and conditions applicable to an electrical corporation pursuant
to this chapter. Nothing in this paragraph shall impair a contract
entered into between an electric service provider and a retail
customer prior to the suspension of direct access by the commission
pursuant to Section 80110 of the Water Code.
(2) "Retail seller" does not include any of the following:
(A) A corporation or person employing cogeneration technology or
producing electricity consistent with subdivision (b) of Section 218.
(B) The Department of Water Resources acting in its capacity
pursuant to Division 27 (commencing with Section 80000) of the Water
Code.
(C) A local publicly owned electric utility.
(k) "Total system annual revenue requirements" means the annual
amount of funds that a retail seller or local publicly owned electric
utility received from its retail customers in this state, averaged
over the previous three years, to pay its costs, including operating
expenses, taxes, and interest paid on debts owed, and a reasonable
rate of return.
(i)
(l) "WECC" means the Western Electricity Coordinating
Council of the North American Electric Reliability Corporation, or a
successor entity to either corporation.
953. To be eligible for meeting the renewables portfolio
standard, an eligible renewable energy resource shall satisfy one of
the following requirements:
(a) The
facility is located in the state, or near the border of the state
with its first point of connection to the transmission network
within this state, and electricity produced by the facility
is delivered to an in-state location. controlled by
the Independent System Operator or a local publicly owned electric
utility.
(b) The facility has its first point of interconnection to the
transmission network outside the state and satisfies all of the
following requirements:
(1) It is connected to the transmission network within the WECC
service territory.
(2) Electricity produced by the facility is delivered to an
in-state location.
(3) It will not cause or contribute to any violation of a
California environmental quality standard or requirement.
(4) If the facility is outside of the United States, it is
developed and operated in a manner that is as protective of the
environment as a similar facility located in the state.
(5) It participates in the accounting system to verify compliance
with the renewables portfolio standard by retail sellers, once
established by the Energy Commission pursuant to subdivision (a) of
Section 975 980 .
(6) It commences initial commercial operation after January 1,
2005.
(c) The facility meets the requirements of paragraphs (1), (2),
(3), (4), and (5) in subdivision (b), but does not meet the
requirements of paragraph (6) because it commences initial operation
prior to January 1, 2005, if the facility satisfies either of the
following requirements:
(1) The electricity is from incremental generation resulting from
expansion or repowering of the facility.
(2) The facility has been part of the existing baseline of
eligible renewable energy resources of the retail seller or local
publicly owned electric utility.
954. (a) (1) Except as provided in paragraph (2), a hydroelectric
generation facility that is larger than 30 megawatts is not an
eligible renewable energy resource.
(2) The incremental increase in the amount of electricity
generated from a hydroelectric generation facility as a result of
efficiency improvements at the facility, is electricity from an
eligible renewable energy resource, without regard to the electrical
output of the facility, if all of the following conditions are met:
(A) The incremental increase is the result of efficiency
improvements from a retrofit that do not result in an adverse impact
on instream beneficial uses or cause a change in the volume or timing
of streamflow.
(B) The hydroelectric generation facility has, within the
immediately preceding 15 years, received certification from the State
Water Resources Control Board pursuant to Section 401 of the Clean
Water Act (33 U.S.C. Sec. 1341), or has received certification from a
regional board to which the state board has delegated authority to
issue certification, unless the facility is exempt from certification
because there is no potential for discharge into waters of the
United States.
(C) The hydroelectric generation facility was operational prior to
January 1, 2007, the efficiency improvements are initiated on or
after January 1, 2008, the efficiency improvements are not the result
of routine maintenance activities, as determined by the Energy
Commission, and the efficiency improvements were not included in any
resource plan sponsored by the facility owner prior to January 1,
2008.
(D) All of the incremental increase in electricity resulting from
the efficiency improvements are demonstrated to result from a
long-term financial commitment by the retail seller or local publicly
owned electric utility. For purposes of this paragraph, "long-term
financial commitment" means either new ownership investment in the
facility by the retail seller or local publicly owned electric
utility, or a new or renewed contract with a term of 10 or more
years, which includes procurement of the incremental generation.
(b) (1) Except for a conduit hydroelectric generation facility
operating pursuant to subdivision (c), a hydroelectric generation
facility of 30 megawatts or less that was in operation prior to
January 1, 2006, shall be eligible only if a retail seller or local
publicly owned electric utility procured the electricity from the
facility as of December 31, 2005.
(2) A hydroelectric generation facility of 30 megawatts or less
that becomes operational on or after January 1, 2006, is not eligible
if it will cause an adverse impact on instream beneficial uses or
cause a change in the volume or timing of streamflow.
(3) A small hydroelectric generation facility that satisfies the
criteria for an eligible renewable energy resource pursuant to this
subdivision shall not lose its eligibility if efficiency improvements
undertaken after January 1, 2008, cause the generating capacity of
the facility to exceed 30 megawatts, and the efficiency improvements
do not result in an adverse impact on instream beneficial uses or
cause a change in the volume or timing of streamflow. The entire
generating capacity of the facility shall be eligible.
(c) (1) A conduit hydroelectric facility of 30 megawatts or less
that commenced operation before January 1, 2006, is an eligible
renewable energy resource.
(2) A conduit hydroelectric generation facility of 30 megawatts or
less that becomes operational on or after January 1, 2006, is an
eligible renewable energy resource unless it will cause an adverse
impact on instream beneficial uses or cause a change in the volume or
timing of streamflow.
(d) A facility engaged in the combustion of municipal solid waste
is not an eligible renewable energy resource unless it is located in
Stanislaus County and was operational prior to September 26, 1996.
(d)
(e) A facility engaged in the conversion of municipal
solid waste using a noncombustion thermal process to convert solid
waste to a clean-burning fuel for the purpose of generating
electricity is an eligible renewable energy resource if
either it is located in Stanislaus County and was operational prior
to September 26, 1996, or it meets all of the following
conditions:
(1) The technology does not use air or oxygen in the conversion
process, except ambient air to maintain temperature control.
(2) The technology produces no discharges of air contaminants or
emissions, including greenhouse gases as defined in Section 42801.1
of the Health and Safety Code.
(3) The technology produces no discharges to surface waters
or groundwaters of the state.
(4) The technology produces no hazardous wastes.
(5) The technology removes all recyclable materials and marketable
green waste compostable materials from the solid waste stream prior
to the conversion process, to the maximum extent feasible, and the
owner or operator of the facility certifies that those materials will
be recycled or composted.
(6) The facility is in compliance with all applicable laws,
regulations, and ordinances.
(7) The technology meets any other conditions established by the
commission.
(8) The facility certifies that any local agency sending solid
waste to the facility diverted at least 30 percent of all solid waste
it collects through solid waste reduction, recycling, and
composting. For purposes of this paragraph, "local agency" means any
city, county, or special district, or subdivision thereof, which is
authorized to provide solid waste handling services.
955. A retail seller or local publicly owned electric utility
may, for purposes of complying with its renewables portfolio standard
procurement requirements, count electricity generated by a renewable
energy resource that does not meet the requirements to be an
eligible renewable energy resource pursuant to this chapter, if both
of the following are true:
(a) The electricity and any associated renewable energy credits
are procured pursuant to a contract formed prior to January 1, 2010.
(b) The renewable energy resource was certified by the Energy
Commission as an eligible renewable energy resource under Article 16
(commencing with Section 399.11) of Chapter 2.3 prior to January 1,
2010.
955. 959. This chapter shall become
operative on January 1, 2011.
Article 2. Implementation of the Renewables Portfolio Standard
for Retail Sellers
960. In order to fulfill unmet long-term resource needs, the
commission shall establish a renewables portfolio standard requiring
each retail seller to increase its procurement of eligible renewable
energy resources to accomplish all of the following:
(a) Procure at least 20 percent of the electricity delivered to
its retail customers from eligible renewable energy resources.
(b) Procure at least 25 percent of the electricity delivered to
its retail customers from eligible renewable energy resources by
December 31, 2015.
(c) Procure at least 33 percent of the electricity delivered to
its retail customers from eligible renewable energy resources by
December 31, 2020.
960. (a) In order to fulfill unmet long-term resource needs, the
commission shall establish a renewables portfolio standard requiring
all retail sellers to procure a minimum quantity of electricity
generated by eligible renewable energy resources as a specified
percentage of total kilowatthours sold to their retail end-use
customers, each calendar year, to achieve the targets of subdivision
(b).
(b) The commission shall implement procurement targets for all
retail sellers that require a retail seller to increase its total
procurement of eligible renewable energy resources as follows:
(1) Procure at least 23 percent of the electricity delivered to
its retail customers from eligible renewable energy resources by
December 31, 2014.
(2) Procure at least 27 percent of the electricity delivered to
its retail customers from eligible renewable energy resources by
December 31, 2017.
(3) Procure at least 33 percent of the electricity delivered to
its retail customers from eligible renewable energy resources by
December 31, 2020.
(c) If a retail seller fails to procure sufficient eligible
renewable energy resources in a given year to meet any procurement
requirement established pursuant to subdivision (b), the retail
seller shall procure additional eligible renewable energy resources
in subsequent years to compensate for the shortfall.
962. (a) The commission shall direct each electrical corporation
to prepare a renewable energy procurement plan to satisfy its
procurement requirements under the renewables portfolio standard. The
renewable energy procurement plan shall, to the extent feasible, be
proposed, reviewed, and adopted by the commission as part of, and
pursuant to, a general procurement plan process pursuant to Section
454.5. The commission shall require each electrical corporation to
review and update its renewable energy procurement plan as it
determines to be necessary.
(b) (1) The renewable energy procurement plan shall include a
process that provides criteria
(b) The renewable energy procurement plan submitted by an
electrical corporation shall include all of the following:
(1) Criteria for the rank
ordering and selection of eligible renewable energy resources to
comply with the renewables portfolio standard procurement requirement
so that each the electrical
corporation's total renewables portfolio benefits ratepayers. This
process shall consider estimates of indirect costs associated with
needed transmission investments and ongoing utility expenses
resulting from integrating and operating eligible renewable energy
resources. This process shall also consider
(2) An analysis of the viability
of the eligible renewable energy resource, including the developer's
experience, the feasibility of the technology used to generate
electricity, and the risk that the facility will not be built, or
construction will be delayed, with the result that electricity will
not be delivered as required by the contract.
(2) The renewable energy procurement plan submitted by an
electrical corporation shall include all of the following:
(A)
(3) An assessment of annual or multiyear portfolio
supplies and demand to determine the optimal mix of eligible
renewable energy resources with deliverability characteristics that
may include peaking, dispatchable, baseload, firm, and as-available
capacity.
(B)
(4) Provisions for employing available compliance
flexibility mechanisms established by the commission.
(C)
(5) A bid solicitation setting forth the need for
eligible renewable energy resources of each deliverability
characteristic, required online dates, and locational preferences, if
any.
(D) An analysis of the risk that the eligible renewable energy
resource will not be built, or that construction will be delayed,
with the result that electricity will not be delivered as required by
the contract.
(6) An analysis of the potential federal and local impediments to
the construction and operation of the eligible renewable energy
resources.
(7) An analysis of the degree to which the eligible renewable
energy resource is likely to fulfill the goals of the renewables
portfolio standard program.
(c) Each electrical corporation's renewable energy procurement
plan shall rank and express a preference to procure eligible
renewable energy resources in the following order:
(1) Electricity and associated renewable energy credits from
eligible renewable energy resources located in this state.
(2) Delivered electricity and associated renewable energy credits
from eligible renewable energy resources located outside this state,
but within the WECC.
(c)
(d) As part of its procurement plan bid solicitation,
each electrical corporation shall offer standard terms and conditions
to be used in contracting with renewable generators for eligible
renewable energy resources, including performance requirements for
renewable generators. A contract for the purchase of electricity
generated by an eligible renewable energy resource shall, at a
minimum, include the renewable energy credits associated with all
electricity generation specified under the contract. The standard
terms and conditions of the contract shall include the requirement
that, no later than six months after the commission's approval of an
electricity purchase agreement entered into pursuant to this chapter,
the following information about the agreement shall be disclosed by
the commission: the names of the contracting parties, the renewable
energy resource type, the project location, and the generating
capacity of the project.
(d)
(e) (1) In soliciting and procuring eligible renewable
energy resources, each electrical corporation shall offer contracts
of no less than 10 years' duration, unless the commission approves of
a contract of shorter duration.
(2) The commission may authorize a retail seller to enter into a
contract of less than 10 years' duration with a renewable generator
for the electricity generated by an eligible renewable energy
resource, if the commission has established, for each retail seller,
minimum quantities of eligible renewable energy resources to be
procured either through contracts of at least 10 years' duration or
from new facilities commencing commercial operations on or after
January 1, 2005.
(e)
(f) The commission shall review and accept, modify, or
reject each electrical corporation's renewable energy procurement
plan prior to the commencement of renewable procurement
procurement of eligible renewable energy resources
pursuant to this chapter by an electrical corporation.
(f)
(g) (1) The commission
shall review the results of a solicitation for eligible renewable
energy resources submitted for approval by an electrical corporation
and accept or reject proposed contracts with the renewable generator
based on consistency with the approved renewable energy procurement
plan. If the commission determines that the bid prices are elevated
due to a lack of effective competition among the bidders, the
commission shall direct the electrical corporation to renegotiate the
contracts or conduct a new solicitation.
(2) In determining the reasonableness of individual contracts for
eligible renewable energy resources, the commission shall not use the
benchmark price established pursuant to Section 963 as the basis for
determining whether a contract is presumed reasonable or as the sole
basis for determining whether a contract is, or is not, just and
reasonable.
(g) (1) The commission shall provide preference to contracts for
renewable energy resources that are from a California supplier.
(2) For purposes of this paragraph, "California supplier" means
any sole proprietorship, partnership, joint venture, corporation, or
other business entity that manufactures eligible renewable energy
resources in California that are supplied to the renewable generator
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 renewable energy resources to a renewable generator:
(i) Owns and operates a manufacturing facility located in
California that builds or manufactures eligible renewable energy
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.
(h) Procurement and administrative costs associated with long-term
contracts entered into by an electrical corporation for eligible
renewable energy resources pursuant to this chapter and approved by
the commission shall be deemed reasonable per se by the commission,
and shall be recoverable in rates.
(i) (1) If an electrical corporation fails to comply with a
commission order adopting a renewable energy procurement plan, the
commission shall exercise its authority pursuant to Section 2113 to
require compliance. The commission shall enforce comparable penalties
on any retail seller that is not an electrical corporation that
fails to meet renewables procurement requirements pursuant to Section
960.
(2) Notwithstanding paragraph (1), if the
the commission may waive penalties for a retail seller's failure to
achieve the procurement requirements established pursuant to
subdivision (b) of Section 960, if either of the following conditions
are met:
(A) The commission determines
that a retail seller has made a commercially
reasonable effort to procure eligible renewable energy resources in
an amount sufficient to meet its renewables portfolio standard
procurement requirements, the commission may waive penalties
for the retail seller's failure to procure at least 20 percent of
the electricity delivered to its retail customers from eligible
renewable energy resources by December 31, 2010.
requirements and, as a result of circumstances beyond the control of
the retail seller, it was unable to meet its procurement requireme
nts.
(B) The commission determines that a retail seller has made
investments in energy efficiency that has resulted in significantly
less demand for electricity.
963. (a) The commission shall provide preference to contracts for
eligible renewable energy resources that are from a California
supplier.
(b) For purposes of this paragraph, "California supplier" means
any sole proprietorship, partnership, joint venture, corporation, or
other business entity that manufactures eligible renewable energy
resources in California that are supplied to the renewable generator
and that meets either of the following criteria:
(1) 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.
(2) 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 renewable energy resources to a renewable generator:
(A) Owns and operates a manufacturing facility located in
California that builds or manufactures eligible renewable energy
resources.
(B) Is licensed by the state to conduct business within the state.
(C) 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.
963. 964. (a) (1) The commission
shall, by January 1, 2011, and annually thereafter, establish and
adopt a benchmark price for electricity generated by an eligible
renewable energy resource, for terms corresponding to the length of
contracts with renewable generators, in consideration of the
following:
(A) The long-term market price of electricity for all fixed-price
contracts determined pursuant to an electrical corporation's general
procurement activities as authorized by the commission.
(B) The value of different deliverability characteristics for
electricity, including baseload, peaking, dispatchable, firm, and
as-available electricity.
(C) The value of the carbon reductions from the
reducing emissions of greenhouse gases by generating
electricity using eligible renewable energy resources and the
value of any other emissions reductions that are not already
accounted for pursuant to Section 40709 of the Health and Safety
Code.
(D) The value of increasing the diversity of the statewide supply
of sources of energy for generating electricity.
(2) The benchmark price shall not include any indirect expenses,
including imbalance energy charges, sale of excess energy, decreased
generation from existing resources, or transmission upgrades.
(b) The commission shall, by January 1, 2011, for each electrical
corporation, establish a limitation on the total costs expended above
the benchmark prices determined in subdivision (a) for the
procurement of eligible renewable energy resources to achieve the
procurement targets established pursuant to this article. The cost
limitation shall not exceed 5 percent of the electrical corporation's
revenue requirement.
(c) If the cost limitation established by the commission for an
electrical corporation pursuant to subdivision (b) is insufficient to
support the total costs expended above the benchmark prices
determined pursuant to subdivision (a) for the procurement of
eligible renewable energy resources, the commission shall allow the
electrical corporation to limit its procurement to the quantity of
eligible renewable energy resources that can be procured at or below
the benchmark prices.
(b) (1) A retail seller shall not be required to procure
additional electricity generated by eligible renewable energy
resources pursuant to Section 960, if the net annualized costs
expended above the benchmark prices adopted by the commission
pursuant to subdivision (a) exceed 5 percent of the retail seller's
total system annual revenue requirement.
(2) The net annualized costs expended above the benchmark prices
shall be calculated by determining the sum of all above-market costs
and reducing that amount by the sum of all below-market costs of
procurement of electricity from eligible renewable energy resources.
(d)
(c) An electrical corporation may voluntarily propose
to procure eligible renewable energy resources at above the benchmark
price that are not counted toward the cost limitation. Any voluntary
procurement above the benchmark price shall be subject to commission
approval prior to the expense being recovered in rates.
964. 965. (a) Subject to the
provisions of this section, the requirements of this chapter apply to
an electrical corporation with 60,000 or fewer customer accounts in
California that serves retail end-use customers outside California.
(b) For an electrical corporation with 60,000 or fewer customer
accounts in California that serves retail end-use customers outside
California, an eligible renewable energy resource includes a facility
that is located outside California, if the facility is connected to
the WECC transmission system, provided all of the following
conditions are met:
(1) The electricity generated by the facility is procured by the
electrical corporation on behalf of its California customers, and is
not used to fulfill renewable energy procurement requirements in
other states.
(2) The electrical corporation participates in, and complies with,
the accounting system administered by the Energy Commission pursuant
to Article 4 (commencing with Section 975)
980) .
(3) The Energy Commission verifies that the electricity
generated by the facility is eligible to meet the procurement targets
of this article.
(c) The commission shall determine the procurement targets for an
electrical corporation with 60,000 or fewer customer accounts in
California that serves retail end-use customers outside California,
as a specified percentage of total kilowatthours sold by the
electrical corporation to its retail end-use customers in California
in a calendar year.
(d) An electrical corporation with 60,000 or fewer customer
accounts in California that serves retail end-use customers outside
California, may use an integrated resource plan prepared in
compliance with the requirements of another state utility regulatory
commission, to fulfill the requirement to prepare a renewable energy
procurement plan pursuant to this article, provided the plan meets
the requirements of this chapter, as modified by this section.
(e) Procurement and administrative costs associated with long-term
contracts entered into by an electrical corporation with 60,000 or
fewer customer accounts in California that serves retail end-use
customers outside California, for eligible renewable energy resources
pursuant to this chapter, at or below the benchmark price determined
by the commission pursuant to Section 963
964 , are reasonable and shall be recoverable in rates of the
electrical corporation's California customers, provided the costs are
not recoverable in rates in other states served by the electrical
corporation.
966. (a) The commission, in consultation with the Energy
Commission and the Independent System Operator, shall report to the
Governor and the Legislature by January 1, 2012, and by January 1 of
each even-numbered year thereafter, on the state's progress toward
achieving a statewide 33 percent renewables portfolio standard. The
report shall include all of the following:
(1) The current status and progress made during the prior two
years toward procurement of eligible renewable energy resources
located in the state as a percentage of retail sales, including the
status of siting and permitting eligible renewable resources by
federal, state, and local agencies, procurement of eligible renewable
energy resources located outside the state and within the WECC, and
procurement of unbundled renewable energy credits.
(2) The current status and progress made during the prior two
years toward construction of, and upgrades to, transmission and
distribution facilities and other electrical system components to
interconnect eligible renewable energy resources and to deliver the
electricity generated by those resources to load, including the
status of planning, siting, and permitting transmission facilities by
federal, state, and local agencies.
(3) The current status and progress made during the prior two
years in integrating intermittent eligible renewable energy resources
into the total electricity supply mix, including frequency control,
balancing load and generation, ramping, utilization of smart grid and
storage technologies, and the status of siting and permitting load
following resources by federal, state, and local agencies.
(4) The total costs of achieving progress toward a statewide 33
percent renewables portfolio standard, including indirect costs,
including, but not limited to, integrating and delivering eligible
renewable resources, and the cost per ton of reducing emissions of
greenhouse gases and the amount and rate of reductions achieved.
(5) Recommendations to remove impediments to making progress
toward achieving a statewide 33 percent renewables portfolio
standard, including adjustments to total cost limitations.
(6) Recommendations to achieve greater cost-effective reductions
in emissions of greenhouse gases through energy efficiency and demand
response, including use of efficient combined heat and power
systems, or other strategies.
(b) The commission may include the information required by this
section with the report prepared pursuant to Section 747.
965. 967. (a) The commission may
authorize a procurement entity to enter into contracts on behalf of
customers of a retail seller for electricity generated by eligible
renewable energy resources to meet the retail seller's renewables
portfolio standard procurement requirements. The commission may not
require any person or corporation to act as a procurement entity or
require any party to purchase electricity generated by eligible
renewable energy resources from a procurement entity.
(b) The procurement entity shall, subject to review and approval
by the commission, recover reasonable administrative and procurement
costs through the retail rates of end-use customers that are served
by the procurement entity and are directly benefiting from the
procurement of electricity generated by eligible renewable energy
resources.
966. 968. Construction, alteration,
demolition, installation, and repair work on an eligible renewable
energy resource that receives production incentives pursuant to
Section 25742 of the Public Resources Code, including work performed
to qualify, receive, or maintain production incentives is "public
works" for the purposes of Chapter 1 (commencing with Section 1720)
of Part 7 of Division 2 of the Labor Code.
Article 3. Implementation of the Renewables Portfolio Standard
for Local Publicly Owned Electric Utilities
970. (a) In order to fulfill unmet long-term resource needs, each
governing body of a local publicly owned electric utility shall
be responsible for implementing and enforcing a renewables
portfolio standard that accomplishes all of the following:
(1) Procures at least 20 percent of the electricity delivered to
its retail customers from eligible renewable energy resources.
(2) Procures at least 25 percent of the electricity delivered to
its retail customers from eligible renewable energy resources by
December 31, 2015.
(3) Procures at
least 33 percent of the electricity delivered to its retail customers
from eligible renewable energy resources by December 31, 2020.
establish a renewables portfolio standard requiring
the utility to procure a minimum quantity of electricity generated by
eligible renewable energy resources as a specified percentage of
total kilow atthours sold to the utility's retail end-use
customers, each calendar year, to achieve the targets of subdivision
(b).
(b) The governing board shall implement procurement targets for a
local publicly owned electric utility that require the utility to
increase its total procurement of eligible renewable energy resources
as follows:
(1) Procure at least 23 percent of the electricity delivered to
its retail customers from eligible renewable energy resources by
December 31, 2014.
(2) Procure at least 27 percent of the electricity delivered to
its retail customers from eligible renewable energy resources by
December 31, 2017.
(3) Procure at least 33 percent of the electricity delivered to
its retail customers from eligible renewable energy resources by
December 31, 2020.
(c) If a local publicly owned electric utility fails to procure
sufficient eligible renewable energy resources in a given year to
meet any target established pursuant to subdivision (b), the utility
shall procure additional eligible renewable energy resources in
subsequent years to compensate for the shortfall.
(b)
971. (a) The governing board of
the local publicly owned electric utility shall adopt a program for
the enforcement of this article on or before January 1, 2011. The
program shall be adopted at a publicly noticed meeting offering all
interested parties an opportunity to comment. Not less than 30 days'
notice shall be given to the public of any meeting held for purposes
of adopting the program. Not less than 10 days' notice shall be given
to the public before any meeting is held to make a substantive
change to the program.
(c) A local publicly owned electric utility shall retain
discretion over the manner employed by the utility to meet the
renewables portfolio standard established pursuant to this section.
The discretionary authority of a local publicly owned electric
utility includes, but is not limited to, all of the following:
(1) The mix of eligible renewable energy resources procured or
owned by the utility and those additional generation resources
procured or owned by the utility for purposes of ensuring resource
adequacy and reliability.
(2) The prices paid by the utility for electricity generated by
eligible renewable energy resources.
(3) The reasonable costs incurred by the utility for renewable
energy resources owned by the utility.
(d)
(b) (1) Each local publicly owned electric utility
shall annually post notice, in accordance with Chapter 9 (commencing
with Section 54950) of Part 1 of Division 2 of Title 5 of the
Government Code, whenever its governing body will deliberate in
public on its renewable energy resources procurement plan.
(2) Contemporaneous with the posting of the notice of a public
meeting to consider the renewable energy resources procurement plan,
the local publicly owned electric utility shall notify the Energy
Commission of the date, time, and location of the meeting in order to
enable the Energy Commission to post the information on its Internet
Web site. This requirement is satisfied if the local publicly owned
electric utility provides the uniform resource locator (URL) that
links to this information.
(3) Upon distribution to its governing body of information related
to its renewable energy resources procurement status and future
plans, for its consideration at a noticed public meeting, the local
publicly owned electric utility shall make that information available
to the public and shall provide the Energy Commission with an
electronic copy of the documents for posting on the Energy Commission'
s Internet Web site. This requirement is satisfied if the local
publicly owned electric utility provides the uniform resource locator
(URL) that links to the documents or information regarding other
manners of access to the documents.
(e)
(c) Within 30 business days after a local publicly
owned electric utility executes a renewable energy resources
procurement contract, the local publicly owned electric utility shall
submit, to the Energy Commission, documentation that includes all of
the following:
(1) A description of the eligible renewable energy resource,
including the duration of the contract or electricity purchase
agreement.
(2) A description and identification of the electric generating
facility providing the eligible renewable energy resource under the
contract.
(3) An estimate of the percentage increase in the utility's total
retail sales of electricity from eligible renewable energy resources
that will result from the contract.
(f) A local publicly owned electric utility may use renewable
energy credits to meet its renewables portfolio standard procurement
requirements to the same extent and under the same circumstances as a
retail seller is authorized to use renewable energy credits to meet
the retail seller's renewables portfolio standard procurement
requirements.
(g)
(d) Each local publicly owned electric utility shall
report, on an annual basis, to its customers and to the Energy
Commission, the following:
(1) Expenditures of public goods funds collected pursuant to
Section 385 for eligible renewable energy resource development.
Reports shall contain a description of programs, expenditures, and
expected or actual results.
(2) The resource mix used to serve its customers by energy source.
(3) The utility's status in implementing a renewables portfolio
standard pursuant to subdivision (a) and the utility's progress
toward attaining the standard following implementation.
972. A local publicly owned electric utility may use renewable
energy credits to meet its renewables portfolio standard procurement
requirements to the same extent and under the same circumstances as a
retail seller is authorized to use renewable energy credits to meet
the retail seller's renewables portfolio standard procurement
requirements.
973. A local publicly owned electric utility shall
retain discretion over the manner employed by the utility to meet
the renewables portfolio standard established pursuant to this
section. The discretionary authority of a local publicly owned
electric utility includes, but is not limited to, all of the
following:
(a) The mix of eligible renewable energy resources procured or
owned by the utility and those additional generation resources
procured or owned by the utility for purposes of ensuring resource
adequacy and reliability.
(b) The prices paid by the utility for electricity generated by
eligible renewable energy resources.
(c) The reasonable costs incurred by the utility for eligible
renewable energy resources owned by the utility.
(h)
974. Upon a determination by the Energy Commission that
a local publicly owned electric utility has failed to comply with
this article, the State Air Resources Board may impose penalties
pursuant to Part 6 (commencing with Section 38580) of Division 25.5
of the Health and Safety Code. If the State Air Resources Board
has imposed a penalty upon a local publicly owned electric utility
for the utility's failure to meet a renewable energy resources
procurement requirement imposed upon the utility pursuant to the
California Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code), the
board shall not impose an additional penalty pursuant to
this section for the utility's failure to comply with the procurement
requirements of this article.
975. (a) A local publicly owned electric utility
shall not be required to procure additional eligible renewable energy
resources in any three-year procurement period in which net
annualized costs expended above the benchmark prices exceed 5 percent
of the local publicly owned electric utility's total system annual
revenue requirement.
(b) The net annualized costs expended above the benchmark prices
shall be calculated by determining the sum of all above-market costs
and reducing that amount by the sum of all below-market costs of
procurement of electricity from eligible renewable energy resources.
971.
979. (a) A public utility
district that receives all of its electricity pursuant to a
preference right adopted and authorized by the United States Congress
pursuant to Section 4 of the Trinity River Division Act of August
12, 1955 (Public Law 84-386) shall be in compliance with the
renewable energy procurement requirements of this chapter.
(b) For a local publicly owned electric utility that was in
existence on or before January 1, 2009, that provides retail electric
service to 15,000 or fewer customer accounts in California, and is
interconnected to a control area located outside this state within
the WECC, an eligible renewable energy resource includes a facility
that is located outside California, if the facility is connected to
the WECC transmission system, if all of the following conditions are
met:
(1) The electricity generated by the facility is procured by the
local publicly owned electric utility and is not used to fulfill
renewable energy procurement requirements in other states.
(2) The local publicly owned electric utility participates in, and
complies with, the accounting system administered by the Energy
Commission pursuant to Article 4.
(3) The Energy Commission verifies that the electricity generated
by the facility is eligible to meet the renewables portfolio standard
procurement requirements.
Article 4. Duties of the Energy Commission in Implementing the
Renewables Portfolio Standard
975. 980. (a) The Energy Commission
shall do all of the following:
(1) Design and implement an accounting system to verify compliance
with the renewables portfolio standard by retail sellers and local
publicly owned electric utilities, to ensure that electricity
generated by an eligible renewable energy resource is counted only
once for the purpose of compliance with regulatory or legal
requirements of this state or any other state, for verifying retail
product claims in this state or any other state , or to
certify renewable energy credits. In establishing the guidelines
governing this accounting system, the Energy Commission shall collect
data from electricity market participants that it deems necessary to
verify compliance of retail sellers, in accordance with the
requirements of this article and the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code). In seeking data from electrical
corporations, the Energy Commission shall request data from the
commission. The commission shall collect data from electrical
corporations and remit the data to the Energy Commission within 90
days of the request.
(2) Certify eligible renewable energy resources that it determines
meet the criteria described in subdivision (c) of Section 952, the
requirements of Section 953, and when applicable, the requirements of
Section 954.
(3) Establish a system for tracking and verifying renewable energy
credits that, through the use of independently audited data,
verifies the generation and delivery of electricity associated with
each renewable energy credit and protects against multiple counting
of the same renewable energy credit. The Energy Commission shall
consult with other western states and with the WECC in the
development of this system. No electricity generated by an eligible
renewable energy resource attributable to the use of nonrenewable
fuels, beyond a de minimus quantity, as determined by the Energy
Commission, shall result in the creation of a renewable energy
credit.
(b) The Energy Commission may, 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, recommend
additional technologies and resources to be included in the
definition of an eligible renewable energy resource for purposes of
this chapter.
(c) The Energy Commission shall implement this article so that it
is compatible with, and does not preclude achievement of, the
combined heat and power system electricity generation objectives
identified by the State Air Resources Board in its scoping plan
implementing the California Global Warming Solutions Act of 2006
(Division 25.5 (commencing with Section 38500) of the Health and
Safety Code), including maintaining existing levels of electrical
generation from combined heat and power systems and the installation
of an additional 4,000 megawatts of electrical generation from
combined heat and power systems in order to meet goals for reducing
emissions of greenhouse gases.
Article 5. Renewable Energy Credits
980. 990. (a) Subject to the
conditions of this article, a retail seller or local publicly owned
electric utility may use renewable energy credits from eligible
renewable energy resources that are certified by the Energy
Commission pursuant to Article 4, to comply with the renewables
portfolio standard procurement requirements.
(b) No retail seller or local publicly owned electric utility
shall use renewable energy credits to comply with the renewables
portfolio standard procurement requirements pursuant to
subdivision (a) or (b) until the commission and the Energy Commission
find that the tracking system established pursuant to paragraph (3)
of subdivision (a) of Section 975, is operational, is
subdivision (a) unless those renewable energy credits are tracked
through a system, established pursuant to paragraph (3) of
subdivision (a) of Section 980, that is capable of
independently verifying the electricity generated by an eligible
renewable energy resource , and can ensure that
renewable energy credits shall not be double counted for the purposes
of compliance with regulatory or legal requirements of this state or
any other state, or for verifying retail product claims in this
state or any other state.
(c) A renewable energy credit shall be counted only once for the
purposes of compliance with regulatory or legal requirements of this
state or any other state, or for verifying retail product claims in
this state or any other state, except that a renewable energy credit
may be used by a retail seller or local publicly owned electric
utility for both compliance with any federal renewable energy
portfolio requirement and for compliance with the renewables
portfolio standard pursuant to this chapter.
(d) A renewable energy credit shall either be used for purposes of
compliance with regulatory or legal requirements of this state or
any other state, or shall expire within 18 months of the date of
purchase by the retail seller or local publicly owned
utility. its creation.
(e) No renewable energy credits shall be created for electricity
generated pursuant to any electricity purchase contract with a retail
seller or a local publicly owned electric utility executed before
January 1, 2005, unless the contract contains explicit terms and
conditions specifying the ownership or disposition of those credits.
Deliveries under those contracts shall be tracked through the
accounting system described in paragraph (3) of subdivision (a) of
Section 975 980 and included in the
baseline quantity of eligible renewable energy resources of a
purchasing retail seller pursuant to Article 2, or a local publicly
owned electric utility pursuant to Article 3.
(f) No renewable energy credits shall be created for electricity
generated under any electricity purchase contract with a qualifying
facility executed after January 1, 2005, pursuant to the federal
Public Utility Regulatory Policies Act of 1978 (Public Law 95-617).
Deliveries under the electricity purchase contracts shall be tracked
through the accounting system described in paragraph (3) of
subdivision (a) of Section 975 980 and
count toward the renewables portfolio standard procurement
requirements of the purchasing retail seller or local publicly owned
electric utility.
(g) The commission shall allow an electrical corporation to
recover in rates the reasonable costs of purchasing renewable energy
credits to meet its renewables portfolio standard procurement
requirements.
(h) All revenues received by an electrical corporation for the
sale of a renewable energy credit shall be credited to the benefit of
ratepayers.
SEC. 23. Section 1002 of the Public Utilities Code is amended to
read:
1002. (a) The commission, as a basis for granting any certificate
pursuant to Section 1001 shall give consideration to the following
factors:
(1) Community values.
(2) Recreational and park areas.
(3) Historical and aesthetic values.
(4) Influence on environment, except that in the case of any line,
plant, or system or extension thereof located in another state that
will be subject to environmental impact review pursuant to the
National Environmental Policy Act of 1969 (Chapter 55 (commencing
with Section 4321) of Title 42 of the United States Code) or similar
state laws in the other state, the commission shall not consider
influence on the environment unless any emissions or discharges
therefrom would have a significant influence on the environment of
this state.
(b) With respect to any thermal powerplant, eligible renewable
energy resource with a generating capacity of five megawatts or more,
or electrical transmission line for which a certificate is required
pursuant to the provisions of Division 15 (commencing with Section
25000) of the Public Resources Code, no certificate of public
convenience and necessity shall be granted pursuant to Section 1001
without that other certificate having been obtained first, and the
decision granting that other certificate shall be conclusive as to
all matters determined thereby and shall take the place of the
requirement for consideration by the commission of the four factors
specified in subdivision (a) of this section.
(c) The commission, with the concurrence of the Division of
Ratepayer Advocates may, accept as a rebuttable presumption, a
determination of the Independent System Operator, made as part of its
transmission planning process, that a transmission project is needed
to connect to renewable generation.
SEC. 24. Section 1004.5 is added to the Public Utilities Code, to
read:
1004.5. For any application for a certificate to construct or
modify an electrical transmission line, a substantial purpose of
which is to access electricity generated by eligible renewable energy
resources, the commission shall establish a schedule for review of
the application and employ staffing and other resources sufficient to
produce a decision on whether to issue the certificate, or refuse to
issue it, within 12 months of receiving the completed application.
SEC. 25. 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.