Amended in Senate April 20, 2015

Amended in Senate April 16, 2015

Amended in Senate April 14, 2015

Amended in Senate March 26, 2015

Amended in Senate March 12, 2015

Senate BillNo. 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 emission performance standards for baseload generation with greenhouse gases emission performance standards for nonpeaking generation and peaking generation. 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 nonpeaking generation of load-serving entities, and a separate standard for peaking 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 nonpeaking generation of local publicly owned electric utilities, and a separate standard for peaking generation. The bill would requirebegin delete thatend deletebegin insert that, taking into consideration siting factors such as altitude, regional climate, and operating capacity,end insert the greenhouse gases emission performance standard for nonpeaking generation and peaking generation be established at the lowest level that the respective commissions determine to be technologically feasible without putting reliability of the electrical grid and of electric service atbegin delete risk.end deletebegin insert risk and without hampering further deployment of renewable generation resources or reductions of greenhouse gases emissions.end insert The bill would require that the commissions update their respective greenhouse gases emission performance standards every 5 years based on new technology.begin delete The bill would require that the greenhouse gases emission performance standard for nonpeaking generation that will take effect on July 1, 2017, establish a rate of emissions of greenhouse gases that has an initial cap that is not higher than the rate of emissions of greenhouse gases for the lowest-emitting combined-cycle natural gas powerplant in operation at that time, as specified.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 commission 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 (CEQA) 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. 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.

This bill would provide that any carbon capture and storage project associated with an application for 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.

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:

P4    1

SECTION 1.  

Section 25544 is added to the Public Resources
2Code
, to read:

3

25544.  

Any carbon capture and storage project associated with
4an application for certification is a related facility pursuant to this
5chapter and for purposes of Section 21080.5. For purposes of this
6section, “carbon capture and storage,” also known as carbon capture
7and sequestration, means any method that prevents the release of
8greenhouse gases into the atmosphere.

9

SEC. 2.  

The heading of Chapter 3 (commencing with Section
108340) of Division 4.1 of the Public Utilities Code is amended to
11read:

12 

13Chapter  3. Greenhouse Gases Emission Performance
14Standard
15

 

16

SEC. 3.  

Section 8340 of the Public Utilities Code is amended
17to read:

18

8340.  

For purposes of this chapter, the following terms have
19the following meanings:

20(a) “Baseload generation” means electricity generation from a
21powerplant that is designed and intended to provide electricity at
22an annualized plant capacity factor of at least 60 percent.

23(b) “Combined-cycle natural gas” with respect to a powerplant
24means the powerplant employs a combination of one or more gas
25turbines and steam turbines in which electricity is produced in the
26steam turbine from otherwise lost waste heat exiting from one or
27more of the gas turbines.

28(c) “Electric service provider” means an “electric service
29provider” as defined in Section 218.3, but does not include
30corporations or persons employing cogeneration technology or
P5    1producing electricity from other than a conventional power source
2consistent with subdivision (b) of Section 218.

3(d) “Greenhouse gases” means those gases listed in Section
438505 of the Health and Safety Code.

5(e) “Load-serving entity” means every electrical corporation,
6electric service provider, or community choice aggregator serving
7end-use customers in the state.

8(f) “Long-term financial commitment” means either a new
9ownership investment in baseload generation or a new or renewed
10contract with a term of five or more years, which includes
11procurement of baseload generation.

12(g) “Output-based methodology” means a greenhouse gases
13emission performance standard that is expressed in pounds of
14greenhouse gases emitted per megawatthour and factoring in the
15useful thermal energy employed for purposes other than the
16generation of electricity.

17(h) “Plant capacity factor” means the ratio of the electricity
18produced during a given time period, measured in kilowatthours,
19to the electricity the unit could have produced if it had been
20operated at its rated capacity during that period, expressed in
21kilowatthours.

22(i) “Powerplant” means a facility for the generation of electricity,
23and includes one or more generating units at the same location.

24(j) “Zero- or low-carbon generating resource” means an
25electrical generating resource that will generate electricity while
26producing emissions of greenhouse gases at a rate substantially
27below the greenhouse gases emission performance standard, as
28determined by the commission.

29(k) This section shall become inoperative on July 1, 2017, and,
30as of January 1, 2018, is repealed.

31

SEC. 4.  

Section 8340 is added to the Public Utilities Code, to
32read:

33

8340.  

For purposes of this chapter, the following terms have
34the following meanings:

35(a) “Electric service provider” has the same meaning as defined
36in Section 218.3, but does not include corporations or persons
37employing cogeneration technology or producing electricity from
38other than a conventional power source consistent with subdivision
39(b) of Section 218.

P6    1(b) “Greenhouse gases” means those gases listed in Section
238505 of the Health and Safety Code.

3(c) “Greenhouse gases emission performance standard” means
4the permissible levels of emissions of greenhouse gases established
5pursuant to Section 8341 for nonpeaking generation and peaking
6generation.

7(d) “Load-serving entity” means every electrical corporation,
8electric service provider, or community choice aggregator serving
9end-use customers in the state.

10(e)  “Long-term financial commitment” means either a new
11ownership investment in nonpeaking generation or peaking
12generation or a new or renewed contract with a term of five or
13more years, which includes procurement of nonpeaking generation
14or peaking generation.

15(f) “Nonpeaking generation” means electricity generation from
16a powerplant that is designed and intended to provide electricity
17at an annualized plant capacity factor to be determined by the
18commission and the Energy Commission, in consultation with the
19Independent System Operator. In making this determination,
20consideration shall be given to both current energy generation
21needs, as well as energy generation needs as the greenhouse gases
22emission performance standards for nonpeaking generation are
23implemented. “Nonpeaking powerplant” means a powerplant that
24provides nonpeaking generation.

25(g) “Output-based methodology” means a greenhouse gases
26emission performance standard that is expressed in pounds of
27greenhouse gases emitted per megawatthour and factoring in the
28useful thermal energy employed for purposes other than the
29generation of electricity.

30(h) “Peaking generation” means electricity generation from a
31powerplant that is designed and intended to provide electricity at
32an annualized plant capacity factor to be determined by the
33commission and the Energy Commission, in consultation with the
34Independent System Operator. In making this determination,
35consideration shall be given to both current energy generation
36needs, as well as energy generation needs as the greenhouse gases
37emission performance standards for peaking generation are
38implemented. “Peaking powerplant” means a powerplant that
39provides peaking generation.

P7    1(i) “Plant capacity factor” means the ratio of the electricity
2produced during a given time period, measured in kilowatthours,
3to the electricity the unit could have produced if it had been
4operated at its rated capacity during that period, expressed in
5kilowatthours.

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

8(k) “Zero- or low-carbon generating resource” means an
9electrical generating resource that will generate electricity while
10producing emissions of greenhouse gases at a rate substantially
11below the greenhouse gases emission performance standard, as
12determined by the commission.

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

14

SEC. 5.  

Section 8341 of the Public Utilities Code is amended
15to read:

16

8341.  

(a) No load-serving entity or local publicly owned
17electric utility may enter into a long-term financial commitment
18unless any baseload generation supplied under the long-term
19financial commitment complies with the greenhouse gases emission
20performance standard established by the commission, pursuant to
21subdivision (d), for a load-serving entity, or by the Energy
22Commission, pursuant to subdivision (e), for a local publicly owned
23electric utility.

24(b) (1) The commission shall not approve a long-term financial
25commitment by an electrical corporation unless any baseload
26generation supplied under the long-term financial commitment
27complies with the greenhouse gases emission performance standard
28established by the commission pursuant to subdivision (d).

29(2) The commission may, in order to enforce this section, review
30any long-term financial commitment proposed to be entered into
31by an electric service provider or a community choice aggregator.

32(3) The commission shall adopt rules to enforce the requirements
33of this section, for load-serving entities. The commission shall
34adopt procedures, for all load-serving entities, to verify the
35emissions of greenhouse gases from any baseload generation
36supplied under a contract subject to the greenhouse gases emission
37performance standard to ensure compliance with the standard.

38(4) In determining whether a long-term financial commitment
39is for baseload generation, the commission shall consider the design
40of the powerplant and the intended use of the powerplant, as
P8    1determined by the commission based upon the electricity purchase
2contract, any certification received from the Energy Commission,
3any other permit or certificate necessary for the operation of the
4powerplant, including a certificate of public convenience and
5necessity, any procurement approval decision for the load-serving
6entity, and any other matter the commission determines is relevant
7under the circumstances.

8(5) Costs incurred by an electrical corporation to comply with
9this section, including those costs incurred for electricity purchase
10agreements that are approved by the commission that comply with
11the greenhouse gases emission performance standard, are to be
12treated as procurement costs incurred pursuant to an approved
13procurement plan and the commission shall ensure timely cost
14recovery of those costs pursuant to paragraph (3) of subdivision
15(d) of Section 454.5.

16(6) A long-term financial commitment entered into through a
17contract approved by the commission, for electricity generated by
18a zero- or low-carbon generating resource that is contracted for,
19on behalf of consumers of this state on a cost-of-service basis,
20shall be recoverable in rates, in a manner determined by the
21commission consistent with Section 380. The commission may,
22after a hearing, approve an increase from one-half to 1 percent in
23the return on investment by the third party entering into the contract
24with an electrical corporation with respect to investment in zero-
25or low-carbon generation resources authorized pursuant to this
26subdivision.

27(c) (1) The Energy Commission shall adopt regulations for the
28enforcement of this chapter with respect to a local publicly owned
29electric utility.

30(2) The Energy Commission may, in order to ensure compliance
31with the greenhouse gases emission performance standard by local
32publicly owned electric utilities, apply the procedures adopted by
33the commission to verify the emissions of greenhouse gases from
34baseload generation pursuant to subdivision (b).

35(3) In determining whether a long-term financial commitment
36is for baseload generation, the Energy Commission shall consider
37the design of the powerplant and the intended use of the
38powerplant, as determined by the Energy Commission based upon
39the electricity purchase contract, any certification received from
40the Energy Commission, any other permit for the operation of the
P9    1powerplant, any procurement approval decision for the load-serving
2entity, and any other matter the Energy Commission determines
3is relevant under the circumstances.

4(d) (1) On or before February 1, 2007, the commission, through
5a rulemaking proceeding, and in consultation with the Energy
6Commission and the State Air Resources Board, shall establish a
7greenhouse gases emission performance standard for all baseload
8generation of load-serving entities, at a rate of emissions of
9greenhouse gases that is no higher than the rate of emissions of
10greenhouse gases for combined-cycle natural gas baseload
11generation. Enforcement of the greenhouse gases emission
12performance standard shall begin immediately upon the
13establishment of the standard. All combined-cycle natural gas
14powerplants that are in operation, or that have an Energy
15Commission final permit decision to operate as of June 30, 2007,
16shall be deemed to be in compliance with the greenhouse gases
17emission performance standard.

18(2) In determining the rate of emissions of greenhouse gases
19for baseload generation, the commission shall include the net
20emissions resulting from the production of electricity by the
21baseload generation.

22(3) The commission shall establish an output-based methodology
23to ensure that the calculation of emissions of greenhouse gases for
24cogeneration recognizes the total usable energy output of the
25process, and includes all greenhouse gases emitted by the facility
26in the production of both electrical and thermal energy.

27(4) In calculating the emissions of greenhouse gases by facilities
28generating electricity from biomass, biogas, or landfill gas energy,
29the commission shall consider net emissions from the process of
30growing, processing, and generating the electricity from the fuel
31source.

32(5) Carbon dioxide that is injected in geological formations, so
33as to prevent releases into the atmosphere, in compliance with
34applicable laws and regulations shall not be counted as emissions
35of the powerplant in determining compliance with the greenhouse
36gases emissions performance standard.

37(6) In adopting and implementing the greenhouse gases emission
38performance standard, the commission, in consultation with the
39Independent System Operator shall consider the effects of the
P10   1standard on system reliability and overall costs to electricity
2customers.

3(7) In developing and implementing the greenhouse gases
4emission performance standard, the commission shall address
5long-term purchases of electricity from unspecified sources in a
6manner consistent with this chapter.

7(8) In developing and implementing the greenhouse gases
8emission performance standard, the commission shall consider
9and act in a manner consistent with any rules adopted pursuant to
10Section 824a-3 of Title 16 of the United States Code.

11(9) An electrical corporation that provides electric service to
1275,000 or fewer retail end-use customers in California may file
13with the commission a proposal for alternative compliance with
14this section, which the commission may accept upon a showing
15by the electrical corporation of both of the following:

16(A) A majority of the electrical corporation’s retail end-use
17customers for electric service are located outside of California.

18(B) The emissions of greenhouse gases to generate electricity
19for the retail end-use customers of the electrical corporation are
20subject to a review by the utility regulatory commission of at least
21one other state in which the electrical corporation provides
22regulated retail electric service.

23(e) (1) On or before June 30, 2007, the Energy Commission,
24at a duly noticed public hearing and in consultation with the
25commission and the State Air Resources Board, shall establish a
26greenhouse gases emission performance standard for all baseload
27generation of local publicly owned electric utilities at a rate of
28emissions of greenhouse gases that is no higher than the rate of
29emissions of greenhouse gases for combined-cycle natural gas
30baseload generation. The greenhouse gases emission performance
31standard established by the Energy Commission for local publicly
32owned electric utilities shall be consistent with the standard adopted
33by the commission for load-serving entities. Enforcement of the
34greenhouse gases emission performance standard shall begin
35immediately upon the establishment of the standard. All
36combined-cycle natural gas powerplants that are in operation, or
37that have an Energy Commission final permit decision to operate
38as of June 30, 2007, shall be deemed to be in compliance with the
39greenhouse gases emission performance standard.

P11   1(2) The greenhouse gases emission performance standard shall
2be adopted by regulation pursuant to the Administrative Procedure
3Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of
4Division 3 of Title 2 of the Government Code).

5(3) In determining the rate of emissions of greenhouse gases
6for baseload generation, the Energy Commission shall include the
7net emissions resulting from the production of electricity by the
8baseload generation.

9(4) The Energy Commission shall establish an output-based
10methodology to ensure that the calculation of emissions of
11greenhouse gases for cogeneration recognizes the total usable
12energy output of the process, and includes all greenhouse gases
13emitted by the facility in the production of both electrical and
14thermal energy.

15(5) In calculating the emissions of greenhouse gases by facilities
16generating electricity from biomass, biogas, or landfill gas energy,
17the Energy Commission shall consider net emissions from the
18process of growing, processing, and generating the electricity from
19the fuel source.

20(6) Carbon dioxide that is captured from the emissions of a
21powerplant and that is permanently disposed of in geological
22formations in compliance with applicable laws and regulations,
23shall not be counted as emissions from the powerplant.

24(7) In adopting and implementing the greenhouse gases emission
25performance standard, the Energy Commission, in consultation
26with the Independent System Operator, shall consider the effects
27of the standard on system reliability and overall costs to electricity
28customers.

29(8) In developing and implementing the greenhouse gases
30emission performance standard, the Energy Commission shall
31address long-term purchases of electricity from unspecified sources
32in a manner consistent with this chapter.

33(9) In developing and implementing the greenhouse gases
34emission performance standard, the Energy Commission shall
35consider and act in a manner consistent with any rules adopted
36pursuant to Section 824a-3 of Title 16 of the United States Code.

37(f) The Energy Commission, in a duly noticed public hearing
38and in consultation with the commission and the State Air
39Resources Board, shall reevaluate and continue, modify, or replace
40the greenhouse gases emission performance standard when an
P12   1enforceable greenhouse gases emissions limit is established and
2in operation, that is applicable to local publicly owned electric
3utilities.

4(g) The commission, through a rulemaking proceeding and in
5consultation with the Energy Commission and the State Air
6Resources Board, shall reevaluate and continue, modify, or replace
7the greenhouse gases emission performance standard when an
8enforceable greenhouse gases emissions limit is established and
9in operation, that is applicable to load-serving entities.

10(h) This section shall become inoperative on July 1, 2017, and,
11as of January 1, 2018, is repealed.

12

SEC. 6.  

Section 8341 is added to the Public Utilities Code, to
13read:

14

8341.  

(a) (1) Beginning July 1, 2017, no load-serving entity
15or local publicly owned electric utility may enter into a new
16long-term financial commitment unless any nonpeaking generation
17supplied under the long-term financial commitment complies with
18the greenhouse gases emission performance standard established
19by the commission, pursuant to subdivision (d), for a load-serving
20entity, or by the Energy Commission, pursuant to subdivision (f),
21for a local publicly owned electric utility.

22(2) Beginning July 1, 2017, no load-serving entity or local
23publicly owned electric utility may enter into a new long-term
24financial commitment unless any peaking generation supplied
25under the long-term financial commitment complies with the
26greenhouse gases emission performance standard established by
27the commission, pursuant to subdivision (e), for a load-serving
28entity, or by the Energy Commission, pursuant to subdivision (g),
29for a local publicly owned electric utility.

begin delete

30(3) Once a powerplant has all necessary permits or certificates
31to operate and has been deemed to comply with the applicable
32 greenhouse gases emission performance standard, the permitted
33or certificated greenhouse gases emission performance standard
34is the only greenhouse gases emission performance standard that
35shall govern the powerplant’s energy generation.

end delete
begin insert

36(3) The nonpeaking emissions performance standard shall apply
37only to nonpeaking powerplants and the peaking emissions
38performance standard shall apply only to peaking powerplants.

end insert

39(b) (1) (A) The commission shall not approve a long-term
40financial commitment by an electrical corporation unless the
P13   1 nonpeaking generation supplied under the long-term financial
2commitment complies with the greenhouse gases emission
3performance standard established by the commission pursuant to
4subdivision (d).

5(B) The commission shall not approve a long-term financial
6commitment by an electrical corporation unless the peaking
7generation supplied under the long-term financial commitment
8complies with the greenhouse gases emission performance standard
9established by the commission pursuant to subdivision (e).

10(2) The commission may, in order to enforce this section, review
11any long-term financial commitment proposed to be entered into
12by an electric service provider or a community choice aggregator.

13(3) The commission shall adopt rules to enforce the requirements
14of this section, for load-serving entities. The commission shall
15adopt procedures, for all load-serving entities, to verify the
16emissions of greenhouse gases from any nonpeaking generation
17or peaking generation supplied under a contract subject to the
18greenhouse gases emission performance standard to ensure
19compliance with the standard.

20(4) In determining whether a long-term financial commitment
21is for nonpeaking generation or peaking generation, the commission
22shall consider the design of the powerplant and the intended use
23of the powerplant, as determined by the commission based upon
24the electricity purchase contract, any certification received from
25the Energy Commission, any other permit or certificate necessary
26for the operation of the powerplant, including a certificate of public
27 convenience and necessity, any procurement approval decision
28for the load-serving entity, and any other matter the commission
29determines is relevant under the circumstances.

30(5) Costs incurred by an electrical corporation to comply with
31this section, including those costs incurred for electricity purchase
32agreements that are approved by the commission that comply with
33the respective greenhouse gases emission performance standards,
34are to be treated as procurement costs incurred pursuant to an
35approved procurement plan and the commission shall ensure timely
36cost recovery of those costs pursuant to paragraph (3) of
37subdivision (d) of Section 454.5.

38(6)  A long-term financial commitment entered into through a
39contract approved by the commission, for electricity generated by
40a zero- or low-carbon generating resource that is contracted for,
P14   1on behalf of consumers of this state on a cost-of-service basis,
2shall be recoverable in rates, in a manner determined by the
3commission consistent with Section 380. The commission may,
4after a hearing, approve an increase from one-half to 1 percent in
5the return on investment by the third party entering into the contract
6with an electrical corporation with respect to investment in zero-
7or low-carbon generation resources authorized pursuant to this
8paragraph.

9(c) (1) The Energy Commission shall adopt regulations for the
10 enforcement of this chapter with respect to a local publicly owned
11electric utility.

12(2) The Energy Commission may, in order to ensure compliance
13with the greenhouse gases emission performance standard by local
14publicly owned electric utilities, apply the procedures adopted by
15the commission to verify the emissions of greenhouse gases from
16nonpeaking generation and peaking generation pursuant to
17subdivision (b).

18(3) In determining whether a long-term financial commitment
19is for nonpeaking generation or peaking generation, the Energy
20Commission shall consider the design of the powerplant and the
21intended use of the powerplant, as determined by the Energy
22Commission based upon the electricity purchase contract, any
23certification received from the Energy Commission, any other
24permit for the operation of the powerplant, any procurement
25approval decision for the load-serving entity, and any other matter
26the Energy Commission determines is relevant under the
27circumstances.

28(d) (1) On or before June 30, 2017, the commission, through a
29rulemaking proceeding, and in consultation with the Energy
30Commission and the State Air Resources Board, shall establish a
31greenhouse gases emission performance standard for all nonpeaking
32generation of load-serving entities.begin delete Theend deletebegin insert Taking into consideration
33siting factors such as altitude, regional climate, and operating
34capacity, theend insert
greenhouse gases emission performance standard for
35nonpeaking generation shall be established at the lowest level that
36the commission determines to be technologically feasible without
37putting reliability of the electrical grid and of electric service at
38begin delete risk.end deletebegin insert risk and without hampering further deployment of renewable
39generation resources or reductions of greenhouse gases emissions.end insert

40 Enforcement of the greenhouse gases emission performance
P15   1standard for nonpeaking generation shall begin on July 1, 2017.
2The commission, in consultation with the Energy Commission and
3the State Air Resources Board, shall update the greenhouse gases
4emission performance standard for nonpeaking generation every
5five years based on new technology.begin delete The greenhouse gases
6emission performance standard for nonpeaking generation that
7will take effect on July 1, 2017, shall establish a rate of emissions
8of greenhouse gases that has an initial cap that is not higher than
9the rate of emissions of greenhouse gases for the lowest-emitting
10combined-cycle natural gas powerplant in operation at that time,
11taking into consideration siting factors such as altitude, regional
12climate, and operating capacity.end delete
All combined-cycle natural gas
13powerplants that are in operation, or that have an Energy
14Commission final permit decision to operate as of June 30, 2017,
15shall be deemed to be in compliance with the nonpeaking emission
16performance standard.

17(2) In determining the rate of emissions of greenhouse gases
18for nonpeaking generation, the commission shall include the net
19emissions resulting from the production of electricity by the
20 nonpeaking generation.

21(3) The commission shall establish an output-based methodology
22to ensure that the calculation of emissions of greenhouse gases for
23cogeneration recognizes the total usable energy output of the
24process, and includes all greenhouse gases emitted by the facility
25in the production of both electricity and thermal energy.

26(4) In calculating the emissions of greenhouse gases by facilities
27generating electricity from biomass, biogas, or landfill gas energy,
28the commission shall reconsider and modify its prior decisions
29implementing this section, including, but not limited to,
30D.07-01-039, in light of the best and most recent scientific
31information available regarding methodologies for determining
32the greenhouse gas emissions associated with producing energy
33from different biomass feedstocks.

34(5) Greenhouse gases that are prevented from being released
35into the atmosphere as a result of carbon capture and storage or
36carbon capture and sequestration, in compliance with applicable
37laws and regulations, shall not be counted as emissions of the
38powerplant in determining compliance with the greenhouse gases
39emission performance standard for nonpeaking generation.

P16   1(6) In adopting and implementing the greenhouse gases emission
2performance standard for nonpeaking generation, the commission,
3in consultation with the Independent System Operator, shall
4consider the effects of the standard on system reliability and overall
5costs to electricity customers.

6(7) In developing and implementing the greenhouse gases
7emission performance standard for nonpeaking generation, the
8commission shall address long-term purchases of electricity from
9unspecified sources in a manner consistent with this chapter.

10(8) In developing and implementing the greenhouse gases
11emission performance standard for nonpeaking generation, the
12commission shall consider and act in a manner consistent with any
13rules adopted pursuant to Section 824a-3 of Title 16 of the United
14States Code.

15(9) An electrical corporation that provides electric service to
1675,000 or fewer retail end-use customers in California may file
17with the commission a proposal for alternative compliance with
18this subdivision, which the commission may accept upon a showing
19by the electrical corporation of both of the following:

20(A) A majority of the electrical corporation’s retail end-use
21customers for electric service are located outside of California.

22(B) The emissions of greenhouse gases to generate electricity
23for the retail end-use customers of the electrical corporation are
24subject to a review by the utility regulatory commission of at least
25one other state in which the electrical corporation provides
26regulated retail electric service.

27(e) (1) On or before June 30, 2017, the commission, through a
28rulemaking proceeding, and in consultation with the Energy
29Commission and the State Air Resources Board, shall establish a
30greenhouse gases emission performance standard for all peaking
31generation of load-serving entities.begin delete Theend deletebegin insert Taking into consideration
32siting factors such as altitude, regional climate, and operating
33capacity, theend insert
greenhouse gases emission performance standard for
34peaking generation shall be established at the lowest level that the
35commission determines to be technologically feasible without
36putting reliability of the electrical grid and of electric service at
37begin delete risk.end deletebegin insert risk and without hampering further deployment of renewable
38generation resources or reductions of greenhouse gases emissions.end insert

39 Enforcement of the greenhouse gases emission performance
40standard for peaking generation shall begin on July 1, 2017. The
P17   1commission, in consultation with the Energy Commission and the
2State Air Resources Board, shall update the greenhouse gases
3emission performance standard for peaking generation every five
4years based on new technology.

5(2) In determining the rate of emissions of greenhouse gases
6for peaking generation, the commission shall include the net
7emissions resulting from the production of electricity by the
8peaking generation.

9(3) The commission shall establish an output-based methodology
10to ensure that the calculation of emissions of greenhouse gases for
11cogeneration recognizes the total usable energy output of the
12process, and includes all greenhouse gases emitted by the facility
13in the production of both electrical and thermal energy.

14(4) In calculating the emissions of greenhouse gases by facilities
15generating electricity from biomass, biogas, or landfill gas energy,
16the commission shall reconsider and modify its prior decisions
17 implementing this section, including, but not limited to,
18D.07-01-039, in light of the best and most recent scientific
19information available regarding methodologies for determining
20the greenhouse gas emissions associated with producing energy
21from different biomass feedstocks.

22(5) Greenhouse gases that are prevented from being released
23into the atmosphere as a result of carbon capture and storage or
24carbon capture and sequestration, in compliance with applicable
25laws and regulations, shall not be counted as emissions of the
26powerplant in determining compliance with the greenhouse gases
27emission performance standard for peaking generation.

28(6) In adopting and implementing the greenhouse gases emission
29performance standard for peaking generation, the commission, in
30consultation with the Independent System Operator, shall consider
31the effects of the standard on system reliability and overall costs
32to electricity customers.

33(7) In developing and implementing the greenhouse gases
34emission performance standard for peaking generation, the
35commission shall address long-term purchases of electricity from
36unspecified sources in a manner consistent with this chapter.

37(8) In developing and implementing the greenhouse gases
38emission performance standard for peaking generation, the
39commission shall consider and act in a manner consistent with any
P18   1rules adopted pursuant to Section 824a-3 of Title 16 of the United
2States Code.

3(9) An electrical corporation that provides electric service to
475,000 or fewer retail end-use customers in California may file
5with the commission a proposal for alternative compliance with
6this subdivision, which the commission may accept upon a showing
7by the electrical corporation of both of the following:

8(A) A majority of the electrical corporation’s retail end-use
9customers for electric service are located outside of California.

10(B) The emissions of greenhouse gases to generate electricity
11for the retail end-use customers of the electrical corporation are
12subject to a review by the utility regulatory commission of at least
13one other state in which the electrical corporation provides
14regulated retail electric service.

15(f) (1) On or before June 30, 2017, the Energy Commission, at
16a duly noticed public hearing and in consultation with the
17commission and the State Air Resources Board, shall establish a
18greenhouse gases emission performance standard for all nonpeaking
19generation of local publicly owned electric utilities.begin delete Theend deletebegin insert Taking
20into consideration siting factors such as altitude, regional climate,
21and operating capacity, theend insert
greenhouse gases emission
22performance standard for nonpeaking generation shall be
23established at the lowest level that the Energy Commission
24determines to be technologically feasible without putting reliability
25of the electrical grid and of electric service atbegin delete risk.end deletebegin insert risk and without
26hampering further deployment of renewable generation resources
27or reductions of greenhouse gases emissions.end insert
The greenhouse
28gases emission performance standard for nonpeaking generation
29established by the Energy Commission for local publicly owned
30electric utilities shall be consistent with the standard adopted by
31the commission for load-serving entities. Enforcement of the
32greenhouse gases emission performance standard for nonpeaking
33generation shall begin on July 1, 2017. The Energy Commission,
34in consultation with the commission and the State Air Resources
35Board, shall update the greenhouse gases emission performance
36standard for nonpeaking generation every five years based on new
37technology. begin delete The greenhouse gases emission performance standard
38for nonpeaking generation that will take effect on July 1, 2017,
39shall establish a rate of emissions of greenhouse gases that has an
40initial cap that is not higher than the rate of emissions of
P19   1greenhouse gases for the lowest-emitting combined-cycle natural
2gas powerplant in operation at that time, taking into consideration
3siting factors such as altitude, regional climate, and operating
4capacity.end delete
All combined-cycle natural gas powerplants that are in
5operation, or that have an Energy Commission final permit decision
6to operate as of June 30, 2017, shall be deemed to be in compliance
7with the nonpeaking emission performance standard.

8(2) The greenhouse gases emission performance standard for
9nonpeaking generation shall be adopted by regulation pursuant to
10the Administrative Procedure Act (Chapter 3.5 (commencing with
11Section 11340) of Part 1 of Division 3 of Title 2 of the Government
12Code).

13(3) In determining the rate of emissions of greenhouse gases
14for nonpeaking generation, the Energy Commission shall include
15the net emissions resulting from the production of electricity by
16the nonpeaking generation.

17(4) The Energy Commission shall establish an output-based
18methodology to ensure that the calculation of emissions of
19greenhouse gases for cogeneration recognizes the total usable
20energy output of the process, and includes all greenhouse gases
21emitted by the facility in the production of both electricity and
22thermal energy.

23(5) In calculating the emissions of greenhouse gases by facilities
24generating electricity from biomass, biogas, or landfill gas energy,
25the Energy Commission shall act consistent with the commission’s
26reconsideration and modification of its prior decisions
27implementing this section, including, but not limited to,
28D.07-01-039, in light of the best and most recent scientific
29information available regarding methodologies for determining
30the greenhouse gas emissions associated with producing energy
31from different biomass feedstocks.

32(6) Greenhouse gases that are prevented from being released
33into the atmosphere as a result of carbon capture and storage or
34carbon capture and sequestration, in compliance with applicable
35laws and regulations, shall not be counted as emissions of the
36powerplant in determining compliance with the greenhouse gases
37emission performance standard for nonpeaking generation.

38(7) In adopting and implementing the greenhouse gases emission
39performance standard for nonpeaking generation, the Energy
40Commission, in consultation with the Independent System
P20   1Operator, shall consider the effects of the standard on system
2reliability and overall costs to electricity customers.

3(8) In developing and implementing the greenhouse gases
4emission performance standard for nonpeaking generation, the
5 commission shall address long-term purchases of electricity from
6unspecified sources in a manner consistent with this chapter.

7(9) In developing and implementing the greenhouse gases
8emission performance standard for nonpeaking generation, the
9Energy Commission shall consider and act in a manner consistent
10with any rules adopted pursuant to Section 824a-3 of Title 16 of
11the United States Code.

12(g) (1) On or before June 30, 2017, the Energy Commission,
13through a rulemaking proceeding, and in consultation with the
14commission and the State Air Resources Board, shall establish a
15greenhouse gases emission performance standard for all peaking
16generation of load-serving entities.begin delete Theend deletebegin insert Taking into consideration
17siting factors such as altitude, regional climate, and operating
18capacity, theend insert
greenhouse gases emission performance standard for
19peaking generation shall be established at the lowest level that the
20Energy Commission determines to be technologically feasible
21without putting reliability of the electrical grid and of electric
22service atbegin delete risk.end deletebegin insert end insertbegin insertrisk and without hampering further deployment of
23renewable generation resources or reductions of greenhouse gases
24emissions.end insert
The greenhouse gases emission performance standard
25for peaking generation established by the Energy Commission for
26local publicly owned electric utilities shall be consistent with the
27standard adopted by the commission for load-serving entities.
28Enforcement of the greenhouse gases emission performance
29standard for peaking generation shall begin on July 1, 2017. The
30Energy Commission, in consultation with the commission and the
31State Air Resources Board, shall update the greenhouse gases
32emission performance standard for peaking generation every five
33years based on new technology.

34(2) The greenhouse gases emission performance standard for
35 peaking generation shall be adopted by regulation pursuant to the
36Administrative Procedure Act (Chapter 3.5 (commencing with
37Section 11340) of Part 1 of Division 3 of Title 2 of the Government
38Code).

39(3) In determining the rate of emissions of greenhouse gases
40for peaking generation, the Energy Commission shall include the
P21   1net emissions resulting from the production of electricity by the
2peaking generation.

3(4) The Energy Commission shall establish an output-based
4methodology to ensure that the calculation of emissions of
5greenhouse gases for cogeneration recognizes the total usable
6energy output of the process, and includes all greenhouse gases
7emitted by the facility in the production of both electricity and
8thermal energy.

9(5) In calculating the emissions of greenhouse gases by facilities
10generating electricity from biomass, biogas, or landfill gas energy,
11the Energy Commission shall act consistent with the commission’s
12reconsideration and modification of its prior decisions
13implementing this section, including, but not limited to,
14D.07-01-039, in light of the best and most recent scientific
15information available regarding methodologies for determining
16the greenhouse gas emissions associated with producing energy
17from different biomass feedstocks.

18(6) Greenhouse gases that are prevented from being released
19into the atmosphere as a result of carbon capture and storage or
20carbon capture and sequestration, in compliance with applicable
21laws and regulations, shall not be counted as emissions of the
22powerplant in determining compliance with the greenhouse gases
23emission performance standard for peaking generation.

24(7) In adopting and implementing the greenhouse gases emission
25performance standard for peaking generation, the Energy
26Commission, in consultation with the Independent System
27Operator, shall consider the effects of the standard on system
28reliability and overall costs to electricity customers.

29(8) In developing and implementing the greenhouse gases
30emission performance standard for peaking generation, the Energy
31 Commission shall address long-term purchases of electricity from
32unspecified sources in a manner consistent with this chapter.

33(9) In developing and implementing the greenhouse gases
34emission performance standard for peaking generation, the Energy
35Commission shall consider and act in a manner consistent with
36any rules adopted pursuant to Section 824a-3 of Title 16 of the
37United States Code.

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

39

SEC. 7.  

No reimbursement is required by this act pursuant to
40Section 6 of Article XIII B of the California Constitution because
P22   1the only costs that may be incurred by a local agency or school
2district will be incurred because this act creates a new crime or
3infraction, eliminates a crime or infraction, or changes the penalty
4for a crime or infraction, within the meaning of Section 17556 of
5the Government Code, or changes the definition of a crime within
6the meaning of Section 6 of Article XIII B of the California
7Constitution.



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