BILL NUMBER: AB 1106 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 15, 2010
AMENDED IN SENATE JULY 15, 2009
AMENDED IN SENATE JUNE 25, 2009
AMENDED IN ASSEMBLY MAY 6, 2009
INTRODUCED BY Assembly Members Fuentes and Ruskin
( Coauthors: Senators Price
and Padilla )
FEBRUARY 27, 2009
An act to amend Section 399.20 of, and to add Section
399.21 to, the Public Utilities Code, relating to energy.
An act to amend Section 44272 of the Health and Safety Code,
relating to alternative and renewable fuel and vehicle technology.
LEGISLATIVE COUNSEL'S DIGEST
AB 1106, as amended, Fuentes. Renewable electric
generation facilities: feed-in tariffs. Alternative
and renewable fuel and vehicle technology.
The California Alternative and Renewable Fuel, Vehicle Technology,
Clean Air, and Carbon Reduction Act of 2007 establishes the
Alternative and Renewable Fuel and Vehicle Technology Program, which
is administered by the State Energy Resources Conservation and
Development Commission. The program is required to provide, upon
appropriation by the Legislature, competitive grants, revolving
loans, loan guarantees, or other appropriate funding measures to
public agencies, vehicle and technology entities, businesses and
projects, public-private partnerships, workforce training
partnerships and collaboratives, fleet owners, consumers,
recreational boaters, and academic institutions to develop and deploy
innovative technologies that transform the state's fuel and vehicle
types to help attain the state's climate change policies. The
commission is authorized, until January 1, 2012, to contract with the
Treasurer to expend funds through programs implemented by the
Treasurer, if that expenditure is consistent with all of the
requirements of the act.
This bill would also authorize the commission, until January 1,
2012, to contract with small business financial development
corporations established by the Business, Transportation and Housing
Agency to expend funds through the Small Business Loan Guarantee
Program, if the expenditure is consistent with all of the
requirements of the program and the act.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations,
as defined. The Public Utilities Act imposes various duties and
responsibilities on the commission with respect to the purchase of
electricity by electrical corporations and requires the commission to
review and adopt a procurement plan and a renewable energy
procurement plan for each electrical corporation pursuant to the
California Renewables Portfolio Standard Program (RPS program). The
RPS program requires that a retail seller of electricity, including
electrical corporations, purchase a specified minimum percentage of
electricity generated by eligible renewable energy resources, as
defined, in any given year as a specified percentage of total
kilowatthours sold to retail end-use customers each calendar year
(renewables portfolio standard).
Existing law requires every electrical corporation to file with
the commission a standard tariff for electricity generated by an
electric generation facility, as defined, that is owned and operated
by a retail customer of the electrical corporation. Existing law
requires that the electric generation facility: (1) have an effective
capacity of not more than 1.5 megawatts and be located on property
owned or under the control of the customer, (2) be interconnected and
operate in parallel with the electric transmission and distribution
grid, (3) be strategically located and interconnected to the electric
transmission system in a manner that optimizes the deliverability of
electricity generated at the facility to load centers, and (4) meet
the definition of an eligible renewable energy resource under the RPS
program. Existing law requires that the tariff provide for payment
for every kilowatthour of electricity generated by an electric
generation facility at a market price referent established by the
commission pursuant to the program. Existing law requires the
electrical corporation to make this tariff available to customers
that own and operate an electric generation facility within the
service territory of the electrical corporation, upon request, on a
first-come-first-served basis, until the combined statewide
cumulative rated generating capacity of those electric generation
facilities equals 500 megawatts, or the electrical corporation meets
its proportionate share of the 500 megawatt limit based upon the
ratio of its peak demand to total statewide peak demand of all
electrical corporations. Existing law authorizes the commission to
modify or adjust the above-described requirements for any electrical
corporation with less than 100,000 service connections, as individual
circumstances merit. Existing law provides that the electricity
generated by an electric generation facility counts toward the
electrical corporation's renewables portfolio standard and provides
that the physical generating capacity counts toward meeting the
electrical corporation's resource adequacy requirements. Existing
decisions of the commission refer to this tariff as a feed-in tariff.
This bill would make the existing feed-in tariff statute
applicable to an electric generation facility that interconnects to
the grid and commences initial operation on or before June 30, 2011.
The bill would require an electrical corporation with 100,000 or more
service connections to develop, and upon approval by the commission,
implement a standard-offer contract and feed-in tariff, as defined,
that requires payment for every kilowatthour of electricity delivered
to the grid generated by a tariff-eligible generation facility, as
defined. The bill would require that an electrical corporation obtain
commission approval of the standard-offer contract and feed-in
tariff by June 1, 2011, and to implement the contract and tariff by
July 1, 2011. The bill would have different requirements for two
separate tiers, as specified, of tariff-eligible generation
facilities. For a tier one tariff-eligible generation facility with a
nameplate capacity of not more than 5 megawatts, the price paid by
the electrical corporation for electricity delivered to the grid
would be based on the reasonable cost of production for each eligible
renewable energy resource technology as determined by the
commission, plus a reasonable profit commensurate to that authorized
by the commission for the electrical corporation. For a tier 2
tariff-eligible generation facility with a nameplate capacity of more
than 5 megawatts and not more than 10 megawatts, the price to be
paid by the electrical corporation for electricity delivered to the
grid would be the total benefit of the electricity to ratepayers as
determined by the commission. The bill would require the commission
to establish the price to reflect the value of every kilowatthour of
electricity generated on a time-of-delivery basis and any other
attributes of renewable generation. The bill would require an
electrical corporation to make the standard-offer contract and
feed-in tariff available to the owner or operator of a
tariff-eligible generation facility upon request. The bill would
authorize the commission to modify these requirements for an
electrical corporation with less than 100,000 service connections in
the state based upon the individual circumstances of that electrical
corporation. The bill would provide that the electricity generated by
a tariff-eligible generation facility counts toward the electrical
corporation's renewables portfolio standard and that the purchase of
electricity includes the purchase of all renewable and environmental
attributes associated with the production of electricity by the
tariff-eligible generation facility.
Under existing law, a violation of the Public Utilities Act or an
order or direction of the commission is a crime. Because this bill
would require an order or other action of the commission to implement
its provisions and a violation of that order or action would be a
crime, the bill would impose a state-mandated local program by
creating a new crime.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 44272 of the Health
and Safety Code is amended to read:
44272. (a) The Alternative and Renewable Fuel and Vehicle
Technology Program is hereby created. The program shall be
administered by the commission. The commission shall implement the
program by regulation pursuant to the requirements of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of
Title 2 of the Government Code. The program shall provide, upon
appropriation by the Legislature, competitive grants, revolving
loans, loan guarantees, loans, or other appropriate funding measures,
to public agencies, vehicle and technology entities, businesses and
projects, public-private partnerships, workforce training
partnerships and collaboratives, fleet owners, consumers,
recreational boaters, and academic institutions to develop and deploy
innovative technologies that transform California's fuel and vehicle
types to help attain the state's climate change policies. The
emphasis of this program shall be to develop and deploy technology
and alternative and renewable fuels in the marketplace, without
adopting any one preferred fuel or technology.
(b) A project funded by the commission shall be approved at a
noticed public hearing of the commission and shall be consistent with
the priorities established by the investment plan adopted pursuant
to Section 44272.5.
(c) The commission shall provide preferences to those projects
that maximize the goals of the Alternative and Renewable Fuel and
Vehicle Technology Program, based on the following criteria, as
applicable:
(1) The project's ability to provide a measurable transition from
the nearly exclusive use of petroleum fuels to a diverse portfolio of
viable alternative fuels that meet petroleum reduction and
alternative fuel use goals.
(2) The project's consistency with existing and future state
climate change policy and low-carbon fuel standards.
(3) The project's ability to reduce criteria air pollutants and
air toxics and reduce or avoid multimedia environmental impacts.
(4) The project's ability to decrease, on a life-cycle
life cycle basis, the discharge of water
pollutants or any other substances known to damage human health or
the environment, in comparison to the production and use of
California Phase 2 Reformulated Gasoline or diesel fuel produced and
sold pursuant to California diesel fuel regulations set forth in
Article 2 (commencing with Section 2280) of Chapter 5 of Division 3
of Title 13 of the California Code of Regulations.
(5) The project does not adversely impact the sustainability of
the state's natural resources, especially state and federal lands.
(6) The project provides nonstate matching funds.
(7) The project provides economic benefits for California by
promoting California-based technology firms, jobs, and businesses.
(8) The project uses existing or proposed fueling infrastructure
to maximize the outcome of the project.
(9) The project's ability to reduce on a life-cycle
life cycle assessment greenhouse gas emissions
by at least 10 percent, and higher percentages in the future, from
current reformulated gasoline and diesel fuel standards established
by the state board.
(10) The project's use of alternative fuel blends of at least 20
percent, and higher blend ratios in the future, with a preference for
projects with higher blends.
(11) The project drives new technology advancement for vehicles,
vessels, engines, and other equipment, and promotes the deployment of
that technology in the marketplace.
(d) Only the following shall be eligible for funding:
(1) Alternative and renewable fuel projects to develop and improve
alternative and renewable low-carbon fuels, including electricity,
ethanol, dimethyl ether, renewable diesel, natural gas, hydrogen, and
biomethane, among others, and their feedstocks that have high
potential for long-term or short-term commercialization, including
projects that lead to sustainable feedstocks.
(2) Demonstration and deployment projects that optimize
alternative and renewable fuels for existing and developing engine
technologies.
(3) Projects to produce alternative and renewable low-carbon fuels
in California.
(4) Projects to decrease the overall impact of an alternative and
renewable fuel's life cycle carbon footprint and increase
sustainability.
(5) Alternative and renewable fuel infrastructure, fueling
stations, and equipment. The preference in paragraph (10) of
subdivision (c) shall not apply to renewable diesel or biodiesel
infrastructure, fueling stations, and equipment used solely for
renewable diesel or biodiesel fuel.
(6) Projects to develop and improve light-, medium-, and
heavy-duty vehicle technologies that provide for better fuel
efficiency and lower greenhouse gas emissions, alternative fuel usage
and storage, or emission reductions, including propulsion systems,
advanced internal combustion engines with a 40 percent or better
efficiency level over the current market standard, light-weight
materials, energy storage, control systems and system integration,
physical measurement and metering systems and software, development
of design standards and testing and certification protocols, battery
recycling and reuse, engine and fuel optimization electronic and
electrified components, hybrid technology, plug-in hybrid technology,
battery electric vehicle technology, fuel cell technology, and
conversions of hybrid technology to plug-in technology through the
installation of safety certified supplemental battery modules.
(7) Programs and projects that accelerate the commercialization of
vehicles and alternative and renewable fuels including buy-down
programs through near-market and market-path deployments, advanced
technology warranty or replacement insurance, development of market
niches, supply-chain development, and research related to the
pedestrian safety impacts of vehicle technologies and alternative and
renewable fuels.
(8) Programs and projects to retrofit medium- and heavy-duty
on-road and nonroad vehicle fleets with technologies that create
higher fuel efficiencies, including alternative and renewable fuel
vehicles and technologies, idle management technology, and
aerodynamic retrofits that decrease fuel consumption.
(9) Infrastructure projects that promote alternative and renewable
fuel infrastructure development connected with existing fleets,
public transit, and existing transportation corridors, including
physical measurement or metering equipment and truck stop
electrification.
(10) Workforce training programs related to alternative and
renewable fuel feedstock production and extraction, renewable fuel
production, distribution, transport, and storage, high-performance
and low-emission vehicle technology and high tower electronics,
automotive computer systems, mass transit fleet conversion,
servicing, and maintenance, and other sectors or occupations related
to the purposes of this chapter.
(11) Block grants administered by not-for-profit technology
entities for multiple projects, education and program promotion
within California, and development of alternative and renewable fuel
and vehicle technology centers.
(12) Life-cycle Life cycle and
multimedia analyses, sustainability and environmental impact
evaluations, and market, financial, and technology assessments
performed by a state agency to determine the impacts of increasing
the use of low-carbon transportation fuels and technologies, and to
assist in the preparation of the investment plan and program
implementation.
(e) The commission may make a single source or sole source award
pursuant to this section for applied research. The same requirements
set forth in Section 25620.5 of the Public Resources Code shall apply
to awards made on a single source basis or a sole source basis. This
subdivision does not authorize the commission to make a single
source or sole source award for a project or activity other than for
applied research. The commission may pursuant to this
subdivision make a single source or sole source award for the applied
research to be conducted by the Quiet Motorized Road Vehicle and
Safe Mobility Committee created pursuant to Section 25227 of the
Public Resources Code, if Senate Bill 1174 of the 2007-08 Regular
Session, which would add that section, is enacted.
(f) Until January 1, 2012, the commission may contract
do both of the following:
(1) Contract with the Treasurer
to expend funds through programs implemented by the Treasurer, if
that the expenditure is consistent with
all of the requirements of this chapter.
(2) Contract with small business financial development
corporations established by the Business, Transportation and Housing
Agency to expend funds through the Small Business Loan Guarantee
Program if the expenditure is consistent with all of the requirements
of the program and this chapter. All matter omitted in this
version of the bill appears in the bill as amended in the Senate,
July 15, 2009. (JR11)