Amended in Senate March 12, 2015

Senate Bill No. 180

Introduced by Senator Jackson

February 9, 2015

An act to add Section 25544 to the Public Resources Code, and to amend the heading of Chapter 3 (commencing with Section 8340) of Division 4.1 of, and to amend, repeal, and add Sections 8340 and 8341 of, the Public Utilities Code, relating to electricity.

LEGISLATIVE COUNSEL’S DIGEST

SB 180, as amended, Jackson. Electricity: emissions of greenhouse gases.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations while local publicly owned electric utilities are under the direction of their governing board. Existing law prohibits any load-serving entity and any local publicly owned electric utility from entering into a long-term financial commitment for baseload generation unless that baseload generation complies with a greenhouse gases emission performance standard. Existing law requires the Public Utilities Commission, by February 1, 2007, through a rulemaking proceeding and in consultation with the State Energy Resources Conservation and Development Commission and the State Air Resources Board, to establish a greenhouse gases emission performance standard for all baseload generation of load-serving entities. Existing law requires the State Energy Resources Conservation and Development Commission, by June 30, 2007, at a duly noticed public hearing and in consultation with the Public Utilities Commission and the State Air Resources Board, to establish a greenhouse gases emission performance standard for all baseload generation of local publicly owned electric utilities.

This bill would, on July 1, 2017, replace the greenhouse gases begin insert emission end insert performance begin delete emission end delete standards for baseload generation with greenhouse gases begin insert emission end insert performance begin delete emission end delete standards for begin delete primary end delete begin insert nonpeaking end insert generation and begin delete secondary end delete begin insert peaking end insert generation, as defined. The bill would require the Public Utilities Commission, by June 30, 2017, through a rulemaking proceeding and in consultation with the State Energy Resources Conservation and Development Commission and the State Air Resources Board, to establish a greenhouse gases emission performance standard for all begin delete primary end delete begin insert nonpeaking end insert generation of load-serving entities, and a separate standard for begin delete secondary end delete begin insert peaking end insert generation. The bill would require the State Energy Resources Conservation and Development Commission, by June 30, 2017, at a duly noticed public hearing and in consultation with the Public Utilities Commission and the State Air Resources Board, to establish a greenhouse gases emission performance standard for all begin delete primary end delete begin insert nonpeaking end insert generation of local publicly owned electric utilities, and a separate standard for begin delete secondary end delete begin insert peaking end insert generation. The bill would require that the greenhouse gases emission performance standard for begin delete primary end delete begin insert nonpeaking end insert generation and begin delete secondary end delete begin insert peaking end insert generation be established at the lowest level that the begin delete 2 end delete begin insert respective end insert commissions determine to be technologically feasible without putting reliability of the electrical grid and of electric service at risk. begin insert The bill would require that the commissions update their respective greenhouse gases emission performance standards every 5 years based on new technology. end insert The bill would require that the begin delete initial end delete greenhouse gases emission performance standard for begin delete primary end delete begin insert nonpeaking end insert generation begin insert that will take effect on July 1, 2027, end insert establish a rate of emissions of greenhouse gases that is 80% lower than the permissible rate of emissions of greenhouse gases for baseload generation in effect as of January 1, 2015. begin delete The bill would require that the commissions update their respective greenhouse gases emission performance standards every 5 years based on new technology. end delete

Existing law makes any public utility that fails to comply with any part of any order, decision, rule, direction, demand, or requirement of the commission guilty of a crime. Existing law additionally makes every corporation or person other than a public utility who fails to comply with any part of any order, decision, rule, direction, demand, or requirement of the commission guilty of a crime.

Because this bill would require action by the Public Utilities Commission to implement its requirements with respect to a load-serving entity, and a violation of an order or decision of the Public Utilities Commission would be a crime, the bill would impose a state-mandated local program by expanding what is a crime.

The Warren-Alquist State Energy Resources Conservation and Development Act establishes the State Energy Resources Conservation and Development Commission and requires it to certify sufficient sites and related facilities that are required to provide a supply of electricity sufficient to accommodate projected demand for power statewide. The act grants the begin delete State Energy Resources Conservation and Development Commission end delete begin insert commission end insert the exclusive authority to certify any stationary or floating electrical generating facility using any source of thermal energy, with a generating capacity of 50 megawatts or more, and any facilities appurtenant thereto.

The California Environmental Quality Act begin insert (CEQA) end insert generally requires all state and local governmental lead agencies to prepare, or cause to be prepared by contract, and certify the completion of, an environmental impact report on any discretionary project that they propose to carry out or approve that may result in a significant effect on the environment, that is, a substantial, or potentially substantial, adverse change in the physical conditions that exist within the area that will be affected by the project. begin delete The “lead agency” for a project is the public agency that has the principal responsibility for carrying out or approving the project that may have a significant effect on the environment. end delete begin insert CEQA authorizes the plan or other written documentation containing environmental information of state agencies to be submitted in lieu of an otherwise required environmental impact report if the Secretary of the Natural Resources Agency has certified the regulatory program in a specified manner. end insert

This bill would begin delete designate the State Energy Resources Conservation and Development Commission to be the lead agency with respect to end delete begin insert provide that end insert any carbon capture and storage project associated with an application for begin delete certification. end delete begin insert certification is a related facility for purposes of the certification of a thermal powerplant by the State Energy Resources Conservation and Development Commission and for purposes of the secretary’s authority with respect to a certified regulatory program. end insert

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.  

Section 25544 is added to the Public Resources
Code, to read:

25544.  

begin delete The commission shall be the lead agency, as defined
in Section 21067, for any end delete begin insert Any end insert carbon capture and storage project
associated with an application for certification begin insert is a related facility end insert
pursuant to this chapter begin insert and for purposes of Section 21080.5 end insert . For
purposes of this section, “carbon capture and storage,” also known
as carbon capture and sequestration, means begin insert any method authorized
by the commission for preventing the release of greenhouse gases
into the atmosphere, including end insert the injection of carbon dioxide or
other greenhouse gases into geological formations so as to prevent
releases into the atmosphere.

SEC. 2.  

The heading of Chapter 3 (commencing with Section
8340) of Division 4.1 of the Public Utilities Code is amended to
read:

 

Chapter  3. Greenhouse Gases Emission Performance
Standard

 

SEC. 3.  

Section 8340 of the Public Utilities Code is amended
to read:

8340.  

For purposes of this chapter, the following terms have
the following meanings:

(a) “Baseload generation” means electricity generation from a
powerplant that is designed and intended to provide electricity at
an annualized plant capacity factor of at least 60 percent.

(b) “Combined-cycle natural gas” with respect to a powerplant
means the powerplant employs a combination of one or more gas
turbines and steam turbines in which electricity is produced in the
steam turbine from otherwise lost waste heat exiting from one or
more of the gas turbines.

(c) “Electric service provider” means an “electric service
provider” as defined in Section 218.3, but does not include
corporations or persons employing cogeneration technology or
producing electricity from other than a conventional power source
consistent with subdivision (b) of Section 218.

(d) “Greenhouse gases” means those gases listed in Section
38505 of the Health and Safety Code.

(e) “Load-serving entity” means every electrical corporation,
electric service provider, or community choice aggregator serving
end-use customers in the state.

(f) “Long-term financial commitment” means either a new
ownership investment in baseload generation or a new or renewed
contract with a term of five or more years, which includes
procurement of baseload generation.

(g) “Output-based methodology” means a greenhouse gases
emission performance standard that is expressed in pounds of
greenhouse gases emitted per megawatthour and factoring in the
useful thermal energy employed for purposes other than the
generation of electricity.

(h) “Plant capacity factor” means the ratio of the electricity
produced during a given time period, measured in kilowatthours,
to the electricity the unit could have produced if it had been
operated at its rated capacity during that period, expressed in
kilowatthours.

(i) “Powerplant” means a facility for the generation of electricity,
and includes one or more generating units at the same location.

(j) “Zero- or low-carbon generating resource” means an
electrical generating resource that will generate electricity while
producing emissions of greenhouse gases at a rate substantially
below the greenhouse gases emission performance standard, as
determined by the commission.

(k) This section shall become inoperative on July 1, 2017, and,
as of January 1, 2018, is repealed.

SEC. 4.  

Section 8340 is added to the Public Utilities Code, to
read:

8340.  

For purposes of this chapter, the following terms have
the following meanings:

(a) “Electric service provider” has the same meaning as defined
in Section 218.3, but does not include corporations or persons
employing cogeneration technology or producing electricity from
other than a conventional power source consistent with subdivision
(b) of Section 218.

(b) “Exempt generation” means electricity generation from a
powerplant that is designed and intended to provide electricity at
an annualized plant capacity factor of less than 2 percent.

(c) “Greenhouse gases” means those gases listed in Section
38505 of the Health and Safety Code.

(d) “Greenhouse gases begin delete performance emissions end delete begin insert emission
performance end insert standard” means the permissible levels of emissions
of greenhouse gases established pursuant to Section 8341 for
begin delete primary end delete begin insert nonpeaking end insert generation and begin delete secondary end delete begin insert peaking end insert generation.

(e) “Load-serving entity” means every electrical corporation,
electric service provider, or community choice aggregator serving
end-use customers in the state.

(f)  “Long-term financial commitment” means either a new
ownership investment in begin delete primary end delete begin insert nonpeaking end insert generation or
begin delete secondary end delete begin insert peaking end insert generation or a new or renewed contract with
a term of five or more years, which includes procurement of
begin delete primary end delete begin insert nonpeaking end insert generation or begin delete secondary end delete begin insert peaking end insert generation.

begin insert

(g) “Nonpeaking generation” means electricity generation from
a powerplant that is designed and intended to provide electricity
at an annualized plant capacity factor of at least 15 percent.
“Nonpeaking powerplant” means a powerplant that provides
nonpeaking generation.

end insert begin delete

(g)

end delete

begin insert (h) end insert  “Output-based methodology” means a greenhouse gases
emission performance standard that is expressed in pounds of
greenhouse gases emitted per megawatthour and factoring in the
useful thermal energy employed for purposes other than the
generation of electricity.

begin insert

(i) “Peaking generation” means electricity generation from a
powerplant that is designed and intended to provide electricity at
an annualized plant capacity factor of less than 15 percent and at
least 2 percent. “Peaking powerplant” means a powerplant that
provides peaking generation.

end insert begin delete

(h)

end delete

begin insert (j) end insert  “Plant capacity factor” means the ratio of the electricity
produced during a given time period, measured in kilowatthours,
to the electricity the unit could have produced if it had been
operated at its rated capacity during that period, expressed in
kilowatthours.

begin delete

(i)

end delete

begin insert (k) end insert  “Powerplant” means a facility for the generation of
electricity, and includes one or more generating units at the same
location.

begin delete

(j) “Primary generation” means electricity generation from a
powerplant that is designed and intended to provide electricity at
an annualized plant capacity factor of at least 15 percent.

end delete begin delete

(k) “Secondary generation” means electricity generation from
a powerplant that is designed and intended to provide electricity
at an annualized plant capacity factor of less than 15 percent and
at least 2 percent.

end delete

(l) “Zero- or low-carbon generating resource” means an
electrical generating resource that will generate electricity while
producing emissions of greenhouse gases at a rate substantially
below the greenhouse gases emission performance standard, as
determined by the commission.

(m) This section shall become operative on January 1, 2017.

SEC. 5.  

Section 8341 of the Public Utilities Code is amended
to read:

8341.  

(a) No load-serving entity or local publicly owned
electric utility may enter into a long-term financial commitment
unless any baseload generation supplied under the long-term
financial commitment complies with the greenhouse gases emission
performance standard established by the commission, pursuant to
subdivision (d), for a load-serving entity, or by the Energy
Commission, pursuant to subdivision (e), for a local publicly owned
electric utility.

(b) (1) The commission shall not approve a long-term financial
commitment by an electrical corporation unless any baseload
generation supplied under the long-term financial commitment
complies with the greenhouse gases emission performance standard
established by the commission pursuant to subdivision (d).

(2) The commission may, in order to enforce this section, review
any long-term financial commitment proposed to be entered into
by an electric service provider or a community choice aggregator.

(3) The commission shall adopt rules to enforce the requirements
of this section, for load-serving entities. The commission shall
adopt procedures, for all load-serving entities, to verify the
emissions of greenhouse gases from any baseload generation
supplied under a contract subject to the greenhouse gases emission
performance standard to ensure compliance with the standard.

(4) In determining whether a long-term financial commitment
is for baseload generation, the commission shall consider the design
of the powerplant and the intended use of the powerplant, as
determined by the commission based upon the electricity purchase
contract, any certification received from the Energy Commission,
any other permit or certificate necessary for the operation of the
powerplant, including a certificate of public convenience and
necessity, any procurement approval decision for the load-serving
entity, and any other matter the commission determines is relevant
under the circumstances.

(5) Costs incurred by an electrical corporation to comply with
this section, including those costs incurred for electricity purchase
agreements that are approved by the commission that comply with
the greenhouse gases emission performance standard, are to be
treated as procurement costs incurred pursuant to an approved
procurement plan and the commission shall ensure timely cost
recovery of those costs pursuant to paragraph (3) of subdivision
(d) of Section 454.5.

(6) A long-term financial commitment entered into through a
contract approved by the commission, for electricity generated by
a zero- or low-carbon generating resource that is contracted for,
on behalf of consumers of this state on a cost-of-service basis,
shall be recoverable in rates, in a manner determined by the
commission consistent with Section 380. The commission may,
after a hearing, approve an increase from one-half to 1 percent in
the return on investment by the third party entering into the contract
with an electrical corporation with respect to investment in zero-
or low-carbon generation resources authorized pursuant to this
subdivision.

(c) (1) The Energy Commission shall adopt regulations for the
enforcement of this chapter with respect to a local publicly owned
electric utility.

(2) The Energy Commission may, in order to ensure compliance
with the greenhouse gases emission performance standard by local
publicly owned electric utilities, apply the procedures adopted by
the commission to verify the emissions of greenhouse gases from
baseload generation pursuant to subdivision (b).

(3) In determining whether a long-term financial commitment
is for baseload generation, the Energy Commission shall consider
the design of the powerplant and the intended use of the
powerplant, as determined by the Energy Commission based upon
the electricity purchase contract, any certification received from
the Energy Commission, any other permit for the operation of the
powerplant, any procurement approval decision for the load-serving
entity, and any other matter the Energy Commission determines
is relevant under the circumstances.

(d) (1) On or before February 1, 2007, the commission, through
a rulemaking proceeding, and in consultation with the Energy
Commission and the State Air Resources Board, shall establish a
greenhouse gases emission performance standard for all baseload
generation of load-serving entities, at a rate of emissions of
greenhouse gases that is no higher than the rate of emissions of
greenhouse gases for combined-cycle natural gas baseload
generation. Enforcement of the greenhouse gases emission
performance standard shall begin immediately upon the
establishment of the standard. All combined-cycle natural gas
powerplants that are in operation, or that have an Energy
Commission final permit decision to operate as of June 30, 2007,
shall be deemed to be in compliance with the greenhouse gases
emission performance standard.

(2) In determining the rate of emissions of greenhouse gases
for baseload generation, the commission shall include the net
emissions resulting from the production of electricity by the
baseload generation.

(3) The commission shall establish an output-based methodology
to ensure that the calculation of emissions of greenhouse gases for
cogeneration recognizes the total usable energy output of the
process, and includes all greenhouse gases emitted by the facility
in the production of both electrical and thermal energy.

(4) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the commission shall consider net emissions from the process of
growing, processing, and generating the electricity from the fuel
source.

(5) Carbon dioxide that is injected in geological formations, so
as to prevent releases into the atmosphere, in compliance with
applicable laws and regulations shall not be counted as emissions
of the powerplant in determining compliance with the greenhouse
gases emissions performance standard.

(6) In adopting and implementing the greenhouse gases emission
performance standard, the commission, in consultation with the
Independent System Operator shall consider the effects of the
standard on system reliability and overall costs to electricity
customers.

(7) In developing and implementing the greenhouse gases
emission performance standard, the commission shall address
long-term purchases of electricity from unspecified sources in a
manner consistent with this chapter.

(8) In developing and implementing the greenhouse gases
emission performance standard, the commission shall consider
and act in a manner consistent with any rules adopted pursuant to
Section 824a-3 of Title 16 of the United States Code.

(9) An electrical corporation that provides electric service to
75,000 or fewer retail end-use customers in California may file
with the commission a proposal for alternative compliance with
this section, which the commission may accept upon a showing
by the electrical corporation of both of the following:

(A) A majority of the electrical corporation’s retail end-use
customers for electric service are located outside of California.

(B) The emissions of greenhouse gases to generate electricity
for the retail end-use customers of the electrical corporation are
subject to a review by the utility regulatory commission of at least
one other state in which the electrical corporation provides
regulated retail electric service.

(e) (1) On or before June 30, 2007, the Energy Commission,
at a duly noticed public hearing and in consultation with the
commission and the State Air Resources Board, shall establish a
greenhouse gases emission performance standard for all baseload
generation of local publicly owned electric utilities at a rate of
emissions of greenhouse gases that is no higher than the rate of
emissions of greenhouse gases for combined-cycle natural gas
baseload generation. The greenhouse gases emission performance
standard established by the Energy Commission for local publicly
owned electric utilities shall be consistent with the standard adopted
by the commission for load-serving entities. Enforcement of the
greenhouse gases emission performance standard shall begin
immediately upon the establishment of the standard. All
combined-cycle natural gas powerplants that are in operation, or
that have an Energy Commission final permit decision to operate
as of June 30, 2007, shall be deemed to be in compliance with the
greenhouse gases emission performance standard.

(2) The greenhouse gases emission performance standard shall
be adopted by regulation pursuant to the Administrative Procedure
Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code).

(3) In determining the rate of emissions of greenhouse gases
for baseload generation, the Energy Commission shall include the
net emissions resulting from the production of electricity by the
baseload generation.

(4) The Energy Commission shall establish an output-based
methodology to ensure that the calculation of emissions of
greenhouse gases for cogeneration recognizes the total usable
energy output of the process, and includes all greenhouse gases
emitted by the facility in the production of both electrical and
thermal energy.

(5) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the Energy Commission shall consider net emissions from the
process of growing, processing, and generating the electricity from
the fuel source.

(6) Carbon dioxide that is captured from the emissions of a
powerplant and that is permanently disposed of in geological
formations in compliance with applicable laws and regulations,
shall not be counted as emissions from the powerplant.

(7) In adopting and implementing the greenhouse gases emission
performance standard, the Energy Commission, in consultation
with the Independent System Operator, shall consider the effects
of the standard on system reliability and overall costs to electricity
customers.

(8) In developing and implementing the greenhouse gases
emission performance standard, the Energy Commission shall
address long-term purchases of electricity from unspecified sources
in a manner consistent with this chapter.

(9) In developing and implementing the greenhouse gases
emission performance standard, the Energy Commission shall
consider and act in a manner consistent with any rules adopted
pursuant to Section 824a-3 of Title 16 of the United States Code.

(f) The Energy Commission, in a duly noticed public hearing
and in consultation with the commission and the State Air
Resources Board, shall reevaluate and continue, modify, or replace
the greenhouse gases emission performance standard when an
enforceable greenhouse gases emissions limit is established and
in operation, that is applicable to local publicly owned electric
utilities.

(g) The commission, through a rulemaking proceeding and in
consultation with the Energy Commission and the State Air
Resources Board, shall reevaluate and continue, modify, or replace
the greenhouse gases emission performance standard when an
enforceable greenhouse gases emissions limit is established and
in operation, that is applicable to load-serving entities.

(h) This section shall become inoperative on July 1, 2017, and,
as of January 1, 2018, is repealed.

SEC. 6.  

Section 8341 is added to the Public Utilities Code, to
read:

8341.  

(a) (1) Beginning July 1, 2017, no load-serving entity
or local publicly owned electric utility may enter into a new
long-term financial commitment unless any begin delete primary end delete begin insert nonpeaking end insert
generation supplied under the long-term financial commitment
complies with the greenhouse gases emission performance standard
established by the commission, pursuant to subdivision (d), for a
load-serving entity, or by the Energy Commission, pursuant to
subdivision (f), for a local publicly owned electric utility.

(2) Beginning July 1, 2017, no load-serving entity or local
publicly owned electric utility may enter into a new long-term
financial commitment unless any begin delete secondary end delete begin insert peaking end insert generation
supplied under the long-term financial commitment complies with
the greenhouse gases emission performance standard established
by the commission, pursuant to subdivision (e), for a load-serving
entity, or by the Energy Commission, pursuant to subdivision (g),
for a local publicly owned electric utility.

(3) Neither the commission begin delete or end delete begin insert nor end insert the Energy Commission shall
establish a greenhouse gases emission performance standard for
exempt generation.

(b) (1) (A) The commission shall not approve a long-term
financial commitment by an electrical corporation unless the
begin delete primary end delete begin insert nonpeaking end insert generation supplied under the long-term
financial commitment complies with the greenhouse gases emission
performance standard established by the commission pursuant to
subdivision (d).

(B) The commission shall not approve a long-term financial
commitment by an electrical corporation unless the begin delete secondary end delete
begin insert peaking end insert generation supplied under the long-term financial
commitment complies with the greenhouse gases emission
performance standard established by the commission pursuant to
subdivision (e).

(2) The commission may, in order to enforce this section, review
any long-term financial commitment proposed to be entered into
by an electric service provider or a community choice aggregator.

(3) The commission shall adopt rules to enforce the requirements
of this section, for load-serving entities. The commission shall
adopt procedures, for all load-serving entities, to verify the
emissions of greenhouse gases from any begin delete primary end delete begin insert nonpeaking end insert
generation or begin delete secondary end delete begin insert peaking end insert generation supplied under a
contract subject to the greenhouse gases emission performance
standard to ensure compliance with the standard.

(4) In determining whether a long-term financial commitment
is for begin delete primary end delete begin insert nonpeaking end insert generation or begin delete secondary end delete begin insert peaking end insert
generation, the commission shall consider the design of the
powerplant and the intended use of the powerplant, as determined
by the commission based upon the electricity purchase contract,
any certification received from the Energy Commission, any other
permit or certificate necessary for the operation of the powerplant,
including a certificate of public convenience and necessity, any
procurement approval decision for the load-serving entity, and any
other matter the commission determines is relevant under the
circumstances.

(5) Costs incurred by an electrical corporation to comply with
this section, including those costs incurred for electricity purchase
agreements that are approved by the commission that comply with
the respective greenhouse gases emission performance standards,
are to be treated as procurement costs incurred pursuant to an
approved procurement plan and the commission shall ensure timely
cost recovery of those costs pursuant to paragraph (3) of
subdivision (d) of Section 454.5.

(6)  A long-term financial commitment entered into through a
contract approved by the commission, for electricity generated by
a zero- or low-carbon generating resource that is contracted for,
on behalf of consumers of this state on a cost-of-service basis,
shall be recoverable in rates, in a manner determined by the
commission consistent with Section 380. The commission may,
after a hearing, approve an increase from one-half to 1 percent in
the return on investment by the third party entering into the contract
with an electrical corporation with respect to investment in zero-
or low-carbon generation resources authorized pursuant to this
paragraph.

(c) (1) The Energy Commission shall adopt regulations for the
enforcement of this chapter with respect to a local publicly owned
electric utility.

(2) The Energy Commission may, in order to ensure compliance
with the greenhouse gases emission performance standard by local
publicly owned electric utilities, apply the procedures adopted by
the commission to verify the emissions of greenhouse gases from
begin delete primary end delete begin insert nonpeaking end insert generation and begin delete secondary end delete begin insert peaking end insert generation
pursuant to subdivision (b).

(3) In determining whether a long-term financial commitment
is for begin delete primary end delete begin insert nonpeaking end insert generation or begin delete secondary end delete begin insert peaking end insert
generation, the Energy Commission shall consider the design of
the powerplant and the intended use of the powerplant, as
determined by the Energy Commission based upon the electricity
purchase contract, any certification received from the Energy
Commission, any other permit for the operation of the powerplant,
any procurement approval decision for the load-serving entity, and
any other matter the Energy Commission determines is relevant
under the circumstances.

(d) (1) On or before June 30, 2017, the commission, through a
rulemaking proceeding, and in consultation with the Energy
Commission and the State Air Resources Board, shall establish a
greenhouse gases emission performance standard for all begin delete primary end delete
begin insert nonpeaking end insert generation of load-serving entities. The greenhouse
gases emission performance standard for begin delete primary end delete begin insert nonpeaking end insert
generation shall be established at the lowest level that the
commission determines to be technologically feasible without
putting reliability of the electrical grid and of electric service at
risk. begin delete The initial greenhouse gases emission performance standard
for primary generation shall establish a rate of emissions of
greenhouse gases that is 80 percent lower than the permissible rate
of emissions of greenhouse gases for baseload generation in effect
as of January 1, 2015. The commission, in consultation with the
Energy Commission and the State Air Resources Board, shall
update the greenhouse gases emission performance standard for
primary generation every five years based on new technology. end delete
Enforcement of the greenhouse gases emission performance
standard for begin delete primary end delete begin insert nonpeaking end insert generation shall begin on July
1, 2017. begin insert The commission, in consultation with the Energy
Commission and the State Air Resources Board, shall update the
greenhouse gases emission performance standard for nonpeaking
generation every five years based on new technology. The
greenhouse gases emission performance standard for nonpeaking
generation that will take effect on July 1, 2027, shall establish a
rate of emissions of greenhouse gases that is 80 percent lower
than the permissible rate of emissions of greenhouse gases for
baseload generation in effect as of January 1, 2015. end insert

(2) In determining the rate of emissions of greenhouse gases
for begin delete primary end delete begin insert nonpeaking end insert generation, the commission shall include
the net emissions resulting from the production of electricity by
the begin delete primary end delete begin insert nonpeaking end insert generation.

(3) The commission shall establish an output-based methodology
to ensure that the calculation of emissions of greenhouse gases for
cogeneration recognizes the total usable energy output of the
process, and includes all greenhouse gases emitted by the facility
in the production of both electricity and thermal energy.

(4) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the commission shall consider net emissions from the process of
growing, processing, and generating the electricity from the fuel
source.

(5) Greenhouse gases that are begin delete injected in geological formations,
so as to prevent releases end delete begin insert prevented from being released end insert into the
begin delete atmosphere, commonly termed end delete begin insert atmosphere as a result of end insert carbon
capture and storage or carbon capture and sequestration, in
compliance with applicable laws and regulations, shall not be
counted as emissions of the powerplant in determining compliance
with the greenhouse gases begin delete emissions end delete begin insert emission end insert performance
standard for begin delete primary end delete begin insert nonpeaking end insert generation.

(6) In adopting and implementing the greenhouse gases emission
performance standard for begin delete primary end delete begin insert nonpeaking end insert generation, the
commission, in consultation with the Independent System Operator,
shall consider the effects of the standard on system reliability and
overall costs to electricity customers.

(7) In developing and implementing the greenhouse gases
emission performance standard for begin delete primary end delete begin insert nonpeaking end insert generation,
the commission shall address long-term purchases of electricity
from unspecified sources in a manner consistent with this chapter.

(8) In developing and implementing the greenhouse gases
emission performance standard for begin delete primary end delete begin insert nonpeaking end insert generation,
the commission shall consider and act in a manner consistent with
any rules adopted pursuant to Section 824a-3 of Title 16 of the
United States Code.

(9) An electrical corporation that provides electric service to
75,000 or fewer retail end-use customers in California may file
with the commission a proposal for alternative compliance with
this subdivision, which the commission may accept upon a showing
by the electrical corporation of both of the following:

(A) A majority of the electrical corporation’s retail end-use
customers for electric service are located outside of California.

(B) The emissions of greenhouse gases to generate electricity
for the retail end-use customers of the electrical corporation are
subject to a review by the utility regulatory commission of at least
one other state in which the electrical corporation provides
regulated retail electric service.

(e) (1) On or before June 30, 2017, the commission, through a
rulemaking proceeding, and in consultation with the Energy
Commission and the State Air Resources Board, shall establish a
greenhouse gases emission performance standard for all begin delete secondary end delete
begin insert peaking end insert generation of load-serving entities. The greenhouse gases
emission performance standard for begin delete secondary end delete begin insert peaking end insert generation
shall be established at the lowest level that the commission
determines to be technologically feasible without putting reliability
of the electrical grid and of electric service at risk. begin delete The commission,
in consultation with the Energy Commission and the State Air
Resources Board, shall update the greenhouse gases emission
performance standard for secondary generation every five years
based on new technology. end delete Enforcement of the greenhouse gases
emission performance standard for begin delete secondary end delete begin insert peaking end insert generation
shall begin on July 1, 2017. begin insert The commission, in consultation with
the Energy Commission and the State Air Resources Board, shall
update the greenhouse gases emission performance standard for
peaking generation every five years based on new technology. end insert

(2) In determining the rate of emissions of greenhouse gases
for begin delete secondary end delete begin insert peaking end insert generation, the commission shall include
the net emissions resulting from the production of electricity by
the begin delete secondary end delete begin insert peaking end insert generation.

(3) The commission shall establish an output-based methodology
to ensure that the calculation of emissions of greenhouse gases for
cogeneration recognizes the total usable energy output of the
process, and includes all greenhouse gases emitted by the facility
in the production of both electrical and thermal energy.

(4) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the commission shall consider net emissions from the process of
growing, processing, and generating the electricity from the fuel
source.

(5) Greenhouse gases that are begin delete injected in geological formations,
so as to prevent releases end delete begin insert prevented from being released end insert into the
begin delete atmosphere, commonly termed end delete begin insert atmosphere as a result of end insert carbon
capture and storage or carbon capture and sequestration, in
compliance with applicable laws and regulations, shall not be
counted as emissions of the powerplant in determining compliance
with the greenhouse gases begin delete emissions end delete begin insert emission end insert performance
standard for begin delete secondary end delete begin insert peaking end insert generation.

(6) In adopting and implementing the greenhouse gases emission
performance standard for begin delete secondary end delete begin insert peaking end insert generation, the
commission, in consultation with the Independent System Operator,
shall consider the effects of the standard on system reliability and
overall costs to electricity customers.

(7) In developing and implementing the greenhouse gases
emission performance standard for begin delete secondary end delete begin insert peaking end insert generation,
the commission shall address long-term purchases of electricity
from unspecified sources in a manner consistent with this chapter.

(8) In developing and implementing the greenhouse gases
emission performance standard for begin delete secondary end delete begin insert peaking end insert generation,
the commission shall consider and act in a manner consistent with
any rules adopted pursuant to Section 824a-3 of Title 16 of the
United States Code.

(9) An electrical corporation that provides electric service to
75,000 or fewer retail end-use customers in California may file
with the commission a proposal for alternative compliance with
this subdivision, which the commission may accept upon a showing
by the electrical corporation of both of the following:

(A) A majority of the electrical corporation’s retail end-use
customers for electric service are located outside of California.

(B) The emissions of greenhouse gases to generate electricity
for the retail end-use customers of the electrical corporation are
subject to a review by the utility regulatory commission of at least
one other state in which the electrical corporation provides
regulated retail electric service.

(f) (1) On or before June 30, 2017, the Energy Commission, at
a duly noticed public hearing and in consultation with the
commission and the State Air Resources Board, shall establish a
greenhouse gases emission performance standard for all begin delete primary end delete
begin insert nonpeaking end insert generation of local publicly owned electric utilities.
The greenhouse gases emission performance standard for begin delete primary end delete
begin insert nonpeaking end insert generation shall be established at the lowest level that
the Energy Commission determines to be technologically feasible
without putting reliability of the electrical grid and of electric
service at risk. begin delete The initial greenhouse gases emission performance
standard for primary generation shall establish a rate of emissions
of greenhouse gases that is 80 percent lower than the permissible
rate of emissions of greenhouse gases for baseload generation in
effect as of January 1, 2015. The Energy Commission, in
consultation with the commission and the State Air Resources
Board, shall update the greenhouse gases emission performance
standard for primary generation every five years based on new
technology. end delete The greenhouse gases emission performance standard
for begin delete primary end delete begin insert nonpeaking end insert generation established by the Energy
Commission for local publicly owned electric utilities shall be
consistent with the standard adopted by the commission for
load-serving entities. Enforcement of the greenhouse gases
emission performance standard for begin delete primary end delete begin insert nonpeaking end insert generation
shall begin on July 1, 2017. begin insert The Energy Commission, in
consultation with the commission and the State Air Resources
Board, shall update the greenhouse gases emission performance
standard for nonpeaking generation every five years based on new
technology. The greenhouse gases emission performance standard
for nonpeaking generation that will take effect on July 1, 2027,
shall establish a rate of emissions of greenhouse gases that is 80
percent lower than the permissible rate of emissions of greenhouse
gases for baseload generation in effect as of January 1, 2015. end insert

(2) The greenhouse gases emission performance standard for
begin delete primary end delete begin insert nonpeaking end insert generation shall be adopted by regulation
pursuant to the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code).

(3) In determining the rate of emissions of greenhouse gases
for begin delete primary end delete begin insert nonpeaking end insert generation, the Energy Commission shall
include the net emissions resulting from the production of
electricity by the begin delete primary end delete begin insert nonpeaking end insert generation.

(4) The Energy Commission shall establish an output-based
methodology to ensure that the calculation of emissions of
greenhouse gases for cogeneration recognizes the total usable
energy output of the process, and includes all greenhouse gases
emitted by the facility in the production of both electricity and
thermal energy.

(5) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the commission shall consider net emissions from the process of
growing, processing, and generating the electricity from the fuel
source.

(6) Greenhouse gases that are begin delete injected in geological formations,
so as to prevent releases end delete begin insert prevented from being released end insert into the
begin delete atmosphere, commonly termed end delete begin insert atmosphere as a result of end insert carbon
capture and storage or carbon capture and sequestration, in
compliance with applicable laws and regulations, shall not be
counted as emissions of the powerplant in determining compliance
with the greenhouse gases begin delete emissions end delete begin insert emission end insert performance
standard for begin delete primary end delete begin insert nonpeaking end insert generation.

(7) In adopting and implementing the greenhouse gases emission
performance standard for begin delete primary end delete begin insert nonpeaking end insert generation, the
Energy Commission, in consultation with the Independent System
Operator, shall consider the effects of the standard on system
reliability and overall costs to electricity customers.

(8) In developing and implementing the greenhouse gases
emission performance standard for begin delete primary end delete begin insert nonpeaking end insert generation,
the commission shall address long-term purchases of electricity
from unspecified sources in a manner consistent with this chapter.

(9) In developing and implementing the greenhouse gases
emission performance standard for begin delete primary end delete begin insert nonpeaking end insert generation,
the Energy Commission shall consider and act in a manner
consistent with any rules adopted pursuant to Section 824a-3 of
Title 16 of the United States Code.

(g) (1) On or before June 30, 2017, the Energy Commission,
through a rulemaking proceeding, and in consultation with the
commission and the State Air Resources Board, shall establish a
greenhouse gases emission performance standard for all begin delete secondary end delete
begin insert peaking end insert generation of load-serving entities. The greenhouse gases
emission performance standard for begin delete secondary end delete begin insert peaking end insert generation
shall be established at the lowest level that the Energy Commission
determines to be technologically feasible without putting reliability
of the electrical grid and of electric service at risk. begin delete The Energy
Commission, in consultation with the commission and the State
Air Resources Board, shall update the greenhouse gases emission
performance standard for secondary generation every five years
based on new technology. end delete The greenhouse gases emission
performance standard for begin delete secondary end delete begin insert peaking end insert generation established
by the Energy Commission for local publicly owned electric
utilities shall be consistent with the standard adopted by the
commission for load-serving entities. Enforcement of the
greenhouse gases emission performance standard for begin delete secondary end delete
begin insert peaking end insert generation shall begin on July 1, 2017. begin insert The Energy
Commission, in consultation with the commission and the State
Air Resources Board, shall update the greenhouse gases emission
performance standard for peaking generation every five years
based on new technology. end insert

(2) The greenhouse gases emission performance standard for
begin delete secondary end delete begin insert peaking end insert generation shall be adopted by regulation
pursuant to the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code).

(3) In determining the rate of emissions of greenhouse gases
for begin delete secondary end delete begin insert peaking end insert generation, the Energy Commission shall
include the net emissions resulting from the production of
electricity by the begin delete secondary end delete begin insert peaking end insert generation.

(4) The Energy Commission shall establish an output-based
methodology to ensure that the calculation of emissions of
greenhouse gases for cogeneration recognizes the total usable
energy output of the process, and includes all greenhouse gases
emitted by the facility in the production of both electricity and
thermal energy.

(5) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the Energy Commission shall consider net emissions from the
process of growing, processing, and generating the electricity from
the fuel source.

(6) Greenhouse gases that are begin delete injected in geological formations,
so as to prevent releases end delete begin insert prevented from being released end insert into the
begin delete atmosphere, commonly termed end delete begin insert atmosphere as a result of end insert carbon
capture and storage or carbon capture and sequestration, in
compliance with applicable laws and regulations, shall not be
counted as emissions of the powerplant in determining compliance
with the greenhouse gases begin delete emissions end delete begin insert emission end insert performance
standard for begin delete secondary end delete begin insert peaking end insert generation.

(7) In adopting and implementing the greenhouse gases emission
performance standard for begin delete secondary end delete begin insert peaking end insert generation, the Energy
Commission, in consultation with the Independent System
Operator, shall consider the effects of the standard on system
reliability and overall costs to electricity customers.

(8) In developing and implementing the greenhouse gases
emission performance standard for begin delete secondary end delete begin insert peaking end insert generation,
the Energy Commission shall address long-term purchases of
electricity from unspecified sources in a manner consistent with
this chapter.

(9) In developing and implementing the greenhouse gases
emission performance standard for begin delete secondary end delete begin insert peaking end insert generation,
the Energy Commission shall consider and act in a manner
consistent with any rules adopted pursuant to Section 824a-3 of
Title 16 of the United States Code.

begin insert

(h) (1) It is the intent of the Legislature that the greenhouse
gases emission performance standard operate in a prospective
manner.

end insert begin insert

(2) (A) A nonpeaking powerplant that has all necessary permits
or certificates to operate at the time it commences operation may
continue to operate and provide nonpeaking generation for its
anticipated useful life and need not comply with a greenhouse
gases emission performance standard adopted after it commences
operation.

end insert begin insert

(B) A nonpeaking powerplant that meets the applicable
greenhouse gases emission performance standard at the time it
commences operation may continue to operate and provide
nonpeaking generation for its anticipated useful life and need not
comply with a more stringent greenhouse gases emission
performance standard adopted after it commences operation.

end insert begin insert

(3) (A) A peaking powerplant that has all necessary permits or
certificates to operate at the time it commences operation may
continue to operate and provide peaking generation for its
anticipated useful life and need not comply with a greenhouse
gases emission performance standard adopted after it commences
operation.

end insert begin insert

(B) A peaking powerplant that meets the applicable greenhouse
gases emission performance standard at the time it commences
operation may continue to operate and provide peaking generation
for its anticipated useful life and need not comply with a more
stringent greenhouse gases emission performance standard adopted
after it commences operation.

end insert begin insert

(4) (A) The commission shall determine the anticipated useful
life of a nonpeaking or peaking powerplant and when that
powerplant commences or commenced operation for a load-serving
entity.

end insert begin insert

(B) The Energy Commission shall determine the anticipated
useful life of a nonpeaking or peaking powerplant and when that
powerplant commences or commenced operation for a local
publicly owned electric utility.

end insert begin delete

(h)

end delete

begin insert (i) end insert  This section shall become operative on January 1, 2017.

SEC. 7.  

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.