BILL NUMBER: AB 1990	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 26, 2012
	AMENDED IN ASSEMBLY  MAY 25, 2012
	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 electrical corporations and interested
stakeholders, to develop program elements for the program that are
applicable to electrical corporations and that encourage the hiring
of employees from the state's most impacted and disadvantaged
communities. 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
utility's percentage share of the state's total peak demand measured
in megawatts for the calendar year ending December 31, 2012.  The
bill would authorize the commission to adjust the procurement target
for electrical corporations to account for demographic distribution
of populations meeting the screening criteria for most impact 
ed and disadvantaged communities. 
   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) The Legislature finds and declares both of the following:
 
   (1) Building small-scale renewable generation facilities in areas
with high unemployment and high levels of air pollutants is
beneficial to the public health and welfare and provides benefits to
the electrical grid.  
   (2) The Federal Energy Regulatory Commission in its Order Denying
Rehearing (Jan. 20, 2011) 134 FERC paragraph 61,044, at pages 15 and
18-19, inclusive, in California Public Utilities Commission, et al.,
Docket Nos. EL10-64-002 and EL10-66-002, affirmed that "where a state
requires a utility to procure energy from generators with certain
characteristics, generators with those characteristics appropriately
constitute the sources that are relevant to the determination of the
utility's avoided cost for that procurement requirement." 

   (b)
    (c)  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 census
tracts that are identified  as being within the top 20 percent of
results from the regional cumulative impact screening methodology
 using 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, inclusive)
 , including health risk and exposure from environmental
hazards, socioeconomic vulnerability, climate vulnerability, and
proximity of sensitive land uses. The commission, in consultation
with the State Air Resourc   es Board, may modify the
environmental justice screening metrics and develop   rules
for determining the most impacted and disadvantaged communities 
. 
   (3) "Program" means the procurement requirements for electricity
purchased through clean energy contracts generated by small-scale
renewable generation facilities that provide the benefits specified
in paragraph (1) of subdivision (c).  
   (4) "Ratepayer indifference" means that ratepayers should not be
subject to increased rates or reduced service as the result of the
program. The Legislature finds and declares that ratepayers will be
made indifferent to the program if the price paid for electricity
generated by small-scale renewable generation facilities complies
with the avoid cost methodology for qualifying facilities developed
by the Federal Energy Regulatory Commission in implementing Section
210 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C.
Sec. 824a-3).  
   (5) "Renewable feed-in tariff" means the tariff approved by the
commission for an electrical corporation pursuant to Section 399.20
or a tariff approved by the governing board for a local publicly
owned electric utility pursuant to Section 387.6.  
   (3) 
    (6)  "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) 
    (d)  (1) The commission, in consultation with electrical
corporations 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 that encourage the hiring
of employees from, the state's most impacted and disadvantaged
communities.
   (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 peak demand, measured in megawatts, for
the calendar year ending December 31, 2012  , but may be adjusted
by the commission to account for demographic distribution of
populations meeting the screening criteria for most impacte 
 d and disadvantaged communities  .
   (3)  (A)    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  demand  for a diverse portfolio of
project sizes and to achieve the targets and specified benefits of
the program, while maintaining ratepayer indifference for the program
as a whole.  Tariff 
    (B)     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. 
   (C) The commission may use the same pricing methodology for the
small-scale renewable generation program as adopted for the renewable
feed-in tariff program implemented pursuant to Section 399.20, if
the commission finds that employing that pricing methodology meets
the requirements of this section. 
   (4) 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.
   (5) 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.
   (6) 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.
   (7) 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.
   (8) Not later than January 31, 2013, the commission shall open a
proceeding or expand the scope of an existing proceeding in order to
accomplish the requirements of this subdivision and shall ensure that
electrical corporations begin offering clean energy contracts
pursuant to the program by  January   August
 1, 2014. 
   (d) 
    (e)  (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.
   (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.  The local publicly owned
electric utility shall endeavor to make the contract short and
understandable to program   participants, and the terms and
conditions of the contract should support efficiency implementation
of the program goals. 
   (3)  (A)    The tariff payment rates shall be
sufficient to stimulate  the  market  demand
 for a diverse portfolio of project sizes and to achieve the
targets and specified benefits of the program, while maintaining
ratepayer indifference for the program as a whole. Tariff

    (B)     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   Notwithstanding   any
other provision of this section, 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. 
   (9) Each local publicly owned electric utility 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 local publicly owned electric utility's forecast retail sales in
the calendar year ending December 31, 2020. The local publicly owned
electric utility shall endeavor to design the program so that the
program goals can reasonably be expected to be met within the cost
containment limitation.  
   (10) A local publicly owned electric utility that adopts and
implements a renewable feed-in tariff for which small-scale renewable
generation facilities are eligible, where the total capacity
allocation for that tariff exceeds the utility's combined share for
the small-scale renewable generation program when added to the
utility's proportionate share of the statewide limitation for
renewable feed-in tariffs, shall allocate a portion of the utility's
renewable feed-in tariff to the small-scale renewable generation
program equal to the lesser of either of the following:  
   (A) The local publicly owned electric utility's percentage share
of the state's peak demand measured in megawatts for the calendar
year ending December 31, 2012, multiplied by 375 megawatts. 

   (B) The generating capacity that remains available after
subtracting the generating capacity of the electric generation
facilities receiving service pursuant to the utility's renewable
feed-in tariff as of January 31, 2013, from the utility's
proportionate share of the statewide limitation of 750 megawatts
cumulative rated generating capacity required to be made available
for service pursuant to the renewable feed-in tariff program. 

   (e) 
    (f)  The program shall be implemented at a regular
annual pace over a period of six years  , with goals of providing
program stability and minimizing ratepayer impacts  . 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) 
    (g)  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) 
    (h)  (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) 
    (A)  The distribution grid that would serve as the point
of interconnection is inadequate. 
   (C) 
    (B)  The small-scale renewable generation facility does
not meet all applicable state and local laws and building standards,
and utility interconnection requirements. 
   (D) 
    (C)  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) Prior to denying a request for a clean energy contract
pursuant to this section, an electrical corporation or local publicly
owned electric utility shall make a good faith effort to offer the
owner or operator of the electric generation facility an opportunity
to avoid denial by recommending specific and reasonable actions or
project design modifications that, if performed properly, will lead
to approval of the clean energy contract pursuant to this section.
 
   (2) (A) 
    (B)  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) 
    (C)  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  larger
than 100 kilowatts rated generating capacity  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   five years  . 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) 
    (i)  (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) 
    (j)  The commission shall require electrical
corporations to ensure expedited interconnection of small-scale
renewable generation facilities. 
   (j) 
    (k)  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) 
    (l)  Each electrical corporation and local publicly
owned electric utility shall post updated information on the program
on its Internet Web site, that includes all of the following:
   (1) Maps  and geographical information systems (GIS) data
 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 any recommendations for modifications
to the program that would help to meet the program goals. 
   (5) Up-to-date information about the locations and status of
applications, including project size, ZIP Code, and census tract.
 
   (l) 
    (m)  The 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) 
    (n)  The 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.