BILL NUMBER: SB 32 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 13, 2009
AMENDED IN ASSEMBLY JULY 1, 2009
AMENDED IN SENATE JUNE 2, 2009
AMENDED IN SENATE APRIL 29, 2009
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 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 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
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 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 consider, 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 an
electric generation facility located on a distribution circuit that
offsets peak demand on that circuit, if the electrical corporation
determines that the electric generation facility will not adversely
affect the distribution grid. The bill would require the electrical
corporation to make the tariff available to 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 until certain alternative limits are reached
either the corporation meets its proportionate share
of a statewide cap of 750 megawatts cumulative rate generation
capacity served under the tariffs adopted pursuant to the
requirements of the bill or the electrical corporation has reached or
exceeds its above-market cost limitation, as specified . 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 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
, but would require the commission to require reimbursement of
funds in some circumstances . 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.
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 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
utility meets its proportionate share of a statewide cap of 750
megawatts cumulative rate generation capacity served under the
tariffs adopted purs uant to the requirements of this bill
. 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) 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 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 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 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 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.
(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 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 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 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.
(e) A local publicly owned electric utility that sells electricity
at retail to 75,000 or more customers shall make the tariff
available to 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 utility meets its
proportionate share of a statewide cap of 750 megawatts cumulative
rate generation capacity served under this section and Section
399.20. The proportionate share shall be calculated based on the
ratio of the utility's peak demand compared to the total statewide
peak demand.
(f) The local publicly owned electric utility may make the terms
of the tariff available to owners and operators of an electrical
generation facility in the form of a standard contract.
(f)
(g) 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)
(h) (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 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.
(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.
(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) (1) The tariff shall provide for 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.
(2) 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.
(3) 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) An electrical corporation shall provide expedited
interconnection procedures to 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 , if the electrical corporation determines that the
electric generation facility will not adversely affect the
distribution grid.
(f) Every electrical corporation shall make this tariff available
to 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, or until the electrical corporation
has reached or exceeded its above-market cost limitation established
pursuant to subdivision (d) of Section 399.15, whichever occurs
first. An electrical corporation may make the terms of the tariff
available to 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) An electrical corporation shall make the tariff available to
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 either of the following
conditions is met:
(1) The electrical corporation meets its proportionate share of a
statewide cap of 750 megawatts cumulative rate generation capacity
served under this section and Section 387.6. The proportionate share
shall be calculated based on the ratio of the electrical corporation'
s peak demand compared to the total statewide peak demand.
(2) The electrical corporation has reached or exceeds its
above-market cost limitation established pursuant to subdivision (d)
of Section 399.15.
(g) The electrical corporation may make the terms of the tariff
available to owners and operators of an electrical generation
facility in the form of a standard contract subject to commission
approval.
(g)
(h) 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.
(h)
(i) The electricity generated by an electric generation
facility, consistent with Section 380, shall count toward the
electrical corporation's resource adequacy requirement.
(i)
(j) (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.
(j)
(k) (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 shall
consider ratepayer-funded incentive payments previously received by
the generation facility pursuant to Section 379.6 or Section 25782 of
the Public Resources Code. The commission shall require
reimbursement of any funds received from these incentive
programs to a electrical generation facility, in order for that
facility to be eligible for a tariff or standard contract filed by an
electrical corporation pursuant to this section, unless the
commission determines ratepayers have received sufficient value from
the incentives provided to the facility based on how long the project
has been in operation and the amount of renewable electricity
previously gen erated by the facility.
(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.
(k)
(l) 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:
(1) The owner or operator of an electric generation facility no
longer meets the eligibility requirements for receiving service
pursuant to the tariff or contract.
(2) The period of service established by the commission pursuant
to subdivision (d) is completed.
(l)
(m) The commission shall not order or otherwise require
an electrical corporation to implement a must-buy renewable feed-in
tariff except as required by this section or as otherwise expressly
authorized by statute.
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.