Amended in Senate August 17, 2015

Amended in Assembly April 14, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1144

Introduced by Assembly Member Rendon

February 27, 2015

An act to amend Section 399.16 of the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

AB 1144, as amended, Rendon. California Renewables Portfolio Standard Program: begin delete unbundled end delete renewable energy credits.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. The existing definition of an electrical corporation excludes from that definition a corporation or person employing landfill gas technology or digester gas technology for the generation of electricity for (1) its own use or the use of not more than 2 of its tenants located on the real property on which the electricity is generated, (2) the use of or sale to not more than 2 other corporations or persons solely for use on the real property on which the electricity is generated, or (3) the sale or transmission to an electrical corporation or state or local public agency, if the sale or transmission of the electricity service to a retail customer is provided through the transmission system of the existing local publicly owned electric utility or electrical corporation of that retail customer.

The California Renewables Portfolio Standard Program requires the Public Utilities Commission to establish a renewables portfolio standard requiring all retail sellers, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources, as defined, at specified percentages of the total kilowatthours sold to their retail end-customers during specified compliance periods. The program additionally requires each local publicly owned electric utility, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources to achieve the targets established by the program. The program, consistent with the goals of procuring the least-cost and best-fit eligible renewable energy resources that meet project viability principles, requires that all retail sellers procure a balanced portfolio of electricity products from eligible renewable energy resources, as specified, referred to as the portfolio content requirements.

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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. This tariff requirement is known as the renewable feed-in tariff program. The program additionally requires the commission, by June 1, 2013, to direct the electrical corporations to collectively procure at least 250 megawatts of cumulative rated generating capacity from developers of bioenergy projects that commence operation on or after June 1, 2013. Pursuant to this requirement, the commission has established the small-scale bioenergy feed-in tariff program.

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This bill would provide that begin delete unbundled end delete renewable energy credits may be used to meet the first category of the portfolio content requirements if (1) the credits are earned by electricity that is generated by an entity that, if it were a person or corporation, would be excluded from the definition of an electrical corporation by operation of the exclusions for a corporation or person employing landfill gas technology or digester gas technology, (2) the entity employing the landfill gas technology or digester gas technology has a first point of interconnection with a California balancing authority, a first point of interconnection with distribution facilities used to serve end users within a California balancing authority area, or begin delete are end delete begin insert is end insert scheduled from the eligible renewable energy resource into a California balancing authority without substituting electricity from another source, begin delete and end delete (3) where the electricity generated that earned the credit is used at a wastewater treatment facility that is owned by a public begin delete entity and end delete begin insert entity, (4) the generating capability, as specified, of the wastewater treatment facility that earned the renewable energy credit is end insert first put into service on or after January 1, begin delete 2016. end delete begin insert 2016, and (5) the wastewater treatment facility does not participate in the small-scale bioenergy feed-in tariff program. The bill would prohibit a public entity, selling renewable energy that is eligible to meet the first category of the portfolio content requirements pursuant to the bill’s provisions, from making any marketing or advertising claims regarding the renewable attributes of the electricity that earned the renewable energy credit. The bill would require that the electricity generated that earned the renewable energy credit that is sold by the public entity be added to the total retail sales of the retail seller or local publicly owned electric utility purchasing the renewable energy credit for purposes of determining their renewables portfolio standard procurement requirements. end insert

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

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

SECTION 1.  

Section 399.16 of the Public Utilities Code is
amended to read:

399.16.  

(a) Various electricity products from eligible renewable
energy resources located within the WECC transmission network
service area shall be eligible to comply with the renewables
portfolio standard procurement requirements in Section 399.15.
These electricity products may be differentiated by their impacts
on the operation of the grid in supplying electricity, as well as,
meeting the requirements of this article.

(b) Consistent with the goals of procuring the least-cost and
best-fit electricity products from eligible renewable energy
resources that meet project viability principles adopted by the
commission pursuant to paragraph (4) of subdivision (a) of Section
399.13 and that provide the benefits set forth in Section 399.11, a
balanced portfolio of eligible renewable energy resources shall be
procured consisting of the following portfolio content categories:

(1) Eligible renewable energy resource electricity products that
meet any of the following criteria:

(A) Have a first point of interconnection with a California
balancing authority, have a first point of interconnection with
distribution facilities used to serve end users within a California
balancing authority area, or are scheduled from the eligible
renewable energy resource into a California balancing authority
without substituting electricity from another source. The use of
another source to provide real-time ancillary services required to
maintain an hourly or subhourly import schedule into a California
balancing authority shall be permitted, but only the fraction of the
schedule actually generated by the eligible renewable energy
resource shall count toward this portfolio content category.

(B) Have an agreement to dynamically transfer electricity to a
California balancing authority.

(C)  begin delete Unbundled renewable end delete begin insert Renewable end insert energy credits that are
earned by electricity that is generated by an entity that, if it were
a person or corporation, would be excluded from the definition of
an electrical corporation by operation of subdivision (c) or (d) of
Section 218, begin delete that meets the criteria of subparagraph (A), and where
the electricity generated that earned the credit is used at a
wastewater treatment facility that is owned by a public entity and
first put into service on or after January 1, 2016. end delete begin insert consistent with
the following requirements: end insert

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(i) The generating facility earning the renewable energy credit
meets the criteria of subparagraph (A).

end insert begin insert

(ii) The electricity generated that earned the renewable energy
credit is used at a wastewater treatment facility that is owned by
a public entity.

end insert begin insert

(iii) The generating capability of the wastewater treatment
facility that earned the renewable energy credit is first put into
service on or after January 1, 2016. For these purposes,
“generating capability” includes new or additional generation of
electricity at a wastewater treatment facility that is the result of
capital investment or operational changes made to the facility on
or after January 1, 2016, that result in incremental increases in
generation at the facility, as well as repowered wastewater
facilities.

end insert begin insert

(iv) The wastewater treatment facility does not participate in
the small-scale bioenergy feed-in tariff program established by
the commission pursuant to Section 399.20.

end insert

(2) Firmed and shaped eligible renewable energy resource
electricity products providing incremental electricity and scheduled
into a California balancing authority.

(3) Eligible renewable energy resource electricity products, or
any fraction of the electricity generated, including unbundled
renewable energy credits, that do not qualify under the criteria of
paragraph (1) or (2).

(c) In order to achieve a balanced portfolio, all retail sellers
shall meet the following requirements for all procurement credited
toward each compliance period:

(1) Not less than 50 percent for the compliance period ending
December 31, 2013, 65 percent for the compliance period ending
December 31, 2016, and 75 percent thereafter of the eligible
renewable energy resource electricity products associated with
contracts executed after June 1, 2010, shall meet the product
content requirements of paragraph (1) of subdivision (b).

(2) Not more than 25 percent for the compliance period ending
December 31, 2013, 15 percent for the compliance period ending
December 31, 2016, and 10 percent thereafter of the eligible
renewable energy resource electricity products associated with
contracts executed after June 1, 2010, shall meet the product
content requirements of paragraph (3) of subdivision (b).

(3) Any renewable energy resources contracts executed on or
after June 1, 2010, not subject to the limitations of paragraph (1)
or (2), shall meet the product content requirements of paragraph
(2) of subdivision (b).

(4) For purposes of electric service providers only, the
restrictions in this subdivision on crediting eligible renewable
energy resource electricity products to each compliance period
shall apply to contracts executed after January 13, 2011.

(d) Any contract or ownership agreement originally executed
prior to June 1, 2010, shall count in full toward the procurement
requirements established pursuant to this article, if all of the
following conditions are met:

(1) The renewable energy resource was eligible under the rules
in place as of the date when the contract was executed.

(2) For an electrical corporation, the contract has been approved
by the commission, even if that approval occurs after June 1, 2010.

(3) Any contract amendments or modifications occurring after
June 1, 2010, do not increase the nameplate capacity or expected
quantities of annual generation, or substitute a different renewable
energy resource. The duration of the contract may be extended if
the original contract specified a procurement commitment of 15
or more years.

(e) A retail seller may apply to the commission for a reduction
of a procurement content requirement of subdivision (c). The
commission may reduce a procurement content requirement of
subdivision (c) to the extent the retail seller demonstrates that it
cannot comply with that subdivision because of conditions beyond
the control of the retail seller as provided in paragraph (5) of
subdivision (b) of Section 399.15. The commission shall not, under
any circumstance, reduce the obligation specified in paragraph (1)
of subdivision (c) below 65 percent for any compliance obligation
after December 31, 2016.

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(f) (1) A public entity selling renewable energy credits that are
eligible for treatment pursuant to subparagraph (C) of paragraph
(1) of subdivision (b) shall not make any marketing or advertising
claims regarding the renewable attributes of the electricity that
earned the renewable energy credit. All renewable attributes of
the electricity that earned the renewable energy credit are
transferred to the purchaser of the renewable energy credit.

end insert begin insert

(2) For purposes of calculating the renewables portfolio
standard procurement obligations for a retail seller pursuant to
Section 399.15, and for a local publicly owned electric utility
pursuant to Section 399.30, the electricity generated that earned
the renewable energy credit that is eligible for treatment pursuant
to subparagraph (C) of paragraph (1) of subdivision (b) and is
sold by the public entity shall be added to the total retail sales of
the retail seller or local publicly owned electric utility that
purchases the renewable energy credit.

end insert