Amended in Assembly April 6, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1333

Introduced by Assembly Member Quirk

February 27, 2015

An act to begin delete amend Section 399.20 end delete begin insert add Chapter 6 (commencing with Section 8390) to Division 4.1 end insert of the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

AB 1333, as amended, Quirk. begin delete Renewable energy. end delete begin insert Energy efficiency programs. end insert

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Existing law requires the Public Utilities Commission, in consultation with the State Energy Resources Conservation and Development Commission, to identify all potential cost-effective energy efficiency savings and establish efficiency targets for an electrical or gas corporation. Existing law requires a local publicly owned electric utility, in procuring energy, to acquire all cost-effective energy efficiency and demand response resources that are cost-effective, reliable, and feasible.

end insert begin insert

This bill would require electric and gas corporations and local publicly owned electric and gas utilities to require recipients of rebates or incentives from their residential or commercial energy efficiency or weatherization programs to install demand response infrastructure on the property for which the rebates or incentives are provided.

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Under the Public Utilities Act, electrical corporations are required to file with the Public Utilities Commission a standard tariff for electricity purchased from certain electric generation facilities. The act declares it is the policy of this state and the intent of the Legislature to encourage electrical generation from eligible renewable energy resources.

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This bill would specifically include in those eligible renewable energy resources those that can be used to meet peak demand. The bill also would make nonsubstantive changes and would correct erroneous cross-references.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . 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   

end insert

begin insert Chapter 6 (commencing with Section 8390) is
added to Division 4.1 of the end insert begin insert Public Utilities Code end insert begin insert , to read: end insert

begin insert

 

Chapter   begin insert 6. end insert Energy Efficiency Programs and Demand
Response

 

begin insert 8390. end insert   

(a) An electrical or gas corporation shall require
recipients of rebates or incentives from residential or commercial
energy efficiency or weatherization programs of the electrical or
gas corporation, not including programs for appliance
replacement, to install demand response infrastructure on the
property for which the rebates or incentives are provided.

(b) A local publicly owned electric or gas utility shall require
recipients of rebates or incentives from residential or commercial
energy efficiency or weatherization programs of the utility, not
including programs for appliance replacement, to install demand
response infrastructure on the property for which the rebates or
incentives are provided.

end insert

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SECTION 1.  

Section 399.20 of the Public Utilities Code is
amended to read:

399.20.  

(a) It is the policy of this state and the intent of the
Legislature to encourage electrical generation from eligible
renewable energy resources, including renewable energy resources
that can be used to meet peak demand.

(b) As used in this section, “electric generation facility” means
an electric generation facility located within the service territory
of, and developed to sell electricity to, an electrical corporation
that meets all of the following criteria:

(1) Has an effective capacity of not more than three megawatts.

(2) Is interconnected and operates in parallel with the electrical
transmission and distribution grid.

(3) Is strategically located and interconnected to the electrical
transmission and distribution grid in a manner that optimizes the
deliverability of electricity generated at the facility to load centers.

(4) Is an eligible renewable energy resource.

(c) An electrical corporation shall file with the commission a
standard tariff for electricity purchased from an electric generation
facility. The commission may modify or adjust the requirements
of this section for an electrical corporation with less than 100,000
service connections, as individual circumstances merit.

(d) (1) The tariff shall provide for payment for every
kilowatthour of electricity purchased from an electric generation
facility for a period of 10, 15, or 20 years, as authorized by the
commission. The payment shall be the market price determined
by the commission pursuant to paragraph (2) and shall include all
current and anticipated environmental compliance costs, including,
but not limited to, mitigation of emissions of greenhouse gases
and air pollution offsets associated with the operation of new
generating facilities in the local air pollution control or air quality
management district where the electric generation facility is
located.

(2) The commission shall establish a methodology to determine
the market price of electricity for terms corresponding to the length
of contracts with an electric generation facility, in consideration
of the following:

(A) The long-term market price of electricity for fixed price
contracts, determined pursuant to an electrical corporation’s general
procurement activities, as authorized by the commission.

(B) The long-term ownership, operating, and fixed-price fuel
costs associated with fixed-price electricity from new generating
facilities.

(C) The value of different electricity products including
baseload, peaking, and as-available electricity.

(3) The commission may adjust the payment rate to reflect the
value of every kilowatthour of electricity generated on a
time-of-delivery basis.

(4) The commission shall ensure, with respect to rates and
charges, that ratepayers that do not receive service pursuant to the
tariff are indifferent to whether a ratepayer with an electric
generation facility receives service pursuant to the tariff.

(e) An electrical corporation shall provide expedited
interconnection procedures to an electric generation facility located
on a distribution circuit that generates electricity at a time and in
a manner so as to offset the peak demand on the distribution circuit,
if the electrical corporation determines that the electric generation
facility will not adversely affect the distribution grid. The
commission shall consider, and may establish, a value for an
electric generation facility located on a distribution circuit that
generates electricity at a time and in a manner so as to offset the
peak demand on the distribution circuit.

(f) (1) An electrical corporation shall make the tariff available
to the owner or operator of an electric generation facility within
the service territory of the electrical corporation, upon request, on
a first-come-first-served basis, until the electrical corporation meets
its proportionate share of a statewide cap of 750 megawatts
cumulative rated generation capacity served under this section and
Section 399.32. The proportionate share shall be calculated based
on the ratio of the electrical corporation’s peak demand compared
to the total statewide peak demand.

(2) By June 1, 2013, the commission shall, in addition to the
750 megawatts identified in paragraph (1), 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. The
commission shall, for each electrical corporation, allocate shares
of the additional 250 megawatts based on the ratio of each electrical
corporation’s peak demand compared to the total statewide peak
demand. In implementing this paragraph, the commission shall do
all of the following:

(A) Allocate the 250 megawatts identified in this paragraph
among the electrical corporations based on the following
categories:

(i) For biogas from wastewater treatment, municipal organic
waste diversion, food processing, and codigestion, 110 megawatts.

(ii) For dairy and other agricultural bioenergy, 90 megawatts.

(iii) For bioenergy using byproducts of sustainable forest
management, 50 megawatts. Allocations under this category shall
be determined based on the proportion of bioenergy that sustainable
forest management providers derive from sustainable forest
management in fire threat treatment areas, as designated by the
Department of Forestry and Fire Protection.

(B) Direct the electrical corporations to develop standard
contract terms and conditions that reflect the operational
characteristics of the projects, and to provide a streamlined
contracting process.

(C) Coordinate, to the maximum extent feasible, any incentive
or subsidy programs for bioenergy with the agencies listed in
subparagraph (A) of paragraph (3) to provide maximum benefits
to ratepayers and to ensure that incentives are used to reduce
contract prices.

(D) The commission shall encourage gas and electrical
corporations to develop and offer programs and services to facilitate
development of in-state biogas for a broad range of purposes.

(3) (A) The commission, in consultation with the Energy
Commission, the State Air Resources Board, the Department of
Forestry and Fire Protection, the Department of Food and
Agriculture, and the Department of Resources Recycling and
Recovery, may review the allocations of the 250 additional
megawatts identified in paragraph (2) to determine if those
allocations are appropriate.

(B) If the commission finds that the allocations of the 250
additional megawatts identified in paragraph (2) are not
appropriate, the commission may reallocate the 250 megawatts
among the categories established in subparagraph (A) of paragraph
(2).

(4) For purposes of this subdivision, “bioenergy” means biogas
and biomass.

(g) The electrical corporation may make the terms of the tariff
available to owners and operators of an electric generation facility
in the form of a standard contract subject to commission approval.

(h) Every kilowatthour of electricity purchased from an electric
generation facility shall count toward meeting the electrical
corporation’s renewables portfolio standard annual procurement
targets for purposes of paragraph (1) of subdivision (b) of Section
399.15.

(i) The physical generating capacity of an electric generation
facility shall count toward the electrical corporation’s resource
adequacy requirement for purposes of Section 380.

(j) (1) The commission shall establish performance standards
for any electric generation facility that has a capacity greater than
one megawatt to ensure that those facilities are constructed,
operated, and maintained to generate the expected annual net
production of electricity and do not impact system reliability.

(2) The commission may reduce the three megawatt capacity
limitation of paragraph (1) of subdivision (b) if the commission
finds that a reduced capacity limitation is necessary to maintain
system reliability within that electrical corporation’s service
territory.

(k) (1) An owner or operator of an electric generation facility
that received ratepayer-funded incentives in accordance with
Section 379.6 of this code, or with Section 25782 of the Public
Resources Code, and participated in a net metering program
pursuant to Sections 2827 and 2827.10 of, and former Section
2827.9 of, this code before January 1, 2010, shall be eligible for
a tariff or standard contract filed by an electrical corporation
pursuant to this section.

(2) In establishing the tariffs or standard contracts pursuant to
this section, the commission shall consider ratepayer-funded
incentive payments previously received by the generation facility
pursuant to Section 379.6 of this code or Section 25782 of the
Public Resources Code. The commission shall require
reimbursement of any funds received from these incentive
programs to an electric generation facility, in order for that facility
to be eligible for a tariff or standard contract filed by an electrical
corporation pursuant to this section, unless the commission
determines ratepayers have received sufficient value from the
incentives provided to the facility based on how long the project
has been in operation and the amount of renewable electricity
previously generated by the facility.

(3) A customer that receives service under a tariff or contract
approved by the commission pursuant to this section is not eligible
to participate in a net metering program.

(l) An owner or operator of an electric generation facility
electing to receive service under a tariff or contract approved by
the commission shall continue to receive service under the tariff
or contract until either of the following occurs:

(1) The owner or operator of an electric generation facility no
longer meets the eligibility requirements for receiving service
pursuant to the tariff or contract.

(2) The period of service established by the commission pursuant
to subdivision (d) is completed.

(m) Within 10 days of receipt of a request for a tariff pursuant
to this section from an owner or operator of an electric generation
facility, the electrical corporation that receives the request shall
post a copy of the request on its Internet Web site. The information
posted on the Internet Web site shall include the name of the city
in which the facility is located, but information that is proprietary
and confidential, including, but not limited to, address information
beyond the name of the city in which the facility is located, shall
be redacted.

(n) An electrical corporation may deny a tariff request pursuant
to this section if the electrical corporation makes any of the
following findings:

(1) The electric generation facility does not meet the
requirements of this section.

(2) The transmission or distribution grid that would serve as the
point of interconnection is inadequate.

(3) The electric generation facility does not meet all applicable
state and local laws and building standards and utility
interconnection requirements.

(4) The aggregate of all electric generating facilities on a
distribution circuit would adversely impact utility operation and
load restoration efforts of the distribution system.

(o) Upon receiving a notice of denial from an electrical
corporation, the owner or operator of the electric generation facility
denied a tariff pursuant to this section shall have the right to appeal
that decision to the commission.

(p) To ensure the safety and reliability of electric generation
facilities, the owner of an electric generation facility receiving a
tariff pursuant to this section shall provide an inspection and
maintenance report to the electrical corporation at least once every
other year. The inspection and maintenance report shall be prepared
at the owner’s or operator’s expense by a California-licensed
contractor who is not the owner or operator of the electric
generation facility. A California-licensed electrician shall perform
the inspection of the electrical portion of the generation facility.

(q) The contract between the electric generation facility
receiving the tariff and the electrical corporation shall contain
provisions that ensure that construction of the electric generating
facility complies with all applicable state and local laws and
building standards, and utility interconnection requirements.

(r) (1) All construction and installation of facilities of the
electrical corporation, including at the point of the output meter
or at the transmission or distribution grid, shall be performed only
by that electrical corporation.

(2) All interconnection facilities installed on the electrical
corporation’s side of the transfer point for electricity between the
electrical corporation and the electrical conductors of the electric
generation facility shall be owned, operated, and maintained only
by the electrical corporation. The ownership, installation, operation,
reading, and testing of revenue metering equipment for electric
generating facilities shall only be performed by the electrical
corporation.

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