Amended in Senate April 1, 2013

Senate Bill No. 43

Introduced by Senator Wolk

(Coauthors: Senators Corbett and Pavley)

(Coauthors: Assembly Members Levine begin delete and Skinner end delete begin insert , Skinner, and Williams end insert )

December 11, 2012

begin delete An act relating to energy. end delete begin insert An act to amend Section 25019 of the Corporations Code, and to amend Sections 216 and 218 of, to repeal Section 2826.5 of, and to repeal and add Chapter 7.5 (commencing with Section 2830) of Part 2 of Division 1 of the Public Utilities Code, relating to energy. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 43, as amended, Wolk. Shared renewable energy self-generation program.

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Under

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begin insert (1) end insert begin insert   end insert begin insert Under end insert existing law, the Public Utilities Commission has regulatory jurisdiction over public utilities, including electrical corporations, as defined. 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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This bill would state various findings and declarations, and state the intent of the Legislature to enact legislation, relating to a shared renewable energy self-generation program.

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This bill would repeal the local government renewable energy self-generation program and enact the Shared Renewable Energy Self-Generation Program. The program would authorize a retail customer of an electrical corporation to acquire an interest, as defined, in a shared renewable energy facility, as defined, for the purpose of receiving a bill credit, as defined, to offset all or a portion of the customer’s electricity usage, consistent with specified requirements.

end insert begin insert

The bill would provide that any corporation or person engaged directly or indirectly in developing, owning, producing, delivering, participating in, or selling interests in, a shared renewable energy facility is not a public utility or electrical corporation solely by reason of engaging in any of those activities.

end insert begin insert

(2) Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

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Because the provisions of the bill would require action by the commission to implement its requirements, a violation of these provisions would impose a state-mandated local program by expanding the definition of a crime.

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(3) Existing law authorizes the City of Davis to receive a bill credit, as defined, to a benefiting account, as defined, for electricity supplied to the electrical grid by a photovoltaic electricity generation facility located within, and partially owned by, the city, referred to as the PVUSA solar facility, and requires the commission to adopt a rate tariff for the benefiting account.

end insert begin insert

This bill would repeal these provisions relating to the City of Davis, but would require a shared renewable energy facility to be either the PVUSA facility or a newly constructed renewable facility constructed pursuant to the Shared Renewable Energy Self-Generation Program that begins commercial operation on or after June 1, 2014.

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(4)  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:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes 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 Section 25019 of the end insert begin insert Corporations Code end insert begin insert is
amended to read: end insert

25019.  

begin insert (a) end insert begin insert   end insert “Security” means any note; stock; treasury stock;
membership in an incorporated or unincorporated association;
bond; debenture; evidence of indebtedness; certificate of interest
or participation in any profit-sharing agreement; collateral trust
certificate; preorganization certificate or subscription; transferable
share; investment contract; viatical settlement contract or a
fractionalized or pooled interest therein; life settlement contract
or a fractionalized or pooled interest therein; voting trust certificate;
certificate of deposit for a security; interest in a limited liability
company and any class or series of those interests (including any
fractional or other interest in that interest), except a membership
interest in a limited liability company in which the person claiming
this exception can prove that all of the members are actively
engaged in the management of the limited liability company;
provided that evidence that members vote or have the right to vote,
or the right to information concerning the business and affairs of
the limited liability company, or the right to participate in
management, shall not establish, without more, that all members
are actively engaged in the management of the limited liability
company; certificate of interest or participation in an oil, gas or
mining title or lease or in payments out of production under that
title or lease; put, call, straddle, option, or privilege on any security,
certificate of deposit, or group or index of securities (including
any interest therein or based on the value thereof); or any put, call,
straddle, option, or privilege entered into on a national securities
exchange relating to foreign currency; any beneficial interest or
other security issued in connection with a funded employees’
pension, profit sharing, stock bonus, or similar benefit plan; or, in
general, any interest or instrument commonly known as a
“security”; or any certificate of interest or participation in,
temporary or interim certificate for, receipt for, guarantee of, or
warrant or right to subscribe to or purchase, any of the foregoing.
All of the foregoing are securities whether or not evidenced by a
written document. begin delete “Security” does not include: (1) any beneficial
interest in any voluntary inter vivos trust which is not created for
the purpose of carrying on any business or solely for the purpose
of voting, or (2) any beneficial interest in any testamentary trust,
or (3) any insurance or endowment policy or annuity contract under
which an insurance company admitted in this state promises to
pay a sum of money (whether or not based upon the investment
performance of a segregated fund) either in a lump sum or
periodically for life or some other specified period, or (4) any
franchise subject to registration under the Franchise Investment
Law (Division 5 (commencing with Section 31000)), or exempted
from registration by Section 31100 or 31101. end delete

begin insert

(b) “Security” does not include: (1) any beneficial interest in
any voluntary inter vivos trust which is not created for the purpose
of carrying on any business or solely for the purpose of voting, (2)
any beneficial interest in any testamentary trust, (3) any insurance
or endowment policy or annuity contract under which an insurance
company admitted in this state promises to pay a sum of money
(whether or not based upon the investment performance of a
segregated fund) either in a lump sum or periodically for life or
some other specified period, (4) any franchise subject to
registration under the Franchise Investment Law (Division 5
(commencing with Section 31000)), or exempted from registration
by Section 31100 or 31101, or (5) any right to a bill credit or
interest of a participant in a community renewable energy facility
pursuant to Chapter 7.5 (commencing with Section 2830) of Part
2 of Division 1 of the Public Utilities Code.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 216 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

216.  

(a) “Public utility” includes every common carrier, toll
bridge corporation, pipeline corporation, gas corporation, electrical
corporation, telephone corporation, telegraph corporation, water
corporation, sewer system corporation, and heat corporation, where
the service is performed for, or the commodity is delivered to, the
public or any portion thereof.

(b) Whenever any common carrier, toll bridge corporation,
pipeline corporation, gas corporation, electrical corporation,
telephone corporation, telegraph corporation, water corporation,
sewer system corporation, or heat corporation performs a service
for, or delivers a commodity to, the public or any portion thereof
for which any compensation or payment whatsoever is received,
that common carrier, toll bridge corporation, pipeline corporation,
gas corporation, electrical corporation, telephone corporation,
telegraph corporation, water corporation, sewer system corporation,
or heat corporation, is a public utility subject to the jurisdiction,
control, and regulation of the commission and the provisions of
this part.

(c) When any person or corporation performs any service for,
or delivers any commodity to, any person, private corporation,
municipality, or other political subdivision of the state, that in turn
either directly or indirectly, mediately or immediately, performs
that service for, or delivers that commodity to, the public or any
portion thereof, that person or corporation is a public utility subject
to the jurisdiction, control, and regulation of the commission and
the provisions of this part.

(d) Ownership or operation of a facility that employs
cogeneration technology or produces power from other than a
conventional power source or the ownership or operation of a
facility which employs landfill gas technology does not make a
corporation or person a public utility within the meaning of this
section solely because of the ownership or operation of that facility.

(e) Any corporation or person engaged directly or indirectly in
developing, producing, transmitting, distributing, delivering, or
selling any form of heat derived from geothermal or solar resources
or from cogeneration technology to any privately owned or publicly
owned public utility, or to the public or any portion thereof, is not
a public utility within the meaning of this section solely by reason
of engaging in any of those activities.

(f) The ownership or operation of a facility that sells compressed
natural gas at retail to the public for use only as a motor vehicle
fuel, and the selling of compressed natural gas at retail from that
facility to the public for use only as a motor vehicle fuel, does not
make the corporation or person a public utility within the meaning
of this section solely because of that ownership, operation, or sale.

(g) Ownership or operation of a facility that is an exempt
wholesale generator, as defined in the Public Utility Holding
Company Act of 2005 (42 U.S.C. Sec. 16451(6)), does not make
a corporation or person a public utility within the meaning of this
section, solely due to the ownership or operation of that facility.

(h) The ownership, control, operation, or management of an
electric plant used for direct transactions or participation directly
or indirectly in direct transactions, as permitted by subdivision (b)
of Section 365, sales into a market established and operated by the
Independent System Operator or any other wholesale electricity
market, or the use or sale as permitted under subdivisions (b) to
(d), inclusive, of Section 218, shall not make a corporation or
person a public utility within the meaning of this section solely
because of that ownership, participation, or sale.

(i) The ownership, control, operation, or management of a
facility that supplies electricity to the public only for use to charge
light duty plug-in electric vehicles does not make the corporation
or person a public utility within the meaning of this section solely
because of that ownership, control, operation, or management. For
purposes of this subdivision, “light duty plug-in electric vehicles”
includes light duty battery electric and plug-in hybrid electric
vehicles. This subdivision does not affect the commission’s
authority under Section 454 or 740.2 or any other applicable statute.

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(j) A corporation or person engaged directly or indirectly in
developing, owning, producing, delivering, participating in, or
selling interests in a shared renewable energy facility, pursuant
to Chapter 7.5 (commencing with Section 2830) of Part 2, is not
a public utility within the meaning of this section solely by reason
of engaging in any of those activities.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 218 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

218.  

(a) “Electrical corporation” includes every corporation
or person owning, controlling, operating, or managing any electric
plant for compensation within this state, except where electricity
is generated on or distributed by the producer through private
property solely for its own use or the use of its tenants and not for
sale or transmission to others.

(b) “Electrical corporation” does not include a corporation or
person employing cogeneration technology or producing power
from other than a conventional power source for the generation of
electricity solely for any one or more of the following purposes:

(1) Its own use or the use of its tenants.

(2) The use of or sale to not more than two other corporations
or persons solely for use on the real property on which the
electricity is generated or on real property immediately adjacent
thereto, unless there is an intervening public street constituting the
boundary between the real property on which the electricity is
generated and the immediately adjacent property and one or more
of the following applies:

(A) The real property on which the electricity is generated and
the immediately adjacent real property is not under common
ownership or control, or that common ownership or control was
gained solely for purposes of sale of the electricity so generated
and not for other business purposes.

(B) The useful thermal output of the facility generating the
electricity is not used on the immediately adjacent property for
petroleum production or refining.

(C) The electricity furnished to the immediately adjacent
property is not utilized by a subsidiary or affiliate of the corporation
or person generating the electricity.

(3) Sale or transmission to an electrical corporation or state or
local public agency, but not for sale or transmission to others,
unless the corporation or person is otherwise an electrical
corporation.

(c) “Electrical corporation” does not include a corporation or
person employing landfill gas technology for the generation of
electricity for any one or more of the following purposes:

(1) Its own use or the use of not more than two of its tenants
located on the real property on which the electricity is generated.

(2) The use of or sale to not more than two other corporations
or persons solely for use on the real property on which the
electricity is generated.

(3) Sale or transmission to an electrical corporation or state or
local public agency.

(d) “Electrical corporation” does not include a corporation or
person employing digester gas technology for the generation of
electricity for any one or more of the following purposes:

(1) Its own use or the use of not more than two of its tenants
located on the real property on which the electricity is generated.

(2) The use of or sale to not more than two other corporations
or persons solely for use on the real property on which the
electricity is generated.

(3) Sale or transmission to an electrical corporation or state or
local public agency, if the sale or transmission of the electricity
service to a retail customer is provided through the transmission
system of the existing local publicly owned electric utility or
electrical corporation of that retail customer.

(e) “Electrical corporation” does not include an independent
solar energy producer, as defined in Article 3 (commencing with
Section 2868) of Chapter 9 of Part 2.

(f) The amendments made to this section at the 1987 portion of
the 1987-88 Regular Session of the Legislature do not apply to
any corporation or person employing cogeneration technology or
producing power from other than a conventional power source for
the generation of electricity that physically produced electricity
prior to January 1, 1989, and furnished that electricity to
immediately adjacent real property for use thereon prior to January
1, 1989.

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(g) A corporation or person engaged directly or indirectly in
developing, owning, producing, delivering, participating in, or
selling interests in a shared renewable energy facility, pursuant
to Chapter 7.5 (commencing with Section 2830) of Part 2, is not
an electrical corporation within the meaning of this section solely
by reason of engaging in any of those activities.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 2826.5 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin delete

2826.5.  

(a) As used in this section, the following terms have
the following meanings:

(1) “Benefiting account” means an electricity account, or more
than one account, mutually agreed upon by Pacific Gas and Electric
Company and the City of Davis.

(2) “Bill credit” means credits calculated based upon the
electricity generation component of the rate schedule applicable
to a benefiting account, as applied to the net metered quantities of
electricity.

(3) “PVUSA” means the photovoltaic electricity generation
facility selected by the City of Davis, located at 24662 County
Road, Davis, California, with a rated peak electricity generation
capacity of 600 kilowatts, and as it may be expanded, not to exceed
one megawatt of peak generation capacity.

(4) “Net metered” means the electricity output from the PVUSA.

(5) “Environmental attributes” associated with the PVUSA
include, but are not limited to, the credits, benefits, emissions
reductions, environmental air quality credits, and emissions
reduction credits, offsets, and allowances, however entitled
resulting from the avoidance of the emission of any gas, chemical,
or other substance attributable to the PVUSA.

(b) The City of Davis may elect to designate a benefiting
account, or more than one account, to receive bill credit for the
electricity generated by the PVUSA, if all of the following
conditions are met:

(1) A benefiting account receives service under a time-of-use
rate schedule.

(2) The electricity output of the PVUSA is metered for time of
use to allow allocation of each bill credit to correspond to the
time-of-use period of a benefiting account.

(3) All costs associated with the metering requirements of
paragraphs (1) and (2) are the responsibility of the City of Davis.

(4) All electricity delivered to the electrical grid by the PVUSA
is the property of Pacific Gas and Electric Company.

(5) PVUSA does not sell electricity delivered to the electrical
grid to a third party.

(6) The right, title, and interest in the environmental attributes
associated with the electricity delivered to the electrical grid by
the PVUSA are the property of Nuon Renewable Ventures USA,
LLC.

(c) A benefiting account shall be billed on a monthly basis, as
follows:

(1) For all electricity usage, the rate schedule applicable to the
benefiting account, including any surcharge, exit fee, or other cost
recovery mechanism, as determined by the commission, to
reimburse the Department of Water Resources for purchases of
electricity, pursuant to Division 27 (commencing with Section
80000) of the Water Code.

(2) The rate schedule for the benefiting account shall also
provide credit for the generation component of the time-of-use
rates for the electricity generated by the PVUSA that is delivered
to the electrical grid. The generation component credited to the
benefiting account may not include the surcharge, exit fee, or other
cost recovery mechanism, as determined by the commission, to
reimburse the Department of Water Resources for purchases of
electricity, pursuant to Division 27 (commencing with Section
80000) of the Water Code.

(3) If in any billing cycle, the charge pursuant to paragraph (1)
for electricity usage exceeds the billing credit pursuant to paragraph
(2), the City of Davis shall be charged for the difference.

(4) If in any billing cycle, the billing credit pursuant to paragraph
(2), exceeds the charge for electricity usage pursuant to paragraph
(1), the difference shall be carried forward as a credit to the next
billing cycle.

(5) After the electricity usage charge pursuant to paragraph (1)
and the credit pursuant to paragraph (2) are determined for the last
billing cycle of a calendar year, any remaining credit resulting
from the application of this section shall be reset to zero.

(d) Not more frequently that once per year, and upon providing
Pacific Gas and Electric Company with a minimum of 60 days
notice, the City of Davis may elect to change a benefiting account.
Any credit resulting from the application of this section earned
prior to the change in a benefiting account that has not been used
as of the date of the change in the benefit account, shall be applied,
and may only be applied, to a benefiting account as changed.

(e) Pacific Gas and Electric Company shall file an advice letter
with the Public Utilities Commission, that complies with this
section, not later than 10 days after the effective date of this section,
proposing a rate tariff for a benefiting account. The commission,
within 30 days of the date of filing, shall approve the proposed
tariff, or specify conforming changes to be made by Pacific Gas
and Electric Company to be filed in a new advice letter.

(f) The City of Davis may terminate its election pursuant to
subdivision (b), upon providing Pacific Gas and Electric Company
with a minimum of 60 days notice. Should the City of Davis sell
its interest in the PVUSA, or sell the electricity generated by the
PVUSA, in a manner other than required by this section, upon the
date of either event, and the earliest date if both events occur, no
further bill credit pursuant to paragraph (2) of subdivision (b) may
be earned. Only credit earned prior to that date shall be made to a
benefiting account.

(g) The Legislature finds and declares that credit for a benefiting
account for the electricity output from the PVUSA are in the public
interest in order to value the production of this unique, wholly
renewable resource electricity generation facility located in, and
owned in part by, the City of Davis. Because of the unique
circumstances applicable only to the PVUSA a statute of general
applicability cannot be enacted within the meaning of subdivision
(b) of Section 16 of Article IV of the California Constitution.
Therefore, this special statute is necessary.

end delete

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Chapter 7.5 (commencing with Section 2830) of Part
2 of Division 1 of the end insert begin insert Public Utilities Code end insert begin insert is repealed. end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Chapter 7.5 (commencing with Section 2830) 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 7.5. end insert Shared Renewable Energy Self-Generation
Program

 

begin insert 2830. end insert   

The Legislature finds and declares all of the following:

(a) The creation of renewable energy within California provides
significant financial, health, environmental, and workforce benefits
to the State of California.

(b) The California Solar Initiative has been extremely successful,
resulting in over 140,000 residential and commercial onsite
installations of solar energy systems. However, it cannot reach all
residents and businesses that want to participate and is limited to
solar. The Shared Renewable Energy Self-Generation Program
seeks to build on this success by expanding access to renewable
energy resources to all ratepayers who are currently unable to
access the benefits of onsite generation.

(c) The Governor has proposed the Clean Energy Jobs Plan
calling for the development of 12,000 megawatts of generation
from distributed renewable energy resources of up to 20 megawatts
in size by 2020. There is widespread interest from many large
institutional customers, including schools, colleges, universities,
local governments, businesses, and the military, for development
of renewable generation facilities to serve more than 33 percent
of their energy needs. For these reasons, the Legislature agrees
that the Governor’s Clean Energy Jobs Plan represents a desired
policy direction for the state. It is the intent of the Legislature that
renewable generation that comes online as part of the Shared
Renewable Energy Self-Generation Program is counted toward
an electrical corporation’s efforts to implement the Governor’s
Clean Energy Jobs Plan.

(d) Properly designed, shared renewable energy programs can
provide access and cost savings to underserved communities, such
as low- to moderate-income residents, and residential and
commercial renters, while not shifting costs to nonbeneficiaries.

(e) While municipal utilities already have the authority to create
their own shared renewable energy programs, only an act of the
Legislature can empower the vast majority of California residents
to be able to enjoy the significant benefits of shared renewable
energy systems , while the state benefits from avoided transmission
and distribution upgrades, avoided line loss, and cleaner air and
water.

(f) Public institutions will benefit from the Shared Renewable
Energy Self-Generation Program’s enhanced flexibility to
participate in shared renewable energy facilities. Electricity usage
is one of the most significant cost pressures facing public
institutions at a time when they have been forced to cut essential
programs, increase classroom sizes, and lay off teachers. Schools
may use the savings for restoring funds for salaries, facility
maintenance, and other budgetary needs.

(g) Shared renewable energy self-generation creates jobs,
reduces emissions of greenhouse gases, and promotes energy
independence.

(h) Many large energy users in California have pursued onsite
renewable energy generation, but cannot achieve their goals due
to rooftop or land space limitations, or size limits on net metering.
The enactment of this chapter will create a mechanism whereby
institutional customers such as military installations, universities,
and local governments, as well as commercial customers and
groups of individuals, can efficiently invest in generating electricity
from renewable generation.

(i) Therefore, it is the intent of the legislature that this program
be implemented in such a manner as to create a large, sustainable
market for the purchase of an interest in offsite renewable
generation, while fairly compensating electrical corporations for
the services they provide.

(j) It is the further intent of the Legislature to preserve a
thriving, sustainable agricultural industry, and to ensure that the
development of renewable energy does not remove prime farmland
from productive use without a comprehensive public review
process.

(k) It is further the intent of the Legislature that the commission
minimize the rate impact the Shared Renewable Energy
Self-Generation Program has on nonbeneficiaries, with a goal of
ratepayer indifference. To the extent that the program imposes
incremental increases in rates, the commission shall determine
the appropriate way to allocate costs, which may include equitable
allocation of costs to all customers on a nonbypassable basis.

begin insert 2832. end insert   

As used in this chapter, the following terms have the
following meanings:

(a) “Benefiting account” means one or more electricity accounts
designated to receive a bill credit pursuant to Section 2834 and
mutually agreed upon by the facility provider and an electrical
corporation.

(b) “Bill credit” means an amount of money credited each
month, or in an otherwise applicable billing period, to one or more
benefiting accounts based on the amount of the electrical output
of a shared renewable energy facility that is assigned to the
account pursuant to the methodology described in Section 2834.

(c) “Default load aggregation point price” means a
commission-determined day-ahead price for electricity.

(d) “Energy component” means the generation portion of a
customer’s otherwise applicable tariff and any other portion of
the customer’s charges that the commission determines may be
appropriate to offset without resulting in a net cost shift to
nonbeneficiaries.

(e) “Facility rate” means the per kilowatthour rate assigned to
each facility built under the program, used to calculate the bill
credit pursuant to the method described in paragraphs (1) to (3),
inclusive, of subdivision (b) of Section 2834.

(f) “Interest” means a direct or indirect ownership, lease,
subscription, or financing interest in a shared renewable energy
facility that enables the participant to receive a bill credit for a
retail account with the electrical corporation.

(g) “Local government” means a city, county, city and county,
special district, school district, public water district, public
irrigation district, county office of education, political subdivision,
or other local governmental entity. For the purposes of this
chapter, “water district” has the same meaning as defined in
Section 20200 of the Water Code, and “irrigation district” means
an entity formed pursuant to the Irrigation District Law set forth
in Division 11 (commencing with Section 20500) of the Water
Code.

(h) “Participant” means a retail customer of an electrical
corporation who owns, leases, finances, or subscribes to an interest
in a shared renewable energy facility and who has designated one
or more of its own retail accounts as a benefiting account to which
the interest shall be attributed.

(i) “Participant account” means a retail customer account with
an electrical corporation to which a participant’s interest in a
shared renewable energy facility shall be attributed.

(j) “Provider” means any entity whose purpose is to beneficially
own or operate a shared renewable energy facility for the
participants or owners of that facility, or to market an interest in
the facility.

(k) “Program” means the Shared Renewable Energy
Self-Generation Program established pursuant to this chapter.

(l) “Project” means the cumulative activities to build and make
operational a shared renewable energy facility.

(m) “Renewable energy credit” has the same meaning as defined
in Section 399.12.

(n) “Shared renewable energy facility” means a facility for the
generation of electricity that meets all of the following
requirements:

(1) Has a nameplate generating capacity of no more than 20
megawatts of alternating current.

(2) Is an eligible renewable energy resource pursuant to the
California Renewables Portfolio Standard Program (Article 16
(commencing with Section 399.11) of Chapter 2.3 of Part 1).

(3) Has its electrical output measured by a production meter
owned by the electrical corporation, that meets the tariff
requirements of the electrical corporation and the Independent
System Operator, and that independently measures the electricity
delivered to the grid by the facility.

(4) Is located within the service territory of a California
electrical corporation.

(5) Has been interconnected with the electrical grid in
compliance with the tariffs of the applicable interconnection
authority.

(6) Is either the PVUSA facility, meaning the photovoltaic
electricity generation facility selected by the City of Davis and
located at 24662 County Road, Davis, California, or is a newly
constructed renewable facility constructed pursuant to this chapter,
beginning commercial operation on or after June 1, 2014.

(7) The provider has, where applicable, complied with all
program rules and written notice procedures that may be required
by the commission.

begin insert 2834. end insert   

(a) (1) A retail customer of an electrical corporation
having 100,000 or more service connections within the state may
acquire an interest in a shared renewable energy facility for the
purpose of becoming a participant and shall designate one or more
benefiting accounts to which the interest shall be attributed.

(2) To be eligible to be designated as a benefiting account, the
account shall be for service to premises located within the
geographical boundaries of the service territory of the electrical
corporation containing the shared renewable energy facility.

(3) The participating customer’s bill credit may be used to offset
all or a portion of the energy component of that customer’s
electrical service, as provided in this chapter and in accordance
with those rules that the commission may adopt.

(4) A participant shall not acquire an interest in a shared
renewable energy facility that represents more than two megawatts
of generating capacity or the equivalent amount, as denominated
in kilowatt hours of energy. This limitation does not apply to a
federal, state, or local government, school, school district, county
office of education, the California Community Colleges, the
California State University, or the University of California.

(b) The commission shall establish a facility rate for all shared
renewable energy facilities, as follows:

(1) The commission shall undertake a comprehensive analysis
of the costs and benefits associated with shared renewable energy
generation to determine a facility rate for all facilities participating
in the program that shall be based on the full value that the shared
renewable energy generation provides. No later than December
31, 2014, the commission shall adopt a methodology to calculate
a facility rate for shared renewable energy.

(2) In order to ensure that the program becomes effective on
January 1, 2014, an interim facility rate shall be set at the
cumulative weighted average time-of-delivery adjusted cost of
electricity established in the commission’s Renewables Portfolio
Standard Quarterly Reports published for 2012 and 2013 in
compliance with Chapter 600 of the statutes of 2011 (Senate Bill
No. 836 of the 2011-12 Regular Session) for eligible renewable
energy resources of comparable size to, and utilizing the same
generating technology as, the shared renewable energy facility,
and that are under contract with the electrical corporation.

(3) The facility rate shall be set annually as a price per
kilowatthour of electricity and shall be applied at the time the
provider receives an award of capacity. Once established, a facility
rate shall be applicable to that facility for the operational life of
the facility, except as allowed in paragraph (1) of subdivision (c).

(4) The commission shall publish tariffs applicable to all
participants per electrical corporation, as necessary, no later than
90 days following the addition of this section.

(5) Any subsequent facility or a subsequent expansion of a
facility placed in service on or after the initial award of rated
generating capacity pursuant to paragraph (3) that results in an
increase in the facility’s capacity to produce electricity shall be
subject to the facility rate in effect on the date the provider applied
for an award of rated generating capacity for the subsequent
facility or increase in the facility’s capacity.

(6) The electrical corporation shall assign a monthly bill credit
equal to the facility rate for each kilowatt hour of energy received
to the benefiting account, as directed by the provider. The bill
credit shall be applied to the energy component of the benefiting
account.

(c) (1) The commission may revise the methodology for
calculating facility rates at any time that it concludes that the
existing mechanism does not provide program participants with
the fair value of electricity and other benefits produced by the
shared renewable energy facility or overvalues the benefits to
nonparticipating customers of the electrical corporation for the
electricity generated by a shared renewable energy facility. Any
revision to the methodology for calculating the facility rate shall
apply to all new program capacity and shall also apply to existing
program capacity provided the change results in an increase to
the facility rate.

(2) Any renewable energy credits associated with an interest
shall be retired by either the provider or electrical corporation,
as they may agree, on behalf of the participant or transferred to
the Western Renewable Energy Generation Information System
account of that participant, for the purpose of demonstrating the
purchase of renewable energy. Those renewable energy credits
shall not be further sold, transferred, or otherwise monetized by
a party for any purpose. Renewable energy credits associated with
electricity paid for by the electrical corporation shall be counted
toward meeting that electrical corporation’s renewables portfolio
standard. For purposes of this subdivision, “renewable energy
credit” and “renewables portfolio standard” have the same
meanings as defined in Section 399.12.

(3) For energy that is unallocated to a benefiting account during
the previous billing period, the recipient electrical corporation
shall pay the provider the current default load aggregation point
price plus the renewable energy credit value and receive any
renewable energy credits associated with that energy.

(d) (1) A pilot program of 500 megawatts of alternating current
rated nameplate generating capacity of shared renewable energy
facilities shall be made available during the 18-month period
beginning January 1, 2014, and ending July, 1 2015. Each
electrical corporation’s proportionate share of the program’s total
capacity shall be calculated based on the ratio of the electrical
corporation’s peak demand compared to the total statewide peak
demand.

(2) On or before March 1, 2014, each electrical corporation
shall submit a proposal to the commission for how to allocate the
initial available capacity. Within 60 days of receipt of these
proposals, the commission shall adopt rules for the allocation of
the initial available capacity amongst the electrical corporations
and to establish a transparent process for evaluating and ranking
applications for shared renewable energy facility projects and
awarding the initial capacity to those projects.

(3) Of the initial pilot program capacity:

(A) Twenty percent shall be reserved for projects of a size no
greater than one megawatt of alternating current, constructed in
areas previously identified by the California Environmental
Protection Agency as the most impacted and disadvantaged
communities for opportunities related to this chapter. These
communities shall be identified as census tracts that are identified
within the top 20 percent of results from the best available
cumulative impact screening methodology by considering the
following categories:

(i) Areas disproportionately affected by environmental pollution
and other hazards that can lead to negative public health effects,
exposure, or environmental degradation.

(ii) Areas with socioeconomic vulnerability.

(B) Twenty percent shall be reserved for initial subscription by
residential customers.

(4) No shared renewable energy facilities under this program
may be sited on lands that have held, within the previous five years,
a land use designation of prime farmland as defined by the
Department of Conservation’s Farmland Mapping and Monitoring
Program pursuant to Section 65570 of the Government Code,
except when the designation has been reclassified to one congruent
to the use of the site for the purposes of this chapter by either the
Farmland Mapping and Monitoring Program, or via a public
process conducted by the relevant local land use management
planning authority.

(e) Each electrical corporation shall make awards allocating
rated generating capacity pursuant to the program in the following
manner:

(1) (A) Each electrical corporation shall, by March 1, 2014,
submit a proposed standard contract with providers for commission
approval. The commission shall utilize the Tier 2 advice letter
procedure for approval of a standard contract submitted by an
electrical corporation.

(B) The proposed standard contract shall be based on the
electrical corporation’s standard contract used for the
commission’s most recently approved renewable auction
mechanism program. Each electrical corporation shall modify the
contract to eliminate language irrelevant to this program,
including, but not limited to, compensation and monthly payments,
operating and development security, and time-of-day periods.

(2) A provider wishing to build a shared renewable energy
facility shall remit a nonrefundable administrative fee of one dollar
and fifty cents ($1.50) per kilowatt of rated generating capacity
to the electrical corporation with its application for an allocation
of capacity. At any time, the commission shall have the authority
to modify the rated generating capacity allocation mechanism,
including, but not limited to, creating project ranking criteria,
setting deposit requirements, and creating an award allocation
methodology for prospective projects.

(3) A provider shall meet the following benchmarks and
timelines for construction and operation of a shared renewable
energy facility. Failure to do so shall result in the provider
forfeiting the rated generating capacity awarded to it.

(A) The provider shall issue an unrestricted notice to proceed
with construction of the shared renewable energy facility within
180 days of the provider receiving an award allocating rated
generating capacity from the electrical corporation.

(B) The shared renewable energy facility shall achieve
commercial operation within 24 months of receiving an award
allocating rated generating capacity pursuant to this subdivision.

(C) A provider shall receive an extension because of
interconnection delays that are outside the provider’s control, for
a maximum extension of six months.

(D) A provider may receive a six-month extension for
noninterconnection factors outside the control of the provider.

(4) The electrical corporation shall ensure that no single entity
or its affiliates or subsidiaries is awarded more than 20 percent
of any single calendar year’s total cumulative rated generating
capacity made available pursuant to this program.

(5) The commission shall maintain a public database of facility
rates for shared renewable energy facilities that have achieved
commercial operation.

(f) (1) Once the initial 500 megawatts of cumulative rated
generating capacity has been awarded for shared renewable energy
facility projects, the commission shall evaluate the functioning of
the program.

(2) By July 1, 2015, the commission shall conclude an evaluation
of the program to date, to determine if the goals of the program
are being met, including, but not limited to, the goals of increasing
access to renewable power and ensuring nonbeneficiary ratepayer
indifference.

(3) Unless the commission determines that the program goals
are not being met per the goals and timetable identified in
paragraph (1) of subdivision (d), the commission shall authorize
additional capacity to be made available under this program in
keeping with the stated legislative intent, and determine the
capacity allocation and manner of participation by residential
customers and the capacity allocation for developing projects in
areas specified in subparagraphs (A) and (B) of paragraph (3) of
subdivision (d).

(4) If the commission determines that one or more of the goals
are not being met, the commission shall revise the program prior
to authorizing additional capacity. Revisions may include
increasing customer disclosure information or other safeguards
to ensure customer protection, revising capacity set-asides for
customer classes or project sizes to increase customer access to
the program, alterations in the bill credit mechanism in paragraph
(1) of subdivision (c) to ensure shared renewable energy facilities
are financially viable through this program while ensuring that
all ratepayers are paying for the benefits they receive from this
program, or other revisions the commission deems necessary to
ensure the program goals can be met. After the commission has
revised the program, the commission may authorize additional
capacity to be released provided in accordance with paragraph
(2) of subdivision (d).

(5) Following completion of the pilot program, the commission
may evaluate the program at any time, either on its own motion
or upon motion by an interested party, and may modify or adopt
any rules it determines to be necessary or convenient to ensure
that program goals can be met.

(6) An electrical corporation shall comply with the requirements
applicable to protection of the right to commercial free speech
described in Commission Decision 10-05-050 as applied to the
development, sale of subscriptions, and operation of shared
renewable energy facilities. Shared renewable energy facilities
may file a complaint with the commission for violation of this
paragraph.

(7) If requested by a city, county, or city and county, an
electrical corporation shall annually provide the city, county, or
city and county with the annual total generation of each shared
renewable energy facility in that local jurisdiction and the annual
aggregated total generation, by fuel type, allocated to benefiting
accounts in that local jurisdiction from all shared renewable
energy facilities, regardless of their location. The benefiting
account data shall be aggregated in a manner determined by the
commission to protect customer privacy and to provide a city,
county, or city and county with the information necessary to
calculate greenhouse gas emissions from energy consumption
within its jurisdiction supplied by shared renewable energy
facilities. The commission may develop alternative methods to
enable the sharing of annual total generation information.

(g) (1) The tariff applicable to a participant shall remain the
same, with respect to rate structure, all retail rate components,
and any monthly charges, to the charges that the participant would
be assigned if the participant did not receive a bill credit.
Participants shall not be assessed standby charges on the shared
renewable energy facility or the kilowatthour generation of a
shared renewable energy facility.

(2) Prior to the sale or resale of an interest in a shared
renewable energy facility, the provider or the participant, or both,
shall provide a disclosure to the potential participant that, at a
minimum, includes all of the following:

(A) A good faith estimate of the annual kilowatthours to be
delivered by the shared renewable energy facility based on the
size of the interest.

(B) A plain language explanation of the terms under which the
bill credits will be calculated.

(C) A plain language explanation of the contract provisions
regulating the disposition or transfer of the interest.

(D) A plain language explanation of the costs and benefits to
the potential participant based on its current usage and applicable
tariff, for the term of the proposed contract.

(3) Not more frequently than once per month, and upon
providing the electrical corporation with a minimum of 30 days’
notice, the participant organization may change, add, or remove
a benefiting account. If the owner of a benefiting account transfers
service to a new address or benefiting account, the electrical
corporation shall transfer any credit remaining from the previous
account to the new account.

(4) A provider shall be responsible for providing to the electrical
corporation, on a monthly basis, a statement of the kilowatthours
allocated to each participant to be used to determine the bill credit
to each benefiting account. If there has been no change in the
allocations from the previous submission, the provider is not
required to submit a new statement. An electrical corporation may
rely on the statement of kilowatthours allocated to each participant,
as provided by the provider, in implementing the requirements of
this chapter.

(5) The provider shall provide real-time meter data to the
electrical corporation and shall make the data available to a
participant upon request. A provider shall be responsible for all
costs of metering and shall retain production data for a period of
36 months.

(6) A provider shall provide to the electrical corporation
information on the identity of the benefiting accounts that will
receive a bill credit pursuant to this section not less than 30 days
prior to the billing cycle for which the participant’s account will
receive a bill credit.

(7) A provider shall provide not less than 60 days’ notice to the
electrical corporation prior to the date the shared renewable
energy facility becomes operational and shall execute all necessary
interconnection agreements, participation, and surplus sale
agreements with the electrical corporation and the Independent
System Operator on a schedule required by those entities.

(8) Unless the electrical corporation will be registering
renewable energy credits on behalf of the participant, the provider
shall establish an account and register the shared renewable
energy facility with the Western Renewable Energy Generation
Information System or its successor.

(9) The provider’s interconnection process and cost allocation
for facilities built under this section shall be determined by
applicable rules for interconnection established by the commission
and the Independent System Operator.

(10) An electrical corporation shall ensure that requests for
establishment of bill credits and changes to benefiting accounts
are processed in a time period not to exceed 30 days from the date
it receives the request.

(11) An electrical corporation shall cooperate fully with shared
renewable energy facilities to implement this chapter.

(12) The commission shall not regulate the prices paid by the
participant for an interest in a shared renewable energy facility,
but may enforce the required disclosures, and may establish rules
applicable to providers to ensure consumer protection. Any
interested person or corporation may file a complaint with the
commission contending that a provider or electrical corporation
is not complying with any requirement of this chapter and seek an
order of the commission to enforce the requirements of this chapter
and to take whatever steps are necessary to ensure consumer
protection and compliance with the requirements of this chapter.

(h) (1) The electrical corporation may petition the commission
to incorporate in its bill those charges by the provider to
participants, provided that the electrical corporation recovers all
incremental costs of providing that service and provided that the
provider elects to use this service.

(2) Unless the electrical corporation elects to provide the service
of incorporating in its bill those charges by the provider to the
participant pursuant to paragraph (3), the following process shall
be used when billing and crediting a benefiting account:

(A) An electrical corporation shall bill a benefiting account for
all electricity usage, and for each applicable bill component,
including, but not limited to, transmission and distribution charges,
at the rate schedule applicable to the benefiting account, including
any cost-responsibility surcharge or other cost recovery
mechanism, as determined by the commission, to reimburse the
Department of Water Resources for purchases of electricity
pursuant to Division 27 (commencing with Section 80000) of the
Water Code. Participants shall not be subject to any departing
load charge.

(B) An electrical corporation shall subtract the bill credit
applicable to the benefiting account monthly. The electrical
corporation shall ensure that the participant receives the full bill
credit to which it is entitled. The information and line items on a
participant’s bill statement will be unchanged, except one or more
entries detailing the bill credit that shall be added to a participant’s
bill.

(C) If, at the end of each billing cycle, the total otherwise
applicable energy component of the bill exceeds the bill credit,
the benefiting account shall be billed for the difference.

(D) If, at the end of a billing cycle, the bill credit exceeds the
energy component of the amount billed to the account, the
difference shall be carried forward as a dollar credit to the next
billing cycle. Any earned credit that exceeds the energy component
of the bill shall roll over to the subsequent billing period and shall
continue to roll over until used or until the annual anniversary
date of the participant’s initial bill credit, whichever occurs first.
On the annual anniversary date of the participant’s initial bill
credit, any remaining bill credit earned during the previous year
and that remains after the application of bill credits to the energy
component of a participant’s bills shall cease to roll over and will
be subject to a default load aggregation point price true-up. The
default load aggregation point price true-up shall be calculated
by converting the remaining unused bill credits to kilowatthours,
by dividing the unused bill credits by the monetary value of a bill
credit, and then multiplying the kilowatthours by the default load
aggregation point price. The amount calculated doing the default
load aggregation point price true-up is owed by the electrical
corporation to the participant. The commission shall determine
whether the default load aggregation point price true-up is to be
paid to participants or credited to future billings and, if so, the
manner of crediting.

(3) If the electrical corporation elects to incorporate in its bill
those charges by the provider to the participant, the following
process shall be used for the bundled electric service customers
of the electrical corporation:

(A) The provider shall convey ownership of the electricity
generated by the shared renewable energy facility that passes
through the meter and is delivered to the transmission or
distribution grid (delivered electricity) to the electrical corporation
under terms and conditions determined between the provider and
the electrical corporation, pursuant to paragraph (1) of subdivision
(e).

(B) Unsubscribed delivered electricity shall be sold to the
electrical corporation at the default load aggregation point price
plus the renewable energy credit value. The electrical corporation
shall receive credit under the California Renewable Portfolio
Standard Program (Article 16 (commencing with Section 399.11)
of Chapter 2.3 of Part 1) for all delivered electricity purchased
pursuant to this subparagraph, without the need for further
qualifying action.

(C) The electrical corporation shall charge the participant for
service under each benefiting account at the electrical
corporation’s otherwise applicable tariff.

(D) The electrical corporation shall provide the participant
with a bill credit based on the allocated share of delivered
electricity and shall collect revenue from the participant
commensurate with the participant’s contract with the provider.

(E) The electrical corporation, within 60 days, shall remit to
the participant organization the revenue collected from participants
through billings pursuant to subparagraph (D).

(4) Nothing in paragraph (3) requires a particular bill format
or the inclusion of any specific separate billing line items.

(5) The commission shall, by January 1, 2015, determine
whether customers participating in direct transactions may receive
bill credits equivalent to what would be provided to bundled
electric service customers of a participating electrical corporation
pursuant to this chapter, and, if so, shall implement rules and
procedures for enabling those transactions. These particular
transactions may include those with an electric service provider
that does not provide distribution services, customers receiving
electric service through a shared choice aggregation program,
and customers of a local publicly owned utility that receive
distribution service from an electrical corporation having 100,000
or more service connections in California.

(i) (1) To ensure the maximum systemic benefit from shared
renewable energy facilities under this chapter, electrical
corporations shall provide to the commission, prior to the release
of capacity, maps indicating locations in their service territory
where the addition of capacity would reduce line loss, lower
transmission capacity constraints, and defer or avoid transmission
and distribution network upgrades and construction. The
commission may adopt guidance in determining criteria for the
awarding of capacity in a manner as to reflect these benefits.

(2) Before December 31, 2015, the commission shall complete
an evaluation of whether the program causes any incremental rate
impacts. If the commission finds rate impacts, it will determine
whether and how to allocate these costs equitably to all program
participants, or instead recover on a fully nonbypassable basis
from all customers receiving distribution service from an electrical
corporation, including ratepayers with rates that are otherwise
subject to rate increase limitations pursuant to Section 739.9, but
excluding customers in the California Alternate Rates for Energy
(CARE) or family electric rate assistance (FERA) programs.

(3) On or before February 1, 2016, the commission shall require
each electrical corporation to file with the commission, for its
approval, any revisions to its tariffs, rates, and rate design as are
necessary to ensure an equitable allocation to all customers,
consistent with the commission’s evaluation.

(4) The commission shall ensure full and timely recovery of all
reasonable costs incurred by an electrical corporation to
implement the program, including reasonable expenses for changes
to its billing system and handling of collections, and shall
determine the appropriate method of allocating those costs. The
commission shall approve a memorandum account to track billing
system and implementation costs, as well as revenue from provider
project applications, and may not direct an electrical corporation
to conduct any billing system work prior to approval of the
memorandum account.

(5) In calculating its procurement requirements to meet the
requirements of the California Renewables Portfolio Standard
Program (Article 16 (commencing with Section 399.11) of Chapter
2.3 of Part 1), an electrical corporation may exclude from total
retail sales the kilowatthours generated by a shared renewable
energy facility commencing with the point in time at which the
facility achieves commercial operation.

(6) The local and system resource adequacy value attributable
to a shared renewable energy facility, as determined by the
commission pursuant to Section 380, shall be assigned to the
electrical corporation to which the facility is interconnected.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert begin insert

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.

end insert

begin delete

SECTION 1.  

The Legislature finds and declares as follows:

(a) The creation of renewable energy within California provides
significant financial, health, environmental, and workforce benefits
to the state of California.

(b) The California Solar Initiative has been extremely successful,
resulting in over 100,000 residential and commercial onsite
installations of solar energy systems. However, it cannot reach all
residents and businesses that want to participate. It is the intent of
the Legislature to enact legislation that would build on the success
of the California Solar Initiative by dramatically expanding the
market for renewable energy resources to include all ratepayers
who are currently unable to access the benefits of onsite generation.

(c) The Governor has proposed the Clean Energy Jobs Plan
calling for the development of 12,000 megawatts of generation
from distributed eligible renewable energy resources of up to 20
megawatts in size by 2020. There is widespread interest from many
large institutional customers, including schools, colleges,
universities, local governments, businesses, and the military, for
development of distributed generation facilities to serve their
energy needs. For these reasons, the Legislature agrees that the
Governor’s Clean Energy Jobs Plan represents a desired policy
direction for the state. It is the intent of the Legislature that
distributed generation that comes online as part of a shared
renewable energy self-generation program is counted toward an
electrical corporation’s efforts to implement the Governor’s Clean
Energy Jobs Plan.

(d) Properly designed shared renewable energy programs can
provide access and cost savings to communities that have under
participated previously, such as low- and moderate-income
residents and renters, while not shifting costs to nonbeneficiaries.

(e) While municipal utilities already have the authority to create
their own shared renewable energy programs, only an act of the
Legislature can empower the vast majority of California residents
to be able to create the significant systemic benefits of shared
renewable energy systems, including, but not limited to, avoided
transmission and distribution upgrades, avoided line loss, and
cleaner air and water.

(f) Public institutions need the flexibility and opportunity to
participate in shared renewable energy facilities to generate
electricity. Electricity usage is one of the most significant cost
pressures facing public institutions at a time when they have been
forced to cut essential programs, increase classroom sizes, and
send pink slips to teachers throughout the state. Schools may use
the savings for restoring funds for salaries, student achievement,
facility maintenance, and other budgetary needs.

(g) Shared renewable energy self-generation creates jobs,
reduces emissions of greenhouse gases, and promotes energy
independence. Further, shared renewable energy self-generation
will enable schools, colleges, universities, local governments,
businesses, and consumers to save money on their electricity bills,
thereby helping to fund educational programs, spur investments,
and strengthen our communities.

(h) Many large energy users in California have pursued
renewable energy programs of their own, but cannot make their
goals due to seismic or land space limitations, or size limits on net
metering. It is the intent of the Legislature to enact legislation that
will create a mechanism whereby institutional customers, including
military installations, universities, and local governments, as well
as groups of individuals, can efficiently invest in generating
electricity from eligible renewable energy resources.

(i) Therefore, it is the intent of the Legislature to enact
legislation establishing a shared renewable energy self-generation
program that will be implemented in such a manner as to broaden
access to self-generation of renewable energy, while fairly
compensating electrical corporations for the services they provide.

(j) It is the intent of the Legislature to enact legislation that
would require the Public Utilities Commission to carefully consider
regulatory barriers to distributed generation projects already
identified and those not yet identified and quickly address those
barriers in a manner that is conducive to the development of
distributed generation projects consistent with appropriate ratepayer
protections.

(k) It is the intent of the Legislature to enact legislation that
would require the commission to minimize the rate impact of a
shared renewable energy self-generation program on
nonbeneficiaries, with a goal of ratepayer indifference. To the
extent that a program would impose incremental increases in rates,
it is the intent that the commission ensure that the cost increases
are equitably allocated to all customers on a nonbypassable basis
reflecting both the costs and benefits that shared renewable energy
facilities provide to the residents of California.

end delete