California Legislature—2013–14 Regular Session

Assembly Bill No. 762

Introduced by Assembly Member Patterson

February 21, 2013

An act to amend Section 399.12 of, and to repeal Section 399.12.5 of, the Public Utility Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

AB 762, as introduced, Patterson. Renewable energy resources: hydroelectric generation.

Existing law establishes the California Renewables Portfolio Standard Program, which requires the Public Utilities Commission to implement annual procurement targets for the procurement of eligible renewable energy resources, as defined, for all retail sellers, as defined, to achieve the targets and goals of the program. The existing definition of an eligible renewable energy resource includes small hydroelectric generation facilities of 30 megawatts or less that meet specified criteria.

This bill would revise the definition of an eligible renewable energy resource for the purposes of the California Renewables Portfolio Standard Program to include a hydroelectric generation facility of any size if it meets certain requirements. The bill would also make conforming 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.  

Section 399.12 of the Public Utilities Code is
amended to read:

399.12.  

For purposes of this article, the following terms have
the following meanings:

(a) “Conduit hydroelectric facility” means a facility for the
generation of electricity that uses only the hydroelectric potential
of an existing pipe, ditch, flume, siphon, tunnel, canal, or other
manmade conduit that is operated to distribute water for a
beneficial use.

(b) “Balancing authority” means the responsible entity that
integrates resource plans ahead of time, maintains load-interchange
generation balance within a balancing authority area, and supports
interconnection frequency in real time.

(c) “Balancing authority area” means the collection of
generation, transmission, and loads within the metered boundaries
of the area within which the balancing authority maintains the
electrical load-resource balance.

(d) “California balancing authority” is a balancing authority
with control over a balancing authority area primarily located in
this state and operating for retail sellers and local publicly owned
electric utilities subject to the requirements of this article and
includes the Independent System Operator (ISO) and a local
publicly owned electric utility operating a transmission grid that
is not under the operational control of the ISO. A California
balancing authority is responsible for the operation of the
transmission grid within its metered boundaries which may not be
limited by the political boundaries of the State of California.

(e) begin insert   end insert begin insert (1) end insert  “Eligible renewable energy resource” means begin delete an end delete begin insert either
of the following: end insert

begin insert (A) end insert begin insert   end insert begin insert An end insert electrical generating facility that meets the definition of
a “renewable electrical generation facility” in Section 25741 of
the Public Resources Code, subject to the following:

begin delete

(1) (A)

end delete

begin insert (i) end insert  An existing small hydroelectric generation facility of 30
megawatts or less shall be eligible only if a retail seller or local
publicly owned electric utility procured the electricity from the
facility as of December 31, 2005. A small hydroelectric generation
unit with a nameplate capacity not exceeding 40 megawatts that
is operated as part of a water supply or conveyance system is an
eligible renewable energy resource if the retail seller or local
publicly owned electric utility procured the electricity from the
facility as of December 31, 2005. A new hydroelectric facility that
commences generation of electricity after December 31, 2005, is
not an eligible renewable energy resource if it will cause an adverse
impact on instream beneficial uses or cause a change in the volume
or timing of streamflow.

begin delete

(B)

end delete

begin insert (ii) end insert  Notwithstanding begin delete subparagraph (A) end delete begin insert clause (i) end insert , a conduit
hydroelectric facility of 30 megawatts or less that commenced
operation before January 1, 2006, is an eligible renewable energy
resource. A conduit hydroelectric facility of 30 megawatts or less
that commences operation after December 31, 2005, is an eligible
renewable energy resource so long as it does not cause an adverse
impact on instream beneficial uses or cause a change in the volume
or timing of streamflow.

begin delete

(C)

end delete

begin insert (iii) end insert  A facility approved by the governing board of a local
publicly owned electric utility prior to June 1, 2010, for
procurement to satisfy renewable energy procurement obligations
adopted pursuant to former Section 387, shall be certified as an
eligible renewable energy resource by the Energy Commission
pursuant to this article, if the facility is a “renewable electrical
generation facility” as defined in Section 25741 of the Public
Resources Code.

begin insert

(B) Notwithstanding subparagraph (A), a hydroelectric
generation facility of any size is an eligible renewable energy
resource if the facility satisfies the requirements in paragraph (2)
of subdivision (a) of Section 25741 of the Public Resources Code.

end insert

(2) A facility engaged in the combustion of municipal solid
waste shall not be considered an eligible renewable energy resource
unless it is located in Stanislaus County and was operational prior
to September 26, 1996.

(f) “Procure” means to acquire through ownership or contract.

(g) “Procurement entity” means any person or corporation
authorized by the commission to enter into contracts to procure
eligible renewable energy resources on behalf of customers of a
retail seller pursuant to subdivision (f) of Section 399.13.

(h) (1) “Renewable energy credit” means a certificate of proof
associated with the generation of electricity from an eligible
renewable energy resource, issued through the accounting system
established by the Energy Commission pursuant to Section 399.25,
that one unit of electricity was generated and delivered by an
eligible renewable energy resource.

(2) “Renewable energy credit” includes all renewable and
environmental attributes associated with the production of
electricity from the eligible renewable energy resource, except for
an emissions reduction credit issued pursuant to Section 40709 of
the Health and Safety Code and any credits or payments associated
with the reduction of solid waste and treatment benefits created
by the utilization of biomass or biogas fuels.

(3) (A) Electricity generated by an eligible renewable energy
resource attributable to the use of nonrenewable fuels, beyond a
de minimis quantity used to generate electricity in the same process
through which the facility converts renewable fuel to electricity,
shall not result in the creation of a renewable energy credit. The
Energy Commission shall set the de minimis quantity of
nonrenewable fuels for each renewable energy technology at a
level of no more than 2 percent of the total quantity of fuel used
by the technology to generate electricity. The Energy Commission
may adjust the de minimis quantity for an individual facility, up
to a maximum of 5 percent, if it finds that all of the following
conditions are met:

(i) The facility demonstrates that the higher quantity of
nonrenewable fuel will lead to an increase in generation from the
eligible renewable energy facility that is significantly greater than
generation from the nonrenewable fuel alone.

(ii) The facility demonstrates that the higher quantity of
nonrenewable fuels will reduce the variability of its electrical
output in a manner that results in net environmental benefits to the
state.

(iii) The higher quantity of nonrenewable fuel is limited to either
natural gas or hydrogen derived by reformation of a fossil fuel.

(B) Electricity generated by a small hydroelectric generation
facility shall not result in the creation of a renewable energy credit
unless the facility meets the requirements of begin insert clause (i) of end insert
subparagraph (A) of paragraph (1) of subdivision (e).

(C) Electricity generated by a conduit hydroelectric generation
facility shall not result in the creation of a renewable energy credit
unless the facility meets the requirements of begin insert clause (ii) of end insert
subparagraph begin delete (B) end delete begin insert (A) end insert of paragraph (1) of subdivision (e).

(D) Electricity generated by a facility engaged in the combustion
of municipal solid waste shall not result in the creation of a
renewable energy credit unless the facility meets the requirements
of paragraph (2) of subdivision (e).

(i) “Renewables portfolio standard” means the specified
percentage of electricity generated by eligible renewable energy
resources that a retail seller or a local publicly owned electric utility
is required to procure pursuant to this article.

(j) “Retail seller” means an entity engaged in the retail sale of
electricity to end-use customers located within the state, including
any of the following:

(1) An electrical corporation, as defined in Section 218.

(2) A community choice aggregator. The commission shall
institute a rulemaking to determine the manner in which a
community choice aggregator will participate in the renewables
portfolio standard program subject to the same terms and conditions
applicable to an electrical corporation.

(3) An electric service provider, as defined in Section 218.3,
for all sales of electricity to customers beginning January 1, 2006.
The commission shall institute a rulemaking to determine the
manner in which electric service providers will participate in the
renewables portfolio standard program. The electric service
provider shall be subject to the same terms and conditions
applicable to an electrical corporation pursuant to this article. This
paragraph does not impair a contract entered into between an
electric service provider and a retail customer prior to the
suspension of direct access by the commission pursuant to Section
80110 of the Water Code.

(4) “Retail seller” does not include any of the following:

(A) A corporation or person employing cogeneration technology
or producing electricity consistent with subdivision (b) of Section
218.

(B) The Department of Water Resources acting in its capacity
pursuant to Division 27 (commencing with Section 80000) of the
Water Code.

(C) A local publicly owned electric utility.

(k) “WECC” means the Western Electricity Coordinating
Council of the North American Electric Reliability Corporation,
or a successor to the corporation.

SEC. 2.  

Section 399.12.5 of the Public Utilities Code is
repealed.

begin delete

399.12.5.  

(a) Notwithstanding subdivision (c) of Section
399.12, a small hydroelectric generation facility that satisfies the
criteria for an eligible renewable energy resource pursuant to
Section 399.12 shall not lose its eligibility if efficiency
improvements undertaken after January 1, 2008, cause the
generating capacity of the facility to exceed 30 megawatts, and
the efficiency improvements do not result in an adverse impact on
instream beneficial uses or cause a change in the volume or timing
of streamflow. The entire generating capacity of the facility shall
be eligible.

(b) Notwithstanding subdivision (c) of Section 399.12, the
incremental increase in the amount of electricity generated from
a hydroelectric generation facility as a result of efficiency
improvements at the facility, is electricity from an eligible
renewable energy resource, without regard to the electrical output
of the facility, if all of the following conditions are met:

(1) The incremental increase is the result of efficiency
improvements from a retrofit that do not result in an adverse impact
on instream beneficial uses or cause a change in the volume or
timing of streamflow.

(2) The hydroelectric generation facility meets one of the
following certification mechanisms:

(A) The hydroelectric generation facility has, within the
immediately preceding 15 years, received certification from the
State Water Resources Control Board pursuant to Section 401 of
the federal Clean Water Act (33 U.S.C. Sec. 1341), or has received
certification from a regional board to which the state board has
delegated authority to issue certification, unless the facility is not
subject to certification because there is no potential for discharge
into waters of the United States.

(B) If the hydroelectric facility is not located in California, the
certification pursuant to Section 401 of the federal Clean Water
Act (33 U.S.C. Sec. 1341) may be received from the applicable
state board or agency or from a regional board to which the state
board has delegated authority to issue the certification.

(C) If the hydroelectric generation facility is the Rock Creek
Powerhouse, Federal Energy Regulatory Commission Project
Number 1962, the efficiency improvements have received any
necessary incremental certification from the State Water Resources
Control Board.

(3) The hydroelectric generation facility is owned by a retail
seller or a local publicly owned electric utility, was operational
prior to January 1, 2007, the efficiency improvements are initiated
on or after January 1, 2008, the efficiency improvements are not
the result of routine maintenance activities, as determined by the
Energy Commission, and the efficiency improvements were not
included in any resource plan sponsored by the facility owner prior
to January 1, 2008.

(4) All of the incremental increase in electricity resulting from
the efficiency improvements are demonstrated to result from a
long-term financial commitment by the retail seller or local publicly
owned electric utility. For purposes of this paragraph, “long-term
financial commitment” means either new ownership investment
in the facility by the retail seller or local publicly owned electric
utility or a new or renewed contract with a term of 10 or more
years, which includes procurement of the incremental generation.

(c) The incremental increase in the amount of electricity
generated from a hydroelectric generation facility as a result of
efficiency improvements at the facility are not eligible for
supplemental energy payments pursuant to the Renewable Energy
Resources Program (Chapter 8.6 (commencing with Section 25740)
of Division 15 of the Public Resources Code), or a successor
program.

(d) Notwithstanding subdivision (c) of Section 399.12 and
subdivisions (a) and (b), a hydroelectric generation facility that is
an eligible renewable energy resource pursuant to this article as
of January 1, 2010, shall not lose its eligibility if the facility causes
a change in the volume or timing of streamflow required by license
conditions approved pursuant to the Federal Power Act (Chapter
12 (commencing with Section 791a) of Title 16 of the United States
Code) on or after January 1, 2010.

end delete