Amended in Assembly April 9, 2013

Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 177

Introduced by Assembly Members V. Manuel Pérez and Bradford

January 24, 2013

An act to amend Sections 345.5 and 454.55 of, and to add Section 399.23 to, the Public Utilities Code, relating to renewable energy resources.

LEGISLATIVE COUNSEL’S DIGEST

AB 177, as amended, V. Manuel Pérez. Renewable resources.

Under existing law, the Public Utilities Commission begin delete (PUC) end delete has regulatory authority over public utilities, including electrical corporations, as defined. The Public Utilities Act requires the begin delete PUC end delete begin insert Public Utilities Commission end insert , in consultation with the Independent System Operator, to establish resource adequacy requirements for all load-serving entities, as defined, in accordance with specified objectives. The definition of a “load-serving entity” includes an electrical corporation. That law further requires each load-serving entity to maintain physical generating capacity adequate to meet its load requirements, including peak demand and planning and operating reserves, deliverable to locations and at times as may be necessary to provide reliable electric service.

The California Renewables Portfolio Standard Program, also known as the 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, sufficient to ensure that the procurement of electricity products from eligible renewable energy resources achieves 20% of retail sales for the period January 1, 2011, to December 31, 2013, inclusive, 25% of retail sales by December 31, 2016, and 33% of retail sales by December 31, 2020, and in all subsequent years. The RPS program, consistent with the goals of procuring the least-cost and best-fit eligible renewable energy resources that meet project viability principles, requires that all retail sellers procure a balanced portfolio of electricity products from eligible renewable energy resources, as specified begin delete (portfolio content requirements) end delete begin insert , referred to as the portfolio content requirements end insert . The RPS program requires the begin delete PUC end delete begin insert Public Utilities Commission end insert to direct each electrical corporation, which are included within the definition of a retail seller, to annually prepare a renewable energy procurement plan containing specified matter and an annual compliance report. The RPS program requires the begin delete PUC end delete begin insert Public Utilities Commission end insert to adopt, by rulemaking, a process that provides criteria for the rank ordering and selection of least-cost and best-fit eligible renewable energy resources by electrical corporations to comply with the RPS program procurement obligations, on a total cost basis, that take specified matter into account.

This bill would state the policy of the state to require all retail sellers of electricity, including investor-owned electrical corporations and local publicly owned electric utilities, to procure all available begin delete demand-side and clean, eligible renewable energy resources to achieve reductions in the emissions of greenhouse gases and the state’s resource adequacy goals end delete begin insert cost-effective energy efficiency, demand response, and renewable resources, so as to achieve renewable, reliability, and greenhouse gases emission reduction end insert simultaneously, in the most cost-effective begin insert and affordable end insert manner practicable. begin insert The bill would require that procurement not be limited by any targets established for these resources by statute or regulatory decision. end insert

The Public Utilities Act requires the begin delete PUC end delete begin insert Public Utilities Commission end insert to review and adopt a procurement plan for each electrical corporation in accordance with specified elements, incentive mechanisms, and objectives. The act requires that an electrical corporation’s proposed procurement plan include certain elements, including a showing that the electrical corporation will first meet its unmet needs through all available energy efficiency and demand reduction resources that are cost effective, reliable, and feasible. The act requires the begin delete PUC end delete begin insert Public Utilities Commission end insert , in consultation with the State Energy Resources Conservation and Development Commission begin delete (Energy Commission) end delete , to identify all potentially achievable cost-effective electricity efficiency savings and to establish efficiency targets for electrical corporations to achieve pursuant to their procurement plan.

This bill would require begin delete the PUC, in consultation with the Energy Commission, to identify all potentially achievable cost-effective electricity efficiency savings, demand response resources, and eligible renewable energy resources and establish procurement targets to be met by an electrical corporation to achieve pursuant to its procurement plan, over-and-above any separate procurement targets or mandates for these resources established in the Public Utilities Code or by PUC action. end delete begin insert electrical corporations to procure all available cost-effective energy efficiency, demand response, and renewable energy resources so as to simultaneously achieve the goals of renewable resource development, reductions in emissions of greenhouse gases, and sustain system reliability in the most cost-effective and affordable manner and would provide that this procurement is not limited by any targets established for these resources by statute or regulatory decision. The bill would require the Public Utilities Commission to continue to establish efficiency targets for an electrical corporation pursuant to the utility’s procurement plan. end insert

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the begin delete commission end delete begin insert Public Utilities Commission end insert is a crime.

Because the provisions of this bill are within the act, a violation of above requirement would impose a state-mandated local program by expanding the definition of a crime.

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 a specified reason.

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.  

Section 345.5 of the Public Utilities Code is
amended to read:

345.5.  

(a) The Independent System Operator, as a nonprofit,
public benefit corporation, shall conduct its operations consistent
with applicable state and federal laws and consistent with the
interests of the people of the state.

(b) To ensure the reliability of electric service and the health
and safety of the public, the Independent System Operator shall
manage the transmission grid and related energy markets in a
manner that is consistent with all of the following:

(1) Making the most efficient use of available energy resources.
For purposes of this section, “available energy resources” include
energy, capacity, ancillary services, and demand bid into markets
administered by the Independent System Operator. “Available
energy resources” do not include a schedule submitted to the
Independent System Operator by an electrical corporation or a
local publicly owned electric utility to meet its own customer load.

(2) Reducing, to the extent possible, overall economic cost to
the state’s consumers.

(3) Applicable state law intended to protect the public’s health
and the environment.

(4) Maximizing availability of existing electric generation
resources, including all available demand side and clean, eligible
renewable energy resources necessary to meet the needs of the
state’s electricity consumers.

(5) Conducting internal operations in a manner that minimizes
cost impact on ratepayers to the extent practicable and consistent
with the provisions of this chapter.

(6) Communicating with all balancing area authorities in
California in a manner that supports electrical reliability.

(c) The Independent System Operator shall do all of the
following:

(1) Consult and coordinate with appropriate state and local
agencies to ensure that the Independent System Operator operates
in furtherance of state law regarding consumer and environmental
protection.

(2) Ensure that the purposes and functions of the Independent
System Operator are consistent with the purposes and functions
of nonprofit, public benefit corporations in the state, including
duties of care and conflict-of-interest standards for officers and
directors of a corporation.

(3) Maintain open meeting standards and meeting notice
requirements consistent with the general policies 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) and affording the public the greatest
possible access, consistent with other duties of the corporation.
The Independent System Operator’s Open Meeting Policy, as
adopted on April 23, 1998, and in effect as of May 1, 2002, meets
the requirements of this paragraph. The Independent System
Operator shall maintain a policy that is no less consistent with the
Bagley-Keene Open Meeting Act than its policy in effect as of
May 1, 2002.

(4) Provide public access to corporate records consistent with
the general policies of the California Public Records Act (Chapter
3.5 (commencing with Section 6250) of Division 7 of Title 1 of
the Government Code) and affording the public the greatest
possible access, consistent with the other duties of the corporation.
The Independent System Operator’s Information Availability
Policy, as adopted on October 22, 1998, and in effect as of May
1, 2002, meets the requirements of this paragraph. The Independent
System Operator shall maintain a policy that is no less consistent
with the California Public Records Act than its policy in effect as
of May 1, 2002.

SEC. 2.  

Section 399.23 is added to the Public Utilities Code,
to read:

399.23.  

(a) The Legislature finds and declares all of the
following:

(1) There is increasing uncertainty with regard to the availability
of California’s fleet of older powerplants, creating the need for
increased reduction in demand for electricity through energy
efficiency, demand response, and adding new sources of clean
energy generation.

(2) It is in the best interest of the electricity consumers of this
state that sufficient clean energy generation supply and
demand-side resources are procured to meet electricity demand
that provide the highest value, including providing safe, reliable,
and affordable electricity supplies and minimizing air quality
impacts to consumers in the most cost-effective manner practicable.

(3) Clean energy generation with flexible delivery characteristics
are essential to maintaining reliable electricity deliveries.

(4) There are substantial high-quality renewable resources in
the County of Imperial near the Salton Sea, which can help provide
cost-effective renewable resources that can reduce greenhouse gas
emissions while simultaneously contributing to resources adequacy
and reliability needs and providing significant local and regional
environmental and economic development benefits.

(b)  begin delete Without limitation imposed by any existing procurement
targets or requirements, and consistent end delete begin insert Consistent end insert with the loading
order adopted by the Energy Commission and the commission
which sets forth state policy for preferred resources to meet
electrical load needs, it is the intent of the Legislature, and the
policy of the state, that all retail sellers of electricity, including
investor-owned electrical corporations and local publicly owned
electric utilities, shall procure all available begin delete demand side and clean,
eligible renewable energy resources to achieve reductions in the
emissions of greenhouse gases and the state’s resource adequacy
goals end delete begin insert cost-effective energy efficiency, demand response, and
renewable resources, so as to achieve renewable, reliability, and
greenhouse gases emission reduction end insert simultaneously, in the most
cost-effective begin insert and affordable end insert manner practicable. begin insert Procurement
shall not be limited by any targets established for these resources
by statute or regulatory decision. end insert

begin delete

SEC. 3.  

Section 454.55 of the Public Utilities Code is amended
to read:

454.55.  

In furtherance of the loading order adopted by the
Energy Commission and the commission that sets forth state policy
for preferred resources to meet long-term electrical load needs
pursuant to Section 454.5, the commission, in consultation with
the Energy Commission, shall identify all potentially achievable
cost-effective electricity efficiency savings, demand response
resources, and eligible renewable energy resources and establish
procurement targets to be met by an electrical corporation pursuant
to this section, over-and-above any separate procurement targets
or mandates for these resources established in this code or by
commission action.

end delete

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 454.55 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

454.55.  

begin delete The commission, in consultation with the State Energy
Resources Conservation and Development Commission, shall
identify all potentially achievable cost-effective electricity
efficiency savings and end delete begin insert Electrical corporations shall procure all
available cost-effective energy efficiency, demand response, and
renewable energy resources so as to simultaneously achieve the
goals of renewable resource development, reductions in emissions
of greenhouse gases, and sustain system reliability in the most
cost-effective and affordable manner. This procurement shall not
be limited by any targets established for these resources by statute
or regulatory decision. However, the commission shall continue
to end insert establish efficiency targets for an electrical corporation to
achieve pursuant to Section 454.5.

SEC. 4.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only 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.