BILL NUMBER: SB 14 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 24, 2009
AMENDED IN SENATE MARCH 12, 2009
AMENDED IN SENATE FEBRUARY 17, 2009
AMENDED IN SENATE JANUARY 29, 2009
INTRODUCED BY Senators Simitian, Kehoe, Padilla, and Steinberg
(Coauthors: Senators Alquist, DeSaulnier, Leno,
Lowenthal, Romero, Strickland, and Wiggins)
DECEMBER 1, 2008
An act to add Section 705 to the Fish and Game Code, to amend
Sections 25740, 25741, 25746, 25747, and 25751 of, and to add Section
25524 to, the Public Resources Code, to amend Sections 399.11,
399.12, 399.15, 399.17, and 454.5 of, to amend and renumber Sections
399.13, 399.14, and 399.16 399.16, and 747
of, to add Sections 399.14, 399.16, 399.22, 399.26, 399.27,
399.30, 399.31, and 1005.1 to 911, 1005.1 to,
to add the heading of Article 11 (commencing with Section 910) to
Chapter 4 of Part 1 of Division 1 of , and to repeal Section
387 of, the Public Utilities Code, relating to utilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 14, as amended, Simitian. Utilities: Renewable energy
resources.
(1) Under existing law, the Public Utilities Commission (PUC) has
regulatory authority over public utilities, including electrical
corporations, as defined. 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.
The existing Warren-Alquist State Energy Resources Conservation
and Development Act establishes the State Energy Resources
Conservation and Development Commission (Energy Commission). Existing
law establishes the Renewable Resource Trust Fund as a fund that is
continuously appropriated, with certain exceptions for administrative
expenses, 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 amount equals at least 20% of total retail sales of
electricity in California per year by December 31, 2010, and 33% by
December 31, 2020.
(2) Existing law expresses the intent of the Legislature, in
establishing the California Renewables Portfolio Standard Program
(RPS program), to increase the amount of electricity generated per
year from eligible renewable energy resources, as defined, to an
amount that equals at least 20% of the total electricity sold to
retail customers in California per year by December 31, 2010.
This bill would express the additional intent that the amount of
electricity generated per year from eligible renewable energy
resources is increased to an amount that equals at least 33% of the
total electricity sold to retail customers in California per year by
December 31, 2020.
(3) The Public Utilities Act imposes various duties and
responsibilities on the 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, as defined, pursuant to the 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 in any given year as a specified
percentage of total kilowatthours sold to retail end-use customers
each calendar year. The RPS program requires the PUC to implement
annual procurement targets for each retail seller to increase its
total procurement of electricity generated by eligible renewable
energy resources by at least an additional 1% of retail sales per
year so that 20% of its retail sales of electricity are procured from
eligible renewable energy resources no later than December 31, 2010.
This bill would additionally require, once the retail seller
reaches the 20% renewables target, that the PUC implement triennial
procurement targets for each retail seller to increase its total
procurement of electricity generated by eligible renewable energy
resources by at least an additional 3% every three years so that 33%
of its retail sales are procured from eligible renewable energy
resources no later than December 31, 2020, if the commission
determines that achieving these targets will result in just and
reasonable rates.
Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the PUC
is a crime.
Because the provisions of this bill are within the act and require
action by the PUC to implement its requirements, a violation of
these provisions would impose a state-mandated local program by
expanding the definition of a crime.
(4) 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 repeal this provision and instead make certain of
the requirements of the RPS program, as discussed below, applicable
to local publicly owned electric utilities. By placing additional
requirements upon local publicly owned electric utilities, the bill
would impose a state-mandated local program.
(5) Existing law requires the Energy Commission to certify
eligible renewable energy resources, to design and implement an
accounting system to verify compliance with the RPS requirements by
retail sellers, and to develop tracking, accounting, verification,
and enforcement mechanisms for renewable energy credits, as defined.
This bill would require the Energy Commission to design and
implement an accounting system to verify compliance with the RPS
requirements by retail sellers and local publicly owned electric
utilities. The bill would require the Energy Commission, among other
things, to adopt regulations for the enforcement of the RPS program
with respect to a local publicly owned electric utility, would
require, by October 30, 2010, at a noticed public meeting and in
consultation with the State Air Resources Board, to establish an RPS
requiring each local publicly owned electric utility to procure a
minimum quantity of electricity generated by eligible renewable
energy resources as a specified percentage of total kilowatthours
sold to the utility's retail end-use customers each calendar year.
The bill would require that the RPS established for a local publicly
owned electric utility be consistent with certain targets and
purposes that are applicable to retail sellers. The bill would
require the utility to adopt and implement a renewable energy
resources procurement plan that, at a minimum, complies with the RPS
adopted for the utility by the Energy Commission, would provide that
the utility retains discretion with respect to certain matter in
complying with the RPS, would require that certain notices be given
by the utility when adopting and periodically revising its
procurement plan, and would require the utility to report certain
information relative to RPS compliance to the Energy Commission and
its customers. The bill would require the Energy Commission, in order
to meet the requirements of the RPS program, undertake certain
measures in order to substantially increase the amounts of
electricity generated by eligible renewable energy resources
integrated with and interconnected to specified transmission grids.
(6) Existing law requires that an electrical corporation's
proposed procurement plan include certain elements, including a
showing that the electrical corporation will, in order to fulfill its
unmet resource needs, until a 20% renewable resources portfolio is
achieved, procure renewable energy resources with the goal of
ensuring that at least an additional 1% per year of the electricity
sold by the electrical corporation is generated from eligible
renewable energy resources, provided sufficient funds are made
available to cover the above-market costs for new renewable energy
resources pursuant to certain provisions of the Renewable Energy
Resources Program. Existing law requires the PUC to make a
determination of the existing market cost for electricity (market
price referent).
This bill would require that the PUC enforce these requirements
until the retail seller procures 20% of its retail sales from
eligible renewable energy resources. Once the 20% requirement is met,
the bill would require that an electrical corporation's proposed
procurement plan include a showing that 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 pursuant to the RPS program.
(7) Existing law requires the PUC to prepare and submit to the
Governor and the Legislature a written report annually before
February 1 of each year on the costs of programs and activities
conducted by an electrical corporation or gas corporation that have
more than a specified number of customers in California.
The bill would require the PUC to prepare and submit to the policy
and fiscal committees of the Legislature, annually before February 1
of each year, a report on (a) all electrical corporation revenue
requirement increases associated with meeting the renewables
portfolio standard, (b) all cost savings experienced, or costs
avoided, by electrical corporations as a result of meeting the
renewables portfolio standard, (c) all costs incurred by electrical
corporations for incentives for distributed and renewable generation,
(d) all cost savings experienced, or costs avoided, by electrical
corporations as a result of incentives for distributed generation and
renewable generation, (e) specified costs for which an electrical
corporation is seeking recovery in rates that are pending
determination or approval by the PUC, (f) the decision number of each
PUC decision in the prior year authorizing an electrical corporation
to recover costs incurred in rates, and (g) any changes in the prior
year in load serviced by an electrical corporation.
(7)
(8) The 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, termed a certificate of public convenience and
necessity. Existing law requires the PUC, in acting upon an
application by an electrical corporation for a certificate of public
convenience and necessity, to deem new transmission facilities
necessary to the provision of electric service if the PUC finds that
new transmission facilities are necessary to facilitate achievement
of the renewable power goals established under the RPS program.
Existing law requires the PUC, upon finding that new transmission
facilities are necessary to facilitate achievement of the renewable
power goals established under the RPS, to take all feasible actions
to ensure that the transmission rates established by the Federal
Energy Regulatory Commission (FERC) are fully reflected in any retail
rates established by the PUC.
This bill would require the PUC to approve an application for a
certificate of public convenience and necessity within one year of
the filing of a completed application under specified circumstances
and would authorize the PUC, if it finds the costs are justified
pursuant to the statutory requirements for approving a rate increase,
to allow recovery of certain transmission costs incurred by an
electrical corporation.
(8)
(9) The existing restructuring of the electrical
industry within the Public Utilities Act provides for the
establishment of an Independent System Operator (ISO). Existing law
requires the ISO to ensure efficient use and reliable operation of
the transmission grid consistent with achieving planning and
operating reserve criteria no less stringent than those established
by the Western Electricity Coordinating Council and the American
Electric Reliability Council. Pursuant to existing law, the ISO's
tariffs are required to be approved by the FERC.
This bill would require the ISO to undertake all feasible efforts
to do certain things and seek the approval of the FERC, if necessary,
including adjusting its market structure to achieve, in the most
cost-effective manner possible, the increased amount of electricity
to be generated by eligible renewable energy resources. The bill
would require the PUC to approve reasonable and cost-effective
transmission and power line investments that are not under the
ratemaking authority of the FERC that are necessary to enable
electricity generated by eligible renewable energy resources to be
delivered to retail sellers and local publicly owned electric
utilities.
(9)
(10) This bill would require the PUC, Energy
Commission, and ISO to consider the recommendations of the Renewable
Energy Transmission Initiative in their respective responsibilities
relative to the siting of transmission and eligible renewable energy
resources that are necessary to achieve the renewables portfolio
standard.
(10)
(11) Existing law establishes the Department of Fish
and Game in the Resources Agency, and generally charges the
department with the administration and enforcement of the Fish and
Game Code.
This bill would require the department to establish an internal
division with the primary purpose of performing comprehensive
planning and streamlined environmental compliance services with
priority given to projects involving the building of eligible
renewable energy resources.
(11)
(12) Existing law 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. 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. Each person
proposing to construct a thermal powerplant or electric transmission
line on a site is required to submit an application to the Energy
Commission. The Energy Commission is required to prescribe the form
and content of applications for facilities and to formally act to
approve or disapprove applications, including specifying conditions
under which approval and continuing operation of any facility is
permitted.
This bill would require the Energy Commission to develop a
concurrent application review process with the Department of Fish and
Game for eligible renewable energy resources with the goal of
reducing the time required to complete certification and compliance
with the California Environmental Quality Act for eligible renewable
energy resources that are within a competitive renewable energy zone.
(12)
(13) This bill would state the intent of the
Legislature to appropriate $3,700,000 from the Public Interest
Research, Development, and Demonstration Fund to the Energy
Commission for contracts and for interagency agreements with the
Department of Fish and Game or other wildlife agencies for the
preparation of one or more natural communities conservation plans in
the Mojave and Colorado Desert regions for the purposes of
facilitating the development of solar energy in those regions.
(13)
(14) The California Constitution requires the state to
reimburse local agencies and school districts for certain costs
mandated by the state. Statutory provisions establish procedures for
making that reimbursement.
This bill would provide that no reimbursement is required by this
act for specified reasons.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 705 is added to the Fish and Game Code, to
read:
705. (a) For purposes of this section, "eligible renewable energy
resources" has the same meaning as in the California Renewables
Portfolio Standard Program (Article 16 (commencing with Section
399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public
Utilities Code).
(b) The department shall establish an internal division with the
primary purpose of performing comprehensive planning and streamlined
environmental compliance services with priority given to projects
involving the building of eligible renewable energy resources.
(c) The internal division shall ensure the timely completion of
plans pursuant to the Natural Community Conservation Planning Act
(Chapter 10 (commencing with Section 2800) of Division 3), that
embody the balancing of project assurances with ecosystem
protections.
SEC. 2. Section 25524 is added to the Public Resources Code, to
read:
25524. (a) For purposes of this section, "eligible renewable
energy resources" has the same meaning as in the California
Renewables Portfolio Standard Program (Article 16 (commencing with
Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public
Utilities Code).
(b) The commission shall develop a concurrent application review
process with the Department of Fish and Game for eligible renewable
energy resources with the goal of reducing the time required to
complete certification and compliance with the California
Environmental Quality Act (Division 13 (commencing with Section
21000)) for eligible renewable energy resources that are within a
competitive renewable energy zone. Nothing in this section effects
the requirements of the California Environmental Quality Act.
SEC. 3. Section 25740 of the Public Resources Code is amended to
read:
25740. The Legislature finds and declares that the State Air
Resources Board has identified a statewide 33 percent renewables
portfolio standard as a key measure to comply with the requirements
of the California Global Warming Solutions Act of 2006. 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, and 33 percent by December 31, 2020.
SEC. 4. 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) "Delivered" and "delivery" mean the electricity output of an
in-state renewable electricity generation facility that is used to
serve end-use retail customers located within the state. Subject to
verification by the accounting system established by the commission
pursuant to subdivision (b) of Section 399.25 of the Public Utilities
Code, electricity shall be deemed delivered if it is either
generated at a location within the state, or generated at a location
outside the state and scheduled for simultaneous consumption by
California end-use retail customers.
(b) "In-state renewable electricity generation facility" means a
facility that meets all of the following criteria:
(1) The facility uses biomass, solar thermal, photovoltaic, 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.
(2) The facility satisfies one of the following requirements:
(A) The facility is located in the state or near the border of the
state with the first point of connection to the transmission network
within this state and electricity produced by the facility is
delivered to an in-state location.
(B) The facility has its first point of interconnection to the
transmission network outside the state and satisfies all of the
following requirements:
(i) It is connected to the transmission network within the Western
Electricity Coordinating Council (WECC) service territory.
(ii) It commences initial commercial operation after January 1,
2005.
(iii) Electricity produced by the facility is delivered to an
in-state location.
(iv) It will not cause or contribute to any violation of a
California environmental quality standard or requirement.
(v) 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.
(vi) It participates in the accounting system to verify compliance
with the renewables portfolio standard once established by the
commission pursuant to subdivision (b) of Section 399.25 of the
Public Utilities Code.
(C) The facility meets the requirements of clauses (i), (iii),
(iv), (v), and (vi) of subparagraph (B), but does not meet the
requirements of clause (ii) of subparagraph (B) because it commenced
initial operation prior to January 1, 2005, if the facility satisfies
either of the following requirements:
(i) The electricity is from incremental generation resulting from
expansion or repowering of the facility.
(ii) The facility has been part of the existing baseline of
eligible renewable energy resources of a retail seller established
pursuant to paragraph (2) of subdivision (b) of Section 399.15 of the
Public Utilities Code or has been part of the existing baseline of
eligible renewable energy resources of a local publicly owned
electric utility established pursuant to Section 387 of the Public
Utilities Code.
(3) For the purposes of this subdivision, "solid waste conversion"
means a technology that uses a noncombustion thermal process to
convert solid waste to a clean-burning fuel for the purpose of
generating electricity, and that meets all of the following criteria:
(A) The technology does not use air or oxygen in the conversion
process, except ambient air to maintain temperature control.
(B) The technology produces no discharges of air contaminants or
emissions, including greenhouse gases as defined in Section 38505 of
the Health and Safety Code.
(C) The technology produces no discharges to surface or
groundwaters of the state.
(D) The technology produces no hazardous wastes.
(E) To the maximum extent feasible, the technology removes all
recyclable materials and marketable green waste compostable materials
from the solid waste stream prior to the conversion process and the
owner or operator of the facility certifies that those materials will
be recycled or composted.
(F) The facility at which the technology is used is in compliance
with all applicable laws, regulations, and ordinances.
(G) The technology meets any other conditions established by the
commission.
(H) 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.
(c) "Procurement entity" means any person or corporation that
enters into an agreement with a retail seller to procure eligible
renewable energy resources pursuant to subdivision (f) of Section
399.13 of the Public Utilities Code.
(d) "Renewable energy public goods charge" means that portion of
the nonbypassable system benefits charge required to be collected to
fund renewable energy 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) "Report" means the report entitled "Investing in Renewable
Electricity Generation in California" (June 2001, Publication Number
P500-00-022) submitted to the Governor and the Legislature by the
commission.
(f) "Retail seller" means a "retail seller" as defined in Section
399.12 of the Public Utilities Code.
SEC. 5. Section 25746 of the Public Resources Code is amended to
read:
25746. (a) One percent of the money collected pursuant to the
renewable energy public goods charge shall be used in accordance with
this chapter to promote renewable energy and disseminate information
on renewable energy technologies, including emerging renewable
technologies, and to help develop a consumer market for renewable
energy and for small-scale emerging renewable energy technologies.
(b) If the commission provides funding for a regional accounting
system to verify compliance with the renewable portfolio standard by
retail sellers, pursuant to subdivision (b) of Section 399.25 of the
Public Utilities Code, the commission shall recover all costs from
user fees.
SEC. 6. Section 25747 of the Public Resources Code is amended to
read:
25747. (a) The commission shall adopt guidelines governing the
funding programs authorized under this chapter, at a publicly noticed
meeting offering all interested parties an opportunity to comment.
Substantive changes to the guidelines may not be adopted without at
least 10 days' written notice to the public. The public notice of
meetings required by this subdivision may not be less than 30 days.
Notwithstanding any other provision of law, any guidelines adopted
pursuant to this chapter or Section 399.25 of the Public Utilities
Code, shall be exempt from the requirements of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. The Legislature declares that the changes made
to this subdivision by the act amending this section during the 2002
portion of the 2001-02 Regular Session are declaratory of, and not a
change in existing law.
(b) Funds to further the purposes of this chapter may be committed
for multiple years.
(c) Awards made pursuant to this chapter are grants, subject to
appeal to the commission upon a showing that factors other than those
described in the guidelines adopted by the commission were applied
in making the awards and payments. Any actions taken by an applicant
to apply for, or become or remain eligible and registered to receive,
payments or awards, including satisfying conditions specified by the
commission, shall not constitute the rendering of goods, services,
or a direct benefit to the commission.
(d) An award made pursuant to this chapter, the amount of the
award, and the terms and conditions of the grant are public
information.
SEC. 7. Section 25751 of the Public Resources Code is amended to
read:
25751. (a) The Renewable Resource Trust Fund is hereby created in
the State Treasury.
(b) The following accounts are hereby established within the
Renewable Resource Trust Fund:
(1) Existing Renewable Resources Account.
(2) Emerging Renewable Resources Account.
(3) Renewable Resources Consumer Education Account.
(c) The money in the fund may be expended, only upon appropriation
by the Legislature in the annual Budget Act, for the following
purposes:
(1) The administration of this article by the state.
(2) The state's expenditures associated with the accounting system
established by the commission pursuant to subdivision (b) of Section
399.25 of the Public Utilities Code.
(d) That portion of revenues collected by electrical corporations
for the benefit of in-state operation and development of existing and
new and emerging renewable resource technologies, pursuant to
Section 399.8 of the Public Utilities Code, shall be transmitted to
the commission at least quarterly for deposit in the Renewable
Resource Trust Fund pursuant to Section 25740.5. After setting aside
in the fund money that may be needed for expenditures authorized by
the annual Budget Act in accordance with subdivision (c), the
Treasurer shall immediately deposit money received pursuant to this
section into the accounts created pursuant to subdivision (b) in
proportions designated by the commission for the current calendar
year. Notwithstanding Section 13340 of the Government Code, the money
in the fund and the accounts within the fund are hereby continuously
appropriated to the commission without regard to fiscal year for the
purposes enumerated in this chapter.
(e) Upon notification by the commission, the Controller shall pay
all awards of the money in the accounts created pursuant to
subdivision (b) for purposes enumerated in this chapter. The
eligibility of each award shall be determined solely by the
commission based on the procedures it adopts under this chapter.
Based on the eligibility of each award, the commission shall also
establish the need for a multiyear commitment to any particular award
and so advise the Department of Finance. Eligible awards submitted
by the commission to the Controller shall be accompanied by
information specifying the account from which payment should be made
and the amount of each payment; a summary description of how payment
of the award furthers the purposes enumerated in this chapter; and an
accounting of future costs associated with any award or group of
awards known to the commission to represent a portion of a multiyear
funding commitment.
(f) The commission may transfer funds between accounts for
cashflow purposes, provided that the balance due each account is
restored and the transfer does not adversely affect any of the
accounts.
(g) The Department of Finance shall conduct an independent audit
of the Renewable Resource Trust Fund and its related accounts
annually, and provide an audit report to the Legislature not later
than March 1 of each year for which this article is operative. The
Department of Finance's report shall include information regarding
revenues, payment of awards, reserves held for future commitments,
unencumbered cash balances, and other matters that the Director of
Finance determines may be of importance to the Legislature.
SEC. 8. Section 387 of the Public Utilities Code is repealed.
SEC. 9. Section 399.11 of the Public Utilities Code is amended to
read:
399.11. The Legislature finds and declares all of the following:
(a) In order to attain a target of generating 20 percent of total
retail sales of electricity in California from eligible renewable
energy resources by December 31, 2010, and 33 percent by December 31,
2020, and for the purposes of increasing the diversity, reliability,
public health, and environmental benefits of the energy mix,
reducing emissions of greenhouse gases, and promoting economic
development it is the intent of the Legislature that the commission
and the Energy Commission implement the California Renewables
Portfolio Standard Program described in this article.
(b) Increasing California's reliance on eligible renewable energy
resources may promote stable electricity prices, protect public
health, improve environmental quality, stimulate sustainable economic
development, create new employment opportunities, and reduce
reliance on imported fuels.
(c) The development of eligible renewable energy resources and the
delivery of the electricity generated by those resources to
customers in California may ameliorate air quality problems
throughout the state and improve public health by reducing the
burning of fossil fuels and the associated environmental impacts and
by reducing in-state fossil fuel consumption.
(d) The California Renewables Portfolio Standard Program is
intended to complement the Renewable Energy Resources Program
administered by the Energy Commission and established pursuant to
Chapter 8.6 (commencing with Section 25740) of Division 15 of the
Public Resources Code.
(e) New and modified electric transmission facilities will be
necessary to facilitate the state achieving its renewables portfolio
standard targets.
SEC. 10. Section 399.12 of the Public Utilities Code is amended to
read:
399.12. For purposes of this article, the following terms have
the following meanings:
(a) "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.
(b) "Delivered" and "delivery" have the same meaning as provided
in subdivision (a) of Section 25741 of the Public Resources Code.
(c) "Eligible renewable energy resource" means an electric
generating facility that meets the definition of "in-state renewable
electricity generation facility" in Section 25741 of the Public
Resources Code, subject to the following:
(1) (A) An existing small hydroelectric generation facility of 30
megawatts or less shall be eligible only if a retail seller or local
publicly owned electric utility owned or procured the electricity
from the facility as of December 31, 2005. A new hydroelectric
facility is not an eligible renewable energy resource if it will
cause an adverse impact on instream beneficial uses or cause a change
in the volume or timing of streamflow.
(B) Notwithstanding subparagraph (A), a conduit hydroelectric
facility of 30 megawatts or less that commenced operation before
January 1, 2006, is an eligible renewable energy resource. A conduit
hydroelectric facility of 30 megawatts or less that commences
operation after December 31, 2005, is an eligible renewable energy
resource so long as it does not cause an adverse impact on instream
beneficial uses or cause a change in the volume or timing of
streamflow.
(2) A facility engaged in the combustion of municipal solid waste
shall not be considered an eligible renewable resource unless it is
located in Stanislaus County and was operational prior to September
26, 1996.
(d) "Procure" means that a retail seller or local publicly owned
electric utility 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
article 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 article
or the obligation of a local publicly owned electric utility to meet
its renewables portfolio standard implemented pursuant to Section
399.30.
(e) (1) "Renewable energy credit" means a certificate of proof
associated with the generation of electricity from an eligible
renewable energy resource, issued through the accounting system
established by the Energy Commission pursuant to Section 399.25, that
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, 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.
(3) No electricity generated by an eligible renewable energy
resource attributable to the use of nonrenewable fuels, beyond a de
minimis quantity, as determined by the Energy Commission, shall
result in the creation of a renewable energy credit.
(f) "Renewable energy public goods charge" means that portion of
the nonbypassable system benefits charge required to be collected to
fund renewable energy pursuant to the Reliable Electric Service
Investments Act (Article 15 (commencing with Section 399) of Chapter
2.3 of Part 1 of Division 1, for an electrical corporation, and
pursuant to Section 385 for a local publicly owned electric utility.
(g) "Renewables portfolio standard" means the specified percentage
of electricity generated by eligible renewable energy resources that
a retail seller or a local publicly owned electric utility is
required to procure pursuant to this article.
(h) "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:
(1) An electrical corporation, as defined in Section 218.
(2) 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.
(3) An electric service provider, as defined in Section 218.3, for
all sales of electricity to customers beginning January 1, 2006. The
commission shall institute a rulemaking to 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 article. 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.
(4) "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.
SEC. 11. Section 399.13 of the Public Utilities Code is amended
and renumbered to read:
399.25. The Energy Commission shall do all of the following:
(a) Certify eligible renewable energy resources that it determines
meet the criteria described in subdivision (c) of Section 399.12.
(b) 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 meeting the renewables portfolio standard of
this state or any other state, to certify renewable energy credits
produced by eligible renewable energy resources, and to verify retail
product claims in this state or any other state. 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 and local publicly
owned electric utilities, 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.
(c) 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 Western Electricity
Coordinating Council in the development of this system.
(d) Certify, for purposes of compliance with the renewables
portfolio standard requirements by a retail seller, the eligibility
of renewable energy credits associated with deliveries of electricity
by an eligible renewable energy resource to a local publicly owned
electric utility, if the Energy Commission determines that all of the
conditions of Section 399.31 have been met.
(e) In consultation with the State Air Resources Board, adopt
regulations for the enforcement of this article with respect to a
local publicly owned electric utility. The regulations 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
regulations. Not less than 10 days' notice shall be given to the
public before any meeting is held to make a substantive change to the
regulations. Until such time as there is a market mechanism
established and implemented for the distribution and purchase of
emission allowances for greenhouse gases, the regulations shall
provide for the imposition of penalties by the State Air Resources
Board pursuant to Part 6 (commencing with Section 38580) of Division
25.5 of the Health and Safety Code, upon referral and recommendation
by the Energy Commission, for failure to comply with this article.
(f) (1) By October 30, 2010, at a duly noticed public meeting and
in consultation with the State Air Resources Board, establish a
renewables portfolio standard requiring each local publicly owned
electric utility to procure a minimum quantity of electricity
generated by eligible renewable energy resources, including renewable
energy credits, as a specified percentage of total kilowatthours
sold to the utility's retail end-use customers each calendar year.
The renewables portfolio standard shall be consistent with the target
of generating 33 percent of total retail sales of electricity in
California from eligible renewable energy resources by December 31,
2020, and the purposes set forth in subdivisions (a), (b), and (c) of
Section 399.11. The Energy Commission shall enforce the renewables
portfolio standard upon its establishment.
(2) A local publicly owned electric utility shall retain
discretion
over the percentage 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 and the prices paid by the utility
for electricity generated by eligible renewable energy resources.
SEC. 12. Section 399.14 of the Public Utilities Code is amended
and renumbered to read:
399.13. (a) (1) The commission shall direct each electrical
corporation to prepare a renewable energy procurement plan that
includes the matter in paragraph (3), to satisfy its obligations
under the renewables portfolio standard. To the extent feasible, this
procurement plan shall be proposed, reviewed, and adopted by the
commission as part of, and pursuant to, a general procurement plan
process. The commission shall require each electrical corporation to
review and update its
renewable energy procurement plan as it determines to be necessary.
(2) The commission shall adopt, by rulemaking, all of the
following:
(A) A process for determining market prices pursuant to
subdivision (c) of Section 399.15. The commission shall make specific
determinations of market prices after the closing date of a
competitive solicitation conducted by an electrical corporation for
eligible renewable energy resources.
(B) A process that provides criteria for the rank ordering and
selection of least-cost and best-fit eligible renewable energy
resources to comply with the annual California Renewables Portfolio
Standard Program obligations on a total cost basis. 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.
(C) (i) Flexible rules for compliance, including rules permitting
retail sellers to apply excess procurement in one year to subsequent
years or inadequate procurement in one year to no more than the
following three years. The flexible rules for compliance shall apply
to all years, including years before and after a retail seller
procures at least 20 percent of total retail sales of electricity
from eligible renewable energy resources.
(ii) The flexible rules for compliance shall address situations
where, as a result of insufficient transmission, a retail seller is
unable to procure eligible renewable energy resources sufficient to
satisfy the requirements of this article. Any rules addressing
insufficient transmission shall require a finding by the commission
that the retail seller has undertaken all reasonable efforts to do
all of the following:
(I) Utilize flexible delivery points.
(II) Ensure the availability of any needed transmission capacity.
(III) If the retail seller is an electric corporation, to
construct needed transmission facilities.
(IV) Nothing in this subparagraph shall be construed to revise any
portion of Section 454.5.
(D) Standard terms and conditions to be used by all electrical
corporations in contracting 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 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 article, the following information about the agreement shall
be disclosed by the commission: party names, resource type, project
location, and project capacity.
(3) Consistent with the goal of procuring the least-cost and
best-fit eligible renewable energy resources, the renewable energy
procurement plan submitted by an electrical corporation shall include
all of the following:
(A) 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) Provisions for employing available compliance flexibility
mechanisms established by the commission.
(C) A bid solicitation setting forth the need for eligible
renewable energy resources of each deliverability characteristic,
required online dates, and locational preferences, if any.
(4) In soliciting and procuring eligible renewable energy
resources, each electrical corporation shall offer contracts of no
less than 10 years in duration, unless the commission approves of a
contract of shorter duration.
(5) In soliciting and procuring eligible renewable energy
resources, each electrical corporation may give preference to
projects that provide tangible demonstrable benefits to communities
with a plurality of minority or low-income populations.
(b) The commission may authorize a retail seller to enter into a
contract of less than 10 years' duration with 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.
(c) The commission shall review and accept, modify, or reject each
electrical corporation's renewable energy procurement plan prior to
the commencement of renewable procurement pursuant to this article by
an electrical corporation.
(d) The commission shall review the results of an eligible
renewable energy resources solicitation submitted for approval by an
electrical corporation and accept or reject proposed contracts with
eligible renewable energy resources 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.
(e) 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
other retail seller that fails to meet annual procurement targets
established pursuant to Section 399.15.
(f) (1) The commission may authorize a procurement entity to enter
into contracts on behalf of customers of a retail seller for
deliveries of eligible renewable energy resources to satisfy annual
renewables portfolio standard obligations. The commission may not
require any person or corporation to act as a procurement entity or
require any party to purchase eligible renewable energy resources
from a procurement entity.
(2) Subject to review and approval by the commission, the
procurement entity shall be permitted to 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 eligible renewable energy
resources.
(g) Procurement and administrative costs associated with long-term
contracts entered into by an electrical corporation for eligible
renewable energy resources pursuant to this article and approved by
the commission shall be deemed reasonable per se, and shall be
recoverable in rates.
(h) 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.
(i) The commission shall enforce the requirements of this section
until the electrical corporation procures 20 percent of its retail
sales from eligible renewable energy resources. Upon determining that
the electrical corporation is procuring 20 percent of its retail
sales from eligible renewable energy resources, the commission shall
enforce the requirements of Section 399.14 with respect to that
electrical corporation.
SEC. 13. Section 399.14 is added to the Public Utilities Code, to
read:
399.14. (a) (1) The commission shall direct each electrical
corporation to prepare a renewable energy procurement plan that
includes the matter in paragraph (3), to satisfy its obligations
under the renewables portfolio standard. To the extent feasible, this
procurement plan shall be proposed, reviewed, and adopted by the
commission as part of, and pursuant to, a general procurement plan
process. The commission shall require each electrical corporation to
review and update its renewable energy procurement plan as it
determines to be necessary.
(2) The commission shall adopt, by rulemaking, all of the
following:
(A) A process that provides criteria for the rank ordering and
selection of least-cost and best-fit eligible renewable energy
resources to comply with the annual California Renewables Portfolio
Standard Program obligations on a total cost basis. 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, but shall not be limited to, the cost
impact of procuring the eligible renewable energy resources on the
electrical corporation's electricity portfolio, system reliability,
and the environmental and economic benefits of procuring renewable
energy.
(B) Flexible rules for compliance. The flexible rules for
compliance shall apply to all years, including years before and after
a retail seller procures at least 20 percent by 2010, and 33 percent
by 2020, of total retail sales of electricity from eligible
renewable energy resources.
(C) Standard terms and conditions to be used by all electrical
corporations in contracting 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 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 article, the following information about the agreement shall
be disclosed by the commission: party names, resource type, project
location, and project capacity.
(3) Consistent with the goal of increasing California's reliance
on eligible renewable energy resources, the renewable energy
procurement plan submitted by an electrical corporation shall include
all of the following:
(A) 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.
This assessment shall be consistent with the electrical corporation's
long-term portfolio planning conducted pursuant to Section 454.5 and
shall consider the electrical corporation's optimal portfolio to
reach the state's goals for reducing emissions of greenhouse gases.
Consistent with an electrical corporation's long-term portfolio
planning, the commission may require analyses, including, but not
limited to, the rate impact, effects on system reliability, and the
environmental and economic benefits of the proposed procurement.
(B) Strategies for employing available compliance flexibility
mechanisms established by the commission.
(C) 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) A status update on the development schedule of all eligible
renewable resources currently under contract.
(4) In soliciting and procuring eligible renewable energy
resources, each electrical corporation shall offer contracts of no
less than 10 years in duration, unless the commission approves of a
contract of shorter duration.
(5) (A) In soliciting and procuring eligible renewable energy
resources for California-based projects, each electrical corporation
shall give preference to renewable energy projects that provide
environmental and economic benefits to communities afflicted with
poverty or high unemployment, or that suffer from high emission
levels of toxic air contaminants, criteria air pollutants, and
greenhouse gases.
(B) The commission shall report to the Legislature by January 1 of
every even-numbered year on the progress and status of procurement
activities, the identification of barriers, and policy
recommendations for achieving the goals set forth in this paragraph.
(b) A retail seller may enter into a combination of long- and
short-term contracts for delivery of electricity and associated
renewable energy credits. The commission may authorize a retail
seller to enter into a contract of less than 10 years' duration with
an eligible renewable energy resource, if the commission has
established, for each retail seller, minimum quantities of eligible
renewable energy resources to be procured through contracts of at
least 10 years' duration.
(c) The commission shall review and accept, modify, or reject each
electrical corporation's renewable energy procurement plan prior to
the commencement of renewable procurement pursuant to this article by
an electrical corporation.
(d) (1) The commission shall review the results of an eligible
renewable energy resources solicitation submitted for approval by an
electrical corporation and accept or reject proposed contracts with
eligible renewable energy resources 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) The commission shall establish project development milestones
to evaluate the potential for compliance with the adopted renewable
procurement plan and a set of actions that will occur as a result of
not meeting those milestones. These actions may include, but shall
not be limited to, determining a cure period for failure to meet
milestones, a suspense period on the contract online date for events
beyond the developer's control that cause a failure to meet
milestones, allow other developers that are prepared to go forward to
move ahead of suspended contracts, and forfeiture of deposits.
(e) The commission, in consultation with the State Air Resources
Board, shall adopt rules for the enforcement of this article with
respect to retail sellers. The rules 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 rules. Not less than
10 days' notice shall be given to the public before any meeting is
held to make a substantive change to the rules. The rules shall
provide for the imposition of penalties by the State Air Resources
Board pursuant to Part 6 (commencing with Section 38580) of Division
25.5 of the Health and Safety Code, upon referral and recommendation
by the commission, for failure to comply with this article. Nothing
in this subdivision precludes the imposition of any other penalties
under any other provision of law.
(f) (1) The commission may authorize a procurement entity to enter
into contracts on behalf of customers of a retail seller for
deliveries of eligible renewable energy resources to satisfy
triennial renewables portfolio standard obligations. The commission
may not require any person or corporation to act as a procurement
entity or require any party to purchase eligible renewable energy
resources from a procurement entity.
(2) Subject to review and approval by the commission, the
procurement entity shall be permitted to 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 eligible renewable energy
resources.
(g) Procurement and administrative costs associated with long-term
contracts entered into by an electrical corporation for eligible
renewable energy resources pursuant to this article and approved by
the commission shall be deemed reasonable and shall be recoverable in
rates.
(h) 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 are "public works" for the purposes of
Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of
the Labor Code.
(i) The commission shall not enforce the requirements of this
section until the electrical corporation procures 20 percent of its
retail sales from eligible renewable energy resources. Upon
determining that the electrical corporation is procuring 20 percent
of its retail sales from eligible renewable energy resources, the
commission shall enforce the requirements of this section with
respect to that electrical corporation.
SEC. 14. Section 399.15 of the Public Utilities Code is amended to
read:
399.15. (a) In order to fulfill unmet long-term resource needs,
the commission shall establish a renewables portfolio standard
requiring all electrical corporations 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, subject to limits on the total
amount of costs expended above the market prices determined in
subdivision (c), to achieve the targets established under this
article.
(b) The commission shall implement annual procurement targets for
each retail seller as follows:
(1) Each retail seller shall, pursuant to subdivision (a),
increase its total procurement of eligible renewable energy resources
by at least an additional 1 percent of retail sales per year so that
20 percent of its retail sales are procured from eligible renewable
energy resources no later than December 31, 2010, and 33 percent no
later than December 31, 2020, if the commission determines that
achieving these targets will result in just and reasonable rates. A
retail seller with 33 percent of retail sales procured from eligible
renewable energy resources in any year shall not be required to
increase its procurement of renewable energy resources in the
following year.
(2) For purposes of setting annual procurement targets, the
commission shall establish an initial baseline for each retail seller
based on the actual percentage of retail sales procured from
eligible renewable energy resources in 2001, and to the extent
applicable, adjusted going forward pursuant to Section 399.12.
(3) Only for purposes of establishing these targets, the
commission shall include all electricity sold to retail customers by
the Department of Water Resources pursuant to Section 80100 of the
Water Code in the calculation of retail sales by an electrical
corporation.
(4) In the event that a retail seller fails to procure sufficient
eligible renewable energy resources in a given year to meet any
annual target established pursuant to this subdivision, the retail
seller shall procure additional eligible renewable energy resources
in subsequent years to compensate for the shortfall, subject to the
limitation on costs for electrical corporations established pursuant
to subdivision (d).
(c) The commission shall establish a methodology to determine the
market price of electricity for terms corresponding to the length of
contracts with eligible renewable energy resources, in consideration
of the following:
(1) The long-term market price of electricity for fixed price
contracts, determined pursuant to an electrical corporation's general
procurement activities as authorized by the commission.
(2) The long-term ownership, operating, and fixed-price fuel costs
associated with fixed-price electricity from new generating
facilities.
(3) The value of different products including baseload, peaking,
and as-available electricity.
(d) The commission shall establish, for each electrical
corporation, a limitation on the total costs expended above the
market prices determined in subdivision (c) for the procurement of
eligible renewable energy resources to achieve the annual procurement
targets established under this article.
(1) The cost limitation shall be equal to the amount of funds
transferred to each electrical corporation by the Energy Commission
pursuant to subdivision (b) of Section 25743 of the Public Resources
Code and the 51.5 percent of the funds which would have been
collected through January 1, 2012, from the customers of the
electrical corporation based on the renewable energy public goods
charge in effect as of January 1, 2007.
(2) The above-market costs of a contract selected by an electrical
corporation may be counted toward the cost limitation if all of the
following conditions are satisfied:
(A) The contract has been approved by the commission and was
selected through a competitive solicitation pursuant to the
requirements of subdivision (d) of Section 399.13 or 399.14.
(B) The contract covers a duration of no less than 10 years.
(C) The contracted project is a new or repowered facility
commencing commercial operations on or after January 1, 2005.
(D) No purchases of renewable energy credits may be eligible for
consideration as an above-market cost.
(E) The above-market costs of a contract do not include any
indirect expenses including imbalance energy charges, sale of excess
energy, decreased generation from existing resources, or transmission
upgrades.
(3) If the cost limitation for an electrical corporation is
insufficient to support the total costs expended above the market
prices determined in subdivision (c) for the procurement of eligible
renewable energy resources satisfying the conditions of paragraph
(2), 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 market prices
established in subdivision (c).
(4) Nothing in this section prevents an electrical corporation
from voluntarily proposing to procure eligible renewable energy
resources at above-market prices that are not counted toward the cost
limitation. Any voluntary procurement involving above-market costs
shall be subject to commission approval prior to the expense being
recovered in rates.
(e) The establishment of a renewables portfolio standard shall not
constitute implementation by the commission of the federal Public
Utility Regulatory Policies Act of 1978 (Public Law 95-617).
(f) The commission shall consult with the Energy Commission in
calculating market prices under subdivision (c) and establishing
other renewables portfolio standard policies.
(g) The commission shall enforce the requirements of this section
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 Section 399.16 with respect to that retail seller.
SEC. 15. Section 399.16 is added to the Public Utilities Code, to
read:
399.16. (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
established under this article.
(b) The commission shall implement triennial procurement targets
for each retail seller as follows:
(1) Each retail seller shall, pursuant to subdivision (a),
increase its total procurement of eligible renewable energy resources
by at least an additional 3 percent of retail sales every three
years so that 33 percent of its retail sales are procured from
eligible renewable energy resources no later than December 31, 2020,
if the commission determines that achieving these targets will result
in just and reasonable rates. A retail seller with 33 percent of
retail sales procured from eligible renewable energy resources in any
year shall not be required to increase its procurement of renewable
energy resources in the following three years. A retail seller may
voluntarily increase its procurement of eligible renewable energy
resources beyond the renewables portfolio standard procurement
requirements.
(2) For purposes of setting triennial procurement targets, the
commission shall establish an initial baseline for each retail seller
based on the actual percentage of retail sales procured from
eligible renewable energy resources in 2001, and to the extent
applicable, adjusted in subsequent years pursuant to Section 399.12.
(3) Only for purposes of establishing these targets, the
commission shall include all electricity sold to retail customers by
the Department of Water Resources pursuant to Section 80100 of the
Water Code in the calculation of retail sales by an electrical
corporation.
(4) If a retail seller fails to procure sufficient eligible
renewable energy resources in a given year to meet any triennial
target established pursuant to this subdivision, the retail seller
shall procure additional eligible renewable energy resources in
subsequent years to compensate for the shortfall.
(c) The establishment of a renewables portfolio standard shall not
constitute implementation by the commission of the federal Public
Utility Regulatory Policies Act of 1978 (Public Law 95-617).
(d) The commission shall consult with the Energy Commission in
establishing renewables portfolio standard policies.
(e) An electrical corporation shall submit a contract for eligible
renewable energy resources to the commission for review, pursuant to
the electrical corporation's approved renewable energy procurement
plan.
(1) In conducting a review, the commission shall do all of the
following:
(A) Consider system reliability.
(B) Consider the value of different generation characteristics
including peaking, dispatchable, baseload, and firm and as-available
capacity of renewable projects.
(C) Make an assessment of the price risk associated with the
electrical corporation's renewable energy portfolio, including any
proposed contracts or purchases under which an electrical corporation
will procure renewable energy.
(2) The costs of contracts for eligible renewable energy resources
that have been approved by the commission shall be recoverable in
rates of electrical corporations.
(d) The commission shall not enforce the requirements of
this section 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 this section with respect to that
retail seller.
SEC. 16. Section 399.16 of the Public Utilities Code is amended
and renumbered to read:
399.21. (a) The commission, by rule, may authorize the use of
renewable energy credits to satisfy the requirements of the
renewables portfolio standard established pursuant to this article,
subject to the following conditions:
(1) Prior to authorizing any renewable energy credit to be used
toward satisfying triennial procurement targets, the commission and
the Energy Commission shall conclude that the tracking system
established pursuant to subdivision (c) of Section 399.25, is
operational, is capable of independently verifying the electricity
generated by an eligible renewable energy resource and delivered to
the retail seller, and can ensure that renewable energy credits shall
not be double counted by any seller of electricity within the
service territory of the Western Electricity Coordinating Council
(WECC).
(2) A renewable energy credit shall be counted only once for
compliance with the renewables portfolio standard of this state or
any other state, or for verifying retail product claims in this state
or any other state.
(3) The electricity is delivered to a retail seller, the
Independent System Operator, or a local publicly owned electric
utility.
(4) All revenues received by an electrical corporation for the
sale of a renewable energy credit shall be credited to the benefit of
ratepayers.
(5) 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 subdivision (b) of Section 399.25 and
included in the baseline quantity of eligible renewable energy
resources of the purchasing retail seller pursuant to Section 399.15.
(6) No renewable energy credits shall be created for electricity
generated under any electricity purchase contract executed after
January 1, 2005, pursuant to the federal Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. Sec. 2601 et seq.). Deliveries under
the electricity purchase contracts shall be tracked through the
accounting system described in subdivision (b) of Section 399.12 and
count toward the renewables portfolio standard obligations of the
purchasing retail seller.
(7) The commission may limit the quantity of renewable energy
credits that may be procured unbundled from electricity generation by
any retail seller, to meet the requirements of this article.
(8) No electrical corporation shall be obligated to procure
renewable energy credits to satisfy the requirements of this article
in the event that the total costs expended above the applicable
market prices for the procurement of eligible renewable energy
resources exceeds the cost limitation established pursuant to
subdivision (d) of Section 399.15.
(9) Any additional condition that the commission determines is
reasonable.
(b) The commission shall allow an electrical corporation to
recover the reasonable costs of purchasing renewable energy credits
in rates.
SEC. 17. Section 399.17 of the Public Utilities Code is amended to
read:
399.17. (a) Subject to the provisions of this section, the
requirements of this article 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 Western Electricity Coordinating Council (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 subdivision (b) of Section 399.25.
(3) The Energy Commission verifies that the electricity generated
by the facility is eligible to meet the triennial procurement targets
of this article.
(c) The commission shall determine the triennial 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 Sections 399.11, 399.12, 399.13, or 399.14, and
399.25, 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 article, at or below the market price determined by
the commission pursuant to subdivision (c) of Section 399.15, shall
be deemed reasonable per se, 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.
SEC. 18. Section 399.22 is added to the Public Utilities Code, to
read:
399.22. (a) In order for the state to meet the requirements of
the California Renewables Portfolio Standard Program, substantially
increased amounts of electricity generated by eligible renewable
energy resources must be integrated with, and interconnected to, the
transmission grid that is under the operational control of the
Independent System Operator.
(b) The Independent System Operator shall undertake all feasible
efforts to do all of the following, and shall seek the approval of
the Federal Energy Regulatory Commission, if necessary:
(1) Adjust its market structure to achieve, in the most
cost-effective manner possible, a minimum of 33 percent of
electricity generated from eligible renewable energy resources by
December 31, 2020.
(2) In consultation and cooperation with local publicly owned
electric utilities develop annual statewide transmission plans that
incorporate local publicly owned electric utility transmission plans
and any potential joint privately owned and local publicly owned
electric utility infrastructure projects, with the goal of minimizing
the aggregate amount and cost of new transmission needed statewide
to meet both reliability needs and renewable energy targets.
(3) Seek proposals from, and propose transmission projects to,
local publicly owned electric utilities that can be jointly owned by
electrical corporations, merchant transmission companies, and local
publicly owned electric utilities.
(4) Eliminate barriers established by the Independent System
Operator over transmission lines in its control area.
(c) The commission shall approve reasonable and cost-effective
transmission and power line investments that are not under the
ratemaking authority of the Federal Energy Regulatory Commission and
that are necessary to enable electricity generated by eligible
renewable energy resources to be delivered to retail sellers and
local publicly owned electric utilities.
SEC. 19. Section 399.26 is added to the Public Utilities Code, to
read:
399.26. (a) In order for the state to meet the requirements of
the California Renewables Portfolio Standard Program, substantially
increased amounts of electricity generated by eligible renewable
energy resources must be integrated with, and interconnected to, the
transmission grid that is either owned by, or under the operational
control of, the local publicly owned electric utilities and the
transmission grid that is under the operational control of the
Independent System Operator.
(b) The Energy Commission shall facilitate both of the following:
(1) The development of annual statewide transmission plans that
incorporate local publicly owned electric utility transmission plans
and any potential joint privately owned and local publicly owned
electric utility infrastructure projects, with the goal of minimizing
the aggregate amount and cost of new transmission needed statewide
to meet both reliability needs and renewables portfolio standard
targets.
(2) The siting and approval of new transmission lines that can be
jointly owned or utilized by electrical corporations, merchant
transmission companies, and local publicly owned electric utilities,
and can be jointly operated by the Independent System Operator and
local publicly owned electric utility balancing authorities.
SEC. 20. Section 399.27 is added to the Public Utilities Code, to
read:
399.27. (a) The Legislature finds and declares both of the
following:
(1) The Renewable Energy Transmission Initiative (RETI) is a joint
effort among the commission, Energy Commission, Independent System
Operator, electrical corporations, local publicly owned electric
utilities and various stakeholder, tribal, and public interest
organizations to help identify the transmission projects needed to
accommodate and reach the renewables portfolio standard, facilitate
transmission corridor designation, and facilitate transmission and
generation siting permitting.
(2) RETI has and will identify and assess competitive renewable
energy zones that can provide significant supplies of electricity to
California consumers by 2020 in the most cost-effective and
environmentally benign manner.
(b) The commission, Energy Commission, and Independent System
Operator shall consider the recommendations of the Renewable Energy
Transmission Initiative in their respective responsibilities relative
to the siting of transmission and eligible renewable energy
resources that are necessary to achieve the renewables portfolio
standard.
SEC. 21. Section 399.30 is added to the Public Utilities Code, to
read:
399.30. (a) In order to fulfill unmet long-term generation
resource needs, each local publicly owned electric utility shall
adopt and implement a renewable energy resources procurement plan
that, at a minimum, complies with the renewables portfolio standard
adopted by the Energy Commission pursuant to subdivision (f) of
Section 399.25. 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 article.
(b) (1) Every three years, each local publicly owned electric
utility shall 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 energy resources procurement plan, the local
publicly owned electric utility shall notify the Energy Commission of
the date, time, and location of the meeting so the Energy Commission
may 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 resource 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.
(c) Within 30 business days after a local publicly owned electric
utility executes a renewable resource 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.
(d) (1) 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.
(2) A local publicly owned electric utility shall not sell
renewable energy credits to a retail seller if the utility is not in
compliance with its renewables portfolio standard procurement
requirements or if, as a result of the sale, the utility would fail
to meet its procurement requirements.
(e) Each local publicly owned electric utility shall report, on an
annual basis, to its customers, and to the Energy Commission, all of
the following:
(1) Expenditures of funds collected pursuant to the renewable
energy public goods charge for eligible renewable energy resource
development. Reports shall contain a description of programs,
expenditures, expected results, and 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 the renewables portfolio
standard adopted by the Energy Commission for the utility pursuant to
subdivision (f) of Section 399.25.
SEC. 22. Section 399.31 is added to the Public Utilities Code, to
read:
399.31. A retail seller may procure renewable energy credits
associated with deliveries of electricity by an eligible renewable
energy resource to a local publicly owned electric utility, for
purposes of compliance with the renewables portfolio standard
requirements, if both of the following conditions are met:
(a) The local publicly owned electric utility has adopted and
implemented a renewable energy resources procurement plan that
complies with the renewables portfolio standard adopted by the Energy
Commission pursuant to subdivision (f) of Section 399.25.
(b) The local publicly owned electric utility is procuring
sufficient eligible renewable energy resources to satisfy the target
standard, and will not fail to satisfy the target standard in the
event that the renewable energy credit is sold to the retail seller.
SEC. 23. 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 shall, in order to fulfill its
unmet resource needs, procure resources from eligible renewable
energy resources in an amount sufficient to meet its procurement
requirements pursuant to the California Renewables Portfolio Standard
Program (Article 16 (commencing with Section 399.11) of Chapter
2.3).
(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 Office 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 the date of enactment of the act adding this section, 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 the
effective date of the act adding this subdivision 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. 24. Section 747 of the Public
Utilities Code is amended and renumbered to read:
747. 910. (a) It is the intent of
the Legislature that the commission reduce rates for electricity and
natural gas to the lowest amount possible.
(b) The commission shall prepare a written report on the costs of
programs and activities conducted by each electrical corporation and
gas corporation that is subject to this section, including activities
conducted to comply with their duty to serve. The report shall be
completed on an annual basis before February 1 of each year, and
shall identify, clearly and concisely, all of the following:
(1) Each program mandated by statute and its annual cost to
ratepayers.
(2) Each program mandated by the commission and its annual cost to
ratepayers.
(3) Energy purchase contract costs and bond-related costs incurred
pursuant to Division 27 (commencing with Section 80000) of the Water
Code.
(4) All other aggregated categories of costs currently recovered
in retail rates as determined by the commission.
(c) As used in this section, the reporting requirements apply to
electrical corporations with at least 1,000,000 retail customers in
California and gas corporations with at least 500,000 retail
customers in California.
(d) The report required by subdivision (b) shall be submitted to
the Governor and the Legislature no later than February 1 of each
year.
(e) The commission shall post the report required by subdivision
(b) in a conspicuous area of its Internet Web site.
SEC. 25. The heading of Article 11 (commencing
with Section 910) is added to Chapter 4 of Part 1 of Division 1 of
the Public Utilities Code , to read:
Article 11. Reports
SEC. 26. Section 911 is added to the
Public Utilities Code , to read:
911. (a) The commission shall, on an annual basis by February 1
of each year, prepare and submit to the policy and fiscal committees
of the Legislature a written report summarizing the following
information:
(1) All electrical corporation revenue requirement increases
associated with meeting the renewables portfolio standard, as defined
in Section 399.12, including direct procurement costs for eligible
renewable energy resources and renewable energy credits,
administrative expenses for procurement, expenses incurred to ensure
a reliable supply of electricity, and expenses for upgrades to the
electrical transmission and distribution grid necessary to delivery
electricity from eligible renewable energy resources to load.
(2) All cost savings experienced, or costs avoided, by electrical
corporations as a result of meeting the renewables portfolio
standard.
(3) All costs incurred by electrical corporations for incentives
for distributed and renewable generation, including the
self-generation incentive program, the California Solar Initiative,
and net energy metering.
(4) All cost savings experienced, or costs avoided, by electrical
corporations as a result of incentives for distributed and renewable
generation.
(5) All renewable, fossil fuel, and nuclear procurement costs,
research, study, or pilot program costs, or other program costs for
which an electrical corporation is seeking recovery in rates, that is
pending determination or approval by the commission.
(6) The decision number for each decision of the commission of
recovery in rates of costs incurred by an electrical corporation
since the preceding report.
(7) Any change in the electrical load serviced by an electrical
corporation since the preceding report.
(b) The commission may combine the information required by this
section with the report prepared pursuant to Section 910.
SEC. 24. SEC. 27. Section 1005.1 is
added to the Public Utilities Code, to read:
1005.1. (a) The commission shall approve an application for a
certificate within one year of the date of filing of the completed
application, when all of the following are true:
(1) The application is for a certificate for building or upgrading
an electrical transmission line.
(2) The transmission line is needed to provide transmission to
load centers for electricity generated in a high priority renewable
energy zone or is reasonably necessary to facilitate achievement of
the renewables portfolio standard established in Article 16
(commencing with Section 399.11) of Chapter 2.3.
(3) The commission has not expressly found any of the following:
(A) That the investment is not reasonable and necessary to
maintain or enhance reliability of the transmission grid.
(B) That the building or upgrading of the electrical transmission
line will not maintain or enhance efficient use of the transmission
grid.
(C) That the transmission line fails to meet other applicable
standards and requirements for approval and construction.
(D) That the transmission line threatens substantial harm to the
environment that necessitates an extension of time for completion of
review pursuant to the California Environmental Quality Act (Division
13 (commencing with Section 21000) of the Public Resources Code).
(b) The commission may, if it finds that the costs were justified
pursuant to subdivision (a) of Section 454, allow recovery in rates
of any increase in transmission costs incurred by an electrical
corporation in planning, designing, and engineering the
reconfiguration, replacement, expansion, or construction of
transmission facilities, to the extent that those costs are not
otherwise authorized for recovery in rates approved by the Federal
Energy Regulatory Commission.
SEC. 25. SEC. 28. It is the intent of
the Legislature to, through the Budget Act or other measure,
appropriate the sum of three million seven hundred thousand dollars
($3,700,000) from the Public Interest Research, Development, and
Demonstration Fund to the Energy Commission for contracts and for
interagency agreements with the Department of Fish and Game or other
wildlife agencies for the preparation of one or more natural
communities conservation plans in the Mojave and Colorado Desert
regions for the purposes of facilitating the development of solar
energy in those regions.
SEC. 26. SEC. 29. 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.