SB 350, as introduced, De León. Clean Energy and Pollution Reduction Act of 2015.
(1) Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations, as defined, while local publicly owned electric utilities, as defined, are under the direction of their governing boards.
Existing law establishes the California Renewables Portfolio Standard (RPS) program, which expresses the intent of the Legislature that the amount of electricity generated per year from eligible renewable energy resources be increased to an amount that equals at least 33% of the total electricity sold to retail customers in California per year by December 31, 2020. Existing law requires the PUC, by January 1, 2012, to establish the quantity of electricity products from eligible renewable energy resources to be procured by each retail seller for specified compliance periods, sufficient to ensure that the procurement of electricity products from eligible renewable energy resources achieves 25% of retail sales by December 31, 2016, and 33% of retail sales by December 31, 2020, and that retail sellers procure not less than 33% of retail sales in all subsequent years. Existing law includes as an eligible renewable energy resources a specified facility engaged in the combustion of municipal solid waste.
Existing law makes the requirements of the RPS program applicable to local publicly owned electric utilities, except that the utility’s governing board is responsible for implementation of those requirements, instead of the PUC, and certain enforcement authority with respect to local publicly owned electric utilities is given to the State Energy Resources Conservation and Development Commission (Energy Commission) and State Air Resources Board, instead of the PUC.
This bill would additionally express the intent of the Legislature for the purposes of the RPS program that the amount of electricity generated per year from eligible renewable energy resources be increased to an amount equal to at least 50% by December 31, 2030, and would require the PUC, by January 1, 2017, to establish the quantity of electricity products from eligible renewable energy resources be procured by each retail seller for specified compliance periods sufficient to ensure that the procurement of electricity products from eligible renewable energy resources achieves 50% of retail sales by December 31, 2030. The bill would require the governing boards of local publicly owned electric utilities to ensure that specified quantities of electricity products from eligible renewable energy resources to be procured for specified compliance periods to ensure that the procurement of electricity products from eligible renewable energy resources achieve 50% of retail sales by December 31, 2030. The bill would exclude all facilities engaged in the combustion of municipal solid waste from being eligible renewable energy resources. The bill would require community choice aggregators and electric service providers to prepare and submit renewable energy procurement plans. The bill would revise other aspects of the RPS program, including, among other things, the enforcement provisions and would require penalties collected for noncompliance to be deposited in the Electric Program Investment Charge Fund. The bill would require the PUC to direct electrical corporations to include in their proposed procurement plans a strategy for procuring a diverse portfolio of resources that provide a reliable electricity supply. The bill would require the PUC and the Energy Commission to take certain actions in furtherance of meeting the state’s clean energy and pollution reduction objectives.
(2) Under existing law, a violation of the RPS program is a crime.
Because the provisions of this bill would expand the RPS program, a violation of these provisions would impose a state-mandated local program by expanding the definition of a crime.
(3) By placing additional requirements upon local publicly owned electric utilities, this bill would impose a state-mandated local program.
(4) Existing law requires the State Air Resources Board to adopt and implement various standards related to emissions from motor vehicles.
This bill would require those standards to be in furtherance of achieving a reduction in petroleum use in motor vehicles by 50% by January 1, 2030.
(5) Existing law states the policy of the state to exploit all practicable and cost-effective conservation and improvements in the efficiency of energy use and distribution, and to achieve energy security, diversity of supply sources, and competitiveness of transportation energy markets based on the least environmental and economic costs.
This bill would additionally state the policy of the state to exploit those conservation and improvements in furtherance of reducing petroleum use in the transportation sector by 50% by January 1, 2030.
(6) Existing law requires the Energy Commission to establish a regulatory proceeding to develop and implement a comprehensive program to achieve greater energy savings in California’s existing residential and nonresidential building stock and to periodically update criteria for the program.
This bill would require the Energy Commission, by January 1, 2017, and at least once every 3 years thereafter, to adopt an update to the program in furtherance of achieving a doubling of energy efficiency in buildings by January 1, 2030.
(7) 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 reasons.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
This act shall be known and may be cited as the
2Clean Energy and Pollution Reduction Act of 2015.
(a) The Legislature finds and declares that the
2Governor has called for a new set of objectives in clean energy,
3clean air, and pollution reduction for 2030 and beyond. Those
4objectives consist of the following:
5(1) To increase from 33 percent to 50 percent, the procurement
6of our electricity from renewable sources.
7(2) To reduce today’s petroleum use in cars and trucks by up
8to 50 percent.
9(3) To double the efficiency of existing buildings.
10(b) It is the intent of the Legislature in enacting this act to codify
11the targets described under subdivision (a) to ensure they are
12permanent, enforceable, and quantifiable.
Section 43013 of the Health and Safety Code is
14amended to read:
(a) The state board shall adopt and implement motor
16vehicle emission standards, in-use performance standards, and
17motor vehicle fuel specifications for the control of air contaminants
18and sources of air pollution which the state board has found to be
19necessary, cost effective, and technologically feasible, to carry out
20the purposes of this
begin delete division,end delete unless preempted by federal law.
23(b) The state board shall,
consistent with subdivision (a), adopt
24standards and regulations for light-duty and heavy-duty motor
25vehicles, medium-duty motor vehicles, as determined and specified
26by the state board, portable fuel containers and spouts, and off-road
27or nonvehicle engine categories, including, but not limited to,
28off-highway motorcycles, off-highway vehicles, construction
29equipment, farm equipment, utility engines, locomotives, and, to
30the extent permitted by federal law, marine vessels.
31(c) Prior to adopting standards and regulations for farm
32equipment, the state board shall hold a public hearing and find and
33determine that the standards and regulations are necessary, cost
34effective, and technologically feasible. The state board shall also
35consider the technological effects of emission control standards
36on the cost, fuel consumption, and performance characteristics of
37mobile farm equipment.
38(d) Notwithstanding subdivision (b), the state board shall not
39adopt any standard or regulation affecting locomotives until the
40final study required under Section 5 of Chapter 1326 of the Statutes
P5 1of 1987 has been completed and submitted to the Governor and
3(e) Prior to adopting or amending any standard or regulation
4relating to motor vehicle fuel specifications pursuant to this section,
5the state board shall, after consultation with public or private
6entities that would be significantly impacted as described in
7paragraph (2) of subdivision (f), do both of the following:
8(1) Determine the cost-effectiveness of the adoption or
9amendment of the standard or regulation. The cost-effectiveness
10shall be compared on an incremental basis with other mobile source
11control methods and options.
12(2) Based on a preponderance of scientific and engineering data
13in the record, determine the technological feasibility of the adoption
14or amendment of the standard or regulation. That determination
15shall include, but is not limited to, the availability, effectiveness,
16reliability, and safety expected of the proposed technology in an
17application that is representative of the proposed use.
18(f) Prior to adopting or amending any motor vehicle fuel
19specification pursuant to this section, the state board shall do both
20of the following:
21(1) To the extent feasible, quantitatively document the
22significant impacts of the proposed standard or specification on
23affected segments of the state’s economy. The economic analysis
24shall include, but is not limited to, the significant impacts of any
25change on motor vehicle fuel efficiency, the existing motor vehicle
26fuel distribution system, the competitive position of the affected
27segment relative to border states, and the cost to consumers.
28(2) Consult with public or private entities that would be
29significantly impacted to identify those investigative or preventive
30actions that may be necessary to ensure consumer acceptance,
31product availability, acceptable performance, and equipment
32reliability. The significantly impacted parties shall include, but are
33not limited to, fuel manufacturers, fuel distributors, independent
34marketers, vehicle manufacturers, and fuel users.
35(g) To the extent that there is any conflict between the
36information required to be prepared by the state board pursuant to
37subdivision (f) and information required to be prepared by the state
38board pursuant to Chapter 3.5 (commencing with Section 11340)
39of Part 1 of Division 3 of Title 2 of the Government Code, the
40requirements established under subdivision (f) shall prevail.
P6 1(h) It is the intent of the Legislature that the state board act as
2expeditiously as is feasible to reduce nitrogen oxide emissions
3from diesel vehicles, marine vessels, and other categories of
4vehicular and mobile sources which significantly contribute to air
Section 25000.5 of the Public Resources Code is
7amended to read:
(a) The Legislature finds and declares that
9overdependence on the production, marketing, and consumption
10of petroleum based fuels as an energy resource in the transportation
11sector is a threat to the energy security of the state due to
12continuing market and supply uncertainties. In addition, petroleum
13use as an energy resource contributes substantially to the following
14public health and environmental problems: air pollution, acid rain,
15global warming, and the degradation of California’s marine
16environment and fisheries.
17(b) Therefore, it is the policy of this state to fully evaluate the
18economic and environmental costs of petroleum use, and the
19economic and environmental costs of other transportation
begin delete fuels,end delete
20 including the costs and values of environmental
21impacts, and to establish a state transportation energy policy that
22results in the least environmental and economic cost to the state.
23In pursuing the “least environmental and economic cost” strategy,
24it is the policy of the state to exploit all practicable and
25cost-effective conservation and improvements in the efficiency of
26energy use and distribution, and to achieve energy security,
27diversity of supply sources, and competitiveness of transportation
28energy markets based on the least environmental and economic
begin delete cost.end delete
31(c) It is also the
policy of this state to minimize the economic
32and environmental costs due to the use of petroleum-based and
33other transportation fuels by state agencies. In implementing a
34least-cost economic and environmental strategy for state fleets, it
35is the policy of the state to implement practicable and cost-effective
36measures, including, but not necessarily limited to, the purchase
37of the cleanest and most efficient automobiles and replacement
38tires, the use of alternative fuels in its fleets, and other conservation
P7 1(d) For the purposes of this section, “petroleum based fuels”
2means fuels derived from liquid unrefined crude oil, including
3natural gas liquids, liquefied petroleum gas, or the energy fraction
4of methyl tertiary-butyl ether (MTBE) or other ethers that is not
5attributed to natural gas.
Section 25943 of the Public Resources Code is
7amended to read:
(a) (1) By March 1, 2010, the commission shall
9establish a regulatory proceeding to develop and implement a
10comprehensive program to achieve greater energy savings in
11California’s existing residential and nonresidential building stock.
12This program shall comprise a complementary portfolio of
13techniques, applications, and practices that will achieve greater
14energy efficiency in existing residential and nonresidential
15structures that fall significantly below the current standards in Title
1624 of the California Code of Regulations, as determined by the
18(2) The comprehensive program may include, but need not be
19limited to, a broad range of energy assessments, building
20benchmarking, energy rating, cost-effective energy efficiency
21 improvements, public and private sector energy efficiency
22financing options, public outreach and education efforts, and green
24(b) To develop and implement the program specified in
25subdivision (a), the commission shall do both of the following:
26(1) Coordinate with the Public Utilities Commission and consult
27with representatives from the Bureau of Real Estate, the
28Department of Housing and Community Development,
29investor-owned and publicly owned utilities, local governments,
30real estate licensees, commercial and homebuilders, commercial
31property owners, small businesses, mortgage lenders, financial
32institutions, home appraisers, inspectors, energy rating
33organizations, consumer groups, environmental and environmental
34justice groups, and other entities the commission deems
36(2) Hold at
least three public hearings in geographically diverse
37locations throughout the state.
38(c) In developing the requirements for the program specified in
39subdivision (a), the commission shall consider all of the following:
P8 1(1) The amount of annual and peak energy savings, greenhouse
2gas emission reductions, and projected customer utility bill savings
3that will accrue from the program.
4(2) The most cost-effective means and reasonable timeframes
5to achieve the goals of the program.
6(3) The various climatic zones within the state.
7(4) An appropriate method to inform and educate the public
8about the need for, benefits of, and environmental impacts of, the
9comprehensive energy efficiency program.
10(5) The most effective way to report the energy assessment
11results and the corresponding energy efficiency improvements to
12the owner of the residential or nonresidential building, including,
13among other things, the following:
14(A) Prioritizing the identified energy efficiency improvements.
15(B) The payback period or cost-effectiveness of each
17(C) The various incentives, loans, grants, and rebates offered
18to finance the improvements.
19(D) Available financing options including all of the following:
20(i) Mortgages or sales agreement components.
21(ii) On-bill financing.
22(iii) Contractual property tax assessments.
23(iv) Home warranties.
24(6) Existing statutory and regulatory requirements to achieve
25energy efficiency savings and greenhouse gas emission reductions.
26(7) A broad range of implementation approaches, including both
27utility and nonutility administration of energy efficiency programs.
28(8) Any other considerations deemed appropriate by the
30(d) The program developed pursuant to this section shall do all
31of the following:
32(1) Minimize the overall costs of establishing and
33the comprehensive energy efficiency program requirements.
34(2) Ensure, for residential buildings, that the energy efficiency
35assessments, ratings, or improvements do not unreasonably or
36unnecessarily affect the home purchasing process or the ability of
37individuals to rent housing. A transfer of property subject to the
38program implemented pursuant to this section shall not be
39invalidated solely because of the failure of a person to comply
40with a provision of the program.
P9 1(3) Ensure, for nonresidential buildings, that the energy
2improvements do not have an undue economic impact on California
4(4) Determine, for residential buildings, the appropriateness of
5the Home Energy Rating System (HERS) program to support the
6goals of this section and whether there are a sufficient number of
7HERS-certified raters available to meet the program requirements.
8(5) Determine, for nonresidential structures, the availability of
9an appropriate cost-effective energy efficiency assessment system
10and whether there are a sufficient number of certified raters or
11auditors available to meet the program requirements.
12(6) Coordinate with the California Workforce Investment Board,
13the Employment Training Panel, the California Community
14Colleges, and other entities to ensure a qualified, well-trained
15workforce is available to implement the program requirements.
16(7) Coordinate with, and avoid duplication of, existing
17proceedings of the Public Utilities Commission and programs
18administered by utilities.
19(e) A home energy rating or energy assessment service does not
20meet the requirements of this section unless the service has been
21certified by the commission to be in compliance with the program
22criteria developed pursuant to this section and is in conformity
23with other applicable elements of the program.
24(f) The commission shall periodically update the criteria
25and adopt any revision that, in its judgment, is necessary to improve
26or refine program requirements after receiving public input.
31(g) Before implementing an element of the program developed
32pursuant to subdivision (a) that requires the expansion of statutory
33authority of the commission or the Public Utilities Commission,
34the commission and the Public Utilities Commission shall obtain
35legislative approval for the expansion of their authorities.
36(h) The commission shall report on the status of the program in
37the integrated energy policy report pursuant to Section 25302.
38(i) The commission shall fund activities undertaken pursuant
39to this section from the Federal Trust Fund consistent with the
40federal American Recovery and Reinvestment Act of 2009 (Public
P10 1Law 111-5) or other sources of nonstate funds available to the
2commission for the purposes of this section.
3(j) For purposes of this section, “energy assessment” means a
4determination of an energy user’s energy consumption level,
5relative efficiency compared to other users, and opportunities to
6achieve greater efficiency or improve energy resource utilization.
Section 399.11 of the Public Utilities Code is amended
The Legislature finds and declares all of the following:
10(a) In order to attain a target of generating 20 percent of total
11retail sales of electricity in California from eligible renewable
12energy resources by December 31, 2013,
begin delete andend delete 33 percent by
13December 31, 2020, it is
14the intent of the Legislature that the commission and the Energy
15Commission implement the California Renewables Portfolio
16Standard Program described in this article.
17(b) Achieving the renewables portfolio standard through the
18 procurement of various electricity products from eligible renewable
19energy resources is intended to provide unique benefits to
20California, including all of the following, each of which
21independently justifies the program:
22(1) Displacing fossil fuel consumption within the state.
23(2) Adding new electrical generating facilities in the
24transmission network within the Western Electricity Coordinating
25Council service area.
26(3) Reducing air pollution in the state.
27(4) Meeting the state’s climate change goals by reducing
28emissions of greenhouse gases associated with electrical generation.
29(5) Promoting stable retail rates for electric service.
30(6) Meeting the state’s need for a diversified and balanced
31energy generation portfolio.
32(7) Assistance with meeting the state’s resource adequacy
34(8) Contributing to the safe and reliable operation of the
35electrical grid, including providing predictable electrical supply,
36voltage support, lower line losses, and congestion relief.
37(9) Implementing the state’s transmission and land use planning
38activities related to development of eligible renewable energy
P11 1(c) The California Renewables Portfolio Standard Program is
2intended to complement the Renewable Energy Resources Program
3administered by the Energy Commission and established pursuant
4to Chapter 8.6 (commencing with Section 25740) of Division 15
5of the Public Resources Code.
6(d) New and modified electric transmission facilities may be
7necessary to facilitate the state achieving its renewables portfolio
9(e) (1) Supplying electricity to California end-use customers
10that is generated by eligible renewable energy resources is
11necessary to improve California’s air quality and public health,
12and the commission shall ensure rates are just and reasonable, and
13are not significantly affected by the procurement requirements of
14this article. This electricity may be generated anywhere in the
15interconnected grid that includes many states, and areas of both
16Canada and Mexico.
17(2) This article requires generating resources located outside of
18California that are able to supply that electricity to California
19end-use customers to be treated identically to generating resources
20located within the state, without discrimination.
21(3) California electrical corporations have already executed,
22and the commission has approved, power purchase agreements
23with eligible renewable energy resources located outside of
24California that will supply electricity to California end-use
25customers. These resources will fully count toward meeting the
26renewables portfolio standard procurement requirements.
begin delete In
27addition, there are nearly 7,000 megawatts of additional proposed
28renewable energy resources located outside of California that are
29awaiting interconnection approval from the Independent System
30Operator. All of these resources, if procured, will count as eligible
31renewable energy resources that satisfy the portfolio content
32requirements of paragraph (1) of subdivision (c) of Section 399.16.end delete
Section 399.12 of the Public Utilities Code is amended
For purposes of this article, the following terms have
36the following meanings:
37(a) “Conduit hydroelectric facility” means a facility for the
38generation of electricity that uses only the hydroelectric potential
39of an existing pipe, ditch, flume, siphon, tunnel, canal, or other
P12 1manmade conduit that is operated to distribute water for a
3(b) “Balancing authority” means the responsible entity that
4integrates resource plans ahead of time, maintains load-interchange
5generation balance within a balancing authority area, and supports
6interconnection frequency in real time.
7(c) “Balancing authority area” means the collection of
8generation, transmission, and loads within the metered boundaries
9of the area within which the balancing authority maintains the
10electrical load-resource balance.
11(d) “California balancing authority” is a balancing authority
12with control over a balancing authority area primarily located in
13this state and operating for retail sellers and local publicly owned
14electric utilities subject to the requirements of this article and
15includes the Independent System Operator (ISO) and a local
16publicly owned electric utility operating a transmission grid that
17is not under the operational control of the ISO. A California
18balancing authority is responsible for the operation of the
19transmission grid within its metered boundaries which may not be
20limited by the political boundaries of the State of California.
21(e) “Eligible renewable energy resource” means an electrical
22generating facility that meets the definition of a “renewable
23electrical generation facility” in Section 25741 of the Public
24Resources Code, subject to the following:
25(1) (A) An existing small hydroelectric generation facility of
2630 megawatts or less shall be eligible only if a retail seller or local
27publicly owned electric utility procured the electricity from the
28facility as of December 31, 2005. A new hydroelectric facility that
29commences generation of electricity after December 31, 2005, is
30not an eligible renewable energy resource if it will cause an adverse
31impact on instream beneficial uses or cause a change in the volume
32or timing of streamflow.
33(B) Notwithstanding subparagraph (A), a conduit hydroelectric
34facility of 30 megawatts or less that commenced operation before
35January 1, 2006, is an eligible renewable energy resource. A
36conduit hydroelectric facility of 30 megawatts or less that
37commences operation after December 31, 2005, is an eligible
38renewable energy resource so long as it does not cause an adverse
39impact on instream beneficial uses or cause a change in the volume
40or timing of streamflow.
P13 1(C) A facility approved by the governing board of a local
2publicly owned electric utility prior to June 1, 2010, for
3procurement to satisfy renewable energy procurement obligations
4adopted pursuant to former Section 387, shall be certified as an
5eligible renewable energy resource by the Energy Commission
6pursuant to this article, if the facility is a “renewable electrical
7generation facility” as defined in Section 25741 of the Public
9(D) (i) A small hydroelectric generation unit with a nameplate
10capacity not exceeding 40 megawatts that is operated as part of a
11water supply or conveyance system is an eligible renewable energy
12resource only for the retail seller or local publicly owned electric
13utility that procured the electricity from the unit as of December
1431, 2005. No unit shall be eligible pursuant to this subparagraph
15if an application for certification is submitted to the Energy
16Commission after January 1, 2013. Only one retail seller or local
17publicly owned electric utility shall be deemed to have procured
18electricity from a given unit as of December 31, 2005.
19(ii) Notwithstanding clause (i), a local publicly owned electric
20utility that meets the criteria of subdivision (j) of Section 399.30
21may sell to another local publicly owned electric utility electricity
22from small hydroelectric generation units that qualify as eligible
23renewable energy resources under clause (i), and that electricity
24may be used by the local publicly owned electric utility that
25purchased the electricity to meet its renewables portfolio standard
26procurement requirements. The total of all those sales from the
27utility shall be no greater than 100,000 megawatthours of
29(iii) The amendments made to this subdivision by the act adding
30this subparagraph are intended to clarify existing law and apply
31from December 10, 2011.
32(2) A facility engaged in the combustion of municipal solid
33waste shall not be considered an eligible renewable energy
begin delete resource
34unless it is located in Stanislaus County and was operational prior
35to September 26, 1996.end delete
40(f) “Procure” means to acquire through ownership or contract.
P14 1(g) “Procurement entity” means any person or corporation
2authorized by the commission to enter into contracts to procure
3eligible renewable energy resources on behalf of customers of a
4retail seller pursuant to subdivision (f) of Section 399.13.
5(h) (1) “Renewable energy credit” means a certificate of proof
6associated with the generation of electricity from an eligible
7renewable energy resource, issued through the accounting system
8established by the Energy Commission pursuant to Section 399.25,
9that one unit of electricity was generated and delivered by an
10eligible renewable energy resource.
11(2) “Renewable energy credit” includes all renewable and
12environmental attributes associated with the production of
13electricity from the eligible renewable energy resource, except for
14an emissions reduction credit issued pursuant to Section 40709 of
15the Health and Safety Code and any credits or payments associated
16with the reduction of solid waste and treatment benefits created
17by the utilization of biomass or biogas fuels.
18(3) (A) Electricity generated by an eligible renewable energy
19resource attributable to the use of nonrenewable fuels, beyond a
20de minimis quantity used to generate electricity in the same process
21through which the facility converts renewable fuel to electricity,
22shall not result in the creation of a renewable energy credit. The
23Energy Commission shall set the de minimis quantity of
24nonrenewable fuels for each renewable energy technology at a
25level of no more than 2 percent of the total quantity of fuel used
26by the technology to generate electricity. The Energy Commission
27may adjust the de minimis quantity for an individual facility, up
28to a maximum of 5 percent, if it finds that all of the following
29conditions are met:
30(i) The facility demonstrates that the higher quantity of
31nonrenewable fuel will lead to an increase in generation from the
32eligible renewable energy facility that is significantly greater than
33generation from the nonrenewable fuel alone.
34(ii) The facility demonstrates that the higher quantity of
35nonrenewable fuels will reduce the variability of its electrical
36output in a manner that results in net environmental benefits to the
38(iii) The higher quantity of nonrenewable fuel is limited to either
39natural gas or hydrogen derived by reformation of a fossil fuel.
P15 1(B) Electricity generated by a small hydroelectric generation
2facility shall not result in the creation of a renewable energy credit
3unless the facility meets the requirements of subparagraph (A) or
4(D) of paragraph (1) of subdivision (e).
5(C) Electricity generated by a conduit hydroelectric generation
6facility shall not result in the creation of a renewable energy credit
7unless the facility meets the requirements of subparagraph (B) of
8paragraph (1) of subdivision (e).
9(D) Electricity generated by a facility engaged in the combustion
10of municipal solid waste shall not result in the creation of a
begin delete credit unless the facility meets the requirements
12of paragraph (2) of subdivision (e).end delete
18(i) “Renewables portfolio standard” means the specified
19percentage of electricity generated by eligible renewable energy
20resources that a retail seller or a local publicly owned electric utility
21is required to procure pursuant to this article.
seller” means an entity engaged in the retail sale of
23electricity to end-use customers located within the state, including
24any of the following:
25(1) An electrical corporation, as defined in Section 218.
26(2) A community choice aggregator.
begin delete The commission shall
27institute a rulemaking to determine the manner in which aend delete
28 community choice aggregator
begin delete willend delete participate in the
29renewables portfolio standard program subject to the same terms
30and conditions applicable to an electrical corporation.
31(3) An electric service provider, as defined in Section
begin delete 218.3, The electric service
32for all sales of electricity to customers beginning January 1, 2006.
33The commission shall institute a rulemaking to determine the
34manner in which electric service providers will participate in the
35renewables portfolio standard program.end delete
36provider shall be subject to the same terms and conditions
37applicable to an electrical corporation pursuant to this article. This
38paragraph does not impair a contract entered into between an
39electric service provider and a retail customer prior to the
P16 1suspension of direct access by the commission pursuant to Section
280110 of the Water Code.
3(4) “Retail seller” does not include any of the following:
4(A) A corporation or person employing cogeneration technology
5or producing electricity consistent with subdivision (b) of Section
7(B) The Department of Water Resources acting in its capacity
8pursuant to Division 27 (commencing with Section 80000) of the
10(C) A local publicly owned electric utility.
11(k) “WECC” means the Western Electricity Coordinating
12Council of the North American Electric Reliability Corporation,
13or a successor to the corporation.
Section 399.13 of the Public Utilities Code is amended
(a) (1) The commission shall direct each electrical
17corporation to annually prepare a renewable energy procurement
18plan that includes the matter in paragraph (5), to satisfy its
19obligations under the renewables portfolio standard. To the extent
20feasible, this procurement plan shall be proposed, reviewed, and
21adopted by the commission as part of, and pursuant to, a general
22procurement plan process. The commission shall require each
23electrical corporation to review and update its renewable energy
24procurement plan as it determines to be necessary.
28(2) Every electrical corporation that owns electrical transmission
29facilities shall annually prepare, as part of the Federal Energy
30Regulatory Commission Order 890 process, and submit to the
31commission, a report identifying any electrical transmission
32facility, upgrade, or enhancement that is reasonably necessary to
33achieve the renewables portfolio standard procurement
34requirements of this article. Each report shall look forward at least
35five years and, to ensure that adequate investments are made in a
36timely manner, shall include a preliminary schedule when an
37application for a certificate of public convenience and necessity
38will be made, pursuant to Chapter 5 (commencing with Section
391001), for any electrical transmission facility identified as being
40reasonably necessary to achieve the renewable energy resources
P17 1procurement requirements of this article. Each electrical
2corporation that owns electrical transmission facilities shall ensure
3that project-specific interconnection studies are completed in a
5(3) The commission shall direct each retail seller to prepare and
6submit an annual compliance report that includes all of the
8(A) The current status and progress made during the prior year
9toward procurement of eligible renewable energy resources as a
10percentage of retail sales, including, if applicable, the status of any
11necessary siting and permitting approvals from federal, state, and
12local agencies for those eligible renewable energy resources
13procured by the retail seller, and the current status of compliance
14with the portfolio content requirements of subdivision (c) of
15Section 399.16, including procurement of eligible renewable energy
16resources located outside the state and within the WECC and
17unbundled renewable energy credits.
18(B) If the retail seller is an electrical corporation, the current
19status and progress made during the prior year toward construction
20of, and upgrades to, transmission and distribution facilities and
21other electrical system components it owns to interconnect eligible
22renewable energy resources and to supply the electricity generated
23by those resources to load, including the status of planning, siting,
24and permitting transmission facilities by federal, state, and local
26(C) Recommendations to remove impediments to making
27progress toward achieving the renewable energy resources
28procurement requirements established pursuant to this article.
29(4) The commission shall adopt, by rulemaking, all of the
31(A) A process that provides criteria for the rank ordering and
32selection of least-cost and best-fit eligible renewable energy
33resources to comply with the California Renewables Portfolio
34Standard Program obligations on a total cost basis. This process
35shall take into account all of the following:
36(i) Estimates of indirect costs associated with needed
38(ii) The cost impact of procuring the eligible renewable energy
39resources on the electrical corporation’s electricity portfolio.
P18 1(iii) The viability of the project to construct and reliably operate
2the eligible renewable energy resource, including the developer’s
3experience, the feasibility of the technology used to generate
4electricity, and the risk that the facility will not be built, or that
5construction will be delayed, with the result that electricity will
6not be supplied as required by the contract.
7(iv) Workforce recruitment, training, and retention efforts,
8including the employment growth associated with the construction
9and operation of eligible renewable energy resources and goals
10for recruitment and training of women, minorities, and disabled
12(v) (I) Estimates of electrical corporation expenses resulting
13from integrating and operating eligible renewable energy resources,
14including, but not limited to, any additional wholesale energy and
15capacity costs associated with integrating each eligible renewable
17(II) No later than December 31, 2015, the commission shall
18approve a methodology for determining the integration costs
19described in subclause (I).
20(B) Rules permitting retail sellers to accumulate,
21January 1, 2011, excess procurement in one compliance period to
22be applied to any subsequent compliance period. The rules shall
23apply equally to all retail sellers. In determining the quantity of
24excess procurement for the applicable compliance period, the
25commission shall deduct from actual procurement quantities the
26total amount of procurement associated with contracts of less than
2710 years in
begin delete duration. In no event shallend delete electricity
28products meeting the portfolio content of paragraph (3) of
29subdivision (b) of Section
begin delete 399.16 be counted as excess
31(C) Standard terms and conditions to be used by all electrical
32corporations in contracting for eligible renewable energy resources,
33including performance requirements for renewable generators. A
34contract for the purchase of electricity generated by an eligible
35renewable energy resource, at a minimum, shall include the
36renewable energy credits associated with all electricity generation
37specified under the contract. The standard terms and conditions
38shall include the requirement that, no later than six months after
39the commission’s approval of an electricity purchase agreement
40entered into pursuant to this article, the following information
P19 1about the agreement shall be disclosed by the commission: party
2names, resource type, project location, and project capacity.
3(D) An appropriate minimum margin of procurement above the
4minimum procurement level necessary to comply with the
5renewables portfolio standard to mitigate the risk that renewable
6projects planned or under contract are delayed or canceled. This
7paragraph does not preclude an electrical corporation from
8voluntarily proposing a margin of procurement above the
9appropriate minimum margin established by the commission.
10(5) Consistent with the goal of increasing California’s reliance
11on eligible renewable energy resources, the renewable energy
begin delete submitted by an electrical corporationend delete
13include all of the following:
14(A) An assessment of annual or multiyear portfolio supplies
15and demand to determine the optimal mix of eligible renewable
16energy resources with deliverability characteristics that may include
17peaking, dispatchable, baseload, firm, and as-available capacity.
18(B) Potential compliance delays related to the conditions
19described in paragraph (5) of subdivision (b) of Section 399.15.
20(C) A bid solicitation setting forth the need for eligible
21renewable energy resources of each deliverability characteristic,
22required online dates, and locational preferences, if any.
23(D) A status update on the development schedule of all eligible
24renewable energy resources currently under contract.
25(E) Consideration of mechanisms for price adjustments
26associated with the costs of key components for eligible renewable
27energy resource projects with online dates more than 24 months
28after the date of contract execution.
29(F) An assessment of the risk that an eligible renewable energy
30resource will not be built, or that construction will be delayed,
31with the result that electricity will not be delivered as required by
33(6) In soliciting and procuring eligible renewable energy
34resources, each electrical corporation shall offer contracts of no
35less than 10 years duration, unless the commission approves of a
36contract of shorter duration.
37(7) In soliciting and procuring eligible renewable energy
38resources for California-based projects, each electrical corporation
39shall give preference to renewable energy projects that provide
40environmental and economic benefits to communities afflicted
P20 1with poverty or high unemployment, or that suffer from high
2emission levels of toxic air contaminants, criteria air pollutants,
3and greenhouse gases.
4(b) A retail seller may enter into a combination of long- and
5short-term contracts for electricity and associated renewable energy
6credits. The commission may authorize a retail seller to enter into
7a contract of less than 10 years’ duration with an eligible renewable
8energy resource, if the commission has established, for each retail
9seller, minimum quantities of eligible renewable energy resources
10to be procured through contracts of at least 10 years’ duration.
11(c) The commission shall review and accept, modify, or reject
12each electrical corporation’s renewable energy resource
13 procurement plan prior to the commencement of renewable energy
14procurement pursuant to this article by an electrical corporation.
15(d) Unless previously preapproved by the commission, an
16electrical corporation shall submit a contract for the generation of
17an eligible renewable energy resource to the commission for review
18and approval consistent with an approved renewable energy
19resource procurement plan. If the commission determines that the
20bid prices are elevated due to a lack of effective competition among
21the bidders, the commission shall direct the electrical corporation
22to renegotiate the contracts or conduct a new solicitation.
23(e) If an electrical corporation fails to comply with a commission
24order adopting a renewable energy resource procurement plan, the
25commission shall exercise its authority
begin delete pursuant to Section 2113end delete
26 to require compliance.
begin delete The
commission shall enforce comparable
27penalties on any retail seller that is not an electrical corporation
28that fails to meet the procurement targets established pursuant to
29Section 399.15.end delete
30(f) (1) The commission may authorize a procurement entity to
31enter into contracts on behalf of customers of a retail seller for
32electricity products from eligible renewable energy resources to
33satisfy the retail seller’s renewables portfolio standard procurement
34requirements. The commission shall not require any person or
35corporation to act as a procurement entity or require any party to
36purchase eligible renewable energy resources from a procurement
38(2) Subject to review and approval by the commission, the
39procurement entity shall be permitted to recover reasonable
40administrative and procurement costs through the retail rates of
P21 1end-use customers that are served by the procurement entity and
2are directly benefiting from the procurement of eligible renewable
4(g) Procurement and administrative costs associated with
5contracts entered into by an electrical corporation for eligible
6renewable energy resources pursuant to this article and approved
7by the commission are reasonable and prudent and shall be
8recoverable in rates.
9(h) Construction, alteration, demolition, installation, and repair
10work on an eligible renewable energy resource that receives
11production incentives pursuant to Section 25742 of the Public
12Resources Code, including work performed to qualify, receive, or
13maintain production incentives, are “public works” for the purposes
14of Chapter 1 (commencing with Section 1720) of Part 7 of Division
152 of the Labor Code.
Section 399.15 of the Public Utilities Code is amended
(a) In order to fulfill unmet long-term resource needs,
19the commission shall establish a renewables portfolio standard
20requiring all retail sellers to procure a minimum quantity of
21electricity products from eligible renewable energy resources as
22a specified percentage of total kilowatthours sold to their retail
23end-use customers each compliance period to achieve the targets
24established under this article. For any retail seller procuring at least
2514 percent of retail sales from eligible renewable energy resources
26in 2010, the deficits associated with any previous renewables
27portfolio standard shall not be added to any procurement
28requirement pursuant to this article.
29(b) The commission shall implement renewables portfolio
30standard procurement requirements only as follows:
31(1) Each retail seller shall procure a minimum quantity of
32eligible renewable energy resources for each of the following
34(A) January 1, 2011, to December 31, 2013, inclusive.
35(B) January 1, 2014, to December 31, 2016, inclusive.
36(C) January 1, 2017, to December 31, 2020, inclusive.
P22 1(2) (A) No later than January 1,
begin delete 2012,end delete the commission
2shall establish the quantity of electricity products from eligible
3renewable energy resources to be procured by the retail seller for
4each compliance period. These quantities shall be established in
5the same manner for all retail sellers and result in the same
6percentages used to establish compliance period quantities for all
8(B) In establishing quantities for the compliance period from
9January 1, 2011, to December 31, 2013, inclusive, the commission
10shall require procurement for each retail seller equal to an average
11of 20 percent of retail sales. For the following compliance periods,
12the quantities shall reflect reasonable progress in each of the
13intervening years sufficient to ensure that the procurement of
14electricity products from eligible renewable energy resources
15achieves 25 percent of retail sales by December 31, 2016,
begin delete andend delete
begin delete of retail salesend delete by December 31, begin delete 2020.end delete The commission shall require retail sellers to procure not less than begin delete 33end delete percent of
21retail sales of electricity products from eligible renewable energy
begin delete resources in all subsequent years.end delete
23(C) Retail sellers shall be obligated to procure no less than the
24quantities associated with all intervening years by the end of each
25compliance period. Retail sellers shall not be required to
26demonstrate a specific quantity of procurement for any individual
28(3) The commission may require the procurement of eligible
29renewable energy resources in excess of the quantities specified
30in paragraph (2).
31(4) Only for purposes of establishing the renewables portfolio
32standard procurement requirements of paragraph (1) and
33determining the quantities pursuant to paragraph (2), the
34commission shall include all electricity sold to retail customers by
35the Department of Water Resources pursuant to Division 27
36(commencing with Section 80000) of the Water Code in the
37 calculation of retail sales by an electrical corporation.
38(5) The commission shall waive enforcement of this section if
39it finds that the retail seller has demonstrated any of the following
P23 1conditions are beyond the control of the retail seller and will
3(A) There is inadequate transmission capacity to allow for
4sufficient electricity to be delivered from proposed eligible
5renewable energy resource projects using the current operational
6protocols of the Independent System Operator. In making its
7findings relative to the existence of this condition with respect to
8a retail seller that owns transmission lines, the commission shall
9consider both of the following:
10(i) Whether the retail seller has undertaken, in a timely fashion,
11reasonable measures under its control and consistent with its
12obligations under local, state, and federal laws and regulations, to
13develop and construct new transmission lines or upgrades to
14existing lines intended to transmit electricity generated by eligible
15renewable energy resources. In determining the reasonableness of
16a retail seller’s actions, the commission shall consider the retail
17seller’s expectations for full-cost recovery for these transmission
18lines and upgrades.
19(ii) Whether the retail seller has taken all reasonable operational
20measures to maximize cost-effective deliveries of electricity from
21eligible renewable energy resources in advance of transmission
23(B) Permitting, interconnection, or other circumstances that
24delay procured eligible renewable energy resource projects, or
25there is an insufficient supply of eligible renewable energy
26resources available to the retail seller. In making a finding that this
27condition prevents timely compliance, the commission shall
28consider whether the retail seller has done all of the following:
29(i) Prudently managed portfolio risks, including relying on a
30sufficient number of viable projects.
31(ii) Sought to develop one of the following: its own eligible
32renewable energy resources, transmission to interconnect to eligible
33renewable energy resources, or energy storage used to integrate
34eligible renewable energy resources. This clause shall not require
35an electrical corporation to pursue development of eligible
36renewable energy resources pursuant to Section 399.14.
37(iii) Procured an appropriate minimum margin of procurement
38above the minimum procurement level necessary to comply with
39the renewables portfolio standard to compensate for foreseeable
40delays or insufficient supply.
P24 1(iv) Taken reasonable measures, under the control of the retail
2seller, to procure cost-effective distributed generation and allowable
3unbundled renewable energy credits.
4(C) Unanticipated curtailment of eligible renewable energy
5resources necessary to address the needs of a balancing authority.
6(6) If the commission waives the compliance requirements of
7this section, the commission shall establish additional reporting
8requirements on the retail seller to demonstrate that all reasonable
9actions under the control of the retail seller are taken in each of
10the intervening years sufficient to satisfy future procurement
12(7) The commission shall not waive enforcement pursuant to
13this section, unless the retail seller demonstrates that it has taken
14 all reasonable actions under its control, as set forth in paragraph
15(5), to achieve full compliance.
16(8) If a retail seller fails to procure sufficient eligible renewable
17energy resources to comply with a procurement requirement
18pursuant to paragraphs (1) and (2) and fails to obtain an order from
19the commission waiving enforcement pursuant to paragraph (5),
20the commission shall
begin delete exercise its authority pursuant to Section
29(9) Deficits associated with the compliance period shall not be
30added to a future compliance period.
31(c) The commission shall establish a limitation for each electrical
32corporation on the procurement expenditures for all eligible
33renewable energy resources used to comply with the renewables
begin delete In establishing this limitation, the commission
35shall rely on the following:end delete
37(1) The most recent renewable energy procurement plan.
38(2) Procurement expenditures that approximate the expected
39 cost of building, owning, and operating eligible renewable energy
P25 1(3) The potential that some planned resource additions may be
2delayed or canceled.
3(d) In developing the limitation pursuant to subdivision (c), the
4commission shall ensure all of the following:
5(1) The limitation is set at a level that prevents disproportionate
7(2) The costs of all procurement credited toward achieving the
8renewables portfolio standard are counted towards the limitation.
9(3) Procurement expenditures do not include any indirect
10expenses, including imbalance energy charges, sale of excess
11energy, decreased generation from existing resources, transmission
12upgrades, or the costs associated with relicensing any utility-owned
14(e) (1) No later than January 1, 2016, the commission shall
15prepare a report to the Legislature assessing whether each electrical
16corporation can achieve a 33-percent renewables portfolio standard
17by December 31, 2020, and maintain that level thereafter, within
18the adopted cost limitations. If the commission determines that it
19is necessary to change the limitation for procurement costs incurred
20by any electrical corporation after that date, it may propose a
21revised cap consistent with the criteria in subdivisions (c) and (d).
22The proposed modifications shall take effect no earlier than January
24(2) Notwithstanding Section 10231.5 of the Government Code,
25the requirement for submitting a report imposed under paragraph
26(1) is inoperative on January 1, 2021.
27(3) A report to be submitted pursuant to paragraph (1) shall be
28submitted in compliance with Section 9795 of the Government
31 If the cost limitation for an electrical corporation is
32insufficient to support the projected costs of meeting the
33renewables portfolio standard procurement requirements, the
34electrical corporation may refrain from entering into new contracts
35or constructing facilities beyond the quantity that can be procured
36within the limitation, unless eligible renewable energy resources
37can be procured without exceeding a de minimis increase in rates,
38consistent with the long-term procurement plan established for the
39electrical corporation pursuant to Section 454.5.
P26 1 (1) The commission shall monitor the status of the cost
2limitation for each electrical corporation in order to ensure
3compliance with this article.
4(2) If the commission determines that an electrical corporation
5may exceed its cost limitation prior to achieving the renewables
6portfolio standard procurement requirements, the commission shall
7do both of the following within 60 days of making that
9(A) Investigate and identify the reasons why the electrical
10corporation may exceed its annual cost limitation.
11(B) Notify the appropriate policy and fiscal committees of the
12Legislature that the electrical corporation may exceed its cost
13limitation, and include the reasons why the electrical corporation
14may exceed its cost limitation.
16 The establishment of a renewables portfolio standard shall
17not constitute implementation by the commission of the federal
18Public Utility Regulatory Policies Act of 1978 (Public Law
Section 399.16 of the Public Utilities Code is
21amended to read:
(a) Various electricity products from eligible renewable
23energy resources located within the WECC transmission network
24service area shall be eligible to comply with the renewables
25portfolio standard procurement requirements in Section 399.15.
26These electricity products may be differentiated by their impacts
27on the operation of the grid in supplying electricity, as well as,
28meeting the requirements of this article.
29(b) Consistent with the goals of procuring the least-cost and
30best-fit electricity products from eligible renewable energy
31resources that meet project viability principles adopted by the
32commission pursuant to paragraph (4) of subdivision (a) of Section
33399.13 and that provide the benefits set forth in Section 399.11, a
34balanced portfolio of eligible renewable energy resources shall be
35procured consisting of the following portfolio content categories:
36(1) Eligible renewable energy resource electricity products that
37meet either of the following criteria:
38(A) Have a first point of interconnection with a California
39balancing authority, have a first point of interconnection with
40distribution facilities used to serve end users within a California
P27 1balancing authority area, or are scheduled from the eligible
2renewable energy resource into a California balancing authority
3without substituting electricity from another source. The use of
4another source to provide real-time ancillary services required to
5maintain an hourly or subhourly import schedule into a California
6balancing authority shall be permitted, but only the fraction of the
7schedule actually generated by the eligible renewable energy
8resource shall count toward this portfolio content category.
9(B) Have an agreement to dynamically transfer electricity to a
10California balancing authority.
11(2) Firmed and shaped eligible renewable energy resource
12electricity products providing incremental electricity and scheduled
13into a California balancing authority.
14(3) Eligible renewable energy resource electricity products, or
15any fraction of the electricity generated, including unbundled
16renewable energy credits, that do not qualify under the criteria of
17paragraph (1) or (2).
18(c) In order to achieve a balanced portfolio, all retail sellers
19shall meet the following requirements for all procurement credited
20toward each compliance period:
21(1) Not less than 50 percent
for the compliance period ending
22December 31, 2013, 65 percent for the compliance period ending
23December 31, 2016, and 75 percent
begin delete thereafterend delete of the eligible renewable energy
25resource electricity products associated with contracts executed
26after June 1, 2010, shall meet the product content requirements of
27paragraph (1) of subdivision (b).
36(2) Not more than 25 percent for the compliance period ending
37December 31, 2013, 15 percent for the compliance period ending
38December 31, 2016, and 10 percent
begin delete thereafterend delete of the eligible renewable energy
40resource electricity products associated with contracts executed
P28 1after June 1, 2010, shall meet the product content requirements of
2paragraph (3) of subdivision (b).
8(3) Any renewable energy resources contracts executed on or
9after June 1, 2010, not subject to the limitations of paragraph (1)
10or (2), shall meet the product content requirements of paragraph
11(2) of subdivision (b).
12(4) For purposes of electric service providers only, the
13restrictions in this subdivision on crediting eligible renewable
14energy resource electricity products to each compliance period
15shall apply to contracts executed after January 13, 2011.
16(d) Any contract or ownership agreement originally executed
17prior to June 1, 2010, shall count in full toward the procurement
18requirements established pursuant to this article, if all of the
19following conditions are met:
20(1) The renewable energy resource was eligible under the rules
21in place as of the date when the contract was executed.
22(2) For an electrical corporation, the contract has been approved
23by the commission, even if that approval occurs after June 1, 2010.
24(3) Any contract amendments or modifications occurring after
25June 1, 2010, do not increase the nameplate capacity or expected
26quantities of annual generation, or substitute a different renewable
27energy resource. The duration of the contract may be extended if
28the original contract specified a procurement commitment of 15
29or more years.
30(e) A retail seller may apply to the commission for a reduction
31of a procurement content requirement of subdivision (c). The
32commission may reduce a procurement content requirement of
33subdivision (c) to the extent the retail seller demonstrates that it
34cannot comply with that subdivision because of conditions beyond
35the control of the retail seller as provided in paragraph (5) of
36subdivision (b) of Section 399.15. The commission shall not, under
37any circumstance, reduce the obligation specified in paragraph (1)
38of subdivision (c) below 65 percent for any compliance
39 obligation after December 31, 2016.
Section 399.18 of the Public Utilities Code is
2amended to read:
(a) This section applies to an electrical corporation
4that as of January 1, 2010, met either of the following conditions:
5(1) Served 30,000 or fewer customer accounts in California and
6had issued at least four solicitations for eligible renewable energy
7resources prior to June 1, 2010.
8(2) Had 1,000 or fewer customer accounts in California and was
9not connected to any transmission system or to the Independent
11(b) For an electrical corporation or its successor, electricity
12products from eligible renewable energy resources may be used
13for compliance with this article, notwithstanding any procurement
14content limitation in Section 399.16, provided that
begin delete bothend delete of the
15following conditions are met:
16(1) The electrical corporation or its successor participates in,
17and complies with, the accounting system administered by the
18Energy Commission pursuant to subdivision (b) of Section 399.25.
19(2) The Energy Commission verifies that the electricity
20generated by the facility is eligible to meet the requirements of
Section 399.21 of the Public Utilities Code is
25amended to read:
(a) The commission, by rule, shall authorize the use
27of renewable energy credits to satisfy the renewables portfolio
28standard procurement requirements established pursuant to this
29article, subject to the following conditions:
begin deletePrior to authorizing any renewable energy credit to be used commission and the Energy Commission
31toward satisfying the renewables portfolio standard procurement
32requirements, the end delete
begin delete concludeend delete that the tracking system established pursuant
34to subdivision (c) of Section 399.25, is operational, is capable of
35independently verifying that electricity earning the credit is
36generated by an eligible renewable energy resource, and can ensure
37that renewable energy credits shall not be double counted by any
38seller of electricity within the service territory of the WECC.
39(2) Each renewable energy credit shall be counted only once
40for compliance with the renewables portfolio standard of this state
P30 1or any other state, or for verifying retail product claims in this state
2or any other state.
3(3) All revenues received by an electrical corporation for the
4sale of a renewable energy credit shall be credited to the benefit
6(4) Renewable energy credits shall not be
created for electricity
7generated pursuant to any electricity purchase contract with a retail
8seller or a local publicly owned electric utility executed before
9January 1, 2005, unless the contract contains explicit terms and
10conditions specifying the ownership or disposition of those credits.
11Procurement under those contracts shall be tracked through the
12accounting system described in subdivision (b) of Section 399.25
13and included in the quantity of eligible renewable energy resources
14of the purchasing retail seller pursuant to Section 399.15.
15(5) Renewable energy credits shall not be created for electricity
16generated under any electricity purchase contract executed after
17January 1, 2005, pursuant to the federal Public Utility Regulatory
18Policies Act of 1978 (16 U.S.C. Sec. 2601 et seq.). Procurement
19under the electricity purchase contracts shall be tracked through
20the accounting system implemented by the Energy Commission
21pursuant to subdivision (b) of Section 399.25 and count toward
22the renewables portfolio standard procurement requirements of
23the purchasing retail seller.
24(6) A renewable energy credit shall not be eligible for
25compliance with a renewables portfolio standard procurement
26requirement unless it is retired in the tracking system established
27pursuant to subdivision (c) of Section 399.25 by the retail seller
28or local publicly owned electric utility within 36 months from the
29initial date of generation of the associated electricity.
30(b) The commission shall allow an electrical corporation to
31recover the reasonable costs of purchasing, selling, and
32administering renewable energy credit contracts in rates.
Section 399.30 of the Public Utilities Code is
34amended to read:
(a) To fulfill unmet long-term generation resource
36needs, each local publicly owned electric utility shall adopt and
37implement a renewable energy resources procurement plan that
38requires the utility to procure a minimum quantity of electricity
39products from eligible renewable energy resources, including
40renewable energy credits, as a specified percentage of total
P31 1kilowatthours sold to the utility’s retail end-use customers, each
2compliance period, to achieve the targets of subdivision (c).
3(b) The governing board shall implement procurement targets
4for a local publicly owned electric utility that require the utility to
5procure a minimum quantity of eligible renewable energy resources
6for each of the following compliance periods:
7(1) January 1, 2011, to December 31, 2013, inclusive.
8(2) January 1, 2014, to December 31, 2016, inclusive.
9(3) January 1, 2017, to December 31, 2020, inclusive.
13(c) The governing board of a local publicly owned electric utility
14shall ensure all of the following:
15(1) The quantities of eligible renewable energy resources to be
16procured for the compliance period from January 1, 2011, to
17December 31, 2013, inclusive, are equal to an average of 20 percent
18of retail sales.
19(2) The quantities of eligible renewable energy resources to be
20procured for all other compliance periods reflect reasonable
21progress in each of the intervening years sufficient to ensure that
22the procurement of electricity products from eligible renewable
23energy resources achieves 25 percent of retail sales by December
begin delete andend delete 33 percent begin delete of retail salesend delete by December 31, begin delete 2020.end delete
begin delete local require the local publicly owned electric
27governing board shallend delete
begin delete utilitiesend delete to
30procure not less than
begin delete 33end delete percent of retail sales of electricity
31products from eligible renewable energy
begin delete resources in all subsequent
33(3) A local publicly owned electric utility shall adopt
34procurement requirements consistent with Section 399.16.
35(d) The governing board of a local publicly owned electric utility
36may adopt the following measures:
37(1) Rules permitting the utility to apply excess procurement in
38one compliance period to subsequent compliance periods in the
39same manner as allowed for retail sellers pursuant to Section
P32 1(2) Conditions that allow for delaying timely compliance
2consistent with subdivision (b) of Section 399.15.
3(3) Cost limitations for procurement expenditures consistent
4with subdivision (c) of Section 399.15.
5(e) The governing board of the local publicly owned electric
6utility shall adopt a program for the enforcement of this
begin delete article on The program shall be adopted
7or before January 1, 2012.end delete
8at a publicly noticed meeting offering all interested parties an
9opportunity to comment. Not less than 30 days’ notice shall be
10given to the public of any meeting held for purposes of adopting
11the program. Not less than 10 days’ notice shall be given to the
12public before any meeting is held to make a substantive change to
14(f) (1) Each local publicly owned electric utility shall annually
15post notice, in accordance with Chapter 9 (commencing with
16Section 54950) of Part 1 of Division 2 of Title 5 of the Government
17Code, whenever its governing body will deliberate in public on its
18renewable energy resources procurement plan.
19(2) Contemporaneous with the posting of the notice of a public
20meeting to consider the renewable energy resources procurement
21plan, the local publicly owned electric utility shall notify the
22Energy Commission of the date, time, and location of the meeting
23in order to enable the Energy Commission to post the information
24on its Internet Web site. This requirement is satisfied if the local
25publicly owned electric utility provides the uniform resource
26locator (URL) that links to this information.
27(3) Upon distribution to its governing body of information
28related to its renewable energy resources procurement status and
29future plans, for its consideration at a noticed public meeting, the
30local publicly owned electric utility shall make that information
31available to the public and shall provide the Energy Commission
32with an electronic copy of the documents for posting on the Energy
33Commission’s Internet Web site. This requirement is satisfied if
34the local publicly owned electric utility provides the uniform
35resource locator (URL) that links to the documents or information
36regarding other manners of access to the documents.
37(g) A public utility district that receives all of its electricity
38pursuant to a preference right adopted and authorized by the United
39States Congress pursuant to Section 4 of the Trinity River Division
P33 1Act of August 12, 1955 (Public Law 84-386) shall be in compliance
2with the renewable energy procurement requirements of this article.
3(h) For a local publicly owned electric utility that was in
4existence on or before January 1, 2009, that provides retail electric
5service to 15,000 or fewer customer accounts in California, and is
6interconnected to a balancing authority located outside this state
7but within the WECC, an eligible renewable energy resource
8includes a facility that is located outside California that is
9connected to the WECC transmission system, if all of the following
10conditions are met:
11(1) The electricity generated by the facility is procured by the
12local publicly owned electric utility, is delivered to the balancing
13authority area in which the local publicly owned electric utility is
14located, and is not used to fulfill renewable energy procurement
15requirements of other states.
16(2) The local publicly owned electric utility participates in, and
17complies with, the accounting system administered by the Energy
18Commission pursuant to this article.
19(3) The Energy Commission verifies that the electricity
20generated by the facility is eligible to meet the renewables portfolio
21standard procurement requirements.
22(i) Notwithstanding subdivision (a), for a local publicly owned
23electric utility that is a joint powers authority of districts established
24pursuant to state law on or before January 1, 2005, that furnish
25electric services other than to residential customers, and is formed
26pursuant to the Irrigation District Law (Division 11 (commencing
27with Section 20500) of the Water Code), the percentage of total
28kilowatthours sold to the district’s retail end-use customers, upon
29which the renewables portfolio standard procurement requirements
30in subdivision (b) are calculated, shall be based on the authority’s
31average retail sales over the previous seven years. If the authority
32has not furnished electric service for seven years, then the
33calculation shall be based on average retail sales over the number
34of completed years during which the authority has provided electric
36(j) A local publicly owned electric utility in a city and county
37that only receives greater than 67 percent of its electricity sources
38from hydroelectric generation located within the state that it owns
39and operates, and that does not meet the definition of a “renewable
40electrical generation facility” pursuant to Section 25741 of the
P34 1Public Resources Code, shall be required to procure eligible
2renewable energy resources, including renewable energy credits,
3to meet only the electricity demands unsatisfied by its hydroelectric
4generation in any given year, in order to satisfy its renewable
5energy procurement requirements.
6(k) (1) A local publicly owned electric utility that receives
7greater than 50 percent of its annual retail sales from its own
8hydroelectric generation that is not an eligible renewable energy
9resource shall not be required to procure additional eligible
10renewable energy resources in excess of either of the following:
11(A) The portion of its retail sales not supplied by its own
12hydroelectric generation. For these purposes, retail sales supplied
13by an increase in hydroelectric generation resulting from an
14increase in the amount of water stored by a dam because the dam
15is enlarged or otherwise modified after December 31, 2012, shall
16not count as being retail sales supplied by the utility’s own
18(B) The cost limitation adopted pursuant to this section.
19(2) For the purposes of this subdivision, “hydroelectric
20generation” means electricity generated from a hydroelectric
21facility that satisfies all of the following:
22(A) Is owned solely and operated by the local publicly owned
23electric utility as of 1967.
24(B) Serves a local publicly owned electric utility with a
25distribution system demand of less than 150 megawatts.
26(C) Involves a contract in which an electrical
27receives the benefit of the electric generation through June of 2014,
28at which time the benefit reverts back to the ownership and control
29of the local publicly owned electric utility.
30(D) Has a maximum penstock flow capacity of no more than
313,200 cubic feet per second and includes a regulating reservoir
32with a small hydroelectric generation facility producing fewer than
3320 megawatts with a maximum penstock flow capacity of no more
34than 3,000 cubic feet per second.
35(3) This subdivision does not reduce or eliminate any renewable
36procurement requirement for any compliance period ending prior
37to January 1, 2014.
38(4) This subdivision does not require a local publicly owned
39electric utility to purchase additional eligible renewable energy
P35 1resources in excess of the procurement requirements of subdivision
3(l) A local publicly owned electric utility shall retain discretion
4over both of the following:
5(1) The mix of eligible renewable energy resources procured
6by the utility and those additional generation resources procured
7by the utility for purposes of ensuring resource adequacy and
9(2) The reasonable costs incurred by the utility for eligible
10renewable energy resources owned by the utility.
begin deleteOn or before July 1, 2011, the end deleteEnergy Commission
12shall adopt regulations specifying procedures for enforcement of
begin delete this article.end delete
18 The regulations shall include a public process under which the
19Energy Commission may issue a notice of violation and correction
20against a local publicly owned electric utility for failure to comply
begin delete article, and for referral of violations to the State Air
22Resources Board for penalties pursuant to subdivision (o).end delete
begin delete(1)end delete begin delete end deleteUpon a determination by the Energy Commission that
25a local publicly owned electric utility has failed to comply with
26this article, the Energy Commission shall
begin delete refer the failure to comply
27with this article to the State Air Resources Board, which mayend delete
28 impose penalties
begin delete to enforce this article consistent with Part 6 comparable to
29(commencing with Section 38580) of Division 25.5 of the Health
30and Safety Code. Any penalties imposed shall beend delete
31those adopted by the commission for noncompliance by retail
36(2) If Division 25.5 (commencing with Section 38500) of the
37Health and Safety Code is suspended or repealed, the State Air
38Resources Board may take action to enforce this article on local
39publicly owned electric utilities consistent with Section 41513 of
40the Health and Safety Code, and impose penalties on a local
P36 1publicly owned electric utility consistent with Article 3
2(commencing with Section 42400) of Chapter 4 of Part 4 of, and
3Chapter 1.5 (commencing with Section 43025) of Part 5 of,
4Division 26 of the Health and Safety Code.
5(3) For the purpose of this subdivision, this section is an
6emissions reduction measure pursuant to Section 38580 of the
7Health and Safety Code.
8(4) If the State Air Resources Board has imposed a penalty upon
9a local publicly owned electric utility for the utility’s failure to
10comply with this article, the State Air Resources Board shall not
11impose an additional penalty for the same infraction, or the same
12failure to comply, with any renewables procurement requirement
13imposed upon the utility pursuant to the California Global Warming
14Solutions Act of 2006 (Division 25.5 (commencing with Section
1538500) of the Health and Safety Code).
16(5) Any penalties collected by the State Air Resources
17pursuant to this article shall be deposited in the Air Pollution
18Control Fund and, upon appropriation by the Legislature, shall be
19expended for reducing emissions of air pollution or greenhouse
20gases within the same geographic area as the local publicly owned
22(o) The commission has no authority or jurisdiction to enforce
23any of the requirements of this article on a local publicly owned
Article 17 (commencing with Section 400) is added
26to Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code,
The commission and the Energy Commission shall do all
32of the following in furtherance of meeting the state’s clean energy
33and pollution reduction objectives:
34(a) Take into account the benefits of distributed generation and
35promote the use of distributed generation where it provides
36economic and environmental benefits, particularly in disadvantaged
37communities as identified pursuant to Section 39711 of the Health
38and Safety Code.
39(b) Allow for consideration of costs and benefits of grid
40integration in proceedings associated with meeting the objectives.
P37 1(c) Where feasible, adopt rules for
integrating renewable energy
2that minimize system power and fossil fuel purchases and, where
3feasible and consistent with other state policy objectives, increase
4the use of energy storage, demand response, and other
5low-emission or zero- technologies to protect system reliability.
6(d) Review technology incentive programs overseen by the
7commission and the Energy Commission and make
8recommendations for adjustments that more effectively and
9consistently align with state clean energy and pollution reduction
10objectives, and that provide benefits to disadvantaged communities
11as identified pursuant to Section 39711 of the Health and Safety
13(e) To the extent feasible, give first priority to the manufacture
14and deployment of clean energy and pollution reduction
15technologies that create employment opportunities, including high
16wage, highly skilled employment opportunities, and increased
17investment in the state.
Section 454.51 is added to the Public Utilities Code,
The commission shall direct each electrical corporation
21to include in its proposed procurement plan a strategy for procuring
22a diverse portfolio of resources that provide a reliable electricity
23supply, including renewable energy integration needs, using zero
24carbon-emitting resources to the maximum extent reasonable. The
25net capacity costs of those resources shall be allocated on a fully
26nonbypassable basis consistent with the treatment of costs
27identified in paragraph (2) of subdivision (c) of Section 365.1.
No reimbursement is required by this act pursuant to
29Section 6 of Article XIII B of the California Constitution because
30a local agency or school district has the authority to levy service
31charges, fees, or assessments sufficient to pay for the program or
32level of service mandated by this act or because costs that may be
33incurred by a local agency or school district will be incurred
34because this act creates a new crime or infraction, eliminates a
35crime or infraction, or changes the penalty for a crime or infraction,
36within the meaning of Section 17556 of the Government Code, or
37changes the definition of a crime within the meaning of Section 6
38of Article XIII B of the California Constitution.