Senate BillNo. 674


Introduced by Senator Corbett

February 22, 2013


An act to amend Section 399.20 of the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

SB 674, as introduced, Corbett. Energy: renewable energy.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities. Existing law requires every electrical corporation to file with the commission a standard tariff for electricity generated by an electric generation facility, as defined, that qualifies for the tariff, is owned and operated by a retail customer of the electrical corporation, and is located within the service territory of, and developed to sell electricity to, the electrical corporation. Existing law requires an electrical corporation to make the tariff available to the owner or operator of an electric generation facility within the service territory of the electrical corporation, as specified, until the electrical corporation meets its proportionate share of a statewide cap of 750 megawatts, as specified.

This bill would require the commission to adjust the payment rate for electricity purchased from electrical generation facility projects that integrate energy storage to adequately compensate for the additional value that energy storage system provides.

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

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

P2    1

SECTION 1.  

Section 399.20 of the Public Utilities Code is
2amended to read:

3

399.20.  

(a) It is the policy of this state and the intent of the
4Legislature to encourage electrical generation from eligible
5renewable energy resources.

6(b) As used in this section, “electric generation facility” means
7an electric generation facility located within the service territory
8of, and developed to sell electricity to, an electrical corporation
9that meets all of the following criteria:

10(1) Has an effective capacity of not more than three megawatts.

11(2) Is interconnected and operates in parallel with the electrical
12transmission and distribution grid.

13(3) Is strategically located and interconnected to the electrical
14transmission and distribution grid in a manner that optimizes the
15deliverability of electricity generated at the facility to load centers.

16(4) Is an eligible renewable energy resource.

17(c) Every electrical corporation shall file with the commission
18a standard tariff for electricity purchased from an electric
19generation facility. The commission may modify or adjust the
20requirements of this section for any electrical corporation with less
21than 100,000 service connections, as individual circumstances
22merit.

23(d) (1) The tariff shall provide for payment for every
24kilowatthour of electricity purchased from an electric generation
25facility for a period of 10, 15, or 20 years, as authorized by the
26commission. The payment shall be the market price determined
27by the commission pursuant to paragraph (2) and shall include all
28current and anticipated environmental compliance costs, including,
29but not limited to, mitigation of emissions of greenhouse gases
30and air pollution offsets associated with the operation of new
31generating facilities in the local air pollution control or air quality
32management district where the electric generation facility is
33located.

34(2) The commission shall establish a methodology to determine
35the market price of electricity for terms corresponding to the length
36of contracts with an electric generation facility, in consideration
37of the following:

P3    1(A) The long-term market price of electricity for fixed price
2contracts, determined pursuant to an electrical corporation’s general
3procurement activities as authorized by the commission.

4(B) The long-term ownership, operating, and fixed-price fuel
5costs associated with fixed-price electricity from new generating
6facilities.

7(C) The value of different electricity products including
8baseload, peaking, and as-available electricity.

9(3) The commission may adjust the payment rate to reflect the
10value of every kilowatthour of electricity generated on a
11time-of-delivery basis.

12(4) The commission shall ensure, with respect to rates and
13charges, that ratepayers that do not receive service pursuant to the
14tariff are indifferent to whether a ratepayer with an electric
15generation facility receives service pursuant to the tariff.

begin insert

16(5) The commission shall adjust the payment rate for electricity
17purchased from electrical generation facility projects that integrate
18energy storage to adequately compensate for the additional value
19that energy storage system provides. The adjustment shall reflect
20all the benefits that the energy storage system provides to the
21electrical corporation and the grid.

end insert

22(e) An electrical corporation shall provide expedited
23interconnection procedures to an electric generation facility located
24on a distribution circuit that generates electricity at a time and in
25a manner so as to offset the peak demand on the distribution circuit,
26if the electrical corporation determines that the electric generation
27facility will not adversely affect the distribution grid. The
28commission shall consider and may establish a value for an electric
29generation facility located on a distribution circuit that generates
30electricity at a time and in a manner so as to offset the peak demand
31on the distribution circuit.

32(f) (1) An electrical corporation shall make the tariff available
33to the owner or operator of an electric generation facility within
34the service territory of the electrical corporation, upon request, on
35a first-come-first-served basis, until the electrical corporation meets
36its proportionate share of a statewide cap of 750 megawatts
37cumulative rated generation capacity served under this section and
38Section 387.6. The proportionate share shall be calculated based
39on the ratio of the electrical corporation’s peak demand compared
40to the total statewide peak demand.

P4    1(2) By June 1, 2013, the commission shall, in addition to the
2750 megawatts identified in paragraph (1), direct the electrical
3corporations to collectively procure at least 250 megawatts of
4cumulative rated generating capacity from developers of bioenergy
5projects that commence operation on or after June 1, 2013. The
6commission shall, for each electrical corporation, allocate shares
7of the additional 250 megawatts based on the ratio of each electrical
8corporation’s peak demand compared to the total statewide peak
9demand. In implementing this paragraph, the commission shall do
10all of the following:

11(A) Allocate the 250 megawatts identified in this paragraph
12among the electrical corporations based on the following
13categories:

14(i) For biogas from wastewater treatment, municipal organic
15waste diversion, food processing, and codigestion, 110 megawatts.

16(ii) For dairy and other agricultural bioenergy, 90 megawatts.

17(iii) For bioenergy using byproducts of sustainable forest
18management, 50 megawatts. Allocations under this category shall
19be determined based on the proportion of bioenergy that sustainable
20forest management providers derive from sustainable forest
21management in fire threat treatment areas, as designated by the
22Department of Forestry and Fire Protection.

23(B) Direct the electrical corporations to develop standard
24contract terms and conditions that reflect the operational
25characteristics of the projects, and to provide a streamlined
26contracting process.

27(C) Coordinate, to the maximum extent feasible, any incentive
28or subsidy programs for bioenergy with the agencies listed in
29subparagraph (A) of paragraph (3) in order to provide maximum
30benefits to ratepayers and to ensure that incentives are used to
31reduce contract prices.

32(D) The commission shall encourage gas and electrical
33corporations to develop and offer programs and services to facilitate
34development of in-state biogas for a broad range of purposes.

35(3) (A) The commission, in consultation with the State Energy
36Resources Conservation and Development Commission, the State
37Air Resources Board, the Department of Forestry and Fire
38Protection, the Department of Food and Agriculture, and the
39Department of Resources Recycling and Recovery, may review
P5    1the allocations of the 250 additional megawatts identified in
2paragraph (2) to determine if those allocations are appropriate.

3(B) If the commission finds that the allocations of the 250
4additional megawatts identified in paragraph (2) are not
5appropriate, the commission may reallocate the 250 megawatts
6among the categories established in subparagraph (A) of paragraph
7(2).

8(4) For the purposes of this subdivision, “bioenergy” means
9biogas and biomass.

10(g) The electrical corporation may make the terms of the tariff
11available to owners and operators of an electric generation facility
12in the form of a standard contract subject to commission approval.

13(h) Every kilowatthour of electricity purchased from an electric
14generation facility shall count toward meeting the electrical
15corporation’s renewables portfolio standard annual procurement
16targets for purposes of paragraph (1) of subdivision (b) of Section
17399.15.

18(i) The physical generating capacity of an electric generation
19facility shall count toward the electrical corporation’s resource
20adequacy requirement for purposes of Section 380.

21(j) (1) The commission shall establish performance standards
22for any electric generation facility that has a capacity greater than
23one megawatt to ensure that those facilities are constructed,
24operated, and maintained to generate the expected annual net
25production of electricity and do not impact system reliability.

26(2) The commission may reduce the three megawatt capacity
27limitation of paragraph (1) of subdivision (b) if the commission
28finds that a reduced capacity limitation is necessary to maintain
29system reliability within that electrical corporation’s service
30territory.

31(k) (1) Any owner or operator of an electric generation facility
32that received ratepayer-funded incentives in accordance with
33Section 379.6 of this code, or with Section 25782 of the Public
34Resources Code, and participated in a net metering program
35pursuant to Sections 2827, 2827.9, and 2827.10 of this code prior
36to January 1, 2010, shall be eligible for a tariff or standard contract
37filed by an electrical corporation pursuant to this section.

38(2) In establishing the tariffs or standard contracts pursuant to
39this section, the commission shall consider ratepayer-funded
40incentive payments previously received by the generation facility
P6    1pursuant to Section 379.6 of this code or Section 25782 of the
2Public Resources Code. The commission shall require
3reimbursement of any funds received from these incentive
4programs to an electric generation facility, in order for that facility
5to be eligible for a tariff or standard contract filed by an electrical
6corporation pursuant to this section, unless the commission
7determines ratepayers have received sufficient value from the
8incentives provided to the facility based on how long the project
9has been in operation and the amount of renewable electricity
10previously generated by the facility.

11(3) A customer that receives service under a tariff or contract
12approved by the commission pursuant to this section is not eligible
13to participate in any net metering program.

14(l) An owner or operator of an electric generation facility
15electing to receive service under a tariff or contract approved by
16the commission shall continue to receive service under the tariff
17or contract until either of the following occurs:

18(1) The owner or operator of an electric generation facility no
19longer meets the eligibility requirements for receiving service
20pursuant to the tariff or contract.

21(2) The period of service established by the commission pursuant
22to subdivision (d) is completed.

23(m) Within 10 days of receipt of a request for a tariff pursuant
24to this section from an owner or operator of an electric generation
25facility, the electrical corporation that receives the request shall
26post a copy of the request on its Internet Web site. The information
27posted on the Internet Web site shall include the name of the city
28in which the facility is located, but information that is proprietary
29and confidential, including, but not limited to, address information
30beyond the name of the city in which the facility is located, shall
31be redacted.

32(n) An electrical corporation may deny a tariff request pursuant
33to this section if the electrical corporation makes any of the
34following findings:

35(1) The electric generation facility does not meet the
36requirements of this section.

37(2) The transmission or distribution grid that would serve as the
38point of interconnection is inadequate.

P7    1(3) The electric generation facility does not meet all applicable
2state and local laws and building standards and utility
3interconnection requirements.

4(4) The aggregate of all electric generating facilities on a
5distribution circuit would adversely impact utility operation and
6load restoration efforts of the distribution system.

7(o) Upon receiving a notice of denial from an electrical
8corporation, the owner or operator of the electric generation facility
9denied a tariff pursuant to this section shall have the right to appeal
10that decision to the commission.

11(p) In order to ensure the safety and reliability of electric
12generation facilities, the owner of an electric generation facility
13receiving a tariff pursuant to this section shall provide an inspection
14 and maintenance report to the electrical corporation at least once
15every other year. The inspection and maintenance report shall be
16prepared at the owner’s or operator’s expense by a
17California-licensed contractor who is not the owner or operator of
18the electric generation facility. A California-licensed electrician
19shall perform the inspection of the electrical portion of the
20generation facility.

21(q) The contract between the electric generation facility
22receiving the tariff and the electrical corporation shall contain
23provisions that ensure that construction of the electric generating
24facility complies with all applicable state and local laws and
25building standards, and utility interconnection requirements.

26(r) (1) All construction and installation of facilities of the
27electrical corporation, including at the point of the output meter
28or at the transmission or distribution grid, shall be performed only
29by that electrical corporation.

30(2) All interconnection facilities installed on the electrical
31corporation’s side of the transfer point for electricity between the
32electrical corporation and the electrical conductors of the electric
33generation facility shall be owned, operated, and maintained only
34by the electrical corporation. The ownership, installation, operation,
35reading, and testing of revenue metering equipment for electric
36generating facilities shall only be performed by the electrical
37corporation.



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