Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1295

Introduced by Assembly Member Roger Hernández

February 22, 2013

An act to begin delete amend Section 399.20 of end delete begin insert add and repeal Chapter 7.6 (commencing with Section 2831) of Part 2 of Division 1 end insert begin insert of, and to repeal Sections 2832 and 3832.5 of, end insert the Public Utilities Code, relating to public utilities.

LEGISLATIVE COUNSEL’S DIGEST

AB 1295, as amended, Roger Hernández. Public utilities: renewable begin delete energy. end delete begin insert energy: community renewables option. end insert

begin insert

Under existing law, the Public Utilities Commission has regulatory jurisdiction over public utilities, including electrical corporations, as defined, while local publicly owned electric utilities, as defined, are under the direction of their governing boards. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Under existing law, the local government renewable energy self-generation program authorizes a local government, as defined, to receive a bill credit, as defined, to be applied to a designated benefiting account for electricity exported to the electrical grid by an eligible renewable generating facility, as defined, and requires the commission to adopt a rate tariff for the benefiting account.

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The California Renewables Portfolio Standard Program, referred to 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.

end insert begin insert

This bill would require an electrical corporation and a local publicly owned electric utility to include provisions in its tariff and addenda to a standard contract or allow an electrical generation facility, as defined, to participate in the community renewables option that would allow the facility to assign the payment by the electrical corporation or a local publicly owned electric utility due to that facility to a subscribing customer, as defined, in the form of a bill credit. The bill would, on and after January 1, 2016, require the commission and the governing board of the local publicly owned electric utility to evaluate the demand for the community renewables option. If the commission or the governing board of a local publicly owned electric utility finds that the community renewables option should be discontinued, the bill would make the provisions applicable to an electrical corporation or that local publicly owned electric utility, respective, be inoperative. This bill would repeal the provision of the community renewables option on January 1, 2020, unless the commission or the governing board of a local publicly owned electric utility finds that there is an adequate demand for the community renewables option, in which case, the provision of the community renewables option would remain in effect for the electrical corporation or that local publicly owned utility, respectively.

end insert begin delete

Existing law requires an electrical corporation to file with the Public Utilities Commission a standard tariff for electricity purchased from an electric generation facility and makes that tariff available to the owner or operator of an electric generation facility within the service territory of the electrical corporation.

end delete begin delete

This bill would make technical, nonsubstantive changes to the above provisions and would correct erroneous cross-references.

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

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Chapter 7.6 (commencing with Section 2831) is
added to Part 2 of Division 1 of the end insert begin insert Public Utilities Code end insert begin insert , to read: end insert

begin insert

 

Chapter   begin insert 7.6. end insert Community Renewables Facility

 

begin insert 2831. end insert   

As used in this article, the following terms mean the
following:

(a) “Community renewables facility” means an electric
generation facility that has elected to participate in the community
renewables option.

(b) “Community renewables option” means the right of an
electrical generation facility to assign the payment by the electrical
corporation or a publicly owned electric utility due to that facility
in accordance with this article to subscribing customers of the
electrical corporation in the form of a bill credit.

(c) “Electrical generation facility” means an electrical
generation facility located within the service territory of, and
developed to sell electricity to, an electrical corporation or a local
publicly owned electric utility that meets all of the following
criteria:

(1) Has an effective capacity of not more than three megawatts.

(2) Is interconnected and operates in parallel with the electrical
transmission and distribution grid.

(3) Is strategically located and interconnected to the electrical
transmission and distribution grid in a manner that optimizes the
deliverability of electricity generated at the facility to load centers.

(4) Is an eligible renewable energy resource, as defined in
Section 399.12.

(d) “Subscribing customer” means a customer of an electrical
corporation or publicly owned utility who has subscribed to the
output of a community renewables facility.

(e) “Subscription amount” means the percentage of
kilowatthours delivered to an electrical corporation or a local
publicly owned electric utility from a community renewables facility
to which a subscribing customer has subscribed.

begin insert 2831.5. end insert   

A community renewables facility is not an electrical
corporation, as defined in Section 218 or an electric service
provider, as defined in Section 218.3.

begin insert 2832. end insert   

(a) An electrical corporation shall include provisions
in its tariff and an addendum to a standard contract developed
pursuant to Section 399.20 to provide for a community renewables
option allowing a community renewables facility to assign the
payment of electricity by the electrical corporation due to that
facility to a subscribing customer in the form of a bill credit.

(b) In approving the tariff, the commission shall ensure all of
the following:

(1) Customers that do not participate in the community
renewables option are indifferent to whether other customers
participate in the community renewables option, and no costs are
shifted from subscribing customers to nonsubscribing customers.

(2) An electric generation facility that has executed a standard
contract with an electrical corporation and has begun deliveries
pursuant to the contract may, in its sole discretion, elect to become
a community renewables facility.

(3) (A) The community renewables facility is solely responsible
for any and all arrangements, agreements, or disputes with its
subscribing customers concerning the community renewables
option. The community renewables facility shall communicate, in
writing, to the electrical corporation, in a timely manner, to be
specified in the electrical corporation’s tariff and contract
addendum described in subdivision (c), but not less than once per
year, information necessary for the electrical corporation to make
payment under the standard contract and addendum to the
standard contract that, include, but is not limited to, all of the
following:

(i) The name of each subscribing customer.

(ii) The service address and service account number of each
subscribing customer to which a bill credit should be applied.

(iii) Each subscribing customer’s subscription amount.

(iv) The percentage of delivered kilowatthours of electricity that
remains unsubscribed, if any, for which payment should be made
directly to the community renewables facility.

(B) The electrical corporation shall not be a party to an
arrangement or agreement between the community renewables
facility and the subscribing customer.

(4) The electrical corporation shall continue to bill subscribing
customers for all electricity consumed pursuant to each subscribing
customer’s otherwise applicable tariff. The payments made to a
subscribing customer in the form of a bill credit shall be applied
to the subscribing customer’s monthly bill calculated pursuant to
the customer’s otherwise applicable tariff.

(5) All electricity purchases by an electrical corporation
pursuant this section shall be credited towards the electrical
corporation’s procurement requirements pursuant to Section
399.15 and shall count toward the electrical corporation’s
proportionate share of the statewide cap specified in Section
399.20.

(c) The commission shall not authorize the community
renewables option until it has adopted the tariff consistent with
this section.

(d) Notwithstanding paragraph (1) of subdivision (c) of Section
2831, the commission may allow other renewable programs
adopted by the commission, including those programs adopted in
commission decisions 10-12-048 and 09-06-049, as those decisions
and programs may be modified from time to time, that meet the
requirements of subdivisions (a) and (b) to include an equivalent
community renewables option.

(e) An electrical corporation shall recover from the community
renewables facility any costs of implementing the community
renewables option reasonably attributable to the community
facility. Any implementation costs not reasonably attributable to
the community renewables facility shall not be recovered from the
ratepayers, as determined by the commission.

(f) If a customer participates in direct transactions pursuant to
paragraph (1) of subdivision (b) of Section 365 or Section 365.1,
the electrical corporation that provides distribution service for
the customer is not obligated to allow that customer to participate
in a community renewables option.

(g) On or before July 1, 2015, an energy service provider or
community choice aggregator shall offer a comparable community
renewables option in accordance with the procurement practices
of that load serving entity. The commission shall review and
approve the community renewables option proposed by the load
serving entity to ensure that it is comparable to the requirements
specified in subdivision (b).

(h) (1) On and after January 1, 2016, the commission shall
evaluate the demand for the community renewables option and
consider whether to continue offering a community renewables
option.

(2) If the commission determines that the community renewables
option should terminate, the commission shall issue an order to
that effect and deliver a copy of the order to the Secretary of State.
The section shall become inoperative on the effective date of the
order.

(i) (1) Except as provided in paragraph (2), this section shall
remain in effect only until January 1, 2020, and as of that date is
repealed, unless a later enacted statute, that is enacted before
January 1, 2020, deletes or extends that date.

(2) Notwithstanding paragraph (1), if, before January 1, 2020,
the commission finds that there is adequate demand to continue
offering a community renewables option, this section shall remain
in effect. The commission shall issue an order finding an adequate
demand to continue offering a community renewables option and
deliver a copy of the order to the Secretary of State.

begin insert 2832.5. end insert   

(a) A local publicly owned electric utility shall include
provisions in its tariff and an addendum to a standard contract
developed pursuant to Section 399.32 to provide for a community
renewables option allowing a community renewables facility to
assign the payment of electricity by the local publicly owned
electric utility due to that facility to a subscribing customer in the
form of a bill credit.

(b) The governing board of the local publicly owned electric
utility shall ensure all of the following:

(1) Customers that do not participate in the community
renewables option are indifferent to whether other customers
participate in the community renewables option, and no costs are
shifted from subscribing customers to nonsubscribing customers.

(2) An electric generation facility that has executed a standard
contract with a local publicly owned electric utility and has begun
deliveries pursuant to the contract may, in its sole discretion, elect
to become a community renewables facility.

(3) (A) The community renewables facility is solely responsible
for any and all arrangements, agreements, or disputes with its
subscribing customers concerning the community renewables
option. The community renewables facility shall communicate, in
writing, to the local publicly owned electric utility, information
necessary for the local publicly owned electric utility to make
payment under the standard contract and addendum to the
standard contact that, include, but is not limited to, all of the
following:

(i) The name of each subscribing customer.

(ii) The service address and service account number of each
subscribing customer to which a bill credit should be applied.

(iii) Each subscribing customer’s subscription amount.

(iv) The percentage of delivered kilowatthours of electricity that
remain unsubscribed, if any, for which payment should be made
directly to the community renewables facility.

(B) The local publicly owned electric utility shall not be a party
to an arrangement or agreement between the community
renewables facility and the subscribing customer.

(4) The electrical corporation shall continue to bill subscribing
customers for all electricity consumed pursuant to each subscribing
customer’s otherwise applicable tariff. The payments made to a
subscribing customer in the form of a bill credit shall be applied
to the subscribing customer’s monthly bill calculated pursuant to
the customer’s otherwise applicable tariff.

(5) All electricity purchases by a local publicly owned electric
utility pursuant this section shall be credited towards the local
publicly owned electric utility’s procurement requirements
pursuant to Section 399.30.

(c) The local publicly owned electric utility may allow other
renewable programs it has adopted that meet the requirements of
subdivisions (a) and (b) to include an equivalent community
renewables option.

(d) (1) On and after January 1, 2016, the governing board of
a local publicly owned electric utility shall evaluate the demand
for the community renewables option and consider whether to
continue offering a community renewables option.

(2) If the governing board of a local publicly owned electric
utility determines the offering of a community renewables option
should terminate, the governing board shall adopt a resolution to
that effect and deliver a copy of the resolution to the Secretary of
State. This section shall not apply to that local publicly owned
electric utility on the effective date of the resolution.

(e) (1) Except as provided in paragraph (1), this section shall
remain in effect only until January 1, 2020, and as of that date is
repealed, unless a later enacted statute, that is enacted before
January 1, 2020, deletes or extends that date.

(2) Notwithstanding paragraph (1), if, before January 1, 2020,
the governing board of a local publicly owned electric utility finds
that there is adequate demand to continue offering a community
renewables option, this section shall remain in effect for that local
publicly owned electric utility. The governing board shall adopt
a resolution finding and adequate demand to continue offering a
community renewables option and deliver a copy of the resolution
to the Secretary of State.

begin insert 2833. end insert   

Except as provided in paragraph (2) of subdivision (i)
of Section 2832 or paragraph (2) of subdivision (e) of Section
2832.5, this chapter shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2020, deletes or extends that
date.

end insert

begin delete

SECTION 1.  

Section 399.20 of the Public Utilities Code is
amended to read:

399.20.  

(a) It is the policy of this state and the intent of the
Legislature to encourage electrical generation from eligible
renewable energy resources.

(b) As used in this section, “electric generation facility” means
an electric generation facility located within the service territory
of, and developed to sell electricity to, an electrical corporation
that meets all of the following criteria:

(1) Has an effective capacity of not more than three megawatts.

(2) Is interconnected and operates in parallel with the electrical
transmission and distribution grid.

(3) Is strategically located and interconnected to the electrical
transmission and distribution grid in a manner that optimizes the
deliverability of electricity generated at the facility to load centers.

(4) Is an eligible renewable energy resource.

(c) An electrical corporation shall file with the commission a
standard tariff for electricity purchased from an electric generation
facility. The commission may modify or adjust the requirements
of this section for an electrical corporation with less than 100,000
service connections, as individual circumstances merit.

(d) (1) The tariff shall provide for payment for every
kilowatthour of electricity purchased from an electric generation
facility for a period of 10, 15, or 20 years, as authorized by the
commission. The payment shall be the market price determined
by the commission pursuant to paragraph (2) and shall include all
current and anticipated environmental compliance costs, including,
but not limited to, mitigation of emissions of greenhouse gases
and air pollution offsets associated with the operation of new
generating facilities in the local air pollution control or air quality
management district where the electric generation facility is
located.

(2) The commission shall establish a methodology to determine
the market price of electricity for terms corresponding to the length
of contracts with an electric generation facility, in consideration
of the following:

(A) The long-term market price of electricity for fixed price
contracts, determined pursuant to an electrical corporation’s general
procurement activities as authorized by the commission.

(B) The long-term ownership, operating, and fixed-price fuel
costs associated with fixed-price electricity from new generating
facilities.

(C) The value of different electricity products including
baseload, peaking, and as-available electricity.

(3) The commission may adjust the payment rate to reflect the
value of every kilowatthour of electricity generated on a
time-of-delivery basis.

(4) The commission shall ensure, with respect to rates and
charges, that ratepayers that do not receive service pursuant to the
tariff are indifferent to whether a ratepayer with an electric
generation facility receives service pursuant to the tariff.

(e) An electrical corporation shall provide expedited
interconnection procedures to an electric generation facility located
on a distribution circuit that generates electricity at a time and in
a manner so as to offset the peak demand on the distribution circuit,
if the electrical corporation determines that the electric generation
facility will not adversely affect the distribution grid. The
commission shall consider and may establish a value for an electric
generation facility located on a distribution circuit that generates
electricity at a time and in a manner so as to offset the peak demand
on the distribution circuit.

(f) (1) An electrical corporation shall make the tariff available
to the owner or operator of an electric generation facility within
the service territory of the electrical corporation, upon request, on
a first-come-first-served basis, until the electrical corporation meets
its proportionate share of a statewide cap of 750 megawatts
cumulative rated generation capacity served under this section and
Section 399.32. The proportionate share shall be calculated based
on the ratio of the electrical corporation’s peak demand compared
to the total statewide peak demand.

(2) By June 1, 2013, the commission shall, in addition to the
750 megawatts identified in paragraph (1), direct the electrical
corporations to collectively procure at least 250 megawatts of
cumulative rated generating capacity from developers of bioenergy
projects that commence operation on or after June 1, 2013. The
commission shall, for each electrical corporation, allocate shares
of the additional 250 megawatts based on the ratio of each electrical
corporation’s peak demand compared to the total statewide peak
demand. In implementing this paragraph, the commission shall do
all of the following:

(A) Allocate the 250 megawatts identified in this paragraph
among the electrical corporations based on the following
categories:

(i) For biogas from wastewater treatment, municipal organic
waste diversion, food processing, and codigestion, 110 megawatts.

(ii) For dairy and other agricultural bioenergy, 90 megawatts.

(iii) For bioenergy using byproducts of sustainable forest
management, 50 megawatts. Allocations under this category shall
be determined based on the proportion of bioenergy that sustainable
forest management providers derive from sustainable forest
management in fire threat treatment areas, as designated by the
Department of Forestry and Fire Protection.

(B) Direct the electrical corporations to develop standard
contract terms and conditions that reflect the operational
characteristics of the projects, and to provide a streamlined
contracting process.

(C) Coordinate, to the maximum extent feasible, any incentive
or subsidy programs for bioenergy with the agencies listed in
subparagraph (A) of paragraph (3) in order to provide maximum
benefits to ratepayers and to ensure that incentives are used to
reduce contract prices.

(D) The commission shall encourage gas and electrical
corporations to develop and offer programs and services to facilitate
development of in-state biogas for a broad range of purposes.

(3) (A) The commission, in consultation with the State Energy
Resources Conservation and Development Commission, the State
Air Resources Board, the Department of Forestry and Fire
Protection, the Department of Food and Agriculture, and the
Department of Resources Recycling and Recovery, may review
the allocations of the 250 additional megawatts identified in
paragraph (2) to determine if those allocations are appropriate.

(B) If the commission finds that the allocations of the 250
additional megawatts identified in paragraph (2) are not
appropriate, the commission may reallocate the 250 megawatts
among the categories established in subparagraph (A) of paragraph
(2).

(4) For the purposes of this subdivision, “bioenergy” means
biogas and biomass.

(g) The electrical corporation may make the terms of the tariff
available to owners and operators of an electric generation facility
in the form of a standard contract subject to commission approval.

(h) Every kilowatthour of electricity purchased from an electric
generation facility shall count toward meeting the electrical
corporation’s renewables portfolio standard annual procurement
targets for purposes of paragraph (1) of subdivision (b) of Section
399.15.

(i) The physical generating capacity of an electric generation
facility shall count toward the electrical corporation’s resource
adequacy requirement for purposes of Section 380.

(j) (1) The commission shall establish performance standards
for any electric generation facility that has a capacity greater than
one megawatt to ensure that those facilities are constructed,
operated, and maintained to generate the expected annual net
production of electricity and do not impact system reliability.

(2) The commission may reduce the three megawatt capacity
limitation of paragraph (1) of subdivision (b) if the commission
finds that a reduced capacity limitation is necessary to maintain
system reliability within that electrical corporation’s service
territory.

(k) (1) An owner or operator of an electric generation facility
that received ratepayer-funded incentives in accordance with
Section 379.6 of this code, or with Section 25782 of the Public
Resources Code, and participated in a net metering program
pursuant to Sections 2827 and 2827.10 of, and former Section
2827.9 of, this code prior to January 1, 2010, shall be eligible for
a tariff or standard contract filed by an electrical corporation
pursuant to this section.

(2) In establishing the tariffs or standard contracts pursuant to
this section, the commission shall consider ratepayer-funded
incentive payments previously received by the generation facility
pursuant to Section 379.6 of this code or Section 25782 of the
Public Resources Code. The commission shall require
reimbursement of any funds received from these incentive
programs to an electric generation facility, in order for that facility
to be eligible for a tariff or standard contract filed by an electrical
corporation pursuant to this section, unless the commission
determines ratepayers have received sufficient value from the
incentives provided to the facility based on how long the project
has been in operation and the amount of renewable electricity
previously generated by the facility.

(3) A customer that receives service under a tariff or contract
approved by the commission pursuant to this section is not eligible
to participate in any net metering program.

(l) An owner or operator of an electric generation facility
electing to receive service under a tariff or contract approved by
the commission shall continue to receive service under the tariff
or contract until either of the following occurs:

(1) The owner or operator of an electric generation facility no
longer meets the eligibility requirements for receiving service
pursuant to the tariff or contract.

(2) The period of service established by the commission pursuant
to subdivision (d) is completed.

(m) Within 10 days of receipt of a request for a tariff pursuant
to this section from an owner or operator of an electric generation
facility, the electrical corporation that receives the request shall
post a copy of the request on its Internet Web site. The information
posted on the Internet Web site shall include the name of the city
in which the facility is located, but information that is proprietary
and confidential, including, but not limited to, address information
beyond the name of the city in which the facility is located, shall
be redacted.

(n) An electrical corporation may deny a tariff request pursuant
to this section if the electrical corporation makes any of the
following findings:

(1) The electric generation facility does not meet the
requirements of this section.

(2) The transmission or distribution grid that would serve as the
point of interconnection is inadequate.

(3) The electric generation facility does not meet all applicable
state and local laws and building standards and utility
interconnection requirements.

(4) The aggregate of all electric generating facilities on a
distribution circuit would adversely impact utility operation and
load restoration efforts of the distribution system.

(o) Upon receiving a notice of denial from an electrical
corporation, the owner or operator of the electric generation facility
denied a tariff pursuant to this section shall have the right to appeal
that decision to the commission.

(p) To ensure the safety and reliability of electric generation
facilities, the owner of an electric generation facility receiving a
tariff pursuant to this section shall provide an inspection and
maintenance report to the electrical corporation at least once every
other year. The inspection and maintenance report shall be prepared
at the owner’s or operator’s expense by a California-licensed
contractor who is not the owner or operator of the electric
generation facility. A California-licensed electrician shall perform
the inspection of the electrical portion of the generation facility.

(q) The contract between the electric generation facility
receiving the tariff and the electrical corporation shall contain
provisions that ensure that construction of the electric generating
facility complies with all applicable state and local laws and
building standards, and utility interconnection requirements.

(r) (1) All construction and installation of facilities of the
electrical corporation, including at the point of the output meter
or at the transmission or distribution grid, shall be performed only
by that electrical corporation.

(2) All interconnection facilities installed on the electrical
corporation’s side of the transfer point for electricity between the
electrical corporation and the electrical conductors of the electric
generation facility shall be owned, operated, and maintained only
by the electrical corporation. The ownership, installation, operation,
reading, and testing of revenue metering equipment for electric
generating facilities shall only be performed by the electrical
corporation.

end delete