BILL NUMBER: SB 1139 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 22, 2014
AMENDED IN ASSEMBLY AUGUST 19, 2014
AMENDED IN ASSEMBLY JULY 2, 2014
AMENDED IN SENATE MAY 27, 2014
AMENDED IN SENATE MAY 6, 2014
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. 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, 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 31, 2024, each
retail seller of electricity to procure a proportionate share, as
determined by the Energy Commission,
commission, of a statewide total of 500 megawatts of
electricity generated by specified baseload geothermal powerplants.
The bill would require, no later than January 1, 2016, each retail
seller to file with the Public Utilities Commission
commission a plan for complying with the
procurement requirement. The bill would authorize the Public
Utilities Commission commission to determine
whether the electricity procured by retail sellers from these
baseload geothermal powerplants shall count towards meeting their
obligations under the California Renewables Portfolio Standard
Program to purchase specified minimum quantities of electricity
products from eligible renewable energy resources. The bill would
prohibit the commission from approving a power purchase agreement to
procure electricity pursuant to the above-described requirement that
would result in a cumulative increase in the average rate for
electricity paid by the ratepayers of the retail seller of 1% or
more. The bill would require projects generating electricity procured
pursuant to the bill's requirements to demonstrate an environmental
benefit to California. 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 bill would require the commission,
no later than July 1, 2015, to issue an order instituting an
investigation to examine the expiration of power purchase agreements
between retail sellers and existing geothermal generation facilities.
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 peakload 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 the 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 retail sellers 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 cobenefit of
increased production of baseload geothermal power is in the national
interest of the United States.
(k) It is the intent of the Legislature that the procurement
expenditure limitations described in subdivision (c) of Section
399.15 of the Public Utilities Code apply to electricity procured
pursuant to Section 399.35 of the Public Utilities Code.
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
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.
(b) No later than June 30, 2015, the Energy Commission
commission shall determine the proportionate
share of the 500 megawatts of electricity that each retail seller 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 a plan for complying with subdivision (a). Those
plans shall require each retail seller to procure at least one-half
of its proportionate share by December 31, 2019. Those plans may
authorize a retail seller to aggregate its proportionate share with
the proportionate share of another retail seller in order to minimize
administrative and contracting costs. The commission shall review
and approve, modify, or reject plans filed by retail sellers.
(d) The commission may determine whether electricity procured
pursuant to this section shall count towards meeting the requirements
specified in subparagraph (B) of paragraph (2) of subdivision (b) of
Section 399.15.
(e) The electricity procured pursuant to this section shall be
procured to reasonably minimize costs. The commission shall not
approve a power purchase agreement to procure electricity pursuant to
this section that would result in a cumulative increase in the
average rate for electricity paid by the ratepayers of the retail
seller of 1 percent or more.
(f) No later than July 1, 2015, the commission shall issue an
order instituting an investigation to examine the expiration of power
purchase agreements between retail sellers and existing geothermal
generation facilities. The commission shall investigate the
particular circumstances of those expiring agreements and the value
of renewing those agreements. The investigation shall include, but
not be limited to, the cost-effective value of facilities for system
reliability, achieving greenhouse gas emissions reduction goals, the
local economy and creation of good jobs, and evaluation of
appropriate allocation of reliability costs for any new or renewed
power purchase agreements. The commission shall revise its
procurement review process to ensure the value of an existing
facility is properly accounted for when compared to alternative
renewable and conventional resources and ensure that facilities with
expiring contracts are not disadvantaged by new procurement of new
baseload generation when expiring contracts are considered for
renewal.
(g) Projects generating electricity procured under this section
shall demonstrate an environmental benefit to California, such as
reducing air pollution from fugitive dust, recycling treated
wastewater, or enabling the production of lithium for electric
vehicle batteries.
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.