BILL NUMBER: SB 412 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 14, 2009
AMENDED IN SENATE MAY 28, 2009
INTRODUCED BY Senator Kehoe
(Coauthor: Senator Padilla)
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 amended, 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 require authorize
the commission to require authorize the
annual collection of funding for the
self-generation incentive program for nonsolar distributed generation
resources through December 31, 2011, and not more
than the amount authorized for the self-generation incentive program
in the 2008 calendar year, through December 31, 2011. The bill
would require the commission to extend the administration of the
program until all funds collected for the program have been
allocated as incentives January 1, 2016, and, on that
date, would require the commission to provide repayment of all
unexpended funds collected to reduce ratepayer costs . The bill
would limit the eligibility for incentives pursuant to the program
to distributed generation resources that the commission , in
consultation with the state board, determines will
support the state's goals for the achieve
reduction of greenhouse gas 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 Energy
Commission, shall require the collection of funding for the
self-generation incentive program through December 31, 2011, and
may authorize the annual collection of not more than
the amount authorized for the self-generation incentive program in
the 2008 calendar year, through December 31, 2011. The commission
shall require the administration of the program for distributed
generation resources originally established pursuant to Chapter 329
of the Statutes of 2000 until all funds collected for the
program have been allocated as incentives. January 1,
2016. On January 1, 2016, the commission shall provide repayment of
all unexpended funds collected pursuant to this section to reduce
ratepayer costs.
(2) The commission shall administer solar technologies separately,
pursuant to the California Solar Initiative adopted by the
commission in Decision 06-01-024.
(b) Eligibility for incentives under the program shall be limited
to distributed generation resources that the commission , in
consultation with the State Air Resources Board, determines
will support state goals for the reductions of emissions of
greenhouse gases will achieve reductions of
greenhouse gas emissions 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 funding of any combustion-operated
distributed generation projects using fossil fuel is subject to all
of the following conditions:
(1) An oxides of nitrogen (NOx) emissions rate standard of 0.07
pounds per megawatthour and a minimum efficiency of 60 percent ,
or any other NO x emissions rate or minimum efficiency
standard adopted by the State Air Resources Board . 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)
(3) 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). (1) and (2).
(5)
(4) 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 216.6, or by calculating overall electrical
efficiency.
(e) In administering the self-generation incentive program, the
commission may adjust the amount of rebates and evaluate other public
policy interests, including, but not limited to, ratepayers, and
energy efficiency and environmental interests.
(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.