SB 350, as amended, De León. Clean Energy and Pollution Reduction Act of 2015.
(1) Under existing law, the Public Utilities Commission (PUC) has regulatory jurisdiction over public utilities, including electrical corporations, community choice aggregators, and electric service providers, while local publicly owned electric utilities are under the direction of their governing boards. Existing law imposes various regulations on public utilities and local publicly owned electric utilities. Existing law establishes the California Renewables Portfolio Standards (RPS) Program, which is codified in the Public Utilities Act, with the target to increase the amount of electricity generated per year from eligible renewable energy resources to an amount that equals at least 33% of the total electricity sold to retail customers per year by December 31, 2020. Under existing law, a violation of the Public Utilities Act is a crime.
This bill would require that the amount of electricity generated and sold to retail
begin delete customerend delete per year from eligible renewable energy resources be increased to 50% by December 31, 2030, as provided. The bill would make other revisions to the RPS Program and to certain other requirements on public utilities and publicly owned electric utilities.
Because certain of the above provisions are codified in the Public Utilities Act, this bill would impose a state-mandated local program by expanding the definition of a crime or establishing a new crime.
(2) Existing law requires the State Air Resources Board to adopt and implement various standards related to emissions from motor vehicles.end delete
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. The bill would require the state board to take certain actions, as provided, to further this goal.end delete
Existing law requires the PUC to identify cost-effective electricity efficiency savings and establish efficiency targets for an electrical corporation to achieve, and to identify cost-effective natural gas efficiency savings and establish efficiency targets for a gas corporation to achieve. Existing law requires a local publicly owned electric utility to identify all potential achievable cost-effective electricity efficiency savings and to establish annual targets for energy efficiency savings and demand reduction for the next 10-year period.
This bill would require the State Energy Resources Conservation and Development Commission to establish annual targets for statewide energy efficiency savings and demand reduction that will achieve a cumulative doubling of statewide energy efficiency savings in electricity and natural gas final end uses of retail customers by January 1, 2030. The bill would require the PUC to establish efficiency targets for electrical and gas corporations consistent with this goal. The bill would require local publicly owned electric utilities to establish annual targets for energy efficiency savings and demand reduction consistent with this goal.
The existing restructuring of the electrical industry within the Public Utilities Act provides for the establishment of the Independent System Operator (ISO) and requires the ISO to ensure efficient and reliable operation of the electrical transmission grid. Existing law prohibits the ISO from entering into a multistate entity or regional organization unless the ISO receives approval from the Electricity Oversight Board. Existing law states the intent of the Legislature to provide for the evolution of the ISO into a regional organization to promote the development of regional electricity transmission markets in the western states.
This bill would
begin delete state the intent of the Legislature to enact legislation toend delete provide for the begin delete evolutionend delete of the ISO into a regional begin delete organization.end delete
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:
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
begin delete consist ofend delete 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 energy savings in electricity and natural gas
10final end uses of retail customers through energy efficiency and
12(b) The Legislature further finds and declares that in order for
13California to achieve its statewide greenhouse gas emissions limits
14and reduce petroleum use in motor vehicles by 50 percent by
15January 1, 2030, it will be necessary to improve and expand access
16to all of the following:
17(1) Advanced clean vehicle technologies.
18(2) Clean, low-carbon fuels.
19(3) Transportation choices that reduce vehicle miles traveled.end delete
24 It is the intent of the Legislature in enacting this act to codify
25the targets described under subdivision (a) to ensure they are
26permanent, enforceable, and quantifiable.
Section 39628 is added to the Health and Safety Code,
(a) By July 1, 2016, the state board, in collaboration
30with the Department of Transportation, the State Energy Resources
31Conservation and Development Commission, and the Governor’s
32Office of Business and Economic Development, in a public process
33that allows input from other stakeholders, shall develop an
34integrated action plan that establishes targets to improve freight
35efficiency, transition to zero-emission technologies, and increase
36the competitiveness of California’s freight system.
37(b) The action plan shall identify state policies, programs, and
38investments to achieve the targets described in subdivision (a) and
39shall be informed by existing state strategies, including the
40California Freight Mobility Plan, the Sustainable Freight: Pathways
P5 1to Zero and Near-Zero Emissions plan, and the integrated energy
2policy report prepared pursuant to Section 25302 of the Public
Section 43013 of the Health and Safety Code is
5amended to read:
(a) The state board shall adopt and implement motor
7vehicle emission standards, in-use performance standards, and
8motor vehicle fuel specifications for the control of air contaminants
9and sources of air pollution which the state board has found to be
10necessary, cost effective, and technologically feasible, to carry out
11the purposes of this division and in furtherance of achieving a
12reduction in petroleum use in motor vehicles by 50 percent by
13January 1, 2030, unless preempted by federal law.
14(b) The state board shall, consistent with subdivision (a), adopt
15standards and regulations for light-duty and heavy-duty motor
16vehicles, medium-duty motor vehicles, as determined and specified
17by the state board, portable fuel containers and spouts, and off-road
18or nonvehicle engine categories, including, but not limited to,
19off-highway motorcycles, off-highway vehicles, construction
20equipment, farm equipment, utility engines, locomotives, and, to
21the extent permitted by federal law, marine vessels.
22(c) Prior to adopting standards and regulations for farm
23equipment, the state board shall hold a public hearing and find and
24determine that the standards and regulations are necessary, cost
25effective, and technologically feasible. The state board shall also
26consider the technological effects of emission control standards
27on the cost, fuel consumption, and performance characteristics of
28mobile farm equipment.
29(d) Notwithstanding subdivision (b), the state board shall not
30adopt any standard or regulation affecting locomotives until the
31final study required under Section 5 of Chapter 1326 of the Statutes
32of 1987 has been completed and submitted to the Governor and
34(e) Prior to adopting or amending any standard or regulation
35relating to motor vehicle fuel specifications pursuant to this section,
36the state board shall, after consultation with public or private
37entities that would be significantly impacted as described in
38paragraph (2) of subdivision (f), do both of the following:
39(1) Determine the cost-effectiveness of the adoption or
40amendment of the standard or regulation. The cost-effectiveness
P6 1shall be compared on an incremental basis with other mobile source
2control methods and options.
3(2) Based on a preponderance of scientific and engineering data
4in the record, determine the technological feasibility of the adoption
5or amendment of the standard or regulation. That determination
6shall include, but is not limited to, the availability, effectiveness,
7reliability, and safety expected of the proposed technology in an
8application that is representative of the proposed use.
9(f) Prior to adopting or amending any motor vehicle fuel
10specification pursuant to this section, the state board shall do both
11of the following:
12(1) To the extent feasible, quantitatively document the
13significant impacts of the proposed standard or specification on
14affected segments of the state’s economy. The economic analysis
15shall include, but is not limited to, the significant impacts of any
16change on motor vehicle fuel efficiency, the existing motor vehicle
17fuel distribution system, the competitive position of the affected
18segment relative to border states, and the cost to consumers.
19(2) Consult with public or private entities that would be
20significantly impacted to identify those investigative or preventive
21actions that may be necessary to ensure consumer acceptance,
22product availability, acceptable performance, and equipment
23reliability. The significantly impacted parties shall include, but are
24not limited to, fuel manufacturers, fuel distributors, independent
25marketers, vehicle manufacturers, and fuel users.
26(g) To the extent that there is any conflict between the
27information required to be prepared by the state board pursuant to
28subdivision (f) and information required to be prepared by the state
29board pursuant to Chapter 3.5 (commencing with Section 11340)
30of Part 1 of Division 3 of Title 2 of the Government Code, the
31requirements established under subdivision (f) shall prevail.
32(h) It is the intent of the Legislature that the state board act as
33expeditiously as is feasible to reduce nitrogen oxide emissions
34from diesel vehicles, marine vessels, and other categories of
35vehicular and mobile sources which significantly contribute to air
Section 43013.5 is added to the Health and Safety
38Code, to read:
The state board shall ensure any updates to the
40regional greenhouse gas emission reduction targets pursuant to
P7 1clause (iv) of subparagraph (A) of paragraph (2) of subdivision
2(b) of Section 65080 of the Government Code are consistent with
3achieving a 50-percent reduction in petroleum use in motor vehicles
4by January 1, 2030.
Section 44258.5 is added to the Health and Safety
7Code, to read:
(a) For the purposes of this section, the following
9terms mean the following:
10(1) “Local publicly owned electric utility” has the same meaning
11as defined in Section 224.3 of the Public Utilities Code.
12(2) “Retail seller” has the same meaning as set forth in Section
13399.12 of the Public Utilities Code.
14(3) “Transportation electrification” has the same meaning as
15set forth in Section 237.5 of the Public Utilities Code.
16(b) The state board shall identify and adopt appropriate policies,
17rules, or regulations to remove regulatory disincentives preventing
18 retail sellers and local publicly owned electric utilities from
19facilitating the achievement of greenhouse gas emission reductions
20in other sectors through increased investments in transportation
21electrification. Policies to be considered shall include, but are not
22limited to, an allocation of greenhouse gas emissions allowances
23to retail sellers and local publicly owned electric utilities, or other
24regulatory mechanisms, to account for increased greenhouse gas
25emissions in the electric sector from transportation electrification.
Section 1720 of the Labor Code is amended to read:
(a) As used in this chapter, “public works” means:
29(1) Construction, alteration, demolition, installation, or repair
30work done under contract and paid for in whole or in part out of
31public funds, except work done directly by any public utility
32company pursuant to order of the Public Utilities Commission or
33other public authority. For purposes of this paragraph,
34“construction” includes work performed during the design and
35preconstruction phases of construction, including, but not limited
36to, inspection and land surveying work, and work performed during
37the postconstruction phases of construction, including, but not
38limited to, all cleanup work at the jobsite. For purposes of this
39paragraph, “installation” includes, but is not limited to, the
P8 1assembly and disassembly of freestanding and affixed modular
3(2) Work done for irrigation, utility, reclamation, and
4improvement districts, and other districts of this type. “Public
5work” does not include the operation of the irrigation or drainage
6system of any irrigation or reclamation district, except as used in
7Section 1778 relating to retaining wages.
8(3) Street, sewer, or other improvement work done under the
9direction and supervision or by the authority of any officer or
10public body of the state, or of any political subdivision or district
11thereof, whether the political subdivision or district operates under
12a freeholder’s charter or not.
13(4) The laying of carpet done under a building lease-maintenance
14contract and paid for out of public funds.
laying of carpet in a public building done under contract
16and paid for in whole or in part out of public funds.
17(6) Public transportation demonstration projects authorized
18pursuant to Section 143 of the Streets and Highways Code.
19(7) (A) Infrastructure project grants from the California
20Advanced Services Fund pursuant to Section 281 of the Public
22(B) For purposes of this paragraph, the Public Utilities
23Commission is not the awarding body or the body awarding the
24contract, as defined in Section 1722.
25(b) For purposes of this section, “paid for in whole or in part
26out of public funds” means all of the following:
27(1) The payment of money or the equivalent
of money by the
28state or political subdivision directly to or on behalf of the public
29works contractor, subcontractor, or developer.
30(2) Performance of construction work by the state or political
31subdivision in execution of the project.
32(3) Transfer by the state or political subdivision of an asset of
33value for less than fair market price.
34(4) Fees, costs, rents, insurance or bond premiums, loans, interest
35rates, or other obligations that would normally be required in the
36execution of the contract, that are paid, reduced, charged at less
37than fair market value, waived, or forgiven by the state or political
39(5) Money loaned by the state or political subdivision that is to
40be repaid on a contingent basis.
P9 1(6) Credits that are applied by the state or political subdivision
2against repayment obligations to the state or political subdivision.
3(c) Notwithstanding subdivision (b):
4(1) Private residential projects built on private property are not
5subject to the requirements of this chapter unless the projects are
6built pursuant to an agreement with a state agency, redevelopment
7agency, or local public housing authority.
8(2) If the state or a political subdivision requires a private
9developer to perform construction, alteration, demolition,
10installation, or repair work on a public work of improvement as a
11condition of regulatory approval of an otherwise private
12development project, and the state or political subdivision
13contributes no more money, or the equivalent of money, to the
14overall project than is required to perform this public improvement
15work, and the state or political subdivision maintains no proprietary
16interest in the overall project, then only the public improvement
17work shall thereby become subject to this chapter.
18(3) If the state or a political subdivision reimburses a private
19developer for costs that would normally be borne by the public,
20or provides directly or indirectly a public subsidy to a private
21development project that is de minimis in the context of the project,
22an otherwise private development project shall not thereby become
23subject to the requirements of this chapter.
24(4) The construction or rehabilitation of affordable housing units
25for low- or moderate-income persons pursuant to paragraph (5) or
26(7) of subdivision (e) of Section 33334.2 of the Health and Safety
27Code that are paid for solely with moneys from the Low and
28Moderate Income Housing Fund established pursuant to Section
2933334.3 of the Health and Safety Code or that are paid for by a
30combination of private funds and funds available pursuant to
31Section 33334.2 or 33334.3 of the Health and Safety Code do not
32constitute a project that is paid for in whole or in part out of public
34(5) Unless otherwise required by a public funding program, the
35construction or rehabilitation of privately owned residential projects
36is not subject to the requirements of this chapter if one or more of
37the following conditions are met:
38(A) The project is a self-help housing project in which no fewer
39than 500 hours of construction work associated with the homes
40are to be performed by the home buyers.
P10 1(B) The project consists of rehabilitation or expansion work
2associated with a facility operated on a not-for-profit basis as
3temporary or transitional housing for homeless persons with a total
4project cost of less than twenty-five thousand dollars ($25,000).
5(C) Assistance is provided to a household as either mortgage
6assistance, downpayment assistance, or for the rehabilitation of a
8(D) The project consists of new construction, expansion, or
9rehabilitation work associated with a facility developed by a
10nonprofit organization to be operated on a not-for-profit basis to
11provide emergency or transitional shelter and ancillary services
12and assistance to homeless adults and children. The nonprofit
13organization operating the project shall provide, at no profit, not
14less than 50 percent of the total project cost from nonpublic
15sources, excluding real property that is transferred or leased. Total
16project cost includes the value of donated labor, materials,
17architectural, and engineering services.
18(E) The public participation in the project that would otherwise
19meet the criteria of subdivision (b) is public funding in the form
20of below-market interest rate loans for a project in which
21occupancy of at least 40 percent of the units is restricted for at
22least 20 years, by deed or regulatory agreement, to individuals or
23families earning no more than 80 percent of the area median
25(d) Notwithstanding any provision of this section to the contrary,
26the following projects shall not, solely by reason of this section,
27be subject to the requirements of this chapter:
28(1) Qualified residential rental projects, as defined by Section
29142(d) of the Internal Revenue Code, financed in whole or in part
30through the issuance of bonds that receive allocation of a portion
31of the state ceiling pursuant to Chapter 11.8 (commencing with
32Section 8869.80) of Division 1 of Title 2 of the Government Code
33on or before December 31, 2003.
34(2) Single-family residential projects financed in whole or in
35part through the issuance of qualified mortgage revenue bonds or
36qualified veterans’ mortgage bonds, as defined by Section 143 of
37the Internal Revenue Code, or with mortgage credit certificates
38under a Qualified Mortgage Credit Certificate Program, as defined
39by Section 25 of the Internal Revenue Code, that receive allocation
40of a portion of the state ceiling pursuant to Chapter 11.8
P11 1(commencing with Section 8869.80) of Division 1 of Title 2 of
2the Government Code on or before December 31, 2003.
3(3) Low-income housing projects that are allocated federal or
4state low-income housing tax credits pursuant to Section 42 of the
5Internal Revenue Code, Chapter 3.6 (commencing with Section
650199.4) of Part 1 of Division 31 of the Health and Safety Code,
7or Section 12206, 17058, or 23610.5 of the Revenue and Taxation
8Code, on or before December 31, 2003.
9(e) Notwithstanding paragraph (1) of subdivision (a),
10construction, alteration, demolition, installation, or repair work on
11the electric transmission system located in California constitutes
12a public works project for the purposes of this chapter.
13(f) If a statute, other than this section, or a regulation, other than
14a regulation adopted pursuant to this section, or an ordinance or a
15contract applies this chapter to a project, the exclusions set forth
16in subdivision (d) do not apply to that project.
17(g) For purposes of this section, references to the Internal
18Revenue Code mean the Internal Revenue Code of 1986, as
19amended, and include the corresponding predecessor sections of
20the Internal Revenue Code of 1954, as amended.
21(h) The amendments made to this section by either Chapter 938
22of the Statutes of 2001 or the act adding this subdivision shall not
23be construed to preempt local ordinances requiring the payment
24of prevailing wages on housing projects.
Section 25000.5 of the Public Resources Code is
26amended to read:
(a) The Legislature finds and declares that
28overdependence on the production, marketing, and consumption
29of petroleum based fuels as an energy resource in the transportation
30sector is a threat to the energy security of the state due to
31continuing market and supply uncertainties. In addition, petroleum
32use as an energy resource contributes substantially to the following
33public health and environmental problems: air pollution, acid rain,
34global warming, and the degradation of California’s marine
35environment and fisheries.
36(b) Therefore, it is the policy of this state to fully evaluate the
37economic and environmental costs of petroleum use, and the
38economic and environmental costs of other transportation fuels
39and options, including the costs and values of environmental
40impacts, and to establish a state transportation energy policy that
P12 1results in the least environmental and economic cost to the state.
2In pursuing the “least environmental and economic cost” strategy,
3it is the policy of the state to exploit all practicable and
4cost-effective energy conservation measures and improvements
5in the efficiency of energy use and distribution, and to achieve
6energy security, diversity of supply sources, and competitiveness
7of transportation energy markets based on the least environmental
8and economic cost, in furtherance of reducing petroleum use in
9the transportation sector by 50 percent by January 1, 2030.
10(c) It is also the policy of this state to minimize the economic
11and environmental costs due to the use of petroleum-based and
12other transportation fuels by state agencies. In implementing a
13least-cost economic and environmental strategy for state fleets, it
14is the policy of the state to implement practicable and cost-effective
15measures, including, but not necessarily limited to, the purchase
16of the cleanest and most efficient automobiles and replacement
17tires, the use of alternative fuels in its fleets, and other conservation
19(d) For the purposes of this section, “petroleum based fuels”
20means fuels derived from liquid unrefined crude oil, including
21natural gas liquids, liquefied petroleum gas, or the energy fraction
22of methyl tertiary-butyl ether (MTBE) or other ethers that is not
23attributed to natural gas.
Section 25302.2 is added to the Public Resources Code,
As part of
begin delete heend delete 2019 edition of the integrated energy
28policy report, the commission shall evaluate the actual energy
29efficiency savings, as defined in Section 25310, from negative
30therm interactive effects generated as a result of electricity
Section 25310 of the Public Resources Code is
34amended to read:
(a) For purposes of this section, the following terms
36have the following meanings:
37(1) “End use” means the purpose for which energy is used,
38including, but not limited to, heating, cooling, or lighting, or class
39of energy uses upon which an energy efficiency program is focused,
P13 1typically categorized by equipment purpose, equipment energy
2use intensity, or building type.
3(2) “Energy efficiency savings” means reduced electricity or
4natural gas usage produced either by the installation of an energy
5efficiency measure or the adoption of an energy efficiency practice
6that maintains at least the same level of end-use service or by
7conservation actions that reduce energy use by reducing the
begin delete or qualityend delete
of baseline energy services demanded.
9(b) On or before November 1, 2007, and by November 1 of
10every third year thereafter, the commission in consultation with
11the Public Utilities Commission and local publicly owned electric
12utilities, in a public process that allows input from other
13stakeholders, shall develop a statewide estimate of all potentially
14achievable cost-effective electricity and natural gas efficiency
15savings and establish targets for statewide annual energy efficiency
16savings and demand reduction for the next 10-year period. The
17commission shall base its estimate at least in part on information
18developed pursuant to Sections 454.55, 454.56, 715, 9505, 9615,
19and 9615.5 of the Public Utilities Code. The commission shall,
20for each electrical corporation and each gas corporation, include
21in the integrated energy policy report, a comparison of the public
22utility’s annual targets established pursuant to Sections 454.55 and
23 454.56, and the public utility’s actual energy efficiency savings
24and demand reductions.
25(c) (1) On or before November 1, 2017, the commission, in
26collaboration with the Public Utilities Commission and local
27publicly owned electric utilities, in a public process that allows
28input from other stakeholders, shall establish annual targets for
29statewide energy efficiency savings and demand reduction that
30will achieve a cumulative doubling of statewide energy efficiency
31savings in electricity and natural gas final end uses of retail
32customers by January 1, 2030. The commission shall base the
33targets on a doubling of the midcase estimate of additional
34achievable energy efficiency savings, as contained in the California
35Energy Demand Updated Forecast, 2015-2025, adopted by the
36commission, extended to 2030 using an average annual growth
37rate, and the targets adopted by local publicly owned electric
38utilities pursuant to Section 9505 of the Public Utilities Code,
39extended to 2030 using an average annual growth rate, to the extent
P14 1doing so is cost effective, feasible, and will not adversely impact
2public health and safety.
3(2) The commission may establish targets for the purposes of
4paragraph (1) that aggregate energy efficiency savings from both
5electricity and natural gas final end uses. Before establishing
6aggregate targets, the commission shall, in a public process that
7allows input from other stakeholders, adopt a methodology for
8aggregating electricity and natural gas final end-use energy
9efficiency savings in a consistent manner based on source of energy
10reduction and other relevant factors.
11(3) In establishing the targets pursuant to paragraph (1), the
12commission shall assess the hourly and seasonal impact on
13statewide and local electricity demand.
14(4) In assessing the feasibility and cost-effectiveness of energy
15efficiency savings for the purposes of paragraph (1), the
16commission and the Public Utilities Commission shall consider
17the results of energy efficiency potential studies that are not
18restricted by previous levels of utility energy efficiency savings.
19(5) The energy efficiency savings and demand reduction reported
20for the purposes of achieving the targets established pursuant to
21paragraph (1) shall be measured taking into consideration the
22overall reduction in normalized metered electricity and natural gas
23consumption where these measurement techniques are feasible
24and cost effective.
25(d) The targets established in subdivision (c) may be achieved
26through energy efficiency savings and demand reduction resulting
27from a variety of programs that include, but are not limited to, the
29(1) Appliance and building energy efficiency standards
30developed and adopted pursuant to Section 25402.
31(2) A comprehensive program to achieve greater energy
32efficiency savings in California’s existing residential and
33nonresidential building stock pursuant to Section 25943.
34(3) Programs funded and authorized pursuant to the California
35Clean Energy Job Creation Act (Division 16.3 (commencing with
37(4) Programs funded by the Greenhouse Gas Reduction Fund
38established pursuant to Section 16428.8 of the Government Code.
39(5) Programs funded and authorized pursuant to this division.
P15 1(6) Programs of electrical or gas
begin delete corporationsend delete that provide financial incentives,
3rebates, technical assistance, and support to their customers to
4increase energy efficiency, authorized by the Public Utilities
6(7) Programs of local publicly owned electric utilities that
7provide financial incentives, rebates, technical assistance, and
8support to their customers to increase energy efficiency pursuant
9to Section 385 of the Public Utilities Code.
10(8) Programs of electrical or gas corporations,
begin delete orend delete local publicly
begin delete utilitiesend delete
12 that achieve energy efficiency savings through operational,
13behavioral, and retrocommissioning activities.
14(9) Programs that save energy in final end uses by reducing
15distribution feeder service voltage, known as conservation voltage
17(10) Programs that save energy in final end uses by using cleaner
18fuels to reduce greenhouse gas emissions as measured on a lifecycle
19basis from the provision of energy services.
20(11) Property Assessed Clean Energy (PACE) programs.
21(e) Beginning with the 2019 edition of the integrated energy
22policy report and every two years thereafter, the commission shall
23provide recommendations and an update on progress toward
24achieving a doubling of energy efficiency savings in electricity
25and natural gas final end uses of retail customers by January 1,
262030, pursuant to paragraph (1) of subdivision (c). The commission
27shall also include with the recommendations and update both of
29(1) An assessment of the effect of energy efficiency savings on
30electricity demand statewide, in local service territories, and on
31an hourly and seasonal basis.
32(2) Specific strategies for, and an update on, progress toward
33maximizing the contribution of energy efficiency savings in
34disadvantaged communities identified pursuant to Section 39711
35of the Health and Safety Code.
Section 25327 is added to the Public Resources Code,
(a) The Legislature finds and declares all of the
P16 1(1) There is insufficient information available to fully realize
2the potential of solar photovoltaic energy generation in disadvantaged
5(2) There is insufficient understanding of the barriers to access
6for low-income customers to all forms of renewable energy being
7generated in the state.
8(3) There is insufficient understanding of the barriers to access
9for low-income customers to energy efficiency investments.
10(4) There is insufficient understanding of the barriers to access
11for low-income customers to zero-emission and near-zero-emission
13(b) On or before January 1, 2017, the commission, with input
14from relevant state agencies and the public, shall conduct and
15complete a study on both of the following:
16(1) Barriers to, and opportunities for, solar photovoltaic energy
17generation as well as barriers to, and opportunities for, access to
18other renewable energy by low-income customers.
19(2) Barriers to contracting opportunities for local small
20businesses in disadvantaged communities.
21(c) On or before January 1, 2017, the commission, with input
22from relevant state agencies and the public, shall develop and
23publish a study on barriers for low-income customers to energy
24efficiency and weatherization investments,
begin delete particularlyend delete in disadvantaged communities, as well as recommendations
26on how to increase access to energy efficiency and weatherization
27investments to low-income customers.
28(d) On or before January 1, 2017, the State Air Resources Board,
29in consultation with the commission and with input from relevant
30state agencies and the public, shall develop and publish a study on
31barriers for low-income customers to zero-emission and
32near-zero-emission transportation options,
begin delete particularlyend delete in disadvantaged communities, as well as recommendations
34on how to increase access to zero-emission and near-zero-emission
35transportation options to low-income
begin delete customersend delete in disadvantaged communities.
Section 25943 of the Public Resources Code is
39amended to read:
(a) (1) By March 1, 2010, the commission shall
2establish a regulatory proceeding to develop and implement a
3comprehensive program to achieve greater energy savings in
4California’s existing residential and nonresidential building stock.
5This program shall comprise a complementary portfolio of
6techniques, applications, and practices that will achieve greater
7energy efficiency in existing residential and nonresidential
8structures that fall significantly below the current standards in Title
924 of the California Code of Regulations, as determined by the
11(2) The comprehensive program may include, but need not be
12limited to, a broad range of energy assessments, building
13benchmarking, energy rating, cost-effective energy efficiency
14 improvements, public and private sector energy efficiency
15financing options, public outreach and education efforts, and green
17(3) The commission shall adopt, implement, and enforce a
18responsible contractor policy for use across all ratepayer-funded
19energy efficiency programs that involve installation or
20maintenance, or both installation and maintenance, by building
21contractors to ensure that retrofits meet high-quality performance
22standards and reduce energy savings lost or foregone due to
24(4) The commission, in consultation with the Public Utilities
25Commission, shall establish consumer protection guidelines for
26energy efficiency products and services.
27(b) To develop and implement the program specified in
28subdivision (a), the commission shall do both of the following:
29(1) Coordinate with the Public Utilities Commission and consult
30with representatives from the Bureau of Real Estate, the
31Department of Housing and Community Development,
32investor-owned and publicly owned utilities, local governments,
33real estate licensees, commercial and homebuilders, commercial
34property owners, small businesses, mortgage lenders, financial
35institutions, home appraisers, inspectors, energy rating
36organizations, consumer groups, environmental and environmental
37justice groups, and other entities the commission deems
39(2) Hold at least three public hearings in geographically diverse
40locations throughout the state.
P18 1(c) In developing the requirements for the program specified in
2subdivision (a), the commission shall consider all of the following:
3(1) The amount of annual and peak energy savings, greenhouse
4gas emission reductions, and projected customer utility bill savings
5that will accrue from the program.
6(2) The most cost-effective means and reasonable timeframes
7to achieve the goals of the program.
8(3) The various climatic zones within the state.
9(4) An appropriate method to inform and educate the public
10about the need for, benefits of, and environmental impacts of, the
11comprehensive energy efficiency program.
12(5) The most effective way to report the energy assessment
13results and the corresponding energy efficiency improvements to
14the owner of the residential or nonresidential building, including,
15among other things, the following:
16(A) Prioritizing the identified energy efficiency improvements.
17(B) The payback period or cost-effectiveness of each
19(C) The various incentives, loans, grants, and rebates offered
20to finance the improvements.
21(D) Available financing options including all of the following:
22(i) Mortgages or sales agreement components.
23(ii) On-bill financing.
24(iii) Contractual property tax assessments.
25(iv) Home warranties.
26(6) Existing statutory and regulatory requirements to achieve
27energy efficiency savings and greenhouse gas emission reductions.
28(7) A broad range of implementation approaches, including both
29utility and nonutility administration of energy efficiency programs,
30especially the use of not-for-profit and community-based
31organizations that assist with deployment in disadvantaged
32communities identified pursuant to Section 39711 of the Health
33and Safety Code.
34(8) Workforce development and job training for residents in
35disadvantaged communities, including veterans, at-risk youth, and
36members of the state and local community conservation corps.
37(9) Any other considerations deemed appropriate by the
39(d) The program developed pursuant to
this section shall do all
40of the following:
P19 1(1) Minimize the overall costs of establishing and implementing
2the comprehensive energy efficiency program requirements.
3(2) Ensure, for residential buildings, that the energy efficiency
4assessments, ratings, or improvements do not unreasonably or
5unnecessarily affect the home purchasing process or the ability of
6individuals to rent housing. A transfer of property subject to the
7program implemented pursuant to this section shall not be
8invalidated solely because of the failure of a person to comply
9with a provision of the program.
10(3) Ensure, for nonresidential buildings, that the energy
11improvements do not have an undue economic impact on California
13(4) Determine, for residential buildings, the
14the Home Energy Rating System (HERS) program to support the
15goals of this section and whether there are a sufficient number of
16HERS-certified raters available to meet the program requirements.
17(5) Determine, for nonresidential structures, the availability of
18an appropriate cost-effective energy efficiency assessment system
19and whether there are a sufficient number of certified raters or
20auditors available to meet the program requirements.
21(6) Coordinate with the California Workforce Investment Board,
22the Employment Training Panel, the California Community
23Colleges, and other entities to ensure a qualified, well-trained
24workforce is available to implement the program requirements.
25(7) Promote greater project penetration in disadvantaged
26communities identified pursuant to Section 39711 of the Health
27 and Safety Code, including the deployment of energy efficiency
28surveys and audits, energy efficiency retrofits and upgrades,
29weatherization, and followup project inspections by state-certified
30community conservation corps and other community-based
31workforce development organizations that serve residents of
32disadvantaged communities, including veterans and disadvantaged
34(8) Coordinate with, and avoid duplication of, existing
35proceedings of the Public Utilities Commission and programs
36administered by utilities.
37(e) A home energy rating or energy assessment service does not
38meet the requirements of this section unless the service has been
39certified by the commission to be in compliance with the program
P20 1criteria developed pursuant to this section and is in conformity
2with other applicable elements of the program.
3(f) (1) The commission shall periodically update the criteria
4and adopt any revision that, in its judgment, is necessary to improve
5or refine program requirements after receiving public input.
6(2) On or before January 1, 2017, and at least once every three
7years thereafter, the commission shall adopt an update to the
8program in furtherance of achieving a cumulative doubling of
9statewide energy efficiency savings in electricity and natural gas
10final end uses of retail customers by January 1, 2030.
11(g) Before implementing an element of the program developed
12pursuant to subdivision (a) that requires the expansion of statutory
13authority of the commission or the Public Utilities Commission,
14the commission and the Public Utilities Commission shall obtain
15legislative approval for the expansion of their authorities.
16(h) The commission shall report on the status of the program in
17the integrated energy policy report pursuant to Section 25302.
18(i) The commission shall fund activities undertaken pursuant
19to this section from the Federal Trust Fund consistent with the
20federal American Recovery and Reinvestment Act of 2009 (Public
21Law 111-5) or other sources of nonstate funds available to the
22commission for the purposes of this section.
23(j) For purposes of this section, the following terms mean the
25(1) “Energy assessment” means a determination of an energy
26user’s energy consumption level, relative efficiency compared to
27other users, and opportunities to achieve greater efficiency or
28improve energy resource utilization.
29(2) “Energy efficiency” means delivering equal or more services
30with less energy input from an energy source.
Section 237.5 is added to the Public Utilities Code, to
“Transportation electrification” means the use of
35electricity from external sources of electrical power, including the
36electrical grid, for all or part of vehicles, vessels, trains, boats, or
37other equipment that are mobile sources of air pollution and
38greenhouse gases and the related programs and charging and
39propulsion infrastructure investments to enable and encourage this
40use of electricity.
(a) The Independent System Operator governing board
4shall be composed of a five-member independent governing board
5of directors appointed by the Governor and subject to confirmation
6by the Senate. Any reference in this chapter or in any other
7provision of law to the Independent System Operator governing
8board means the independent governing board appointed under
10(b) A member of the independent governing board appointed
11under subdivision (a) may not be affiliated with any actual or
12potential participant in any market administered by the Independent
14(c) (1) All appointments shall be for three-year terms.
15(2) There is no limit on the number of terms that may be served
16by any member.
17(d) The Oversight Board shall require the articles of
18incorporation and bylaws of the Independent System Operator to
19be revised in accordance with this section, and shall make filings
20with the Federal Energy Regulatory Commission as the Oversight
21Board determines to be necessary.
22(e) For the purposes of the initial appointments to the
23Independent System Operator governing board, as provided in
24subdivision (a), the Governor shall appoint one member to a
25one-year term, two members to a two-year term, and two members
26to a three-year term.
The Independent System Operator may not enter into
33a multistate entity or a regional organization as authorized in
34Section 359 unless that entry is approved by the Oversight Board.
(a) It is the intent of the Legislature to provide for the
2evolution of the Independent System Operator
begin delete and the Power into regional
begin delete organizationsend delete to promote
4the development of regional electricity transmission markets in
5the western states and to improve the access of consumers served
6by the Independent System Operator
begin delete and the Power Exchangeend delete
8(b) The preferred means by which the voluntary evolution
9described in subdivision (a) should occur is through the adoption
10of a regional compact or other comparable agreement among
11cooperating party states, the retail customers of which states would
12reside within the geographic territories served by the Independent
begin delete Operator and the Power Exchange.end delete
14(c) The agreement described in subdivision (b) should provide
15for all of the following:
16(1) An equitable process for the appointment or confirmation
17by party states of members of the governing boards of the
begin delete Operator and the Power Exchange.end delete
19(2) A respecification of the size, structure, representation,
20eligible membership, nominating procedures, and member terms
21of service of the governing boards of the Independent System
begin delete Operator and the Power Exchange.end delete
23(3) Mechanisms by which each party state, jointly or separately,
24can oversee effectively the actions of the Independent System
begin delete and the Power Exchangeend delete as those actions relate to the
26assurance of electricity system reliability within the party state
27and to matters that affect electricity sales to the retail customers
28of the party state or otherwise affect the general welfare of the
29electricity consumers and the general public of the party state.
30(4) The adherence by publicly owned and investor-owned
31utilities located in party states to enforceable standards and
32protocols to protect the reliability of the interconnected regional
33transmission and distribution systems.
Article 5.5 (commencing with Section 359.5) is added
6to Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code,
It is the intent of the Legislature to enact legislation to
13provide for the evolution of the Independent System Operator into
14a regional organization, to promote the development of regional
15electricity transmission markets in the western states, and to
16improve the access of consumers served by the Independent System
17Operator to those markets, and that the evolution should occur
18where it is in the best interests of California ratepayers.
Section 365.2 is added to the Public Utilities Code,
The commission shall ensure that bundled retail
18customers of an electrical corporation do not experience any cost
19increases as a result of retail customers of an electrical corporation
begin delete customersend delete electing to receive service from other providers. The
21commission shall also ensure that departing load does not
22experience any cost increases as a result of an allocation of costs
23that were not incurred on behalf
begin delete of, or that do not benefit,end delete the
Section 366.3 is added to the Public Utilities Code,
Bundled retail customers of an electrical corporation
29shall not experience any cost increase as a result of the
30implementation of a community choice aggregator program. The
31commission shall also ensure that departing load does not
32experience any cost increases as a result of an allocation of costs
33that were not incurred on behalf
begin delete of, or do not benefit,end delete the
Section 399.4 of the Public Utilities Code is amended
(a) (1) In order to ensure that prudent investments in
39energy efficiency continue to be made that produce cost-effective
40energy savings, reduce customer demand, and contribute to the
P26 1safe and reliable operation of the electric distribution grid, it is the
2policy of this state and the intent of the Legislature that the
3commission shall continue to administer cost-effective energy
4efficiency programs authorized pursuant to existing statutory
6(2) As used in this section, the term “energy efficiency” includes,
7but is not limited to, cost-effective activities to achieve peak load
8reduction that improve end-use efficiency, lower customers’ bills,
9and reduce system needs.
10(b) (1) Any rebates or incentives offered by a public utility for
11an energy efficiency improvement or installation of energy efficient
12components, equipment, or appliances in buildings shall be
13provided only if the recipient of the rebate or incentive certifies
14that the improvement or installation has complied with any
15applicable permitting requirements and, if a contractor performed
16the installation or improvement, that the contractor holds the
17appropriate license for the work performed.
18(2) This subdivision does not imply or create authority or
19responsibility, or expand existing authority or responsibility, of a
20public utility for the enforcement of the building energy and water
21efficiency standards adopted pursuant to subdivision (a) or (b) of
22Section 25402 of the Public Resources Code, or appliance
23efficiency standards and certification requirements adopted
24pursuant to subdivision (c) of Section 25402 of the Public
26(c) The commission, in evaluating energy efficiency investments
27under its existing statutory authority, shall also ensure that local
28and regional interests, multifamily dwellings, and energy service
29industry capabilities are incorporated into program portfolio design
30and that local governments, community-based organizations, and
31energy efficiency service providers are encouraged to participate
32in program implementation where appropriate.
33(d) The commission, in a new or existing proceeding, shall
34review and update its policies governing energy efficiency
35programs funded by utility customers to facilitate achieving the
36targets established pursuant to subdivision (c) of Section 25310
37of the Public Resources Code. In updating its policies, the
38commission shall, at a minimum, do all of the following:
39(1) Ensure that customers may use incentives and rebates
40provided by gas and electrical corporations to help bring buildings
P27 1from existing conditions to, or above, code or other applicable
3(2) Evaluate program benefits as the net present value of avoided
4costs of the supply-side resources avoided or deferred in assessing
5the cost-effectiveness of energy efficiency savings for purposes
6of achieving the targets established pursuant to subdivision (c) of
7Section 25310 of the Public Resources Code.
9 Authorize market transformation programs with appropriate
10levels of funding to achieve deeper energy efficiency savings.
12 Authorize pay for performance programs that link incentives
13directly to measured energy savings. As part of pay for performance
14programs authorized by the commission, customers should be
15reasonably compensated for developing and implementing an
16energy efficiency plan, with a portion of their incentive reserved
17pending post project measurement results.
19 Authorize programs to achieve deeper savings through
20operational, behavioral, and retrocommissioning activities.
22 Ensure that customers have certainty in the values and
23methodology used to determine energy efficiency incentives by
24basing the amount of any incentives provided by gas and electrical
25corporations on the values and methodology contained in the
26executed customer agreement. Incentive payments shall be based
27on measured results.
Section 399.11 of the Public Utilities Code is amended
The Legislature finds and declares all of the following:
32(a) In order to attain a target of generating 20 percent of total
33retail sales of electricity in California from eligible renewable
34energy resources by December 31, 2013, 33 percent by December
3531, 2020, and 50 percent by December 31, 2030, it is the intent of
36the Legislature that the commission and the Energy Commission
37implement the California Renewables Portfolio Standard Program
38described in this article.
39(b) Achieving the renewables portfolio standard through the
40procurement of various electricity products from eligible renewable
P28 1energy resources is intended to provide unique benefits to
2California, including all of the following, each of which
3independently justifies the program:
4(1) Displacing fossil fuel consumption within the state.
5(2) Adding new electrical generating facilities in the
6transmission network within the Western Electricity Coordinating
7Council service area.
8(3) Reducing air pollution in the state.
9(4) Meeting the state’s climate change goals by reducing
10emissions of greenhouse gases associated with electrical generation.
11(5) Promoting stable retail rates for electric service.
12(6) Meeting the state’s need for a diversified and balanced
13energy generation portfolio.
14(7) Assistance with meeting the
state’s resource adequacy
16(8) Contributing to the safe and reliable operation of the
17electrical grid, including providing predictable electrical supply,
18voltage support, lower line losses, and congestion relief.
19(9) Implementing the state’s transmission and land use planning
20activities related to development of eligible renewable energy
22(c) The California Renewables Portfolio Standard Program is
23intended to complement the Renewable Energy Resources Program
24administered by the Energy Commission and established pursuant
25to Chapter 8.6 (commencing with Section 25740) of Division 15
26of the Public Resources Code.
27(d) New and modified electric transmission facilities may be
28necessary to facilitate the state achieving its renewables portfolio
30(e) (1) Supplying electricity to California end-use customers
31that is generated by eligible renewable energy resources is
32necessary to improve California’s air quality and public health,
33and the commission shall ensure rates are just and reasonable, and
34are not significantly affected by the procurement requirements of
35this article. This electricity may be generated anywhere in the
36interconnected grid that includes many states, and areas of both
37Canada and Mexico.
38(2) This article requires generating resources located outside of
39California that are able to supply that electricity to California
P29 1end-use customers to be treated identically to generating resources
2located within the state, without discrimination.
3(3) California electrical corporations have already
4and the commission has approved, power purchase agreements
5with eligible renewable energy resources located outside of
6California that will supply electricity to California end-use
7customers. These resources will fully count toward meeting the
8renewables portfolio standard procurement requirements.
Section 399.12 of the Public Utilities Code is amended
For purposes of this article, the following terms have
13the following meanings:
14(a) “Conduit hydroelectric facility” means a facility for the
15generation of electricity that uses only the hydroelectric potential
16of an existing pipe, ditch, flume, siphon, tunnel, canal, or other
17manmade conduit that is operated to distribute water for a
19(b) “Balancing authority” means the responsible entity that
20integrates resource plans ahead of time, maintains load-interchange
21generation balance within a balancing authority area, and supports
22interconnection frequency in real time.
23(c) “Balancing authority area” means the collection of
24generation, transmission, and loads within the metered boundaries
25of the area within which the balancing authority maintains the
26electrical load-resource balance.
27(d) “California balancing authority” is a balancing authority
28with control over a balancing authority area primarily located in
29this state and operating for retail sellers and local publicly owned
30electric utilities subject to the requirements of this article and
31includes the Independent System Operator (ISO) and a local
32publicly owned electric utility operating a transmission grid that
33is not under the operational control of the ISO. A California
34balancing authority is responsible for the operation of the
35transmission grid within its metered boundaries which is not limited
36by the political boundaries of the State of California.
37(e) “Eligible renewable energy resource” means an electrical
38generating facility that meets the definition of a “renewable
39electrical generation facility” in Section 25741 of the Public
40Resources Code, subject to the following:
P30 1(1) (A) An existing small hydroelectric generation facility of
230 megawatts or less shall be eligible only if a retail seller or local
3publicly owned electric utility procured the electricity from the
4facility as of December 31, 2005. A new hydroelectric facility that
5commences generation of electricity after December 31, 2005, is
6not an eligible renewable energy resource if it will cause an adverse
7impact on instream beneficial uses or cause a change in the volume
8or timing of streamflow.
9(B) Notwithstanding subparagraph (A), a conduit hydroelectric
10facility of 30 megawatts or less that commenced operation before
11January 1, 2006, is an eligible renewable energy resource. A
12conduit hydroelectric facility of 30 megawatts or less that
13commences operation after December 31, 2005, is an eligible
14renewable energy resource so long as it does not cause an adverse
15impact on instream beneficial uses or cause a change in the volume
16or timing of streamflow.
17(C) A facility approved by the governing board of a local
18publicly owned electric utility prior to June 1, 2010, for
19procurement to satisfy renewable energy procurement obligations
20adopted pursuant to former Section 387, shall be certified as an
21eligible renewable energy resource by the Energy Commission
22pursuant to this article, if the facility is a “renewable electrical
23generation facility” as defined in Section 25741 of the Public
25(D) (i) A small hydroelectric generation unit with a nameplate
26capacity not exceeding 40 megawatts that is operated as part of a
27water supply or conveyance system is an eligible renewable energy
28resource only for the retail seller or local publicly owned electric
29utility that procured the electricity from the unit as of December
3031, 2005. No unit shall be eligible pursuant to this subparagraph
31if an application for certification is submitted to the Energy
32Commission after January 1, 2013. Only one retail seller or local
33publicly owned electric utility shall be deemed to have procured
34electricity from a given unit as of December 31, 2005.
35(ii) Notwithstanding clause (i), a local publicly owned electric
36utility that meets the criteria of subdivision (j) of Section 399.30
37may sell to another local publicly owned electric utility electricity
38from small hydroelectric generation units that qualify as eligible
39renewable energy resources under clause (i), and that electricity
40may be used by the local publicly owned electric utility that
P31 1purchased the electricity to meet its renewables portfolio standard
2procurement requirements. The total of all those sales from the
3utility shall be no greater than 100,000 megawatthours of
5(iii) The amendments made to this subdivision by the act adding
6this subparagraph are intended to clarify existing law and apply
7from December 10, 2011.
8(2) (A) A facility engaged in the combustion of municipal solid
9waste shall not be considered an eligible renewable energy
11(B) Subparagraph (A) does not apply to contracts entered into
12before January 1,
begin delete 2016,end delete for the procurement of renewable
13energy resources from a facility located in Stanislaus County that
14was operational prior to September 26, 1996.
15(f) “Procure” means to acquire through ownership or contract.
16(g) “Procurement entity” means any person or corporation
17authorized by the commission to enter into contracts to procure
18eligible renewable energy resources on behalf of customers of a
19retail seller pursuant to subdivision (f) of Section 399.13.
20(h) (1) “Renewable energy credit” means a certificate of proof
21associated with the generation of electricity from an eligible
22renewable energy resource, issued through the accounting system
23established by the Energy Commission pursuant to Section 399.25,
24that one unit of electricity was generated and delivered by an
25eligible renewable energy resource.
26(2) “Renewable energy credit” includes all renewable and
27environmental attributes associated with the production of
28electricity from the eligible renewable energy resource, except for
29an emissions reduction credit issued pursuant to Section 40709 of
30the Health and Safety Code and any credits or payments associated
31with the reduction of solid waste and treatment benefits created
32by the utilization of biomass or biogas fuels.
33(3) (A) Electricity generated by an eligible renewable energy
34resource attributable to the use of nonrenewable fuels, beyond a
35de minimis quantity used to generate electricity in the same process
36through which the facility converts renewable fuel to electricity,
37shall not result in the creation of a renewable energy credit. The
38Energy Commission shall set the de minimis quantity of
39nonrenewable fuels for each renewable energy technology at a
40level of no more than 2 percent of the total quantity of fuel used
P32 1by the technology to generate electricity. The Energy Commission
2may adjust the de minimis quantity for an individual facility, up
3to a maximum of 5 percent, if it finds that all of the following
4conditions are met:
5(i) The facility demonstrates that the higher quantity of
6nonrenewable fuel will lead to an increase in generation from the
7eligible renewable energy facility that is significantly greater than
8generation from the nonrenewable fuel alone.
9(ii) The facility demonstrates that the higher quantity of
10nonrenewable fuels will reduce the variability of its electrical
11output in a manner that results in net environmental benefits to the
13(iii) The higher quantity of nonrenewable fuel is limited to either
14natural gas or hydrogen derived by reformation of a fossil fuel.
15(B) Electricity generated by a small hydroelectric
16facility shall not result in the creation of a renewable energy credit
17unless the facility meets the requirements of subparagraph (A) or
18(D) of paragraph (1) of subdivision (e).
19(C) Electricity generated by a conduit hydroelectric generation
20facility shall not result in the creation of a renewable energy credit
21unless the facility meets the requirements of subparagraph (B) of
22paragraph (1) of subdivision (e).
23(D) Electricity generated by a facility engaged in the combustion
24of municipal solid waste shall not result in the creation of a
25renewable energy credit. This subparagraph does not apply to
26renewable energy credits that were generated before January 1,
begin delete 2016,end delete by a
facility engaged in the combustion of municipal
28solid waste located in Stanislaus County that was operational prior
29to September 26, 1996, and sold pursuant to contacts entered into
30before January 1,
begin delete 2016.end delete
31(i) “Renewables portfolio standard” means the specified
32percentage of electricity generated by eligible renewable energy
33resources that a retail seller or a local publicly owned electric utility
34is required to procure pursuant to this article.
35(j) “Retail seller” means an entity engaged in the retail sale of
36electricity to end-use customers located within the state, including
37any of the following:
38(1) An electrical corporation, as defined in Section 218.
39(2) A community choice aggregator. A community choice
40aggregator shall participate in the renewables portfolio standard
P33 1program subject to the same terms and conditions applicable to an
3(3) An electric service provider, as defined in Section 218.3.
4The electric service provider shall be subject to the same terms
5and conditions applicable to an electrical corporation pursuant to
6this article. This paragraph does not impair a contract entered into
7between an electric service provider and a retail customer prior to
8the suspension of direct access by the commission pursuant to
9Section 80110 of the Water Code.
10(4) “Retail seller” does not include any of the following:
11(A) A corporation or person
employing cogeneration technology
12or producing electricity consistent with subdivision (b) of Section
14(B) The Department of Water Resources acting in its capacity
15pursuant to Division 27 (commencing with Section 80000) of the
17(C) A local publicly owned electric utility.
18(k) “WECC” means the Western Electricity Coordinating
19Council of the North American Electric Reliability Corporation,
20or a successor to the corporation.
Section 399.13 of the Public Utilities Code is amended
(a) (1) The commission shall direct each electrical
25corporation to annually prepare a renewable energy procurement
26plan that includes the matter in paragraph (5), to satisfy its
27obligations under the renewables portfolio standard. To the extent
28feasible, this procurement plan shall be proposed, reviewed, and
29adopted by the commission as part of, and pursuant to, a general
30procurement plan process. The commission shall require each
31electrical corporation to review and update its renewable energy
32procurement plan as it determines to be necessary. The commission
33shall require all other retail sellers to prepare and submit renewable
34energy procurement plans that address the requirements identified
35in paragraph (5).
36(2) Every electrical corporation
that owns electrical transmission
37facilities shall annually prepare, as part of the Federal Energy
38Regulatory Commission Order 890 process, and submit to the
39commission, a report identifying any electrical transmission
40facility, upgrade, or enhancement that is reasonably necessary to
P34 1achieve the renewables portfolio standard procurement
2requirements of this article. Each report shall look forward at least
3five years and, to ensure that adequate investments are made in a
4timely manner, shall include a preliminary schedule when an
5application for a certificate of public convenience and necessity
6will be made, pursuant to Chapter 5 (commencing with Section
71001), for any electrical transmission facility identified as being
8reasonably necessary to achieve the renewable energy resources
9procurement requirements of this article. Each electrical
10corporation that owns electrical transmission facilities shall ensure
11that project-specific interconnection studies are completed in a
13(3) The commission shall direct each retail seller to prepare and
14submit an annual compliance report that includes all of the
16(A) The current status and progress made during the prior year
17toward procurement of eligible renewable energy resources as a
18percentage of retail sales, including, if applicable, the status of any
19necessary siting and permitting approvals from federal, state, and
20local agencies for those eligible renewable energy resources
21procured by the retail seller, and the current status of compliance
22with the portfolio content requirements of subdivision (c) of
23Section 399.16, including procurement of eligible renewable energy
24resources located outside the state and within the WECC and
25unbundled renewable energy credits.
26(B) If the retail seller is an electrical corporation, the current
27status and progress made during the prior year toward construction
28of, and upgrades to, transmission and distribution facilities and
29other electrical system components it owns to interconnect eligible
30renewable energy resources and to supply the electricity generated
31by those resources to load, including the status of planning, siting,
32and permitting transmission facilities by federal, state, and local
34(C) Recommendations to remove impediments to making
35progress toward achieving the renewable energy resources
36procurement requirements established pursuant to this article.
37(4) The commission shall adopt, by rulemaking, all of the
39(A) A process that provides criteria for the rank ordering and
40selection of least-cost and best-fit eligible renewable energy
P35 1resources to comply with the California Renewables Portfolio
2Standard Program obligations on a total cost and best-fit basis.
3This process shall take into account all of the following:
4(i) Estimates of indirect costs associated with needed
6(ii) The cost impact of procuring the eligible renewable energy
7resources on the electrical corporation’s electricity portfolio.
8(iii) The viability of the project to construct and reliably operate
9the eligible renewable energy resource, including the developer’s
10experience, the feasibility of the technology used to generate
11electricity, and the risk that the facility will not be built, or that
12construction will be delayed, with the result that electricity will
13not be supplied as required by the contract.
14(iv) Workforce recruitment, training,
and retention efforts,
15including the employment growth associated with the construction
16and operation of eligible renewable energy resources and goals
17for recruitment and training of women, minorities, and disabled
19(v) (I) Estimates of electrical corporation expenses resulting
20from integrating and operating eligible renewable energy resources,
21including, but not limited to, any additional wholesale energy and
22capacity costs associated with integrating each eligible renewable
24(II) No later than December 31, 2015, the commission shall
25approve a methodology for determining the integration costs
26described in subclause (I).
27(vi) Consideration of any statewide greenhouse gas emissions
28limit established pursuant to the California Global Warming
29Solutions Act of 2006 (Division 25.5 (commencing with Section
3038500) of the Health and Safety Code).
31(vii) Consideration of capacity and system reliability of the
32eligible renewable energy resource to ensure grid reliability.
33(B) Rules permitting retail sellers to accumulate, beginning
34January 1, 2011, excess procurement in one compliance period to
35be applied to any subsequent compliance period. The rules shall
36apply equally to all retail sellers. In determining the quantity of
37excess procurement for the applicable compliance period, the
38commission shall retain the rules adopted by the commission and
39in effect as of January 1, 2015, for the compliance period specified
40in subparagraphs (A) to (C), inclusive, of paragraph (1) of
P36 1subdivision (b) of Section 399.15. For any subsequent compliance
2period, the rules shall allow the following:
3(i) For electricity products meeting the portfolio content
4requirements of paragraph (1) of subdivision (b) of Section 399.16,
5contracts of any duration may count as excess procurement.
6(ii) Electricity products meeting the portfolio content
7requirements of paragraph (2) or (3) of subdivision (b) of Section
8399.16 shall not be counted as excess procurement. Contracts of
9any duration for electricity products meeting the portfolio content
10requirements of paragraph (2) or (3) of subdivision (b) of Section
11399.16 that are credited towards a compliance period shall not be
12deducted from a retail seller’s procurement for purposes of
13calculating excess procurement.
14(iii) If a retail seller notifies the commission that it will comply
15with the provisions of subdivision (b)
begin delete of Section 399.13end delete
16compliance period beginning January 1, 2017, the provisions of
17clauses (i) and (ii) shall take effect for that retail seller for that
19(C) Standard terms and conditions to be used by all electrical
20corporations in contracting for eligible renewable energy resources,
21including performance requirements for renewable generators. A
22contract for the purchase of electricity generated by an eligible
23renewable energy resource, at a minimum, shall include the
24renewable energy credits associated with all electricity generation
25specified under the contract. The standard terms and conditions
26shall include the requirement that, no later than six months after
27the commission’s approval of an electricity purchase agreement
28entered into pursuant to this article, the following information
29about the agreement shall be disclosed by the commission: party
30names, resource type, project location, and project capacity.
31(D) An appropriate minimum margin of procurement above the
32minimum procurement level necessary to comply with the
33renewables portfolio standard to mitigate the risk that renewable
34projects planned or under contract are delayed or canceled. This
35paragraph does not preclude an electrical corporation from
36voluntarily proposing a margin of procurement above the
37appropriate minimum margin established by the commission.
38(5) Consistent with the goal of increasing California’s reliance
39on eligible renewable energy resources, the renewable energy
40procurement plan shall include all of the following:
P37 1(A) An assessment of annual or multiyear portfolio supplies
2and demand to determine the optimal mix of eligible renewable
3energy resources with deliverability characteristics that may include
4peaking, dispatchable, baseload, firm, and as-available capacity.
5(B) Potential compliance delays related to the conditions
6described in paragraph (5) of subdivision (b) of Section 399.15.
7(C) A bid solicitation setting forth the need for eligible
8renewable energy resources of each deliverability characteristic,
9required online dates, and locational preferences, if any.
10(D) A status update on the development schedule of all eligible
11renewable energy resources currently under contract.
12(E) Consideration of mechanisms for price adjustments
13associated with the costs of key components for eligible renewable
14energy resource projects with online dates more than 24 months
15after the date of contract execution.
16(F) An assessment of the risk
that an eligible renewable energy
17resource will not be built, or that construction will be delayed,
18with the result that electricity will not be delivered as required by
20(6) In soliciting and procuring eligible renewable energy
21resources, each electrical corporation shall offer contracts of no
22less than 10 years duration, unless the commission approves of a
23contract of shorter duration.
24(7) In soliciting and procuring eligible renewable energy
25resources for California-based projects, each electrical corporation
26shall give preference to renewable energy projects that provide
27environmental and economic benefits to communities afflicted
28with poverty or high unemployment, or that suffer from high
29emission levels of toxic air contaminants, criteria air pollutants,
30and greenhouse gases.
31(8) In soliciting and
procuring eligible renewable energy
32resources, each retail seller shall consider the best-fit attributes of
33resource types that ensure a balanced resource mix to maintain the
34reliability of the electrical grid.
35(b) A retail seller may enter into a combination of long- and
36short-term contracts for electricity and associated renewable energy
37credits. Beginning January 1, 2021, at least 65 percent of the
38procurement a retail seller counts toward the renewables portfolio
39standard requirement of each compliance period shall be from its
40contracts of 10 years or more in
begin delete duration.end delete
3(c) The commission shall review and accept, modify, or reject
begin delete retail seller’send delete renewable energy
5resource procurement plan prior to the commencement of
6renewable energy procurement pursuant to this article by
begin delete a retail
The commission shall assess
8adherence to the approved renewable energy resource procurement
9plans in determining compliance with the obligations of this article.
10(d) Unless previously preapproved by the commission, an
11electrical corporation shall submit a contract for the generation of
12an eligible renewable energy resource to the commission for review
13and approval consistent with an approved renewable energy
14resource procurement plan. If the commission determines that the
15bid prices are elevated due to a lack of effective competition among
16the bidders, the commission shall direct the electrical corporation
17to renegotiate the contracts or conduct a new solicitation.
18(e) If an electrical corporation fails to comply with a commission
19order adopting a renewable energy resource procurement plan, the
20commission shall exercise its authority to require compliance.
21(f) (1) The commission may authorize a procurement entity to
22enter into contracts on behalf of customers of a retail seller for
23electricity products from eligible renewable energy resources to
24satisfy the retail seller’s renewables portfolio standard procurement
25requirements. The commission shall not require any person or
26corporation to act as a procurement entity or require any party to
27purchase eligible renewable energy resources from a procurement
29(2) Subject to review and approval by the commission, the
30procurement entity shall be permitted to recover reasonable
31administrative and procurement costs through the retail rates of
32end-use customers that are served by the procurement entity and
33are directly benefiting from the procurement of eligible renewable
35(g) Procurement and administrative costs associated with
36contracts entered into by an electrical corporation for eligible
37renewable energy resources pursuant to this article and approved
38by the commission are reasonable and prudent and shall be
39recoverable in rates.
P39 1(h) Construction, alteration, demolition, installation, and repair
2work on an eligible renewable energy resource that receives
3production incentives pursuant to Section 25742 of the Public
4Resources Code, including work performed to qualify, receive, or
5maintain production incentives, are “public works” for the purposes
6of Chapter 1 (commencing with Section 1720) of Part 7 of Division
72 of the Labor Code.
Section 399.15 of the Public Utilities Code is amended
(a) In order to fulfill unmet long-term resource needs,
12the commission shall establish a renewables portfolio standard
13requiring all retail sellers to procure a minimum quantity of
14electricity products from eligible renewable energy resources as
15a specified percentage of total kilowatthours sold to their retail
16end-use customers each compliance period to achieve the targets
17established under this article. For any retail seller procuring at least
1814 percent of retail sales from eligible renewable energy resources
19in 2010, the deficits associated with any previous renewables
20portfolio standard shall not be added to any procurement
21requirement pursuant to this article.
22(b) The commission shall implement renewables portfolio
23standard procurement requirements only as follows:
24(1) Each retail seller shall procure a minimum quantity of
25eligible renewable energy resources for each of the following
27(A) January 1, 2011, to December 31, 2013, inclusive.
28(B) January 1, 2014, to December 31, 2016, inclusive.
29(C) January 1, 2017, to December 31, 2020, inclusive.
30(D) January 1, 2021, to December 31, 2024, inclusive.
31(E) January 1, 2025, to December 31, 2027, inclusive.
32(F) January 1, 2028, to December 31, 2030, inclusive.
33(2) (A) No later than January 1, 2017, the commission shall
34establish the quantity of electricity products from eligible
35renewable energy resources to be procured by the retail seller for
36each compliance period. These quantities shall be established in
37the same manner for all retail sellers and result in the same
38percentages used to establish compliance period quantities for all
begin delete For purposes of calculating renewables portfolio
40standard procurement requirements, electricity production used to
P40 1serve onsite load from a resource located behind a customer’s
2meter shall reduce the retail sales of the retail seller serving that
4(B) In establishing quantities for the compliance period from
5January 1, 2011, to December 31, 2013, inclusive, the commission
6shall require procurement for each retail seller equal to an average
7of 20 percent of retail sales. For the following compliance periods,
8the quantities shall reflect reasonable progress in each of the
9intervening years sufficient to ensure that the procurement of
10electricity products from eligible renewable energy resources
11achieves 25 percent of retail sales by December 31, 2016, 33
12percent by December 31, 2020, 40 percent by December 31, 2024,
1345 percent by December 31, 2027, and 50 percent by December
1431, 2030. The commission shall establish appropriate
begin delete multiyearend delete
15 compliance periods for all subsequent years that require
16retail sellers to procure not less than 50 percent of retail sales of
17electricity products from eligible renewable energy resources.
18(C) Retail sellers shall be obligated to procure no less than the
19quantities associated with all intervening years by the end of each
20compliance period. Retail sellers shall not be required to
21demonstrate a specific quantity of procurement for any individual
23(3) The commission may require the procurement of eligible
24renewable energy resources in excess of the quantities specified
25in paragraph (2).
26(4) Only for purposes of establishing the renewables portfolio
27standard procurement requirements of paragraph (1) and
28determining the quantities pursuant to paragraph (2), the
29commission shall include all electricity sold to retail customers by
30the Department of Water Resources pursuant to Division 27
31(commencing with Section 80000) of the Water Code in the
32calculation of retail sales by an electrical corporation.
33(5) The commission shall waive enforcement of this section if
34it finds that the retail seller has demonstrated any of the following
35conditions are beyond the control of the retail seller and will
37(A) There is inadequate transmission capacity to allow for
38sufficient electricity to be delivered from proposed eligible
39renewable energy resource projects using the current operational
40protocols of the Independent System Operator. In making its
P41 1findings relative to the existence of this condition with respect to
2a retail seller that owns transmission lines, the commission shall
3consider both of the following:
4(i) Whether the retail seller has undertaken, in a timely fashion,
5reasonable measures under its control and consistent with its
6obligations under local, state, and federal laws and regulations, to
7develop and construct new transmission lines or upgrades to
8existing lines intended to transmit electricity generated by eligible
9renewable energy resources. In determining the reasonableness of
10a retail seller’s actions, the commission shall consider the retail
11seller’s expectations for full-cost recovery for these transmission
12lines and upgrades.
13(ii) Whether the retail seller has taken all reasonable operational
14measures to maximize cost-effective deliveries of electricity from
15eligible renewable energy resources in advance of transmission
17(B) Permitting, interconnection, or other circumstances that
18delay procured eligible renewable energy resource projects, or
19there is an insufficient supply of eligible renewable energy
20resources available to the retail seller. In making a finding that this
21condition prevents timely compliance, the commission shall
22consider whether the retail seller has done all of the following:
23(i) Prudently managed portfolio risks, including relying on a
24sufficient number of viable projects.
25(ii) Sought to develop one of the following: its own eligible
26renewable energy resources, transmission to interconnect to eligible
27renewable energy resources, or energy storage used to integrate
28eligible renewable energy resources. This clause shall not require
29an electrical corporation to pursue development of eligible
30renewable energy resources pursuant to Section 399.14.
31(iii) Procured an appropriate
minimum margin of procurement
32above the minimum procurement level necessary to comply with
33the renewables portfolio standard to compensate for foreseeable
34delays or insufficient supply.
35(iv) Taken reasonable measures, under the control of the retail
36seller, to procure cost-effective distributed generation and allowable
37unbundled renewable energy credits.
38(C) Unanticipated curtailment of eligible renewable energy
39resources if the waiver would not result in an increase in
40greenhouse gas emissions.
P42 1(D) Unanticipated increase in retail sales due to transportation
2electrification. In making a finding that this condition prevents
3timely compliance, the commission shall consider all of the
5(i) Whether transportation electrification significantly
6forecasts in that retail seller’s service territory based on the best
7and most recently available information filed with the State Air
8Resources Board, the Energy Commission, or other state agency.
9(ii) Whether the retail seller has taken reasonable measures to
10procure sufficient resources to account for unanticipated increases
11in retail sales due to transportation electrification.
12(6) If the commission waives the compliance requirements of
13this section, the commission shall establish additional reporting
14requirements on the retail seller to demonstrate that all reasonable
15actions under the control of the retail seller are taken in each of
16the intervening years sufficient to satisfy future procurement
18(7) The commission shall not waive enforcement pursuant to
19this section, unless the retail seller demonstrates that it has taken
20all reasonable actions under its control, as set forth in paragraph
21(5), to achieve full compliance.
22(8) If a retail seller fails to procure sufficient eligible renewable
23energy resources to comply with a procurement requirement
24pursuant to paragraphs (1) and (2) and fails to obtain an order from
25the commission waiving enforcement pursuant to paragraph (5),
26the commission shall assess penalties for noncompliance. A
27schedule of penalties shall be adopted by the commission that shall
28be comparable for electrical corporations and other retail sellers.
29For electrical corporations, the cost of any penalties shall not be
30collected in rates. Any penalties collected under this article shall
31be deposited into the Electric Program Investment Charge Fund
32and used for the purposes described in Chapter 8.1 (commencing
33with Section 25710) of Division 15 of the Public Resources Code.
34(9) Deficits associated with the compliance period shall not be
35added to a future compliance period.
36(c) The commission shall establish a limitation for each electrical
37corporation on the procurement expenditures for all eligible
38renewable energy resources used to comply with the renewables
39portfolio standard. This limitation shall be set at a level that
40prevents disproportionate rate impacts.
P43 1(d) If the cost limitation for an electrical corporation is
2insufficient to support the projected costs of meeting the
3renewables portfolio standard procurement requirements, the
4electrical corporation may refrain from entering into new contracts
5or constructing facilities beyond the quantity that can be procured
6within the limitation, unless eligible renewable energy resources
7can be procured without exceeding a de minimis increase in rates,
8consistent with the long-term procurement plan established for the
9electrical corporation pursuant to Section 454.5.
10(e) (1) The commission shall monitor the status of the cost
11limitation for each electrical corporation in order to ensure
12compliance with this article.
13(2) If the commission determines that an electrical corporation
14may exceed its cost limitation prior to achieving the renewables
15portfolio standard procurement requirements, the commission shall
16do both of the following within 60 days of making that
18(A) Investigate and identify the reasons why the electrical
19corporation may exceed its annual cost limitation.
20(B) Notify the appropriate policy and fiscal committees of the
21Legislature that the electrical corporation may exceed its cost
22limitation, and include the reasons why the electrical corporation
23may exceed its cost limitation.
24(f) The establishment of a renewables portfolio standard shall
25not constitute implementation by the commission of the federal
26Public Utility Regulatory Policies Act of 1978 (Public Law
Section 399.16 of the Public Utilities Code is amended
(a) Various electricity products from eligible renewable
32energy resources located within the WECC transmission network
33service area shall be eligible to comply with the renewables
34portfolio standard procurement requirements in Section 399.15.
35These electricity products may be differentiated by their impacts
36on the operation of the grid in supplying electricity, as well as
37meeting the requirements of this article.
38(b) Consistent with the goals of procuring the least-cost and
39best-fit electricity products from eligible renewable energy
40resources that meet project viability principles adopted by the
P44 1commission pursuant to paragraph (4) of subdivision (a) of Section
2399.13 and that provide the benefits set forth in Section 399.11, a
3balanced portfolio of eligible renewable energy resources shall be
4procured consisting of the following portfolio content categories:
5(1) Eligible renewable energy resource electricity products that
6meet either of the following criteria:
7(A) Have a first point of interconnection with a California
8balancing authority, have a first point of interconnection with
9distribution facilities used to serve end users within a California
10balancing authority area, or are scheduled from the eligible
11renewable energy resource into a California balancing authority
12 without substituting electricity from another source. The use of
13another source to provide real-time ancillary services required to
14maintain an hourly or subhourly import schedule into a California
15balancing authority shall be permitted, but only the fraction of the
16schedule actually generated by the eligible renewable energy
17resource shall count toward this portfolio content category.
18(B) Have an agreement to dynamically transfer electricity to a
19California balancing authority.
20(2) Firmed and shaped eligible renewable energy resource
21electricity products providing incremental electricity and scheduled
22into a California balancing authority.
23(3) Eligible renewable energy resource electricity products, or
24any fraction of the electricity generated, including unbundled
25renewable energy credits, that do not qualify under the criteria of
26paragraph (1) or (2).
27(c) In order to achieve a balanced portfolio, all retail sellers
28shall meet the following requirements for all procurement credited
29toward each compliance period:
30(1) Not less than 50 percent
for the compliance period ending
31December 31, 2013, 65 percent for the compliance period ending
32December 31, 2016, and 75 percent for each compliance period
33thereafter, of the eligible renewable energy resource electricity
34products associated with contracts executed after June 1, 2010,
35shall meet the product content requirements of paragraph (1) of
37(2) Not more than 25 percent for the compliance period ending
38December 31, 2013, 15 percent for the compliance period ending
39December 31, 2016, and 10 percent for each compliance period
40thereafter, of the eligible renewable energy resource electricity
P45 1products associated with contracts executed after June 1, 2010,
2shall meet the product content requirements of paragraph (3) of
4(3) Any renewable energy resources contracts executed on or
5after June 1, 2010, not subject to the limitations of paragraph (1)
6 or (2), shall meet the product content requirements of paragraph
7(2) of subdivision (b).
8(4) For purposes of electric service providers only, the
9restrictions in this subdivision on crediting eligible renewable
10energy resource electricity products to each compliance period
11shall apply to contracts executed after January 13, 2011.
12(d) Any contract or ownership agreement originally executed
13prior to June 1, 2010, shall count in full toward the procurement
14requirements established pursuant to this article, if all of the
15following conditions are met:
16(1) The renewable energy resource was eligible under the rules
17in place as of the date when the contract was executed.
18(2) For an electrical corporation, the contract has been approved
19by the commission, even if that approval occurs after June 1, 2010.
20(3) Any contract amendments or modifications occurring after
21June 1, 2010, do not increase the nameplate capacity or expected
22quantities of annual generation, or substitute a different renewable
23energy resource. The duration of the contract may be extended if
24the original contract specified a procurement commitment of 15
25or more years.
26(e) A retail seller may apply to the commission for a reduction
27of a procurement content requirement of subdivision (c). The
28commission may reduce a procurement content requirement of
29subdivision (c) to the extent the retail seller demonstrates that it
30cannot comply with that subdivision because of conditions beyond
31the control of the retail seller as provided in paragraph (5) of
32subdivision (b) of Section 399.15. The commission shall not, under
33any circumstance, reduce the obligation specified in paragraph (1)
34of subdivision (c) below 65 percent for any compliance period
35obligation after December 31, 2016.
Section 399.18 of the Public Utilities Code is amended
(a) This section applies to an electrical corporation
40that as of January 1, 2010, met either of the following conditions:
P46 1(1) Served 30,000 or fewer customer accounts in California and
2had issued at least four solicitations for eligible renewable energy
3resources prior to June 1, 2010.
4(2) Had 1,000 or fewer customer accounts in California and was
5not connected to any transmission system or to the Independent
7(b) For an electrical corporation or its successor, electricity
8products from eligible renewable energy resources may be used
9for compliance with this article, notwithstanding any procurement
10content limitation in Section 399.16, provided that all of the
11following conditions are met:
12(1) The electrical corporation or its successor participates in,
13and complies with, the accounting system administered by the
14Energy Commission pursuant to subdivision (b) of Section 399.25.
15(2) The Energy Commission verifies that the electricity
16generated by the facility is eligible to meet the requirements of
18(3) The electrical corporation continues to satisfy either of the
19conditions described in subdivision (a).
Section 399.21 of the Public Utilities Code is amended
(a) The commission, by rule, shall authorize the use
24of renewable energy credits to satisfy the renewables portfolio
25standard procurement requirements established pursuant to this
26article, subject to the following conditions:
27(1) The commission and the Energy Commission shall ensure
28that the tracking system established pursuant to subdivision (c) of
29Section 399.25, is operational, is capable of independently
30verifying that electricity earning the credit is generated by an
31eligible renewable energy resource, and can ensure that renewable
32energy credits shall not be double counted by any seller of
33electricity within the service territory of the WECC.
34(2) Each renewable energy credit shall be counted
35for compliance with the renewables portfolio standard of this state
36or any other state, or for verifying retail product claims in this state
37or any other state.
38(3) All revenues received by an electrical corporation for the
39sale of a renewable energy credit shall be credited to the benefit
P47 1(4) Renewable energy credits shall not be created for electricity
2generated pursuant to any electricity purchase contract with a retail
3seller or a local publicly owned electric utility executed before
4January 1, 2005, unless the contract contains explicit terms and
5conditions specifying the ownership or disposition of those credits.
6Procurement under those contracts shall be tracked through the
7accounting system described in subdivision (b) of Section 399.25
8and included in the quantity of eligible renewable energy resources
9of the purchasing retail seller pursuant to Section 399.15.
10(5) Renewable energy credits shall not be created for electricity
11generated under any electricity purchase contract executed after
12January 1, 2005, pursuant to the federal Public Utility Regulatory
13Policies Act of 1978 (16 U.S.C. Sec. 2601 et seq.). Procurement
14under the electricity purchase contracts shall be tracked through
15the accounting system implemented by the Energy Commission
16pursuant to subdivision (b) of Section 399.25 and count toward
17the renewables portfolio standard procurement requirements of
18the purchasing retail seller.
January 1, 2021, renewable energy credits shall
20not be created for any electricity generated by an eligible renewable
21energy resource located behind a customer’s meter that operates
22in parallel with the electrical grid and is used to offset onsite loads.
28(7) A renewable energy credit shall not be eligible for
29compliance with a renewables portfolio standard procurement
30requirement unless it is retired in the tracking system established
31pursuant to subdivision (c) of Section 399.25 by the retail seller
32or local publicly owned electric utility within 36 months from the
33initial date of generation of the associated electricity.
34(b) The commission shall allow an electrical corporation to
35recover the reasonable costs of purchasing, selling, and
36administering renewable energy credit contracts in rates.
Section 399.30 of the Public Utilities Code is amended
(a) (1) To fulfill unmet long-term generation resource
2needs, each local publicly owned electric utility shall adopt and
3implement a renewable energy resources procurement plan that
4requires the utility to procure a minimum quantity of electricity
5products from eligible renewable energy resources, including
6renewable energy credits, as a specified percentage of total
7kilowatthours sold to the utility’s retail end-use customers, each
8compliance period, to achieve the targets of subdivision (c).
9(2) Beginning January 1, 2019, a local publicly owned electric
10utility subject to Section 9621 shall incorporate the renewable
11energy resources procurement plan required by this section as part
12of a broader integrated resource plan developed and adopted
13 pursuant to Section 9621.
14(b) The governing board shall implement procurement targets
15for a local publicly owned electric utility that require the utility to
16procure a minimum quantity of eligible renewable energy resources
17for each of the following compliance periods:
18(1) January 1, 2011, to December 31, 2013, inclusive.
19(2) January 1, 2014, to December 31, 2016, inclusive.
20(3) January 1, 2017, to December 31, 2020, inclusive.
21(4) January 1, 2021, to December 31, 2024, inclusive.
22(5) January 1, 2025, to December 31, 2027, inclusive.
23(6) January 1, 2028, to December 31, 2030, inclusive.
24(c) The governing board of a local publicly owned electric utility
25shall ensure all of the following:
26(1) The quantities of eligible renewable energy resources to be
27procured for the compliance period from January 1, 2011, to
28December 31, 2013, inclusive, are equal to an average of 20 percent
29of retail sales.
30(2) The quantities of eligible renewable energy resources to be
31procured for all other compliance periods reflect reasonable
32progress in each of the intervening years sufficient to ensure that
33the procurement of electricity products from eligible renewable
34energy resources achieves 25 percent of retail sales by December
35 31, 2016, 33 percent by December 31, 2020, 40 percent by
36December 31, 2024, 45 percent by December 31, 2027, and 50
37percent by December 31, 2030. The Energy Commission shall
38establish appropriate multiyear compliance periods for all
39subsequent years that require the local publicly owned electric
40utility to procure not less than 50 percent of retail sales of
P49 1electricity products from eligible renewable energy resources.
begin delete For
2purposes of calculating renewables portfolio standard procurement
3requirements, electricity production used to serve onsite load from
4a resource located behind a customer’s meter shall reduce the retail
5sales of the local publicly owned electric utility serving that
7(3) A local publicly owned electric utility shall adopt
8procurement requirements consistent with Section 399.16.
9(4) Beginning January 1, 2014, in calculating the procurement
10requirements under this article, a local publicly owned electric
11utility may exclude from its total retail sales the kilowatthours
12generated by an eligible renewable energy resource that is credited
13to a participating customer pursuant to a voluntary green pricing
14or shared renewable generation program. Any exclusion shall be
15limited to electricity products that do not meet the portfolio content
16criteria set forth in paragraph (2) or (3) of subdivision (b) of Section
17399.16. Any renewable energy credits associated with electricity
18credited to a participating customer shall not be used for
19compliance with procurement requirements under this article, shall
20be retired on behalf of the participating customer, and shall not be
21further sold, transferred, or otherwise monetized for any purpose.
22To the extent possible for generation that is excluded from retail
23sales under this subdivision, a local publicly owned electric utility
24shall seek to procure those eligible renewable energy resources
25that are located in reasonable proximity to program participants.
26(d) (1) The governing board of a local publicly owned electric
27utility shall adopt procurement requirements consistent with
28subparagraph (B) of paragraph (4) of subdivision (a) of, and
29subdivision (b) of, Section 399.13.
30(2) The governing board of a local publicly owned electric utility
31may adopt the following measures:
32(A) Conditions that allow for delaying timely compliance
33consistent with subdivision (b) of Section 399.15.
34(B) Cost limitations for procurement expenditures consistent
35with subdivision (c) of Section 399.15.
36(e) The governing board of the local publicly owned electric
37utility shall adopt a program for the enforcement of this article.
38The program shall be adopted at a publicly noticed meeting offering
39all interested parties an opportunity to comment. Not less than 30
40days’ notice shall be given to the public of any meeting held for
P50 1purposes of adopting the program. Not less than 10 days’ notice
2shall be given to the public before any meeting is held to make a
3substantive change to the program.
4(f) (1) Each local publicly owned electric utility shall annually
5post notice, in accordance with Chapter 9 (commencing with
6Section 54950) of Part 1 of Division 2 of Title 5 of the Government
7Code, whenever its governing body will deliberate in public on its
8renewable energy resources procurement plan.
9(2) Contemporaneous with the posting of the notice of a public
10meeting to consider the renewable energy resources procurement
11plan, the local publicly owned electric utility shall notify the
12Energy Commission of the date, time, and location of the meeting
13in order to enable the Energy Commission to post the information
14on its Internet Web site. This requirement is satisfied if the local
15publicly owned electric utility provides the uniform resource
16locator (URL) that links to this information.
17(3) Upon distribution to its governing body of information
18related to its renewable energy resources procurement status and
19future plans, for its consideration at a noticed public meeting, the
20local publicly owned electric utility shall make that information
21available to the public and shall provide the Energy Commission
22with an electronic copy of the documents for posting on the Energy
23Commission’s Internet Web site. This requirement is satisfied if
24the local publicly owned electric utility provides the uniform
25resource locator (URL) that links to the documents or information
26regarding other manners of access to the documents.
27(g) A public utility district that receives all of its electricity
28pursuant to a preference right adopted and authorized by the United
29States Congress pursuant to Section 4 of the Trinity River Division
30Act of August 12, 1955 (Public Law 84-386) shall be in compliance
31with the renewable energy procurement requirements of this article.
32(h) For a local publicly owned electric utility that was in
33existence on or before January 1, 2009, that provides retail electric
34service to 15,000 or fewer customer accounts in California, and is
35interconnected to a balancing authority located outside this state
36but within the WECC, an eligible renewable energy resource
37includes a facility that is located outside California that is
38connected to the WECC transmission system, if all of the following
39conditions are met:
P51 1(1) The electricity
generated by the facility is procured by the
2local publicly owned electric utility, is delivered to the balancing
3authority area in which the local publicly owned electric utility is
4located, and is not used to fulfill renewable energy procurement
5requirements of other states.
6(2) The local publicly owned electric utility participates in, and
7complies with, the accounting system administered by the Energy
8Commission pursuant to this article.
9(3) The Energy Commission verifies that the electricity
10generated by the facility is eligible to meet the renewables portfolio
11standard procurement requirements.
12(i) Notwithstanding subdivision (a), for a local publicly owned
13electric utility that is a joint powers authority of districts established
14pursuant to state law on or before January 1, 2005, that furnish
15electric services other than to residential customers, and is formed
16pursuant to the Irrigation District Law (Division 11 (commencing
17with Section 20500) of the Water Code), the percentage of total
18kilowatthours sold to the district’s retail end-use customers, upon
19which the renewables portfolio standard procurement requirements
20in subdivision (b) are calculated, shall be based on the authority’s
21average retail sales over the previous seven years. If the authority
22has not furnished electric service for seven years, then the
23calculation shall be based on average retail sales over the number
24of completed years during which the authority has provided electric
26(j) A local publicly owned electric utility in a city and county
27that only receives greater than 67 percent of its electricity sources
28from hydroelectric generation located within the state that it owns
29and operates, and that does not meet the definition of a “renewable
30electrical generation facility” pursuant to Section 25741 of the
31Public Resources Code, shall be required to procure eligible
32renewable energy resources, including renewable energy credits,
33to meet only the electricity demands unsatisfied by its hydroelectric
34generation in any given year, in order to satisfy its renewable
35energy procurement requirements.
36(k) (1) A local publicly owned electric utility that receives
37greater than 50 percent of its annual retail sales from its own
38hydroelectric generation that is not an eligible renewable energy
39resource shall not be required to procure additional eligible
40renewable energy resources in excess of either of the following:
P52 1(A) The portion of its retail sales not supplied by its own
2hydroelectric generation. For these purposes, retail sales supplied
3by an increase in hydroelectric generation resulting from an
4increase in the amount of water stored by a dam because the dam
5is enlarged or otherwise modified after December 31, 2012, shall
6not count as being retail sales supplied by the utility’s own
8(B) The cost limitation adopted pursuant to this section.
9(2) For the purposes of this subdivision, “hydroelectric
10generation” means electricity generated from a hydroelectric
11facility that satisfies all of the following:
12(A) Is owned solely and operated by the local publicly owned
13electric utility as of 1967.
14(B) Serves a local publicly owned electric utility with a
15distribution system demand of less than 150 megawatts.
16(C) Involves a contract in which an electrical corporation
17receives the benefit of the electric generation through June of 2014,
18at which time the benefit reverts back to the ownership and control
19of the local publicly owned electric utility.
20(D) Has a maximum penstock flow capacity of no more than
213,200 cubic feet per second and includes a regulating reservoir
22with a small hydroelectric generation facility producing fewer than
2320 megawatts with a maximum penstock flow capacity of no more
24than 3,000 cubic feet per second.
25(3) This subdivision does not reduce or eliminate any renewable
26procurement requirement for any compliance period ending prior
27to January 1, 2014.
28(4) This subdivision does not require a local publicly owned
29electric utility to purchase additional eligible renewable energy
30resources in excess of the procurement requirements of subdivision
32(l) (1) (A) For purposes of this subdivision, “large hydroelectric
33generation” means electricity generated from a hydroelectric
34facility that is not an eligible renewable energy resource and
35provides electricity to a local publicly owned electric utility from
36facilities owned by the federal government as a part of the federal
37Central Valley Project or a joint powers agency formed and created
38pursuant to Chapter 5 (commencing with Section 6500) of Division
397 of Title 1 of the Government Code.
P53 1(B) Large hydroelectric generation does not include any resource
2that meets the definition of hydroelectric generation set forth in
4(2) If, during a year within a compliance period set forth in
5subdivision (b), a local publicly owned electric utility receives
6greater than 50 percent of its retail sales from large hydroelectric
7generation, it is not required to procure eligible renewable energy
8resources that exceed the lesser of the following for that year:
9(A) The portion of the local publicly owned electric utility retail
10sales unsatisfied by the local publicly owned electric utility’s large
12(B) The soft target adopted by the Energy Commission for the
13intervening year of the relevant compliance period.
14(3) Except for an existing agreement effective as of January 1,
152015, or extension or renewal of that agreement, any new
16procurement commitment shall not be eligible to count towards
17the determination that the local publicly owned electric utility
18receives more than 50 percent of its retail sales from large
19hydroelectric generation in any year.
20(4) The Energy Commission shall adjust the total quantities of
21eligible renewable energy resources to be procured by a local
22publicly owned electric utility for a compliance period to reflect
23any reductions required pursuant to paragraph (2).
24(5) This subdivision does not modify the compliance obligation
25of a local publicly owned electric utility to satisfy the requirements
26of subdivision (c) of Section 399.16.
27(m) (1) (A) For purposes of this subdivision, “unavoidable
28long-term contracts and ownership agreements” means
29commitments for electricity from a coal-fired powerplant, located
30outside the state, originally entered into by a local publicly owned
31electric utility before June 1, 2010, that is not subsequently
32modified to result in an extension of the duration of the agreement
33or result in an increase in total quantities of energy delivered during
34any compliance period set forth in subdivision (b).
35(B) The governing board of a local publicly owned electric
36utility shall demonstrate in its renewable energy resources
37procurement plan required pursuant to subdivision (f) that any
38cancellation or divestment of the commitment would result in
39significant economic harm to its retail customers that cannot be
P54 1substantially mitigated through resale, transfer to another entity,
2early closure of the facility, or other feasible measures.
3(2) For the compliance period set forth in paragraph (4) of
4subdivision (b), a local publicly owned electric utility meeting the
5requirement of subparagraph (B) of paragraph (1) may adjust its
6renewable energy procurement targets to ensure that the
7procurement of additional electricity from eligible renewable
8energy resources, in combination with the procurement of
9electricity from unavoidable long-term contracts and ownership
10agreements, does not exceed the total retail sales of the local
11publicly owned electric utility during that compliance period. The
12local publicly owned electric utility may limit its procurement of
13eligible renewable energy resources for that compliance period to
14no less than an average of 33 percent of its retail sales.
15(3) The Energy Commission shall approve any reductions in
16procurement targets proposed by a local publicly owned electric
17utility if it determines that the requirements of this subdivision are
19(n) A local publicly owned electric utility shall retain discretion
20over both of the following:
21(1) The mix of eligible renewable energy resources procured
22by the utility and those additional generation resources procured
23by the utility for purposes of ensuring resource adequacy and
25(2) The reasonable costs incurred by the utility for eligible
26renewable energy resources owned by the utility.
27(o) The Energy Commission shall adopt regulations specifying
28procedures for enforcement of this article. The regulations shall
29include a public process under which the Energy Commission may
30issue a notice of violation and correction against a local publicly
31owned electric utility for failure to comply with this article, and
32for referral of violations to the State Air Resources Board for
33penalties pursuant to subdivision (n).
34(p) (1) Upon a determination by the Energy Commission that
35a local publicly owned electric utility has failed to comply with
36this article, the Energy Commission shall refer the failure to comply
37with this article to the State Air Resources Board, which may
38impose penalties to enforce this article consistent with Part 6
39(commencing with Section 38580) of Division 25.5 of the Health
40and Safety Code. Any penalties imposed shall be comparable to
P55 1those adopted by the commission for noncompliance by retail
3(2) Any penalties collected by the State Air Resources Board
4pursuant to this article shall be deposited in the Air Pollution
5Control Fund and, upon appropriation by the Legislature, shall be
6expended for reducing emissions of air pollution or greenhouse
7gases within the same geographic area as the local publicly owned
Article 17 (commencing with Section 400) is added
11to Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code,
The commission and the Energy Commission shall do all
17of the following in furtherance of meeting the state’s clean energy
18and pollution reduction objectives:
19(a) Take into account the use of distributed generation to the
20extent that it provides economic and environmental benefits in
21disadvantaged communities as identified pursuant to Section 39711
22of the Health and Safety Code.
23(b) Take into account the opportunities to decrease costs and
24increase benefits, including pollution reduction and grid integration,
25using technologies with zero or
26lowest feasible emissions of greenhouse gases, criteria
begin delete pollutant and toxic air contaminants onsite in
28proceedings associated with meeting the objectives.
29(c) Where feasible, authorize procurement of resources to
30provide grid reliability services that minimize reliance on system
31power and fossil fuel resources and, where feasible, cost effective,
32and consistent with other state policy objectives, increase the use
33of large- and small-scale energy storage with a variety of
34technologies, targeted energy efficiency, demand response,
35including, but not limited to, automated demand response, eligible
36renewable energy resources, or other
37 technologies with zero or lowest feasible emissions of greenhouse
begin delete pollutant emissions,end delete and toxic air
39contaminants onsite to protect system reliability.
P56 1(d) Review technology incentive, research, development,
2deployment, and market facilitation programs overseen by the
3commission and the Energy Commission and make
4recommendations to advance state clean energy and pollution
5reduction objectives and provide benefits to disadvantaged
6communities as identified pursuant to Section 39711 of the Health
7and Safety Code.
8(e) To the extent feasible, give first priority to the manufacture
9and deployment of clean energy and pollution reduction
10technologies that create employment opportunities, including high
11wage, highly skilled employment opportunities, and increased
12investment in the state.
13(f) Establish a publicly available tracking system to provide
14 up-to-date information on progress toward meeting the clean energy
15and pollution reduction goals of the Clean Energy and Pollution
16Reduction Act of 2015.
17(g) Establish an advisory group consisting of representatives
18from disadvantaged communities identified in Section 39711 of
19the Health and Safety Code. The advisory group shall review and
20provide advice on programs proposed to achieve clean energy and
21pollution reduction and determine whether those proposed
22programs will be effective and useful in disadvantaged
Section 454.51 is added to the Public Utilities Code,
The commission shall do all of the following:
28(a) Identify a diverse and balanced portfolio of resources needed
29to ensure a reliable electricity supply that provides optimal
30integration of renewable energy in a cost-effective manner. The
31portfolio shall rely upon zero carbon-emitting resources to the
32maximum extent reasonable and be designed to achieve any
33statewide greenhouse gas emissions limit established pursuant to
34the California Global Warming Solutions Act of 2006 (Division
3525.5 (commencing with Section 38500) of the Health and Safety
36Code) or any successor legislation.
37(b) Direct each electrical corporation to include, as part of its
38proposed procurement plan, a strategy for procuring best-fit and
39least-cost resources to satisfy the portfolio needs identified by the
40commission pursuant to subdivision (a).
P57 1(c) Ensure that the net costs of any incremental renewable energy
2integration resources procured by an electrical corporation to satisfy
3the need identified in subdivision (a) are allocated on a fully
4nonbypassable basis consistent with the treatment of costs
5identified in paragraph (2) of subdivision (c) of Section 365.1.
6(d) Permit community choice aggregators to submit proposals
7for satisfying their portion of the renewable integration need
8identified in subdivision (a). If the commission finds this need is
9best met through long-term procurement commitments for
10resources, community choice aggregators shall also be required
11to make long-term commitments for resources. The commission
begin delete thoseend delete
proposals if it
13finds all of the following:
14(1) The resources proposed by a community choice aggregator
15will provide equivalent integration of renewable energy.
16(2) The resources proposed by a community choice aggregator
17will promote the efficient achievement of state energy policy
18objectives, including reductions in greenhouse gas emissions.
19(3) Bundled customers of an electrical corporation will be
20indifferent from the approval of the community choice aggregator
22(4) All costs resulting from nonperformance will be borne by
begin delete electric corporation, electric service provider,end delete or community choice aggregator responsible for them.
Section 454.52 is added to the Public Utilities Code,
(a) (1) Commencing in 2017, and to be updated
29regularly thereafter, the commission shall adopt a process for each
30load-serving entity, as defined in Section 380, to file an integrated
31resource plan, and a schedule for periodic updates to the plan, to
32ensure that load-serving entities do the following:
33(A) Meet the greenhouse gas emissions reduction targets
34established by the State Air Resources Board, in coordination with
35the commission and the Energy Commission, for the electricity
36sector and each load-serving entity that reflect the electricity
begin delete roleend delete in achieving economywide greenhouse
38gas emissions reductions of 40 percent from 1990 levels by 2030.
P58 1(B) Procure at least 50 percent eligible renewable energy
2resources by December 31, 2030, consistent with Article 16
3(commencing with Section 399.11) of Chapter 2.3.
4(C) Enable each electrical corporation to fulfill its obligation to
5serve its customers at just and reasonable rates.
6(D) Minimize impacts on ratepayers’ bills.
7(E) Ensure system and local reliability.
8(F) Strengthen the diversity, sustainability, and resilience of the
9 bulk transmission and distribution systems, and local communities.
10(G) Enhance distribution systems and demand-side energy
12(H) Minimize localized air pollutants and other greenhouse gas
13emissions, with early priority on disadvantaged communities
14identified pursuant to Section 39711 of the Health and Safety Code.
15(2) (A) The commission may authorize all source procurement
16 that includes various resource types
17including demand-side resources, supply side resources, and
18resources that may be either demand-side resources or supply side
begin delete resourcesend delete to ensure that each
21load-serving entity meets the goals set forth in paragraph (1).
22(B) The commission may approve procurement of resource
23types that will reduce overall greenhouse gas emissions from the
24electricity sector and meet the other goals specified in paragraph
25(1), but due to the nature of the technology or fuel source may not
26compete favorably in price against other resources over the time
27period of the integrated resource plan.
28(b) (1) Each load-serving entity shall prepare and file an
29integrated resource plan consistent with paragraph (2) of
30subdivision (a) on a time schedule directed by the commission and
31subject to commission review.
electrical corporation’s plan shall
begin delete be consistent withend delete
33 Section 454.5.
34(3) The plan of a community choice aggregator
begin delete or an electric
35service provider,end delete
37 consistent with paragraph (5) of subdivision (a) of Section 366.2,
38 shall achieve the following:
P59 1(A) Economic, reliability, environmental, security, and other
2benefits and performance characteristics that are consistent with
3the goals set forth in paragraph (1) of subdivision (a).
4(B) A diversified procurement portfolio consisting of both
5short-term and long-term electricity and electricity-related and
6demand reduction products.
7(C) The resource adequacy requirements established pursuant
8to Section 380.
13(c) To the extent that additional procurement is authorized for
14the electrical corporation in the integrated resource plan or the
15procurement process authorized pursuant to Section 454.5, the
16commission shall ensure that the
begin delete renewable integrationend delete costs are
17allocated in a fair and equitable manner to all customers consistent
18with 454.51, that there is no cost-shifting among customers of
19load-serving entities, and that community choice aggregators may
begin delete self provide theseend delete resources
21consistent with Section 454.51.
begin deleteThe end deleteprocess adopted pursuant to subdivision (a) shall
24incorporate, and not duplicate, any other planning processes of the
Section 454.55 of the Public Utilities Code is amended
(a) The commission, in consultation with the Energy
30Commission, shall identify all potentially achievable cost-effective
31electricity efficiency savings and establish efficiency targets for
32an electrical corporation to achieve, pursuant to Section 454.5,
33consistent with the targets established pursuant to subdivision (c)
34of Section 25310 of the Public Resources Code.
35(1) By July 1, 2018, and every four years thereafter, each
36electrical corporation shall report on its progress toward achieving
37the targets established pursuant to subdivision (a).
38(2) By July 1, 2019, and every four years thereafter, the
39commission shall, pursuant to Section 9795 of the Government
40 Code, report to the Legislature on the progress toward achieving
P60 1the targets established pursuant to subdivision (a). The commission
2shall include specific strategies for, and an update on, progress
3toward maximizing the contribution of electricity efficiency savings
4in disadvantaged communities identified pursuant to Section 39711
5of the Health and Safety Code.
6(b) (1) By December 31, 2023, the commission shall, in a new
7or existing proceeding, undertake a comprehensive review of the
8feasibility, costs, barriers, and benefits of achieving a cumulative
9doubling of energy efficiency savings and demand reduction by
102030 pursuant to subdivision (c) of Section 25310 of the Public
12(2) Notwithstanding subdivision (c) of Section 25310 of the
13Public Resources Code, if the commission concludes the targets
14established for electrical corporations to achieve pursuant to
15subdivision (a) are not cost effective, feasible, or pose potential
16adverse impacts to public health and safety, the commission shall
17revise the targets to the level that optimizes the amount of energy
18efficiency savings and demand reduction and shall modify, revise,
19or update its policies as needed to address barriers preventing
20achievement of those targets.
Section 454.56 of the Public Utilities Code is amended
(a) The commission, in consultation with the Energy
25Commission, shall identify all potentially achievable cost-effective
26natural gas efficiency savings and establish efficiency targets for
27the gas corporation to achieve, consistent with the targets
28established pursuant to subdivision (c) of Section 25310 of the
29Public Resources Code.
30(b) A gas corporation shall first meet its unmet resource needs
31through all available natural gas efficiency and demand reduction
32resources that are cost effective, reliable, and feasible.
33(c) By July 1, 2018, and every four years thereafter, each
begin delete naturalend delete
34 gas corporation shall report on its progress toward achieving the
35targets established pursuant to subdivision (a).
36(d) By July 1, 2019, and every four years thereafter, the
37commission shall, pursuant to Section 9795 of the Government
38Code, report to the Legislature on the progress toward achieving
39the targets establish pursuant to subdivision (a). The commission
40shall include specific strategies for, and an update on, progress
P61 1toward maximizing the contribution of energy efficiency savings
2in disadvantaged communities identified pursuant to Section 39711
3of the Health and Safety Code.
4(e) Notwithstanding subdivision (c) of Section 25310 of the
5Public Resources Code, if the commission concludes in its review
6pursuant to paragraph (1) of subdivision (b) of Section 454.55 that
7the targets established for gas corporations to achieve pursuant to
8subdivision (a) are not cost effective, feasible, or pose potential
9adverse impacts to public health and safety, the commission shall
10revise the targets to the level that maximizes the amount of energy
11efficiency savings and demand reduction and shall modify, revise,
12or update its policies as needed to address barriers preventing
13achievement of those targets.
Section 636 is added to the Public Utilities Code, to
In a procurement plan adopted by an electrical corporation
17or a local publicly owned electric utility, the electrical corporation
18or local publicly owned electric utility shall give consideration to
19both of the following:
20(a) Any statewide greenhouse gas emissions limit established
21pursuant to the California Global Warming Solutions Act of 2006
22(Division 25.5 (commencing with Section 38500) of the Health
23and Safety Code).
24(b) Capacity and system reliability to ensure grid reliability.
Section 701.1 of the Public Utilities Code is amended
(a) (1) The Legislature finds and declares that, in
29addition to other ratepayer protection objectives, a principal goal
30of electric and natural gas utilities’ resource planning and
31investment shall be to minimize the cost to society of the reliable
32energy services that are provided by natural gas and electricity,
33and to improve the environment and to encourage the diversity of
34energy sources through improvements in energy efficiency,
35development of renewable energy resources, such as wind, solar,
36biomass, and geothermal energy, and widespread transportation
38(2) The amendment made to this subdivision by the Clean
39Energy and Pollution Reduction Act of 2015 does not expand the
40authority of the commission beyond that provided by other law.
P62 1(b) The Legislature further finds and declares that, in addition
2to any appropriate investments in energy production, electrical
3and natural gas utilities should seek to exploit all practicable and
4cost-effective conservation and improvements in the efficiency of
5energy use and distribution that offer equivalent or better system
6reliability, and which are not being exploited by any other entity.
7(c) In calculating the cost-effectiveness of energy resources,
8including conservation and load management options, the
9commission shall include, in addition to other ratepayer protection
10objectives, a value for any costs and benefits to the environment,
11including air quality. The commission shall ensure that any values
12it develops pursuant to this section are consistent with values
13developed by the State Energy Resources Conservation and
14 Development Commission pursuant to Section 25000.1 of the
15Public Resources Code. However, if the commission determines
16that a value developed pursuant to this subdivision is not consistent
17with a value developed by the State Energy Resources
18Conservation and Development Commission pursuant to
19subdivision (c) of Section 25000.1 of the Public Resources Code,
20the commission may nonetheless use this value if, in the
21appropriate record of its proceedings, it states its reasons for using
22the value it has selected.
23(d) In determining the emission values associated with the
24current operating capacity of existing electric powerplants pursuant
25to subdivision (c), the commission shall adhere to the following
26protocol in determining values for air quality costs and benefits to
27the environment. If the commission finds that an air pollutant that
28is subject to regulation is a component of residual emissions from
29an electric powerplant and that the owner of that powerplant is
30either of the following:
31(1) Using a tradable emission allowance, right, or offset for that
32pollutant, which (A) has been approved by the air quality district
33regulating the powerplant, (B) is consistent with federal and state
34law, and (C) has been obtained, authorized, or acquired in a
36(2) Paying a tax per measured unit of that pollutant.
37The commission shall not assign a value or cost to that residual
38pollutant for the current operating capacity of that powerplant
39because the alternative protocol for dealing with the pollutant
P63 1operates to internalize its cost for the purpose of planning for and
2acquiring new generating resources.
3(e) (1) The values determined pursuant to subdivision (c) to
4represent costs and benefits to the environment shall not be used
5by the commission, in and of themselves, to require early
6decommissioning or retirement of an electric utility powerplant
7that complies with applicable prevailing environmental regulations.
8(2) Further, the environmental values determined pursuant to
9subdivision (c) shall not be used by the commission in a manner
10which, when those values are aggregated, will result in advancing
11an electric utility’s need for new powerplant capacity by more than
13(f) This subdivision shall apply whenever a powerplant bid
14solicitation is required by the commission for an electric utility
15and a portion of the amount of new powerplant capacity, which is
16the subject of the bid solicitation, is the result of the commission’s
17use of environmental values to advance that electric utility’s need
18for new powerplant capacity in the manner authorized by paragraph
19(2) of subdivision (e). The affected electric utility may propose to
20the commission any combination of alternatives to that portion of
21the new powerplant capacity that is the result of the commission’s
22use of environmental values as authorized by paragraph (2) of
23subdivision (c). The commission shall approve an alternative in
24place of the new powerplant capacity if it finds all of the following:
25(1) The alternative has been approved by the relevant air quality
27(2) The alternative is consistent with federal and state law.
28(3) The alternative will result in needed system reliability for
29the electric utility at least equivalent to that which would result
30from bidding for new powerplant capacity.
31(4) The alternative will result in
reducing system operating costs
32for the electric utility over those which would result from the
33process of bidding for new powerplant capacity.
34(5) The alternative will result in equivalent or better
35environmental improvements at a lower cost than would result
36from bidding for new powerplant capacity.
37(g) This section does not require an electric utility to alter the
38dispatch of its powerplants for environmental purposes.
39(h) This section does not preclude an electric utility from
40submitting to the commission any combination of alternatives to
P64 1meet a commission-identified need for new capacity, if the
2submission is otherwise authorized by the commission.
3(i) This section does not change or alter any provision of
4commission decision 92-04-045, dated April 22, 1992.
Section 740.8 of the Public Utilities Code is amended
As used in Section 740.3 or 740.12, “interests” of
9ratepayers, short- or long-term, mean direct benefits that are
10specific to ratepayers, consistent with both of the following:
11(a) Safer, more reliable, or less costly gas or electrical service,
12consistent with Section 451, including electrical service that is
13safer, more reliable, or less costly due to either improved use of
14the electric system or improved integration of renewable energy
16(b) Any one of the following:
17(1) Improvement in energy efficiency of travel.
18(2) Reduction of health and
environmental impacts from air
20(3) Reduction of greenhouse gas emissions related to electricity
21and natural gas production and use.
22(4) Increased use of alternative fuels.
23(5) Creating high-quality jobs or other economic benefits,
24including in disadvantaged communities identified pursuant to
25Section 39711 of the Health and Safety Code.
Section 740.12 is added to the Public Utilities Code,
(a) (1) The Legislature finds and declares all of the
31(A) Advanced clean vehicles and fuels are needed to reduce
32petroleum use, to meet air quality standards, to improve public
33health, and to achieve greenhouse gas emissions reduction goals.
34(B) Widespread transportation electrification is needed to
35achieve the goals of the Charge Ahead California Initiative
36(Chapter 8.5 (commencing with Section 44258) of Part 5 of
37Division 26 of the Health and Safety Code).
38(C) Widespread transportation electrification requires increased
39access for disadvantaged communities, low- and moderate-income
40 communities, and other consumers of zero-emission and
P65 1near-zero-emission vehicles, and increased use of those vehicles
2in those communities and by other consumers to enhance air
3quality, lower greenhouse gases emissions, and promote overall
4benefits to those communities and other consumers.
5(D) Reducing emissions of greenhouse gases to 40 percent below
61990 levels by 2030 and to 80 percent below 1990 levels by 2050
7will require widespread transportation electrification.
8(E) Widespread transportation electrification requires electrical
9corporations to increase access to the use of electricity as a
11(F) Widespread transportation electrification should stimulate
12innovation and competition, attract private capital investments, and
14create high-quality jobs for Californians, where technologically
16(G) Deploying electric vehicles should assist in grid
17management, integrating generation from eligible renewable energy
18resources, and reducing fuel costs for vehicle drivers who charge
19in a manner consistent with electrical grid conditions.
20(H) Deploying electric vehicle charging infrastructure should
21facilitate increased sales of electric vehicles by making charging
22easily accessible and should provide the opportunity to access
23electricity as a fuel that is cleaner and less costly than gasoline or
24other fossil fuels in public and private locations.
25(I) According to the State Alternative Fuels Plan analysis by
26the Energy Commission and the State Air Resources Board, light-,
27medium-, and heavy-duty vehicle electrification results in
28approximately 70 percent fewer greenhouse gases emitted, over
2985 percent fewer ozone-forming air pollutants emitted, and 100
30percent fewer petroleum used. These reductions will become larger
31as renewable generation increases.
32(2) It is the policy of the state and the intent of the Legislature
33to encourage transportation electrification as a means to achieve
34ambient air quality standards and the state’s climate goals.
35Agencies designing and implementing regulations, guidelines,
36plans, and funding programs to reduce greenhouse gas emissions
37shall take the findings described in paragraph (1) into account.
38(b) The commission, in consultation with the State Air Resources
39Board and the Energy Commission, shall direct electrical
40corporations to file applications for programs and investments to
P66 1 accelerate widespread transportation electrification to reduce
2dependence on petroleum, meet air quality standards, achieve the
3goals set forth in the Charge Ahead California Initiative (Chapter
48.5 (commencing with Section 44258) of Part 5 of Division 26 of
5the Health and Safety Code), and reduce emissions of greenhouse
6gases to 40 percent below 1990 levels by 2030 and to 80 percent
7below 1990 levels by 2050. Programs proposed by electrical
8corporations shall seek to minimize overall costs and maximize
9overall benefits. The commission shall approve, or modify and
10approve, programs and investments in transportation electrification,
11including those that deploy charging
begin delete infrastructureend delete
12 via a reasonable cost recovery mechanism, if they are consistent
13with this section, do not unfairly compete with nonutility
14enterprises as required under Section 740.3, include performance
15accountability measures, and are in the interests of ratepayers as
16defined in Section 740.8.
17(c) The commission shall review data concerning current and
18future electric transportation adoption and charging infrastructure
19utilization prior to authorizing an electrical corporation to collect
20new program costs related to transportation electrification in
21customer rates. If market barriers unrelated to the investment made
22by an electric corporation prevent electric transportation from
23adequately utilizing available charging infrastructure, the
24commission shall not permit additional investments in
25transportation electrification without a reasonable showing that
26the investments would not result in long-term stranded costs
27recoverable from ratepayers.
28(d) This section applies to an application to the commission
29transportation electrification programs and investments if one of
30the following conditions is met:
31(1) The application is filed on or after January 1, 2016.
32(2) The application is filed before January 1, 2016, but has an
33evidentiary hearing scheduled on or after July 1, 2016.
Section 9505 of the Public Utilities Code is amended
(a) By March 15, 2013, and by March 15 of each year
38thereafter, each local publicly owned electric utility shall report
39to the Energy Commission and to its customers all of the following:
P67 1(1) Its investments in energy efficiency and demand reduction
3(2) A description of each energy efficiency and demand
4reduction program, program expenditures, the cost-effectiveness
5of each program, and expected and actual energy efficiency savings
6and demand reduction results that reflect the intent of the
7Legislature to encourage energy savings and reductions in
8emissions of greenhouse gases resulting from providing service
9to existing residential and nonresidential buildings, while taking
10into consideration the effect of the program on rates, reliability,
11and financial resources.
12(3) The sources for funding of its energy efficiency and demand
14(4) The methodologies and input assumptions used to determine
15the cost-effectiveness of its energy efficiency and demand reduction
17(5) A comparison of the local publicly owned electric utility’s
18annual targets established pursuant to subdivision (b) and the local
19publicly owned electric utility’s reported electricity efficiency
20savings and demand reductions.
21(b) By March 15, 2013, and by March 15 of every fourth year
22thereafter, each local publicly owned electric utility shall identify
23all potentially achievable cost-effective electricity efficiency
24savings and shall establish annual targets for energy efficiency
25savings and demand reduction for the next 10-year period,
26consistent with the annual targets established by the Energy
27Commission pursuant to subdivision (c) of Section 25310 of the
28Public Resources Code. A local publicly owned electric utility’s
29determination of potentially achievable cost-effective electricity
30efficiency savings shall be made without regard to previous
31minimum investments undertaken pursuant to Section 385. A local
32publicly owned electric utility shall treat investments made to
33achieve energy efficiency savings and demand reduction targets
34as procurement investments.
35(c) Within 60 days of establishing annual targets pursuant to
36subdivision (b), each local publicly owned electric utility shall
37report those targets to the Energy Commission, and the basis for
38establishing those targets.
39(d) Each local publicly owned electric utility
40available to its customers and to the Energy Commission the results
P68 1of any independent evaluation that measures and verifies the energy
2efficiency savings and the reduction in energy demand achieved
3by its energy efficiency and demand reduction programs.
Section 9620 of the Public Utilities Code is amended
(a) Each local publicly owned electric utility serving
8end-use customers, shall prudently plan for and procure resources
9that are adequate to meet its planning reserve margin and peak
10demand and operating reserves, sufficient to provide reliable
11electric service to its customers. Customer generation located on
12the customer’s site or providing electric service through
13arrangements authorized by Section 218, shall not be subject to
14these requirements if the customer generation, or the load it serves,
15meets one of the following criteria:
16(1) It takes standby service from the local publicly owned
17electric utility on a rate schedule that provides for adequate backup
18planning and operating reserves for the standby customer class.
19(2) It is not physically interconnected to the electric transmission
20or distribution grid, so that, if the customer generation fails, backup
21power is not supplied from the electricity grid.
22(3) There is physical assurance that the load served by the
23customer generation will be curtailed concurrently and
24commensurately with an outage of the customer generation.
25(b) Each local publicly owned electric utility serving end-use
26customers shall, at a minimum, meet the most recent minimum
27planning reserve and reliability criteria approved by the Board of
28Trustees of the Western Systems Coordinating Council or the
29Western Electricity Coordinating Council.
30(c) Each local publicly owned electric utility shall prudently
31plan for and procure energy storage systems that are adequate to
32meet the requirements of Section 2836.
33(d) A local publicly owned electric utility serving end-use
34customers shall, upon request, provide the Energy Commission
35with any information the Energy Commission determines is
36necessary to evaluate the progress made by the local publicly
37owned electric utility in meeting the requirements of this section,
38consistent with the annual targets established pursuant to
39subdivision (c) of Section 25310 of the Public Resources Code.
P69 1(e) The Energy Commission shall report to the Legislature, to
2be included in each integrated energy policy report prepared
3pursuant to Section 25302 of the Public Resources Code, regarding
4the progress made by each local publicly owned electric utility
5serving end-use customers in meeting the requirements of this
Section 9621 is added to the Public Utilities Code,
(a) This section shall apply to a local publicly owned
11electric utility with an annual electrical demand exceeding 700
12gigawatthours, as determined on a three-year average commencing
13January 1, 2013.
14(b) On or before January 1, 2019, the governing board of a local
15publicly owned electric utility shall adopt an integrated resource
16plan and a process for updating the plan at least once every five
17years to ensure the utility achieves all of the following:
18(1) Meets the greenhouse gas emissions reduction targets
19established by the State Air Resources Board, in coordination with
20the commission and the Energy Commission, for the electricity
21sector and each local publicly-owned electric utility that reflect
22the electricity sector’s
begin delete roleend delete in achieving
23 economywide greenhouse gas emissions reductions of 40 percent
24from 1990 levels by 2030.
25(2) Ensures procurement of at least 50 percent eligible renewable
26energy resources by 2030 consistent with Article 16 (commencing
27with Section 399.11) of Chapter 2.3.
28(3) Meets the goals specified in subparagraphs (C) to (H),
29inclusive, of paragraph (1) of subdivision (a) of Section 454.52.
30(c) (1) The integrated resource plan shall
31for the following:
32(A) Energy efficiency and demand response resources pursuant
33to Section 9615.
34(B) Energy storage requirements pursuant to Chapter 7.7
35(commencing with Section 2835) of Part 2 of Division 1.
36(C) Transportation electrification.
37(D) A diversified procurement portfolio consisting of both
38short-term and long-term electricity, electricity-related, and demand
P70 1(E) The resource adequacy requirements established pursuant
2to Section 9620.
3(2) (A) The governing board of the local publicly owned electric
4utility may authorize all source procurement that includes various
5resource types, including demand-side resources, supply side
6resources, and resources that may be either demand-side resources
7or supply side resources, to ensure that the local publicly owned
8electric utility procures the optimum resource mix that meets the
9objectives of subdivision (b).
10(B) The governing board may authorize procurement of resource
11types that will reduce overall greenhouse gas emissions from the
12electricity sector and meet the other goals specified in
begin delete paragraph but due
13(1) of subdivision (a) of Section 454.52,end delete
14to the nature of the technology or fuel source may not compete
15favorably in price against other resources over the time period of
16the integrated resource plan.
17(d) A local publicly owned electric utility shall satisfy the notice
18and public disclosure requirements of subdivision (f) of Section
19399.30 with respect to any integrated resource plan or plan update
Section 9622 is added to the Public Utilities Code,
(a) Integrated resource plans and plan updates adopted
25pursuant to Section 9621 shall be submitted to the Energy
27(b) The Energy Commission shall review the integrated resource
28plans and plan updates. If the Energy Commission determines an
29integrated resource plan or plan update is inconsistent with the
30requirements of Section 9621, the Energy Commission shall
31provide recommendations to correct the deficiencies.
32(c) The Energy Commission may adopt guidelines to govern
33the submission of information and data and reports needed to
34support the Energy Commission’s review of the utility’s integrated
35resource plan pursuant to this section at a publicly noticed meeting
36offering all interested parties an opportunity to comment. The
37Energy Commission shall provide written public notice of not less
38than 30 days for the initial adoption of guidelines and not less than
3910 days for the subsequent adoption of substantive changes.
40Notwithstanding any other law, any guidelines adopted pursuant
P71 1to this section shall be exempt from the requirements of Chapter
23.5 (commencing with Section 11340) of Part 1 of Division 3 of
3Title 2 of the Government Code.
No reimbursement is required by this act pursuant to
5Section 6 of Article XIII B of the California Constitution because
6a local agency or school district has the authority to levy service
7charges, fees, or assessments sufficient to pay for the program or
8level of service mandated by this act or because costs that may be
9incurred by a local agency or school district will be incurred
10because this act creates a new crime or infraction, eliminates a
11crime or infraction, or changes the penalty for a crime or infraction,
12within the meaning of Section 17556 of the Government Code, or
13changes the definition of a crime within the meaning of Section 6
14of Article XIII B of the California Constitution.
The provisions of this act are severable. If any
26provision of this act or its application is held invalid, that invalidity
27shall not affect other provisions or applications that can be given
28effect without the invalid provision or application.
Corrected 9-14-15—See last page. 95