BILL NUMBER: AB 44 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 3, 2010
AMENDED IN ASSEMBLY JUNE 1, 2009
AMENDED IN ASSEMBLY MARCH 31, 2009
AMENDED IN ASSEMBLY MARCH 18, 2009
INTRODUCED BY Assembly Member Blakeslee
(Coauthor: Assembly Member Harkey)
(Coauthor: Senator Benoit)
DECEMBER 1, 2008
An act to amend Section 454.5 of, to add Section 454.35
to, and to add Chapter 7.7 (commencing with Section 2835) to Part 2
of Division 1 of, the Public Utilities Code, relating to energy.
An act to amend Section 5898.20 of the Streets and
Highways Code, relating to public improvements.
LEGISLATIVE COUNSEL'S DIGEST
AB 44, as amended, Blakeslee. Energy storage facilities.
Improvement Act of 1911: contractual assessments.
Existing law, the Improvement Act of 1911, authorizes the
legislative body of any public agency, as defined, to determine that
it would be convenient, advantageous, and in the public interest to
designate an area within the public agency, as specified, within
which authorized public agency officials and property owners may
enter into voluntary contractual assessments to finance the
installation of distributed generation renewable energy sources or
energy or water efficiency improvements that are permanently fixed to
real property, as specified. Existing law requires the legislative
body to make these determinations by adopting a resolution indicating
its intention to do so and requires that the resolution include
specified information and directs an appropriate public agency
official to prepare a prescribed report.
This bill would define the term "permanently fixed," for purposes
of financing the installation of distributed generation renewable
energy sources, to include systems that are attached to specified
types of real property pursuant to an electricity purchase agreement
between the owner of the system and the owner of the assessed
property, if the agreement satisfies prescribed criteria.
This bill would also require the legislative body of a public
agency to establish criteria to ensure that a real property owner is
guaranteed the electricity from a distributed generation renewable
energy source in the event that the owner of the system files for
bankruptcy, as specified. The bill would also require the legislative
body of the public agency to make a finding that an electricity
purchase agreement funded with a contractual assessment is structured
to provide protections to the property owner in the event of a
bankruptcy of the owner of the system, as specified.
(1) Under existing law, the Public Utilities Commission is vested
with regulatory authority over public utilities, including electrical
corporations, and the commission is authorized to fix the rates and
charges for every public utility. Existing law authorizes the
commission to approve an increase of 1/2 of 1% to 1% in the rate of
return otherwise allowed an electrical corporation for investment by
the corporation in generation facilities using renewable resources.
This bill would authorize the commission, after a hearing, to
approve a similar increase in the rate of return for investment by a
corporation in energy storage systems, as defined, that (A) are used
and useful, (B) have costs of construction and operation over their
useful life that are less than other facilities that provide load
shifting, voltage support, and scheduling and shaping services for
intermittent renewable energy resources, and (C) perform any of 4
specified purposes.
(2) The existing Public Utilities Act requires the commission to
review and adopt a procurement plan for each electrical corporation
in accordance with specified elements, incentive mechanisms, and
objectives. The elements, among other things, require that the plan
include a showing that the electrical corporation will, in order to
fulfill its unmet resource needs, until a 20% renewable resources
portfolio is achieved, procure renewable energy resources with the
goal of ensuring that at least an additional 1% per year of the
electricity sold by the electrical corporation is generated from
eligible renewable energy resources, provided sufficient funds are
made available to cover certain above-market costs.
This bill would require that an electrical corporation's proposed
procurement plan include a showing that the electrical corporation
will, in order to fulfill its unmet resource needs, procure resources
from eligible renewable energy resources in an amount sufficient to
meet its procurement requirements pursuant to the renewables
portfolio standard established pursuant to the California Renewables
Portfolio Standard Program. The bill would add a requirement that the
procurement plan include a showing that the electrical corporation
will incorporate cost-effective, reliable, and feasible energy
storage systems, both centralized and distributed, that reduce
emissions of greenhouse gases, or reduce demand for peak electrical
generation, or improve the reliable operation of the electrical grid.
(3) Under existing law, a violation of the Public Utilities Act or
an order, decision, rule, direction, demand, or requirement of the
commission is a crime. Because certain of the provisions of this bill
are within the act and require action by the commission to implement
its requirements, a violation of these provisions would impose a
state-mandated local program by creating a new crime.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes
no . State-mandated local program: yes
no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 5898.20 of the
Streets and Highways Code is amended to read:
5898.20. (a) (1) The legislative body of any public agency may
determine that it would be convenient and advantageous to designate
an area within the public agency, which may encompass the entire
public agency or a lesser portion, within which authorized public
agency officials and property owners may enter into voluntary
contractual assessments for public improvements and to make financing
arrangements pursuant to this chapter.
(2) The legislative body of any public agency may also determine
that it would be convenient, advantageous, and in the public interest
to designate an area within the public agency, which may encompass
the entire public agency or a lesser portion, within which authorized
public agency officials and property owners may enter into voluntary
contractual assessments to finance the installation of distributed
generation renewable energy sources or energy or water efficiency
improvements that are permanently fixed to real property pursuant to
this chapter.
(b) The legislative body shall make these determinations by
adopting a resolution indicating its intention to do so. The
resolution of intention shall include a statement that the public
agency proposes to make voluntary contractual assessment financing
available to property owners, shall identify the kinds of public
works, distributed generation renewable energy sources, or energy or
water efficiency improvements that may be financed, shall describe
the boundaries of the area within which voluntary contractual
assessments may be entered into, and shall briefly describe the
proposed arrangements for financing the program, including a brief
description of criteria for determining the creditworthiness of a
property owner. The resolution of intention shall state that it is in
the public interest to finance the installation of distributed
generation renewable energy sources or energy or water efficiency
improvements, or both, pursuant to paragraph (2) of subdivision (a),
if applicable. The resolution shall state that a public hearing
should be held at which interested persons may object to or inquire
about the proposed program or any of its particulars, and shall state
the time and place of the hearing. The resolution shall direct an
appropriate public agency official to prepare a report pursuant to
Section 5898.22 and to enter into consultations with the county
auditor's office or county controller's office in order to reach
agreement on what additional fees, if any, will be charged to the
city or county for incorporating the proposed voluntary contractual
assessments into the assessments of the general taxes of the city or
county on real property.
(c) As used in this chapter, each of the following terms shall
have the following meaning:
(1) "Efficiency improvements" means permanent improvements fixed
to residential, commercial, industrial, agricultural, or other real
property.
(2) "Legislative body" means the governing body of a public
agency.
(3) (A) For the purpose of financing the installation of water
efficiency improvements, "public agency" means a city, county, city
and county, municipal utility district, community services district,
sanitary district, sanitation district, or water district, as defined
in Section 20200 of the Water Code. The definition of "city" in
Section 5005 shall not apply to this subparagraph.
(B) For the purpose of financing the installation of distributed
generation renewable energy sources or energy efficiency
improvements, "public agency" means a county, city, city and county,
or a municipal utility district, an irrigation district, or public
utility district that owns and operates an electric distribution
system. The definition of "city" in Section 5005 shall not apply to
this subparagraph.
(C) For the purpose of financing the public improvements, "public
agency" means a city as defined in Section 5005.
(4) For the purpose of financing the installation of distributed
generation renewable energy sources, "permanently fixed" includes,
but is not limited to, systems attached to a residential, commercial,
industrial, agricultural, or other real property pursuant to an
electricity purchase agreement between the owner of the system and
the owner of the assessed property, if the electricity purchase
agreement contains all of the following provisions:
(A) The attached system is an eligible renewable energy resource
pursuant to the California Renewables Portfolio Standard Program
(Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1
of Division 1 of the Public Utilities Code).
(B) The term of the electricity purchase agreement is at least as
long as the term of the related assessment contract.
(C) The owner of the attached system agrees to install, maintain,
and monitor the system for the entire term of the electricity
purchase agreement.
(D) The owner of the attached system is not permitted to remove
the system prior to completion of the term of the contractual
assessment lien.
(E) After installation, the electricity is purchased by a single
payment using the funds from the contractual assessment program.
(F) The right to receive the electricity from the system is tied
to the ownership of the assessed real property and is required to be
automatically transferred with the title to the real property whether
the title is transferred by voluntary sale or judicial or
nonjudicial foreclosure or by any other means.
(G) The system shall provide electricity to the assessed property
and to no other property or location.
(H) The property owner, and all successors in interest to the real
property, shall not use the electricity generated from the system
for any location other than the assessed property.
(I) The electricity purchase agreement identifies the public
agency that is a party to the assessment contract on the real
property as a third-party beneficiary of the electricity purchase
agreement until the assessment lien on the property has been fully
paid and, only until that time, prohibits amendments to the
electricity purchase agreement without the consent of the public
agency.
(J) The property owner is guaranteed, pursuant to criteria adopted
by the legislative body of a public agency as required by
subdivision (d), the electric power from the system.
(d) The legislative body of the public agency shall establish
criteria to ensure that a real property owner is guaranteed the
electricity from a distributed generation renewable energy source in
the event that the owner of the system files for bankruptcy, to the
extent permitted by federal law, prior to authorizing public agency
officials and property owners to enter into voluntary contractual
assessments for financing the installation of distributed generation
renewable energy sources attached to a residential, commercial,
industrial, agricultural, or other real property pursuant to a
contract that meets the provisions of paragraph (4) of subdivision
(c).
(e) The legislative body of the public agency shall make a finding
that any electricity purchase agreement funded with a contractual
assessment under this chapter is structured, to the extent permitted
by federal law, to provide protections to the property owner in the
event of a bankruptcy of the owner of the system. The protections may
include, but need not be limited to, the use of a special purpose
entity or other adequate security as required by the legislative
body. All matter omitted in this version of the bill appears in
the bill as amended in the Assembly, June 1, 2009. (JR11)