Amended in Assembly August 6, 2013

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 BillNo. 43


Introduced by Senator Wolk

(Coauthors: Senators Corbett and Pavley)

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

December 11, 2012


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

LEGISLATIVE COUNSEL’S DIGEST

SB 43, as amended, Wolk. begin insertElectricity: Green Tariff end insertSharedbegin delete Renewable Energy Self-Generationend deletebegin insert Renewablesend insert 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 thebegin insert Green Tariffend insert Sharedbegin delete Renewable Energy Self-Generationend deletebegin insert Renewablesend insert Program. The program wouldbegin delete 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 requirementsend deletebegin insert require a participating utility, defined as being an electrical corporation with 100,000 or more customers in California, to file with the commission an application requesting approval of a green tariff shared renewable program to implement a program enabling ratepayers to participate directly in offsite electrical generation facilities that use eligible renewable energy resources, consistent with certain legislative findings and statements of intent. The bill would require the commission, by July 1, 2014, to issue a decision concerning the participating utility’s application, determining whether to approve or disapprove the application, with or without modifications. The bill would require the commission, after notice and opportunity for public comment, to approve the application if the commission determines that the proposed program is reasonable and consistent with the legislative findings and statements of intent. The bill would require the commission to require that a participating utility’s green tariff shared renewable program be administered in accordance with specified provisionsend insert. The bill would repeal the program on January 1, 2019.

begin delete

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

end delete

(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:

P3    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertChapter 7.6 (commencing with Section 2831) is
2added to Part 2 of Division 1 of the end insert
begin insertPublic Utilities Codeend insertbegin insert, to read:end insert

begin insert

3 

4Chapter  begin insert7.6.end insert Green Tariff Shared Renewables Program
5

 

6

begin insert2831.end insert  

The Legislature finds and declares all of the following:

7(a) Building operational generating facilities that utilize sources
8of renewable energy within California, to supply the state’s demand
9for electricity, provides significant financial, health, environmental,
10and workforce benefits to the State of California.

11(b) The California Solar Initiative will achieve its goals,
12resulting in over 150,000 residential and commercial onsite
13installations of solar energy systems. However, the California
14Solar Initiative cannot reach all residents and businesses that want
15to participate and is limited to only solar energy systems and not
16other eligible renewable energy resources. A green tariff shared
17 renewables program seeks to build on the success of the California
18Solar Initiative by expanding access to all eligible renewable
19energy resources to all ratepayers who are currently unable to
20access the benefits of onsite generation.

21(c) There is widespread interest from many large institutional
22customers, including schools, colleges, universities, local
23governments, businesses, and the military, for the development of
24generation facilities that are eligible renewable energy resources
25to serve more than 33 percent of their energy needs.

26(d) Public institutions will benefit from a green tariff shared
27renewables program’s enhanced flexibility to participate in shared
28generation facilities that are eligible renewable energy resources.

P4    1(e) Building operational generating facilities that are eligible
2renewable energy resources creates jobs, reduces emissions of
3greenhouse gases, and promotes energy independence.

4(f) Many large energy users in California have pursued onsite
5electrical generation from eligible renewable energy resources,
6but cannot achieve their goals due to rooftop or land space
7limitations, or size limits on net energy metering. The enactment
8of this chapter will create a mechanism whereby institutional
9customers, such as military installations, universities, and local
10governments, as well as commercial customers and groups of
11individuals, can meet their needs with electrical generation from
12eligible renewable energy resources.

13(g) It is the intent of the Legislature that a green tariff shared
14renewables program be implemented in such a manner that
15facilitates a large, sustainable market for offsite electrical
16generation from facilities that are eligible renewable energy
17 resources, while fairly compensating electrical corporations for
18the services they provide, without affecting nonparticipating
19ratepayers.

20(h) It is the further intent of the Legislature that a green tariff
21shared renewables program be implemented in a manner that
22ensures nonparticipating ratepayer indifference for the remaining
23bundled service, direct access, and community choice aggregation
24customers.

25

begin insert2831.5.end insert  

(a) This chapter shall be known, and may be cited, as
26the Green Tariff Shared Renewables Program.

27(b) For purposes of this chapter, the following terms have the
28following meanings:

29(1) “Eligible renewable energy resource,” “renewable energy
30credit,” and “renewables portfolio standard” have the same
31meaning as those terms have for the California Renewables
32Portfolio Standard Program (Article 16 (commencing with Section
33399.11) of Chapter 2.3 of Part 1).

34(2) “Participating utility” means an electrical corporation with
35100,000 or more customer accounts in California.

36

begin insert2832.end insert  

(a) On or before March 1, 2014, a participating utility
37shall file with the commission an application requesting approval
38of a green tariff shared renewables program to implement a
39program that the utility determines is consistent with the legislative
40findings and statements of intent of Section 2831. Nothing in this
P5    1chapter limits an electrical corporation with less than 100,000
2customer accounts in California from filing an application with
3the commission to administer a green tariff shared renewables
4program that is consistent with the legislative findings and
5statements of intent of Section 2831.

6(b) On or before July 1, 2014, the commission shall issue a
7decision on the participating utility’s application for a green tariff
8shared renewables program, determining whether to approve or
9disapprove it, with or without modifications.

10(c) After notice and an opportunity for public comment, the
11commission shall approve an application by a participating utility
12for a green tariff shared renewables program if the commission
13determines that the program is reasonable and consistent with the
14legislative findings and statements of intent of Section 2831.

15(d) The requirements of this chapter shall not apply to an
16electrical corporation that, prior to May 1, 2013, filed an
17application with the commission to have a green tariff shared
18renewables program, or an equivalent program of whatever name,
19provided the commission approves the application with a
20determination that the program does not shift costs to
21nonparticipating customers and the application is consistent with
22this chapter. If the commission has approved a settlement
23agreement relative to parties contesting an application filed prior
24to May 1, 2013, the requirements of this section shall not apply if
25the commission, within a reasonable period of time, requires
26revisions to the previously approved settlement agreement that
27requires the program to be consistent with this chapter.

28

begin insert2833.end insert  

(a) The commission shall require a green tariff shared
29renewables program to be administered by a participating utility
30in accordance with this section.

31(b) Generating facilities participating in a participating utility’s
32green tariff shared renewables program shall be eligible renewable
33energy resources with a nameplate rated generating capacity not
34exceeding 20 megawatts, except for those generating facilities
35reserved for location in areas identified by the California
36Environmental Protection Agency as the most impacted and
37disadvantaged communities pursuant to paragraph (1) of
38subdivision (d), which shall not exceed one megawatt nameplate
39rated generating capacity.

P6    1(c) A participating utility shall use existing
2commission-approved tools and mechanisms to procure additional
3eligible renewable energy resources for the green tariff shared
4renewables program from electrical generation facilities that are
5in addition to those required by the California Renewables
6Portfolio Standard Program (Article 16 (commencing with Section
7399.11) of Chapter 2.3 of Part 1). For purposes of this subdivision,
8“existing commission-approved tools and mechanisms” means
9those procurement methods approved by the commission on or
10before December 31, 2013, for an electrical corporation to procure
11eligible renewable energy resources for purposes of meeting the
12procurement requirements of the California Renewables Portfolio
13Standard Program (Article 16 (commencing with Section 399.11)
14of Chapter 2.3 of Part 1).

15(d) A participating utility shall permit customers within the
16service territory of the utility to purchase electricity pursuant to
17 the tariff approved by the commission to implement the utility’s
18green tariff shared renewables program, until the utility meets its
19proportionate share of a statewide limitation of 600 megawatts of
20customer participation, measured by nameplate rated generating
21capacity. The proportionate share shall be calculated based on
22the ratio of each participating utility’s retail sales to total retail
23sales of electricity by all participating utilities. The commission
24may place other restrictions on purchases under a green tariff
25shared renewables program, including restricting participation
26to a certain level of capacity each year. The following restrictions
27shall apply to the statewide 600 megawatt limitation:

28(1) (A) One hundred megawatts shall be reserved for facilities
29that are no larger than one megawatt nameplate rated generating
30capacity and that are located in areas previously identified by the
31California Environmental Protection Agency as the most impacted
32and disadvantaged communities. These communities shall be
33identified by census tract, and shall be determined to be the most
34impacted 20 percent based on results from the best available
35cumulative impact screening methodology designed to identify
36each of the following:

37(i) Areas disproportionately affected by environmental pollution
38and other hazards that can lead to negative public health effects,
39exposure, or environmental degradation.

40(ii) Areas with socioeconomic vulnerability.

P7    1(B) Of the 100 megawatts reserved for eligible renewable energy
2resources that are located in areas previously identified by the
3California Environmental Protection Agency as the most impacted
4and disadvantaged communities, 20 percent shall be allocated to
5residential customers.

6(C) For purposes of this paragraph, “previously identified”
7means identified prior to commencing construction of the facility.

8(2) In addition to any residential allocation pursuant to
9subparagraph (B) of paragraph (1), not less than 100 megawatts
10shall be reserved for participation by residential class customers.

11(3) Twenty megawatts shall be reserved for the City of Davis.

12(e) To the extent possible, a participating utility shall seek to
13procure eligible renewable energy resources that are located in
14reasonable proximity to enrolled participants.

15(f) A participating utility’s green tariff shared renewables
16program shall support diverse procurement and the goals of
17commission General Order 156.

18(g) A participating utility’s green tariff shared renewables
19program shall not allow a customer to subscribe to more than 100
20percent of the customer’s electricity demand.

21(h) Except as authorized by this subdivision, a participating
22utility’s green tariff shared renewables program shall not allow
23a customer to subscribe to more than two megawatts of nameplate
24generating capacity. This limitation does not apply to a federal,
25state, or local government, school or school district, county office
26of education, the California Community Colleges, the California
27State University, or the University of California.

28(i) A participating utility’s green tariff shared renewables
29program shall not allow any single entity or its affiliates or
30subsidiaries to subscribe to more than 20 percent of any single
31calendar year’s total cumulative rated generating capacity.

32(j) To the extent possible, a participating utility shall actively
33market the utility’s green tariff shared renewables program to
34low-income and minority communities and customers.

35(k) Participating customers shall receive bill credits for the
36generation of a participating eligible renewable energy resource
37using the class average retail generation rate as established in the
38participating utility’s approved tariff for the class to which the
39participating customer belongs, plus a renewables adjustment
40value representing the difference between the time-of-delivery
P8    1profile of the eligible renewable energy resource used to serve the
2participating customer and the class average time-of-delivery
3profile and the resource adequacy value, if any, of the resource
4contained in the utility’s green tariff shared renewables program.
5The renewables adjustment value applicable to a time-of-delivery
6profile of an eligible renewable energy resource shall be
7determined according to rules adopted by the commission. For
8these purposes, “time-of-delivery profile” refers to the daily
9generating pattern of a participating eligible renewable energy
10resource over time, the value of which is determined by comparing
11the generating pattern of that participating eligible renewable
12energy resource to the demand for electricity over time and other
13generating resources available to serve that demand.

14(l) Participating customers shall pay a renewable generation
15rate established by the commission, the administrative costs of the
16participating utility, and any other charges the commission
17determines are just and reasonable to fully cover the cost of
18procuring a green tariff shared renewables program’s resources
19to serve a participating customer’s needs.

20(m) A participating customer’s rates shall be debited or credited
21with any other commission-approved costs or values applicable
22to the eligible renewable energy resources contained in a
23participating utility’s green tariff shared renewables program’s
24portfolio. These additional costs or values shall be applied to new
25customers when they initially subscribe after the cost or value has
26been approved by the commission.

27(n) Participating customers shall pay all otherwise applicable
28charges without modification.

29(o) A participating utility shall provide support for enhanced
30community renewables programs to facilitate development of
31eligible renewable energy resource projects located close to the
32source of demand.

33(p) The commission shall ensure that charges and credits
34associated with a participating utility’s green tariff shared
35renewables program are set in a manner that ensures
36nonparticipant ratepayer indifference for the remaining bundled
37service, direct access, and community choice aggregation
38customers and ensures that no costs are shifted from participating
39customers to nonparticipating ratepayers.

P9    1(q) A participating utility shall track and account for all
2revenues and costs to ensure that the utility recovers the actual
3costs of the utility’s green tariff shared renewables program and
4that all costs and revenues are fully transparent and auditable.

5(r) Any renewable energy credits associated with electricity
6procured by a participating utility for the utility’s green tariff
7shared renewables program and utilized by a participating
8customer shall be retired by the participating utility on behalf of
9the participating customer. Those renewable energy credits shall
10not be further sold, transferred, or otherwise monetized for any
11purpose. Any renewable energy credits associated with electricity
12procured by a participating utility for the shared renewable energy
13self-generation program, but not utilized by a participating
14customer, shall be counted toward meeting that participating
15utility’s renewables portfolio standard.

16(s) A participating utility shall, in the event of participant
17customer attrition or other causes that reduce customer
18participation or electrical demand below generation levels, apply
19the excess generation from the eligible renewable energy resources
20procured through the utility’s green tariff shared renewables
21program to the utility’s renewable portfolio standard procurement
22obligations or bank the excess generation for future use to benefit
23all customers in accordance with the renewables portfolio standard
24banking and procurement rules approved by the commission.

25(t) In calculating its procurement requirements to meet the
26requirements of the California Renewables Portfolio Standard
27Program (Article 16 (commencing with Section 399.11) of Chapter
282.3 of Part 1), a participating utility may exclude from total retail
29sales the kilowatthours generated by an eligible renewable energy
30resource that is credited to a participating customer pursuant to
31the utility’s green tariff shared renewables program, commencing
32with the point in time at which the generating facility achieves
33commercial operation.

34(u) All renewable energy resources procured on behalf of
35participating customers in the participating utility’s green tariff
36shared renewables program shall comply with the State Air
37Resources Board’s Voluntary Renewable Electricity Program.
38California-eligible greenhouse gas allowances associated with
39these purchases shall be retired on behalf of participating
P10   1customers as part of the board’s Voluntary Renewable Electricity
2Program.

3(v) A participating utility shall provide a municipality with
4aggregated consumption data for participating customers within
5the municipality’s jurisdiction to allow for reporting on progress
6toward climate action goals by the municipality. A participating
7utility shall also publicly disclose, on a geographic basis,
8consumption data and reductions in emissions of greenhouse gases
9achieved by participating customers in the utility’s green tariff
10shared renewables program, on an aggregated basis consistent
11with privacy protections as specified in Chapter 5 (commencing
12with Section 8380) of Division 4.1.

13

begin insert2834.end insert  

This chapter shall remain in effect only until January 1,
142019, and as of that date is repealed, unless a later enacted statute,
15that is enacted before January 1, 2019, deletes or extends that
16date.

end insert
17begin insert

begin insertSEC. 2.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant to
18Section 6 of Article XIII B of the California Constitution because
19the only costs that may be incurred by a local agency or school
20district will be incurred because this act creates a new crime or
21infraction, eliminates a crime or infraction, or changes the penalty
22for a crime or infraction, within the meaning of Section 17556 of
23the Government Code, or changes the definition of a crime within
24the meaning of Section 6 of Article XIII B of the California
25Constitution.

end insert
begin delete
26

SECTION 1.  

Section 25100 of the Corporations Code is
27amended to read:

28

25100.  

The following securities are exempted from Sections
2925110, 25120, and 25130:

30(a) Any security (including a revenue obligation) issued or
31guaranteed by the United States, any state, any city, county, city
32and county, public district, public authority, public corporation,
33public entity, or political subdivision of a state or any agency or
34corporate or other instrumentality of any one or more of the
35foregoing; or any certificate of deposit for any of the foregoing.

36(b) Any security issued or guaranteed by Canada, any Canadian
37province, any political subdivision or municipality of that province,
38or by any other foreign government with which the United States
39 currently maintains diplomatic relations, if the security is
P11   1 recognized as a valid obligation by the issuer or guarantor; or any
2certificate of deposit for any of the foregoing.

3(c) Any security issued or guaranteed by and representing an
4interest in or a direct obligation of a national bank or a bank or
5trust company incorporated under the laws of this state, and any
6security issued by a bank to one or more other banks and
7representing an interest in an asset of the issuing bank.

8(d) Any security issued or guaranteed by a federal savings
9association or federal savings bank or federal land bank or joint
10land bank or national farm loan association or by any savings
11association, as defined in subdivision (a) of Section 5102 of the
12Financial Code, which is subject to the supervision and regulation
13of the Commissioner of Financial Institutions of this state.

14(e) Any security (other than an interest in all or portions of a
15parcel or parcels of real property which are subdivided land or a
16subdivision or in a real estate development), the issuance of which
17is subject to authorization by the Insurance Commissioner, the
18Public Utilities Commission, or the Real Estate Commissioner of
19this state.

20(f) Any security consisting of any interest in all or portions of
21a parcel or parcels of real property which are subdivided lands or
22a subdivision or in a real estate development; provided that the
23exemption in this subdivision shall not be applicable to: (1) any
24investment contract sold or offered for sale with, or as part of, that
25interest, or (2) any person engaged in the business of selling,
26distributing, or supplying water for irrigation purposes or domestic
27use that is not a public utility except that the exemption is
28applicable to any security of a mutual water company (other than
29an investment contract as described in paragraph (1)) offered or
30sold in connection with subdivided lands pursuant to Chapter 2
31(commencing with Section 14310) of Part 7 of Division 3 of Title
321.

33(g) Any mutual capital certificates or savings accounts, as
34defined in the Savings Association Law, issued by a savings
35association, as defined by subdivision (a) of Section 5102 of the
36Financial Code, and holding a license or certificate of authority
37then in force from the Commissioner of Financial Institutions of
38this state.

P12   1(h) Any security issued or guaranteed by any federal credit
2union, or by any credit union organized and supervised, or
3regulated, under the Credit Union Law.

4(i) Any security issued or guaranteed by any railroad, other
5common carrier, public utility, or public utility holding company
6which is (1) subject to the jurisdiction of the Interstate Commerce
7Commission or its successor or (2) a holding company registered
8with the United States Securities and Exchange Commission under
9the Public Utility Holding Company Act of 1935 or a subsidiary
10of that company within the meaning of that act or (3) regulated in
11respect of the issuance or guarantee of the security by a
12governmental authority of the United States, of any state, of Canada
13or of any Canadian province; and the security is subject to
14registration with or authorization of issuance by that authority.

15(j) Any security (except evidences of indebtedness, whether
16interest bearing or not) of an issuer (1) organized exclusively for
17educational, benevolent, fraternal, religious, charitable, social, or
18reformatory purposes and not for pecuniary profit, if no part of the
19net earnings of the issuer inures to the benefit of any private
20shareholder or individual, or (2) organized as a chamber of
21commerce or trade or professional association. The fact that
22amounts received from memberships or dues or both will or may
23be used to construct or otherwise acquire facilities for use by
24members of the nonprofit organization does not disqualify the
25organization for this exemption. This exemption does not apply
26to the securities of any nonprofit organization if any promoter
27thereof expects or intends to make a profit directly or indirectly
28from any business or activity associated with the organization or
29operation of that nonprofit organization or from remuneration
30received from that nonprofit organization.

31(k) Any agreement, commonly known as a “life income
32contract,” of an issuer (1) organized exclusively for educational,
33benevolent, fraternal, religious, charitable, social, or reformatory
34purposes and not for pecuniary profit and (2) which the
35commissioner designates by rule or order, with a donor in
36consideration of a donation of property to that issuer and providing
37for the payment to the donor or persons designated by him or her
38of income or specified periodic payments from the donated
39property or other property for the life of the donor or those other
40persons.

P13   1(l) Any note, draft, bill of exchange, or banker’s acceptance
2which is freely transferable and of prime quality, arises out of a
3current transaction or the proceeds of which have been or are to
4be used for current transactions, and which evidences an obligation
5to pay cash within nine months of the date of issuance, exclusive
6of days of grace, or any renewal of that paper which is likewise
7limited, or any guarantee of that paper or of that renewal, provided
8that the paper is not offered to the public in amounts of less than
9twenty-five thousand dollars ($25,000) in the aggregate to any one
10purchaser. In addition, the commissioner may, by rule or order,
11exempt any issuer of any notes, drafts, bills of exchange or banker’s
12acceptances from qualification of those securities when the
13commissioner finds that the qualification is not necessary or
14appropriate in the public interest or for the protection of investors.

15(m) Any security issued by any corporation organized and
16existing under the provisions of Chapter 1 (commencing with
17Section 54001) of Division 20 of the Food and Agricultural Code.

18(n) Any beneficial interest in an employees’ pension,
19profit-sharing, stock bonus or similar benefit plan which meets the
20requirements for qualification under Section 401 of the federal
21Internal Revenue Code or any statute amendatory thereof or
22supplementary thereto. A determination letter from the Internal
23Revenue Service stating that an employees’ pension, profit-sharing,
24stock bonus or similar benefit plan meets those requirements shall
25be conclusive evidence that the plan is an employees’ pension,
26profit-sharing, stock bonus or similar benefit plan within the
27meaning of the first sentence of this subdivision until the date the
28determination letter is revoked in writing by the Internal Revenue
29Service, regardless of whether or not the revocation is retroactive.

30(o) Any security listed or approved for listing upon notice of
31issuance on a national securities exchange, if the exchange has
32been certified by rule or order of the commissioner and any warrant
33or right to purchase or subscribe to the security. The exemption
34afforded by this subdivision does not apply to securities listed or
35approved for listing upon notice of issuance on a national securities
36exchange, in a rollup transaction unless the rollup transaction is
37an eligible rollup transaction as defined in Section 25014.7.

38That certification of any exchange shall be made by the
39commissioner upon the written request of the exchange if the
40commissioner finds that the exchange, in acting on applications
P14   1for listing of common stock, substantially applies the minimum
2standards set forth in either subparagraph (A) or (B) of paragraph
3(1), and, in considering suspension or removal from listing,
4substantially applies each of the criteria set forth in paragraph (2).

5(1) Listing standards:

6(A) (i) Shareholders’ equity of at least four million dollars
7($4,000,000).

8(ii) Pretax income of at least seven hundred fifty thousand
9dollars ($750,000) in the issuer’s last fiscal year or in two of its
10last three fiscal years.

11(iii) Minimum public distribution of 500,000 shares (exclusive
12of the holdings of officers, directors, controlling shareholders, and
13other concentrated or family holdings), together with a minimum
14of 800 public holders or minimum public distribution of 1,000,000
15shares together with a minimum of 400 public holders. The
16exchange may also consider the listing of a company’s securities
17if the company has a minimum of 500,000 shares publicly held, a
18minimum of 400 shareholders and daily trading volume in the
19issue has been approximately 2,000 shares or more for the six
20months preceding the date of application. In evaluating the
21suitability of an issue for listing under this trading provision, the
22exchange shall review the nature and frequency of that activity
23and any other factors as it may determine to be relevant in
24ascertaining whether the issue is suitable for trading. A security
25that trades infrequently shall not be considered for listing under
26this paragraph even though average daily volume amounts to 2,000
27shares per day or more.

28Companies whose securities are concentrated in a limited
29geographical area, or whose securities are largely held in block by
30institutional investors, normally may not be considered eligible
31for listing unless the public distribution appreciably exceeds
32500,000 shares.

33(iv) Minimum price of three dollars ($3) per share for a
34reasonable period of time prior to the filing of a listing application;
35provided, however, in certain instances an exchange may favorably
36consider listing an issue selling for less than three dollars ($3) per
37share after considering all pertinent factors, including market
38conditions in general, whether historically the issue has sold above
39three dollars ($3) per share, the applicant’s capitalization, and the
40number of outstanding and publicly held shares of the issue.

P15   1(v) An aggregate market value for publicly held shares of at
2least three million dollars ($3,000,000).

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

5(ii) Minimum public distribution set forth in clause (iii) of
6subparagraph (A) of paragraph (1).

7(iii) Operating history of at least three years.

8(iv) An aggregate market value for publicly held shares of at
9least fifteen million dollars ($15,000,000).

10(2) Criteria for consideration of suspension or removal from
11listing:

12(A) If a company that (i) has shareholders’ equity of less than
13one million dollars ($1,000,000) has sustained net losses in each
14of its two most recent fiscal years, or (ii) has net tangible assets
15of less than three million dollars ($3,000,000) and has sustained
16net losses in three of its four most recent fiscal years.

17(B) If the number of shares publicly held (excluding the holdings
18of officers, directors, controlling shareholders and other
19concentrated or family holdings) is less than 150,000.

20(C) If the total number of shareholders is less than 400 or if the
21number of shareholders of lots of 100 shares or more is less than
22300.

23(D) If the aggregate market value of shares publicly held is less
24than seven hundred fifty thousand dollars ($750,000).

25(E) If shares of common stock sell at a price of less than three
26dollars ($3) per share for a substantial period of time and the issuer
27shall fail to effectuate a reverse stock split of the shares within a
28reasonable period of time after being requested by the exchange
29to take that action.

30A national securities exchange, certified by rule or order of the
31commissioner under this subdivision, shall file annual reports when
32requested to do so by the commissioner. The annual reports shall
33contain, by issuer: the variances granted to an exchange’s listing
34standards, including variances from corporate governance and
35voting rights’ standards, for any security of that issuer; the reasons
36for the variances; a discussion of the review procedure instituted
37by the exchange to determine the effect of the variances on
38investors and whether the variances should be continued; and any
39other information that the commissioner deems relevant. The
40purpose of these reports is to assist the commissioner in
P16   1determining whether the quantitative and qualitative requirements
2of this subdivision are substantially being met by the exchange in
3general or with regard to any particular security.

4The commissioner after appropriate notice and opportunity for
5hearing in accordance with the provisions of the Administrative
6Procedure Act (Chapter 5 (commencing with Section 11500) of
7Part 1 of Division 3 of Title 2 of the Government Code) may, in
8his or her discretion, by rule or order, decertify any exchange
9previously certified that ceases substantially to apply the minimum
10standards or criteria as set forth in paragraphs (1) and (2).

11A rule or order of certification shall conclusively establish that
12any security listed or approved for listing upon notice of issuance
13on any exchange named in a rule or order of certification, and any
14warrant or right to purchase or subscribe to that security, is exempt
15under this subdivision until the adoption by the commissioner of
16any rule or order decertifying the exchange.

17(p) A promissory note secured by a lien on real property, which
18is neither one of a series of notes of equal priority secured by
19 interests in the same real property nor a note in which beneficial
20interests are sold to more than one person or entity.

21(q) Any unincorporated interindemnity or reciprocal or
22interinsurance contract, that qualifies under the provisions of
23Section 1280.7 of the Insurance Code, between members of a
24cooperative corporation, organized and operating under Part 2
25(commencing with Section 12200) of Division 3 of Title 1, and
26whose members consist only of physicians and surgeons licensed
27in California, which contracts indemnify solely in respect to
28medical malpractice claims against the members, and which do
29not collect in advance of loss any moneys other than contributions
30by each member to a collective reserve trust fund or for necessary
31expenses of administration.

32(1) Whenever it appears to the commissioner that any person
33has engaged or is about to engage in any act or practice constituting
34a violation of any provision of Section 1280.7 of the Insurance
35Code, the commissioner may, in the commissioner’s discretion,
36bring an action in the name of the people of the State of California
37in the superior court to enjoin the acts or practices or to enforce
38compliance with Section 1280.7 of the Insurance Code. Upon a
39proper showing a permanent or preliminary injunction, a restraining
40order, or a writ of mandate shall be granted and a receiver or
P17   1conservator may be appointed for the defendant or the defendant’s
2assets.

3(2) The commissioner may, in the commissioner’s discretion,
4(A) make public or private investigations within or outside of this
5state as the commissioner deems necessary to determine whether
6any person has violated or is about to violate any provision of
7Section 1280.7 of the Insurance Code or to aid in the enforcement
8of Section 1280.7 of the Insurance Code, and (B) publish
9information concerning the violation of Section 1280.7 of the
10Insurance Code.

11(3) For the purpose of any investigation or proceeding under
12this section, the commissioner or any officer designated by the
13commissioner may administer oaths and affirmations, subpoena
14witnesses, compel their attendance, take evidence, and require the
15production of any books, papers, correspondence, memoranda,
16agreements, or other documents or records which the commissioner
17deems relevant or material to the inquiry.

18(4) In case of contumacy by, or refusal to obey a subpoena
19issued to, any person, the superior court, upon application by the
20commissioner, may issue to the person an order requiring the
21person to appear before the commissioner, or the officer designated
22by the commissioner, to produce documentary evidence, if so
23ordered, or to give evidence touching the matter under investigation
24or in question. Failure to obey the order of the court may be
25punished by the court as a contempt.

26(5) No person is excused from attending or testifying or from
27producing any document or record before the commissioner or in
28obedience to the subpoena of the commissioner or any officer
29designated by the commissioner, or in any proceeding instituted
30by the commissioner, on the ground that the testimony or evidence
31(documentary or otherwise), required of the person may tend to
32incriminate the person or subject the person to a penalty or
33forfeiture, but no individual may be prosecuted or subjected to any
34penalty or forfeiture for or on account of any transaction, matter,
35or thing concerning which the person is compelled, after validly
36claiming the privilege against self-incrimination, to testify or
37produce evidence (documentary or otherwise), except that the
38individual testifying is not exempt from prosecution and
39punishment for perjury or contempt committed in testifying.

P18   1(6) The cost of any review, examination, audit, or investigation
2made by the commissioner under Section 1280.7 of the Insurance
3Code shall be paid to the commissioner by the person subject to
4the review, examination, audit, or investigation, and the
5commissioner may maintain an action for the recovery of these
6costs in any court of competent jurisdiction. In determining the
7cost, the commissioner may use the actual amount of the salary or
8other compensation paid to the persons making the review,
9examination, audit, or investigation plus the actual amount of
10expenses including overhead reasonably incurred in the
11performance of the work.

12The recoverable cost of each review, examination, audit, or
13investigation made by the commissioner under Section 1280.7 of
14the Insurance Code shall not exceed twenty-five thousand dollars
15($25,000), except that costs exceeding twenty-five thousand dollars
16($25,000) shall be recoverable if the costs are necessary to prevent
17a violation of any provision of Section 1280.7 of the Insurance
18Code.

19(r) Any shares or memberships issued by any corporation
20organized and existing pursuant to the provisions of Part 2
21(commencing with Section 12200) of Division 3 of Title 1,
22provided the aggregate investment of any shareholder or member
23in shares or memberships sold pursuant to this subdivision does
24not exceed three hundred dollars ($300). This exemption does not
25apply to the shares or memberships of that corporation if any
26promoter thereof expects or intends to make a profit directly or
27indirectly from any business or activity associated with the
28corporation or the operation of the corporation or from
29remuneration, other than reasonable salary, received from the
30corporation. This exemption does not apply to nonvoting shares
31or memberships of that corporation issued to any person who does
32not possess, and who will not acquire in connection with the
33issuance of nonvoting shares or memberships, voting power
34(Section 12253) in the corporation. This exemption also does not
35apply to shares or memberships issued by a nonprofit cooperative
36corporation organized to facilitate the creation of an unincorporated
37interindemnity arrangement that provides indemnification for
38medical malpractice to its physician and surgeon members as set
39forth in subdivision (q).

P19   1(s) Any security consisting of or representing an interest in a
2pool of mortgage loans that meets each of the following
3requirements:

4(1) The pool consists of whole mortgage loans or participation
5interests in those loans, which loans were originated or acquired
6in the ordinary course of business by a national bank or federal
7savings association or federal savings bank having its principal
8office in this state, by a bank incorporated under the laws of this
9state or by a savings association as defined in subdivision (a) of
10Section 5102 of the Financial Code and which is subject to the
11supervision and regulation of the Commissioner of Financial
12Institutions, and each of which at the time of transfer to the pool
13is an authorized investment for the originating or acquiring
14institution.

15(2) The pool of mortgage loans is held in trust by a trustee which
16is a financial institution specified in paragraph (1) as trustee or
17otherwise.

18(3) The loans are serviced by a financial institution specified in
19paragraph (1).

20(4) The security is not offered in amounts of less than
21twenty-five thousand dollars ($25,000) in the aggregate to any one
22purchaser.

23(5) The security is offered pursuant to a registration under the
24federal Securities Act of 1933, or pursuant to an exemption under
25Regulation A under that act, or in the opinion of counsel for the
26issuer, is offered pursuant to an exemption under Section 4(2) of
27that act.

28(t) (1) Any security issued or guaranteed by and representing
29an interest in or a direct obligation of an industrial loan company
30incorporated under the laws of the state and authorized by the
31Commissioner of Financial Institutions to engage in industrial loan
32business.

33(2) Any investment certificate in or issued by any industrial
34loan company that is organized under the laws of a state of the
35United States other than this state, that is insured by the Federal
36Deposit Insurance Corporation, and that maintains a branch office
37in this state.

38(u) (1) Any right to a bill credit or interest of a participant in a
39shared renewable energy facility pursuant to Chapter 7.5
P20   1(commencing with Section 2830) of Part 2 of Division 1 of the
2Public Utilities Code.

3(2) This subdivision shall become inoperative on January 1,
42019.

5

SEC. 2.  

Section 216 of the Public Utilities Code is amended
6to read:

7

216.  

(a) “Public utility” includes every common carrier, toll
8bridge corporation, pipeline corporation, gas corporation, electrical
9corporation, telephone corporation, telegraph corporation, water
10corporation, sewer system corporation, and heat corporation, where
11the service is performed for, or the commodity is delivered to, the
12public or any portion thereof.

13(b) Whenever any common carrier, toll bridge corporation,
14pipeline corporation, gas corporation, electrical corporation,
15telephone corporation, telegraph corporation, water corporation,
16sewer system corporation, or heat corporation performs a service
17for, or delivers a commodity to, the public or any portion thereof
18for which any compensation or payment whatsoever is received,
19that common carrier, toll bridge corporation, pipeline corporation,
20gas corporation, electrical corporation, telephone corporation,
21telegraph corporation, water corporation, sewer system corporation,
22or heat corporation, is a public utility subject to the jurisdiction,
23control, and regulation of the commission and the provisions of
24this part.

25(c) When any person or corporation performs any service for,
26or delivers any commodity to, any person, private corporation,
27municipality, or other political subdivision of the state, that in turn
28either directly or indirectly, mediately or immediately, performs
29that service for, or delivers that commodity to, the public or any
30portion thereof, that person or corporation is a public utility subject
31to the jurisdiction, control, and regulation of the commission and
32the provisions of this part.

33(d) Ownership or operation of a facility that employs
34cogeneration technology or produces power from other than a
35conventional power source or the ownership or operation of a
36facility which employs landfill gas technology does not make a
37corporation or person a public utility within the meaning of this
38section solely because of the ownership or operation of that facility.

39(e) Any corporation or person engaged directly or indirectly in
40developing, producing, transmitting, distributing, delivering, or
P21   1selling any form of heat derived from geothermal or solar resources
2or from cogeneration technology to any privately owned or publicly
3owned public utility, or to the public or any portion thereof, is not
4a public utility within the meaning of this section solely by reason
5of engaging in any of those activities.

6(f) The ownership or operation of a facility that sells compressed
7natural gas at retail to the public for use only as a motor vehicle
8fuel, and the selling of compressed natural gas at retail from that
9facility to the public for use only as a motor vehicle fuel, does not
10make the corporation or person a public utility within the meaning
11of this section solely because of that ownership, operation, or sale.

12(g) Ownership or operation of a facility that is an exempt
13wholesale generator, as defined in the Public Utility Holding
14Company Act of 2005 (42 U.S.C. Sec. 16451(6)), does not make
15a corporation or person a public utility within the meaning of this
16section, solely due to the ownership or operation of that facility.

17(h) The ownership, control, operation, or management of an
18electric plant used for direct transactions or participation directly
19or indirectly in direct transactions, as permitted by subdivision (b)
20of Section 365, sales into a market established and operated by the
21Independent System Operator or any other wholesale electricity
22market, or the use or sale as permitted under subdivisions (b) to
23(d), inclusive, of Section 218, shall not make a corporation or
24person a public utility within the meaning of this section solely
25because of that ownership, participation, or sale.

26(i) The ownership, control, operation, or management of a
27facility that supplies electricity to the public only for use to charge
28light duty plug-in electric vehicles does not make the corporation
29or person a public utility within the meaning of this section solely
30because of that ownership, control, operation, or management. For
31purposes of this subdivision, “light duty plug-in electric vehicles”
32includes light duty battery electric and plug-in hybrid electric
33vehicles. This subdivision does not affect the commission’s
34authority under Section 454 or 740.2 or any other applicable statute.

35(j) (1) A corporation or person engaged directly or indirectly
36in developing, owning, producing, delivering, participating in, or
37selling interests in a shared renewable energy facility, pursuant to
38Chapter 7.5 (commencing with Section 2830) of Part 2, is not a
39public utility within the meaning of this section solely by reason
40of engaging in any of those activities.

P22   1(2) This subdivision shall become inoperative on January 1,
22019.

3

SEC. 3.  

Section 218 of the Public Utilities Code is amended
4to read:

5

218.  

(a) “Electrical corporation” includes every corporation
6or person owning, controlling, operating, or managing any electric
7plant for compensation within this state, except where electricity
8is generated on or distributed by the producer through private
9property solely for its own use or the use of its tenants and not for
10sale or transmission to others.

11(b) “Electrical corporation” does not include a corporation or
12person employing cogeneration technology or producing power
13from other than a conventional power source for the generation of
14electricity solely for any one or more of the following purposes:

15(1) Its own use or the use of its tenants.

16(2) The use of or sale to not more than two other corporations
17or persons solely for use on the real property on which the
18electricity is generated or on real property immediately adjacent
19thereto, unless there is an intervening public street constituting the
20boundary between the real property on which the electricity is
21generated and the immediately adjacent property and one or more
22of the following applies:

23(A) The real property on which the electricity is generated and
24the immediately adjacent real property is not under common
25ownership or control, or that common ownership or control was
26gained solely for purposes of sale of the electricity so generated
27and not for other business purposes.

28(B) The useful thermal output of the facility generating the
29electricity is not used on the immediately adjacent property for
30 petroleum production or refining.

31(C) The electricity furnished to the immediately adjacent
32property is not utilized by a subsidiary or affiliate of the corporation
33or person generating the electricity.

34(3) Sale or transmission to an electrical corporation or state or
35local public agency, but not for sale or transmission to others,
36unless the corporation or person is otherwise an electrical
37corporation.

38(c) “Electrical corporation” does not include a corporation or
39person employing landfill gas technology for the generation of
40electricity for any one or more of the following purposes:

P23   1(1) Its own use or the use of not more than two of its tenants
2located on the real property on which the electricity is generated.

3(2) The use of or sale to not more than two other corporations
4or persons solely for use on the real property on which the
5electricity is generated.

6(3) Sale or transmission to an electrical corporation or state or
7local public agency.

8(d) “Electrical corporation” does not include a corporation or
9person employing digester gas technology for the generation of
10electricity for any one or more of the following purposes:

11(1) Its own use or the use of not more than two of its tenants
12located on the real property on which the electricity is generated.

13(2) The use of or sale to not more than two other corporations
14or persons solely for use on the real property on which the
15electricity is generated.

16(3) Sale or transmission to an electrical corporation or state or
17local public agency, if the sale or transmission of the electricity
18service to a retail customer is provided through the transmission
19system of the existing local publicly owned electric utility or
20electrical corporation of that retail customer.

21(e) “Electrical corporation” does not include an independent
22solar energy producer, as defined in Article 3 (commencing with
23Section 2868) of Chapter 9 of Part 2.

24(f) The amendments made to this section at the 1987 portion of
25the 1987-88 Regular Session of the Legislature do not apply to
26any corporation or person employing cogeneration technology or
27producing power from other than a conventional power source for
28the generation of electricity that physically produced electricity
29prior to January 1, 1989, and furnished that electricity to
30immediately adjacent real property for use thereon prior to January
311, 1989.

32(g) (1) A corporation or person engaged directly or indirectly
33in developing, owning, producing, delivering, participating in, or
34selling interests in a shared renewable energy facility, pursuant to
35Chapter 7.5 (commencing with Section 2830) of Part 2, is not an
36electrical corporation within the meaning of this section solely by
37reason of engaging in any of those activities.

38(2) This subdivision shall become inoperative on January 1,
392019.

P24   1

SEC. 4.  

Section 365.1 of the Public Utilities Code is amended to
2read:

3

365.1.  

(a) (1) Except as expressly authorized by this section,
4and subject to the limitations in subdivisions (b) and (c), the right
5of retail end-use customers pursuant to this chapter to acquire
6service from other providers is suspended until the Legislature, by
7statute, lifts the suspension or otherwise authorizes direct
8transactions.

9(2) For purposes of this section, “other provider” means any
10person, corporation, or other entity that is authorized to provide
11electric service within the service territory of an electrical
12corporation pursuant to this chapter, and includes an aggregator,
13broker, or marketer, as defined in Section 331, and an electric
14service provider, as defined in Section 218.3.

15(3) “Other provider” does not include a community choice
16aggregator, as defined in Section 331.1, and the limitations in this
17section do not apply to the sale of electricity by “other providers”
18to a community choice aggregator for resale to community choice
19aggregation electricity consumers pursuant to Section 366.2.

20(4) (A) “Other provider” does not include a “provider” as
21defined in subdivision (j) of Section 2832 or any corporation or
22person engaged directly or indirectly in developing, owning,
23producing, delivering, participating in, or selling interests in a
24shared renewable energy facility, pursuant to Chapter 7.5
25(commencing with Section 2830) of Part 2, solely by reason of
26engaging in any of those activities.

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

28(b) The commission shall allow individual retail nonresidential
29end-use customers to acquire electric service from other providers
30in each electrical corporation’s distribution service territory, up to
31a maximum allowable total kilowatthours annual limit. The
32maximum allowable annual limit shall be established by the
33commission for each electrical corporation at the maximum total
34kilowatthours supplied by all other providers to distribution
35customers of that electrical corporation during any sequential
3612-month period between April 1, 1998, and the effective date of
37this section. Within six months of the effective date of this section,
38or by July 1, 2010, whichever is sooner, the commission shall
39adopt and implement a reopening schedule that commences
40immediately and will phase in the allowable amount of increased
P25   1kilowatthours over a period of not less than three years, and not
2more than five years, raising the allowable limit of kilowatthours
3supplied by other providers in each electrical corporation’s
4distribution service territory from the number of kilowatthours
5provided by other providers as of the effective date of this section,
6to the maximum allowable annual limit for that electrical
7corporation’s distribution service territory. The commission shall
8review and, if appropriate, modify its currently effective rules
9governing direct transactions, but that review shall not delay the
10start of the phase-in schedule.

11(c) Once the commission has authorized additional direct
12transactions pursuant to subdivision (b), it shall do both of the
13following:

14(1) Ensure that other providers are subject to the same
15requirements that are applicable to the state’s three largest electrical
16corporations under any programs or rules adopted by the
17commission to implement the resource adequacy provisions of
18Section 380, the renewables portfolio standard provisions of Article
1916 (commencing with Section 399.11), and the requirements for
20the electricity sector adopted by the State Air Resources Board
21pursuant to the California Global Warming Solutions Act of 2006
22(Division 25.5 (commencing with Section 38500) of the Health
23and Safety Code). This requirement applies notwithstanding any
24prior decision of the commission to the contrary.

25(2) (A) Ensure that, in the event that the commission authorizes,
26in the situation of a contract with a third party, or orders, in the
27situation of utility-owned generation, an electrical corporation to
28obtain generation resources that the commission determines are
29needed to meet system or local area reliability needs for the benefit
30of all customers in the electrical corporation’s distribution service
31territory, the net capacity costs of those generation resources are
32allocated on a fully nonbypassable basis consistent with departing
33load provisions as determined by the commission, to all of the
34following:

35(i) Bundled service customers of the electrical corporation.

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

38(iii) Customers of community choice aggregators.

39(B) If the commission authorizes or orders an electrical
40corporation to obtain generation resources pursuant to subparagraph
P26   1(A), the commission shall ensure that those resources meet a system
2or local reliability need in a manner that benefits all customers of
3the electrical corporation. The commission shall allocate the costs
4of those generation resources to ratepayers in a manner that is fair
5and equitable to all customers, whether they receive electric service
6from the electrical corporation, a community choice aggregator,
7or an electric service provider.

8(C) The resource adequacy benefits of generation resources
9acquired by an electrical corporation pursuant to subparagraph (A)
10shall be allocated to all customers who pay their net capacity costs.
11Net capacity costs shall be determined by subtracting the energy
12and ancillary services value of the resource from the total costs
13paid by the electrical corporation pursuant to a contract with a
14third party or the annual revenue requirement for the resource if
15the electrical corporation directly owns the resource. An energy
16auction shall not be required as a condition for applying this
17allocation, but may be allowed as a means to establish the energy
18and ancillary services value of the resource for purposes of
19determining the net costs of capacity to be recovered from
20customers pursuant to this paragraph, and the allocation of the net
21capacity costs of contracts with third parties shall be allowed for
22the terms of those contracts.

23(D) It is the intent of the Legislature, in enacting this paragraph,
24to provide additional guidance to the commission with respect to
25the implementation of subdivision (g) of Section 380, as well as
26 to ensure that the customers to whom the net costs and benefits of
27capacity are allocated are not required to pay for the cost of
28electricity they do not consume.

29(d) (1) If the commission approves a centralized resource
30adequacy mechanism pursuant to subdivisions (h) and (i) of Section
31380, upon the implementation of the centralized resource adequacy
32mechanism the requirements of paragraph (2) of subdivision (c)
33shall be suspended. If the commission later orders that electrical
34corporations cease procuring capacity through a centralized
35resource adequacy mechanism, the requirements of paragraph (2)
36of subdivision (c) shall again apply.

37(2) If the use of a centralized resource adequacy mechanism is
38authorized by the commission and has been implemented as set
39forth in paragraph (1), the net capacity costs of generation resources
40that the commission determines are required to meet urgent system
P27   1or urgent local grid reliability needs, and that the commission
2authorizes to be procured outside of the Section 380 or Section
3454.5 processes, shall be recovered according to the provisions of
4paragraph (2) of subdivision (c).

5(3) Nothing in this subdivision supplants the resource adequacy
6requirements of Section 380 or the resource procurement
7procedures established in Section 454.5.

8(e) The commission may report to the Legislature on the efficacy
9of authorizing individual retail end-use residential customers to
10enter into direct transactions, including appropriate consumer
11protections.

12

SEC. 5.  

Chapter 7.6 (commencing with Section 2831) is added
13to Part 2 of Division 1 of the Public Utilities Code, to read:

14 

15Chapter  7.6. Shared Renewable Energy Self-Generation
16Program
17

 

18

2831.  

The Legislature finds and declares all of the following:

19(a) The creation of renewable energy within California provides
20significant financial, health, environmental, and workforce benefits
21to the State of California.

22(b) The California Solar Initiative has been extremely successful,
23resulting in over 140,000 residential and commercial onsite
24installations of solar energy systems. However, it cannot reach all
25residents and businesses that want to participate and is limited to
26 solar energy. The Shared Renewable Energy Self-Generation
27Program seeks to build on this success by expanding access to
28renewable energy resources to all ratepayers that are currently
29unable to access the benefits of onsite generation, without shifting
30costs to nonparticipants.

31(c) The Governor has proposed the Clean Energy Jobs Plan,
32calling for the development of 20,000 megawatts of generation
33from renewable energy resources by 2020. There is widespread
34interest from many large institutional customers, including schools,
35colleges, universities, local governments, businesses, and the
36military, for development of renewable generation facilities to
37serve more than 33 percent of their energy needs. For these reasons,
38the Legislature agrees that the Governor’s Clean Energy Jobs Plan
39represents a desired policy direction for the state.

P28   1(d) Properly designed, shared renewable energy programs can
2provide access and cost savings to underserved communities, such
3as low- to moderate-income residents, and residential and
4commercial renters, without shifting costs to nonparticipants.

5(e) Public institutions will benefit from the Shared Renewable
6Energy Self-Generation Program’s enhanced flexibility to
7participate in shared renewable energy facilities. Electricity usage
8is one of the most significant cost pressures facing public
9institutions at a time when they have been forced to cut essential
10programs, increase classroom sizes, and lay off teachers. Schools
11may use the savings for restoring funds for salaries, facility
12maintenance, and other budgetary needs.

13(f) Shared renewable energy self-generation creates jobs, reduces
14emissions of greenhouse gases, and promotes energy independence.

15(g) Many large energy users in California have pursued onsite
16renewable energy generation, but cannot achieve their goals due
17to rooftop or land space limitations, or size limits on net metering.
18The enactment of this chapter will create a mechanism whereby
19institutional customers such as military installations, universities,
20and local governments, as well as commercial customers and
21groups of individuals, can efficiently invest in generating electricity
22from renewable generation.

23(h) Therefore, it is the intent of the Legislature that this program
24be implemented in such a manner as to create a large, sustainable
25market for the purchase of an interest in offsite renewable
26generation, while fairly compensating electrical corporations for
27the services they provide.

28(i) It is the further intent of the Legislature to preserve a thriving
29natural environment and to ensure that projects developed under
30the Shared Renewable Energy Self-Generation Program are subject
31to environmental protection best practices afforded under California
32law and policies.

33

2832.  

As used in this chapter, the following terms have the
34following meanings:

35(a) “Benefiting account” means one or more electricity accounts
36designated to receive a bill credit pursuant to Section 2833 and
37mutually agreed upon by the facility provider and an electrical
38corporation.

39(b) “Bill credit” means an amount of money credited each
40month, or in an otherwise applicable billing period, to one or more
P29   1benefiting accounts based on the amount of the electrical output
2of a shared renewable energy facility that is assigned to the account
3pursuant to the methodology described in Section 2833.

4(c) “Default load aggregation point price” means a
5commission-determined day-ahead price for electricity.

6(d) “Energy component” means the generation portion of a
7customer’s otherwise applicable tariff and any other portion of the
8customer’s charges that the commission determines may be
9appropriate to offset without resulting in a net cost shift to
10 nonparticipants.

11(e) “Interest” means a direct or indirect ownership, lease,
12 subscription, or financing interest in a shared renewable energy
13facility that enables the participant to receive a bill credit for a
14retail account with the electrical corporation.

15(f) “Local government” means a city, county, city and county,
16special district, school district, public water district, public
17irrigation district, county office of education, political subdivision,
18or other local governmental entity. For the purposes of this chapter,
19“water district” has the same meaning as defined in Section 20200
20of the Water Code, and “irrigation district” means an entity formed
21pursuant to the Irrigation District Law set forth in Division 11
22(commencing with Section 20500) of the Water Code.

23(g) “Participant” means a retail customer of an electrical
24corporation that owns, leases, finances, or subscribes to an interest
25in a shared renewable energy facility and who has designated at
26least one of its own retail accounts as a benefiting account to which
27the interest shall be attributed.

28(h) “Participant account” means a retail customer account with
29an electrical corporation to which a participant’s interest in a shared
30renewable energy facility shall be attributed.

31(i) “Provider” means any entity whose purpose is to beneficially
32own or operate a shared renewable energy facility for the
33participants or owners of that facility, or to market an interest in
34the facility.

35(j) “Program” means the Shared Renewable Energy
36Self-Generation Program established pursuant to this chapter.

37(k) “Project” means the cumulative activities to build and make
38operational a shared renewable energy facility.

39(l) “Renewable energy credit” has the same meaning as defined
40in Section 399.12.

P30   1(m) “Shared renewable energy facility” means a facility for the
2generation of electricity that meets all of the following
3requirements:

4(1) Has a nameplate generating capacity of no more than 20
5megawatts of alternating current.

6(2) Is an eligible renewable energy resource pursuant to the
7California Renewables Portfolio Standard Program (Article 16
8(commencing with Section 399.11) of Chapter 2.3 of Part 1).

9(3) Has its electrical output measured by a production meter
10owned by the electrical corporation, that meets the tariff
11requirements of the electrical corporation and the Independent
12System Operator, and that independently measures the electricity
13delivered to the grid by the facility.

14(4) Is located within the service territory of a California electrical
15corporation.

16(5) Has been interconnected with the electrical grid in
17compliance with the tariffs of the applicable interconnection
18authority.

19(6) Is either the PVUSA facility, meaning the photovoltaic
20electricity generation facility selected by the City of Davis and
21located at 24662 County Road, Davis, California, or is a newly
22constructed renewable energy facility constructed pursuant to this
23chapter, beginning commercial operation on or after June 1, 2014.

24(7) The provider has, where applicable, complied with all
25program rules and written notice procedures that may be required
26by the commission.

27

2833.  

(a) (1) A retail customer of an electrical corporation
28having 100,000 or more service connections within the state may
29acquire an interest in a shared renewable energy facility for the
30purpose of becoming a participant and shall designate one or more
31benefiting accounts to which the interest shall be attributed.

32(2) To be eligible to be designated as a benefiting account, the
33account shall be for service to premises located within the
34geographical boundaries of the service territory of the electrical
35corporation containing the shared renewable energy facility.

36(3) The participating customer’s bill credit may be used to offset
37all or a portion of the energy component of that customer’s
38electrical service, as provided in this chapter and in accordance
39with those rules that the commission may adopt.

P31   1(4) A participant shall not acquire an interest in a shared
2renewable energy facility that represents more than two megawatts
3of generating capacity or the equivalent amount, as denominated
4in kilowatthours of energy. This limitation does not apply to a
5federal, state, or local government, school, school district, county
6office of education, the California Community Colleges, the
7California State University, or the University of California.

8(b) The electrical corporation shall assign a monthly bill credit
9equal to the class average retail generation rate for each
10kilowatthour of energy received to the benefiting account plus any
11differences between the time-of-day profile of the renewable
12resources for which the participating customer subscribes and the
13class average time-of-day profile. The bill credit shall be applied
14to the energy component of the benefiting account.

15(c) (1) Any renewable energy credits associated with an interest
16shall be retired by either the provider or electrical corporation, as
17they may agree, on behalf of the participant or transferred to the
18Western Renewable Energy Generation Information System
19account of that participant, for the purpose of demonstrating the
20purchase of renewable energy. Those renewable energy credits
21shall not be further sold, transferred, or otherwise monetized by a
22party for any purpose. Renewable energy credits associated with
23electricity paid for by the electrical corporation shall be counted
24toward meeting that electrical corporation’s renewables portfolio
25standard. For purposes of this subdivision, “renewable energy
26credit” and “renewables portfolio standard” have the same
27meanings as defined in Section 399.12.

28(2) For energy that is unallocated to a benefiting account during
29the previous billing period, the recipient electrical corporation
30shall pay the provider the current default load aggregation point
31price plus the renewable energy credit value and receive any
32 renewable energy credits associated with that energy.

33(d) (1) A pilot program of 500 megawatts of alternating current
34rated nameplate generating capacity of shared renewable energy
35facilities shall be made available during the 18-month period
36beginning March 1, 2015, and ending July 1, 2016. Each electrical
37corporation’s proportionate share of the program’s total capacity
38shall be calculated based on the ratio of the electrical corporation’s
39peak demand compared to the total statewide peak demand.

P32   1(2) On or before March 1, 2015, each electrical corporation
2shall submit a proposal to the commission for how to allocate the
3initial available capacity. Within 60 days of receipt of these
4proposals, the commission shall adopt rules for the allocation of
5the initial available capacity amongst the electrical corporations
6and to establish a transparent process for evaluating and ranking
7applications for shared renewable energy facility projects and
8awarding the initial capacity to those projects.

9(3) Of the initial pilot program capacity:

10(A) Twenty percent shall be reserved for projects of a size no
11greater than one megawatt of alternating current, constructed in
12areas previously identified by the California Environmental
13Protection Agency as the most impacted and disadvantaged
14communities for opportunities related to this chapter. These
15communities shall be identified as census tracts that are identified
16within the top 20 percent of results from the best available
17cumulative impact screening methodology by considering the
18following categories:

19(i) Areas disproportionately affected by environmental pollution
20and other hazards that can lead to negative public health effects,
21 exposure, or environmental degradation.

22(ii) Areas with socioeconomic vulnerability.

23(B) Twenty percent shall be reserved for initial subscription by
24residential customers.

25(e) The commission shall determine the manner in which the
26capacity under the program shall be allocated and the contracting
27mechanisms between, and procedures regarding, providers and
28electrical corporations.

29(f) (1) The electrical corporation shall ensure that no single
30entity or its affiliates or subsidiaries is awarded more than 20
31percent of any single calendar year’s total cumulative rated
32generating capacity made available pursuant to this program.

33(2) The commission shall maintain a public database that
34includes all of the following:

35(A) All projects that have been approved for participation in
36the pilot program, their size, and where the projects are connecting
37to the transmission or distribution system.

38(B) The nameplate generating capacity of those projects located
39in environmental justice areas described in subparagraph (A) of
40paragraph (3) of subdivision (d).

P33   1(C) The proportion of shared renewable energy facilities
2subscribed to by residential customers.

3(D) Any other data relative to the program that the commission
4considers suitable for disclosure to the public.

5(g) (1) Once the initial 500 megawatts of cumulative rated
6generating capacity has been awarded for shared renewable energy
7facility projects, the commission shall evaluate the functioning of
8the program.

9(2) By January 1, 2016, the commission shall conclude an
10evaluation of the program to date, to determine if the goals of the
11program are being met, including, but not limited to, the goals of
12increasing access to renewable power and ensuring nonparticipant
13ratepayer indifference.

14(3) The commission may evaluate the program at any time,
15either on its own motion or upon the motion of an interested party,
16and may modify or adopt any rules it determines to be necessary
17or convenient to ensure that program goals can be met provided
18that the program modifications and rules do not result in a shifting
19of costs to nonparticipating ratepayers. The commission shall
20ensure that the charges and credits associated with this program
21shall be structured to ensure nonparticipating ratepayer indifference
22for the remaining bundled service, direct access, and community
23choice aggregation customers and that no costs are shifted from
24participating customers to nonparticipating ratepayers.

25(4) An electrical corporation shall comply with the requirements
26 applicable to protection of the right to commercial free speech
27described in Commission Decision 10-05-050 as applied to the
28development, sale of subscriptions, and operation of shared
29renewable energy facilities. Shared renewable energy facilities
30may file a complaint with the commission for violation of this
31paragraph.

32(5) If requested by a city, county, or city and county, an
33electrical corporation shall annually provide the city, county, or
34city and county with the annual total generation of each shared
35renewable energy facility in that local jurisdiction and the annual
36aggregated total generation, by fuel type, allocated to benefiting
37accounts in that local jurisdiction from all shared renewable energy
38facilities, regardless of their location. The benefiting account data
39shall be aggregated in a manner determined by the commission to
40protect customer privacy and to provide a city, county, or city and
P34   1county with the information necessary to calculate greenhouse gas
2emissions from energy consumption within its jurisdiction supplied
3by shared renewable energy facilities. The commission may
4develop alternative methods to enable the sharing of annual total
5generation information.

6(h) (1) The tariff applicable to a participant shall remain the
7same, with respect to rate structure, all retail rate components, and
8any monthly charges, to the charges that the participant would be
9assigned if the participant did not receive a bill credit.

10(2) Prior to the sale or resale of an interest in a shared renewable
11energy facility, the provider or the participant, or both, shall
12provide a disclosure to the potential participant that, at a minimum,
13 includes all of the following:

14(A) A good faith estimate of the annual kilowatthours to be
15delivered by the shared renewable energy facility based on the size
16of the interest.

17(B) A plain language explanation of the terms under which the
18bill credits will be calculated.

19(C) A plain language explanation of the contract provisions
20regulating the disposition or transfer of the interest.

21(D) A plain language explanation of the costs and benefits to
22the potential participant based on its current usage and applicable
23tariff, for the term of the proposed contract.

24(3) The commission shall determine the manner in which
25customer accounts are to be credited for energy provided under
26the program, including, but not limited to, how production is
27counted and assigned, the entry and exits of accounts from the
28program, and the disposition of excess credits received.

29(4) A provider shall execute all necessary interconnection
30agreements, participation, and surplus sale agreements with the
31electrical corporation and the Independent System Operator on a
32schedule required by those entities.

33(5) Unless the electrical corporation will be registering
34renewable energy credits on behalf of the participant, the provider
35shall establish an account and register the shared renewable energy
36facility with the Western Renewable Energy Generation
37Information System or its successor.

38(6) The provider’s interconnection process and cost allocation
39for facilities built under this section shall be determined by
P35   1applicable rules for interconnection established by the commission
2and the Independent System Operator.

3(7) The commission shall not regulate the prices paid by the
4participant for an interest in a shared renewable energy facility,
5but may enforce the required disclosures, and may establish rules
6applicable to providers to ensure consumer protection. Any
7interested person or corporation may file a complaint with the
8commission contending that a provider or electrical corporation
9is not complying with any requirement of this chapter and seek an
10order of the commission to enforce the requirements of this chapter
11and to take whatever steps are necessary to ensure consumer
12protection and compliance with the requirements of this chapter.

13(i) (1) The commission shall determine the manner in which
14customers are billed and receive credits under the program. The
15electrical corporation may petition the commission to incorporate
16in its bill those charges by the provider to participants, provided
17that the electrical corporation recovers all incremental costs of
18providing that service and provided that the provider elects to use
19this service.

20(2) Unsubscribed delivered electricity shall be sold to the
21electrical corporation at the default load aggregation point price
22plus the renewable energy credit value. The electrical corporation
23shall receive credit under the California Renewables Portfolio
24Standard Program (Article 16 (commencing with Section 399.11)
25of Chapter 2.3 of Part 1) for all delivered electricity purchased
26pursuant to this subparagraph, without the need for further
27qualifying action.

28(3) The electrical corporation shall charge the participant for
29service under each benefiting account at the electrical corporation’s
30otherwise applicable tariff.

31(4) The electrical corporation shall provide the participant with
32a bill credit based on the allocated share of delivered electricity
33and shall collect revenue from the participant commensurate with
34the participant’s contract with the provider.

35(5) The electrical corporation, within 60 days, shall remit to the
36participant organization the revenue collected from participants
37through billings pursuant to paragraph (4).

38(6) Nothing in paragraphs (2), (3), (4), and (5) requires a
39particular bill format or the inclusion of any specific separate
40billing line items.

P36   1(7) The commission shall, by January 1, 2015, determine
2whether customers participating in direct transactions may receive
3bill credits equivalent to what would be provided to bundled
4electric service customers of a participating electrical corporation
5pursuant to this chapter, and, if so, shall implement rules and
6procedures for enabling those transactions. These particular
7transactions may include those with an electric service provider
8that does not provide distribution services and, customers receiving
9electric service through a community choice aggregation program.

10(j) (1) To ensure the maximum systemic benefit from shared
11renewable energy facilities under this chapter, electrical
12corporations shall provide to the commission, prior to the release
13of capacity, maps indicating locations in their service territory
14 where the addition of capacity would reduce line loss, lower
15transmission capacity constraints, and defer or avoid transmission
16and distribution network upgrades and construction. The
17commission may adopt guidance in determining criteria for the
18awarding of capacity in a manner as to reflect these benefits. The
19commission shall also ensure that projects being awarded capacity
20under the program are subject to protections consistent with those
21afforded under the California Renewables Portfolio Standard
22Program (Article 16 (commencing with Section 399.11) of Chapter
232.3 of Part 1).

24(2) (A) The commission shall ensure full and timely recovery
25of all reasonable costs incurred by an electrical corporation to
26implement the program, including reasonable expenses for changes
27to its billing system and handling of collections, and shall
28determine the appropriate method of allocating those costs. The
29commission shall approve a memorandum account to track billing
30system and implementation costs, as well as revenue from provider
31project applications, and may not direct an electrical corporation
32to conduct any billing system work prior to approval of the
33memorandum account.

34(B) Participating customers shall pay the administrative costs
35of the electrical corporation to implement the shared renewable
36self-generation program consistent with other existing similar
37voluntary optional rate schedules.

38(3) In calculating its procurement requirements to meet the
39requirements of the California Renewables Portfolio Standard
40Program (Article 16 (commencing with Section 399.11) of Chapter
P37   12.3 of Part 1), an electrical corporation may exclude from total
2retail sales the kilowatthours generated by a shared renewable
3energy facility commencing with the point in time at which the
4facility achieves commercial operation.

5(4) The local and system resource adequacy value attributable
6to a shared renewable energy facility, as determined by the
7commission pursuant to Section 380, shall be assigned to the
8electrical corporation to which the facility is interconnected.

9

2834.  

This chapter shall remain in effect only until January 1,
102019, and as of that date is repealed, unless a later enacted statute,
11that is enacted before January 1, 2019, deletes or extends that date.

12

SEC. 6.  

No reimbursement is required by this act pursuant to
13Section 6 of Article XIII B of the California Constitution because
14the only costs that may be incurred by a local agency or school
15district will be incurred because this act creates a new crime or
16infraction, eliminates a crime or infraction, or changes the penalty
17for a crime or infraction, within the meaning of Section 17556 of
18the Government Code, or changes the definition of a crime within
19the meaning of Section 6 of Article XIII B of the California
20Constitution.

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