BILL NUMBER: SB 870 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 29, 2011
AMENDED IN ASSEMBLY JULY 12, 2011
INTRODUCED BY Senator Padilla
FEBRUARY 18, 2011
An act to amend Section 25217.5 of, and to repeal the
heading of Chapter 6.5 (commencing with Section 25550) of Division 15
of, the Public Resources Code, relating to energy. An
act to add and repeal Article 2 (commencing with Section 25620.10)
of Chapter 7.1 of Division 15 of, and to repeal and add Chapter 7.1
(commencing with Section 25620) of Division 15 of, the Public
Resources Code, and to amend Section 384 of the Public Utilities
Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 870, as amended, Padilla. Energy: State Energy
Resources Conservation and Development Commission.
California Energy Research and Technology program.
(1) Under the Public Utilities Act, the Public Utilities
Commission (PUC) has regulatory authority over public utilities,
including electrical corporations. The act requires the PUC to
require, until January 1, 2012, an electrical corporation to identify
a separate electrical rate component to fund energy efficiency,
renewable energy, and research, development, and demonstration
programs that enhance system reliability and provide in-state
benefits. Existing law requires the rate component collected for the
purposes of funding the research, development, and demonstration
programs be transferred to the Public Interest Research, Development,
and Demonstration Fund.
Existing law requires that the moneys collected between January 1,
2007, and January 1, 2012, from the electrical corporations for
public interest research, development, and demonstration projects be
transferred to the Public Interest Research, Development, and
Demonstration Fund and be used for the purposes of the Public
Interest Research, Demonstration, and Development Program.
This bill would repeal the Public Interest Research,
Demonstration, and Development Program and would eliminate the Public
Interest Research, Development, and Demonstration Fund for the above
purpose and would instead establish the California Energy Research
and Technology Program Fund for those purposes described in (3)
below.
(3) This bill would require the State Energy Resources
Conservation and Development Commission (Energy Commission) to
establish and administer the California Energy Research and
Technology program (CERT) to fund research, development, and
demonstration projects that may lead to advancement and other
breakthroughs to overcome those barriers that prevent the achievement
of the state's statutory energy goals. The bill would require the
Energy Commission to convene, no less than twice a year, meetings of
the CERT Coordinating Council consisting of members representing
specified entities and would require the council to identify the
technological and other challenges that most warranted funding under
the CERT and opportunities for joint funding of projects and to make
recommendations for avoiding the funding of duplicative projects. The
bill would require the Energy Commission to adopt regulations or
modify existing regulations to implement the CERT. The bill would
require the Energy Commission to consult with the CERT Coordinating
Council to establish a process for tracking the progress and outcome
of funded projects. The bill would require the Energy Commission to
consult with the CERT Coordinating Council and the Treasurer to
establish terms that may be imposed as conditions for the receipt of
CERT funding. The bill would, upon appropriation by the Legislature,
authorize the Energy Commission to expend moneys in the California
Energy Research and Technology Program Fund to implement the CERT.
The bill would establish the CERT Cost-Share Account in the
California Energy Research and Technology Program Fund and, upon
appropriation by the Legislature, would provide up to $10,000,000 per
year for the Energy Commission to make cost-share commitments as
leverage to help California-based entities to obtain matching funds
from the United States Department of Energy. The bill would require
the Energy Commission, no later than March 31 of each year, to
prepare and submit to the Legislature an annual report regarding
projects funded by the CERT. The bill would require the Energy
Commission to contract with an independent entity to review the CERT
and would require the Energy Commission, no later than an October 1,
2015, to report to the Legislature regarding the CERT. The bill would
repeal these provisions on January 1, 2020.
(1) Existing law requires the chair of the State Energy Resources
Conservation and Development Commission to direct the various
personnel within the commission to conform the performance of their
duties with the policies and guidelines established by the
commission.
This bill would require the chair of the commission to appear
annually before the appropriate policy committees of the Senate and
the Assembly to report on the activities of the commission.
(2) The bill would make other technical, nonsubstantive changes.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 7.1 (commencing with Section
25620) of Division 15 of the Public Resources Code
is repealed.
SEC. 2. Chapter 7.1 (commencing with Section
25620) is added to Division 15 of the Public Resources
Code , to read:
CHAPTER 7.1. CLEAN ENERGY PROGRAMS
Article 1. Reserved]
25620. Reserved]
Article 2. California Energy Research and Technology
25620.10. The Legislature finds and declares all of the
following:
(a) California has been a national leader in reducing energy
consumption by establishing ambitious goals, policies, and programs
to increase energy efficiency and generation from renewable energy
sources.
(b) Achieving these state energy goals will benefit the public and
energy utility ratepayers through reduced system costs and reduced
end-user charges for service.
(c) Barriers to achieving these energy goals and ratepayer
benefits include significant technological and other challenges
relating to energy efficiency technologies, energy storage,
integrating renewable energy into the electric grid, and accurately
forecasting the availability of renewable energy for integration into
the grid.
(d) Breakthroughs to overcome those technological and other
challenges referred to in subdivision (c) and to enable the state to
achieve its statutory energy goals require strategically focused
research, development, and demonstration projects.
(e) It is appropriate and necessary for the state to administer a
program of research, development, and demonstration to accelerate
technological advancement and other breakthroughs that may enable the
state to achieve its statutory energy goals.
25620.11. For the purpose of this article, "California-based
entity" means either of the following:
(a) A corporation or other business form organized for the
transaction of business that has its headquarters in California and
manufactures in California the product that qualifies for the
incentive or award pursuant to this chapter.
(b) A corporation or other business form organized for the
transaction of business that has an office for the transaction of
business in California and substantially manufactures in California
the product that qualifies for the incentive or award pursuant to
this chapter, or substantially develops within California the
research that qualifies for the incentive or award pursuant to this
chapter, as determined by the commission.
25620.12. (a) The California Energy Research and Technology
program (CERT) is hereby established for the purpose of funding
research, development, and demonstration projects that may lead to
technological advancement and other breakthroughs to overcome the
most significant barriers that prevent the achievement of the state's
statutory energy goals.
(b) The CERT may fund projects relating to energy efficiency
technologies, energy storage, integrating renewable energy into the
electrical grid, accurately forecasting the availability of renewable
energy for integration into the electrical grid, and additional
areas identified by the CERT Coordinating Council pursuant to
subdivision (c) of Section 25620.13.
(c) The commission shall develop and administer the program
consistent with this article.
25620.13. (a) The commission shall, no less than twice a year,
convene a meeting of the CERT Coordinating Council, which shall
consist of the following:
(1) Members representing public entities consisting of the
following:
(A) The chair of the commission, who shall serve as the chair of
the council.
(B) One representative from the Independent System Operator.
(C) One representative from the State Air Resources Board.
(D) One representative from the Division of Ratepayer Advocates
within the Public Utilities Commission.
(E) One representative from the Public Utilities Commission.
(2) Members representing stakeholders, which shall consist of the
following:
(A) One representative from Pacific Gas and Electric Corporation.
(B) One representative from Southern California Edison
Corporation.
(C) One representative from San Diego Gas and Electric
Corporation.
(D) One representative from Southern California Gas Company.
(E) Two representatives from consumer organizations, with one
appointed by the Senate Committee on Rules and one appointed by the
Speaker of the Assembly.
(F) Two representatives from environmental organizations, with one
appointed by the Senate Committee on Rules and one appointed by the
Speaker of the Assembly.
(G) Two representatives from environmental justice organizations,
with one appointed by the Senate Committee on Rules and one appointed
by the Speaker of the Assembly.
(H) Two representatives from university research institutions,
with one appointed by the Senate Committee on Rules and one appointed
by the Speaker of the Assembly.
(I) Two representatives from clean energy businesses,
organizations, or investors appointed by the Governor.
(J) Two at-large members appointed by the Governor.
(3) (A) Two ex officio, nonvoting members from the Legislature,
with one Senator appointed by the Senate Committee on Rules and one
Assembly Member appointed by the Speaker of the Assembly.
(B) The Members of the Legislature shall participate in the
activities of the council to the extent that the participation is not
incompatible with their respective positions as Members of the
Legislature.
(b) Each member of the council specified in paragraph (2) of
subdivision (a) shall serve a term of three years.
(c) The council shall annually identify the technological or other
challenges that are the most significant barriers to achieving the
state's statutory energy goals for which CERT funding is most
warranted.
(d) The council shall identify opportunities for joint funding of
research, development, and demonstration projects, and make
recommendations to help the commission avoid funding projects that
would duplicate projects already being funded by the Public Utilities
Commission, the State Air Resources Board, or any other public
agency or private organization.
(e) The council shall comply with the requirements of the
Bagley-Keene Open Meeting Act (Article 9 (commencing with Section
11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the
Government Code).
25620.14. (a) The commission shall award CERT funds for research,
development, and demonstration projects that result in a portfolio
of project awards that does all of the following:
(1) Is strategically focused and sufficiently narrow to make
advancement on the technological or other challenges that are the
most significant barriers to achieving the state's statutory energy
goals pursuant to Section 25620.12.
(2) Ensures that prior, current, and future research, development,
and demonstration projects are not unnecessarily duplicated.
(3) Invests in projects of California-based entities unless there
is a unique need that can be met only by an entity based outside of
California.
(4) Results in a reasonably equitable distribution of awards from
various geographic regions of California, if consistent with this
article.
(5) Maximizes expenditure of funds for research, development, and
demonstration projects and minimizes expenditure of funds for
administration and overhead costs.
(b) The commission shall not award or expend CERT funds for any
purposes except as provided in this article.
25620.15. The commission shall, prior to awarding any CERT funds,
adopt regulations for the solicitation and evaluation of
applications, and the award of funds consistent with this article.
The regulations shall do all of the following:
(a) Require each applicant to demonstrate how the proposed project
may lead to technological advancement or other breakthroughs to
overcome barriers to achieving the state's statutory energy goals.
(b) Require each award recipient, as a condition of receiving CERT
funds, to agree to any terms the commission determines are
appropriate for the state to accrue any intellectual property
interest or royalties that may derive from CERT funding, including a
requirement that each recipient report progress and outcomes of each
funded project for up to five years.
(c) Prohibit any person from participating in the evaluation or
disposition of any application if that person has a conflict of
interest regarding that application, within the meaning of Section
87100 of the Government Code.
25620.16. The commission, prior to awarding any CERT funds, and
in consultation with the CERT Coordinating Council, shall establish a
process for tracking the progress and outcomes of each funded
project, including an accounting of the amount of funds spent on
administrative and overhead costs and whether the project resulted in
any technological advancement or other breakthroughs to overcome
barriers to achieving the state's statutory energy goals.
25620.17. The commission, prior to awarding any CERT funds, and
in consultation with the CERT Coordinating Council and the Treasurer,
shall establish terms that may be imposed as a condition to receipt
of funding, as the commission determines appropriate, for the state
to accrue any intellectual property interest or royalties that may
derive from CERT funding. The commission, when determining if
imposition of these terms is appropriate, shall balance the potential
benefit to the state from those terms and the effect those terms may
have on the state achieving its statutory energy goals.
25620.18. (a) The commission shall establish a cost-share program
to help California entities to obtain research funds from the United
States Department of Energy.
(b) The commission shall, upon appropriation by the Legislature,
use funds in the CERT Cost-Share Account, which is hereby established
in the California Energy Research and Technology Program Fund
established pursuant to Section 384 of the Public Utilities Code, to
enable California-based entities seeking energy research funds from
the United States Department of Energy to meet the federal cost-share
requirements.
(c) A California university, research institution, nonprofit
organization, or a California-based entity is eligible to participate
in the cost-share program if the energy research project for which
that entity is seeking federal funds would otherwise be eligible for
CERT funds pursuant to this chapter.
(d) The commission shall establish a process to provide timely and
sufficient documentation to the United States Department of Energy
to demonstrate that funds for the cost-share program will be
available if the federal funds are awarded to an entity specified in
subdivision (c).
(e) The commission may make cost-share commitments of up to ten
million dollars ($10,000,000) per year and shall maintain a balance
in the CERT Cost-Share Account to ensure that all outstanding
commitments can be met if federal funds are awarded to an entity
specified in subdivision (c).
25620.19. (a) The commission may solicit applications and award
CERT funds using a sealed competitive bid, interagency agreement, or
sole source method.
(b) A sealed competitive bid method shall be used in all cases in
which a research project can be described with sufficient specificity
so that bids can be evaluated against specifications and criteria
set forth in the solicitation for bids.
(c) The commission shall not award CERT funds to the University of
California through the sole source or interagency agreement method
for a research project for which funds could be awarded through a
sealed competitive bid method. Notwithstanding any other law,
standard terms and conditions that generally apply to contracts
between any state agency and the University of California do not
automatically preclude the award of CERT funds to the University of
California through the sealed competitive bid method.
(d) If an award cannot be made using the competitive bid method
pursuant to subdivision (a), the commission, in accordance with
subdivision (e) and in consultation with the Department of General
Services, may provide awards on a sole source basis when the cost to
the state is reasonable and any of the following apply:
(1) The proposal was unsolicited and meets the evaluation criteria
of this chapter.
(2) The expertise, service, or product is unique.
(3) The award funds the next phase of a multiphased proposal and
the existing agreement is being satisfactorily performed.
(e) (1) The commission shall not use a sole source basis for an
award pursuant to subdivision (d), or a sole source or interagency
agreement for an award to the University of California, unless both
of the following conditions are met:
(A) The commission, at least 60 days prior to making an award
pursuant to this subdivision, notifies the Joint Legislative Budget
Committee and the relevant policy committees in both houses of the
Legislature, in writing, of its intent to take the proposed action.
(B) The Joint Legislative Budget Committee either approves or does
not disapprove the proposed action within 60 days from the date of
notification required by subparagraph (A).
(2) It is the intent of the Legislature to enact the subdivision
to ensure legislative oversight for awards made on a sole source
basis, or awards to the University of California through a sole
source or interagency agreement.
(f) The commission shall give priority to California-based
entities in making awards pursuant to this chapter.
(g) The provisions of this section are severable. If any provision
of this section or its application is held to be invalid, that
invalidity does not affect other provisions or applications that can
be given effect without the invalid provision or application.
25620.20. (a) The commission, not later than March 31 of each
year, shall prepare and submit to the Legislature an annual report in
compliance with Section 9795 of the Government Code that shall
include all of the following:
(1) A brief description of each project for which funding was
awarded in the immediately prior calendar year, including the name of
the recipient and amount of award, and a description of how the
project may lead to technological advancement or other breakthroughs
to overcome barriers to achieving the state's statutory energy goals.
(2) A brief description of each CERT-funded project that was
completed in the immediately prior calendar year, including the name
of the recipient, the amount of the award, and the outcomes of the
funded project, in accordance with the process described in Section
25620.16.
(3) A brief description of each CERT-funded project for which an
award was made in the previous years but that is not completed,
including the name of the recipient and amount of the award, and a
description of how the project may lead to technological advancement
or other breakthroughs to overcome barriers to achieving the state's
statutory energy goals.
(4) A list and description of the technological or other
challenges that the council identifies as the most significant
barriers to achieving the state's statutory energy goals, as
identified by the council pursuant to Section 25620.13 for the
current year and all prior years.
(5) Designation of which award recipients are California-based
entities and which award recipients are small businesses or
businesses owned by women, minorities, or disabled veterans.
(6) A list of entities participating in the cost-share program
pursuant to Section 25620.18 and the total amount of cost-share
commitments made by the commission.
(b) The commission shall post on its Internet Web site each annual
report, and a searchable database containing information in the
annual report, and shall also include information on awards made
under the former Public Interest Research, Development, and
Demonstration Program.
(c) The commission shall establish procedures for protecting
confidential or proprietary information in public reports about
CERT-funded projects.
25620.21. The commission shall contract with an independent
entity to conduct a review of the CERT and pursuant to Section 9795
of the Government Code report the conclusions and recommendations
from that review to the Legislature no later than October 1, 2015.
25620.22. This article shall remain in effect only until January
1, 2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.
SEC. 3. Section 384 of the Public
Utilities Code is amended to read:
384. (a) Funds transferred to the State Energy
Resources Conservation and Development Commission
pursuant to this article for purposes of public interest research,
development, and demonstration shall be transferred to the
Public Interest Research, Development, and Demonstration
California Energy Research and Technology Program Fund,
which is hereby created in the State Treasury. The fund is a trust
fund and shall contain money from all interest, repayments,
disencumbrances, royalties, and any other proceeds appropriated,
transferred, or otherwise received for purposes pertaining to public
interest research, development, and demonstration. Any appropriations
that are made from the fund shall have an encumbrance period of not
longer than two years, and a liquidation period of not longer than
four years.
(b) Funds deposited in the Public Interest Research, Development,
and Demonstration Fund may be expended for projects that serve the
energy needs of both stationary and transportation purposes if the
research provides an electricity ratepayer benefit.
(c)
(b) The State Energy
Resources Conservation and Development Commission shall
report annually to the appropriate budget committees of the
Legislature on any encumbrances or liquidations that are outstanding
at the time the commission's Energy
Commission's budget is submitted to the Legislature for review.
(c) Moneys in the Public Interest Research, Development, and
Demonstration Fund that have not been encumbered as of the effective
date of this section shall be transferred to the California Energy
Research and Technology Program Fund.
(d) Moneys in the California Energy Research and Technology
Program Fund, upon appropriation by the Legislature, shall be
expended by the Energy Commission to implement Article 2 (commencing
with Section 25620.10) of Chapter 7.1 of Division 15 of the Public
Resources Code.
(e) Any reference in any law or regulation to the Public Interest
Research, Development, and Demonstration Fund shall hereafter be to
the California Energy Research and Technology Program Fund.
SECTION 1. Section 25217.5 of the Public
Resources Code is amended to read:
25217.5. The chair of the commission shall do both of the
following:
(a) Direct the adviser, the executive director, and other staff
in the performance of their duties in conformance with the policies
and guidelines established by the commission.
(b) Annually appear before the appropriate policy committees of
the Senate and the Assembly to report on the activities of the
commission.
SEC. 2. The heading of Chapter 6.5 (commencing
with Section 25550) of Division 15 of the Public Resources Code is
repealed.