Amended in Assembly June 15, 2013

Amended in Senate May 28, 2013

Amended in Senate May 24, 2013

Amended in Senate May 15, 2013

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 25100 of the Corporations Code, and to amend Sections 216, 218, and 365.1 of, and to add and repeal Chapter 7.6 (commencing with Section 2831) of Part 2 of Division 1 of, the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

SB 43, as amended, Wolk. Shared Renewable Energy Self-Generation Program.

(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 to receive a bill credit 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 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 to offset all or a portion of the customer’s electricity usage, consistent with specified requirements. The bill would repeal the program on January 1, 2019.

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.

(3)  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 25100 of the Corporations Code is
amended to read:

25100.  

The following securities are exempted from Sections
25110, 25120, and 25130:

(a) Any security (including a revenue obligation) issued or
guaranteed by the United States, any state, any city, county, city
and county, public district, public authority, public corporation,
public entity, or political subdivision of a state or any agency or
corporate or other instrumentality of any one or more of the
foregoing; or any certificate of deposit for any of the foregoing.

(b) Any security issued or guaranteed by Canada, any Canadian
province, any political subdivision or municipality of that province,
or by any other foreign government with which the United States
currently maintains diplomatic relations, if the security is
recognized as a valid obligation by the issuer or guarantor; or any
certificate of deposit for any of the foregoing.

(c) Any security issued or guaranteed by and representing an
interest in or a direct obligation of a national bank or a bank or
trust company incorporated under the laws of this state, and any
security issued by a bank to one or more other banks and
representing an interest in an asset of the issuing bank.

(d) Any security issued or guaranteed by a federal savings
association or federal savings bank or federal land bank or joint
land bank or national farm loan association or by any savings
association, as defined in subdivision (a) of Section 5102 of the
Financial Code, which is subject to the supervision and regulation
of the Commissioner of Financial Institutions of this state.

(e) Any security (other than an interest in all or portions of a
parcel or parcels of real property which are subdivided land or a
subdivision or in a real estate development), the issuance of which
is subject to authorization by the Insurance Commissioner, the
Public Utilities Commission, or the Real Estate Commissioner of
this state.

(f) Any security consisting of any interest in all or portions of
a parcel or parcels of real property which are subdivided lands or
a subdivision or in a real estate development; provided that the
exemption in this subdivision shall not be applicable to: (1) any
investment contract sold or offered for sale with, or as part of, that
interest, or (2) any person engaged in the business of selling,
distributing, or supplying water for irrigation purposes or domestic
use that is not a public utility except that the exemption is
applicable to any security of a mutual water company (other than
an investment contract as described in paragraph (1)) offered or
sold in connection with subdivided lands pursuant to Chapter 2
(commencing with Section 14310) of Part 7 of Division 3 of Title
1.

(g) Any mutual capital certificates or savings accounts, as
defined in the Savings Association Law, issued by a savings
association, as defined by subdivision (a) of Section 5102 of the
Financial Code, and holding a license or certificate of authority
then in force from the Commissioner of Financial Institutions of
this state.

(h) Any security issued or guaranteed by any federal credit
union, or by any credit union organized and supervised, or
regulated, under the Credit Union Law.

(i) Any security issued or guaranteed by any railroad, other
common carrier, public utility, or public utility holding company
which is (1) subject to the jurisdiction of the Interstate Commerce
Commission or its successor or (2) a holding company registered
with the United States Securities and Exchange Commission under
the Public Utility Holding Company Act of 1935 or a subsidiary
of that company within the meaning of that act or (3) regulated in
respect of the issuance or guarantee of the security by a
governmental authority of the United States, of any state, of Canada
or of any Canadian province; and the security is subject to
registration with or authorization of issuance by that authority.

(j) Any security (except evidences of indebtedness, whether
interest bearing or not) of an issuer (1) organized exclusively for
educational, benevolent, fraternal, religious, charitable, social, or
reformatory purposes and not for pecuniary profit, if no part of the
net earnings of the issuer inures to the benefit of any private
shareholder or individual, or (2) organized as a chamber of
commerce or trade or professional association. The fact that
amounts received from memberships or dues or both will or may
be used to construct or otherwise acquire facilities for use by
members of the nonprofit organization does not disqualify the
organization for this exemption. This exemption does not apply
to the securities of any nonprofit organization if any promoter
thereof expects or intends to make a profit directly or indirectly
from any business or activity associated with the organization or
operation of that nonprofit organization or from remuneration
received from that nonprofit organization.

(k) Any agreement, commonly known as a “life income
contract,” of an issuer (1) organized exclusively for educational,
benevolent, fraternal, religious, charitable, social, or reformatory
purposes and not for pecuniary profit and (2) which the
commissioner designates by rule or order, with a donor in
consideration of a donation of property to that issuer and providing
for the payment to the donor or persons designated by him or her
of income or specified periodic payments from the donated
property or other property for the life of the donor or those other
persons.

(l) Any note, draft, bill of exchange, or banker’s acceptance
which is freely transferable and of prime quality, arises out of a
current transaction or the proceeds of which have been or are to
be used for current transactions, and which evidences an obligation
to pay cash within nine months of the date of issuance, exclusive
of days of grace, or any renewal of that paper which is likewise
limited, or any guarantee of that paper or of that renewal, provided
that the paper is not offered to the public in amounts of less than
twenty-five thousand dollars ($25,000) in the aggregate to any one
purchaser. In addition, the commissioner may, by rule or order,
exempt any issuer of any notes, drafts, bills of exchange or banker’s
acceptances from qualification of those securities when the
commissioner finds that the qualification is not necessary or
appropriate in the public interest or for the protection of investors.

(m) Any security issued by any corporation organized and
existing under the provisions of Chapter 1 (commencing with
Section 54001) of Division 20 of the Food and Agricultural Code.

(n) Any beneficial interest in an employees’ pension,
profit-sharing, stock bonus or similar benefit plan which meets the
requirements for qualification under Section 401 of the federal
Internal Revenue Code or any statute amendatory thereof or
supplementary thereto. A determination letter from the Internal
Revenue Service stating that an employees’ pension, profit-sharing,
stock bonus or similar benefit plan meets those requirements shall
be conclusive evidence that the plan is an employees’ pension,
profit-sharing, stock bonus or similar benefit plan within the
meaning of the first sentence of this subdivision until the date the
determination letter is revoked in writing by the Internal Revenue
Service, regardless of whether or not the revocation is retroactive.

(o) Any security listed or approved for listing upon notice of
issuance on a national securities exchange, if the exchange has
been certified by rule or order of the commissioner and any warrant
or right to purchase or subscribe to the security. The exemption
afforded by this subdivision does not apply to securities listed or
approved for listing upon notice of issuance on a national securities
exchange, in a rollup transaction unless the rollup transaction is
an eligible rollup transaction as defined in Section 25014.7.

That certification of any exchange shall be made by the
commissioner upon the written request of the exchange if the
commissioner finds that the exchange, in acting on applications
for listing of common stock, substantially applies the minimum
standards set forth in either subparagraph (A) or (B) of paragraph
(1), and, in considering suspension or removal from listing,
substantially applies each of the criteria set forth in paragraph (2).

(1) Listing standards:

(A) (i) Shareholders’ equity of at least four million dollars
($4,000,000).

(ii) Pretax income of at least seven hundred fifty thousand
dollars ($750,000) in the issuer’s last fiscal year or in two of its
last three fiscal years.

(iii) Minimum public distribution of 500,000 shares (exclusive
of the holdings of officers, directors, controlling shareholders, and
other concentrated or family holdings), together with a minimum
of 800 public holders or minimum public distribution of 1,000,000
shares together with a minimum of 400 public holders. The
exchange may also consider the listing of a company’s securities
if the company has a minimum of 500,000 shares publicly held, a
minimum of 400 shareholders and daily trading volume in the
issue has been approximately 2,000 shares or more for the six
months preceding the date of application. In evaluating the
suitability of an issue for listing under this trading provision, the
exchange shall review the nature and frequency of that activity
and any other factors as it may determine to be relevant in
ascertaining whether the issue is suitable for trading. A security
that trades infrequently shall not be considered for listing under
this paragraph even though average daily volume amounts to 2,000
shares per day or more.

Companies whose securities are concentrated in a limited
geographical area, or whose securities are largely held in block by
institutional investors, normally may not be considered eligible
for listing unless the public distribution appreciably exceeds
500,000 shares.

(iv) Minimum price of three dollars ($3) per share for a
reasonable period of time prior to the filing of a listing application;
provided, however, in certain instances an exchange may favorably
consider listing an issue selling for less than three dollars ($3) per
share after considering all pertinent factors, including market
conditions in general, whether historically the issue has sold above
three dollars ($3) per share, the applicant’s capitalization, and the
number of outstanding and publicly held shares of the issue.

(v) An aggregate market value for publicly held shares of at
least three million dollars ($3,000,000).

(B) (i) Shareholders’ equity of at least four million dollars
($4,000,000).

(ii) Minimum public distribution set forth in clause (iii) of
subparagraph (A) of paragraph (1).

(iii) Operating history of at least three years.

(iv) An aggregate market value for publicly held shares of at
least fifteen million dollars ($15,000,000).

(2) Criteria for consideration of suspension or removal from
listing:

(A) If a company that (i) has shareholders’ equity of less than
one million dollars ($1,000,000) has sustained net losses in each
of its two most recent fiscal years, or (ii) has net tangible assets
of less than three million dollars ($3,000,000) and has sustained
net losses in three of its four most recent fiscal years.

(B) If the number of shares publicly held (excluding the holdings
of officers, directors, controlling shareholders and other
concentrated or family holdings) is less than 150,000.

(C) If the total number of shareholders is less than 400 or if the
number of shareholders of lots of 100 shares or more is less than
300.

(D) If the aggregate market value of shares publicly held is less
than seven hundred fifty thousand dollars ($750,000).

(E) If shares of common stock sell at a price of less than three
dollars ($3) per share for a substantial period of time and the issuer
shall fail to effectuate a reverse stock split of the shares within a
reasonable period of time after being requested by the exchange
to take that action.

A national securities exchange, certified by rule or order of the
commissioner under this subdivision, shall file annual reports when
requested to do so by the commissioner. The annual reports shall
contain, by issuer: the variances granted to an exchange’s listing
standards, including variances from corporate governance and
voting rights’ standards, for any security of that issuer; the reasons
for the variances; a discussion of the review procedure instituted
by the exchange to determine the effect of the variances on
investors and whether the variances should be continued; and any
other information that the commissioner deems relevant. The
purpose of these reports is to assist the commissioner in
determining whether the quantitative and qualitative requirements
of this subdivision are substantially being met by the exchange in
general or with regard to any particular security.

The commissioner after appropriate notice and opportunity for
hearing in accordance with the provisions of the Administrative
Procedure Act (Chapter 5 (commencing with Section 11500) of
Part 1 of Division 3 of Title 2 of the Government Code) may, in
his or her discretion, by rule or order, decertify any exchange
previously certified that ceases substantially to apply the minimum
standards or criteria as set forth in paragraphs (1) and (2).

A rule or order of certification shall conclusively establish that
any security listed or approved for listing upon notice of issuance
on any exchange named in a rule or order of certification, and any
warrant or right to purchase or subscribe to that security, is exempt
under this subdivision until the adoption by the commissioner of
any rule or order decertifying the exchange.

(p) A promissory note secured by a lien on real property, which
is neither one of a series of notes of equal priority secured by
interests in the same real property nor a note in which beneficial
interests are sold to more than one person or entity.

(q) Any unincorporated interindemnity or reciprocal or
interinsurance contract, that qualifies under the provisions of
Section 1280.7 of the Insurance Code, between members of a
cooperative corporation, organized and operating under Part 2
(commencing with Section 12200) of Division 3 of Title 1, and
whose members consist only of physicians and surgeons licensed
in California, which contracts indemnify solely in respect to
medical malpractice claims against the members, and which do
not collect in advance of loss any moneys other than contributions
by each member to a collective reserve trust fund or for necessary
expenses of administration.

(1) Whenever it appears to the commissioner that any person
has engaged or is about to engage in any act or practice constituting
a violation of any provision of Section 1280.7 of the Insurance
Code, the commissioner may, in the commissioner’s discretion,
bring an action in the name of the people of the State of California
in the superior court to enjoin the acts or practices or to enforce
compliance with Section 1280.7 of the Insurance Code. Upon a
proper showing a permanent or preliminary injunction, a restraining
order, or a writ of mandate shall be granted and a receiver or
conservator may be appointed for the defendant or the defendant’s
assets.

(2) The commissioner may, in the commissioner’s discretion,
(A) make public or private investigations within or outside of this
state as the commissioner deems necessary to determine whether
any person has violated or is about to violate any provision of
Section 1280.7 of the Insurance Code or to aid in the enforcement
of Section 1280.7 of the Insurance Code, and (B) publish
information concerning the violation of Section 1280.7 of the
Insurance Code.

(3) For the purpose of any investigation or proceeding under
this section, the commissioner or any officer designated by the
commissioner may administer oaths and affirmations, subpoena
witnesses, compel their attendance, take evidence, and require the
production of any books, papers, correspondence, memoranda,
agreements, or other documents or records which the commissioner
deems relevant or material to the inquiry.

(4) In case of contumacy by, or refusal to obey a subpoena
issued to, any person, the superior court, upon application by the
commissioner, may issue to the person an order requiring the
person to appear before the commissioner, or the officer designated
by the commissioner, to produce documentary evidence, if so
ordered, or to give evidence touching the matter under investigation
or in question. Failure to obey the order of the court may be
punished by the court as a contempt.

(5) No person is excused from attending or testifying or from
producing any document or record before the commissioner or in
obedience to the subpoena of the commissioner or any officer
designated by the commissioner, or in any proceeding instituted
by the commissioner, on the ground that the testimony or evidence
(documentary or otherwise), required of the person may tend to
incriminate the person or subject the person to a penalty or
forfeiture, but no individual may be prosecuted or subjected to any
penalty or forfeiture for or on account of any transaction, matter,
or thing concerning which the person is compelled, after validly
claiming the privilege against self-incrimination, to testify or
produce evidence (documentary or otherwise), except that the
individual testifying is not exempt from prosecution and
punishment for perjury or contempt committed in testifying.

(6) The cost of any review, examination, audit, or investigation
made by the commissioner under Section 1280.7 of the Insurance
Code shall be paid to the commissioner by the person subject to
the review, examination, audit, or investigation, and the
commissioner may maintain an action for the recovery of these
costs in any court of competent jurisdiction. In determining the
cost, the commissioner may use the actual amount of the salary or
other compensation paid to the persons making the review,
examination, audit, or investigation plus the actual amount of
expenses including overhead reasonably incurred in the
performance of the work.

The recoverable cost of each review, examination, audit, or
investigation made by the commissioner under Section 1280.7 of
the Insurance Code shall not exceed twenty-five thousand dollars
($25,000), except that costs exceeding twenty-five thousand dollars
($25,000) shall be recoverable if the costs are necessary to prevent
a violation of any provision of Section 1280.7 of the Insurance
Code.

(r) Any shares or memberships issued by any corporation
organized and existing pursuant to the provisions of Part 2
(commencing with Section 12200) of Division 3 of Title 1,
provided the aggregate investment of any shareholder or member
in shares or memberships sold pursuant to this subdivision does
not exceed three hundred dollars ($300). This exemption does not
apply to the shares or memberships of that corporation if any
promoter thereof expects or intends to make a profit directly or
indirectly from any business or activity associated with the
corporation or the operation of the corporation or from
remuneration, other than reasonable salary, received from the
corporation. This exemption does not apply to nonvoting shares
or memberships of that corporation issued to any person who does
not possess, and who will not acquire in connection with the
issuance of nonvoting shares or memberships, voting power
(Section 12253) in the corporation. This exemption also does not
apply to shares or memberships issued by a nonprofit cooperative
corporation organized to facilitate the creation of an unincorporated
interindemnity arrangement that provides indemnification for
medical malpractice to its physician and surgeon members as set
forth in subdivision (q).

(s) Any security consisting of or representing an interest in a
pool of mortgage loans that meets each of the following
requirements:

(1) The pool consists of whole mortgage loans or participation
interests in those loans, which loans were originated or acquired
in the ordinary course of business by a national bank or federal
savings association or federal savings bank having its principal
office in this state, by a bank incorporated under the laws of this
state or by a savings association as defined in subdivision (a) of
Section 5102 of the Financial Code and which is subject to the
supervision and regulation of the Commissioner of Financial
Institutions, and each of which at the time of transfer to the pool
is an authorized investment for the originating or acquiring
institution.

(2) The pool of mortgage loans is held in trust by a trustee which
is a financial institution specified in paragraph (1) as trustee or
otherwise.

(3) The loans are serviced by a financial institution specified in
paragraph (1).

(4) The security is not offered in amounts of less than
twenty-five thousand dollars ($25,000) in the aggregate to any one
purchaser.

(5) The security is offered pursuant to a registration under the
federal Securities Act of 1933, or pursuant to an exemption under
Regulation A under that act, or in the opinion of counsel for the
issuer, is offered pursuant to an exemption under Section 4(2) of
that act.

(t) (1) Any security issued or guaranteed by and representing
an interest in or a direct obligation of an industrial loan company
incorporated under the laws of the state and authorized by the
Commissioner of Financial Institutions to engage in industrial loan
business.

(2) Any investment certificate in or issued by any industrial
loan company that is organized under the laws of a state of the
United States other than this state, that is insured by the Federal
Deposit Insurance Corporation, and that maintains a branch office
in this state.

(u) (1) Any right to a bill credit or interest of a participant in a
shared renewable energy facility pursuant to Chapter 7.5
(commencing with Section 2830) of Part 2 of Division 1 of the
Public Utilities Code.

(2) This subdivision shall become inoperative on January 1,
2019.

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) (1) 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.

(2) This subdivision shall become inoperative on January 1,
2019.

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) (1) 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.

(2) This subdivision shall become inoperative on January 1,
2019.

SEC. 4.  

Section 365.1 of the Public Utilities Code is amended
to read:

365.1.  

(a) (1) Except as expressly authorized by this section,
and subject to the limitations in subdivisions (b) and (c), the right
of retail end-use customers pursuant to this chapter to acquire
service from other providers is suspended until the Legislature, by
statute, lifts the suspension or otherwise authorizes direct
transactions.

(2) For purposes of this section, “other provider” means any
person, corporation, or other entity that is authorized to provide
electric service within the service territory of an electrical
corporation pursuant to this chapter, and includes an aggregator,
broker, or marketer, as defined in Section 331, and an electric
service provider, as defined in Section 218.3.

(3) “Other provider” does not include a community choice
aggregator, as defined in Section 331.1, and the limitations in this
section do not apply to the sale of electricity by “other providers”
to a community choice aggregator for resale to community choice
aggregation electricity consumers pursuant to Section 366.2.

(4) (A) “Other provider” does not include a “provider” as
defined in subdivision (j) of Section 2832 or any 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, solely by reason of
engaging in any of those activities.

(B) This paragraph shall become inoperative on January 1, 2019.

(b) The commission shall allow individual retail nonresidential
end-use customers to acquire electric service from other providers
in each electrical corporation’s distribution service territory, up to
a maximum allowable total kilowatthours annual limit. The
maximum allowable annual limit shall be established by the
commission for each electrical corporation at the maximum total
kilowatthours supplied by all other providers to distribution
customers of that electrical corporation during any sequential
12-month period between April 1, 1998, and the effective date of
this section. Within six months of the effective date of this section,
or by July 1, 2010, whichever is sooner, the commission shall
adopt and implement a reopening schedule that commences
immediately and will phase in the allowable amount of increased
kilowatthours over a period of not less than three years, and not
more than five years, raising the allowable limit of kilowatthours
supplied by other providers in each electrical corporation’s
distribution service territory from the number of kilowatthours
provided by other providers as of the effective date of this section,
to the maximum allowable annual limit for that electrical
corporation’s distribution service territory. The commission shall
review and, if appropriate, modify its currently effective rules
governing direct transactions, but that review shall not delay the
start of the phase-in schedule.

(c) Once the commission has authorized additional direct
transactions pursuant to subdivision (b), it shall do both of the
following:

(1) Ensure that other providers are subject to the same
requirements that are applicable to the state’s three largest electrical
corporations under any programs or rules adopted by the
commission to implement the resource adequacy provisions of
Section 380, the renewables portfolio standard provisions of Article
16 (commencing with Section 399.11), and the requirements for
the electricity sector adopted by the State Air Resources Board
pursuant to the California Global Warming Solutions Act of 2006
(Division 25.5 (commencing with Section 38500) of the Health
and Safety Code). This requirement applies notwithstanding any
prior decision of the commission to the contrary.

(2) (A) Ensure that, in the event that the commission authorizes,
in the situation of a contract with a third party, or orders, in the
situation of utility-owned generation, an electrical corporation to
obtain generation resources that the commission determines are
needed to meet system or local area reliability needs for the benefit
of all customers in the electrical corporation’s distribution service
territory, the net capacity costs of those generation resources are
allocated on a fully nonbypassable basis consistent with departing
load provisions as determined by the commission, to all of the
following:

(i) Bundled service customers of the electrical corporation.

(ii) Customers that purchase electricity through a direct
transaction with other providers.

(iii) Customers of community choice aggregators.

(B) If the commission authorizes or orders an electrical
corporation to obtain generation resources pursuant to subparagraph
(A), the commission shall ensure that those resources meet a system
or local reliability need in a manner that benefits all customers of
the electrical corporation. The commission shall allocate the costs
of those generation resources to ratepayers in a manner that is fair
and equitable to all customers, whether they receive electric service
from the electrical corporation, a community choice aggregator,
or an electric service provider.

(C) The resource adequacy benefits of generation resources
acquired by an electrical corporation pursuant to subparagraph (A)
shall be allocated to all customers who pay their net capacity costs.
Net capacity costs shall be determined by subtracting the energy
and ancillary services value of the resource from the total costs
paid by the electrical corporation pursuant to a contract with a
third party or the annual revenue requirement for the resource if
the electrical corporation directly owns the resource. An energy
auction shall not be required as a condition for applying this
allocation, but may be allowed as a means to establish the energy
and ancillary services value of the resource for purposes of
determining the net costs of capacity to be recovered from
customers pursuant to this paragraph, and the allocation of the net
capacity costs of contracts with third parties shall be allowed for
the terms of those contracts.

(D) It is the intent of the Legislature, in enacting this paragraph,
to provide additional guidance to the commission with respect to
the implementation of subdivision (g) of Section 380, as well as
to ensure that the customers to whom the net costs and benefits of
capacity are allocated are not required to pay for the cost of
electricity they do not consume.

(d) (1) If the commission approves a centralized resource
adequacy mechanism pursuant to subdivisions (h) and (i) of Section
380, upon the implementation of the centralized resource adequacy
mechanism the requirements of paragraph (2) of subdivision (c)
shall be suspended. If the commission later orders that electrical
corporations cease procuring capacity through a centralized
resource adequacy mechanism, the requirements of paragraph (2)
of subdivision (c) shall again apply.

(2) If the use of a centralized resource adequacy mechanism is
authorized by the commission and has been implemented as set
forth in paragraph (1), the net capacity costs of generation resources
that the commission determines are required to meet urgent system
or urgent local grid reliability needs, and that the commission
authorizes to be procured outside of the Section 380 or Section
454.5 processes, shall be recovered according to the provisions of
paragraph (2) of subdivision (c).

(3) Nothing in this subdivision supplants the resource adequacy
requirements of Section 380 or the resource procurement
procedures established in Section 454.5.

(e) The commission may report to the Legislature on the efficacy
of authorizing individual retail end-use residential customers to
enter into direct transactions, including appropriate consumer
protections.

SEC. 5.  

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

 

Chapter  7.6. Shared Renewable Energy Self-Generation
Program

 

2831.  

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 energy. The Shared Renewable Energy Self-Generation
Program seeks to build on this success by expanding access to
renewable energy resources to all ratepayers that are currently
unable to access the benefits of onsite generation, without shifting
costs to nonparticipants.

(c) The Governor has proposed the Clean Energy Jobs Plan,
calling for the development of 20,000 megawatts of generation
from renewable energy resources 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.

(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, without shifting costs to nonparticipants.

(e) 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.

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

(g) 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.

(h) 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.

(i) It is the further intent of the Legislature to preserve a thriving
natural environment and to ensure that projects developed under
the Shared Renewable Energy Self-Generation Program are subject
to environmental protection best practices afforded under California
law and policies.

2832.  

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 2833 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 2833.

(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
nonparticipants.

begin delete

(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) and (2)
of subdivision (b) of Section 2833.

end delete begin delete

(f)

end delete

begin insert (e) end insert  “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.

begin delete

(g)

end delete

begin insert (f) end insert  “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.

begin delete

(h)

end delete

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

begin delete

(i)

end delete

begin insert (h) end insert  “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.

begin delete

(j)

end delete

begin insert (i) end insert  “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.

begin delete

(k)

end delete

begin insert (j) end insert  “Program” means the Shared Renewable Energy
Self-Generation Program established pursuant to this chapter.

begin delete

(l)

end delete

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

begin delete

(m)

end delete

begin insert (l) end insert  “Renewable energy credit” has the same meaning as defined
in Section 399.12.

begin delete

(n)

end delete

begin insert (m) end insert  “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 energy 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.

2833.  

(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.

begin delete

(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 the value of electricity generated by shared
renewable energy facilities for the purpose of setting a facility rate.
The commission shall determine the valuation methodology after
notice and an opportunity to comment. The commission shall
ensure that the valuation methodology does not result in a net cost
shift to nonparticipants. No later than December 31, 2014, the
commission shall publish facility rates for shared renewable energy
facilities, differentiated by resource type, as appropriate.

(2) 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.

(3) The commission shall publish tariffs applicable to all
participants per electrical corporation, as necessary, no later than
90 days following the publication of the facility rates.

(4) 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 (2) 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.

(5)

end delete

begin insert (b) end insert  The electrical corporation shall assign a monthly bill credit
equal to the begin delete facility end delete begin insert class average retail generation end insert rate for each
kilowatthour of energy received to the benefiting begin delete account, as
directed by the provider end delete begin insert account plus any differences between the
time end insert begin insert -of end insert begin insert -day profile of the renewable resources for which the
participating customer subscribes and the class average
time end insert begin insert -of end insert begin insert -day profile end insert . The bill credit shall be applied to the energy
component of the benefiting account.

begin delete

(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, if this
revision does not result in a cost shift to nonparticipants. Any
revision to the methodology for calculating the facility rate shall
apply to all new program capacity.

(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, if these adjustments do not result
in a cost shift to nonparticipants.

(3)

end delete

begin insert (c) end insert begin insert   end insert begin insert (1) 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

(4)

end delete

begin insert (2) 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 March 1, 2015, and ending July 1, 2016. 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, 2015, 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.

begin delete

(C) (i) The commission, when determining facility rates, may
adjust the rates for those participants receiving a bill credit for the
generation by a shared renewable energy facility described in
subparagraph (A), until the total cumulative nameplate generating
capacity of those facilities reaches 100 megawatts of alternating
current, provided that any cost shift associated with an adjusted
facility rate impacts only other program participants.

(ii) The commission, when determining facility rates, may adjust
the rates for residential customers until the total cumulative
interests of residential customers reaches 100 megawatts of
alternating current rated nameplate generating capacity, provided
that any cost shift associated with an adjusted facility rate impacts
only other program participants.

end delete

(e) The commission shall determine the manner in which the
capacity under the program shall be allocated and the contracting
mechanisms between, and procedures regarding, providers and
electrical corporations.

begin delete

(4)

end delete

begin insert (f) end insert begin insert   end insert begin insert (1) end insert  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.

begin delete

(5)

end delete

begin insert (2) end insert  The commission shall maintain a public database that
includes all of the following:

(A) All projects that have been approved for participation in
the pilot program, their size, and where the projects are connecting
to the transmission or distribution system.

(B) The nameplate generating capacity of those projects located
in environmental justice areas described in subparagraph (A) of
paragraph (3) of subdivision (d).

begin delete

(C) The facility rates for shared renewable energy facilities that
have achieved commercial operation.

end delete begin delete

(D)

end delete

begin insert (C) end insert  The proportion of shared renewable energy facilities
subscribed to by residential customers.

begin delete

(E)

end delete

begin insert (D) end insert  Any other data relative to the program that the commission
considers suitable for disclosure to the public.

begin delete

(f)

end delete

begin insert (g) end insert  (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 January 1, 2016, 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 nonparticipant
ratepayer indifference.

(3) The commission may evaluate the program at any time,
either on its own motion or upon the motion of 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 begin insert provided
that the program modifications and rules do not result in a shifting
of costs to nonparticipating ratepayers. The commission shall
ensure that the charges and credits associated with this program
shall be structured to ensure nonparticipating ratepayer
indifference for the remaining bundled service, direct access, and
community choice aggregation customers and that no costs are
shifted from participating customers to nonparticipating
ratepayers end insert .

(4) 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.

(5) 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.

begin delete

(g)

end delete

begin insert (h) end insert  (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 begin delete credit, except that
the tariff may also reflect the cost and benefit components and
summary used to determine the bill credit assigned to the
participant end delete begin insert credit end insert .

(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) The commission shall determine the manner in which
customer accounts are to be credited for energy provided under
the program, including, but not limited to, how production is
counted and assigned, the entry and exits of accounts from the
program, and the disposition of excess credits received.

(4) A provider 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.

(5) 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.

(6) 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.

(7) 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.

begin delete

(h)

end delete

begin insert (i) end insert  (1) The commission shall determine the manner in which
customers are billed and receive credits under the program. 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) 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 Renewables 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.

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

(4) 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.

(5) The electrical corporation, within 60 days, shall remit to the
participant organization the revenue collected from participants
through billings pursuant to paragraph (4).

(6) Nothing in paragraphs (2), (3), (4), and (5) requires a
particular bill format or the inclusion of any specific separate
billing line items.

(7) 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 and, customers receiving
electric service through a community choice aggregation program.

begin delete

(i)

end delete

begin insert (j) end insert  (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. The
commission shall also ensure that projects being awarded capacity
under the program are subject to protections consistent with those
afforded under the California Renewables Portfolio Standard
Program (Article 16 (commencing with Section 399.11) of Chapter
2.3 of Part 1).

(2)  begin insert (A) end insert begin insert   end insert 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.

begin insert

(B) Participating customers shall pay the administrative costs
of the electrical corporation to implement the shared renewable
self-generation program consistent with other existing similar
voluntary optional rate schedules.

end insert

(3) 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.

(4) 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.

2834.  

This chapter shall remain in effect only until January 1,
2019, and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2019, deletes or extends that date.

SEC. 6.  

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.