Amended in Senate April 12, 2016

Amended in Senate March 17, 2016

Senate Bill No. 886

Introduced by Senator Pavley

January 20, 2016

An act to add Sections 454.53, 455.6, begin insert 2836.1, end insert and 9620.5 to the Public Utilities Code, relating to electricity.

LEGISLATIVE COUNSEL’S DIGEST

SB 886, as amended, Pavley. Electricity: energy storage systems.

Existing law requires the Public Utilities Commission to determine appropriate targets for each load-serving entity to procure viable and cost-effective energy storage systems to be achieved by December 31, 2015, and December 31, 2020. Existing law requires the governing board of each local publicly owned electric utility to initiate a process to determine appropriate targets for the utility to procure viable cost-effective energy storage systems to be achieved by December 31, 2015, and December 31, 2020. Existing law requires the commission to adopt a process for each load-serving entity to file an integrated resource plan and a schedule for periodic updates to the plan to meet certain objectives. Existing law requires each publicly owned electric utility to prudently plan for and procure resources, including energy storage systems adequate to meet the 2015 and 2020 targets, to provide reliable electric service to its customers.

This bill would require begin delete the commission, by March 1, 2017, to require end delete load-serving entities, in developing and updating their integrated resource plans, to consider the begin insert full end insert benefits of procuring energy storage systems and begin delete to give priority to procuring end delete begin insert would require the commission, in approving the plans, to require the procurement of end insert energy storage systems begin delete over end delete begin insert before end insert fossil-fuel-based begin delete generation. end delete begin insert generation in specified circumstances. end insert The bill would require begin delete the commission on or before October 1, 2017, to require end delete electrical begin delete corporations end delete begin insert corporations, by October 1, 2017, end insert to develop appropriate tariffs begin insert or programs end insert to provide incentives to customers to install grid-connected energy storage systems on the customer side of the electrical meter. begin insert The bill would require the commission to adopt appropriate targets for each load-serving entity to procure viable and cost-effective energy storage systems to be achieved by December 31, 2030, as specified. end insert Because a violation of an order, decision, rule, direction, demand, or requirements of a commission is a crime, this bill would impose a state-mandated local program. The bill would require the governing board of each local publicly owned electric utility, in planning for future procurement of resources, to consider the benefits of procuring energy storage systems and to begin delete give priority to procuring end delete begin insert procure end insert energy storage systems begin delete over end delete begin insert before end insert fossil-fuel-based begin delete generation. end delete begin insert generation in specified circumstances. The bill would require the governing boards, by July 1, 2018, to adopt appropriate targets for the utility to procure viable and cost-effective energy storage systems to be achieved by December 31, 2030. end insert Because this bill would impose additional requirements on the governing board of a local publicly owned electric utility, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin delete

SECTION 1.  

Section 454.53 is added to the Public Utilities
Code, to read:

454.53.  

On or before March 1, 2017, the commission shall, in
a new proceeding or in an existing proceeding, require load-serving
entities, in developing and updating their integrated resource plans
as required by Section 454.52, to consider the benefits of procuring
energy storage systems, as defined in Section 2835, and to give
priority to procuring energy storage systems over fossil-fuel-based
generation.

end delete

begin delete

SEC. 2.  

Section 455.6 is added to the Public Utilities Code, to
read:

455.6.  

On or before October 1, 2017, the commission shall, in
a new proceeding or in an existing proceeding, require each
electrical corporation to develop appropriate tariffs to provide
incentives to customers of the electrical corporation to install
energy storage systems on the customer side of an electric meter
that is connected to the electric grid.

end delete

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 454.53 is added to the end insert begin insert Public Utilities
Code end insert begin insert , to read: end insert

begin insert

begin insert 454.53. end insert   

The commission shall require load-serving entities, in
developing and updating their integrated resource plans pursuant
to Section 454.52, to consider the full benefits of procuring energy
storage systems, as defined in Section 2835. In approving an
integrated resource plan, the commission shall require that, to the
extent energy storage systems can meet resource needs as well as
or better than fossil-fuel-based generation at reasonably equivalent
or lower costs, the plans provide for the procurement of energy
storage systems before fossil-fuel-based generation.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 455.6 is added to the end insert begin insert Public Utilities Code end insert begin insert , to
read: end insert

begin insert

begin insert 455.6. end insert   

The commission shall, in a new or existing proceeding,
require each electrical corporation, by October 1, 2017, to propose
new tariffs or programs to provide incentives to customers of the
electrical corporation for installing energy storage systems on the
customer side of an electric meter that is connected to the electrical
grid.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 2836.1 is added to the end insert begin insert Public Utilities Code end insert begin insert ,
to read: end insert

begin insert

begin insert 2836.1. end insert   

(a) (1) On or before January 1, 2018, the commission
shall adopt appropriate targets for each load-serving entity to
procure viable and cost-effective energy storage systems to be
achieved by December 31, 2030. Energy storage systems procured
pursuant to the targets shall be limited to those that reduce the
need for fossil-fuel-based generation, provide benefits to the
electrical grid, or support the integration of eligible renewable
energy resources procured pursuant to the California Renewables
Portfolio Standard Program (Article 16 (commencing with Section
399.11) of Chapter 2.3 of Part 1).

(2) This subdivision does not prohibit the commission’s
evaluation and approval of any application for funding or recovery
for costs of any ongoing or new development, trial, or testing of
energy storage projects or technologies outside the targets required
by this chapter.

(b) On or before July 1, 2018, the governing board of each local
publicly owned electric utility shall adopt appropriate targets for
the utility to procure viable and cost-effective energy storage
systems to be achieved by December 31, 2030. The governing
board may consider a variety of policies to encourage the
cost-effective deployment of energy storage systems to reach the
targets, including refinement of existing procurement methods to
properly value energy storage systems.

end insert

begin delete SEC. 3. end delete

begin insert SEC. 4. end insert   

Section 9620.5 is added to the Public Utilities Code,
to read:

9620.5.  

The governing board of each local publicly owned
electric utility, in planning for future procurement of resources,
shall consider the benefits of procuring energy storage systems,
as defined in Section 2835, begin delete and shall give priority to procuring
energy storage systems over fossil-fuel-based generation. end delete begin insert and, to
the extent energy storage systems can meet resource needs as well
as or better than fossil-fuel-based generation at reasonably
equivalent or lower costs, procure energy storage systems before
fossil-fuel-based generation. end insert

begin delete SEC. 4. end delete

begin insert SEC. 5. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
a local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act or because costs that may be
incurred by a local agency or school district will be incurred
because this act creates a new crime or infraction, eliminates a
crime or infraction, or changes the penalty for a crime or infraction,
within the meaning of Section 17556 of the Government Code, or
changes the definition of a crime within the meaning of Section 6
of Article XIII B of the California Constitution.