BILL NUMBER: AB 177 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JANUARY 8, 2014
AMENDED IN ASSEMBLY JANUARY 6, 2014
AMENDED IN ASSEMBLY JUNE 5, 2013
AMENDED IN ASSEMBLY APRIL 9, 2013
AMENDED IN ASSEMBLY MARCH 21, 2013
INTRODUCED BY Assembly Member V. Manuel Pérez
JANUARY 24, 2013
An act to amend Section 38550 of the Health and Safety Code, and
to amend Section 345.5 of, to add
Sections 399.23 and 636 Section 399.23 to, and
to repeal and add Section 454.55 of , the Public Utilities
Code, relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 177, as amended, V. Manuel Pérez. Public utilities: greenhouse
gas emissions reduction: renewable resources.
The 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,
including electrical corporations, in accordance with specified
objectives. 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 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, 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 specified
matters 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 , reliable, and feasible
energy efficiency, demand response, and renewable resources, so as to
achieve grid reliability and greenhouse gases emission reductions
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.
The 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 for greenhouse
gas emissions reductions. 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 and 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.
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 , reliable, and feasible energy
efficiency, demand response, and renewable energy resources, and to
consider procuring available cost-effective energy storage
technologies. 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 strategy to achieve the 2030 goal for
reducing emissions of greenhouse gases to be adopted by the State Air
Resources Board. 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.
The 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.
This 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.
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 38550 of the Health and Safety Code is amended
to read:
38550. (a) By January 1, 2008, the state board shall, after one
or more public workshops, with public notice, and an opportunity for
all interested parties to comment, determine what the statewide
greenhouse gas emissions level was in 1990, and approve in a public
hearing, a statewide greenhouse gas emissions limit that is
equivalent to that level, to be achieved by 2020. In order to ensure
the most accurate determination feasible, the state board shall
evaluate the best available scientific, technological, and economic
information on greenhouse gas emissions to determine the 1990 level
of greenhouse gas emissions.
(b) By January 1, 2016, the state board, after conducting one or
more public workshops with public notice and an opportunity for all
interested parties to comment, and performing an analysis of the
progress being made to achieve the 2020 statewide greenhouse gas
emissions limit, shall adopt in a public hearing a statewide
greenhouse gas emissions limit for electrical corporations, as
defined in Section 218 of the Public Utilities Code, and local
publicly owned electric utilities, as defined in Section 224.3 of the
Public Utilities Code, to be achieved by 2030.
SEC. 2. 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) Achieving a continuous reduction in emissions of greenhouse
gases associated with California's electrical system sufficient to
achieve the state policy goal for greenhouse gas emissions
reductions.
(2) Making the most efficient use of available energy resources.
For purposes of this section, "available energy resources" include
energy efficiency savings, 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.
(3) Reducing, to the extent possible, overall economic cost to the
state's consumers.
(4) Applicable state law intended to protect the public's health
and the environment.
(5) Maximizing utilization of existing electrical resources,
including all cost-effective demand-side and 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.
(6) Conducting internal operations in a manner that minimizes cost
impact on ratepayers to the extent practicable and consistent with
the provisions of this chapter.
(7) Coordinating operations and sharing operating data and
resources with all balancing area authorities in California in a
manner that reduces the cost of maintaining or improving 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. 3. 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, as well as
the state's ability to reduce greenhouse gas emissions beyond the
target established for 2020, creating the need for both increased
electrical generation from renewable energy resources and reduced
demand through energy efficiency and demand response.
(2) It is in the best interest of the electricity consumers of
this state that sufficient renewable energy generation supply and
demand-side resources are procured to meet electricity demand, and
that this supply and these resources 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) Renewable energy generation from renewable energy resources
that qualify as local capacity resources are essential to maintaining
reliable electricity deliveries.
(4) There are substantial high-quality renewable energy resources
in the County of Imperial near the Salton Sea with the ability to
reduce greenhouse gas emissions that can generate electricity in a
manner that will simultaneously meet local capacity requirements,
maintain grid reliability, and provide significant local and regional
environmental and economic development benefits.
(5) The commitment to a loading order of preferred resources in
the manner prescribed in Section 454.55 is necessary to the continued
health and safety of California electric consumers.
(b) Consistent with the loading order adopted by the Energy
Commission and the commission that 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 cost-effective , reliable, and feasible
energy efficiency, demand response, and renewable energy
resources, so as to achieve grid reliability and greenhouse gases
emission reductions simultaneously, in the most cost-effective and
affordable manner practicable. Procurement shall not be limited by
any targets established for these resources by statute or regulatory
decision.
SEC. 4. SEC. 3. Section 454.55 of
the Public Utilities Code is repealed.
SEC. 5. SEC. 4. Section 454.55 is
added to the Public Utilities Code, to read:
454.55. Pursuant to a loading order of preferred resources to
meet electricity demand in a manner that improves the state's air
quality, reduces greenhouse gas emissions, and preserves electric
grid reliability, electrical corporations shall procure all available
cost-effective , reliable, and feasible energy
efficiency, demand response, and renewable energy resources, and
shall consider procuring available cost-effective energy storage
technologies. Procurement of conventional or gas-fired
generation shall only be undertaken to meet residual need forecasted
for the long-term planning period that is not otherwise
met b y preferred resources. In measuring the
cost-effectiveness of the procurement of preferred resources, the
commission shall determine and include the value of grid reliability,
including the value of grid reliability of diversity in renewable
electric generation by resource type, size , and location,
both alone and in combination with nontransmission alternatives, and
local environmental benefits provided by each renewable energy
resource type technology in disadvantaged communities that have
been identified by the California Environmental Protection Agency
pursuant to Section 39711 of the Health and Safety Code . This
procurement shall not be limited by any targets established for these
resources by statute or regulatory decision. However, the commission
shall continue to establish efficiency targets for an electrical
corporation to achieve pursuant to Section 454.5.
SEC. 6. Section 636 is added to the Public
Utilities Code, to read:
636. (a) In a long-term plan adopted by an electrical corporation
or in a procurement plan implemented by a local publicly owned
electric utility, the electrical corporation or local publicly owned
electric utility shall adopt a long-term procurement strategy to
achieve the 2030 goal for reducing emissions of greenhouse gases
adopted pursuant to subdivision (b) of Section 38550 of the Health
and Safety Code.
(b) Each long-term plan adopted by an electrical corporation or
procurement plan implemented by a local publicly owned electric
utility shall be updated not less than every three years and released
to the public, the Governor, and the Legislature. Each procurement
plan update shall include estimated emissions of greenhouse gases
that are expected to result from implementation of the procurement
plan for each five-year period through December 31, 2050.
SEC. 7. SEC. 5. 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.