BILL NUMBER: AB 2395	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Low

                        FEBRUARY 18, 2016

   An act to amend Section 372 of the Public Utilities Code, relating
to electrical restructuring.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2395, as introduced, Low. Electrical restructuring:
cogeneration.
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations.
Provisions of the Public Utilities Act restructuring the electrical
services industry state the policy of the state to encourage and
support the development of cogeneration as an efficient,
environmentally beneficial, competitive energy resource that will
enhance the reliability of local generation supply, and promote local
business growth.
   This bill would make nonsubstantive changes to the policy of the
state relative to cogeneration.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 372 of the Public Utilities Code is amended to
read:
   372.  (a) It is the policy of the state to encourage and support
the development of cogeneration as an efficient, environmentally
beneficial, competitive energy resource that will enhance the
reliability of local generation supply, and promote local business
growth. Subject to the specific conditions provided in this section,
the commission shall determine the applicability to customers of
uneconomic costs as specified in Sections 367, 368, 375, and 376.
Consistent with this state policy, the commission shall provide that
these costs shall not apply to any of the following:
   (1) To load served onsite or under an  over the fence
  over-the-fence  arrangement by a nonmobile
self-cogeneration or cogeneration facility that was operational on or
before December 20, 1995, or by increases in the capacity of a
facility to the extent that the increased capacity was constructed by
an entity holding an ownership interest in or operating the facility
and does not exceed 120 percent of the installed capacity as of
December 20, 1995, provided that  prior to  
before  June 30, 2000, the costs shall apply to  over
the fence   over-the-fence  arrangements entered
into after December 20, 1995, between unaffiliated parties. For the
purposes of this subdivision, "affiliated" means  any
  a  person or entity that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is
under common control with another specified entity. "Control" means
either of the following:
   (A) The possession, directly or indirectly, of the power to direct
or to cause the direction of the management or policies of a person
or entity, whether through an ownership, beneficial, contractual, or
equitable interest.
   (B) Direct or indirect ownership of at least 25 percent of an
entity, whether through an ownership, beneficial, or equitable
interest.
   (2) To load served by onsite or under an  over the fence
  over-the-fence  arrangement by a nonmobile
self-cogeneration or cogeneration facility for which the customer was
committed to construction as of December 20, 1995, provided that the
facility was substantially operational on or before January 1, 1998,
or by increases in the capacity of a facility to the extent that the
increased capacity was constructed by an entity holding an ownership
interest in or operating the facility and does not exceed 120
percent of the installed capacity as of January 1, 1998, provided
that  prior to   before  June 30, 2000, the
costs shall apply to  over the fence  
over-the-fence  arrangements entered into after December 20,
1995, between unaffiliated parties.
   (3) To load served by existing, new, or portable emergency
generation equipment used to serve the customer's load requirements
during periods when utility service is unavailable, provided the
emergency generation is not operated in parallel with the integrated
electric grid, except on a momentary parallel basis.
   (4) After June 30, 2000, to  any   a 
load served onsite or under an  over the fence  
over-the-fence  arrangement by  any   a
 nonmobile self-cogeneration or cogeneration facility.
   (b) Further, consistent with state policy, with respect to
self-cogeneration or cogeneration deferral agreements, the commission
shall do the following:
   (1) Provide that a utility shall execute a final self-cogeneration
or cogeneration deferral agreement with  any  
a  customer that, on or before December 20, 1995, had executed a
letter of intent (or similar documentation) to enter into the
agreement with the utility, provided that the final agreement shall
be consistent with the terms and conditions set forth in the letter
of intent and the commission shall review and approve the final
agreement.
   (2) Provide that a customer that holds a self-cogeneration or
cogeneration deferral agreement that was in place on or before
December 20, 1995, or that was executed pursuant to paragraph (1) in
the event the agreement expires, or is terminated, may do any of the
following:
   (A) Continue through December 31, 2001, to receive utility service
at the rate and under terms and conditions applicable to the
customer under the deferral agreement that, as executed, includes an
allocation of uneconomic costs consistent with subdivision (e) of
Section 367.
   (B) Engage in a direct transaction for the purchase of electricity
and pay uneconomic costs consistent with Sections 367, 368, 375, and
376.
   (C) Construct a self-cogeneration or cogeneration facility of
approximately the same capacity as the facility previously deferred,
provided that the costs provided in Sections 367, 368, 375, and 376
shall apply consistent with subdivision (e) of Section 367, unless
otherwise authorized by the commission pursuant to subdivision (c).
   (3) Subject to the firewall described in subdivision (e) of
Section 367, provide that the ratemaking treatment for
self-cogeneration or cogeneration deferral agreements executed
 prior to   before  December 20, 1995, or
executed pursuant to paragraph (1) shall be consistent with the
ratemaking treatment for the contracts approved before January 1995.
   (c) The commission shall authorize, within 60 days of the receipt
of a joint application from the serving utility and one or more
interested parties, applicability conditions as follows:
   (1) The costs identified in Sections 367, 368, 375, and 376 shall
not,  prior to   before  June 30, 2000,
apply to load served onsite by a nonmobile self-cogeneration or
cogeneration facility that became operational on or after December
20, 1995.
   (2) The costs identified in Sections 367, 368, 375, and 376 shall
not,  prior to   before  June 30, 2000,
apply to  any   a  load served under
 over the fence   over-the-fence 
arrangements entered into after December 20, 1995, between
unaffiliated entities.
   (d) For the purposes of this subdivision, all onsite or 
over the fence   over-the-fence  arrangements shall
be consistent with Section 218 as it existed on December 20, 1995.
   (e) To facilitate the development of new microcogeneration
applications, electrical corporations may apply to the commission for
a financing order to finance the transition costs to be recovered
from customers employing the applications.
   (f) To encourage the continued development, installation, and
interconnection of clean and efficient self-generation and
cogeneration resources, to improve system reliability for consumers
by retaining existing generation and encouraging new generation to
connect to the electric grid, and to increase self-sufficiency of
consumers of electricity through the deployment of self-generation
and cogeneration, both of the following shall occur:
   (1) The commission and the Electricity Oversight Board shall
determine if  any   a  policy or action
undertaken by the Independent System Operator, directly or
indirectly, unreasonably discourages the connection of existing
self-generation or cogeneration or new self-generation or
cogeneration to the grid.
   (2) If the commission and the Electricity Oversight Board find
that  any   a  policy or action of the
Independent System Operator unreasonably discourages the connection
of existing self-generation or cogeneration or new self-generation or
cogeneration to the grid, the commission and the Electricity
Oversight Board shall undertake all necessary efforts to revise,
mitigate, or eliminate that policy or action of the Independent
System Operator.