Amended in Assembly August 31, 2016

Amended in Senate April 12, 2016

Senate Bill No. 1393

Introduced by Senator De León

February 19, 2016

An act to amend Section 44258.5 of the Health and Safety Code, to amend begin delete Sections end delete begin insert Section end insert 25302.2 begin delete and 25327 end delete of the Public Resources Code, and to amend Sections 399.11, begin insert 399.12, 399.30, end insert 400, begin insert 454.51, 9508, end insert and 9621 of the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

SB 1393, as amended, De León. Energy efficiency and pollution reduction.

(1) Existing law requires the State Energy Resources Conservation and Development Commission (Energy Commission) to compile and adopt an integrated energy policy report every 2 years and requires the report to include an overview of major energy trends and issues facing the state. As part of the 2019 edition of the report, existing law requires the Energy Commission to evaluate the actual energy efficiency savings from negative therm interactive effects generated as a result of electricity efficiency improvements.

This bill would additionally require the Energy Commission to include that evaluation in each report adopted after 2019.

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(2) Existing law defines “eligible renewable energy resource” for the purposes of the renewable energy portfolio standard. Existing law provides that a facility engaged in the combustion of municipal solid waste shall not be considered as an eligible renewable energy resource. Existing law also provides that electricity generated by a facility engaged in the combustion of municipal solid waste shall not result in the creation of a renewable energy credit. However, these provisions do not apply, under specified circumstances, to a facility located in Stanislaus County.

end insert begin insert

This bill would modify the exception for the facility located in Stanislaus County, as specified.

end insert begin insert

(3) Existing law requires each local publicly owned electric utility to adopt and implement a renewable energy resources procurement plan that requires the utility to procure a minimum quantity of electricity products from eligible renewable energy resources, with various required percentages applicable over time, as specified. Existing law provides various exemptions from minimum renewable energy resources procurement requirements for certain local publicly owned electric utilities relying on hydroelectric generation.

end insert begin insert

This bill would modify certain exemptions from the minimum renewable energy resources procurement requirements relating to hydroelectric generation, as specified.

end insert begin delete

(2)

end delete begin insert

(4) Existing law requires each local publicly owned electric utility to post notice whenever its governing body will deliberate in public on its renewable energy resources procurement plan, and requires the utility to also notify and provide certain information to the Energy Commission in that regard.

end insert begin insert

This bill would delete this requirement for a local publicly owned electric utility to notify and report to the Energy Commission.

end insert

begin insert (5) end insert  Existing law requires the Public Utilities Commission and the begin delete State Energy Resources Conservation and Development Commission (Energy Commission) end delete begin insert Energy Commission end insert to review specified programs overseen by the Public Utilities Commission and the Energy Commission and make recommendations to advance state clean energy and pollution reduction objectives and provide benefits to disadvantaged communities.

This bill would additionally require the begin delete Public Utilities Commission and the end delete Energy Commission to review programs of the same type overseen by academia and the private and nonprofit sectors.

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(6) Existing law requires the Public Utilities Commission to identify a diverse and balanced portfolio of resources needed to ensure a reliable electricity supply that provides optimal integration of renewable energy in a cost-effective manner, and specifies the respective roles of electrical corporations and community choice aggregators in satisfying the portfolio needs for renewable integration. Existing law provides that all costs resulting from nonperformance shall be borne by the electrical corporation or community choice aggregator responsible for them.

end insert begin insert

This bill would require the commission to ensure that all costs resulting from nonperformance to satisfy the need for renewable integration shall be borne by the electrical corporation or community choice aggregator that failed to perform.

end insert begin delete

(3)

end delete

begin insert (7) end insert  This bill would make various other changes to provisions relating to energy efficiency and pollution reduction.

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

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

SECTION 1.  

Section 44258.5 of the Health and Safety Code
is amended to read:

44258.5.  

(a) For the purposes of this section, the following
terms mean the following:

(1) “Local publicly owned electric utility” has the same meaning
as defined in Section 224.3 of the Public Utilities Code.

(2) “Retail seller” has the same meaning as set forth in
subdivision (j) of Section 399.12 of the Public Utilities Code.

(3) “Transportation electrification” has the same meaning as
set forth in Section 237.5 of the Public Utilities Code.

(b) The state board shall identify and adopt appropriate policies,
rules, or regulations to remove regulatory disincentives preventing
retail sellers and local publicly owned electric utilities from
facilitating the achievement of greenhouse gas emission reductions
in other sectors through increased investments in transportation
electrification. Policies to be considered shall include, but are not
limited to, an allocation of greenhouse gas emissions allowances
to retail sellers and local publicly owned electric utilities, or other
regulatory mechanisms, to account for increased greenhouse gas
emissions in the electric sector from transportation electrification.

SEC. 2.  

Section 25302.2 of the Public Resources Code is
amended to read:

25302.2.  

As part of the 2019 edition of the integrated energy
policy report, and as part of each integrated energy policy report
adopted biennially thereafter, the commission shall evaluate the
actual energy efficiency savings, as defined in Section 25310, from
negative therm interactive effects generated as a result of electricity
efficiency improvements.

begin delete

SEC. 3.  

Section 25327 of the Public Resources Code is
amended to read:

25327.  

(a) The Legislature finds and declares all of the
following:

(1) There is insufficient information available to fully realize
the potential of solar photovoltaic energy generation to serve
low-income customers, including those in disadvantaged
communities.

(2) There is insufficient understanding of the barriers to access
for low-income customers to all forms of renewable energy being
generated in the state.

(3) There is insufficient understanding of the barriers to access
for low-income customers to energy efficiency investments.

(4) There is insufficient understanding of the barriers to access
for low-income customers to zero-emission and near-zero-emission
transportation options.

(b) On or before January 1, 2017, the commission, with input
from the environmental justice advisory committee established
pursuant to Section 38591 of the Health and Safety Code, other
relevant state agencies, and the public, shall conduct and complete
a study on both of the following:

(1) Barriers to, and opportunities for, solar photovoltaic energy
generation as well as barriers to, and opportunities for, access to
other renewable energy by low-income customers.

(2) Barriers to contracting opportunities for local small
businesses in disadvantaged communities.

(c) On or before January 1, 2017, the commission, with input
from the environmental justice advisory committee established
pursuant to Section 38591 of the Health and Safety Code, other
relevant state agencies, and the public, shall develop and publish
a study on barriers for low-income customers to energy efficiency
and weatherization investments, including those in disadvantaged
communities, as well as recommendations on how to increase
access to energy efficiency and weatherization investments to
low-income customers.

(d) On or before January 1, 2017, the State Air Resources Board,
in consultation with the commission and with input from the
environmental justice advisory committee established pursuant to
Section 38591 of the Health and Safety Code, other relevant state
agencies, and the public, shall develop and publish a study on
barriers for low-income customers to zero-emission and
near-zero-emission transportation options, including those in
disadvantaged communities, as well as recommendations on how
to increase access to zero-emission and near-zero-emission
transportation options to low-income customers, including those
in disadvantaged communities.

end delete

begin delete SEC. 4. end delete

begin insert SEC. 3. end insert   

Section 399.11 of the Public Utilities Code is amended
to read:

399.11.  

The Legislature finds and declares all of the following:

(a) In order to attain a target of generating 20 percent of total
retail sales of electricity in California from eligible renewable
energy resources by December 31, 2013, 33 percent by December
31, 2020, and 50 percent by December 31, 2030, it is the intent of
the Legislature that the commission and the Energy Commission
implement the California Renewables Portfolio Standard Program
described in this article.

(b) Achieving the renewables portfolio standard through the
procurement of various electricity products from eligible renewable
energy resources is intended to provide unique benefits to
California, including all of the following, each of which
independently justifies the program:

(1) Displacing fossil fuel consumption within the state.

(2) Adding new electrical generating facilities in the
transmission network within the Western Electricity Coordinating
Council service area.

(3) Reducing air pollution, particularly criteria pollutant
emissions and toxic air contaminants, in the state.

(4) Meeting the state’s climate change goals by reducing
emissions of greenhouse gases associated with electrical generation.

(5) Promoting stable retail rates for electric service.

(6) Meeting the state’s need for a diversified and balanced
energy generation portfolio.

(7) Assistance with meeting the state’s resource adequacy
requirements.

(8) Contributing to the safe and reliable operation of the
electrical grid, including providing predictable electrical supply,
voltage support, lower line losses, and congestion relief.

(9) Implementing the state’s transmission and land use planning
activities related to development of eligible renewable energy
resources.

(c) The California Renewables Portfolio Standard Program is
intended to complement the Renewable Energy Resources Program
administered by the Energy Commission and established pursuant
to Chapter 8.6 (commencing with Section 25740) of Division 15
of the Public Resources Code.

(d) New and modified electric transmission facilities may be
necessary to facilitate the state achieving its renewables portfolio
standard targets.

(e) (1) Supplying electricity to California end-use customers
that is generated by eligible renewable energy resources is
necessary to improve California’s air quality and public health,
particularly in disadvantaged communities identified pursuant to
Section 39711 of the Health and Safety Code, and the commission
shall ensure rates are just and reasonable, and are not significantly
affected by the procurement requirements of this article. This
electricity may be generated anywhere in the interconnected grid
that includes many states, and areas of both Canada and Mexico.

(2) This article requires generating resources located outside of
California that are able to supply that electricity to California
end-use customers to be treated identically to generating resources
located within the state, without discrimination.

(3) California electrical corporations have already executed,
and the commission has approved, power purchase agreements
with eligible renewable energy resources located outside of
California that will supply electricity to California end-use
customers. These resources will fully count toward meeting the
renewables portfolio standard procurement requirements.

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begin insert SEC. 4. end insert   

end insert

begin insert Section 399.12 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

399.12.  

For purposes of this article, the following terms have
the following meanings:

(a) “Conduit hydroelectric facility” means a facility for the
generation of electricity that uses only the hydroelectric potential
of an existing pipe, ditch, flume, siphon, tunnel, canal, or other
manmade conduit that is operated to distribute water for a
beneficial use.

(b) “Balancing authority” means the responsible entity that
integrates resource plans ahead of time, maintains load-interchange
generation balance within a balancing authority area, and supports
interconnection frequency in real time.

(c) “Balancing authority area” means the collection of
generation, transmission, and loads within the metered boundaries
of the area within which the balancing authority maintains the
electrical load-resource balance.

(d) “California balancing authority” is a balancing authority
with control over a balancing authority area primarily located in
this state and operating for retail sellers and local publicly owned
electric utilities subject to the requirements of this article and
includes the Independent System Operator (ISO) and a local
publicly owned electric utility operating a transmission grid that
is not under the operational control of the ISO. A California
balancing authority is responsible for the operation of the
transmission grid within its metered boundaries which is not limited
by the political boundaries of the State of California.

(e) “Eligible renewable energy resource” means an electrical
generating facility that meets the definition of a “renewable
electrical generation facility” in Section 25741 of the Public
Resources Code, subject to the following:

(1) (A) An existing small hydroelectric generation facility of
30 megawatts or less shall be eligible only if a retail seller or local
publicly owned electric utility procured the electricity from the
facility as of December 31, 2005. A new hydroelectric facility that
commences generation of electricity after December 31, 2005, is
not an eligible renewable energy resource if it will cause an adverse
impact on instream beneficial uses or cause a change in the volume
or timing of streamflow.

(B) Notwithstanding subparagraph (A), a conduit hydroelectric
facility of 30 megawatts or less that commenced operation before
January 1, 2006, is an eligible renewable energy resource. A
conduit hydroelectric facility of 30 megawatts or less that
commences operation after December 31, 2005, is an eligible
renewable energy resource so long as it does not cause an adverse
impact on instream beneficial uses or cause a change in the volume
or timing of streamflow.

(C) A facility approved by the governing board of a local
publicly owned electric utility prior to June 1, 2010, for
procurement to satisfy renewable energy procurement obligations
adopted pursuant to former Section 387, shall be certified as an
eligible renewable energy resource by the Energy Commission
pursuant to this article, if the facility is a “renewable electrical
generation facility” as defined in Section 25741 of the Public
Resources Code.

(D) (i) A small hydroelectric generation unit with a nameplate
capacity not exceeding 40 megawatts that is operated as part of a
water supply or conveyance system is an eligible renewable energy
resource only for the retail seller or local publicly owned electric
utility that procured the electricity from the unit as of December
31, 2005. No unit shall be eligible pursuant to this subparagraph
if an application for certification is submitted to the Energy
Commission after January 1, 2013. Only one retail seller or local
publicly owned electric utility shall be deemed to have procured
electricity from a given unit as of December 31, 2005.

(ii) Notwithstanding clause (i), a local publicly owned electric
utility that meets the criteria of subdivision (j) of Section 399.30
may sell to another local publicly owned electric utility electricity
from small hydroelectric generation units that qualify as eligible
renewable energy resources under clause (i), and that electricity
may be used by the local publicly owned electric utility that
purchased the electricity to meet its renewables portfolio standard
procurement requirements. The total of all those sales from the
utility shall be no greater than 100,000 megawatthours of
electricity.

(iii) The amendments made to this subdivision by the act adding
this subparagraph are intended to clarify existing law and apply
from December 10, 2011.

(2) (A) A facility engaged in the combustion of municipal solid
waste shall not be considered an eligible renewable energy
resource.

(B) Subparagraph (A) does not apply to begin delete contracts entered into end delete
begin insert generation end insert before January 1, 2017, begin delete for the procurement of
renewable energy resources end delete from a facility located in Stanislaus
County that was operational prior to September 26, 1996.

(f) “Procure” means to acquire through ownership or contract.

(g) “Procurement entity” means any person or corporation
authorized by the commission to enter into contracts to procure
eligible renewable energy resources on behalf of customers of a
retail seller pursuant to subdivision (f) of Section 399.13.

(h) (1) “Renewable energy credit” means a certificate of proof
associated with the generation of electricity from an eligible
renewable energy resource, issued through the accounting system
established by the Energy Commission pursuant to Section 399.25,
that one unit of electricity was generated and delivered by an
eligible renewable energy resource.

(2) “Renewable energy credit” includes all renewable and
environmental attributes associated with the production of
electricity from the eligible renewable energy resource, except for
an emissions reduction credit issued pursuant to Section 40709 of
the Health and Safety Code and any credits or payments associated
with the reduction of solid waste and treatment benefits created
by the utilization of biomass or biogas fuels.

(3) (A) Electricity generated by an eligible renewable energy
resource attributable to the use of nonrenewable fuels, beyond a
de minimis quantity used to generate electricity in the same process
through which the facility converts renewable fuel to electricity,
shall not result in the creation of a renewable energy credit. The
Energy Commission shall set the de minimis quantity of
nonrenewable fuels for each renewable energy technology at a
level of no more than 2 percent of the total quantity of fuel used
by the technology to generate electricity. The Energy Commission
may adjust the de minimis quantity for an individual facility, up
to a maximum of 5 percent, if it finds that all of the following
conditions are met:

(i) The facility demonstrates that the higher quantity of
nonrenewable fuel will lead to an increase in generation from the
eligible renewable energy facility that is significantly greater than
generation from the nonrenewable fuel alone.

(ii) The facility demonstrates that the higher quantity of
nonrenewable fuels will reduce the variability of its electrical
output in a manner that results in net environmental benefits to the
state.

(iii) The higher quantity of nonrenewable fuel is limited to either
natural gas or hydrogen derived by reformation of a fossil fuel.

(B) Electricity generated by a small hydroelectric generation
facility shall not result in the creation of a renewable energy credit
unless the facility meets the requirements of subparagraph (A) or
(D) of paragraph (1) of subdivision (e).

(C) Electricity generated by a conduit hydroelectric generation
facility shall not result in the creation of a renewable energy credit
unless the facility meets the requirements of subparagraph (B) of
paragraph (1) of subdivision (e).

(D) Electricity generated by a facility engaged in the combustion
of municipal solid waste shall not result in the creation of a
renewable energy credit. This subparagraph does not apply to
renewable energy credits that were generated before January 1,
2017, by a facility engaged in the combustion of municipal solid
waste located in Stanislaus County that was operational prior to
September 26, 1996, and sold pursuant to contacts entered into
before January 1, 2017.

(i) “Renewables portfolio standard” means the specified
percentage of electricity generated by eligible renewable energy
resources that a retail seller or a local publicly owned electric utility
is required to procure pursuant to this article.

(j) “Retail seller” means an entity engaged in the retail sale of
electricity to end-use customers located within the state, including
any of the following:

(1) An electrical corporation, as defined in Section 218.

(2) A community choice aggregator. A community choice
aggregator shall participate in the renewables portfolio standard
program subject to the same terms and conditions applicable to an
electrical corporation.

(3) An electric service provider, as defined in Section 218.3.
The electric service provider shall be subject to the same terms
and conditions applicable to an electrical corporation pursuant to
this article. This paragraph does not impair a contract entered into
between an electric service provider and a retail customer prior to
the suspension of direct access by the commission pursuant to
Section 80110 of the Water Code.

(4) “Retail seller” does not include any of the following:

(A) A corporation or person employing cogeneration technology
or producing electricity consistent with subdivision (b) of Section
218.

(B) The Department of Water Resources acting in its capacity
pursuant to Division 27 (commencing with Section 80000) of the
Water Code.

(C) A local publicly owned electric utility.

(k) “WECC” means the Western Electricity Coordinating
Council of the North American Electric Reliability Corporation,
or a successor to the corporation.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 399.30 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

399.30.  

(a) (1) To fulfill unmet long-term generation resource
needs, each local publicly owned electric utility shall adopt and
implement a renewable energy resources procurement plan that
requires the utility to procure a minimum quantity of electricity
products from eligible renewable energy resources, including
renewable energy credits, as a specified percentage of total
kilowatthours sold to the utility’s retail end-use customers, each
compliance period, to achieve the targets of subdivision (c).

(2) Beginning January 1, 2019, a local publicly owned electric
utility subject to Section 9621 shall incorporate the renewable
energy resources procurement plan required by this section as part
of a broader integrated resource plan developed and adopted
pursuant to Section 9621.

(b) The governing board shall implement procurement targets
for a local publicly owned electric utility that require the utility to
procure a minimum quantity of eligible renewable energy resources
for each of the following compliance periods:

(1) January 1, 2011, to December 31, 2013, inclusive.

(2) January 1, 2014, to December 31, 2016, inclusive.

(3) January 1, 2017, to December 31, 2020, inclusive.

(4) January 1, 2021, to December 31, 2024, inclusive.

(5) January 1, 2025, to December 31, 2027, inclusive.

(6) January 1, 2028, to December 31, 2030, inclusive.

(c) The governing board of a local publicly owned electric utility
shall ensure all of the following:

(1) The quantities of eligible renewable energy resources to be
procured for the compliance period from January 1, 2011, to
December 31, 2013, inclusive, are equal to an average of 20 percent
of retail sales.

(2) The quantities of eligible renewable energy resources to be
procured for all other compliance periods reflect reasonable
progress in each of the intervening years sufficient to ensure that
the procurement of electricity products from eligible renewable
energy resources achieves 25 percent of retail sales by December
31, 2016, 33 percent by December 31, 2020, 40 percent by
December 31, 2024, 45 percent by December 31, 2027, and 50
percent by December 31, 2030. The Energy Commission shall
establish appropriate multiyear compliance periods for all
subsequent years that require the local publicly owned electric
utility to procure not less than 50 percent of retail sales of
electricity products from eligible renewable energy resources.

(3) A local publicly owned electric utility shall adopt
procurement requirements consistent with Section 399.16.

(4) Beginning January 1, 2014, in calculating the procurement
requirements under this article, a local publicly owned electric
utility may exclude from its total retail sales the kilowatthours
generated by an eligible renewable energy resource that is credited
to a participating customer pursuant to a voluntary green pricing
or shared renewable generation program. Any exclusion shall be
limited to electricity products that do not meet the portfolio content
criteria set forth in paragraph (2) or (3) of subdivision (b) of Section
399.16. Any renewable energy credits associated with electricity
credited to a participating customer shall not be used for
compliance with procurement requirements under this article, shall
be retired on behalf of the participating customer, and shall not be
further sold, transferred, or otherwise monetized for any purpose.
To the extent possible for generation that is excluded from retail
sales under this subdivision, a local publicly owned electric utility
shall seek to procure those eligible renewable energy resources
that are located in reasonable proximity to program participants.

(d) (1) The governing board of a local publicly owned electric
utility shall adopt procurement requirements consistent with
subparagraph (B) of paragraph (4) of subdivision (a) of, and
subdivision (b) of, Section 399.13.

(2) The governing board of a local publicly owned electric utility
may adopt the following measures:

(A) Conditions that allow for delaying timely compliance
consistent with subdivision (b) of Section 399.15.

(B) Cost limitations for procurement expenditures consistent
with subdivision (c) of Section 399.15.

(e) The governing board of the local publicly owned electric
utility shall adopt a program for the enforcement of this article.
The program shall be adopted at a publicly noticed meeting offering
all interested parties an opportunity to comment. Not less than 30
days’ notice shall be given to the public of any meeting held for
purposes of adopting the program. Not less than 10 days’ notice
shall be given to the public before any meeting is held to make a
substantive change to the program.

(f)  begin delete (1) end delete begin delete   end delete Each local publicly owned electric utility shall annually
post notice, in accordance with Chapter 9 (commencing with
Section 54950) of Part 1 of Division 2 of Title 5 of the Government
Code, whenever its governing body will deliberate in public on its
renewable energy resources procurement plan.

begin delete

(2) Contemporaneous with the posting of the notice of a public
meeting to consider the renewable energy resources procurement
plan, the local publicly owned electric utility shall notify the
Energy Commission of the date, time, and location of the meeting
in order to enable the Energy Commission to post the information
on its Internet Web site. This requirement is satisfied if the local
publicly owned electric utility provides the uniform resource
locator (URL) that links to this information.

(3) Upon distribution to its governing body of information
related to its renewable energy resources procurement status and
future plans, for its consideration at a noticed public meeting, the
local publicly owned electric utility shall make that information
available to the public and shall provide the Energy Commission
with an electronic copy of the documents for posting on the Energy
Commission’s Internet Web site. This requirement is satisfied if
the local publicly owned electric utility provides the uniform
resource locator (URL) that links to the documents or information
regarding other manners of access to the documents.

end delete

(g) A public utility district that receives all of its electricity
pursuant to a preference right adopted and authorized by the United
States Congress pursuant to Section 4 of the Trinity River Division
Act of August 12, 1955 (Public Law 84-386) shall be in compliance
with the renewable energy procurement requirements of this article.

(h) For a local publicly owned electric utility that was in
existence on or before January 1, 2009, that provides retail electric
service to 15,000 or fewer customer accounts in California, and is
interconnected to a balancing authority located outside this state
but within the WECC, an eligible renewable energy resource
includes a facility that is located outside California that is
connected to the WECC transmission system, if all of the following
conditions are met:

(1) The electricity generated by the facility is procured by the
local publicly owned electric utility, is delivered to the balancing
authority area in which the local publicly owned electric utility is
located, and is not used to fulfill renewable energy procurement
requirements of other states.

(2) The local publicly owned electric utility participates in, and
complies with, the accounting system administered by the Energy
Commission pursuant to this article.

(3) The Energy Commission verifies that the electricity
generated by the facility is eligible to meet the renewables portfolio
standard procurement requirements.

(i) Notwithstanding subdivision (a), for a local publicly owned
electric utility that is a joint powers authority of districts established
pursuant to state law on or before January 1, 2005, that furnish
electric services other than to residential customers, and is formed
pursuant to the Irrigation District Law (Division 11 (commencing
with Section 20500) of the Water Code), the percentage of total
kilowatthours sold to the district’s retail end-use customers, upon
which the renewables portfolio standard procurement requirements
in subdivision (b) are calculated, shall be based on the authority’s
average retail sales over the previous seven years. If the authority
has not furnished electric service for seven years, then the
calculation shall be based on average retail sales over the number
of completed years during which the authority has provided electric
service.

(j) A local publicly owned electric utility in a city and county
that only receives greater than 67 percent of its electricity sources
from hydroelectric generation located within the state that it owns
and operates, and that does not meet the definition of a “renewable
electrical generation facility” pursuant to Section 25741 of the
Public Resources Code, shall be required to procure eligible
renewable energy resources, including renewable energy credits,
to meet only the electricity demands unsatisfied by its hydroelectric
generation in any given year, in order to satisfy its renewable
energy procurement requirements.

begin delete

(k) (1) A local publicly owned electric utility that receives
greater than 50 percent of its annual retail sales from its own
hydroelectric generation that is not an eligible renewable energy
resource shall not be required to procure additional eligible
renewable energy resources in excess of either of the following:

(A) The portion of its retail sales not supplied by its own
hydroelectric generation. For these purposes, retail sales supplied
by an increase in hydroelectric generation resulting from an
increase in the amount of water stored by a dam because the dam
is enlarged or otherwise modified after December 31, 2012, shall
not count as being retail sales supplied by the utility’s own
hydroelectric generation.

(B) The cost limitation adopted pursuant to this section.

(2)

end delete

begin insert (k) end insert   begin insert (1) end insert begin insert   end insert For the purposes of this subdivision, “hydroelectric
generation” means electricity generated from a hydroelectric
facility that satisfies all of the following:

(A) Is owned solely and operated by the local publicly owned
electric utility as of 1967.

(B) Serves a local publicly owned electric utility with a
distribution system demand of less than 150 megawatts.

(C) Involves a contract in which an electrical corporation
receives the benefit of the electric generation through June of 2014,
at which time the benefit reverts back to the ownership and control
of the local publicly owned electric utility.

(D) Has a maximum penstock flow capacity of no more than
3,200 cubic feet per second and includes a regulating reservoir
with a small hydroelectric generation facility producing fewer than
20 megawatts with a maximum penstock flow capacity of no more
than 3,000 cubic feet per second.

begin insert

(2) If, during a year within a compliance period set forth in
subdivision (b), a local publicly owned electric utility receives
greater than 50 percent of its retail sales from its own hydroelectric
generation, it is not required to procure eligible renewable energy
resources that exceed the lesser of the following for that year:

end insert begin insert

(A) The portion of the local publicly owned electric utility’s
retail sales unsatisfied by the local publicly owned electric utility’s
hydroelectric generation. For these purposes, retail sales supplied
by an increase in hydroelectric generation resulting from an
increase in the amount of water stored by a dam because the dam
is enlarged or otherwise modified after December 31, 2012, shall
not count as being retail sales supplied by the utility’s own
hydroelectric generation.

end insert begin insert

(B) The soft target adopted by the Energy Commission for the
intervening years of the relevant compliance period.

end insert begin insert

(C) The cost limitation adopted pursuant to this section.

end insert

(3) This subdivision does not reduce or eliminate any renewable
procurement requirement for any compliance period ending prior
to January 1, 2014.

(4) This subdivision does not require a local publicly owned
electric utility to purchase additional eligible renewable energy
resources in excess of the procurement requirements of subdivision
(c).

begin insert

(5) The Energy Commission shall adjust the total quantities of
eligible renewable energy resources to be procured by a local
publicly owned electric utility for a compliance period to reflect
any reductions required pursuant to paragraph (2).

end insert

(l) (1)  begin delete (A) end delete begin delete   end delete For purposes of this subdivision, “large hydroelectric
generation” means electricity generated from a hydroelectric
facility that is not an eligible renewable energy resource and
provides electricity to a local publicly owned electric utility from
facilities owned by the federal government as a part of the federal
Central Valley Project or a joint powers agency formed and created
pursuant to Chapter 5 (commencing with Section 6500) of Division
7 of Title 1 of the Government Code.

begin delete

(B) Large hydroelectric generation does not include any resource
that meets the definition of hydroelectric generation set forth in
subdivision (k).

end delete

(2) If, during a year within a compliance period set forth in
subdivision (b), a local publicly owned electric utility receives
greater than 50 percent of its retail sales from large hydroelectric
generation, it is not required to procure eligible renewable energy
resources that exceed the lesser of the following for that year:

(A) The portion of the local publicly owned electric begin delete utility end delete
begin insert utility’s end insert retail sales unsatisfied by the local publicly owned electric
utility's large hydroelectric generation.

(B) The soft target adopted by the Energy Commission for the
intervening begin delete year end delete begin insert years end insert of the relevant compliance period.

(3) Except for an existing agreement effective as of January 1,
2015, or extension or renewal of that agreement, any new
procurement commitment shall not be eligible to count towards
the determination that the local publicly owned electric utility
receives more than 50 percent of its retail sales from large
hydroelectric generation in any year.

(4) The Energy Commission shall adjust the total quantities of
eligible renewable energy resources to be procured by a local
publicly owned electric utility for a compliance period to reflect
any reductions required pursuant to paragraph (2).

(5) This subdivision does not modify the compliance obligation
of a local publicly owned electric utility to satisfy the requirements
of subdivision (c) of Section 399.16.

(m) (1) (A) For purposes of this subdivision, “unavoidable
long-term contracts and ownership agreements” means
commitments for electricity from a coal-fired powerplant, located
outside the state, originally entered into by a local publicly owned
electric utility before June 1, 2010, that is not subsequently
modified to result in an extension of the duration of the agreement
or result in an increase in total quantities of energy delivered during
any compliance period set forth in subdivision (b).

(B) The governing board of a local publicly owned electric
utility shall demonstrate in its renewable energy resources
procurement plan required pursuant to subdivision (f) that any
cancellation or divestment of the commitment would result in
significant economic harm to its retail customers that cannot be
substantially mitigated through resale, transfer to another entity,
early closure of the facility, or other feasible measures.

(2) For the compliance period set forth in paragraph (4) of
subdivision (b), a local publicly owned electric utility meeting the
requirement of subparagraph (B) of paragraph (1) may adjust its
renewable energy procurement targets to ensure that the
procurement of additional electricity from eligible renewable
energy resources, in combination with the procurement of
electricity from unavoidable long-term contracts and ownership
agreements, does not exceed the total retail sales of the local
publicly owned electric utility during that compliance period. The
local publicly owned electric utility may limit its procurement of
eligible renewable energy resources for that compliance period to
no less than an average of 33 percent of its retail sales.

(3) The Energy Commission shall approve any reductions in
procurement targets proposed by a local publicly owned electric
utility if it determines that the requirements of this subdivision are
satisfied.

(n) A local publicly owned electric utility shall retain discretion
over both of the following:

(1) The mix of eligible renewable energy resources procured
by the utility and those additional generation resources procured
by the utility for purposes of ensuring resource adequacy and
reliability.

(2) The reasonable costs incurred by the utility for eligible
renewable energy resources owned by the utility.

(o) The Energy Commission shall adopt regulations specifying
procedures for enforcement of this article. The regulations shall
include a public process under which the Energy Commission may
issue a notice of violation and correction against a local publicly
owned electric utility for failure to comply with this article, and
for referral of violations to the State Air Resources Board for
penalties pursuant to subdivision (n).

(p) (1) Upon a determination by the Energy Commission that
a local publicly owned electric utility has failed to comply with
this article, the Energy Commission shall refer the failure to comply
with this article to the State Air Resources Board, which may
impose penalties to enforce this article consistent with Part 6
(commencing with Section 38580) of Division 25.5 of the Health
and Safety Code. Any penalties imposed shall be comparable to
those adopted by the commission for noncompliance by retail
sellers.

(2) Any penalties collected by the State Air Resources Board
pursuant to this article shall be deposited in the Air Pollution
Control Fund and, upon appropriation by the Legislature, shall be
expended for reducing emissions of air pollution or greenhouse
gases within the same geographic area as the local publicly owned
electric utility.

begin delete SEC. 5. end delete

begin insert SEC. 6. end insert   

Section 400 of the Public Utilities Code is amended
to read:

400.  

The commission and the Energy Commission shall do all
of the following in furtherance of meeting the state’s clean energy
and pollution reduction objectives:

(a) Take into account the use of distributed generation to the
extent that it provides economic and environmental benefits in
disadvantaged communities identified pursuant to Section 39711
of the Health and Safety Code.

(b) Take into account the opportunities to decrease costs and
increase benefits, including pollution reduction and grid integration,
using renewable and nonrenewable technologies with zero or
lowest feasible emissions of greenhouse gases, criteria pollutants,
and toxic air contaminants onsite in proceedings associated with
meeting the objectives.

(c) Where feasible, authorize procurement of resources to
provide grid reliability services that minimize reliance on system
power and fossil fuel resources and, where feasible, cost effective,
and consistent with other state policy objectives, increase the use
of large- and small-scale energy storage with a variety of
technologies, targeted energy efficiency, demand response,
including, but not limited to, automated demand response, eligible
renewable energy resources, or other renewable and nonrenewable
technologies with zero or lowest feasible emissions of greenhouse
gases, criteria pollutants, and toxic air contaminants onsite to
protect system reliability.

(d)  begin insert (1) end insert begin insert   end insert Review technology incentive, research, development,
deployment, and market facilitation programs overseen by the begin delete commission, end delete begin insert commission and end insert the Energy begin delete Commission, academia,
and the private and nonprofit sectors end delete begin insert Commission end insert and make
recommendations to advance state clean energy and pollution
reduction objectives and provide benefits to disadvantaged
communities identified pursuant to Section 39711 of the Health
and Safety Code.

begin insert

(2) The Energy Commission shall review technology incentive,
research, development, deployment, and market facilitation
programs operating in California and overseen by academia and
the private and nonprofit sectors, and make recommendations to
advance state clean energy and pollution reduction objectives and
provide benefits to disadvantaged communities identified pursuant
to Section 39711 of the Health and Safety Code.

end insert

(e) To the extent feasible and consistent with the state and
federal constitutions, give first priority to the manufacture and
deployment of clean energy and pollution reduction technologies
that create employment opportunities in California, including high
wage, highly skilled employment opportunities, and increased
investment in the state.

(f) Establish a publicly available tracking system to provide
up-to-date information at least once annually on progress toward
meeting the clean energy and pollution reduction goals of the Clean
Energy and Pollution Reduction Act of 2015.

(g) Establish an advisory group consisting of representatives
from disadvantaged communities identified pursuant to Section
39711 of the Health and Safety Code. The advisory group shall
review and provide advice on programs proposed to achieve clean
energy and pollution reduction and determine whether those
proposed programs will be effective and useful in disadvantaged
communities.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 454.51 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

454.51.  

The commission shall do all of the following:

(a) Identify a diverse and balanced portfolio of resources needed
to ensure a reliable electricity supply that provides optimal
integration of renewable energy in a cost-effective manner. The
portfolio shall rely upon zero carbon-emitting resources to the
maximum extent reasonable and be designed to achieve any
statewide greenhouse gas emissions limit established pursuant to
the California Global Warming Solutions Act of 2006 (Division
25.5 (commencing with Section 38500) of the Health and Safety
Code) or any successor legislation.

(b) Direct each electrical corporation to include, as part of its
proposed procurement plan, a strategy for procuring best-fit and
least-cost resources to satisfy the portfolio needs identified by the
commission pursuant to subdivision (a).

(c) Ensure that the net costs of any incremental renewable energy
integration resources procured by an electrical corporation to satisfy
the need identified in subdivision (a) are allocated on a fully
nonbypassable basis consistent with the treatment of costs
identified in paragraph (2) of subdivision (c) of Section 365.1.

(d) Permit community choice aggregators to submit proposals
for satisfying their portion of the renewable integration need
identified in subdivision (a). If the commission finds this need is
best met through long-term procurement commitments for
resources, community choice aggregators shall also be required
to make long-term commitments for resources. The commission
shall approve proposals pursuant to this subdivision if it finds all
of the following:

(1) The resources proposed by a community choice aggregator
will provide equivalent integration of renewable energy.

(2) The resources proposed by a community choice aggregator
will promote the efficient achievement of state energy policy
objectives, including reductions in greenhouse gas emissions.

(3) Bundled customers of an electrical corporation will be
indifferent from the approval of the community choice aggregator
proposals.

begin delete

(4) All costs resulting from nonperformance will be borne by
the electrical corporation or community choice aggregator
responsible for them.

end delete begin insert

(e) Ensure that all costs resulting from nonperformance to
satisfy the need in subdivision (a) or (d), as applicable, shall be
borne by the electrical corporation or community choice
aggregator that failed to perform.

end insert

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 9508 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

9508.  

(a) In developing the rules and procedures specified in
this section and in Section 9507, the Energy Commission shall
seek to minimize the reporting burden and cost of reporting that
it imposes on local publicly owned electric utilities.

(b) A local publicly owned electric utility shall annually submit
to the Energy Commission documentation regarding eligible
renewable energy resources procurement contracts that it executed
during the prior year, as follows:

(1) A description of the eligible renewable energy resource,
including the duration of the contract or electricity purchase
agreement.

(2) A description and identification of the electrical generating
facility providing the eligible renewable energy resource under
the contract.

(3) An estimate of the percentage increase in the utility’s total
retail sales of electricity from eligible renewable energy resources
that will result from the contract.

(c) A local publicly owned electric utility shall annually submit
to the Energy Commission documentation regarding the utility’s
progress toward attaining the renewables portfolio standard
established pursuant to Section begin delete 399.30, and its expenditures of
public goods funds collected pursuant to Section 385, for
development of eligible renewable energy resources, including a
description of programs, sources of funding, expected results, and
actual results. end delete begin insert 399.30. end insert

(d) A local publicly owned electric utility shall, on an annual
basis, make available to the Legislature and the Energy
Commission information relating to the utility’s solar initiative
program established pursuant to Section 2854, including the rated
generating capacity of installed solar energy systems receiving
monetary incentives through the utility’s program, the total number
of solar energy systems installed, the total number of applications
for the utility’s program, the amount of monetary incentives
awarded, and the contribution toward the program goals of the
California Solar Initiative (Article 1 (commencing with Section
2851) of Chapter 9 of Part 2 of Division 1).

(e) For the purposes of this section, “eligible renewable energy
resource,” “renewables portfolio standard,” and “procure” have
the same meanings as these terms have in the California
Renewables Portfolio Standard Program (Article 16 (commencing
with Section 399.11) of Chapter 2.3 of Part 1 of Division 1).

begin delete SEC. 6. end delete

begin insert SEC. 9. end insert   

Section 9621 of the Public Utilities Code is amended
to read:

9621.  

(a) This section shall apply to a local publicly owned
electric utility with an annual electrical demand exceeding 700
gigawatthours, as determined on a three-year average commencing
January 1, 2013.

(b) On or before January 1, 2019, the governing board of a local
publicly owned electric utility shall adopt an integrated resource
plan and a process for updating the plan at least once every five
years to ensure the utility achieves all of the following:

(1) Meets the greenhouse gas emissions reduction targets
established by the State Air Resources Board, in coordination with
the commission and the Energy Commission, for the electricity
sector and each local publicly-owned electric utility that reflect
the electricity sector’s percentage in achieving the economywide
greenhouse gas emissions reductions of 40 percent from 1990
levels by 2030.

(2) Ensures procurement of at least 50 percent eligible renewable
energy resources by 2030 consistent with Article 16 (commencing
with Section 399.11) of Chapter 2.3 of Part 1 of Division 1.

(3) Meets the goals specified in subparagraphs (D) to (H),
inclusive, of paragraph (1) of subdivision (a) of Section 454.52,
and the goal specified in subparagraph (C) of paragraph (1) of
subdivision (a) of Section 454.52, as that goal is applicable to each
local publicly owned electric utility. A local publicly owned electric
utility shall not, solely by reason of this paragraph, be subject to
requirements otherwise imposed on electrical corporations.

(c) (1) The integrated resource plan shall address procurement
for the following:

(A) Energy efficiency and demand response resources pursuant
to Section 9615.

(B) Energy storage requirements pursuant to Chapter 7.7
(commencing with Section 2835) of Part 2 of Division 1.

(C) Transportation electrification.

(D) A diversified procurement portfolio consisting of both
short-term and long-term electricity, electricity-related, and demand
response products.

(E) The resource adequacy requirements established pursuant
to Section 9620.

(2) (A) The governing board of the local publicly owned electric
utility may authorize all source procurement that includes various
resource types, including demand-side resources, supply side
resources, and resources that may be either demand-side resources
or supply side resources, to ensure that the local publicly owned
electric utility procures the optimum resource mix that meets the
objectives of subdivision (b).

(B) The governing board may authorize procurement of resource
types that will reduce overall greenhouse gas emissions from the
electricity sector and meet the other goals specified in subdivision
(b), but due to the nature of the technology or fuel source may not
compete favorably in price against other resources over the time
period of the integrated resource plan.

(d) A local publicly owned electric utility shall satisfy the notice
and public disclosure requirements of subdivision (f) of Section
399.30 with respect to any integrated resource plan or plan update
it considers.