BILL NUMBER: AB 1990 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 10, 2012
AMENDED IN ASSEMBLY MAY 1, 2012
AMENDED IN ASSEMBLY MARCH 29, 2012
INTRODUCED BY Assembly Member Fong
FEBRUARY 23, 2012
An act to add Section 399.23 to the Public Utilities Code,
relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
AB 1990, as amended, Fong. Renewable energy resources: small-scale
renewable generation program.
Under existing law, the Public Utilities Commission (PUC) has
regulatory authority over public utilities, including electrical
corporations, as defined, while local publicly owned electric
utilities, as defined, are under the direction of their governing
board. 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 qualifies for the
tariff, is owned and operated by a retail customer of the electrical
corporation, and is located within the service territory of, and
developed to sell electricity to, the electrical corporation.
Existing law requires that, in order to qualify for the tariff, the
electric generation facility: (1) have an effective capacity of not
more than 3 megawatts, subject to the authority of the PUC to reduce
this megawatt limitation, (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
California Renewables Portfolio Standard Program. Existing decisions
of the PUC implementing these requirements refer to these tariff
requirements as a renewable feed-in tariff. Existing law requires 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.
This bill would establish the small-scale renewable generation
program with the goal of installing 375 megawatts of electrical
generating capacity from small-scale renewable generation facilities,
as defined, in the state's most impacted and disadvantaged
communities, as defined. The bill would require the PUC, in
consultation with the State Energy Resources Conservation
and Development Commission, electrical corporations
, the Division of Ratepayer Advocates, and
interested stakeholders, to develop program elements, as specified,
for the program that are applicable to electrical corporations and
that achieve certain environmental justice objectives. The bill would
require each electrical corporation to file with the PUC a standard
tariff for electricity purchased pursuant to a clean energy contract,
as defined, with a small-scale renewable generation facility owner
or operator. The bill would require the PUC to establish a schedule
of standard tariff rates for electricity that electrical corporations
are required to purchase through clean energy contracts with a
small-scale renewable generation facility owner or operator. The bill
requires each local publicly owned electric utility that sells
electricity at retail to establish a schedule of standard tariff
rates for electricity purchased through clean energy contracts from
small-scale renewable generation facilities pursuant to a small-scale
generation program for the utility. The bill would require the PUC
to allocate procurement targets for each electrical corporation
, and require the governing board of a local publicly owned electric
utility to allocate procurement targets for the utility, in
proportion to each electrical corporation's
utility's percentage share of the state's total
electricity sales peak demand measured in
kilowatthours megawatts for the
calendar year ending December 31, 2012.
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 provisions of this bill would be a part of the act and
because a violation of an order or decision of the commission
implementing its requirements would be a crime, the bill would impose
a state-mandated local program by creating a new crime. Because the
bill would impose various duties upon local publicly owned electric
utilities, 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 specified 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. It is the intent of the Legislature to support
small-scale local clean energy in communities throughout the state in
order to increase green jobs and businesses that benefit the
communities where electrical utility customers live, especially in
the most impacted and disadvantaged communities with high
unemployment that bear a disproportionate burden from air pollution,
disease, and other impacts from the generation of electricity from
the burning of fossil fuels.
SEC. 2 Section 399.23 is added to the Public Utilities Code, to
read:
399.23. (a) It is the goal of this state and the intent of the
Legislature to install, by December 31, 2020, 375 megawatts of
electrical generation capacity from small-scale renewable generation
facilities in the state's most impacted and disadvantaged communities
with high unemployment, supported by a program that provides
carefully calibrated payments for the electricity generated and that
are designed to benefit the state's most impacted and disadvantaged
communities.
(b) For purposes of this section, the following terms have the
following meanings:
(1) "Clean energy contract" means a standard offer long-term
contract through which an electrical corporation or local publicly
owned electric utility is required to purchase electricity generated
by a small-scale renewable generation facility according to a
preestablished price schedule when the requirements of this section
are met.
(2) "Most impacted and disadvantaged communities" means those
areas within a region having the highest 10 percent air pollution and
socioeconomic vulnerability, or those areas within a region having
the highest 10 percent vulnerability to direct health or
environmental impacts of climate change. The evaluation criteria for
air pollution exposure shall include, at a minimum, criteria and
toxic air pollution levels, proximity to sources of air pollution,
and the presence of sensitive populations. The evaluation criteria
for socioeconomic vulnerability, to the extent feasible, shall
include multiple indicators, including poverty level, percent home
ownership, unemployment level, and educational attainment within an
air basin that does not meet one or more national or state ambient
air quality standards, or those areas having the highest 10 percent
socioeconomic vulnerability to direct health, or environmental,
impacts of climate change.
(3) "Small-scale renewable generation facility" means an
electrical generation facility, located within the service territory
of, and developed to sell electricity to, an electrical corporation
or local publicly owned electric utility, that meets all of the
following requirements :
(A) Has a rated capacity of not more than 500 kilowatts.
(B) Is interconnected and operates in parallel with the electrical
distribution grid.
(C) Is interconnected to the electrical distribution grid in a
manner that optimizes the deliverability of electricity generated at
the facility to load centers.
(D) Is an eligible renewable energy resource.
(c) (1) The commission, in consultation with the Energy
Commission, electrical corporations , the Division
of Ratepayer Advocates, and interested stakeholders shall
develop program elements for the small-scale renewable generation
program applicable to electrical corporations, including eligibility
criteria and payment rates for clean energy contracts with
small-scale renewable generation facilities to be located in,
and methods to accomplish some or all of the following environmental
justice benefits for, the state's most impacted and disadvantaged
communities:
(A) Create quality local green jobs that provide prevailing wages,
opportunity for advancement, and benefits.
(B) Promote the hiring of employees from the state's most impacted
and disadvantaged communities and from high-quality local green job
training programs.
(C) Promote the development of local green businesses.
(D) Promote local manufacturing in the state's most impacted and
disadvantaged communities.
(E) Promote environmentally responsible recycling of manufactured
renewable energy products.
(F) Promote local ownership of green businesses and small-scale
renewable generation facilities.
(G) Facilitate efforts to target construction job opportunities to
disadvantaged residents, generate tax revenue and other income for
the state's most impacted and disadvantaged communities, and provide
lasting remediation for the conditions of poverty and unemployment by
providing careers in the skilled construction trades.
(2) The commission shall allocate procurement targets for each
electrical corporation with the goal of procuring 375 megawatts of
electrical generating capacity from small-scale renewable generation
facilities statewide by December 31, 2020. The targets shall be
allocated in proportion to each electrical corporation's percentage
share of the state's total electricity sales measured in
kilowatthours peak demand, measured in megawatts,
for the calendar year ending December 31, 2012.
(3) The commission shall determine the capacity of small-scale
renewable generation facilities that can be built in the state's most
impacted and disadvantaged communities in order to achieve the
environmental justice benefits described in paragraph (1).
(4) The program shall be designed to support the development of a
variety of generating technologies and project sizes so as to achieve
a diverse portfolio of eligible renewable energy resources that
provides benefits to the distribution grid and achieves the
environmental justice benefits described in paragraph (1).
(5) The commission shall establish a schedule of standard tariff
rates for electricity that electrical corporations are required to
purchase through clean energy contracts with a small-scale renewable
generation facility owner or operator. The tariff payment rates shall
be sufficient to stimulate the market for each type of electrical
generation sufficiently to meet the program targets. Separate tariff
payment rates shall be created for each type of electrical generation
service provided, including peaking, base load, and, as available,
specific for the size range and the specified benefits of projects
included in the program, while maintaining ratepayer indifference for
the program as a whole. Tariff rates may be adjusted to account for
the availability of tax credits or other subsidies to owners of
small-scale renewable electric generation facilities, to the extent
necessary to ensure achievement of the benefits of this program.
(6) The commission shall establish an annual cost limitation for
the small-scale renewable generation program, which shall not exceed
0.375 percent of the total cost of each electrical corporation's
forecast retail sales in the calendar year ending December 31, 2020.
The commission shall endeavor to design the program so that the
program goals can reasonably be expected to be met within the cost
containment limitation.
(7) Clean energy contracts shall be for a period of 20 or more
years, as authorized by the commission. It is the intent of the
Legislature that long-term contracts be used to lower the average
cost per kilowatthour for small-scale renewable electric generation
facilities.
(8) 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.
(9) Every electrical corporation shall file with the commission a
standard tariff for electricity purchased pursuant to a clean energy
contract with a small-scale renewable generation facility owner or
operator. The tariff shall provide for payment for every kilowatthour
of electricity purchased from a small-scale renewable generation
facility pursuant to the clean energy contract.
(10) The commission shall open a proceeding or expand the scope of
an existing proceeding in order to accomplish the requirements of
this subdivision no later than January 31, 2013, and shall ensure
that electrical corporations begin offering clean energy contracts
pursuant to the program by January 1, 2014.
(d) (1) Each local publicly owned electric utility that sells
electricity at retail shall establish a schedule of standard tariff
rates for electricity purchased through clean energy contracts from
small-scale renewable generation facilities pursuant to a small-scale
generation program for the utility. The schedule of tariff rates
shall provide for payment for every kilowatthour of electricity
purchased from a small-scale renewable generation facility. The
program shall be designed to support the development of a variety of
generating technologies and project sizes so as to achieve a diverse
portfolio of eligible renewable energy resources that provides
benefits to the distribution grid and achieves the environmental
justice benefits described in paragraph (1) of subdivision (c).
(2) Clean energy contracts shall be for a period of 20 or more
years, as authorized by the local publicly owned electric utility. It
is the intent of the Legislature that long-term contracts be used to
lower the average cost per kilowatthour for small-scale renewable
electric generation facilities.
(3) The tariff payment rates shall be sufficient to stimulate the
market for each type of electrical generation sufficiently to meet
the program targets. Separate tariff payment rates shall be created
for each type of electrical generation service provided, including
peaking, base load, and, as available, specific for the size range
and the specified benefits of projects included in the program, while
maintaining ratepayer indifference for the program as a whole.
Tariff rates may be adjusted to account for the availability of tax
credits or other subsidies to owners of small-scale renewable
electric generation facilities, to the extent necessary to ensure
achievement of the benefits of this program.
(4) Each local publicly owned electric utility shall establish an
expedited interconnection procedure for small-scale renewable
generation facilities.
(5) Each local publicly owned electric utility shall begin to
offer clean energy contracts pursuant to its small-scale renewable
generation program by January 1, 2014.
(6) Each local publicly owned electric utility shall establish a
procurement target for the utility with the goal of procuring 375
megawatts of electrical generating capacity from small-scale
renewable generation facilities statewide by December 31, 2020, to be
allocated in proportion to each utility's percentage share of the
state's total peak demand measured in megawatts for the calendar year
ending December 31, 2012.
(7) The governing board of a publicly owned electric utility with
fewer than 75,000 service connections may modify or adjust the
requirements of this section to account for demographic distribution
of population meeting the environmental justice screening method, or
as individual circumstances merit. For these purposes, "environmental
justice screening methodology" means the environmental justice
screening method metrics developed by Professors James L. Sadd,
Manuel Pastor, Rachel Morello-Frosch, Justin Scoggins, and Bill
Jesdale (Vol. 8, International Journal of Environmental Research and
Public Health (May 2011), Playing It Safe: Assessing Cumulative
Impact and Social Vulnerability through an Environmental Justice
Screening Method in the South Coast Air Basin, California, pages 1441
to 1459).
(8) The governing board of a publicly owned electric utility with
75,000 or more service connections shall ensure that the requirements
of this section are met.
(e) The program shall be implemented at a regular annual pace over
a period of six years. Each electrical corporation and local
publicly owned electric utility shall make the clean energy contract
tariff available to the owner or operator of a small-scale renewable
generation facility until the utility reaches that portion of the 375
megawatts of electrical generation capacity allocated to it by the
commission pursuant to paragraph (2) of subdivision (c).
(f) Within 10 days of receipt of a request for a clean energy
contract pursuant to this section from an owner or operator of a
small-scale renewable generation facility, the electrical corporation
or local publicly owned electric utility receiving 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 the address information beyond the name
of the city in which the facility is located, shall be redacted.
(g) (1) An electrical corporation or local publicly owned electric
utility may deny a request for a clean energy contract pursuant to
this section if the utility determines any of the following to be
true:
(A) The generation facility does not meet the requirements of this
section.
(B) The distribution grid that would serve as the point of
interconnection is inadequate.
(C) The small-scale renewable generation facility does not meet
all applicable state and local laws and building standards, and
utility interconnection requirements.
(D) The aggregate of all small-scale renewable generating
facilities on a distribution circuit would adversely impact utility
operation and load restoration efforts of the distribution system.
(2) (A) Upon receiving a notice of denial from an electrical
corporation, the owner or operator of the electric generation
facility denied a clean energy contract shall have the right to
appeal that decision to the commission.
(B) Upon receiving a notice of denial from a local publicly owned
electric utility, the owner or operator of the small-scale renewable
generation facility denied a clean energy contract shall have the
right to appeal that decision to the governing board of the local
publicly owned electric utility.
(3) In order to ensure the safety and reliability of small-scale
renewable generation facilities, the owner of a facility receiving a
clean energy contract pursuant to this section shall provide an
inspection and maintenance report to the electrical corporation or
local publicly owned electric utility at least once every other year.
The inspection and maintenance report shall be prepared at the
expense of the owner or operator by a California-licensed contractor
who is not the owner or operator of the small-scale renewable
generation facility. A California-licensed electrician shall perform
the inspection of the electrical portion of the facility.
(4) The clean energy contract between the owner or operator of a
small-scale renewable generation facility and the electrical
corporation or local publicly owned electric utility shall contain
provisions that ensure that construction of the facility complies
with all applicable state and local laws and building standards, and
utility interconnection requirements.
(h) (1) All construction and installation of facilities of the
electrical corporation or 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 utility.
(2) All interconnection facilities installed on the utility's side
of the transfer point for electricity between the electrical
corporation or local publicly owned electric utility and the
electrical conductors of the small-scale renewable generation
facility shall be owned, operated, and maintained only by the
utility. The ownership, installation, operation, reading, and testing
of revenue metering equipment for electric generating facilities
shall only be performed by the utility.
(i) The commission shall require electrical corporations to ensure
expedited interconnection of small-scale renewable generation
facilities.
(j) Every kilowatthour of electricity purchased by an electrical
corporation or local publicly owned electric utility from a
small-scale renewable generation facility through a clean energy
contract shall count toward meeting that utility's procurement
requirements for electricity products meeting the first priority
portfolio content category requirements of paragraph (1) of
subdivision (b) of Section 399.16 , but shall not count toward
the procurement requirements of subdivision (e) of Section 387.6 or
subdivision (f) of Section 399.20 .
(k) The commission shall post on its Internet Web site for
electrical corporations, and the Energy Commission
each local publicly owned electric utility shall post on
its Internet Web site for local publicly owned electric
utilities , updated information on the program, that
includes all of the following:
(1) Maps showing where small-scale renewable electric generation
facilities may best be located on the distribution grid.
(2) Current tariffs and available capacity in the program.
(3) Local employment and economic development opportunities
provided by the program.
(4) Annual reports on the program that show capacity of and energy
generated by each renewable energy technology installed, progress on
meeting program targets and environmental justice goals, benefits of
the program, and any recommendations for modifications to the
program that would help to meet the program goals.
(l) The commission , Energy Commission, and
local publicly owned electric utilities shall evaluate ways to
integrate the small-scale renewable generation program with energy
efficiency and other demand-side programs, and shall implement
measures that will optimize the benefits and reduce the costs of the
programs.
(m) The commission , the Energy Commission, and
local publicly owned electric utilities shall evaluate contract
structures, loan guarantees, arrangements with financial
institutions, community bulk purchase agreements, and other potential
program elements, and shall implement measures that will reduce the
cost and ensure the benefits of the small-scale renewable generation
program.
SEC. 3. 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 or because 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.