BILL NUMBER: SB 388 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY SEPTEMBER 12, 2009
AMENDED IN ASSEMBLY SEPTEMBER 4, 2009
AMENDED IN ASSEMBLY JULY 14, 2009
AMENDED IN ASSEMBLY JUNE 29, 2009
AMENDED IN SENATE APRIL 27, 2009
AMENDED IN SENATE APRIL 22, 2009
AMENDED IN SENATE APRIL 16, 2009
AMENDED IN SENATE APRIL 1, 2009
INTRODUCED BY Senator Calderon
FEBRUARY 26, 2009
An act to add and repeal Section 2830.1 of the Public
Utilities Code, relating to energy. An act to add and
repeal Section 40440.15 of the Health and Safety Code, and to add
Section 21080.06 to the Public Resources Code, relating to the South
Coast Air Quality Management District.
LEGISLATIVE COUNSEL'S DIGEST
SB 388, as amended, Calderon. Renewable energy resources.
South Coast Air Quality Management District: emission
reduction credits: California Environmental Quality Act.
(1) Under existing law, every air pollution control district or
air quality management district in a federal nonattainment area for
any national ambient air quality standard is required to establish by
regulation, a system by which all reductions in emissions of air
contaminants that are to be used to offset certain future increases
in the emission of air contaminants are banked prior to use. The
South Coast Air Quality Management District promulgated various rules
establishing offset exemptions, providing Priority Reserve offset
credits, and creating or tracking credits used for offset exemption
or Priority Reserve projects. In Natural Resources Defense Council v.
South Coast Air Quality Management District (Super. Ct. Los Angeles
County, 2007, No. BS 110792), the superior court found the
promulgation of certain of these district rules to be in violation of
the California Environmental Quality Act (CEQA).
This bill would require the executive officer of the South Coast
Air Quality Management District, upon making a specified finding, to
transfer emission reduction credits for certain pollutants from the
south coast district's internal emission credit accounts to eligible
electrical generating facilities, as described. The bill would exempt
those actions from CEQA. By imposing these duties on the South Coast
Air Quality Management District, the bill would impose a
state-mandated local program. These provisions would be repealed on
January 1, 2013.
(2) This bill would state the findings and declarations of the
Legislature concerning the need for special legislation.
(3) 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.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations,
as defined. Existing law authorizes a local government, as defined,
to receive a bill credit, as defined, to a designated benefiting
account for electricity exported to the electrical grid by an
eligible renewable generating facility, as defined, and requires the
commission to adopt a rate tariff for the benefiting account. The
existing definition of a local government excludes a joint powers
authority, the state, and any agency or department of the state. The
existing definition of a "bill credit" provides that the amount of
the credit is based upon the time-of-use electricity generation
component of the electricity usage charge of the generating account.
This bill, until January 1, 2013, would authorize a local
government that is or is within an economically distressed county, as
defined, to receive a bill credit to a designated benefiting account
for electricity exported to the electrical grid by an eligible
photovoltaic generating facility, as defined, and requires the
commission to adopt a rate tariff for the benefiting account. The
bill would include an individual community college campus, California
State University campus, or a University of California campus within
the definition of a local government and would define a bill credit
so that the amount of the credit is based upon the time-of-use
electricity usage charge of the generating account and not the
electricity component of the charge. The bill would provide that a
local government electing to take service pursuant to the rate tariff
is eligible to receive ratepayer funded incentives pursuant to the
California Solar Initiative, as defined, for facilities that are
sized to meet the onsite load and the load of the designated
benefiting account.
Under existing law, a violation of the Public Utilities Act or an
order or direction of the commission is a crime. Because the
provisions of this bill would require an order or other action of the
commission to implement, and a violation of that order or action
would be a crime, the bill would impose a state-mandated local
program by creating a new crime.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 40440.15 is added to the
Health and Safety Code , to read:
40440.15. (a) The executive officer of the south coast district,
upon finding that the eligible electrical generating facility
proposed for certification by the State Energy Resources Conservation
and Development Commission meets the requirements of the applicable
new source review rule and all other applicable district regulations
that must be met under Section 1744.5 of Title 20 of the California
Code of Regulations, shall credit to the south coast district's
internal emission credit accounts and transfer from the south coast
district's internal emission credit accounts to eligible electrical
generating facilities emission credits in the full amounts needed to
issue permits for eligible electrical generating facilities to meet
requirements for sulfur oxides (SOx) and particulate matter (PM2.5
and PM10) emissions.
(b) In implementing subdivision (a), the district shall rely on
the offset tracking system used prior to the adoption of Rule 1315 of
the south coast district until a new tracking system is approved by
the United States Environmental Protection Agency and is in effect,
at which point that new system shall be used by the south coast
district. In addition to using the prior offset tracking system, the
district shall also make use of any emission credits that have
resulted from emission reductions and shutdowns from minor sources
since 1990. The district shall make any necessary submissions to the
United States Environmental Protection Agency with regard to the
crediting and use of emission reductions and shutdowns from minor
sources.
(c) Within 60 days of the effective date of this section, for each
eligible electrical generating facility, the south coast district
shall report to the State Energy Resources Conservation and
Development Commission the emission credits to be credited and
transferred pursuant to subdivision (a). The State Energy Resources
Conservation and Development Commission shall determine whether the
emission credits to be credited and transferred satisfy all
applicable legal requirements. In the exercise of its regulatory
responsibilities under its power facility and site certification
authority, the State Energy Resources Conservation and Development
Commission shall not certify an eligible electrical generation
facility if it determines that the credit and transfer by the south
coast district does not satisfy all applicable legal requirements.
(d) In order to be eligible for emission reduction credits
pursuant to this section, an electrical generating facility shall
meet all of the following requirements:
(1) Be subject to the permitting jurisdiction of the State Energy
Resources Conservation and Development Commission.
(2) Have a purchase agreement, executed on or before December 31,
2008, to provide electricity to a public utility, as defined in
Section 216 of the Public Utilities Code, subject to regulation by
the Public Utilities Commission, for use within the Los Angeles Basin
Local Reliability Area.
(3) Be under the jurisdiction of the south coast district.
(4) Be located within the City of Industry.
(e) The executive officer shall not transfer emission reduction
credits pursuant to this section to an electrical generating facility
pursuant to the south coast district's Rule 1309.1, as adopted
August 3, 2007, until the receipt of payment of the mitigation fees
set forth in the south coast district's Rule 1309.1, as adopted on
August 3, 2007. The mitigation fees shall only be used for emission
reduction purposes. The south coast district shall ensure that at
least 30 percent of the fees are used for emission reductions in
areas within close proximity to the electrical generating facility
and at least 30 percent are used for emission reductions in areas
designated as "Environmental Justice Areas" in Rule 1309.1 of the
south coast district.
(f) The executive officer's authority to transfer emission
reduction credits pursuant to this section shall terminate when the
executive officer has transferred emission reduction credits in
amounts that are equal to the aggregate amounts set forth in
subdivision (a).
(g) This section shall be implemented in a manner consistent with
federal law, including the Clean Air Act (42 U.S.C. Sec. 7401 et
seq.).
(h) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
SEC. 2. Section 21080.06 is added to the
Public Resources Code , to read:
21080.06. This division does not apply to the selection, credit,
and transfer of emission credits by the South Coast Air Quality
Management District pursuant to Section 40440.15 of the Health and
Safety Code until the repeal of that section on January 1, 2013, or a
later date.
SEC. 3. The Legislature finds and declares that a
special law is necessary and that a general law cannot be made
applicable within the meaning of Section 16 of Article IV of the
California Constitution because of unique circumstances concerning
the South Coast Air Quality Management District.
SEC. 4. 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.
SECTION 1. Section 2830.1 is added to the
Public Utilities Code, to read:
2830.1. (a) It is the intent of the Legislature to promote
investment in photovoltaic distributed generation by local
governments in economically distressed counties by expanding the
incentives available pursuant to Section 2830, but subject to the
250-megawatt limitation of subdivision (h) of that section.
(b) As used in this section, the following terms have the
following meanings:
(1) "Benefiting account" means an electricity account, or more
than one account, located within the geographical boundaries of a
local government, that is mutually agreed upon by the local
government and an electrical corporation.
(2) "Bill credit" means an amount of money credited to a
benefiting account that is calculated based upon the time-of-use
electricity usage charge of the generating account, multiplied by the
quantities of electricity generated by an eligible photovoltaic
generating facility that are exported to the grid during the
corresponding time period. Electricity is exported to the grid if it
is generated by an eligible photovoltaic generating facility, is not
utilized onsite by the local government, and the electricity flows
through the meter site and on to the electrical corporation's
distribution or transmission infrastructure.
(3) "Economically distressed county" means a county that with an
unemployment rate of 10 percent or more as determined by the Economic
Development Department as of January 1, 2010.
(4) "Eligible photovoltaic generating facility" means a
photovoltaic solar collector or other photovoltaic solar energy
device that has a generating capacity of no more than one megawatt,
is located within the geographical boundary of, and is owned,
operated, or on property under the control of, the local government,
and is sized to offset all or part of the electrical load of the
benefiting account. The geographic boundary of an individual
community college campus, California State University campus, or
University of California campus shall be the limits of the city,
county, or city and county in which each is located. For these
purposes, premises that are leased by a local government are under
the control of the local government.
(5) "Generating account" means the time-of-use electric service
account of the local government where the eligible photovoltaic
generating facility is located.
(6) "Local government" means a city, county, whether general law
or chartered, city and county, special district, school district,
political subdivision, or an individual community college campus,
California State University campus, or University of California
campus, or other local public agency, that is located within an
economically distressed county, but shall not mean a joint powers
authority, the state or any agency or department of the state, other
than a campus of the University of California or the California State
University.
(c) Subject to the limitation in subdivision (h) of Section 2830,
a local government may elect to receive electric service pursuant to
this section, if all of the following conditions are met:
(1) The local government is itself an economically distressed
county, or is geographically located within an economically
distressed county.
(2) The local government designates one or more benefiting
accounts to receive a bill credit.
(3) A benefiting account receives service under a time-of-use rate
schedule.
(4) The benefiting account is the responsibility of, and serves
property that is owned, operated, or on property under the control of
the same local government that owns, operates, or controls the
eligible photovoltaic generating facility.
(5) The electrical output of the eligible photovoltaic generating
facility is metered for time of use to allow calculation of the bill
credit based upon when the electricity is exported to the grid.
(6) All costs associated with the metering requirements of
paragraphs (2) and (4) are the responsibility of the local
government.
(7) All costs associated with interconnection are the
responsibility of the local government. For purposes of this
paragraph, "interconnection" has the same meaning as defined in
Section 2803, except that it applies to the interconnection of an
eligible photovoltaic generating facility rather than the energy
source of a private energy producer.
(8) The local government does not sell electricity exported to the
electrical grid to a third party.
(9) All electricity generated by the eligible photovoltaic
generating facility shall be counted toward the electrical
corporation's total retail sales procurement requirements, but not
incremental procurement requirements, pursuant to Article 16
(commencing with Section 399.11) of Chapter 2.3 of Part 1. Ownership
of the renewable energy credits, as defined in Section 399.12,
associated with electricity generated by the eligible photovoltaic
generating facility shall be the property of the electrical
corporation.
(d) (1) A benefiting account shall be billed for all electricity
usage, and for each bill component, at the rate schedule applicable
to the benefiting account, including any cost-responsibility
surcharge or other cost recovery mechanism, as determined by the
commission, to reimburse the Department of Water Resources for
purchases of electricity, pursuant to Division 27 (commencing with
Section 80000) of the Water Code.
(2) The bill shall then subtract the bill credit applicable to the
benefiting account. The amount credited to the benefiting account
may not include the cost-responsibility surcharge or other cost
recovery mechanism, as determined by the commission, to reimburse the
Department of Water Resources for purchases of electricity, pursuant
to Division 27 (commencing with Section 80000) of the Water Code.
The electrical corporation shall ensure that the local government
receives the full bill credit.
(3) If, during the billing cycle, the electricity usage charges
exceed the bill credit, the benefiting account shall be billed for
the difference.
(4) If, during the billing cycle, the bill credit applied pursuant
to paragraph (2) exceeds the electricity usage charges, the
difference shall be carried forward as a financial credit to the next
billing cycle.
(5) After the electricity usage charge pursuant to paragraph (1)
and the credit pursuant to paragraph (2) are determined for the last
billing cycle of a 12-month period, any remaining credit resulting
from the application of this section shall be reset to zero.
(e) The commission shall ensure that costs associated with the
transfer of a bill credit to a benefiting account do not result in a
shifting of costs to bundled service subscribers. The costs
associated with the transfer of a bill credit shall include all
billing-related expenses.
(f) Not more frequently than once per year, and upon providing the
electrical corporation with a minimum of 60 days' notice, the local
government may elect to change a benefiting account. Any credit
resulting from the application of this section earned prior to the
change in a benefiting account that has not been used as of the date
of the change in the benefiting account, shall be applied, and may
only be applied, to a benefiting account as changed.
(g) A local government shall provide the electrical corporation to
which the eligible photovoltaic generating facility will be
interconnected with not less than 60 days' notice prior to the
eligible photovoltaic generating facility becoming operational. The
electrical corporation shall file an advice letter with the
commission, that complies with this section, not later than 30 days
after receipt of the notice, proposing a rate tariff for a benefiting
account. The commission, within 30 days of the date of filing, shall
approve the proposed tariff, or specify conforming changes to be
made by the electrical corporation to be filed in a new advice
letter.
(h) The local government may terminate its election pursuant to
subdivision (b), upon providing the electrical corporation with a
minimum of 60 days' notice. Should the local government sell its
interest in the generating account, or sell the electricity generated
by the eligible photovoltaic generating facility, in a manner other
than required by this section, upon the date of either event, and the
earliest date if both events occur, no further bill credit pursuant
to paragraph (3) of subdivision (b) may be earned. Only credit earned
prior to that date shall be made to a benefiting account.
(i) An eligible photovoltaic generation facility is an eligible
renewable generating facility for purposes of the 250-megawatt
limitation of subdivision (h) of Section 2830. An electrical
corporation is not obligated, pursuant to this section, to provide a
bill credit to a benefiting account that is not designated by a local
government prior to the point in time that the combined statewide
cumulative rated generating capacity of all eligible renewable
generating facilities, as defined in Section 2830, and eligible
photovoltaic within the service territories of the state's three
largest electrical corporations reaches 250 megawatts. Each
electrical corporation shall only be required to offer service or
contracts under this section until that electrical corporation
reaches its proportionate share of the 250-megawatt limitation based
on the ratio of its peak demand to the total statewide peak demand of
all electrical corporations.
(j) A local government electing to take service pursuant to
subdivision (b) is eligible to receive ratepayer funded incentives
pursuant to the California Solar Initiative for facilities that are
sized to meet the onsite load and the load of the designated
benefiting account. For purposes of this subdivision, "California
Solar Initiative" means the program providing ratepayer funded
incentives for eligible solar energy systems adopted by the Public
Utilities Commission in Decision 05-12-044 and Decision 06-01-024, as
modified by Chapter 8.8 (commencing with Section 25780) of Division
15 of the Public Resources Code and Article 1 (commencing with
Section 2851) of Chapter 9.
(k) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
SEC. 2. No reimbursement is required by this
act pursuant to Section 6 of Article XIII B of the California
Constitution because the only 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.