BILL NUMBER: SB 412 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Kehoe
FEBRUARY 26, 2009
An act to amend Section 379.6 of the Public Utilities Code,
relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
SB 412, as introduced, Kehoe. Electricity: self-generation
incentive program.
(1) Under existing law, the Public Utilities Commission (PUC) has
regulatory authority over public utilities, including electrical
corporations and gas corporations, as defined. Existing law requires
the PUC, in consultation with the State Energy Resources Conservation
and Development Commission (Energy Commission), to administer, until
January 1, 2012, a self-generation incentive program for distributed
generation resources. The program is applicable to all eligible
technologies, as determined by the PUC and subject to certain air
emissions and efficiency standards, until January 1, 2008, except for
solar technologies, which the PUC is required to administer
separately, after January 1, 2007, pursuant to the California Solar
Initiative. Commencing January 1, 2008, until January 1, 2012,
existing law limits eligibility for nonsolar technologies to fuel
cells and wind distributed generation technologies that meet or
exceed emissions standards adopted by the State Air Resources Board
(state board). Existing law authorizes the PUC, in administering the
program, to include other ultraclean and low-emission distributed
generation technologies, as defined.
Pursuant to decisions of the PUC, Pacific Gas and Electric
Company, Southern California Edison, and Southern California Gas
Company are the program administrators throughout their respective
service territories and the Center for Sustainable Energy is the
program administrator for the San Diego Gas and Electric Company
service territory.
The California Global Warming Solutions Act of 2006 requires the
State Air Resources Board (state board) to adopt a statewide
greenhouse gas emissions limit equivalent to the statewide greenhouse
gas emissions levels in 1990, to be achieved by 2020. Existing law
prohibits any load-serving entity, as defined, and any local publicly
owned electric utility, as defined, from entering into a long-term
financial commitment, as defined, unless any baseload generation, as
defined, complies with a greenhouse gases emission performance
standard. Existing law requires the commission, in consultation with
the Energy Commission and the state board, to establish a greenhouse
gases emission performance standard for all baseload generation of
load-serving entities.
This bill would extend until January 1, 2013, the self-generation
incentive program for nonsolar distributed generation resources and
would limit the eligibility for incentives pursuant to the program to
distributed generation resources that the commission determines will
support the state's goals for the reduction of emissions of
greenhouse gases pursuant to the California Global Warming Solutions
Act of 2006. The bill would require that combined heat and power
units meet certain efficiency and emissions requirements, including
the greenhouse gases emission performance standard, to receive
incentives.
The bill would require the PUC to ensure that distributed
generation resources are made available in the program for all
ratepayers. The bill would prohibit recovery of the costs of the
program from ratepayers that participate in the California
Alternative Rates for Energy (CARE) program. The bill would delete
the authorization for the PUC, in administering the program, to
include other ultraclean and low-emission distributed generation
technologies.
(2) Existing law requires the Energy Commission, by November 1,
2008, and in consultation with the PUC and state board, to evaluate
the costs and benefits of providing ratepayer subsidies for renewable
and fossil fuel ultraclean and low-emission distributed generation.
This bill would delete that requirement.
(3) Under existing law, a violation of the Public Utilities Act or
any order, decision, rule, direction, demand, or requirement of the
commission is a crime.
Because the program that is extended under the provisions of this
bill is within the act and a decision or order of the commission
implements the program requirements, a violation of these provisions
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 379.6 of the Public Utilities Code is amended
to read:
379.6. (a) (1) The commission, in consultation with the
State Energy Resources Conservation and
Development Commission, shall administer, until January 1,
2012 2013 , the self-generation
incentive program for distributed generation resources originally
established pursuant to Chapter 329 of the Statutes of 2000.
(2) Except as provided in paragraph (3), the extension of the
program pursuant to Chapter 894 of the Statutes of 2003, as amended
by Chapter 675 of the Statutes of 2004 and Chapter 22 of the Statutes
of 2005, shall apply to all eligible technologies, as determined by
the commission, until January 1, 2008.
(3)
(2) The commission shall administer solar technologies
separately , after January 1, 2007 , pursuant to
the California Solar Initiative adopted by the commission in Decision
06-01-024.
(b) Commencing January 1, 2008, until January 1, 2012, eligibility
for the program pursuant to paragraphs (1) and (2) of subdivision
(a) shall be limited to fuel cells and wind distributed generation
technologies that meet or exceed the emissions standards required
under the distributed generation certification program requirements
of Article 3 (commencing with Section 94200) of Subchapter 8 of
Chapter 1 of Division 3 of Title 17 of the California Code of
Regulations.
(b) Eligibility for incentives under the program shall be limited
to distributed generation resources that the commission determines
will support state goals for the reductions of emissions of
greenhouse gases pursuant to the California Global Warming Solutions
Act of 2006 (Division 25.5 (commencing with Section 38500) of the
Health and Safety Code).
(c) Eligibility for the self-generation incentive program'
s level 3 incentive category shall be funding of any
combustion-operated distributed generation projects using fossil fuel
is subject to all of the following conditions:
(1) Commencing January 1, 2007, all combustion-operated
distributed generation projects using fossil fuel shall meet an
An oxides of nitrogen (NOx) emissions rate
standard of 0.07 pounds per megawatthour and a minimum efficiency of
60 percent. A minimum efficiency of 60 percent shall be measured as
useful energy output divided by fuel input. The efficiency
determination shall be based on 100 percent load.
(2) Combined heat and power units that meet the 60-percent
efficiency standard may take a credit to meet the applicable NOx
emissions standard of 0.07 pounds per megawatthour. Credit shall be
at the rate of one megawatthour for each 3.4 million British thermal
units (Btus) of heat recovered.
(3) Combined heat and power units shall meet the greenhouse gases
emissions performance standard established by the commission for a
load-serving entity pursuant to Section 8341.
(4) The customer receiving incentives shall adequately maintain
and service the combined heat and power units so that during
operation, the system continues to meet or exceed the efficiency and
emissions standards established pursuant to paragraphs (1), (2), and
(3).
(3)
(5) Notwithstanding paragraph (1), a project that does
not meet the applicable NOx emissions standard is eligible if it
meets both of the following requirements:
(A) The project operates solely on waste gas. The commission shall
require a customer that applies for an incentive pursuant to this
paragraph to provide an affidavit or other form of proof, that
specifies that the project shall be operated solely on waste gas.
Incentives awarded pursuant to this paragraph shall be subject to
refund and shall be refunded by the recipient to the extent the
project does not operate on waste gas. As used in this paragraph,
"waste gas" means natural gas that is generated as a byproduct of
petroleum production operations and is not eligible for delivery to
the utility pipeline system.
(B) The air quality management district or air pollution control
district, in issuing a permit to operate the project, determines that
operation of the project will produce an onsite net air emissions
benefit, compared to permitted onsite emissions if the project does
not operate. The commission shall require the customer to secure the
permit prior to receiving incentives.
(d) In determining the eligibility for the self-generation
incentive program, minimum system efficiency shall be determined
either by calculating electrical and process heat efficiency as set
forth in Section 218.5 216.6 , or by
calculating overall electrical efficiency.
(e) In administering the self-generation incentive program, the
commission may adjust the amount of rebates , include other
ultraclean and low-emission distributed generation technologies, as
defined in Section 353.2, and evaluate other public policy
interests, including, but not limited to, ratepayers, and energy
efficiency and environmental interests.
(f) On or before November 1, 2008, the State Energy Resources
Conservation and Development Commission, in consultation with the
commission and the State Air Resources Board, shall evaluate the
costs and benefits, including air pollution, efficiency, and
transmission and distribution system improvements, of providing
ratepayer subsidies for renewable and fossil fuel "ultraclean and
low-emission distributed generation," as defined in Section 353.2, as
part of the integrated energy policy report adopted pursuant to
Chapter 4 (commencing with Section 25300) of Division 15 of the
Public Resources Code. The State Energy Resources Conservation and
Development Commission shall include recommendations for changes in
the eligibility of technologies and fuels under the program, and
whether the level of subsidy should be adjusted, after considering
its conclusions on costs and benefits pursuant to this subdivision.
(f) The commission shall ensure that distributed generation
resources are made available in the program for all ratepayers.
(g) (1) In administering the self-generation incentive program,
the commission shall provide an additional incentive of 20 percent
from existing program funds for the installation of eligible
distributed generation resources from a California supplier.
(2) "California supplier" as used in this subdivision means any
sole proprietorship, partnership, joint venture, corporation, or
other business entity that manufactures eligible distributed
generation resources in California and that meets either of the
following criteria:
(A) The owners or policymaking officers are domiciled in
California and the permanent principal office, or place of business
from which the supplier's trade is directed or managed, is located in
California.
(B) A business or corporation, including those owned by, or under
common control of, a corporation, that meets all of the following
criteria continuously during the five years prior to providing
eligible distributed generation resources to a self-generation
incentive program recipient:
(i) Owns and operates a manufacturing facility located in
California that builds or manufactures eligible distributed
generation resources.
(ii) Is licensed by the state to conduct business within the
state.
(iii) Employs California residents for work within the state.
(3) For purposes of qualifying as a California supplier, a
distribution or sales management office or facility does not qualify
as a manufacturing facility.
(h) The costs of the program adopted and implemented pursuant to
this section shall not be recovered from customers participating in
the California Alternate Rates for Energy (CARE) program.
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.