BILL NUMBER: SB 1078 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 10, 2014
INTRODUCED BY Senator Jackson
FEBRUARY 19, 2014
An act to amend Section 345.5 of , and to add Section 636 to,
the Public Utilities Code, relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
SB 1078, as amended, Jackson. Electricity: Independent
System Operator. Emissions of greenhouse gases.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations,
as defined. The Public Utilities Act requires the Public Utilities
Commission to review and accept, modify, or reject a procurement plan
for each electrical corporation in accordance with specified
elements, incentive mechanisms, and objectives. Existing law requires
that in any long-term plan adopted by an electrical corporation, or
in a procurement plan implemented by a local publicly owned electric
utility, that the utility adopt a strategy applicable to both newly
constructed or repowered generation owned and procured by the utility
to achieve efficiency in the use of fossil fuels and to address
carbon emissions.
The Warren-Alquist State Energy Resources Conservation and
Development Act establishes the State Energy Resources Conservation
and Development Commission. The act requires the State Energy
Resources Conservation and Development Commission, beginning November
1, 2003, and by November 1 of every odd year thereafter, to adopt an
integrated energy policy report which includes an overview of major
energy trends and issues facing the state, an assessment and forecast
of system reliability, and the need for resource additions,
efficiency, and conservation.
This bill would require the Public Utilities Commission and the
State Energy Resources Conservation and Development Commission, by
July 1, 2015, to calculate and identify an anticipated target for
reducing emissions of greenhouse gases for the electrical industry to
be achieved statewide by 2030, in order to reach anticipated
statewide targets to be established for reducing emissions of
greenhouse gases from the electrical industry by the year 2050. The
bill would require that the targets be established consistent with 2
specified executive orders. The bill would require the State Energy
Resources Conservation and Development Commission and the Public
Utilities Commission to develop joint long-term electrical demand and
generational resource portfolio forecasts to develop scenarios to
achieve the anticipated targets.
The Public Utilities Act provides for the establishment of an
Independent System Operator as a nonprofit, public benefit
corporation. Existing law requires the Independent System Operator to
manage the transmission grid and related energy markets in a manner
that is consistent with (1) making the most efficient use of
available energy resources, (2) reducing, to the extent possible,
overall economic cost to the state's consumers, (3) applicable state
law intended to protect the public's health and the environment, and
(4) maximizing the availability of existing electric generation
resources necessary to meet the needs of the state's electricity
consumers.
This bill would revise the 4th requirement described
above to require that in managing the transmission grid and related
energy markets, the Independent System Operator do so consistent with
maximizing utilization of existing electrical resources, including
all cost-effective demand-side and renewable energy resources, that
are connected to the distribution or transmission grid, as are
necessary for reliable operation of the grid and sufficient to meet
the needs of the state's electricity consumers.
require the Independent System Operator to consider the
joint long-term electrical demand and generational resource portfolio
forecasts developed by the State Energy Resources Conservation and
Development Commission and the Public Utilities Commission when
undertaking long-term transmission planning and to advise the State
Energy Resources Conservation and Development Commission and the
Public Utilities Commission of any long-term resource actions that it
recommends that would facilitate its management of the electrical
grid in order to achieve compliance with the state's
long-term policy goals of reducing emissions of greenhouse gases. The
bill would require the Independent System Operator
to undertake its transmission planning consistent with the
requirements of the bill. The bill would require the Public Utilities
Commission to consider any recommendations made by the Independent
System Operator when acting on a long-term procurement plan submitted
by an electrical corporation and would require the State Energy
Resources Conservation and Development Commission to consider any
recommendations made by the Independent System Operator when adopting
an integrated energy policy report.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 345.5 of the Public
Utilities Code is amended to read:
345.5. (a) The Independent System Operator, as a nonprofit,
public benefit corporation, shall conduct its operations consistent
with applicable state and federal laws and consistent with the
interests of the people of the state.
(b) To ensure the reliability of electric service and the health
and safety of the public, the Independent System Operator shall
manage the transmission grid and related energy markets in a manner
that is consistent with all of the following:
(1) Making the most efficient use of available energy resources.
For purposes of this section, "available energy resources" include
energy, capacity, ancillary services, and demand bid into markets
administered by the Independent System Operator. "Available energy
resources" do not include a schedule submitted to the Independent
System Operator by an electrical corporation or a local publicly
owned electric utility to meet its own customer load.
(2) Reducing, to the extent possible, overall economic cost to the
state's consumers.
(3) Applicable state law intended to protect the public's health
and the environment , including undertaking its transmission
planning consistent with the requirements of Section 636 .
(4) Maximizing availability of existing electric generation
resources necessary to meet the needs of the state's electricity
consumers.
(5) Conducting internal operations in a manner that minimizes cost
impact on ratepayers to the extent practicable and consistent with
the provisions of this chapter.
(6) Communicating with all balancing area authorities in
California in a manner that supports electrical reliability.
(c) The Independent System Operator shall do all of the following:
(1) Consult and coordinate with appropriate state and local
agencies to ensure that the Independent System Operator operates in
furtherance of state law regarding consumer and environmental
protection.
(2) Ensure that the purposes and functions of the Independent
System Operator are consistent with the purposes and functions of
nonprofit, public benefit corporations in the state, including duties
of care and conflict-of-interest standards for officers and
directors of a corporation.
(3) Maintain open meeting standards and meeting notice
requirements consistent with the general policies of the Bagley-Keene
Open Meeting Act (Article 9 (commencing with Section 11120) of
Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code)
and affording the public the greatest possible access, consistent
with other duties of the corporation. The Independent System Operator'
s Open Meeting Policy, as adopted on April 23, 1998, and in effect as
of May 1, 2002, meets the requirements of this paragraph. The
Independent System Operator shall maintain a policy that is no less
consistent with the Bagley-Keene Open Meeting Act than its policy in
effect as of May 1, 2002.
(4) Provide public access to corporate records consistent with the
general policies of the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code) and affording the public the greatest possible
access, consistent with the other duties of the corporation. The
Independent System Operator's Information Availability Policy, as
adopted on October 22, 1998, and in effect as of May 1, 2002, meets
the requirements of this paragraph. The Independent System Operator
shall maintain a policy that is no less consistent with the
California Public Records Act than its policy in effect as of May 1,
2002.
SEC. 2. Section 636 is added to the
Public Utilities Code , to read:
636. (a) The commission and Energy Commission shall, by July 1,
2015, calculate and identify an anticipated target for reducing
emissions of greenhouse gases for the electrical industry to be
achieved statewide by 2030, in order to reach anticipated statewide
targets to be established for reducing emissions of greenhouse gases
from the electrical industry by the year 2050. The anticipated
targets shall be consistent with Governor's Executive Order S-03-05
(June 1, 2005), as modified by Governor's Executive Order B-18-12
(April 25, 2012). The statewide anticipated emissions reduction
targets for greenhouse gases for the electrical industry shall be
measured in tons of carbon dioxide or carbon dioxide equivalent and
percentage reductions from 2014 emissions.
(b) The commission and the Energy Commission shall develop joint
long-term electrical demand and generational resource portfolio
forecasts to develop scenarios to achieve the anticipated targets
identified pursuant to subdivision (b). The long-term electrical
demand forecasts shall consider the effects on electricity demand
resulting from cost-effective and reasonably achievable energy
efficiency and demand response measures, shall consider reasonably
foreseeable future demand for electric vehicles, and shall consider
other factors that may shift demand to the electrical industry from
other industry sectors in order to reduce overall statewide emissions
of greenhouse gases. The long-term generational portfolio forecasts
shall include generation by eligible renewable energy resources
procured by retail sellers and local publicly owned electric
utilities, anticipated distributed generation, hydroelectric
generation, anticipated resource flexibility from energy storage, and
generation from burning of fossil fuels, including reasonably
achievable technological improvements in generation.
(c) The Independent System Operator shall consider the joint
long-term electrical demand and generational resource portfolio
forecasts developed by the commission and the Energy Commission when
undertaking long-term transmission planning. The Independent System
Operator, when undertaking long-term transmission planning, shall
assess the operational characteristics, locations, and combinations
of cost-effective and reasonably achievable energy efficiency and
demand response measures and generational resources, as well as
expansion of, and improvements to, the transmission grid, that would
be needed to achieve the state's long-term policy goals of reducing
emissions of greenhouse gases while managing the electrical grid
consistent with the requirements of Section 345.5. The Independent
System Operator shall advise the commission and the Energy Commission
of any long-term resource actions that it recommends that would
facilitate its management of the electrical grid in order to achieve
compliance with the state's long-term policy goals of reducing
emissions of greenhouse gases.
(d) (1) The commission shall consider any recommendations made by
the Independent System Operator pursuant to subdivision (c) when
acting on a long-term procurement plan submitted by an electrical
corporation pursuant to Section 454.5.
(2) The Energy Commission shall consider any recommendations made
by the Independent System Operator pursuant to subdivision (c) when
adopting an integrated energy policy report pursuant to Section 25302
of the Public Resources Code.
SECTION 1. Section 345.5 of the Public
Utilities Code is amended to read:
345.5. (a) The Independent System Operator, as a nonprofit,
public benefit corporation, shall conduct its operations consistent
with applicable state and federal laws and consistent with the
interests of the people of the state.
(b) To ensure the reliability of electric service and the health
and safety of the public, the Independent System Operator shall
manage the transmission grid and related energy markets in a manner
that is consistent with all of the following:
(1) Making the most efficient use of available energy resources.
For purposes of this section, "available energy resources" include
energy, capacity, ancillary services, and demand bid into markets
administered by the Independent System Operator. "Available energy
resources" do not include a schedule submitted to the Independent
System Operator by an electrical corporation or a local publicly
owned electric utility to meet its own customer load.
(2) Reducing, to the extent possible, overall economic cost to the
state's consumers.
(3) Applicable state law intended to protect the public's health
and the environment.
(4) Maximizing utilization of existing electrical resources,
including all cost-effective demand-side and renewable energy
resources, that are connected to the distribution or transmission
grid, as are necessary for reliable operation of the grid and
sufficient to meet the needs of the state's electricity consumers.
(5) Conducting internal operations in a manner that minimizes cost
impact on ratepayers to the extent practicable and consistent with
the provisions of this chapter.
(6) Communicating with all balancing area authorities in
California in a manner that supports electrical reliability.
(c) The Independent System Operator shall do all of the following:
(1) Consult and coordinate with appropriate state and local
agencies to ensure that the Independent System Operator operates in
furtherance of state law regarding consumer and environmental
protection.
(2) Ensure that the purposes and functions of the Independent
System Operator are consistent with the purposes and functions of
nonprofit, public benefit corporations in the state, including duties
of care and conflict-of-interest standards for officers and
directors of a corporation.
(3) Maintain open meeting standards and meeting notice
requirements consistent with the general policies of the Bagley-Keene
Open Meeting Act (Article 9 (commencing with Section 11120) of
Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code)
and affording the public the greatest possible access, consistent
with other duties of the corporation. The Independent System Operator'
s Open Meeting Policy, as adopted on April 23, 1998, and in effect as
of May 1, 2002, meets the requirements of this paragraph. The
Independent System Operator shall maintain a policy that is no less
consistent with the Bagley-Keene Open Meeting Act than its policy in
effect as of May 1, 2002.
(4) Provide public access to corporate records consistent with the
general policies of the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code) and affording the public the greatest possible
access, consistent with the other duties of the corporation. The
Independent System Operator's Information Availability Policy, as
adopted on October 22, 1998, and in effect as of May 1, 2002, meets
the requirements of this paragraph. The Independent System Operator
shall maintain a policy that is no less consistent with the
California Public Records Act than its policy in effect as of May 1,
2002.