SB 1453, as introduced, De León. Electrical generation: greenhouse gases emission performance standard.
Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations, while local publicly owned electric utilities are under the direction of their governing boards. Existing law authorizes the PUC to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law prohibits any load-serving entity, consisting of electrical corporations, electric service providers, and community choice aggregators serving end-use customers in the state, and any local publicly owned electric utility, from entering into a long-term financial commitment, as defined, for baseload generation, as defined, unless that baseload generation complies with a greenhouse gases emission performance standard. Existing law requires the PUC, through a rulemaking proceeding and in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and the State Air Resources Board (state board), to establish the greenhouse gases emission performance standard for all baseload generation of load-serving entities. Existing law requires the Energy Commission, at a duly noticed public hearing and in consultation with the PUC and the state board, to establish the greenhouse gases emission performance standard for all baseload generation of local publicly owned electric utilities.
This bill would require the PUC to review any capital expenditure proposed by an electrical corporation for baseload generation that does not comply with the greenhouse gases emission performance standard established by the PUC and to not permit those costs to be recovered in rates if it finds (1) the proposed capital expenditure will materially extend the service life of the baseload generation, (2) cost-effective alternative resources not already owned or contracted for by the electrical corporation would provide superior long-term value to customers and satisfy the greenhouses gases emission performance standard, or (3) the accelerated retirement of the baseload generation unit would promote state and regional goals for the reduction of emissions of greenhouse gases.
Under existing law, an electrical corporation that provides electric service to 75,000 or fewer retail end-use customers in California may file with the PUC a proposal for alternative compliance with the greenhouse gases emission performance standard, which the PUC is authorized to accept upon a showing by the electrical corporation that (1) a majority of the electrical corporation’s retail end-use customers for electric service are located outside of California and (2) the emissions of greenhouse gases to generate electricity for the retail end-use customers of the electrical corporation are subject to a review by the utility regulatory commission of at least one other state in which the electrical corporation provides regulated retail electric service.
This bill would eliminate this alternative compliance option.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 8341 of the Public Utilities Code is
2amended to read:
(a) No load-serving entity or local publicly owned
4electric utility may enter into a long-term financial commitment
5unless any baseload generation supplied under the long-term
6financial commitment complies with the greenhouse gases emission
7performance standard established by the commission, pursuant to
8subdivision (d), for a load-serving entity, or by the Energy
P3 1Commission, pursuant to subdivision (e), for a local publicly owned
2electric utility.
3(b) (1) The commission shall not approve a long-term financial
4commitment by an electrical corporation unless any baseload
5generation supplied under the long-term financial commitment
6complies with the greenhouse gases emission performance standard
7established
by the commission pursuant to subdivision (d).
8(2) The commission shall review any capital expenditure
9proposed by an electrical corporation for baseload generation
10that does not comply with the greenhouse gases emission
11performance standard established by the commission pursuant to
12subdivision (d). The commission shall not permit those costs to be
13recovered in rates if it finds any of the following to be true:
14(A) The proposed capital expenditure will materially extend the
15service life of the baseload generation.
16(B) Cost-effective alternative resources not already owned or
17contracted for by the electrical corporation would provide superior
18long-term value to customers and satisfy the greenhouse gases
19emission performance standard.
20(C) The accelerated retirement of the baseload generation unit
21would promote state and regional goals for the reduction of
22emissions of greenhouse gases.
23(2)
end delete
24begin insert(3)end insert The commission may, in order to enforce this section, review
25any long-term financial commitment proposed to be entered into
26by an electric service provider or a community choice aggregator.
27(3)
end delete
28begin insert(4)end insert The commission shall adopt rules to enforce the requirements
29of this section, for load-serving entities. The commission shall
30adopt procedures, for all load-serving entities, to verify the
31emissions of greenhouse gases from any baseload generation
32supplied under a contract subject to the greenhouse gases
emission
33performance standard to ensure compliance with the standard.
34(4)
end delete
35begin insert(5)end insert In determining whether a long-term financial commitment
36is for baseload generation, the commission shall consider the design
37of the powerplant and the intended use of the powerplant, as
38determined by the commission based upon the electricity purchase
39contract, any certification received from the Energy Commission,
40any other permit or certificate necessary for the operation of the
P4 1powerplant, including a certificate of public convenience and
2necessity, any procurement approval decision for the load-serving
3entity, and any other matter the commission determines is relevant
4under the
circumstances.
5(5)
end delete
6begin insert(6)end insert Costs incurred by an electrical corporation to comply with
7this section, including those costs incurred for electricity purchase
8agreements that are approved by the commission that comply with
9the greenhouse gases emission performance standard, are to be
10treated as procurement costs incurred pursuant to an approved
11procurement plan and the commission shall ensure timely cost
12recovery of those costs pursuant to paragraph (3) of subdivision
13(d) of Section 454.5.
14(6)
end delete
15begin insert(7)end insert A long-term financial commitment entered into through a
16contract approved by the commission, for electricity generated by
17a zero- or low-carbon generating resource that is contracted for,
18on behalf of consumers of this state on a cost-of-service basis,
19shall be recoverable in rates, in a manner determined by the
20commission consistent with Section 380. The commission may,
21after a hearing, approve an increase from one-half to 1 percent in
22the return on investment by the third party entering into the contract
23with an electrical corporation with respect to investment in zero-
24or low-carbon generation resources authorized pursuant to this
25subdivision.
26(c) (1) The Energy Commission shall adopt regulations for the
27enforcement of this chapter with respect to a
local publicly owned
28electric utility.
29(2) The Energy Commission may, in order to ensure compliance
30with the greenhouse gases emission performance standard by local
31publicly owned electric utilities, apply the procedures adopted by
32the commission to verify the emissions of greenhouse gases from
33baseload generation pursuant to subdivision (b).
34(3) In determining whether a long-term financial commitment
35is for baseload generation, the Energy Commission shall consider
36the design of the powerplant and the intended use of the
37powerplant, as determined by the Energy Commission based upon
38the electricity purchase contract, any certification received from
39the Energy Commission, any other permit for the operation of the
40powerplant, any procurement approval decision for the load-serving
P5 1entity, and any other matter the Energy Commission determines
2is relevant under the circumstances.
3(d) (1) On or before February 1, 2007, the commission, through
4a rulemaking proceeding, and in consultation with the Energy
5Commission and the State Air Resources Board, shall establish a
6greenhouse gases emission performance standard for all baseload
7generation of load-serving entities, at a rate of emissions of
8greenhouse gases that is no higher than the rate of emissions of
9greenhouse gases for combined-cycle natural gas baseload
10generation. Enforcement of the greenhouse gases emission
11performance standard shall begin immediately upon the
12establishment of the standard. All combined-cycle natural gas
13powerplants that are in operation, or that have an Energy
14Commission final permit decision to operate as of June 30, 2007,
15shall be deemed to be in compliance with the greenhouse gases
16emission performance standard.
17(2) In determining the rate of emissions of
greenhouse gases
18for baseload generation, the commission shall include the net
19emissions resulting from the production of electricity by the
20baseload generation.
21(3) The commission shall establish an output-based methodology
22to ensure that the calculation of emissions of greenhouse gases for
23cogeneration recognizes the total usable energy output of the
24process, and includes all greenhouse gases emitted by the facility
25in the production of both electrical and thermal energy.
26(4) In calculating the emissions of greenhouse gases by facilities
27generating electricity from biomass, biogas, or landfill gas energy,
28the commission shall consider net emissions from the process of
29growing, processing, and generating the electricity from the fuel
30source.
31(5) Carbon dioxide that is injected in geological formations, so
32as to
prevent releases into the atmosphere, in compliance with
33applicable laws and regulations shall not be counted as emissions
34of the powerplant in determining compliance with the greenhouse
35gases emissions performance standard.
36(6) In adopting and implementing the greenhouse gases emission
37performance standard, the commission, in consultation with the
38Independent System Operator shall consider the effects of the
39standard on system reliability and overall costs to electricity
40customers.
P6 1(7) In developing and implementing the greenhouse gases
2emission performance standard, the commission shall address
3long-term purchases of electricity from unspecified sources in a
4manner consistent with this chapter.
5(8) In developing and implementing the greenhouse gases
6emission performance standard, the commission shall consider
7and
act in a manner consistent with any rules adopted pursuant to
8Section 824a-3 of Title 16 of the United States Code.
9(9) An electrical corporation that provides electric service to
1075,000 or fewer retail end-use customers in California may file
11with the commission a proposal for alternative compliance with
12this section, which the commission may accept upon a showing
13by the electrical corporation of both of the following:
14(A) A majority of the electrical corporation’s retail end-use
15customers for electric service are located outside of California.
16(B) The emissions of greenhouse gases to generate electricity
17for the retail end-use customers of the electrical corporation are
18subject to a review by the utility regulatory commission of at least
19one
other state in which the electrical corporation provides
20regulated retail electric service.
21(e) (1) On or before June 30, 2007, the Energy Commission,
22at a duly noticed public hearing and in consultation with the
23commission and the State Air Resources Board, shall establish a
24greenhouse gases emission performance standard for all baseload
25generation of local publicly owned electric utilities at a rate of
26emissions of greenhouse gases that is no higher than the rate of
27emissions of greenhouse gases for combined-cycle natural gas
28baseload generation. The greenhouse gases emission performance
29standard established by the Energy Commission for local publicly
30owned electric utilities shall be consistent with the standard adopted
31by the commission for load-serving entities. Enforcement of the
32greenhouse gases emission performance standard shall begin
33immediately upon the establishment of the standard. All
34
combined-cycle natural gas powerplants that are in operation, or
35that have an Energy Commission final permit decision to operate
36as of June 30, 2007, shall be deemed to be in compliance with the
37greenhouse gases emission performance standard.
38(2) The greenhouse gases emission performance standard shall
39be adopted by regulation pursuant to the Administrative Procedure
P7 1Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of
2Division 3 of Title 2 of the Government Code).
3(3) In determining the rate of emissions of greenhouse gases
4for baseload generation, the Energy Commission shall include the
5net emissions resulting from the production of electricity by the
6baseload generation.
7(4) The Energy Commission shall establish an output-based
8methodology to ensure that the calculation of emissions of
9greenhouse gases
for cogeneration recognizes the total usable
10energy output of the process, and includes all greenhouse gases
11emitted by the facility in the production of both electrical and
12thermal energy.
13(5) In calculating the emissions of greenhouse gases by facilities
14generating electricity from biomass, biogas, or landfill gas energy,
15the Energy Commission shall consider net emissions from the
16process of growing, processing, and generating the electricity from
17the fuel source.
18(6) Carbon dioxide that is captured from the emissions of a
19powerplant and that is permanently disposed of in geological
20formations in compliance with applicable laws and regulations,
21shall not be counted as emissions from the powerplant.
22(7) In adopting and implementing the greenhouse gases emission
23performance standard, the Energy Commission, in
consultation
24with the Independent System Operator, shall consider the effects
25of the standard on system reliability and overall costs to electricity
26customers.
27(8) In developing and implementing the greenhouse gases
28emission performance standard, the Energy Commission shall
29address long-term purchases of electricity from unspecified sources
30in a manner consistent with this chapter.
31(9) In developing and implementing the greenhouse gases
32emission performance standard, the Energy Commission shall
33consider and act in a manner consistent with any rules adopted
34pursuant to Section 824a-3 of Title 16 of the United States Code.
35(f) The Energy Commission, in a duly noticed public hearing
36and in consultation with the commission and the State Air
37Resources Board, shall reevaluate and continue, modify, or replace
38the greenhouse
gases emission performance standard when an
39enforceable greenhouse gases emissions limit is established and
P8 1in operation, that is applicable to local publicly owned electric
2utilities.
3(g) The commission, through a rulemaking proceeding and in
4consultation with the Energy Commission and the State Air
5Resources Board, shall reevaluate and continue, modify, or replace
6the greenhouse gases emission performance standard when an
7enforceable greenhouse gases emissions limit is established and
8in operation, that is applicable to load-serving entities.
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