BILL NUMBER: AB 2196 CHAPTERED
BILL TEXT
CHAPTER 605
FILED WITH SECRETARY OF STATE SEPTEMBER 27, 2012
APPROVED BY GOVERNOR SEPTEMBER 27, 2012
PASSED THE SENATE AUGUST 31, 2012
PASSED THE ASSEMBLY AUGUST 31, 2012
AMENDED IN SENATE AUGUST 31, 2012
AMENDED IN SENATE AUGUST 22, 2012
AMENDED IN SENATE AUGUST 6, 2012
AMENDED IN SENATE JUNE 20, 2012
AMENDED IN ASSEMBLY MAY 15, 2012
INTRODUCED BY Assembly Members Chesbro and Gatto
(Coauthor: Assembly Member Skinner)
FEBRUARY 23, 2012
An act to amend Section 25741 of the Public Resources Code, and to
add Section 399.12.6 to the Public Utilities Code, relating to
energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2196, Chesbro. Renewable energy resources.
Under existing law, the Public Utilities Commission 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 boards. The
existing California Renewables Portfolio Standard Program (RPS
program) requires a retail seller of electricity, as defined, and
local publicly owned electric utilities to purchase specified minimum
quantities of electricity products from eligible renewable energy
resources, as defined, for specified compliance periods. The
specified minimum quantities of electricity products are based upon a
percentage of the utility's total retail sales of electricity in
California.
Existing law requires the State Energy Resources Conservation and
Development Commission (Energy Commission) to (1) certify eligible
renewable energy resources, (2) design and implement an accounting
system to verify compliance with the renewables portfolio standard by
retail sellers, (3) establish a system for tracking and verifying
renewable energy credits (RECs) that verifies the generation and
delivery of electricity associated with RECs, and (4) certify the
eligibility of RECs associated with deliveries of electricity to a
local publicly owned electric utility.
Under existing law the Energy Commission administers the Renewable
Energy Resources Program (RER program) with the near-term objective
of increasing the quantity of electricity generated by renewable
electrical generation facilities, as defined, while protecting system
reliability, fostering resource diversity, and obtaining the
greatest environmental benefits for California residents, and with
the long-term goal of obtaining a fully competitive and
self-sustaining supply of electricity generated from renewable
resources.
Under existing law, the RPS program's definition of an eligible
renewable energy resource incorporates, by reference, the RER program'
s definition of a renewable electrical generation facility.
This bill would amend the RER program's definition of a renewable
electrical generation facility to provide that if the RPS program
eligibility of a facility is based on the use of landfill gas,
digester gas, or another renewable fuel delivered to the facility
through a common carrier pipeline, the transaction for the
procurement of that fuel, including the source of the fuel and
delivery method, shall meet certain conditions, as specified.
This bill would impose certain requirements with respect to the
eligibility of biomethane under the RPS program. The bill would
specify that certain biomethane procurement contracts executed by a
retail seller or local publicly owned electric utility prior to March
29, 2012, count in full toward the RPS program's procurement
requirements under the rules applicable to eligible renewable energy
resources contracts at the time the procurement contracts were
executed, if specified conditions are met. The bill would, with
respect to contracts executed prior to March 29, 2012, but
subsequently extended or modified, as specified, and with respect to
contracts executed after that date, impose certain requirements on
the RPS eligibility of biomethane, as specified. With respect to
biomethane that is used by an onsite generating facility, and
biomethane that is used offsite and delivered to the generating
facility through a dedicated pipeline, the bill would specify that
the use of that biomethane counts towards the RPS program's
procurement requirements if that use satisfies all applicable
requirements established by the Energy Commission. With respect to
biomethane that is delivered to a generating facility through a
common carrier pipeline, the bill would, among other things, require:
(1) the biomethane to be injected into a common carrier pipeline
that physically flows within California or toward the generating
facility for which the biomethane was procured under the original
contract; (2) that the source of biomethane did not inject biomethane
into a common carrier pipeline prior to March 29, 2012, or the
source commenced injection of sufficient incremental quantities of
biomethane after March 29, 2012, to satisfy the contract
requirements; and (3) that the seller or purchaser of the biomethane
demonstrates that the capture and injection of biomethane into a
common carrier pipeline directly results in at least one of 3
specified environmental benefits to California.
The bill would also prohibit specified parties to a biomethane
procurement contract from making representations asserting that the
procurement contract results in greenhouse gas reductions, as
specified, unless the environmental attributes associated with the
biomethane are transferred to the purchaser, as specified.
This bill would become operative only if this bill and AB 1900 of
the 2011-12 Regular Session are both enacted and become effective on
or before January 1, 2013.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 25741 of the Public Resources Code is amended
to read:
25741. As used in this chapter, the following terms have the
following meaning:
(a) "Renewable electrical generation facility" means a facility
that meets all of the following criteria:
(1) The facility uses biomass, solar thermal, photovoltaic, wind,
geothermal, fuel cells using renewable fuels, small hydroelectric
generation of 30 megawatts or less, digester gas, municipal solid
waste conversion, landfill gas, ocean wave, ocean thermal, or tidal
current, and any additions or enhancements to the facility using that
technology.
(2) The facility satisfies one of the following requirements:
(A) The facility is located in the state or near the border of the
state with the first point of connection to the transmission network
of a balancing authority area primarily located within the state.
For purposes of this subparagraph, "balancing authority area" has the
same meaning as defined in Section 399.12 of the Public Utilities
Code.
(B) The facility has its first point of interconnection to the
transmission network outside the state, within the Western
Electricity Coordinating Council (WECC) service area, and satisfies
all of the following requirements:
(i) It commences initial commercial operation after January 1,
2005.
(ii) It will not cause or contribute to any violation of a
California environmental quality standard or requirement.
(iii) It participates in the accounting system to verify
compliance with the renewables portfolio standard once established by
the commission pursuant to subdivision (b) of Section 399.25 of the
Public Utilities Code.
(C) The facility meets the requirements of clauses (ii) and (iii)
in subparagraph (B), but does not meet the requirements of clause (i)
of subparagraph (B) because it commenced initial operation prior to
January 1, 2005, if the facility satisfies either of the following
requirements:
(i) The electricity is from incremental generation resulting from
expansion or repowering of the facility.
(ii) Electricity generated by the facility was procured by a
retail seller or local publicly owned electric utility as of January
1, 2010.
(3) If the facility is outside the United States, it is developed
and operated in a manner that is as protective of the environment as
a similar facility located in the state.
(4) If eligibility of the facility is based on the use of landfill
gas, digester gas, or another renewable fuel delivered to the
facility through a common carrier pipeline, the transaction for the
procurement of that fuel, including the source of the fuel and
delivery method, satisfies the requirements of Section 399.12.6 of
the Public Utilities Code and is verified pursuant to the accounting
system established by the commission pursuant to 399.25 of the Public
Utilities Code, or a comparable system, as determined by the
commission.
(b) "Municipal solid waste conversion," as used in subdivision
(a), means a technology that uses a noncombustion thermal process to
convert solid waste to a clean-burning fuel for the purpose of
generating electricity, and that meets all of the following criteria:
(1) The technology does not use air or oxygen in the conversion
process, except ambient air to maintain temperature control.
(2) The technology produces no discharges of air contaminants or
emissions, including greenhouse gases as defined in Section 38505 of
the Health and Safety Code.
(3) The technology produces no discharges to surface or
groundwaters of the state.
(4) The technology produces no hazardous wastes.
(5) To the maximum extent feasible, the technology removes all
recyclable materials and marketable green waste compostable materials
from the solid waste stream prior to the conversion process and the
owner or operator of the facility certifies that those materials will
be recycled or composted.
(6) The facility at which the technology is used is in compliance
with all applicable laws, regulations, and ordinances.
(7) The technology meets any other conditions established by the
commission.
(8) The facility certifies that any local agency sending solid
waste to the facility diverted at least 30 percent of all solid waste
it collects through solid waste reduction, recycling, and
composting. For purposes of this paragraph, "local agency" means any
city, county, or special district, or subdivision thereof, which is
authorized to provide solid waste handling services.
(c) "Renewable energy public goods charge" means that portion of
the nonbypassable system benefits charge required to be collected to
fund renewable energy pursuant to the Reliable Electric Service
Investments Act (Article 15 (commencing with Section 399) of Chapter
2.3 of Part 1 of Division 1 of the Public Utilities Code).
(d) "Report" means the report entitled "Investing in Renewable
Electricity Generation in California" (June 2001, Publication Number
P500-00-022) submitted to the Governor and the Legislature by the
commission.
(e) "Retail seller" means a "retail seller" as defined in Section
399.12 of the Public Utilities Code.
SEC. 2. Section 399.12.6 is added to the Public Utilities Code, to
read:
399.12.6. (a) (1) Any procurement of biomethane delivered through
a common carrier pipeline under a contract executed by a retail
seller or local publicly owned electric utility and reported to the
Energy Commission prior to March 29, 2012, and otherwise eligible
under the rules in place as of the date of contract execution shall
count toward the procurement requirements established in this
article, under the rules in place at the time the contract was
executed, including the Fourth Edition of the Energy Commission's
Renewables Portfolio Standard Eligibility Guidebook, provided that
those rules shall apply only to sources that are producing biomethane
and injecting it into a common carrier pipeline on or before April
1, 2014.
(2) The eligibility requirements of subdivision (b) shall apply
beginning March 29, 2012, to any quantities of biomethane associated
with any of the following:
(A) An extension of the term of the original contract.
(B) Any quantity of biomethane that exceeds the quantities of
biomethane specified in the original contract.
(C) Any optional quantities of biomethane that can be exercised at
the discretion of the buyer.
(D) Any change in the source or sources of biomethane identified
in the original contract or the original application for
certification submitted to the Energy Commission.
(E) Any quantity of biomethane from a source not producing and
capturing biomethane and injecting it into a common carrier pipeline
on or before April 1, 2014.
(F) The conditions of this paragraph shall apply beginning March
29, 2012.
(b) For contracts initially executed on or after March 29, 2012,
or for quantities of biomethane associated with contract amendments
executed on or after March 29, 2012, the use of biomethane by a
generating facility shall not qualify as an eligible renewable energy
resource unless it satisfies all applicable requirements established
by the Energy Commission and meets any of the following
requirements:
(1) The biomethane is used by an onsite generating facility.
(2) The biomethane is used by an offsite generating facility and
delivered to the generating facility through a dedicated pipeline.
(3) The biomethane is delivered to a generating facility through a
common carrier pipeline and meets all of the following requirements:
(A) The source of biomethane injects the biomethane into a common
carrier pipeline that physically flows within California or toward
the generating facility for which the biomethane was procured under
the original contract.
(B) The source of biomethane did not inject biomethane into a
common carrier pipeline prior to March 29, 2012, or the source
commenced injection of sufficient incremental quantities of
biomethane after March 29, 2012, to satisfy the contract
requirements.
(C) The seller or purchaser of the biomethane demonstrates that
the capture and injection of biomethane into a common carrier
pipeline directly results in at least one of the following
environmental benefits to California:
(i) The reduction or avoidance of the emission of any criteria air
pollutant in California.
(ii) The reduction or avoidance of pollutants that could have an
adverse impact on waters of the state.
(iii) The alleviation of a local nuisance within California that
is associated with the emission of odors.
(c) For all electricity products generated using biomethane that
are credited toward the renewables portfolio standard procurement
obligations established pursuant to this article, sufficient
renewable and environmental attributes of biomethane production and
capture shall be transferred to the retail seller or local publicly
owned electric utility that uses that biomethane to ensure that there
are zero net emissions associated with the production of electricity
from the generating facility using the biomethane. The provisions of
this subdivision shall be applied in a manner consistent with the
definition of "green attributes" as specified by the commission in
Decision 08-08-028, Decision on Definition and Attributes of
Renewable Energy Credits for Compliance with the California
Renewables Portfolio Standard (August 21, 2008), as may be modified
by subsequent decision of the commission.
(d) All sellers and purchasers of biomethane shall comply with a
system for tracking and verifying the use of biomethane, as
established by the Energy Commission, that is equivalent to the
system required by subdivision (c) of Section 399.25.
(e) For contracts initially executed on or after March 29, 2012,
or for quantities of biomethane associated with contract amendments
executed after March 29, 2012, the use of biomethane shall be
assigned to the appropriate portfolio content category based on the
application of the criteria in subdivision (b) of Section 399.16 to
the procurement of electricity by the retail seller or local publicly
owned electric utility from the generating facility consuming the
biomethane.
(f) A retail seller, local publicly owned electric utility, or an
intermediary party to a biomethane procurement contract shall not
make a marketing, regulatory, or retail claim that asserts that a
biomethane procurement contract to which that entity was a party
resulted, or will result, in greenhouse gas reductions related to the
destruction of methane if the capture and destruction is required by
law. If the capture and destruction of the biomethane is not
required by law, a retail seller, local publicly owned electric
utility, or an intermediary party to a biomethane procurement
contract shall not make a marketing, regulatory, or retail claim that
asserts that a biomethane procurement contract to which that entity
was a party resulted, or will result, in greenhouse gas reductions
related to the destruction of methane, unless the environmental
attributes associated with the capture and destruction of the
biomethane pursuant to that contract are transferred to the retail
seller or publicly owned electric utility that purchased that
biomethane and retired on behalf of the retail customers consuming
the electricity associated with the use of that biomethane, or unless
the biomethane procurement contract prohibits the source of
biomethane from separately marketing the environmental attributes
associated with the capture and destruction of the biomethane sold
pursuant to that contract. These attributes shall be retired and may
not be resold.
(g) For the purposes of this section, "biomethane" means landfill
gas or digester gas, consistent with Section 25741 of the Public
Resources Code.
(h) If any provision of this section or the application of any
provision of this section is held invalid, biomethane delivered
through a common carrier pipeline pursuant to a contract executed
within 180 days of, or at any time subsequent to, the invalidation of
that provision shall not qualify as an eligible renewable energy
resource.
SEC. 3. This act shall become operative only if this act and
Assembly Bill 1900 of the 2011-12 Regular Session are both enacted
and become effective before January 1, 2013.