Amended in Assembly January 15, 2014

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

California Legislature—2013–14 Regular Session

Assembly Bill No. 177

Introduced by Assembly Member V. Manuel Pérez

January 24, 2013

An act to begin delete amend Section 38550 of the Health and Safety Code, and to add Section 399.23 to, and to repeal and add Section 454.55 of, the Public Utilities Code, end delete begin insert add Section 25328 to the Public Resources Code, end insert relating to begin delete public utilities. end delete begin insert energy. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 177, as amended, V. Manuel Pérez. begin delete Public utilities: greenhouse gas emissions reduction: renewable resources. end delete begin insert Renewable energy resources: Salton Sea. end insert

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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.

end delete begin insert

The Warren-Alquist State Energy Resources Conservation and Development Act establishes the State Energy Resources Conservation and Development Commission. The act requires the State Energy Resources Conservation and Development Commission, beginning November 1, 2003, and by November 1 of every odd year thereafter, to adopt an integrated energy policy report which includes an overview of major energy trends and issues facing the state, an assessment and forecast of system reliability, and the need for resource additions, efficiency, and conservation. The act requires the State Energy Resources Conservation and Development Commission, beginning November 1, 2004, and by November 1 of each even year thereafter, to prepare an energy policy review to update the analyses from the integrated energy policy report or to raise energy issues that have emerged since the release of the integrated energy policy report.

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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. begin delete 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. end delete

This bill would begin delete 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. end delete begin insert require the State Energy Resources Conservation and Development Commission, in cooperation and consultation with the Public Utilities Commission, the Natural Resources Agency, and the Salton Sea Authority, to convene a stakeholders group to advise the commission on the steps that should be taken to properly develop, integrate, and transmit the electricity generated by eligible renewable energy resources located in and around the Salton Sea. The bill would require the State Energy Resources Conservation and Development Commission to hold workshops and public hearings end insert begin insert and to include its evaluations and recommendations in the next integrated energy policy report or energy policy review update. end insert

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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This bill would provide that no reimbursement is required by this act for a specified reason.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete yes end delete begin insert no end insert .

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert The Legislature finds and declares all of the
following: end insert

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(a) There are substantial high-quality eligible renewable energy
resources located in and around the Salton Sea that can generate
electricity in a manner that will simultaneously do all of the
following:

end insert begin insert

(1) Assist in maintaining grid reliability.

end insert begin insert

(2) Provide lower costs for integrating eligible renewable energy
resources into the electrical grid.

end insert begin insert

(3) Help meet California's renewables portfolio standard
procurement requirements and requirements for reducing emissions
of greenhouse gases.

end insert begin insert

(4) Provide significant local and regional environmental and
economic development benefits.

end insert begin insert

(b) There are similar high-quality eligible renewable energy
resources located in northern California that can generate
electricity in a manner that will simultaneously achieve the same
benefits as would be achieved by developing those resources near
the Salton Sea.

end insert begin insert

(c) The County of Imperial and the Imperial Irrigation District
have signed a memorandum of understanding that pledges their
mutual efforts to advance the development of eligible renewable
energy resources and precious minerals extraction in the Imperial
Irrigation District balancing authority area and thereby provide
a funding source that will assist the state in meeting its mitigation
and restoration obligations pursuant to the Quantification
Settlement Agreement, as defined in subdivision (a) of Section 1
of Chapter 617 of the Statutes of 2002, and related and
implementing agreements.

end insert begin insert

(d) The Natural Resources Agency, in cooperation and
consultation with the Salton Sea Authority, is conducting a
feasibility study that will serve as the blueprint to guide future
efforts to restore the Salton Sea, develop the eligible renewable
energy resources located there, and provide direction to local,
regional, and state agencies responsible for the protection of the
health of those who could otherwise be subjected to the detrimental
air quality effects from an exposed lake bed.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 25328 is added to the end insert begin insert Public Resources Code end insert begin insert ,
to read: end insert

begin insert

begin insert 25328. end insert   

(a) The commission, in cooperation and consultation
with the Public Utilities Commission, the Natural Resources
Agency, and the Salton Sea Authority, shall convene a stakeholders
group to advise the commission on the steps that should be taken
to properly develop, integrate, and transmit the electricity
generated by eligible renewable energy resources, as defined in
Section 399.12 of the Public Utilities Code, located in and around
the Salton Sea. The commission shall hold workshops and public
hearings to consider the recommendations of the stakeholders
group. At a minimum, the commission and stakeholders shall do
all of the following:

(1) Consider methods to expedite transmission line development
from the Imperial Irrigation District balancing authority area to
utilities and regional independent system operators.

(2) Analyze whether state loan guarantees, loans, or state funds
could be made available to assist developers of geothermal and
other eligible renewable energy resources to access capital and
long-term financing.

(3) Identify permitting issues and agencies responsible for
issuing those permits.

(4) Analyze the feasibility of granting blanket permits to multiple
geothermal project developments located near or under the existing
Salton Sea.

(5) Analyze the effectiveness of the value for assessing
procurement contracts for eligible renewable energy resources
that includes integration of those resources into the operation of
the electrical grid, analyze whether the value has resulted in
development of new eligible renewable energy resources located
in and around the Salton Sea, and make recommendations on
whether other measures are appropriate to ensure that eligible
renewable energy resources are appropriately developed in and
around the Salton Sea.

(6) Analyze the costs and the value provided by eligible
renewable energy resource projects located in and around the
Salton Sea that provide baseload generation.

(7) Assist in the framing of a pilot project to evaluate algae and
solar energy facilities located on or near Salton Sea playa areas.

(8) Analyze the benefits and costs of rare earth extraction in
consultation with the relevant state and federal agencies.

(b) The commission shall include its evaluations and
recommendations in the next integrated energy policy report
adopted pursuant to subdivisions (a), (b), and (c) of, or energy
policy review update adopted pursuant to subdivision (d) of,
Section 25302.

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begin delete

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 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. 3.  

Section 454.55 of the Public Utilities Code is repealed.

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 by 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. 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.

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