BILL NUMBER: AB 435 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 23, 2009
AMENDED IN SENATE JUNE 25, 2009
AMENDED IN ASSEMBLY APRIL 14, 2009
INTRODUCED BY Assembly Member De La Torre
FEBRUARY 24, 2009
An act to add Section 327.1 to, and to add
and repeal Chapter 3 (commencing with Section 3260)
to of Part 4 of Division 1 of,
of the Public Utilities Code, relating to public
utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 435, as amended, De La Torre. Public utilities: transmission
facilities: environmental review: infrastructure.
facilities.
Under existing law, the Public Utilities Commission (CPUC) has
regulatory authority over public utilities and can establish
its own procedures, subject to statutory limitations or directions
and constitutional requirements of due process ,
including electrical corporations. The Public Utilities Act prohibits
any electrical corporation from beginning the construction of, among
other things, a line, plant, or system, or of any extension thereof,
without having first obtained from the CPUC a certificate that the
present or future public convenience and necessity require or will
require that construction .
This bill would require the CPUC to study the efficacy of
conducting concurrent environmental review of proposed electricity
transmission facilities by federal and state agencies.
Existing law establishes the State Energy Resources Conservation
and Development Commission (Energy Commission) in the Natural
Resources Agency. Existing law requires the Energy Commission to
conduct biennial assessments and forecasts of all aspects of energy
industry supply, production, transportation, delivery and
distribution, demand, and prices. The Energy Commission is required
to adopt a biennial integrated energy policy by November 1 that
contains an overview of major energy trends and issues facing the
state. Existing law requires the Energy Commission to adopt a
strategic plan for the state's electrical transmission grid using
existing resources, to be included in the integrated energy policy
report adopted on November 1, 2005, which identifies and recommends
actions required to implement investments needed to ensure
reliability, relieve congestion, and to meet future growth in
electrical load and generation, including renewable resources, energy
efficiency, and other demand reduction measures.
Existing law authorizes the CPUC to fix the rates and charges for
every public utility, and requires that those rates and charges be
just and reasonable. The Public Utilities Act prohibits any
electrical corporation from beginning the construction of, among
other things, a line, plant, or system, or of any extension thereof,
without having first obtained from the CPUC a certificate that the
present or future public convenience and necessity require or will
require that construction.
The existing restructuring of the electrical industry within the
Public Utilities Act provides for the establishment of an Independent
System Operator (ISO) as a public benefit nonprofit corporation.
Existing law requires the ISO to ensure efficient use and reliable
operation of the transmission grid consistent with achieving planning
and operating reserve criteria no less stringent than those
established by the Western Electricity Coordinating Council and the
American Electric Reliability Council.
This bill would enact the Electrical Transmission Infrastructure
Investment Act. The bill would require that every electrical
corporation that owns electrical transmission facilities plan for,
and provide, sufficient electrical transmission facilities and any
upgrades or expansion of those facilities as are necessary to ensure
reliable transmission service to its customers, while achieving
certain renewable power goals. The bill would require every
electrical corporation that owns electrical transmission facilities,
by July 1, 2011, and each July 1 thereafter, to provide a report to
the CPUC identifying any electrical transmission facility, upgrade,
or enhancement that the electrical corporation determines is
necessary to ensure reliable transmission service to its customers,
while achieving certain renewable power goals, in coordination with
the ISO.
This bill would require the ISO to identify upgrades and
expansions of the electrical transmission system as are necessary for
its control area. The bill would require the ISO, beginning July 1,
2011, and each July 1 thereafter, to provide a report to the CPUC,
the Energy Commission, and the Electricity Oversight Board
identifying upgrades and expansions of the electrical transmission
system as are necessary for its control area.
The bill would require the CPUC, in acting upon any application
for a certificate of public convenience and necessity, to approve
those investments in electrical transmission infrastructure that it
determines are reasonable and necessary to maintain or enhance grid
reliability, to maintain or enhance efficient use of the grid, or
that facilitate achievement of renewable energy resource goals
pursuant to a specified law, if those investments meet all other
applicable standards and requirements for approval. The bill would
require the CPUC, in acting upon any application for a certificate of
public convenience and necessity, to consider the most recent report
of the ISO. The bill would require the CPUC to streamline the
transmission permitting and siting process by eliminating regulatory
overlap and duplication within the commission's processes, to reduce
the time needed to review and approve a certificate of public
convenience and necessity for transmission facilities and systems, to
expedite the review of new or expanded transmission facilities and
systems located within state or federally designated transmission
corridors. The bill would authorize the CPUC, if it finds that the
costs were prudently incurred in accordance with a specified law, to
allow recovery in rates of any increase in transmission costs
incurred by an electrical corporation or other public utility in
planning, designing, and engineering the reconfiguration,
replacement, expansion, or construction, of transmission facilities
to the extent that those costs are not otherwise authorized for
recovery in rates approved by the Federal Energy Regulatory
Commission. The bill would require the CPUC to report to the
Legislature beginning in 2011, summarizing the status of every
application for a certificate of public convenience and necessity
filed by an electrical corporation or other public utility for a
transmission facility, upgrade, or enhancement and to annually update
its transmission report as part of its annual workplan.
The bill would require every local publicly owned electrical
utility, as defined, that owns electrical transmission facilities to
plan for, and provide, sufficient electrical transmission facilities
and any upgrades or expansion of those facilities as are reasonably
necessary to ensure reliable transmission service to its customers.
The bill , until January 1, 2012, would
require an electrical corporation or a local publicly owned electric
utility that owns electrical transmission facilities to investigate
and evaluate, the cost and feasibility of using high-technology
conductors and other advanced transmission technology in new and
upgraded transmission projects , thereby imposing a
state-mandated local program on local publicly owned electric
utilities that own electrical transmission facilities .
The bill would require an electrical corporation to additionally
evaluate the cost and feasibility of retrofitting existing
transmission facilities with high-technology conductors and other
advanced transmission technology, whether using high-technology
conductors or other advanced transmission technology will expedite
the delivery of electricity generated by eligible renewable energy
resources, and enable the utility to increase transmission
capacity without building new transmission towers. The bill would
require electrical corporations to report the results of the
investigation and evaluation to the CPUC by July 1, 2011. The bill
would require local publicly owned electric utilities to report the
results of the investigation and evaluation to the Energy Commission
by July 1, 2011.
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, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 327.1 is added to the Public
Utilities Code, to read:
327.1. The commission shall study the efficacy of conducting
concurrent environmental reviews of proposed electricity transmission
facilities by federal and state agencies.
SEC. 2. SECTION 1. Chapter 3
(commencing with Section 3260) is added to Part 4 of Division 1 of
the Public Utilities Code, to read:
CHAPTER 3. TRANSMISSION OF ELECTRICITY
3260. (a) This chapter shall be known, and may be cited, as the
Electrical Transmission Infrastructure Investment Act.
(b) For purposes of this chapter, the following terms have the
following meanings:
(1) "ISO" means the Independent System Operator established
pursuant to Article 2 (commencing with Section 334), and operating
pursuant to Article 3 (commencing with Section 345), of Part 1.
(2) "Local publicly owned electric utility" has the same meaning
as set forth in Section 224.3.
(c) The Legislature finds and declares the following:
(1) Planning for, and investing in, electrical transmission
infrastructure to ensure its continued efficient use and reliable
operation is essential to the health, safety, and economic well-being
of California consumers and businesses.
(2) Additional investments in electrical transmission
infrastructure may be necessary to ensure reliability, relieve
transmission congestion, and meet future growth in load and energy
resources, including renewable energy resources, energy efficiency,
and other demand reduction measures.
(3) The responsibility for planning and investing in electrical
transmission infrastructure has historically been carried out as part
of the obligation of an electrical corporation or local publicly
owned electric utility to provide reliable, reasonably priced,
electric service.
(4) Changes that have occurred over the last decade in the
structure, operation, and regulation of the electrical industry make
it appropriate and necessary to clarify and affirm the respective
responsibilities and obligations of industry participants for
planning and investing in electrical transmission infrastructure, to
ensure that adequate investments are made in a timely manner so that
the state's electrical transmission grid system continues to operate
in an efficient and reliable manner.
(5) Planning and investing is specifically needed for the
electrical transmission infrastructure required to facilitate
achievement of the renewable power goals established in Article 16
(commencing with Section 399.11) of Chapter 2.3 of Part 1.
(6) While recognizing the urgency of meeting California's
renewable energy goals and associated transmission needs, the
California Environmental Quality Act (CEQA) is the cornerstone of
California's environmental regulations.
(7) CEQA provides opportunities for meaningful public
participation and enables multiple stakeholders to engage in the
siting and permitting process.
(8) It is equally important that the process have a high level of
transparency so that interested stakeholders may track the process of
the project each step of the way.
(d) It is the policy of this state and the intent of the
Legislature that the commission, the Energy Commission, the ISO, and
electrical corporations ensure that adequate investments are made in
a timely manner so that the state's electrical transmission system
continues to operate in an efficient and reliable manner while
achieving the renewable power goals established in Article 16
(commencing with Section 399.11) of Chapter 2.3 of Part 1.
3261. (a) Every electrical corporation that owns electrical
transmission facilities shall plan for, and provide, sufficient
electrical transmission facilities and any upgrades or expansion of
those facilities as are necessary to ensure reliable transmission
service to its customers, consistent with Sections 380 and 451, while
achieving the renewable power goals established in Article 16
(commencing with Section 399.11) of Chapter 2.3 of Part 1. This
obligation of an electrical corporation includes those customers that
receive distribution service from the electrical corporation,
without regard to whether the customer receives electric service
through a direct transaction with an electric service provider.
(b) Every electrical corporation that owns electrical transmission
facilities shall, by July 1, 2011, and each July 1 thereafter,
provide a report to the commission identifying any electrical
transmission facility, upgrade, or enhancement that the electrical
corporation determines is reasonably necessary to ensure reliable
transmission service to its customers, while achieving the renewable
power goals established in Article 16 (commencing with Section
399.11) of Chapter 2.3 of Part 1. In identifying necessary
transmission investments, the electrical corporation shall coordinate
with the ISO and act consistent with Sections 380 and 451. Each
report shall include those transmission facilities, upgrades, or
enhancements identified by the Independent System Operator pursuant
to Section 3262. Each report shall include projections for at least
the next 10 years and shall consider the resources that are being and
are likely to be procured to achieve the renewable power goals
established in Article 16 (commencing with Section 399.11) of Chapter
2.3 of Part 1, the Energy Commission's most recent electricity
supply and demand outlook forecast, any relevant investments
identified pursuant to Section 25324 of the Public Resources Code,
and any relevant transmission corridor zone designated pursuant to
Chapter 4.3 (commencing with Section 25330) of Division 15 of the
Public Resources Code.
3262. (a) Consistent with its obligations pursuant to Article 3
(commencing with Section 345) of Chapter 2.3 of Part 1, the ISO shall
identify upgrades and expansions of the electrical transmission
system as are necessary for its control area, considering the changes
in the electrical generation and transmission infrastructure that
will occur as a result of the attainment of the renewable power goals
established in Article 16 (commencing with Section 399.11) of
Chapter 2.3 of Part 1.
(b) The ISO shall, beginning July 1, 2011, and each July 1
thereafter, after public review and comment consistent with Section
345.5, provide a report to the commission, the Energy Commission, and
the Electricity Oversight Board. The report shall identify upgrades
and expansions of the electrical transmission system pursuant to
subdivision (a). Each report shall include projections for at least
the next 10 years and shall consider the Energy Commission's most
recent electricity supply and demand outlook forecast, any relevant
investments identified pursuant to Section 25324 of the Public
Resources Code, and any relevant transmission corridor zone
designated pursuant to Chapter 4.3 (commencing with Section 25330) of
Division 15 of the Public Resources Code.
3263. (a) In acting upon any application for a certificate of
public convenience and necessity pursuant to Chapter 5 (commencing
with Section 1001) of Part 1, the commission shall approve those
investments in the electrical transmission infrastructure that it
determines are reasonable and necessary to maintain or enhance grid
reliability, to maintain or enhance efficient use of the grid, or
that facilitate achievement of renewable power goals established in
Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1,
if those investments meet all other applicable standards and
requirements for approval.
(b) In acting upon any application for a certificate of public
convenience and necessity pursuant to Chapter 5 (commencing with
Section 1001), the commission shall consider the most recent report
of the ISO made pursuant to Section 3262.
(c) Consistent with all applicable environmental laws and those
laws and commission rules providing for public review and
participation, the commission shall do all of the following:
(1) Streamline the transmission permitting and siting process by
eliminating regulatory overlap and duplication within the commission'
s processes.
(2) Reduce the time needed to review and approve a certificate of
public convenience and necessity for transmission facilities and
systems.
(3) Expedite the review of new or expanded transmission facilities
and systems located within state or federally designated
transmission corridors.
(d) The commission may, if it finds that the costs were prudently
incurred in accordance with subdivision (a) of Section 454, allow
recovery in rates of any increase in transmission costs incurred by
an electrical corporation or other public utility in planning,
designing, and engineering the reconfiguration, replacement,
expansion, or construction of transmission facilities to the extent
that those costs are not otherwise authorized for recovery in rates
approved by the Federal Energy Regulatory Commission.
(e) The commission shall, beginning in 2011, report to the
Legislature summarizing the status of every application for a
certificate of public convenience and necessity filed by an
electrical corporation or other public utility for a transmission
facility, upgrade, or enhancement. The report shall include actions
the commission has taken to facilitate the permitting and siting of
the facilities and a schedule to ensure adequate investments are made
in a timely manner in electrical transmission infrastructure to
ensure that the state's electrical transmission system continues to
operate in an efficient and reliable manner. The commission shall
annually update its transmission report as part of its annual
workplan.
(f) Nothing in this section shall affect the planning, designing,
engineering, permitting, siting, or construction of any transmission
improvement for which a certificate of public convenience and
necessity has been filed with the commission before January 1, 2010.
3264. (a) Every local publicly owned electric utility that owns
electrical transmission facilities shall plan for, and provide,
sufficient electrical transmission facilities and any upgrades or
expansion of those facilities as are reasonably necessary to ensure
reliable transmission service to its customers.
(b) Every local publicly owned electric utility that owns
electrical transmission facilities shall plan for, and provide,
sufficient electrical transmission facilities and any upgrades or
expansion of those facilities in a manner that recognizes the intent
of the Legislature, in accordance with this chapter, to ensure that
adequate investments are made in a timely manner so that the state's
electrical transmission system continues to operate in an efficient
and reliable manner.
3265. Nothing in this chapter diminishes or expands any existing
authority of a local publicly owned electric utility, electrical
corporation, other public utility, person, or corporation, either
alone or together with any other public or private entity, to plan
for and provide electrical transmission facilities.
3266. 3260. (a) Each electrical
corporation or local publicly owned electric utility that owns
electrical transmission facilities shall investigate and evaluate the
cost and feasibility of using high-technology conductors, including,
but not limited to, ceramic conductors, and other advanced
transmission technology in new and upgraded transmission projects. An
electrical corporation shall also evaluate the cost and feasibility
of retrofitting existing transmission facilities with high-technology
conductors and other advanced transmission technology, and whether
using high-technology conductors or other advanced transmission
technology will expedite the delivery of electricity generated by
eligible renewable energy resources and enable the utility to
increase transmission capacity without building new transmission
towers.
(b) An electrical corporation shall report the results of the
investigation and evaluation made pursuant to subdivision (a) to the
commission by July 1, 2011.
(c) A local publicly owned electric utility shall report the
results of the investigation and evaluation made pursuant to
subdivision (a) to the Energy Commission by July 1, 2011.
(d) This chapter shall remain in effect only until January 1,
2012, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2012, deletes or extends
that date.
SEC. 3. If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.