Amended in Senate April 4, 2013

Senate Bill No. 767

Introduced by Senator Lieu

February 22, 2013

An act to amend Section begin delete 216 end delete begin insert 399.12.6 end insert of the Public Utilities Code, relating to public utilities.

LEGISLATIVE COUNSEL’S DIGEST

SB 767, as amended, Lieu. Public begin delete utilities. end delete begin insert utilities: California Renewables Portfolio Standard Program: biomethane. end insert

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Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as defined. The existing California Renewables Portfolio Standard Program (RPS program) requires a retail seller of electricity, as defined, and a local publicly owned electric utility to purchase specified minimum quantities of electricity products from eligible renewable energy resources, as defined, for specified compliance periods. Existing law requires the procurement of biomethane delivered through a common carrier pipeline under a contract, as provided, to count toward the procurement requirements established by the RPS program, under rules in place at the time the contract was executed, provided that the rules apply only to sources that are producing biomethane and injecting it into a common carrier pipeline on or before April 1, 2014.

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This bill would amend that date to April 1, 2015.

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Under existing law, the Public Utilities Commission has regulatory authority over public utilities and can establish its own procedures, subject to statutory limitations or directions and constitutional requirements of due process. The Public Utilities Act provides the commission with specified regulatory authorities over public utilities. The act defines the term “public utilities” for the purposes of the act.

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This bill would make technical, nonsubstantive changes to that definition.

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

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

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begin insert SECTION 1. end insert   

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begin insert Section 399.12.6 of the end insert begin insert Public Utilities Code end insert begin insert is
amended to read: end insert

399.12.6.  

(a) (1) Any procurement of biomethane delivered
through a common carrier pipeline under a contract executed by
a retail seller or local publicly owned electric utility and reported
to the Energy Commission prior to March 29, 2012, and otherwise
eligible under the rules in place as of the date of contract execution
shall count toward the procurement requirements established in
this article, under the rules in place at the time the contract was
executed, including the Fourth Edition of the Energy Commission’s
Renewables Portfolio Standard Eligibility Guidebook, provided
that those rules shall apply only to sources that are producing
biomethane and injecting it into a common carrier pipeline on or
before April 1, begin delete 2014 end delete begin insert 2015 end insert .

(2) The eligibility requirements of subdivision (b) shall apply
beginning March 29, 2012, to any quantities of biomethane
associated with any of the following:

(A) An extension of the term of the original contract.

(B) Any quantity of biomethane that exceeds the quantities of
biomethane specified in the original contract.

(C) Any optional quantities of biomethane that can be exercised
at the discretion of the buyer.

(D) Any change in the source or sources of biomethane
identified in the original contract or the original application for
certification submitted to the Energy Commission.

(E) Any quantity of biomethane from a source not producing
and capturing biomethane and injecting it into a common carrier
pipeline on or before April 1, begin delete 2014 end delete begin insert 2015 end insert .

(F) The conditions of this paragraph shall apply beginning
March 29, 2012.

(b) For contracts initially executed on or after March 29, 2012,
or for quantities of biomethane associated with contract
amendments executed on or after March 29, 2012, the use of
biomethane by a generating facility shall not qualify as an eligible
renewable energy resource unless it satisfies all applicable
requirements established by the Energy Commission and meets
any of the following requirements:

(1) The biomethane is used by an onsite generating facility.

(2) The biomethane is used by an offsite generating facility and
delivered to the generating facility through a dedicated pipeline.

(3) The biomethane is delivered to a generating facility through
a common carrier pipeline and meets all of the following
requirements:

(A) The source of biomethane injects the biomethane into a
common carrier pipeline that physically flows within California
or toward the generating facility for which the biomethane was
procured under the original contract.

(B) The source of biomethane did not inject biomethane into a
common carrier pipeline prior to March 29, 2012, or the source
commenced injection of sufficient incremental quantities of
biomethane after March 29, 2012, to satisfy the contract
requirements.

(C) The seller or purchaser of the biomethane demonstrates that
the capture and injection of biomethane into a common carrier
pipeline directly results in at least one of the following
environmental benefits to California:

(i) The reduction or avoidance of the emission of any criteria
air pollutant in California.

(ii) The reduction or avoidance of pollutants that could have an
adverse impact on waters of the state.

(iii) The alleviation of a local nuisance within California that
is associated with the emission of odors.

(c) For all electricity products generated using biomethane that
are credited toward the renewables portfolio standard procurement
obligations established pursuant to this article, sufficient renewable
and environmental attributes of biomethane production and capture
shall be transferred to the retail seller or local publicly owned
electric utility that uses that biomethane to ensure that there are
zero net emissions associated with the production of electricity
from the generating facility using the biomethane. The provisions
of this subdivision shall be applied in a manner consistent with
the definition of “green attributes” as specified by the commission
in Decision 08-08-028, Decision on Definition and Attributes of
Renewable Energy Credits for Compliance with the California
Renewables Portfolio Standard (August 21, 2008), as may be
modified by subsequent decision of the commission.

(d) All sellers and purchasers of biomethane shall comply with
a system for tracking and verifying the use of biomethane, as
established by the Energy Commission, that is equivalent to the
system required by subdivision (c) of Section 399.25.

(e) For contracts initially executed on or after March 29, 2012,
or for quantities of biomethane associated with contract
amendments executed after March 29, 2012, the use of biomethane
shall be assigned to the appropriate portfolio content category
based on the application of the criteria in subdivision (b) of Section
399.16 to the procurement of electricity by the retail seller or local
publicly owned electric utility from the generating facility
consuming the biomethane.

(f) A retail seller, local publicly owned electric utility, or an
intermediary party to a biomethane procurement contract shall not
make a marketing, regulatory, or retail claim that asserts that a
biomethane procurement contract to which that entity was a party
resulted, or will result, in greenhouse gas reductions related to the
destruction of methane if the capture and destruction is required
by law. If the capture and destruction of the biomethane is not
required by law, a retail seller, local publicly owned electric utility,
or an intermediary party to a biomethane procurement contract
shall not make a marketing, regulatory, or retail claim that asserts
that a biomethane procurement contract to which that entity was
a party resulted, or will result, in greenhouse gas reductions related
to the destruction of methane, unless the environmental attributes
associated with the capture and destruction of the biomethane
pursuant to that contract are transferred to the retail seller or
publicly owned electric utility that purchased that biomethane and
retired on behalf of the retail customers consuming the electricity
associated with the use of that biomethane, or unless the
biomethane procurement contract prohibits the source of
biomethane from separately marketing the environmental attributes
associated with the capture and destruction of the biomethane sold
pursuant to that contract. These attributes shall be retired and may
not be resold.

(g) For the purposes of this section, “biomethane” means landfill
gas or digester gas, consistent with Section 25741 of the Public
Resources Code.

(h) If any provision of this section or the application of any
provision of this section is held invalid, biomethane delivered
through a common carrier pipeline pursuant to a contract executed
within 180 days of, or at any time subsequent to, the invalidation
of that provision shall not qualify as an eligible renewable energy
resource.

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SECTION 1.  

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

216.  

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

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

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

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

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

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

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

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

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

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