BILL NUMBER: SB 412 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 8, 2009
PASSED THE ASSEMBLY SEPTEMBER 3, 2009
AMENDED IN ASSEMBLY SEPTEMBER 1, 2009
AMENDED IN ASSEMBLY AUGUST 17, 2009
AMENDED IN ASSEMBLY JULY 14, 2009
AMENDED IN SENATE MAY 28, 2009
INTRODUCED BY Senator Kehoe
(Coauthor: Senator Padilla)
(Coauthors: Assembly Members Blakeslee and Skinner)
FEBRUARY 26, 2009
An act to amend Section 379.6 of the Public Utilities Code,
relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
SB 412, 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 authorize the commission to 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 bill would require the commission to extend
the administration of the program until 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 energy resources that the commission, in consultation
with the state board, determines will achieve reduction of greenhouse
gas emissions pursuant to the California Global Warming Solutions
Act of 2006.
The bill would require the PUC to ensure that distributed energy
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.
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, 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 energy
resources originally established pursuant to Chapter 329 of the
Statutes of 2000 until January 1, 2016. On January 1, 2016, the
commission shall provide repayment of all unallocated 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 energy resources that the commission, in consultation
with the State Air Resources Board, determines 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 NOx emissions rate and 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) 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) and (2).
(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, peak load reduction, load management, 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.