Amended in Assembly August 1, 2016

Amended in Senate May 31, 2016

Amended in Senate April 26, 2016

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 begin delete 454.53, end delete 455.6, 2836.1, 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. begin delete 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. end delete 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 begin delete would require load-serving entities, in developing and updating their integrated resource plans, to consider the benefits of procuring energy storage systems and would require the commission, in approving the plans, to require the procurement of energy storage systems before fossil-fuel-based generation in specified circumstances. The bill would require electrical corporations, by October 1, 2017, to develop appropriate tariffs or programs to provide incentives for customers to install grid-connected energy storage systems on the customer side of the electrical meter. The bill end delete would require the commission to determine appropriate targets, if any, for each load-serving entity to procure viable and cost-effective energy storage systems to be achieved by December 31, 2030, as specified. begin insert The bill would require the commission to require electrical corporations to offer time-of-use pricing or dynamic pricing to customers using energy storage at their premises. end insert Because a violation of an order, decision, rule, direction, demand, or requirement of the commission begin delete is end delete begin insert would be end insert a crime, this bill would impose a state-mandated local program. The bill would require the governing board of each community choice begin delete aggregator, end delete begin insert aggregator and each publicly owned electric utility, end insert by July 1, 2018, to determine appropriate targets, if any, for the community choice aggregator begin insert or electric utility, as applicable, end insert to procure viable and cost-effective energy storage systems to be achieved by December 31, 2030. 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 procure energy storage systems before fossil-fuel-based generation in specified circumstances. begin delete The bill would require each of those governing boards, by July 1, 2018, or during its next open integrated resource plan process, to determine appropriate targets, if any, for the utility to procure viable and cost-effective energy storage systems to be achieved by December 31, 2030. end delete Because this bill would impose additional requirements on the governing boards of local publicly owned electric utilities and community choice aggregators, 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.  

(a) The commission shall require load-serving entities,
in developing and updating their integrated resource plans pursuant
to Section 454.52, to consider the benefits of procuring energy
storage systems, as defined in Section 2835.

(b) Except as provided in subdivision (c), the commission, in
approving an integrated resource plan for a load-serving entity
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 cost, the plan provide for the
procurement of energy storage systems before fossil-fuel-based
generation.

(c) In certifying an integrated resource plan for a community
choice aggregator, the commission shall act in accordance with
paragraph (3) of subdivision (b) of Section 454.52 and paragraph
(5) of subdivision (a) of Section 366.2.

end delete

begin delete SEC. 2. end delete

begin insert SECTION 1. end insert   

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

455.6.  

The commission begin delete shall, in a new or existing proceeding, end delete
begin insert shall end insert require each electrical begin delete corporation, by October 1, 2017, to
propose new tariffs or programs to provide incentives to customers
of the electrical corporation for installing end delete begin insert corporation to offer
time-of-use pricing or dynamic pricing to customers using end insert energy
storage begin delete systems on the customer side of an electric meter that is
connected to the electrical grid. end delete begin insert at their premises. end insert

begin delete SEC. 3. end delete

begin insert SEC. 2. end insert   

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

2836.1.  

(a) (1) Except as provided in subdivision (b), on or
before January 1, 2018, the commission shall determine appropriate
targets, if any, 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
community choice aggregator shall determine appropriate targets,
if any, for the community choice aggregator 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 cost-effective deployment of energy storage systems
to reach the targets, including refinement of existing procurement
methods to properly value energy storage systems.

(c) On or before July 1, 2018, begin delete or during its next open integrated
resource plan process, end delete the governing board of each local publicly
owned electric utility shall determine appropriate targets, if any,
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.

begin delete SEC. 4. end delete

begin insert SEC. 3. 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, 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.

begin delete SEC. 5. end delete

begin insert SEC. 4. 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.