Amended in Senate May 8, 2013

Amended in Senate April 1, 2013

Senate Bill No. 43

Introduced by Senator Wolk

(Coauthors: Senators Corbett and Pavley)

(Coauthors: Assembly Members Levine, Skinner, and Williams)

December 11, 2012

An act to amend Section 25019 of the Corporations Code, and to amend Sections 216 and 218 of, begin delete to repeal Section 2826.5 of, and to repeal and add Chapter 7.5 (commencing with Section 2830) of end delete begin insert and to add Chapter 7.6 (commencing with Section 2831) to end insert Part 2 of Division 1 begin delete of end delete begin insert of, end insert the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

SB 43, as amended, Wolk. Shared begin delete renewable energy self-generation program. end delete begin insert Renewable Energy Self-Generation Program. end insert

(1) Under 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.

This bill would begin delete repeal the local government renewable energy self-generation program and end delete 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.

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.

(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.

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.

begin delete

(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 delete begin delete

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.

end delete begin delete

(4)

end delete

begin insert (3) end insert   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.

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

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

Section 25019 of the Corporations Code is
amended to read:

25019.  

(a) “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 begin insert , end insert 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.

(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.

SEC. 2.  

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

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.

(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.

SEC. 3.  

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

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.

(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.

begin delete

SEC. 4.  

Section 2826.5 of the Public Utilities Code is repealed.

end delete

begin delete

SEC. 5.  

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

end delete

begin delete SEC. 6. end delete
begin insert SEC. 4. end insert   

Chapter begin delete 7.5 end delete begin insert 7.6 end insert (commencing with Section begin delete 2830) end delete begin insert 2831) end insert
is added to Part 2 of Division 1 of the Public Utilities Code, to
read:

 

Chapter   begin delete 7.5. end delete begin insert 7.6. end insert Shared Renewable Energy
Self-Generation Program

 

begin delete 2830. end delete
begin insert 2831. 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 begin delete systems , end delete begin insert systems, end insert 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 delete 2832. end delete
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 delete 2834. end delete
begin insert 2833. 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 kilowatthours 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 begin delete time-of-delivery end delete begin insert time of delivery end insert
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 begin delete No. end delete 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 kilowatthour 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.

begin insert

(2) By September 1, 2014, and annually by each September 1
thereafter, the commission shall review the progress toward
meeting the program goals for the most impacted and
disadvantaged communities, and may adjust the facility rate, or
facility rates, and rules for projects located in the most impacted
and disadvantaged communities if it determines that an adjustment
is necessary to achieve the goals and to provide equitable access
to the benefits of the program.

end insert begin delete

(2)

end delete

begin insert (3) end insert  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.

begin delete

(3)

end delete

begin insert (4) end insert  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 begin delete Renewable end delete begin insert Renewables end insert
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 begin insert and end insert , customers receiving
electric service through a shared choice aggregation begin delete 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. end delete begin insert program. end insert

(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) begin insert program end insert or begin insert the end insert 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.

begin delete SEC. 7. end delete
begin insert SEC. 5. end 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.