BILL NUMBER: SB 1139 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 21, 2014
AMENDED IN SENATE APRIL 2, 2014
INTRODUCED BY Senator Hueso
(Principal coauthor: Assembly Member V. Manuel Pérez)
FEBRUARY 20, 2014
An act to add Section 399.35 to the Public Utilities Code,
relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 1139, as amended, Hueso. California Renewables Portfolio
Standard Program.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations,
as defined, while local publicly owned electric utilities, as
defined, are under the direction of their governing board.
boards. The Public Utilities Act imposes various
duties and responsibilities on the commission with respect to the
purchase of electricity and requires the commission to review and
adopt a renewable energy procurement plan for each electrical
corporation pursuant to the California Renewables Portfolio Standard
Program. The California Renewables Portfolio Standard Program
requires a retail seller, as defined, and local publicly owned
electric utilities to purchase specified minimum quantities of
electricity products from eligible renewable energy resources, as
defined, for specified compliance periods. Existing law requires the
State Energy Resources Conservation and Development Commission
(Energy Commission) to certify eligible renewable energy resources
that it determines meet specified statutory criteria. A violation of
the Public Utilities Act is a crime.
This bill would require, no later than December 24, 2024, each
retail seller of electricity and local publicly owned
electric utility to procure a proportionate share, as determined by
the Energy Commission, of a statewide total of 500 megawatts of
electricity generated by specified baseload geothermal powerplants.
The bill would exempt a local publicly owned electric
utility serving fewer than 75,000 customers from the procurement
requirement. The bill would require, no later than January 1,
2016, each retail seller to file with the Public Utilities
Commission, and each local publicly owned electric utility to file
with the Energy Commission, a plan for complying with this
the procurement requirement. The bill would
provide that the electricity procured by retail sellers and local
publicly owned electric utilities from these baseload geothermal
powerplants does not count towards meeting their
requirements obligations under the California
Renewables Portfolio Standard Program to purchase specified minimum
quantities of electricity products from eligible renewable energy
resources. Because a violation of these provisions would be a crime
under the Public Utilities Act, the bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all
of the following:
(a) The California Global Warming Solutions Act of 2006 (AB 32)
established a policy to reduce emissions of greenhouse gases to 1990
levels by 2020 and to continue reductions of emissions of greenhouse
gases beyond 2020.
(b) Executive Order S-3-05 set a policy to reduce emissions of
greenhouse gases by 80 percent from 1990 levels by 2050.
Decarbonizing the electrical generation sector is a key part of
achieving California's policy goals for reducing emissions of
greenhouse gases.
(c) California's electrical supply portfolio must move from merely
increasing the proportion of generation from eligible renewable
energy resources to a portfolio of resources that supply all types of
needed generation, including baseload generation, ramping
generation, and peak load generation.
(d) Recent shortages in the supply of natural gas and the historic
price volatility of natural gas provide additional confirmation of
the need to reduce reliance on natural gas for electrical generation.
(e) California and the western United States have unique,
high-quality solar and geothermal resources. California utilities are
dramatically increasing their utilization of solar resources to
generate electricity, but not effectively increasing utilization of
geothermal resources. California's long-term electrical supply
portfolio should include much greater reliance on geothermal
resources.
(f) Only a fraction of the geothermal resources that could be
supplying California consumers are currently being utilized, and
there has been very little increase in geothermal generation capacity
during the past decade.
(g) The current process used to procure new energy resources
eligible under the California Renewables Portfolio Standard Program
does not adequately value the diverse types of renewable resources
needed to supply California with mostly carbon-free electricity after
2020 while maintaining reliability. Almost no new baseload eligible
renewable energy resources have been procured during the past decade.
(h) To maintain electrical system reliability relying on
generation that, for the most part, emits no greenhouse gases, that
generation must be deliverable to retail customers in real time.
(i) California's electrical corporations should add at least 500
megawatts of electricity from new baseload geothermal generation by
the end of 2024.
(j) Many geothermal resources have the additional benefit of
supplying lithium and other strategic minerals. Currently, the United
States is dependent on foreign supplies for these minerals. Lithium
is needed for electric vehicle batteries. The State Air Resources
Board has identified increasing electric vehicles as a California and
national priority as part of implementing AB 32 and reaching goals
for reducing emissions of greenhouse gases. Thus, increasing
production of lithium and other strategic minerals as a co-benefit of
increased production of baseload geothermal power is in the national
interest of the United States.
(k) To provide for just and reasonable rates, contracts to procure
electricity generated from baseload geothermal power pursuant to
Section 399.35 of the Public Utilities Code should be based on the
cost of generating the electricity, including environmental
mitigation costs, a reasonable rate of return on investment, and the
costs of financing the powerplant.
SECTION 1. SEC. 2. Section 399.35 is
added to the Public Utilities Code, to read:
399.35. (a) No later than December 31, 2024, each retail seller
and local publicly owned electric utility shall procure a
proportionate share of a statewide total of 500 megawatts of
electricity generated by baseload geothermal powerplants that began
being constructed after January 1, 2015, and that meet the
requirements of paragraph (1) of subdivision (b) of Section 399.16.
A local publicly owned electric utility serving fewer than
75,000 customers shall not be required to procure a proportionate
share.
(b) No later than June 30, 2015, the Energy Commission shall
determine the proportionate share of the 500 megawatts of electricity
that each retail seller and local publicly owned electric utility is
required to procure pursuant to subdivision (a). For purposes of
this section, "proportionate share" shall be based on the forecast
retail sales for the year 2018.
(c) No later than January 1, 2016, each retail seller shall file
with the commission, and each local publicly owned electric utility
shall file with the Energy Commission, a plan for complying with
subdivision (a). Those plans shall require each retail seller and
local publicly owned electric utility to procure at least one-half of
its proportionate share by December 31, 2019. Those plans may
authorize a retail seller or local publicly owned electric utility to
aggregate its proportionate share with the proportionate
share of another retail seller or local publicly owned electric
utility in order to minimize administrative and contracting costs.
The commission shall review and approve, modify, or reject
plans filed by retail sellers. The Energy Commission shall review and
approve, modify, or reject plans filed by local publicly owned
electric utilities.
(d) The electricity procured pursuant to this section shall not
count towards meeting the requirements specified in subparagraph (B)
of paragraph (2) of subdivision (b) of Section 399.15 or paragraph
(2) of subdivision (c) of Section 399.30.
(e) The electricity procured pursuant to this section shall be
procured to reasonably minimize costs. A contract entered into
pursuant to subdivision (a) by a retail seller or local
publicly owned electric utility for the electricity generated by a
baseload geothermal powerplant that meets the requirements of this
section shall take into account the costs of generating the
electricity, including environmental mitigation costs, a reasonable
rate of return on investment, and the costs of financing the
powerplant, and the costs of the contract shall be recoverable in
rates. Subdivision (c) of Section 399.15 shall not apply to
electricity procured pursuant to this section.
SEC. 2. SEC. 3. No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution because the only costs that may be incurred
by a local agency or school district will be incurred because this
act creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction, within
the meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article XIII
B of the California Constitution.