BILL NUMBER: SB 32 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 14, 2009
INTRODUCED BY Senator Negrete McLeod
DECEMBER 2, 2008
An act to amend Section 399.20 of, and to add Section 387.6 to,
the Public Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 32, as amended, Negrete McLeod. Renewable electric generation
facilities.
Under existing law, the Public Utilities Commission is vested with
regulatory authority over public utilities, including electrical
corporations. The Public Utilities Act imposes various duties and
responsibilities on the commission with respect to the purchase of
electricity by electrical corporations and requires the commission to
review and adopt a procurement plan and a renewable energy
procurement plan for each electrical corporation pursuant to the
California Renewables Portfolio Standard Program. The program
requires that a retail seller of electricity, including electrical
corporations, purchase a specified minimum percentage of electricity
generated by eligible renewable energy resources, as defined, in any
given year as a specified percentage of total kilowatthours sold to
retail end-use customers each calendar year (renewables portfolio
standard). Under existing law the governing board of a local publicly
owned electric utility is responsible for implementing and enforcing
a renewables portfolio standard for the utility that recognizes the
intent of the Legislature to encourage renewable resources, while
taking into consideration the effect of the standard on rates,
reliability, and financial resources and the goal of environmental
improvement.
Existing law requires every electrical corporation to file with
the commission a standard tariff for electricity generated by an
electric generation facility, as defined, that is owned and operated
by a retail customer of the electrical corporation. Existing law
requires that the electric generation facility: (1) have an effective
capacity of not more than 1.5 megawatts and be located on property
owned or under the control of the customer, (2) be interconnected and
operate in parallel with the electric transmission and distribution
grid, (3) be strategically located and interconnected to the electric
transmission system in a manner that optimizes the deliverability of
electricity generated at the facility to load centers, and (4) meet
the definition of an eligible renewable energy resource under the
renewables portfolio standard program. Existing law requires that the
tariff provide for payment for every kilowatthour of electricity
generated by an electric generation facility at a market price
referent established by the commission pursuant to the renewables
portfolio standard program. Existing law requires the electrical
corporation to make this tariff available to customers that own and
operate an electric generation facility within the service territory
of the electrical corporation, upon request, on a
first-come-first-served basis, until the combined statewide
cumulative rated generating capacity of those electric generation
facilities equals 500 megawatts, or the electrical corporation meets
its proportionate share of the 500 megawatt limit based upon the
ratio of its peak demand to total statewide peak demand of all
electrical corporations. Existing law authorizes the commission to
modify or adjust the above-described requirements for any electrical
corporation with less than 100,000 service connections, as individual
circumstances merit. Existing law provides that the electricity
generated by an electric generation facility counts toward the
electrical corporation's renewables portfolio standard and provides
that the physical generating capacity counts toward meeting the
electrical corporation's resource adequacy requirements.
This bill would require an electrical corporation to file with the
commission a standard tariff for the electricity purchased from an
electric generation facility that is owned, leased, or
rented by a retail customer of located within the
service territory of, and developed to sell electricity to, the
electrical corporation. The bill would revise the first requirement,
discussed above, to instead require that the electric generation
facility have an effective capacity of not more than 3 megawatts,
subject to the authority of the commission to reduce this megawatt
limitation, discussed below , and would delete the requirement
that the facility be located on property owned or under
the control of the customer . The bill would revise the third
requirement, discussed above, to require that the electric generation
facility be strategically located and interconnected to the electric
grid in a manner that is considered deliverable to load, pursuant to
the deliverability assessments of the Independent System Operator
(ISO). The bill would require that the tariff provide for a
base payment rate for every kilowatthour
of electricity purchased from an electric generation facility
at the market price referent established by the commission
pursuant to the renewables portfolio standard program, for
a period of 10, 15, or 20 years, as authorized by the commission.
The bill would require that the payment be the market price
referent established by the commission pursuant to the renewables
portfolio standard program. The bill would authorize the
commission to adjust the payment rate to reflect
the value of the electricity on a time-of-delivery basis and any
other attributes of renewable generation and require, with respect to
rates and charges, that ratepayers that do not receive service
pursuant to the tariff are indifferent to whether other ratepayers
receive service pursuant to the tariff . The bill would require
the commission to consi der, and would authorize the
commission to establish, a value for an electric generation facility
located on a distribution circuit that offsets the peak demand on
that circuit. The bill would require an electrical corporation to
provide expedited interconnection procedures to electric generation
facilities located on a distribution circuit that offsets peak demand
on that circuit . The bill would require the electrical
corporation to make the tariff available to any customer
that owns, leases, or rents the owner or operator of
an electric generation facility within the service territory of
the electrical corporation, upon request, on a
first-come-first-served basis, until the combined statewide
cumulative rated generating capacity of those electric generation
facilities subject to tariffs with electrical corporations reaches
500 megawatts, or its proportionate share of that limit. The bill
would provide that the electricity purchased from an electric
generation facility counts toward meeting the electrical corporation'
s renewables portfolio standard and that electricity generated by the
electric generation facility counts toward meeting the electrical
corporation's resource adequacy requirements. The bill would require
the commission, in consultation with the ISO, to monitor and examine
the impact on the transmission and distribution grid and any effects
upon ratepayers resulting from electric generation facilities
operating pursuant to the bill's provisions, would require the
commission to establish performance standards for any electric
generation facility that has a capacity greater than one megawatt to
ensure that those facilities are constructed, operated, and
maintained to generate the expected annual net production of
electricity and do not impact system reliability, and would authorize
the commission to reduce the 3 megawatt capacity limitation if the
commission finds that a reduced capacity limitation is necessary to
maintain system reliability within that electrical corporation's
service territory. The bill would recast the existing authority of
the commission to modify or adjust the above-described requirements
for any electrical corporation with less than 100,000 service
connections, as individual circumstances merit.
This bill would provide that a customer that
an owner or operator of an electric generation facility that
received ratepayer-funded incentives and participated in a net
metering program prior to January 1, 2010, would be eligible for a
tariff or standard contract filed by an electrical corporation
pursuant to the above-described provisions. An owner or operator that
receives service pursuant to a tariff or standard
contract adopted by an electrical corporation pursuant to the
above-described provisions is not eligible to participate in any net
metering program. Under the bill, a customer that elects to
receive electrical service pursuant to a tariff filed by an
electrical corporation pursuant to the bill is eligible to receive
ratepayer-funded incentives in accordance with the self-generation
incentive program or the California Solar Initiative for the capacity
needed to offset part or all of the electrical demand of the
customer.
This bill would require a local publicly owned electric utility
that sells electricity at retail to 75,000 or more customers to adopt
and implement a tariff for electricity purchased from an electric
generation facility meeting certain size, deliverability, and
interconnection requirements and to consider certain factors. The
bill would require the local publicly owned electric utility to make
the tariff available to customers that own and operate
owners and operators of an electric generation
facility within the service territory of the utility, upon request,
on a first-come-first-served basis, until the combined statewide
cumulative rated generating capacity of those electric generation
facilities subject to tariffs with local publicly owned electric
utilities reaches 250 megawatts. The bill would provide that the
electricity purchased from an electric generation facility counts
towards meeting the local publicly owned electric utility's
renewables portfolio standard annual procurement targets.
Under existing law, a violation of the Public Utilities Act or an
order or direction of the commission is a crime. Because this bill
would require an order or other action of the commission to implement
its provisions, and a violation of that order or action would be a
crime, the bill would impose a state-mandated local program by
creating a new crime. By placing additional requirements upon local
publicly owned electric utilities, which are entities of local
government, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) The state should encourage the reduction of electricity demand
at customer sites and increase generating capacity in order to meet
the demand for electricity.
(a) While the first goal in meeting the state's energy needs
should be to reduce energy demand through cost-effective improvements
in energy efficiency, the state should also encourage the location
of clean generation close to load centers in order to meet increases
in the demand for electricity.
(b) Some tariff structures and regulatory structures are
presenting a barrier to meeting the requirements and goals of the
California Renewables Portfolio Standard Program (Section 387 of, and
Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1
of Division 1 of, the Public Utilities Code).
(c) Small projects of less than three megawatts that are otherwise
eligible renewable energy resources may face difficulties in
participating in competitive solicitations under the renewables
portfolio standard program.
(d) A tariff that allows customers of
owners or operators of electric generation facilities that
are eligible renewable energy resources to sell
electricity generated by those facilities to electrical
corporations and local publicly owned electric utilities to
sell electricity generated by renewable technologies would
address these barriers and could assist in the achievement of the
renewables portfolio standard and the state's goals for reducing
emissions of greenhouse gases pursuant to the California Global
Warming Solutions Act of 2006.
(e) A tariff for electricity generated by renewable technologies
should recognize the environmental attributes of the renewable
technology, the characteristics that contribute to peak electricity
demand reduction, reduced transmission congestion, avoided
transmission and distribution improvements, and in a manner that
accelerates the deployment of renewable energy resources.
(f) It is the policy of this state and the intent of the
Legislature to encourage the generation of electricity from eligible
renewable energy resources at the sites
located in close proximity to where the electricity will be
utilized.
SEC. 2. Section 387.6 is added to the Public Utilities Code, to
read:
387.6. (a) It is the policy of the state and the intent of the
Legislature to encourage electrical generation from eligible
renewable energy resources.
(b) As used in this section, "electric generation facility" means
an electric generation facility , owned, leased, or rented
by a retail customer of located within the service
territory of, and developed to sell electricity to, a local
publicly owned electric utility, and that meets all of the following
criteria:
(1) Has an effective capacity of not more than three megawatts
and is located on property owned or under the control of the
customer. Premises that are leased by the customer are under the
control of the customer for purposes of this paragraph. The customer
is not required to own the electric generation facility.
.
(2) Is interconnected and operates in parallel with the electric
transmission and distribution grid.
(3) Is strategically located and interconnected to the electric
transmission system in a manner that optimizes the deliverability of
electricity generated at the facility to load centers.
(4) Is an eligible renewable energy resource , as defined
in Section 399.12. pursuant to Article 16 (commencing
with Section 399.11).
(c) A local publicly owned electric utility that sells electricity
at retail to 75,000 or more customers shall adopt a standard tariff
for electricity purchased from an electric generation facility.
(d) The governing board of the local publicly owned electric
utility shall ensure that the tariff adopted pursuant to subdivision
(c) reflects the value of every kilowatthour of electricity generated
on a time-of-delivery basis. The governing board may adjust this
value based on the other attributes of renewable generation. The
governing board shall ensure, with respect to rates and charges, that
ratepayers that do not receive service pursuant to the tariff are
indifferent to whether a ratepayer with an electric generation
facility receives service pursuant to the tariff.
(e) A local publicly owned electric utility that sells electricity
at retail to 75,000 or more customers shall make the tariff
available to customers that own, lease, or rent
the owner or operator of an electric generation facility
within the service territory of the utility, upon request, on a
first-come-first-served basis, until the combined statewide
cumulative rated generating capacity of those electric generation
facilities reaches 250 megawatts. A local publicly owned electric
utility may make the terms of the tariff available to
customers owners and operators of an electric
generation facility in the form of a standard contract. A local
publicly owned electric utility is only required to offer service or
contracts under this section until the utility meets its
proportionate share of the 250 megawatts based on the ratio of its
peak demand to the total statewide peak demand.
(f) Every kilowatthour of electricity purchased from an electric
generation facility shall count toward meeting the local publicly
owned electric utility's renewables portfolio standard annual
procurement targets for purposes of Section 387.
(g) (1) A local publicly owned electric utility may establish
performance standards for any electric generation facility that has a
capacity greater than one megawatt to ensure that those facilities
are constructed, operated, and maintained to generate the expected
annual net production of electricity and do not impact system
reliability.
(2) A local publicly owned electric utility may reduce the three
megawatt capacity limitation of paragraph (1) of subdivision (b) if
the utility finds that a reduced capacity limitation is necessary.
SEC. 3. Section 399.20 of the Public Utilities Code is amended to
read:
399.20. (a) It is the policy of this state and the intent of the
Legislature to encourage electrical generation from eligible
renewable energy resources.
(b) As used in this section, "electric generation facility" means
an electric generation facility , owned, leased, or rented
by a retail customer of located within the service
territory of, and developed to sell electricity to, an
electrical corporation that meets all of the following criteria:
(1) Has an effective capacity of not more than three megawatts
and is located on property owned or under the control of the
customer. Premises that are leased or rented by the customer are
under the control of the customer for purposes of this paragraph. The
retail customer is not required to own the electric generation
facility. .
(2) Is interconnected and operates in parallel with the electric
transmission and distribution grid.
(3) Is strategically located and interconnected to the electric
grid in a manner that is considered deliverable to load, pursuant to
the Independent System Operator deliverability assessments.
(4) Is an eligible renewable energy resource , as defined
in Section 399.12 .
(c) Every electrical corporation shall file with the commission a
standard tariff for electricity purchased from an electric generation
facility. The commission may modify or adjust the requirements of
this section for any electrical corporation with less than 100,000
service connections, as individual circumstances merit.
(d) The tariff shall provide for a base payment rate for
every kilowatthour of electricity purchased from an electric
generation facility at the market price as determined by the
commission pursuant to Section 399.15 for a period of 10, 15, or 20
years, as authorized by the commission payment for
every kilowatthour of electricity purchased from an electric
generation facility for a period of 10, 15, or 20 years, as
authorized by the commission. The payment shall be the market price
determined by the commission pursuant to Section 399.15 . The
commission may adjust the payment rate to reflect the value of every
kilowatthour of electricity generated on a time-of-delivery basis and
any other attributes of renewable generation. The commission
shall consider and may establish a value for an electric generation
facility located on a distribution circuit that generates electricity
at a time and in a manner so as to offset the peak demand on the
distribution circuit. The commission, in consultation with the Energy
Commission, shall establish the cost of generation values and costs
for each technology that is an eligible renewable energy resource.
The commission shall ensure, with respect to rates and charges,
that ratepayers that do not receive service pursuant to the tariff
are indifferent to whether a ratepayer with an electric generation
facility receives service pursuant to the tariff.
(e) Electrical corporations shall provide expedited
interconnection procedures to electric generation facilities located
on a distribution circuit that generates electricity at a time and in
a manner so as to offset the peak demand on the distribution
circuit.
(e)
(f) Every electrical corporation shall make this tariff
available to customers that own, lease, or rent
the owner or operator of an electric generation facility
within the service territory of the electrical corporation, upon
request, on a first-come-first-served basis, until the combined
statewide cumulative rated generating capacity of those electric
generation facilities reaches 500 megawatts. An electrical
corporation may make the terms of the tariff available to
customers owners and operators of an electric
generation facility in the form of a standard contract subject
to commission approval. Each electrical corporation shall only be
required to offer service or contracts under this section until that
electrical corporation meets its proportionate share of the 500
megawatts based on the ratio of its peak demand to the total
statewide peak demand.
(f)
(g) Every kilowatthour of electricity purchased from an
electric generation facility shall count toward meeting the
electrical corporation's renewables portfolio standard annual
procurement targets for purposes of paragraph (1) of subdivision (b)
of Section 399.15.
(g)
(h) The electricity generated by an electric generation
facility, consistent with Section 380, shall count toward the
electrical corporation's resource adequacy requirement.
(h)
(i) (1) The commission, in consultation with the
Independent System Operator, shall monitor and examine the impact on
the transmission and distribution grid and any effects upon
ratepayers resulting from electric generation facilities operating
pursuant to a tariff or contract approved by the commission pursuant
to this section.
(2) The commission shall establish performance standards for any
electric generation facility that has a capacity greater than one
megawatt to ensure that those facilities are constructed, operated,
and maintained to generate the expected annual net production of
electricity and do not impact system reliability.
(3) The commission may reduce the three megawatt capacity
limitation of paragraph (1) of subdivision (b) if the commission
finds that a reduced capacity limitation is necessary to maintain
system reliability within that electrical corporation's service
territory.
(i) (1) A customer that elects to receive electrical service
pursuant to a tariff filed by an electrical corporation pursuant to
this section is eligible to receive ratepayer-funded incentives in
accordance with Section 25782 of the Public Resources Code, or with
Section 379.6, for the capacity needed to offset part or all of the
electrical demand of the customer. For the purpose of determining the
capacity needed to offset part or all of the electrical demand of an
agricultural customer, the electrical corporation shall aggregate
the electrical load of the agricultural customer under the same
ownership located on property adjacent or contiguous to the
agricultural customer's electric generation facility.
(j) (1) Any owner or operator of an electric generation facility
that received ratepayer-funded incentives in accordance with Section
379.6, or with Section 25782 of the Public Resources Code, and
participated in a net metering program pursuant to Sections 2827,
2827.9, and 2827.10 prior to January 1, 2010, shall be eligible for a
tariff or standard contract filed by an electrical corporation
pursuant to this section.
(2) In establishing the tariffs or standard contracts pursuant to
this section, the commission may consider ratepayer-funded incentive
payments previously received by the generation facility pursuant to
Section 379.6 or Section 25782 of the Public Resources Code.
(2)
(3) A customer that receives service under a tariff or
contract approved by the commission pursuant to this section is not
eligible to participate in any net metering program.
(j) (1) A customer
(k) (1) An owner
or operator of an electric generation facility electing to
receive service under a tariff or contract approved by the commission
shall continue to receive service under the tariff or contract until
either of the following occurs:
(A) The customer owner or operator of an
electric generation facility no longer meets the eligibility
requirements for receiving service pursuant to the tariff or
contract.
(B) The period of service established by the commission pursuant
to subdivision (d) is completed.
(2) Upon completion of the period of service established by the
commission pursuant to subdivision (d), the customer may elect to
renew receiving service pursuant to the tariff or contract approved
by the commission for the period of time then established by the
commission, or may elect to receive service under another then
applicable tariff.
SEC. 4. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
certain costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
With respect to certain other costs, no reimbursement is required
by this act pursuant to Section 6 of Article XIII B of the California
Constitution because a local agency or school district has the
authority to levy service charges, fees, or assessments sufficient to
pay for the program or level of service mandated by this act, within
the meaning of Section 17556 of the Government Code.