Amended in Senate June 15, 2016

Amended in Senate June 13, 2016

Amended in Assembly March 17, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2868


Introduced by Assembly Member Gatto

(Coauthor: Assembly Member Cristina Garcia)

February 19, 2016


An act to add and repeal Section 2838.2 of the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

AB 2868, as amended, Gatto. Energy storage.

Existing law requires the Public Utilities Commission (PUC) to determine appropriate targets, if any, for each load-serving entity to procure viable and cost-effective energy storage systems to be achieved by December 31, 2020.

This bill would, until January 1, 2020, require the PUC, in consultation with the State Air Resources Board and the State Energy Resources Conservation and Development Commission, to direct electrical corporations to file applications for programs and investments to accelerate widespread deployment of distributed energy storage systems, as defined.begin delete The bill would prohibit costs associated with the programs and investments in distributed energy storage systems from being allocated or charged to community choice aggregators or their customers.end delete The bill would require the PUC to approve programs and investments that provide distributed energy storage systems to industrial, commercial, and low-income customers. The bill would authorize the PUC, beginning January 1, 2019, to approve programs and investments for residential customers who enroll in time-variant pricing. Because a violation of any order, decision, rule, direction, demand, or requirement of the commission implementing these requirements would be a crime, this 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:

P2    1

SECTION 1.  

(a) The Legislature finds and declares all of the
2following:

3(1) The state, through the Public Utilities Commission, has taken
4action to promote energy storage, including setting energy storage
5procurement targets applicable for certain load-serving entities,
6totaling 1,325 megawatts, and for all other load-serving entities,
7to be met by 2020, with installations of the energy storage systems
8meeting the procurement targets by no later than the end of 2024.

9(2) Ratepayer funding is currently allowed to provide incentives
10to customers who purchase energy storage for permanent load
11shifting.

12(3) The Legislature reauthorized the self-generation incentive
13program to provide incentives to customers who achieve reductions
14in the emissions of greenhouse gases using technologies like energy
15storage.

16(4) The State Energy Resources Conservation and Development
17Commission funds research and demonstration programs to further
18the effectiveness of energy storage as an important resource to the
19electric grid through the Electric Program Investment Charge.

20(5) Federal Energy Regulatory Commission Order No. 792
21directs transmission providers to define energy storage devices as
22generating facilities, thereby enabling these resources to take
23advantage of generator interconnection procedures.

24(6) Industrial and commercial customers are subject to the
25time-of-use tariffs of the load-serving entity providing electric
P3    1services, some of which also include demand charges. Industrial
2and commercial customers have challenges modifying their
3businesses to manage their electricity consumption and costs.

4(7) Section 745 of the Public Utilities Code authorizes the
5commission to require or authorize an electrical corporation to
6employ default time-of-use pricing for residential customers.

7(8) Changes in customer electricity usage will modify the peak
8time for electricity demand and effect demand charges in rate
9design.

10(9) Properly designed and dispatched energy storage systems
11will help customers manage energy costs, help reduce overall
12system peak energy demands, improve public health, and assist in
13achieving greenhouse gas emissions goals.

14(10) Increased demand for energy storage technologies will
15drive new business opportunities and create jobs.

16(11) Easing energy costs for large energy users will help keep
17manufacturing and industrial jobs in California.

18(b) It is the policy of the state and the intent of the Legislature
19to encourage energy storage as a means to achieve ratepayer
20benefits, ambient air quality standards, and the state’s climate
21change goals.

22

SEC. 2.  

Section 2838.2 is added to the Public Utilities Code,
23to read:

24

2838.2.  

(a) The following definitions apply to this section:

25(1) “Distributed energy storage system” means an energy storage
26system with a useful life of at least 10 years that is located on the
27customer side of the meter.

28(2) “Energy storage management system” means a system by
29which an electrical corporation can manage the charging and
30discharging of the distributed energy storage system in a manner
31that provides benefits to ratepayers.

32(b) The commission, in consultation with the State Air Resources
33 Board and the Energy Commission, shall direct electrical
34corporations to file applications for programs and investments to
35accelerate widespread deployment of distributed energy storage
36systems to achieve ratepayer benefits, reduce dependence on
37petroleum, meet air quality standards, and reduce emissions of
38greenhouse gases. Programs and investments proposed by electrical
39corporations shall seek to minimize overall costs and maximize
40overall benefits.

P4    1(c) (1) The commission shall approve, or modify and approve,
2programs and investments in distributed energy storage systems
3with appropriate energy storage management systems and
4reasonable mechanisms for cost recovery from all distribution
5customers for distribution level distributed energy storage systems,
6and from transmission customers for transmission level distributed
7energy storage systems, if they are consistent with the section and
8are in the interest of the ratepayers.

begin delete

9 (2) No costs associated with the programs and investments in
10distributed energy storage systems shall be allocated or charged
11to community choice aggregators or their customers.

end delete
begin delete

12(3)

end delete

13begin insert(2)end insert The commission shall first approve those programs and
14investments that provide distributed energy storage systems to
15industrial, commercial, and low-income customers. Beginning
16January 1, 2019, the commission may approve programs and
17investments offered to residential customers who enroll in
18time-variant pricing pursuant to Section 745.

19(d) This section shall remain in effect only until January 1, 2020,
20and as of that date is repealed, unless a later enacted statute, that
21is enacted before January 1, 2020, deletes or extends that date.

22

SEC. 3.  

No reimbursement is required by this act pursuant to
23Section 6 of Article XIII B of the California Constitution because
24the only costs that may be incurred by a local agency or school
25district will be incurred because this act creates a new crime or
26infraction, eliminates a crime or infraction, or changes the penalty
27for a crime or infraction, within the meaning of Section 17556 of
28the Government Code, or changes the definition of a crime within
29the meaning of Section 6 of Article XIII B of the California
30Constitution.



O

    96