BILL NUMBER: SB 32 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 31, 2009
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 and would
require the price to include all current and anticipated
environmental compliance costs . 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 either the corporation meets its proportionate share of
a statewide cap of 750 megawatts cumulative rate
rated 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 physical
generating capacity of 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 utility meets
its proportionate share of a statewide cap of 750 megawatts
cumulative rate rated generation
capacity served under the tariffs adopted pursuant 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
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. 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. strategically
located and interconnected to the electrical transmission and
distribution grid in a manner that optimizes the deliverability of
electricity generated at the facility to load centers.
(g) Electric generation facilities that qualify for tariffs
pursuant to this act are sophisticated high-voltage electric
generating facilities that need to be properly constructed and
maintained to protect the health and safety of utility personnel,
operator personnel, and the public, and to ensure proper operation
over the life of the project.
(h) In implementing this act, the Public Utilities Commission,
electrical corporations, and local publicly owned electric utilities
should ensure that electric generation facilities are designed to
operate lawfully and safely and in accordance with all applicable
state and local laws and building standards, and utility
interconnection requirements.
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 electrical transmission and
distribution grid.
(3) Is strategically located and interconnected to the
electric transmission system electrical transmission
and distribution grid 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 utility meets its
proportionate share of a statewide cap of 750 megawatts cumulative
rate rated 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 electric generation facility in the
form of a standard contract.
(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.
(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.
(i) Within 10 days of receipt of a request for a tariff pursuant
to this section from an owner or operator of an electric generation
facility, the local publicly owned electric utility that receives the
request shall post a copy of the request on its Internet Web site.
The information posted on the Internet Web site shall include the
name of the city in which the facility is located, but information
that is proprietary and confidential, including, but not limited to,
address information beyond the name of the city in which the facility
is located, shall be redacted.
(j) A local publicly owned electric utility may deny a tariff
request pursuant to this section if the local publicly owned electric
utility makes any of the following findings:
(1) The electric generation facility does not meet the
requirements of this section.
(2) The transmission or distribution grid that would serve as the
point of interconnection is inadequate.
(3) The electric generation facility does not meet all applicable
state and local laws and building standards, and utility
interconnection requirements.
(4) The aggregate of all electric generating facilities on a
distribution circuit would adversely impact utility operation and
load restoration efforts of the distribution system.
(k) Upon receiving a notice of denial from a local publicly owned
electric utility, the owner or operator of the electric generation
facility denied a tariff pursuant to this section shall have the
right to appeal that decision to the governing board of the local
publicly owned electric utility.
(l) In order to ensure the safety and reliability of electric
generation facilities, the owner of an electric generation facility
receiving a tariff pursuant to this section shall provide an
inspection and maintenance report to the local publicly owned
electric utility at least once every other year. The inspection and
maintenance report shall be prepared at the owner's or operator's
expense by a California licensed contractor who is not the owner or
operator of the electric generation facility. A California licensed
electrician shall perform the inspection of the electrical portion of
the generation facility.
(m) The contract between the electric generation facility
receiving the tariff and the local publicly owned electric utility
shall contain provisions that ensure that construction of the
electric generating facility complies with all applicable state and
local laws and building standards, and utility interconnection
requirements.
(n) (1) All construction and installation of facilities of the
local publicly owned electric utility, including at the point of the
output meter or at the transmission or distribution grid, shall only
be performed by that local publicly owned electric utility.
(2) All interconnection facilities installed on the local publicly
owned electric utility's side of the transfer point for electricity
between the local publicly owned electric utility and the electrical
conductors of the electric generation facility shall be owned,
operated, and maintained only by the local publicly owned electric
utility. The ownership, installation, operation, reading, and testing
of revenue metering equipment for electric generating facilities
shall only be performed by the local publicly owned electric utility.
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 electrical transmission and
distribution grid.
(3) Is strategically located and interconnected to the
electric electrical transmission and distribution
grid in a manner that is considered deliverable to
load, pursuant to the Independent System Operator deliverability
assessments optimizes the deliverability of
electricity generated at the facility to load centers .
(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 and shall include all
current and anticipated environmental compliance costs, including,
but not limited to, mitigation of emissions of greenhouse gases and
air pollution offsets associated with the operation of new
generating facilities in the local air pollution control or air
quality management district where the electric generation facility is
located .
(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.
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.
(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
rated 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
electric generation facility in the form of a standard
contract subject to commission approval.
(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.
(i) The electricity generated by an electric generation
facility, consistent with Section 380, physical
generating capacity of an electric generation facility shall
count toward the electrical corporation's resource adequacy
requirement for purposes of Section 380 .
(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)
(j) (1) 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)
(2) 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.
(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 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
an electric 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 generated 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.
(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.
(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.
(m) Within 10 days of receipt of a request for a tariff pursuant
to this section from an owner or operator of an electric generation
facility, the electrical corporation that receives the request shall
post a copy of the request on its Internet Web site. The information
posted on the Internet Web site shall include the name of the city in
which the facility is located, but information that is proprietary
and confidential, including, but not limited to, address information
beyond the name of the city in which the facility is located, shall
be redacted.
(n) An electrical corporation may deny a tariff request pursuant
to this section if the electrical corporation makes any of the
following findings:
(1) The electric generation facility does not meet the
requirements of this section.
(2) The transmission or distribution grid that would serve as the
point of interconnection is inadequate.
(3) The electric generation facility does not meet all applicable
state and local laws and building standards, and utility
interconnection requirements.
(4) The aggregate of all electric generating facilities on a
distribution circuit would adversely impact utility operation and
load restoration efforts of the distribution system.
(o) Upon receiving a notice of denial from an electrical
corporation, the owner or operator of the electric generation
facility denied a tariff pursuant to this section shall have the
right to appeal that decision to the commission.
(p) In order to ensure the safety and reliability of electric
generation facilities, the owner of an electric generation facility
receiving a tariff pursuant to this section shall provide an
inspection and maintenance report to the electrical corporation at
least once every other year. The inspection and maintenance report
shall be prepared at the owner's or operator's expense by a
California licensed contractor who is not the owner or operator of
the electric generation facility. A California licensed electrician
shall perform the inspection of the electrical portion of the
generation facility
(q) The contract between the electric generation facility
receiving the tariff and the electrical corporation shall contain
provisions that ensure that construction of the electric generating
facility complies with all applicable state and local laws and
building standards, and utility interconnection requirements.
(r) (1) All construction and installation of facilities of the
electrical corporation, including at the point of the output meter or
at the transmission or distribution grid, shall only be performed by
that electrical corporation.
(2) All interconnection facilities installed on the electrical
corporation's side of the transfer point for electricity between the
electrical corporation and the electrical conductors of the electric
generation facility shall be owned, operated, and maintained only by
the electrical corporation. The ownership, installation, operation,
reading, and testing of revenue metering equipment for electric
generating facilities shall only be performed by the electrical
corporation.
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.