AB 177,
as amended, V. Manuel Pérez. begin deleteRenewable resources. end deletebegin insertPublic utilities: greenhouse gas emissions reduction: renewable resources.end insert
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as defined. The
end delete
begin insertTheend insert Public Utilities Act requires the Public Utilities Commission, in consultation with the Independent System Operator, to establish resource adequacy requirements for all load-serving entities,begin delete as defined,end deletebegin insert including electrical
corporations,end insert
in accordance with specified objectives.begin delete The definition of a “load-serving entity” includes an electrical corporation.end delete 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 achievesbegin delete 20% of retail sales for the period January 1, 2011, to December 31, 2013, inclusive,end delete
25% of retail sales by December 31, 2016begin delete,end delete 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, referred to as the portfolio content requirements. The RPS program requires the Public Utilities Commission 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 Public Utilities Commission 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 specifiedbegin delete matterend deletebegin insert mattersend insert 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 cost-effective energy efficiency, demand response, and renewable resources, so as to achievebegin delete renewable, reliability,end deletebegin insert grid reliabilityend insert and greenhouse gases emissionbegin delete reductionend deletebegin insert
reductionsend insert simultaneously, in the most cost-effective and affordable manner practicable. The bill would require that procurement not be limited by any targets established for these resources by statute or regulatory decision.
Thebegin delete existing restructuring of the electrical industry within theend delete Public Utilities Act provides for the establishment of an Independent System Operator as a nonprofit public benefit corporation. Existing law requires the Independent System Operator to manage the transmission grid and related energy markets in a manner that is consistent with (1) making the most efficient use of available energy resources, (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, and (4) maximizing the availability of existing
electric generation resources necessary to meet the needs of the state’s electricity consumers.
This bill would add a requirement that in managing the transmission grid and related energy markets, the Independent System Operator do so consistent with achieving a continuous reduction in emissions of greenhouse gases associated with California’s electrical system sufficient to achieve the state policy goal forbegin delete 2050 adopted by the State Air Resources Board.end deletebegin insert greenhouse gas emissions reductions.end insert The bill would revise the 4th requirement described above to require that in managing the transmission grid and related energy markets, the Independent System Operator do so consistent with maximizing utilization of existing electrical resources, including all cost-effective demand-side andbegin delete cleanend delete
renewable energy resources, that are connected to the distribution or transmission grid, as are necessary for reliable operation of the grid and sufficient to meet the needs of the state’s electricity consumers.begin delete The bill would require the Independent System Operator, in its annual transmission planning process, to identify the maximum amount of preferred resources capable, in conjunction with installation of nongenerating electrical equipment, of meeting local resource adequacy and system operating needs.end delete
The Public Utilities Act requires the Public Utilities Commission 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 Public Utilities Commission, in consultation with the State Energy Resources Conservation and Development Commission, 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.
Existing law requires that each local publicly owned electric utility, as defined, serving end-use customers prudently plan for and procure resources that are adequate to meet its planning reserve margin and peak demand and operating reserves, sufficient to provide reliable electric service to its customers. Existing law additionally requires the local publicly owned electric utility, upon request, to provide the State Energy Resources Conservation and Development Commission with any information the State Energy Resources Conservation and Development Commission determines is necessary to evaluate the progress made by the local publicly owned electric utility in meeting those planning requirements, and requires the State Energy Resources Conservation and Development Commission to report the progress made by each local publicly owned electric utility to the Legislature, to be included in an integrated energy policy report, as specified. Existing law requires an electrical corporation or local publicly owned electric utility, as defined, to adopt certain strategies in a long-term plan or a procurement plan, as applicable, to achieve efficiency in the use of fossil fuels and to address carbon emissions, as specified.
This bill would require electrical corporations to procure all available cost-effective energy efficiency, demand response, and renewable energybegin delete 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.end deletebegin insert resources, and to consider procuring available cost-effective energy storage technologies.end insert 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. The bill would require an electrical corporation, in a long-term plan, or local publicly owned electric utility, in a procurement plan, to adopt a long-term procurement strategybegin delete to achieve a target of procuring 51% of its electricity products from eligible renewable energy resources by December 31, 2030, andend delete to achieve thebegin delete 2050end deletebegin insert
2030end insert goal for reducing emissions of greenhousebegin delete gases adopted by the State Air Resources Board, consistent with the
potentially achievable cost-effective electricity efficiency savings and efficiency targets established for an electrical corporation by the Public Utilities Commission.end deletebegin insert gases to be adopted by the State Air Resources Board.end insert The bill would require that each long-term plan adopted by an electrical corporation or procurement plan implemented by a local publicly owned electric utility be updated not less than every 3 years and released to the public, the Governor, and the Legislature and would require that each plan update include estimated emissions of greenhouse gases that are expected to result from implementation of the procurement plan for each 5-year period through December 31, 2050.
Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the Public Utilities Commission 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.
begin insertThe California Global Warming Solutions Act of 2006 requires the State Air Resources Board to adopt a statewide greenhouse gas emissions limit to be achieved by 2020.
end insertbegin insertThis bill would require the state board, by January 1, 2016, to adopt a statewide greenhouse gas emissions limit for electrical corporations and local publicly owned electric utilities to be achieved by 2030.
end insertThe 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:
begin insertSection 38550 of the end insertbegin insertHealth and Safety Codeend insertbegin insert is
2amended to read:end insert
begin insert(a)end insertbegin insert end insert By January 1, 2008, the state board shall, after one
4or more public workshops, with public notice, and an opportunity
5for all interested parties to comment, determine what the statewide
6greenhouse gas emissions level was in 1990, and approve in a
7public hearing, a statewide greenhouse gas emissions limit that is
8equivalent to that level, to be achieved by 2020. In order to ensure
9the most accurate determination feasible, the state board shall
10evaluate the best available scientific, technological, and economic
11information on greenhouse gas emissions to determine the 1990
12
level of greenhouse gas emissions.
13(b) By January 1, 2016, the state board, after conducting one
14or more public workshops with public notice and an opportunity
P6 1for all interested parties to comment, and performing an analysis
2of the progress being made to achieve the 2020 statewide
3greenhouse gas emissions limit, shall adopt in a public hearing a
4statewide greenhouse gas emissions limit for electrical
5corporations, as defined in Section 218 of the Public Utilities Code,
6and local publicly owned electric utilities, as defined in Section
7224.3 of the Public Utilities Code, to be achieved by 2030.
begin insertSection 345.5 of the end insertbegin insertPublic Utilities Codeend insertbegin insert is amended
9to read:end insert
(a) The Independent System Operator, as a nonprofit,
11public benefit corporation, shall conduct its operations consistent
12with applicable state and federal laws and consistent with the
13interests of the people of the state.
14(b) To ensure the reliability of electric service and the health
15and safety of the public, the Independent System Operator shall
16manage the transmission grid and related energy markets in a
17manner that is consistent with all of the following:
18(1) Achieving a continuous reduction in emissions of greenhouse
19gases associated with California’s electrical system sufficient to
20achieve the state policy
goal for greenhouse gas emissions
21reductions.
22(1)
end delete
23begin insert(2)end insert Making the most efficient use of available energy resources.
24For purposes of this section, “available energy resources” include
25energybegin insert efficiency savingsend insert, capacity, ancillary services, and demand
26bid into markets administered by the Independent System Operator.
27“Available energy resources” do not include a schedule submitted
28to the Independent System Operator by an electrical corporation
29or a local publicly owned electric utility to meet its own customer
30load.
31(2)
end delete
32begin insert(3)end insert Reducing, to the extent possible, overall economic cost to
33the state’s consumers.
34(3)
end delete
35begin insert(4)end insert Applicable state law intended to protect the public’s health
36and the environment.
37(4)
end delete
38begin insert(5)end insert Maximizingbegin delete availability of existing electric generation begin insert utilization of existing electrical resources,
39resources necessaryend delete
40including all cost-effective demand-side and renewable energy
P7 1resources that are connected to the distribution or transmission
2grid, as are necessary for reliable operation of the grid and
3sufficientend insert to meet the needs of the state’s electricity consumers.
4(5)
end delete
5begin insert(6)end insert Conducting internal operations in a manner that minimizes
6cost impact on ratepayers to
the extent practicable and consistent
7with the provisions of this chapter.
8(6) Communicating with
end delete
9begin insert(7)end insertbegin insert end insertbegin insertCoordinating operations and sharing operating data and
10resources end insertwith all balancing area authorities in California in a
11manner thatbegin delete supportsend deletebegin insert reduces the cost of maintaining or improvingend insert
12
electrical reliability.
13(c) The Independent System Operator shall do all of the
14following:
15(1) Consult and coordinate with appropriate state and local
16agencies to ensure that the Independent System Operator operates
17in furtherance of state law regarding consumer and environmental
18protection.
19(2) Ensure that the purposes and functions of the Independent
20System Operator are consistent with the purposes and functions
21of nonprofit, public benefit corporations in the state, including
22duties of care and conflict-of-interest standards for officers and
23directors of a corporation.
24(3) Maintain open meeting standards and meeting notice
25requirements consistent with the general policies of the
26Bagley-Keene Open Meeting Act (Article 9 (commencing
with
27Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of
28the Government Code) and affording the public the greatest
29possible access, consistent with other duties of the corporation.
30The Independent System Operator’s Open Meeting Policy, as
31adopted on April 23, 1998, and in effect as of May 1, 2002, meets
32the requirements of this paragraph. The Independent System
33Operator shall maintain a policy that is no less consistent with the
34Bagley-Keene Open Meeting Act than its policy in effect as of
35May 1, 2002.
36(4) Provide public access to corporate records consistent with
37the general policies of the California Public Records Act (Chapter
383.5 (commencing with Section 6250) of Division 7 of Title 1 of
39the Government Code) and affording the public the greatest
40possible access, consistent with the other duties of the corporation.
P8 1The Independent System Operator’s Information Availability
2Policy, as adopted on October 22, 1998, and in effect
as of May
31, 2002, meets the requirements of this paragraph. The Independent
4System Operator shall maintain a policy that is no less consistent
5with the California Public Records Act than its policy in effect as
6of May 1, 2002.
begin insertSection 399.23 is added to the end insertbegin insertPublic Utilities Codeend insertbegin insert,
8to read:end insert
(a) The Legislature finds and declares all of the
10following:
11(1) There is increasing uncertainty with regard to the
12availability of California’s fleet of older powerplants, as well as
13the state’s ability to reduce greenhouse gas emissions beyond the
14target established for 2020, creating the need for both increased
15electrical generation from renewable energy resources and reduced
16demand through energy efficiency and demand response.
17(2) It is in the best interest of the electricity consumers of this
18state that sufficient renewable energy generation supply and
19demand-side resources are procured to meet electricity demand,
20and that this supply and these resources provide the
highest value,
21including providing safe, reliable, and affordable electricity
22supplies and minimizing air quality impacts to consumers in the
23most cost-effective manner practicable.
24(3) Renewable energy generation from renewable energy
25resources that qualify as local capacity resources are essential to
26maintaining reliable electricity deliveries.
27(4) There are substantial high-quality renewable energy
28resources in the County of Imperial near the Salton Sea with the
29ability to reduce greenhouse gas emissions that can generate
30electricity in a manner that will simultaneously meet local capacity
31requirements, maintain grid reliability, and provide significant
32local and regional environmental and economic development
33benefits.
34(5) The commitment to a loading order of preferred resources
35in the manner prescribed in
Section 454.55 is necessary to the
36continued health and safety of California electric consumers.
37(b) Consistent with the loading order adopted by the Energy
38Commission and the commission that sets forth state policy for
39preferred resources to meet electrical load needs, it is the intent
40of the Legislature, and the policy of the state, that all retail sellers
P9 1of electricity, including investor-owned electrical corporations
2and local publicly owned electric utilities, shall procure all
3available cost-effective energy efficiency, demand response, and
4renewable energy resources, so as to achieve grid reliability and
5greenhouse gases emission reductions simultaneously, in the most
6cost-effective and affordable manner practicable. Procurement
7shall not be limited by any targets established for these resources
8by statute or regulatory decision.
begin insertSection 454.55 of the end insertbegin insertPublic Utilities Codeend insertbegin insert is repealed.end insert
The commission, in consultation with the State Energy
11Resources Conservation and Development Commission, shall
12identify all potentially achievable cost-effective electricity
13efficiency savings and establish efficiency targets for an electrical
14corporation to achieve pursuant to Section 454.5.
begin insertSection 454.55 is added to the end insertbegin insertPublic Utilities Codeend insertbegin insert,
16to read:end insert
Pursuant to a loading order of preferred resources to
18meet electricity demand in a manner that improves the state’s air
19quality, reduces greenhouse gas emissions, and preserves electric
20grid reliability, electrical corporations shall procure all available
21cost-effective energy efficiency, demand response, and renewable
22energy resources, and shall consider procuring available
23cost-effective energy storage technologies. In measuring the
24cost-effectiveness of the procurement of preferred resources, the
25commission shall determine and include the value of grid
26reliability, including the value of grid reliability of diversity in
27renewable electric generation by resource type, size and location,
28both alone and in combination with nontransmission alternatives,
29and local environmental benefits provided by each renewable
30energy resource
type technology. This procurement shall not be
31limited by any targets established for these resources by statute
32or regulatory decision. However, the commission shall continue
33to establish efficiency targets for an electrical corporation to
34achieve pursuant to Section 454.5.
begin insertSection 636 is added to the end insertbegin insertPublic Utilities Codeend insertbegin insert, to
36read:end insert
(a) In a long-term plan adopted by an electrical
38corporation or in a procurement plan implemented by a local
39publicly owned electric utility, the electrical corporation or local
40publicly owned electric utility shall adopt a long-term procurement
P10 1strategy to achieve the 2030 goal for reducing emissions of
2greenhouse gases adopted pursuant to subdivision (b) of Section
338550 of the Health and Safety Code.
4(b) Each long-term plan adopted by an electrical corporation
5or procurement plan implemented by a local publicly owned
6electric utility shall be updated not less than every three years and
7released to the public, the Governor, and the Legislature. Each
8procurement plan update shall include estimated emissions of
9greenhouse gases that are
expected to result from implementation
10of the procurement plan for each five-year period through
11December 31, 2050.
No reimbursement is required by this act pursuant to
13Section 6 of Article XIII B of the California Constitution because
14the only costs that may be incurred by a local agency or school
15district will be incurred because this act creates a new crime or
16infraction, eliminates a crime or infraction, or changes the penalty
17for a crime or infraction, within the meaning of Section 17556 of
18the Government Code, or changes the definition of a crime within
19the meaning of Section 6 of Article XIII B of the California
20Constitution.
Section 345.5 of the Public Utilities Code is
22amended to read:
(a) The Independent System Operator, as a nonprofit,
24public benefit corporation, shall conduct its operations consistent
25with applicable state and federal laws and consistent with the
26interests of the people of the state.
27(b) To ensure the reliability of electric service and the health
28and safety of the public, the Independent System Operator shall
29manage the transmission grid and related energy markets in a
30manner that is consistent with all of the following:
31(1) Achieving a continuous reduction in emissions of greenhouse
32gases associated with California’s electrical
system sufficient to
33achieve the state policy goal for 2050 adopted by the State Air
34Resources Board.
35(2) Making the most efficient use of available energy resources.
36For purposes of this section, “available energy resources” include
37energy efficiency savings, capacity, ancillary services, and demand
38response and flexibility services bid into markets administered by
39the Independent System Operator.
“Available energy resources”
40do not include a schedule submitted to the Independent System
P11 1Operator by an electrical corporation or a local publicly owned
2electric utility to meet its own customer load.
3(3) Reducing, to the extent possible, overall economic cost to
4the state’s consumers.
5(4) Applicable state law intended to protect the public’s health
6and the environment.
7(5) Maximizing utilization of existing electrical resources,
8including all cost-effective demand-side and clean renewable
9energy resources, that are connected to the distribution or
10transmission grid, as are necessary for reliable operation of the
11grid and sufficient to meet the needs of the state’s electricity
12consumers.
13(6) Conducting internal operations in a manner that minimizes
14cost impact on ratepayers to the extent practicable and consistent
15with the provisions of this chapter.
16(7) Coordinating operations and sharing operating data and
17resources with all balancing area authorities in California in a
18manner that
reduces the cost of maintaining or improving electrical
19reliability.
20(c) The Independent System Operator shall do all of the
21following:
22(1) In its annual transmission planning process, identify the
23maximum amount of preferred resources capable, in conjunction
24with installation of nongenerating
electrical equipment, of meeting
25local resource adequacy and system operating needs. For these
26purposes, “nongenerating electrical equipment” includes, but is
27not limited to, synchronous condensers or similar devices and
28transmission grid additions or upgrades, and “referred resources”
29include, but are not limited to, location-specific energy efficiency,
30demand resources, location-specific renewable generation, and
31geographically dispersed generation. The Independent System
32Operator shall publish and communicate these estimates to the
33commission, the Energy Commission, and the State Air Resources
34Board to facilitate joint consideration of amounts of preferred
35resources available to be included in the commission’s
36establishment of procurement targets.
37(2) Ensure that the purposes and functions of the Independent
38System Operator are consistent with the purposes and functions
39of nonprofit, public
benefit corporations in the state, including
P12 1duties of care and conflict-of-interest standards for officers and
2
directors of a corporation.
3(3) Maintain open meeting standards and meeting notice
4requirements consistent with the general policies of the
5Bagley-Keene Open Meeting Act (Article 9 (commencing with
6Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of
7the Government Code) and affording the public the greatest
8possible access, consistent with other duties of the corporation.
9The Independent System Operator’s Open Meeting Policy, as
10adopted on April 23, 1998, and in effect as of May 1, 2002, meets
11the requirements of this paragraph. The Independent System
12Operator shall maintain a policy that is no less consistent with the
13Bagley-Keene Open Meeting Act than its policy in effect as of
14May 1, 2002.
15(4) Provide public access to corporate records consistent
with
16the general policies of the California Public Records Act (Chapter
173.5 (commencing with Section 6250) of Division 7 of Title 1 of
18the Government Code) and affording the public the greatest
19possible access, consistent with the other duties of the corporation.
20The Independent System Operator’s Information Availability
21Policy, as adopted on October 22, 1998, and in effect as of May
221, 2002, meets the requirements of this paragraph. The Independent
23System Operator shall maintain a policy that is no less consistent
24with the California Public Records Act than its policy in effect as
25of May 1, 2002.
Section 399.23 is added to the Public Utilities Code,
27to read:
(a) The Legislature finds and declares all of the
29following:
30(1) There is increasing uncertainty with regard to the availability
31of California’s fleet of older powerplants, creating the need for
32increased reduction in demand for electricity through energy
33efficiency, demand response, and adding new sources of clean
34energy generation.
35(2) It is in the best interest of the electricity consumers of this
36state that sufficient clean energy generation supply and
37demand-side resources are procured to meet electricity demand
38that provide the highest value, including providing safe, reliable,
39and
affordable electricity supplies and minimizing air quality
40impacts to consumers in the most cost-effective manner practicable.
P13 1(3) Clean energy generation with flexible delivery characteristics
2are essential to maintaining reliable electricity deliveries.
3(4) There are substantial high-quality renewable resources in
4the County of Imperial near the Salton Sea, which can help provide
5cost-effective renewable resources that can reduce greenhouse gas
6emissions while simultaneously contributing to resources adequacy
7and reliability needs and providing significant local and regional
8environmental and economic development benefits.
9(b) Consistent with the loading order adopted by the Energy
10Commission and the commission which
sets forth state policy for
11preferred resources to meet electrical load needs, it is the intent of
12the Legislature, and the policy of the state, that all retail sellers of
13electricity, including investor-owned electrical corporations and
14local publicly owned electric utilities, shall procure all available
15cost-effective energy efficiency, demand response, and renewable
16resources, so as to achieve renewable, reliability, and greenhouse
17gases emission reduction simultaneously, in the most cost-effective
18and affordable manner practicable. Procurement shall not be limited
19by any targets established for these resources by statute or
20regulatory decision.
Section 454.55 of the Public Utilities Code is amended
22to read:
Electrical corporations shall procure all available
24cost-effective energy efficiency, demand response, and renewable
25energy resources so as to simultaneously achieve the goals of
26renewable resource development, reductions in emissions of
27greenhouse gases, and sustain system reliability in the most
28cost-effective and affordable manner. This procurement shall not
29be limited by any targets established for these resources by statute
30or regulatory decision. However, the commission shall continue
31to establish efficiency targets for an electrical corporation to
32achieve pursuant to Section 454.5.
Section 636 is added to the Public Utilities Code, to
34read:
(a) In a long-term plan adopted by an electrical
36corporation or in a procurement plan implemented by a local
37publicly owned electric utility, the electrical corporation or local
38publicly owned electric utility shall adopt a long-term procurement
39strategy to achieve a target of procuring 51 percent of its electricity
40products from eligible renewable energy resources by December
P14 131, 2030, and to achieve the 2050 goal for reducing emissions of
2greenhouse gases adopted by the State Air Resources Board,
3consistent with Section 454.55.
4(b) Each long-term plan adopted by an electrical corporation or
5procurement plan implemented by a local publicly owned electric
6utility shall be updated not less than every three years and released
7to the public, the
Governor, and the Legislature. Each procurement
8plan update shall include estimated emissions of greenhouse gases
9that are expected to result from implementation of the procurement
10plan for each five-year period through December 31, 2050.
No reimbursement is required by this act pursuant to
12Section 6 of Article XIII B of the California Constitution because
13the only costs that may be incurred by a local agency or school
14district will be incurred because this act creates a new crime or
15infraction, eliminates a crime or infraction, or changes the penalty
16for a crime or infraction, within the meaning of Section 17556 of
17the Government Code, or changes the definition of a crime within
18the meaning of Section 6 of Article XIII B of the California
19Constitution.
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95