BILL NUMBER: AB 970 CHAPTERED
BILL TEXT
CHAPTER 329
FILED WITH SECRETARY OF STATE SEPTEMBER 7, 2000
APPROVED BY GOVERNOR SEPTEMBER 6, 2000
PASSED THE SENATE AUGUST 31, 2000
PASSED THE ASSEMBLY AUGUST 31, 2000
AMENDED IN SENATE AUGUST 31, 2000
AMENDED IN SENATE AUGUST 7, 2000
AMENDED IN SENATE JUNE 26, 2000
AMENDED IN SENATE JULY 6, 1999
AMENDED IN ASSEMBLY APRIL 27, 1999
INTRODUCED BY Assembly Members Ducheny, Battin, and Keeley
(Principal coauthor: Assembly Member Baugh)
(Coauthors: Assembly Members Aanestad, Ackerman, Baldwin, Bates,
Brewer, Campbell, Cardoza, Cox, Davis, Dickerson, Gallegos, Granlund,
House, Kaloogian, Leach, Machado, Maddox, Maldonado, Margett,
Nakano, Olberg, Oller, Rod Pacheco, Pescetti, Runner, Strickland,
Thompson, and Zettel)
(Coauthors: Senators Alpert, Bowen, and Kelley)
FEBRUARY 25, 1999
An act to add and repeal Section 12078 of the Government Code, to
add and repeal Section 42301.14 of the Health and Safety Code, to add
Chapter 6.5 (commencing with Section 25550) to Division 15 of, and
to repeal Sections 25550, 25552, and 25555 of, the Public Resources
Code, and to amend Section 372 of, and to add Section 399.15 to, the
Public Utilities Code, relating to energy resources, making an
appropriation therefor, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 970, Ducheny. Electrical energy: thermal powerplants:
permits.
Existing law provides for the restructuring of California's
electric power industry so that the price for the generation of
electricity is determined by a competitive market.
Under existing law, air pollution control districts, air quality
management districts, and the State Energy Resources Conservation and
Development Commission issue permits for the operation of
powerplants.
This bill would authorize those districts to issue a temporary,
expedited, consolidated permit for a thermal powerplant if specified
conditions are met, and would require the commission to establish a
process for the expedited review of applications to construct and
operate powerplants and thermal powerplants and related facilities.
This bill would require the Public Utilities Commission to
identify and undertake certain actions to reduce or remove
constraints on the electrical transmission and distribution system,
and adopt specified energy conservation initiatives and undertake
efforts to revise, mitigate, or eliminate specified policies or
actions of the Independent System Operator for which the Public
Utilities Commission or Electricity Oversight Board make a specified
finding.
The bill would appropriate $57,500,000 from the General Fund for
purposes of the bill. Of that amount, $5,200,000 would be allocated
to fund specified staff resources to implement specified programs at
the commission, the agencies, boards, and departments within the
California Environmental Protection Agency, and the Resources Agency;
$2,300,000 would be allocated to the Public Utilities Commission to
fund specified staff resources, and $50,000,000 would be allocated to
the commission to implement energy conservation and demand-side
energy programs.
The bill would declare that it is to take effect immediately as an
urgency statute.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known, and may be cited, as the
California Energy Security and Reliability Act of 2000.
SEC. 2. The Legislature finds and declares as follows:
(a) In recent years there has been significant growth in the
demand for electricity in the state due to factors such as growth in
population and economic activities that rely on electrical
generation.
(b) In the past decade, efforts to construct and operate new,
environmentally superior and efficient generation facilities and to
promote cost-effective energy conservation and demand-side management
have seriously lagged.
(c) As a result, California faces potentially serious electricity
shortages over the next two years, which necessitates immediate
action by the state.
(d) The purpose of this act is to provide a balanced response to
the electricity problems facing the state that will result in
significant new investments in new, environmentally superior
electricity generation, while also making significant new investments
in conservation and demand-side management programs in order to meet
the energy needs of the state for the next several years.
(e) It is further the intent of this act to provide assistance to
persons proposing to construct electrical generation facilities
without in any manner compromising environmental protection.
SEC. 3. Section 12078 is added to the Government Code, to read:
12078. (a) There is hereby established the Governor's Clean
Energy GREEN TEAM, which shall consist of a chairperson and not more
than 15 members as follows:
(1) The Chair of the Electricity Oversight Board.
(2) The President of the California Public Utilities Commission.
(3) The Chair of the Energy Resources Conservation and Development
Commission.
(4) The Secretary for Environmental Protection.
(5) The Secretary of the Resources Agency.
(6) The Secretary of the Trade and Commerce Agency.
(7) The director of the Governor's Office of Planning and
Research.
(8) Representatives from the United States Environmental
Protection Agency, the United States Fish and Wildlife Service, and
other affected federal agencies appointed by the Governor.
(9) Representatives of local and regional agencies, including, but
not limited to, air pollution control districts and air quality
management districts appointed by the Governor.
(b) Within 90 days of the effective date of this section, the
GREEN TEAM shall do all of the following:
(1) Compile and, upon request, make available to persons proposing
to construct powerplants, all available guidance documents and other
information on the environmental effects associated with powerplants
proposed to be certified pursuant to Division 15 (commencing with
Section 25000) of the Public Resources Code, and including
state-of-the-art and best available control technologies and air
emissions offsets that could be used to mitigate those environmental
effects.
(2) Upon request, provide assistance to persons proposing to
construct powerplants in obtaining essential inputs, including, but
not limited to, natural gas supply, emission offsets, and necessary
water supply.
(3) Upon request, provide assistance to persons proposing to
construct powerplants pursuant to Chapter 6 (commencing with Section
25500) of Division 15 of the Public Resources Code in identifying the
environmental effects of such powerplants and any actions the person
may take to mitigate those effects.
(4) Upon request, provide assistance to persons proposing to
construct powerplants in working with local governments in ensuring
that local permits, land use authorizations, and other approvals made
at the local level are undertaken in the most expeditious manner
feasible without compromising public participation or environmental
protection.
(5) Develop recommendations for low- or zero-interest financing
programs for renewable energy, including distributed renewable energy
for state and nonprofit corporations.
(c) This section shall remain in effect only until January 1,
2004, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2004, deletes or extends
that date.
SEC. 4. Section 42301.14 is added to the Health and Safety Code,
to read:
42301.14. (a) To the extent permitted by the federal Clean Air
Act (42 U.S.C. Sec. 7401 et seq.), and notwithstanding Section 65950
of the Government Code, a district may issue a temporary, expedited,
consolidated permit, as provided by Sections 42300.1 and 42301.3, for
a powerplant within 60 days after the date of certification of an
environmental impact report, within 30 days after the adoption of a
negative declaration, or within 30 days after the date of a
determination that the project is exempt from Division 13 (commencing
with Section 21000) of the Public Resources Code, if all of the
following conditions are met:
(1) The powerplant will emit less than 5 parts per million of
oxides of nitrogen averaged over a three-hour period.
(2) The powerplant will operate exclusively under the terms of a
contract entered into with the Independent System Operator and
approved by the Electricity Oversight Board established pursuant to
Article 2 (commencing with Section 334) of Chapter 2.3 of Part 1 of
Division 1 of the Public Utilities Code.
(3) The owner or operator of the powerplant shall demonstrate that
the powerplant, on average, will displace electrical generation that
produces greater air emissions in the same air basin or in a basin
that causes air pollution transport into that basin.
(4) The powerplant will be interconnected to the grid in a manner
that the Public Utilities Commission, in consultation with the
Electricity Oversight Board, has determined will allow the powerplant
to provide service to a geographical area of the state that is
urgently in need of generation in order to provide reliable electric
service. However, nothing in this paragraph affects the authority of
the Energy Resources Conservation and Development Commission over
powerplants pursuant to Chapter 6 (commencing with Section 25500) of
Division 15 of the Public Resources Code.
(5) The powerplant will be operated at a location that has the
necessary fueling and electrical transmission and distribution
infrastructure for its operation.
(6) The owner or operator of the powerplant enters into a binding
and enforceable agreement with the district, and where applicable,
with the Energy Resources Conservation and Development Commission,
which demonstrates either of the following:
(A) That the powerplant will cease to operate and the permit will
terminate within three years.
(B) That the powerplant will be modified, replaced, or removed
within a period of three years with a combined-cycle powerplant that
uses best available control technology and offsets, as determined at
the time the combined-cycle plant is constructed, and that complies
with all other applicable laws and regulations.
(7) Where applicable, the owner or operator of the powerplant will
obtain offsets or, where offsets are unavailable, pay an air
emissions mitigation fee to the district based upon the actual
emissions from the powerplant, to the district for expenditure by the
district pursuant to Chapter 9 (commencing with Section 44275) of
Part 5, to mitigate the emissions from the plant.
(8) It is the intent of the Legislature in this section to
encourage the expedited siting of cleaner generating units to address
peaking power needs. It is further the intent of the Legislature to
require local air quality management districts and air pollution
control districts to recognize the critical need for these facilities
and the short life span of these facilities in exercising their
discretionary authority to apply more restrictive air quality
regulations than would otherwise be required by law.
(b) This section may be utilized for the purpose of expediting the
siting of electrical generating facilities pursuant to Chapter 6
(commencing with Section 25500) of Division 15 of the Public
Resources Code.
(c) This section shall remain in effect only until January 1,
2004, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2004, deletes or extends
that date.
SEC. 5. Chapter 6.5 (commencing with Section 25550) is added to
Division 15 of the Public Resources Code, to read:
CHAPTER 6.5. EXPEDITED SITING OF ELECTRICAL GENERATION
25550. (a) Notwithstanding subdivision (a) of Section 25522, and
Section 25540.6 the commission shall establish a process to issue its
final certification for any thermal powerplant and related
facilities within six months after the filing of the application for
certification that, on the basis of an initial review, shows that
there is substantial evidence that the project will not cause a
significant adverse impact on the environment or electrical system
and will comply with all applicable standards, ordinances, or laws.
For purposes of this section, filing has the same meaning as in
Section 25522.
(b) Thermal powerplants and related facilities reviewed under this
process shall satisfy the requirements of Section 25520 and other
necessary information required by the commission, by regulation,
including the information required for permitting by each local,
state, and regional agency that would have jurisdiction over the
proposed thermal powerplant and related facilities but for the
exclusive jurisdiction of the commission and the information required
for permitting by each federal agency that has jurisdiction over the
proposed thermal powerplant and related facilities.
(c) After acceptance of an application under this section, the
commission shall not be required to issue a six-month final decision
on the application if it determines there is substantial evidence in
the record that the thermal powerplant and related facilities may
result in a significant adverse impact on the environment or
electrical system or does not comply with an applicable standard,
ordinance, or law. Under this circumstance, the commission shall
make its decision in accordance with subdivision (a) of Section 25522
and Section 25540.6, and a new application shall not be required.
(d) For an application that the commission accepts under this
section, all local, regional, and state agencies that would have had
jurisdiction over the proposed thermal powerplant and related
facilities, but for the exclusive jurisdiction of the commission,
shall provide their final comments, determinations, or opinions
within 100 days after the filing of the application. The regional
water quality control boards, as established pursuant to Chapter 4
(commencing with Section 13200) of Division 7 of the Water Code,
shall retain jurisdiction over any applicable water quality standard
that is incorporated into any final certification issued pursuant to
this chapter.
(e) Thermal powerplants and related facilities that demonstrate
superior environmental or efficiency performance shall receive
priority in review.
(f) With respect to a thermal powerplant and related facilities
reviewed under the process established by this chapter, it shall be
shown that the applicant has a contract with a general contractor and
has contracted for an adequate supply of skilled labor to construct,
operate, and maintain the plant.
(g) With respect to a thermal powerplant and related facilities
reviewed under the process established by this chapter, it shall be
shown that the thermal powerplant and related facilities complies
with all regulations adopted by the commission that ensure that an
application addresses disproportionate impacts in a manner consistent
with Section 65040.12 of the Government Code.
(h) This section shall not apply to an application filed with the
commission on or before August 1, 1999.
(i) To implement this section, the commission may adopt emergency
regulations in accordance with Chapter 3.5 (commencing with Section
11340) of Part 2 of Division 3 of Title 2 of the Government Code.
For purposes of that chapter, including without limitation, Section
11349.6 of the Government Code, the adoption of the regulations shall
be considered by the Office of Administrative Law to be necessary
for the immediate preservation of the public peace, health, safety,
and general welfare.
(j) This section shall remain in effect until January 1, 2004, and
as of that date is repealed unless a later enacted statute, that is
enacted before January 1, 2004, deletes or extends that date.
25552. (a) The commission shall implement a procedure, consistent
with Division 13 (commencing with Section 21000) and with the
federal Clean Air Act (42 U.S.C.A. Sec. 7401 et seq.), for an
expedited decision on simple cycle thermal powerplants and related
facilities that can be put into service on or before August 1, 2001,
including a procedure for considering amendments to a pending
application if the amendments specify a change from a combined cycle
thermal powerplant and related facilities to a simple cycle thermal
powerplant and related facilities.
(b) The procedure shall include all of the following:
(1) A requirement that, within 15 days of receiving the
application or amendment to a pending application, the commission
shall determine whether the application is complete.
(2) A requirement that, within 25 days of determining that an
application is complete, the commission shall determine whether the
application qualifies for an expedited decision pursuant to this
section. If an application qualifies for an expedited decision
pursuant to this section, the commission shall provide the notice
required by Section 21092.
(c) The commission shall issue its final decision on an
application, including an amendment to a pending application, within
four months from the date on which it deems the application or
amendment complete, or at any later time mutually agreed upon by the
commission and the applicant, provided that the thermal powerplant
and related facilities remain likely to be in service before or
during August 2001.
(d) The commission shall issue a decision granting a license to a
simple cycle thermal powerplant and related facilities pursuant to
this section if the commission finds all of the following:
(1) The thermal powerplant is not a major stationary source or a
modification to a major stationary source, as defined by the federal
Clean Air Act, and will be equipped with best available control
technology, in consultation with the appropriate air pollution
control district or air quality management district and the State Air
Resources Board.
(2) The thermal powerplant and related facilities will not have a
significant adverse effect on the environment as a result of
construction or operation.
(3) With respect to a project for a thermal powerplant and related
facilities reviewed under the process established by this section,
the applicant has a contract with a general contractor and has
contracted for an adequate supply of skilled labor to construct,
operate, and maintain the thermal powerplant.
(e) In order to qualify for the procedure established by this
section, an application or an amendment to a pending application
shall be complete by October 31, 2000, satisfy the requirements of
Section 25523, and include a description of the proposed conditions
of certification that will do all of the following:
(1) Assure that the thermal powerplant and related facilities will
not have a significant adverse effect on the environment as a result
of construction or operation.
(2) Assure protection of public health and safety.
(3) Result in compliance with all applicable federal, state, and
local laws, ordinances, and standards.
(4) A reasonable demonstration that the thermal powerplant and
related facilities, if licensed on the expedited schedule provided by
this section, will be in service before August 1, 2001.
(5) A binding and enforceable agreement with the commission, that
demonstrates either of the following:
(A) That the thermal powerplant will cease to operate and the
permit will terminate within three years.
(B) That the thermal powerplant will be modified, replaced, or
removed within a period of three years with a combined-cycle thermal
powerplant that uses best available control technology and obtains
necessary offsets, as determined at the time the combined-cycle
thermal powerplant is constructed, and that complies with all other
applicable laws, ordinances, and standards.
(6) Where applicable, that the thermal powerplant will obtain
offsets or, where offsets are unavailable, pay an air emissions
mitigation fee to the air pollution control district or air quality
management district based upon the actual emissions from the thermal
powerplant, to the district for expenditure by the district pursuant
to Chapter 9 (commencing with Section 44275) of Part 5 of Division 26
of the Health and Safety Code, to mitigate the emissions from the
plant. To the extent consistent with federal law and regulation, any
offsets required pursuant to this paragraph shall be based upon a
1:1 ratio, unless, after consultation with the applicable air
pollution control district or air quality management district, the
commission finds that a different ratio should be required.
(7) Nothing in this section shall affect the ability of an
applicant that receives approval to install simple cycle thermal
powerplants and related facilities as an amendment to a pending
application to proceed with the original application for a combined
cycle thermal powerplant or related facilities.
(f) This section shall remain in effect only until January 1,
2003, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2003, deletes or extends
that date except that the binding commitments in paragraph (5) of
subdivision (e) shall remain in effect after that date.
25553. Notwithstanding any other provision of law, on or before
120 days after the effective date of this section or on the earliest
feasible date thereafter, the commission shall take both of the
following actions:
(a) Update its assessment in trends in energy consumption pursuant
to Section 25216 in order to provide the Governor, the Legislature,
and the public with accurate information on the status of electricity
supply, demand, and conservation in the state and to recommend
measures that could be undertaken to ensure adequate supply and
energy conservation in the state.
(b) Adopt and implement updated and cost-effective standards
pursuant to Section 25402 to ensure the maximum feasible reductions
in wasteful, uneconomic, inefficient, or unnecessary consumption of
electricity.
25555. (a) In consultation with the Public Utilities Commission,
the commission shall implement the peak electricity demand reduction
grant programs listed in paragraphs (1), (2), and (3). The
commission's implementation of these programs shall be consistent
with guidelines established pursuant to subdivision (b). The award
of a grant pursuant to this section is subject to appeal to the
commission upon a showing that factors other than those adopted by
the commission were applied in making the award. Any action taken by
an applicant to apply for, or to become or remain eligible to
receive, a grant award, including satisfying conditions specified by
the commission, does not constitute the rendering of goods, services,
or a direct benefit to the commission. Awards made pursuant to this
section are not subject to any repayment requirements of Chapter 7.4
(commencing with Section 25645). The peak electricity demand
programs the commission shall implement pursuant to this section
shall include, but not be limited to, the following:
(1) For San Francisco Bay Area and San Diego region electricity
customers, the peak electricity demand program shall include both of
the following:
(A) Incentives for price responsive heating, ventilation, air
conditioning, and lighting systems.
(B) Incentives for cool communities.
(2) For statewide electricity customers, the peak electricity
demand program shall include all of the following:
(A) Incentives for price responsive heating, ventilation, air
conditioning, and lighting systems.
(B) Incentives for cool communities.
(C) Incentives for energy efficiency improvements for public
universities and other state facilities.
(D) Funding for state building peak reduction measures.
(E) Incentives for light-emitting diode traffic signals.
(F) Incentives for water and wastewater treatment pump and related
equipment retrofits.
(3) Renewable energy development, except hydroelectric
development, for both onsite distributed energy development and for
commercial scale projects through which awards may be made by the
commission to reduce the cost of financing those projects.
(b) In consultation with the Public Utilities Commission, the
commission shall establish guidelines for the administration of this
section. The guidelines shall enable the commission to allocate
funds between the programs as it determines necessary to lower
electricity system peak demand. The guidelines adopted pursuant to
this subdivision are not regulations subject to the requirements of
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code.
(c) The commission may choose from among one or more business
entities capable of supplying or providing goods or services that
meet a specified need of the commission in carrying out the
responsibilities for programs included in this section. The
commission may select an entity on a sole source basis if the cost to
the state will be reasonable and the commission determines that it
is in the state's best interest.
(d) The commission shall contract with one or more business
entities for evaluation of the effectiveness of the programs
implemented pursuant to subdivision (a). The contracting provisions
specified in subdivision (c) shall apply to these contracts.
(e) For purposes of this section, the following definitions shall
apply:
(1) "Low-rise buildings" means one and two story buildings.
(2) "Price responsive heating, ventilation, air conditioning, and
lighting systems" means a program that provides incentives for the
installation of equipment that will automatically lower the
electricity consumption of these systems when the price of
electricity reaches specific thresholds.
(3) "Light-emitting diode traffic signals" means a program to
provide incentives to encourage the replacement of incandescent
traffic signal lamps with light-emitting diodes.
(4) "Cool communities" means a program to reduce "heat island"
effects in urban areas and thereby conserve energy and reduce peak
demand.
(5) "Water and wastewater treatment pump retrofit" means a program
to provide incentives to encourage the retrofit and replacement of
water and wastewater treatment pumps and equipment and installation
of energy control systems in order to reduce their electricity
consumption during periods of peak electricity system demand.
(f) The commission may expend no more than 3 percent of the amount
appropriated to implement this section, for purposes of
administering this section.
(g) This section shall remain in effect only until January 1,
2004, and as of that date is repealed, unless a later enacted
statute, which is enacted before January 1, 2004, deletes or extends
that date.
SEC. 6. Section 372 of the Public Utilities Code is amended to
read:
372. (a) It is the policy of the state to encourage and support
the development of cogeneration as an efficient, environmentally
beneficial, competitive energy resource that will enhance the
reliability of local generation supply, and promote local business
growth. Subject to the specific conditions provided in this section,
the commission shall determine the applicability to customers of
uneconomic costs as specified in Sections 367, 368, 375, and 376.
Consistent with this state policy, the commission shall provide that
these costs shall not apply to any of the following:
(1) To load served onsite or under an over the fence arrangement
by a nonmobile self-cogeneration or cogeneration facility that was
operational on or before December 20, 1995, or by increases in the
capacity of such a facility to the extent that such increased
capacity was constructed by an entity holding an ownership interest
in or operating the facility and does not exceed 120 percent of the
installed capacity as of December 20, 1995, provided that prior to
June 30, 2000, the costs shall apply to over the fence arrangements
entered into after December 20, 1995, between unaffiliated parties.
For the purposes of this subdivision, "affiliated" means any person
or entity that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common on
control with another specified entity. "Control" means either of the
following:
(A) The possession, directly or indirectly, of the power to direct
or to cause the direction of the management or policies of a person
or entity, whether through an ownership, beneficial, contractual, or
equitable interest.
(B) Direct or indirect ownership of at least 25 percent of an
entity, whether through an ownership, beneficial or equitable
interest.
(2) To load served by onsite or under an over the fence
arrangement by a nonmobile self-cogeneration or cogeneration facility
for which the customer was committed to construction as of December
20, 1995, provided that the facility was substantially operational on
or before January 1, 1998, or by increases in the capacity of such a
facility to the extent that the increased capacity was constructed
by an entity holding an ownership interest in or operating the
facility and does not exceed 120 percent of the installed capacity as
of January 1, 1998, provided that prior to June 30, 2000, the costs
shall apply to over the fence arrangements entered into after
December 20, 1995, between unaffiliated parties.
(3) To load served by existing, new, or portable emergency
generation equipment used to serve the customer's load requirements
during periods when utility service is unavailable, provided such
emergency generation is not operated in parallel with the integrated
electric grid, except on a momentary parallel basis.
(4) After June 30, 2000, to any load served onsite or under an
over the fence arrangement by any nonmobile self-cogeneration or
cogeneration facility.
(b) Further, consistent with state policy, with
respect to self-cogeneration or cogeneration deferral agreements, the
commission shall do the following:
(1) Provide that a utility shall execute a final self-cogeneration
or cogeneration deferral agreement with any customer that, on or
before December 20, 1995, had executed a letter of intent (or similar
documentation) to enter into the agreement with the utility,
provided that the final agreement shall be consistent with the terms
and conditions set forth in the letter of intent and the commission
shall review and approve the final agreement.
(2) Provide that a customer that holds a self-cogeneration or
cogeneration deferral agreement that was in place on or before
December 20, 1995, or that was executed pursuant to paragraph (1) in
the event the agreement expires, or is terminated, may do any of the
following:
(A) Continue through December 31, 2001, to receive utility service
at the rate and under terms and conditions applicable to the
customer under the deferral agreement that, as executed, includes an
allocation of uneconomic costs consistent with subdivision (e) of
Section 367.
(B) Engage in a direct transaction for the purchase of electricity
and pay uneconomic costs consistent with Sections 367, 368, 375, and
376.
(C) Construct a self-cogeneration or cogeneration facility of
approximately the same capacity as the facility previously deferred,
provided that the costs provided in Sections 367, 368, 375, and 376
shall apply consistent with subdivision (e) of Section 367, unless
otherwise authorized by the commission pursuant to subdivision (c).
(3) Subject to the fire wall described in subdivision (e) of
Section 367 provide that the ratemaking treatment for
self-cogeneration or cogeneration deferral agreements executed prior
to December 20, 1995, or executed pursuant to paragraph (1) shall be
consistent with the ratemaking treatment for the contracts approved
before January 1995.
(c) The commission shall authorize, within 60 days of the receipt
of a joint application from the serving utility and one or more
interested parties, applicability conditions as follows:
(1) The costs identified in Sections 367, 368, 375, and 376 shall
not, prior to June 30, 2000, apply to load served onsite by a
nonmobile self-cogeneration or cogeneration facility that became
operational on or after December 20, 1995.
(2) The costs identified in Sections 367, 368, 375, and 376 shall
not, prior to June 30, 2000, apply to any load served under over the
fence arrangements entered into after December 20, 1995, between
unaffiliated entities.
(d) For the purposes of this subdivision, all onsite or over the
fence arrangements shall be consistent with Section 218 as it existed
on December 20, 1995.
(e) To facilitate the development of new microcogeneration
applications, electrical corporations may apply to the commission for
a financing order to finance the transition costs to be recovered
from customers employing the applications.
(f) To encourage the continued development, installation, and
interconnection of clean and efficient self-generation and
cogeneration resources, to improve system reliability for consumers
by retaining existing generation and encouraging new generation to
connect to the electric grid, and to increase self-sufficiency of
consumers of electricity through the deployment of self-generation
and cogeneration, both of the following shall occur:
(1) The commission and the Electricity Oversight Board shall
determine if any policy or action undertaken by the Independent
System Operator, directly or indirectly, unreasonably discourages the
connection of existing self-generation or cogeneration or new
self-generation or cogeneration to the grid.
(2) If the commission and the Electricity Oversight Board find
that any policy or action of the Independent System Operator
unreasonably discourages, the connection of existing
self-generationor cogeneration or new self-generation or cogeneration
to the grid, the commission and the Electricity Oversight Board
shall undertake all necessary efforts to revise, mitigate, or
eliminate that policy or action of the Independent System Operator.
SEC. 7. Section 399.15 is added to the Public Utilities Code, to
read:
399.15. Notwithstanding any other provision of law, within 180
days of the effective date of this section, the commission, in
consultation with the Independent System Operator, shall take all of
the following actions, and shall include the reasonable costs
involved in taking those actions in the distribution revenue
requirements of utilities regulated by the commission, as
appropriate:
(a) (1) Identify and undertake those actions necessary to reduce
or remove constraints on the state's existing electrical transmission
and distribution system, including, but not limited to,
reconductoring of transmission lines, the addition of capacitors to
increase voltage, the reinforcement of existing transmission
capacity, and the installation of new transformer banks. The
commission shall, in consultation with the Independent System
Operator, give first priority to those geographical regions where
congestion reduces or impedes electrical transmission and supply.
(2) Consistent with the existing statutory authority of the
commission, the commission shall afford electrical corporations a
reasonable opportunity to fully recover costs it determines are
reasonable and prudent to plan, finance, construct, operate, and
maintain any facilities under its jurisdiction required by this
section.
(b) In consultation with the State Energy Resources Conservation
and Development Commission, adopt energy conservation demand-side
management and other initiatives in order to reduce demand for
electricity and reduce load during peak demand periods. Those
initiatives shall include, but not be limited to, all of the
following:
(1) Expansion and acceleration of residential and commercial
weatherization programs.
(2) Expansion and acceleration of programs to inspect and improve
the operating efficiency of heating, ventilation, and
air-conditioning equipment in new and existing buildings, to ensure
that these systems achieve the maximum feasible cost-effective energy
efficiency.
(3) Expansion and acceleration of programs to improve energy
efficiency in new buildings, in order to achieve the maximum feasible
reductions in uneconomic energy and peak electricity consumption.
(4) Incentives to equip commercial buildings with the capacity to
automatically shut down or dim nonessential lighting and
incrementally raise thermostats during peak electricity demand
period.
(5) Evaluation of installing local infrastructure to link
temperature setback thermostats to real-time price signals.
(6) Incentives for load control and distributed generation to be
paid for enhancing reliability.
(7) Differential incentives for renewable or super clean
distributed generation resources.
(8) Reevaluation of all efficiency cost-effectiveness tests in
light of increases in wholesale electricity costs and of natural gas
costs to explicitly include the system value of reduced load on
reducing market clearing prices and volatility.
(c) In consultation with the Energy Resources Conservation and
Development Commission, adopt and implement a residential,
commercial, and industrial peak reduction program that encourages
electric customers to reduce electricity consumption during peak
power periods.
SEC. 8. The sum of fifty seven million five hundred thousand
dollars ($57,500,000) is hereby appropriated from the General Fund to
the State Controller for the following purposes:
(a) Five million two hundred thousand dollars ($5,200,000) to fund
temporary staff resources, including, but not limited to, limited
term positions, not to exceed four years, at the Energy Resources
Conservation and Development Commission, the agencies, boards, and
departments within the California Environmental Protection Agency,
and the Resources Agency, with jurisdiction over electrical
powerplant siting and conservation and demand side management
programs, for the exclusive purpose of implementing programs pursuant
to this act.
(1) Prior to the expenditure of funds pursuant to this
subdivision, the commission shall prepare and submit an expenditure
plan to the Governor and the Legislature that specifies those
agencies and positions for which those funds will be expended.
(2) It is the intent of the Legislature that these funds for staff
resources be expended exclusively to implement programs that achieve
the maximum feasible cost-effective energy conservation and
efficiency while providing the necessary staff resources to expedite
siting of electrical powerplants that meet the criteria established
pursuant to the act adding this section.
(b) Two million three hundred thousand dollars ($2,300,000) to the
Public Utilities Commission, to fund temporary staff resources,
including limited term positions not to exceed four years, and to
implement the programs established pursuant to this act.
(c) Fifty million dollars ($50,000,000) to the Energy Resources
Conservation and Development Commission, to implement cost-effective
energy conservation and demand-side management programs established
pursuant to Section 25555 of the Public Resources Code, as enacted by
this act. The commission shall prioritize conservation and
demand-side management programs funded pursuant to this subdivision
to ensure that those programs that achieve the most immediate and
cost-effective energy savings are undertaken as a first priority.
SEC. 9. Nothing in this act shall, in any way, apply to a pending
application for the certification of the Metcalf Energy Center, which
was filed with the State Energy Resources Conservation and
Development Commission by Calpine and Bechtel under Docket No.
(99-AFC-3).
SEC. 10. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
Due to the shortage of electric generation capacity to meet the
needs of the people of this state and in order to limit further
impacts of this shortage on the public health, safety, and welfare,
it is necessary that this act take effect immediately.