AB 1407, as amended, Committee on Utilities and Commerce. Public utilities: resource adequacy requirement.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. Existing law requires the commission, in consultation with the Independent System Operator to establish resource adequacy requirements for all load-serving entities to achieve specified objectives.
This bill wouldbegin delete make technical, nonsubstantive changes to that provisionend deletebegin insert additionally require the Public Utilities Commission to consult with the State Energy Resources Conservation and Development Commission to establish the resource adequacy requirementsend insert.
Vote: majority.
Appropriation: no.
Fiscal committee: begin deleteno end deletebegin insertyesend insert.
State-mandated local program: no.
The people of the State of California do enact as follows:
Section 380 of the Public Utilities Code is
2amended to read:
(a) The commission, in consultation with the Independent
2System Operatorbegin insert and the Energy Commissionend insert, shall establish
3resource adequacy requirements for all load-serving entities.
4(b) In establishing resource adequacy requirements, the
5commission shall achieve all of the following objectives:
6(1) Facilitate development of new generating capacity and
7retention of existing generating capacity that is economic and
8needed.
9(2) Allocate equitably the cost of generating capacity
and
10prevent the shifting of costs between customer classes.
11(3) Minimize enforcement requirements and costs.
12(4) Maximize the ability of community choice aggregators to
13determine the generation resources used to serve their customers.
14(c) Each load-serving entity shall maintain physical generating
15capacity adequate to meet its load requirements, including, but not
16limited to, peak demand and planning and operating reserves. The
17generating capacity shall be deliverable to locations and at times
18as may be necessary to provide reliable electric service.
19(d) Each load-serving entity shall, at a minimum, meet the most
20recent minimum planning reserve and reliability criteria
approved
21by the Board of Trustees of the Western Systems Coordinating
22Council or the Western Electricity Coordinating Council.
23(e) The commission shall implement and enforce the resource
24adequacy requirements established in accordance with this section
25in a nondiscriminatory manner. Each load-serving entity shall be
26subject to the same requirements for resource adequacy and the
27renewables portfolio standard program that are applicable to
28electrical corporations pursuant to this section, or otherwise
29required by law, or by order or decision of the commission. The
30commission shall exercise its enforcement powers to ensure
31compliance by all load-serving entities.
32(f) The commission shall require sufficient information,
33including, but not limited to, anticipated load, actual load,
and
34measures undertaken by a load-serving entity to ensure resource
35adequacy, to be reported to enable the commission to determine
36compliance with the resource adequacy requirements established
37by the commission.
38(g) An electrical corporation’s costs of meeting resource
39adequacy requirements, including, but not limited to, the costs
40associated with system reliability and local area reliability, that
P3 1are determined to be reasonable by the commission, or are
2otherwise recoverable under a procurement plan approved by the
3commission pursuant to Section 454.5, shall be fully recoverable
4from those customers on whose behalf the costs are incurred, as
5determined by the commission, at the time the commitment to
6incur the cost is made, on a fully nonbypassable basis, as
7determined by the commission. The commission shall exclude any
8amounts
authorized to be recovered pursuant to Section 366.2
9when authorizing the amount of costs to be recovered from
10customers of a community choice aggregator or from customers
11
that purchase electricity through a direct transaction pursuant to
12this subdivision.
13(h) The commission shall determine and authorize the most
14efficient and equitable means for achieving all of the following:
15(1) Meeting the objectives of this section.
16(2) Ensuring that investment is made in new generating capacity.
17(3) Ensuring that existing generating capacity that is economic
18is retained.
19(4) Ensuring that the cost of generating capacity is allocated
20equitably.
21(5) Ensuring that community choice aggregators can determine
22the
generation resources used to serve their customers.
23(i) In making the determination pursuant to subdivision (h), the
24commission may consider a centralized resource adequacy
25mechanism among other options.
26(j) For purposes of this section, “load-serving entity” means an
27electrical corporation, electric service provider, or community
28choice aggregator. “Load-serving entity” does not include any of
29the following:
30(1) A local publicly owned electric utility.
31(2) The State Water Resources Development System commonly
32known as the State Water Project.
33(3) Customer generation located on the customer’s site or
34providing
electric service through arrangements authorized by
35Section 218, if the customer generation, or the load it serves, meets
36one of the following criteria:
37(A) It takes standby service from the electrical corporation on
38a commission-approved rate schedule that provides for adequate
39backup planning and operating reserves for the standby customer
40class.
P4 1(B) It is not physically interconnected to the electric transmission
2or distribution grid, so that, if the customer generation fails, backup
3electricity is not supplied from the electricity grid.
4(C) There is physical assurance that the load served by the
5customer generation will be curtailed concurrently and
6commensurately with an outage of the customer
generation.
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