BILL NUMBER: SB 771 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Kehoe
(Coauthors: Senators Blakeslee, Correa, and Harman)
FEBRUARY 18, 2011
An act to amend Section 25744 of the Public Resources Code, and to
amend Sections 379.6 and 399.20 of the Public Utilities Code,
relating to energy, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 771, as introduced, Kehoe. Renewable energy resources.
(1) Under existing law, the Public Utilities Commission (PUC) has
regulatory authority over public utilities, including electrical
corporations, as defined. Existing law requires the PUC to require
the state's 3 largest electrical corporations, Pacific Gas and
Electric Company, San Diego Gas and Electric, and Southern California
Edison, to identify a separate electrical rate component to fund
programs that enhance system reliability and provide in-state
benefits. This rate component is a nonbypassable element of local
distribution and collected on the basis of usage. Existing PUC
resolutions refer to the nonbypassable rate component as a "public
goods charge." The public goods charge moneys are collected to
support cost-effective energy efficiency and conservation activities,
public interest research and development not adequately provided by
competitive and regulated markets, and renewable energy resources.
Existing law establishes the Renewable Resource Trust Fund as a fund
that is continuously appropriated, with certain exceptions for
administrative expenses, in the State Treasury, and requires that
certain moneys collected to support renewable energy resources
through the public goods charge are deposited into the fund and
authorizes the Energy Commission to expend the moneys pursuant to the
Renewable Energy Resources Program. Existing law requires that 79%
of the moneys collected pursuant to the renewable energy public goods
charge that are deposited into the fund be used for a multiyear,
consumer-based program to foster the development of emerging
renewable technologies in distributed generation applications. These
moneys are deposited into the Emerging Renewable Resources Account
within the Renewable Resource Trust Fund.
This bill would include as eligible electricity generating systems
that may receive incentives pursuant to the Emerging Renewable
Resources Account, continuous clean renewable energy resources, as
defined, that utilize waste gases from landfills, digesters, or
wastewater treatment facilities to generate electricity. By expanding
the uses to which moneys that are in a continuously appropriated
account may be used, the bill would make an appropriation.
Existing law limits the eligible electricity generating systems
that may receive incentives pursuant to the Emerging Renewable
Resources Account to those systems that are intended primarily to
offset part or all of the consumer's own electricity demand.
This bill would establish an exception to this requirement for
fuel cells and continuous clean renewable energy resources that
utilize waste gases from landfills, digesters, or wastewater
treatment facilities to generate electricity. The bill would instead
provide that generation that involves the onsite or dedicated
capture, treatment, and conversion of waste gas to generate
electricity utilizing fuel cells or a continuous clean renewable
energy resource may be sized to capture the energy potential of the
source of waste gas and need not be sized to offset part or all of
the customer's load. For these purposes, a dedicated use of waste gas
occurs when the waste gas is transported from the site where the gas
is captured to the generation site using a dedicated pipeline that
is not used to transport natural gas.
(2) Existing law requires every electrical corporation to file a
standard tariff with the commission 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: (A) have an effective capacity of not
more than 3 megawatts, subject to the authority of the commission to
reduce this megawatt limitation, (B) be interconnected and operate in
parallel with the electric transmission and distribution grid, (C)
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 (D) meet
the definition of an eligible renewable energy resource under the
California renewables portfolio standard program.
This bill would state that an eligible renewable energy resource
includes a continuous clean renewable energy resource that utilizes
waste gases from landfills, digesters, or wastewater treatment
facilities to generate electricity.
(3) Existing law requires the PUC, in consultation with the Energy
Commission, to administer, until January 1, 2016, a self-generation
incentive program for distributed generation resources and to
separately administer solar technologies pursuant to the California
Solar Initiative. Existing law limits eligibility for incentives to
distributed energy resources that the PUC, in consultation with the
State Air Resources Board (state board), determines will achieve
reductions in emissions of greenhouse gases pursuant to the
California Global Warming Solutions Act of 2006.
This bill would expressly authorize continuous clean renewable
energy resources that utilize waste gases from landfills, digesters,
or wastewater treatment facilities to generate electricity to be
eligible to participate in the program.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 25744 of the Public Resources Code is amended
to read:
25744. (a) Seventy-nine percent of the money collected pursuant
to the renewable energy public goods charge shall be used for a
multiyear, consumer-based program to foster the development of
emerging renewable technologies in distributed generation
applications.
(b) Any funds used for emerging technologies pursuant to this
section shall be expended in accordance with this chapter, subject to
all of the following requirements:
(1) Funding for emerging technologies shall be provided through a
competitive, market-based process that is in place for a period of
not less than five years, and is structured to allow eligible
emerging technology manufacturers and suppliers to anticipate and
plan for increased sale and installation volumes over the life of the
program.
(2) The program shall provide monetary rebates, buydowns, or
equivalent incentives, subject to paragraph (3), to purchasers,
lessees, lessors, or sellers of eligible electricity generating
systems. Incentives shall benefit the end-use consumer of renewable
generation by directly and exclusively reducing the purchase or lease
cost of the eligible system, or the cost of electricity produced by
the eligible system. Incentives shall be issued on the basis of the
rated electrical generating capacity of the system measured in watts,
or the amount of electricity production of the system, measured in
kilowatthours. Incentives shall be limited to a maximum percentage of
the system price, as determined by the commission. The commission
may establish different incentive levels for systems based on
technology type and system size, and may provide different incentive
levels for systems used in conjunction with energy-efficiency
measures.
(3) (A) Except for generation that
involves the onsite or dedicated capture, treatment, and clean
conversion of waste gas to electricity as described in subparagraph
(C), eligible Eligible distributed emerging
technologies are fuel cell technologies that utilize renewable fuels,
including fuel cell technologies with an emission profile equivalent
or better than the State Air Resources Board 2007 standard, and that
serve as backup generation for emergency, safety, or
telecommunications systems. Eligible renewable fuels may include wind
turbines of not more than 50 kilowatts rated electrical generating
capacity per customer site and other distributed renewable emerging
technologies that meet the emerging technology eligibility criteria
established by the commission and are not eligible for rebates,
buydowns, or similar incentives from any other commission or Public
Utilities Commission program. Eligible electricity
generating systems are intended primarily to offset part or all of
the consumer's own electricity demand, including systems that are
used as backup power for emergency, safety, or telecommunications,
and shall not be owned by local publicly owned electric utilities,
nor be located at a customer site that is not receiving distribution
service from an electrical corporation that is subject to the
renewable energy public goods charge and contributing funds to
support programs under this chapter. All
Eligible distributed emerging technologies shall have a rated
generation capacity of not more than 350 kilowatts and include all of
the following:
(i) Wind turbines.
(ii) Fuel cell technologies that use renewable fuels and that have
an emissions profile equivalent or better than the waste gas
emission standards adopted by the State Air Resources Board that take
effect on January 1, 2013 (subdivisions (c) and (d) of Section 94203
of the California Code of Regulations).
(iii) Continuous clean renewable energy resources that utilize
waste gases from landfills, digesters, or wastewater treatment
facilities to generate electricity. For these purposes, a generating
system is continuous if it is capable of producing electricity for
8,000 hours a year. For these purposes, a generating system is clean
if it has an emissions profile equivalent or better than the waste
gas emission standards adopted by the State Air Resources Board that
take effect on January 1, 2013 (subdivisions (c) and (d) of Section
94203 of the California Code of Regulations).
(iv) Other distributed renewable emerging technologies that meet
the emerging technology eligibility criteria established by the
commission.
(B) Technologies that are eligible for rebates, buydowns, or
similar incentives from any other commission or Public Utilities
Commission program shall not be eligible for funding under this
section.
(C) Generation that involves the onsite or dedicated capture,
treatment, and conversion of waste gas to generate electricity
utilizing fuel cells or a continuous clean renewable energy resource
may be sized to capture the energy potential of the source of waste
gas and need not be sized to offset part or all of the customer's
load. For these purposes, a dedicated use of waste gas occurs when
the waste gas is transported from the site where the gas is captured
to the generation site using a dedicated pipeline that is not used to
transport natural gas.
(D) All eligible electricity
generating system components shall be new and unused, shall not have
been previously placed in service in any other location or for any
other application, and shall have a warranty of not less than five
years to protect against defects and undue degradation of electrical
generation output. Systems
(E) Except for generation that involves
the onsit e or dedicated capture, treatment, and clean
conversion of waste gas to electricity as described in subparagraph
(C), eligible electricity generating systems and their fuel
resources shall be located on the same premises of the end-use
consumer where the consumer's own electricity demand is located, and
all eligible electricity generating systems shall be connected to the
utility grid, unless the system purpose is for backup generation
used in emergency, safety, or telecommunications in California.
The
(F) The commission may require
eligible electricity generating systems to have meters in place to
monitor and measure a system's performance and generation. Only
systems that will be operated in compliance with applicable law and
the rules of the Public Utilities Commission shall be eligible for
funding.
(4) The commission shall limit the amount of funds available for a
system or project of multiple systems and reduce the level of
funding for a system or project of multiple systems that has
received, or may be eligible to receive, any government or utility
funds, incentives, or credit.
(5) In awarding funding, the commission may provide preference to
systems that provide tangible demonstrable benefits to communities
with a plurality of minority or low-income populations.
(6) In awarding funding, the commission shall develop and
implement eligibility criteria and a system that provides preference
to systems based upon system performance , taking into
account factors, including shading, insulation levels, and
installation orientation .
(7) At least once annually, the commission shall publish and make
available to the public the balance of funds available for emerging
renewable energy resources for rebates, buydowns, and other
incentives for the purchase of these resources.
(c) Notwithstanding Section 27540.5, the commission may expend,
until December 31, 2008, up to sixty million dollars ($60,000,000) of
the funding allocated to the Renewable Resources Trust Fund for the
program established in this section, subject to the repayment
requirements of subdivision (f) of Section 25751.
(d) Any funds for photovoltaic or solar thermal electric
technologies shall be awarded in compliance with Chapter 8.8
(commencing with Section 25780), and not with this section.
SEC. 2. 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 Decisions 05-12-044
and 06-01-024 , as modified by Article 1 (commencing with
Section 2851) of Chapter 9 of Part 2 of this code,
and Chapter 8.8 (commencing with Section 25780) of Division 15
of the Public Resources Code .
(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). Eligible
distributed energy resources may include continuous clean renewable
energy resources that use waste gases from landfills, digesters, or
wastewater treatment facilities to generate electricity. For these
purposes, a generating system is continuous if it is capable of
producing electricity for 8,000 hours a year. For these purposes, a
generating system is clean if it has an emissions profile equivalent
or better than the waste gas emission standards adopted by the State
Air Resources Board that take effect on January 1, 2013 (subdivisions
(c) and (d) of Section 94203 of the California Code of Regulations).
(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. 3. Section 399.20 of the Public Utilities Code is amended to
read:
399.20. (a) It is the policy of this state and the intent of the
Legislature to encourage electrical generation from eligible
renewable energy resources.
(b) As used in this section, "electric generation facility" means
an electric generation facility located within the service territory
of, and developed to sell electricity to, an electrical corporation
that meets all of the following criteria:
(1) Has an effective capacity of not more than three megawatts.
(2) Is interconnected and operates in parallel with the electrical
transmission and distribution grid.
(3) Is strategically located and interconnected to the electrical
transmission and distribution grid in a manner that optimizes the
deliverability of electricity generated at the facility to load
centers.
(4) Is an eligible renewable energy resource. An eligible
renewable energy resource includes a continuous clean renewable
energy resource that use waste gases from landfills, digesters, or
wastewater treatment facilities to generate electricity. For these
purposes, a generating system is continuous if it is capable of
producing electricity for 8,000 hours a year. For these purposes, a
generating system is clean if it has an emissions profile equivalent
or better than the waste gas emission standards adopted by the State
Air Resources Board that take effect on January 1, 2013 (subdivisions
(c) and (d) of Section 94203 of the California Code of Regulations).
(c) Every electrical corporation shall file with the commission a
standard tariff for electricity purchased from an electric generation
facility. 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.
(d) (1) The tariff shall provide for payment for every
kilowatthour of electricity purchased from an electric generation
facility for a period of 10, 15, or 20 years, as authorized by the
commission. The payment shall be the market price determined by the
commission pursuant to Section 399.15 and shall include all current
and anticipated environmental compliance costs, including, but not
limited to, mitigation of emissions of greenhouse gases and air
pollution offsets associated with the operation of new generating
facilities in the local air pollution control or air quality
management district where the electric generation facility is
located.
(2) The commission may adjust the payment rate to reflect the
value of every kilowatthour of electricity generated on a
time-of-delivery basis.
(3) The commission shall ensure, with respect to rates and
charges, that ratepayers that do not receive service pursuant to the
tariff are indifferent to whether a ratepayer with an electric
generation facility receives service pursuant to the tariff.
(e) An electrical corporation shall provide expedited
interconnection procedures to an electric generation facility located
on a distribution circuit that generates electricity at a time and
in a manner so as to offset the peak demand on the distribution
circuit, if the electrical corporation determines that the electric
generation facility will not adversely affect the distribution grid.
The commission shall consider and may establish a value for an
electric generation facility located on a distribution circuit that
generates electricity at a time and in a manner so as to offset the
peak demand on the distribution circuit.
(f) An electrical corporation shall make the tariff available to
the owner or operator of an electric generation facility within the
service territory of the electrical corporation, upon request, on a
first-come-first-served basis, until the electrical corporation meets
its proportionate share of a statewide cap of 750 megawatts
cumulative rated generation capacity served under this section and
Section 387.6. The proportionate share shall be calculated based on
the ratio of the electrical corporation's peak demand compared to the
total statewide peak demand.
(g) The electrical corporation may make the terms of the tariff
available to owners and operators of an electric generation facility
in the form of a standard contract subject to commission approval.
(h) Every kilowatthour of electricity purchased from an electric
generation facility shall count toward meeting the electrical
corporation's renewables portfolio standard annual procurement
targets for purposes of paragraph (1) of subdivision (b) of Section
399.15.
(i) The physical generating capacity of an electric generation
facility shall count toward the electrical corporation's resource
adequacy requirement for purposes of Section 380.
(j) (1) The commission shall establish performance standards for
any electric generation facility that has a capacity greater than one
megawatt to ensure that those facilities are constructed, operated,
and maintained to generate the expected annual net production of
electricity and do not impact system reliability.
(2) The commission may reduce the three megawatt capacity
limitation of paragraph (1) of subdivision (b) if the commission
finds that a reduced capacity limitation is necessary to maintain
system reliability within that electrical corporation's service
territory.
(k) (1) Any owner or operator of an electric generation facility
that received ratepayer-funded incentives in accordance with Section
379.6 of this code, or with Section 25782 of the Public Resources
Code, and participated in a net metering program pursuant to Sections
2827, 2827.9, and 2827.10 of this code prior to January 1, 2010,
shall be eligible for a tariff or standard contract filed by an
electrical corporation pursuant to this section.
(2) In establishing the tariffs or standard contracts pursuant to
this section, the commission shall consider ratepayer-funded
incentive payments previously received by the generation facility
pursuant to Section 379.6 of this code or Section 25782 of the Public
Resources Code. The commission shall require reimbursement of any
funds received from these incentive programs to an electric
generation facility, in order for that facility to be eligible for a
tariff or standard contract filed by an electrical corporation
pursuant to this section, unless the commission determines ratepayers
have received sufficient value from the incentives provided to the
facility based on how long the project has been in operation and the
amount of renewable electricity previously generated by the facility.
(3) A customer that receives service under a tariff or contract
approved by the commission pursuant to this section is not eligible
to participate in any net metering program.
(l) An owner or operator of an electric generation facility
electing to receive service under a tariff or contract approved by
the commission shall continue to receive service under the tariff or
contract until either of the following occurs:
(1) The owner or operator of an electric generation facility no
longer meets the eligibility requirements for receiving service
pursuant to the tariff or contract.
(2) The period of service established by the commission pursuant
to subdivision (d) is completed.
(m) Within 10 days of receipt of a request for a tariff pursuant
to this section from an owner or operator of an electric generation
facility, the electrical corporation that receives 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, but not limited to, address information
beyond the name of the city in which the facility is located, shall
be redacted.
(n) An electrical corporation may deny a tariff request pursuant
to this section if the electrical corporation makes any of the
following findings:
(1) The electric generation facility does not meet the
requirements of this section.
(2) The transmission or distribution grid that would serve as the
point of interconnection is inadequate.
(3) The electric generation facility does not meet all applicable
state and local laws and building standards, and utility
interconnection requirements.
(4) The aggregate of all electric generating facilities on a
distribution circuit would adversely impact utility operation and
load restoration efforts of the distribution system.
(o) Upon receiving a notice of denial from an electrical
corporation, the owner or operator of the electric generation
facility denied a tariff pursuant to this section shall have the
right to appeal that decision to the commission.
(p) In order to ensure the safety and reliability of electric
generation facilities, the owner of an electric generation facility
receiving a tariff pursuant to this section shall provide an
inspection and maintenance report to the electrical corporation at
least once every other year. The inspection and maintenance report
shall be prepared at the owner's or operator's expense by a
California-licensed California licensed
contractor who is not the owner or operator of the electric
generation facility. A California-licensed
California licensed electrician shall perform the inspection of
the electrical portion of the generation facility.
(q) The contract between the electric generation facility
receiving the tariff and the electrical corporation shall contain
provisions that ensure that construction of the electric generating
facility complies with all applicable state and local laws and
building standards, and utility interconnection requirements.
(r) (1) All construction and installation of facilities of the
electrical corporation, including at the point of the output meter or
at the transmission or distribution grid, shall be performed only by
that electrical corporation.
(2) All interconnection facilities installed on the electrical
corporation's side of the transfer point for electricity between the
electrical corporation and the electrical conductors of the electric
generation facility shall be owned, operated, and maintained only by
the electrical corporation. The ownership, installation, operation,
reading, and testing of revenue metering equipment for electric
generating facilities shall only be performed by the electrical
corporation.