BILL NUMBER: AB 1536 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 23, 2009
AMENDED IN ASSEMBLY MAY 6, 2009
AMENDED IN ASSEMBLY APRIL 14, 2009
INTRODUCED BY Assembly Member Blakeslee
FEBRUARY 27, 2009
An act to amend Section 379.6 of the Public Utilities Code,
relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1536, as amended, Blakeslee. Clean technology
Distributed energy resources incentive program.
Under existing law, the Public Utilities Commission (PUC) has
regulatory authority over public utilities, including electrical
corporations, as defined. Existing law requires the PUC, in
consultation with the State Energy Resources Conservation and
Development Commission (Energy Commission), to administer, until
January 1, 2012, a self-generation incentive program for distributed
generation resources.
This bill would instead require the PUC, in consultation with the
Energy Commission, to administer the clean technology
distributed energy resources incentive program
for distributed generation until January 1, 2012, for the purposes of
deploying distributed generation technologies that the
commission determines require ratepayer incentives to achieve
commercialization and PUC determines produce
benefits for ratepayers commensurate with their contribution to the
costs of the program. The bill would additionally authorize
incentives to be provided pursuant to the program for energy storage
facilities systems meeting certain
requirements , would specify that hydroelectric facilities
are not eligible for the program, and would delete certain
combustion-operated distributed generation projects from eligibility.
The bill would delete the commission's existing authority to include
other ultraclean and low-emission distributed generation
technologies, as defined, in the program. The bill would limit
program costs to no more than $75,000,000
$83,000,000 per year.
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 379.6 of the Public
Utilities Code is amended to read:
379.6. (a) (1) The commission, in consultation with the Energy
Resources Conservation and Development Commission,
shall administer, until January 1, 2012, the
self-generation incentive program for distributed generation
resources distributed energy resources incentive
program, originally established pursuant to Chapter 329 of the
Statutes of 2000. The distributed energy resources eligible for
program incentives are those specified in subdivision (b). The
purpose of the program is to deploy distributed energy resources
that the commission determines produce benefits for ratepayers
commensurate with their contribution to the costs of the program.
(2) Except as provided in paragraph (3), the extension of the
program pursuant to Chapter 894 of the Statutes of 2003, as amended
by Chapter 675 of the Statutes of 2004 and Chapter 22 of the Statutes
of 2005, shall apply to all eligible technologies, as determined by
the commission, until January 1, 2008.
(3)
(2) The commission shall administer solar technologies
separately , after January 1, 2007, pursuant to
the California Solar Initiative adopted by the commission in Decision
06-01-024 , as modified by Chapter 8.8 (commencing with Section
25780) of Division 15 of the Public Resources Code and Article 1
(commencing with Section 2851) of Chapter 9 of Part 2 .
(b) Commencing January 1, 2008, until January 1, 2012, eligibility
for the program pursuant to paragraphs (1) and (2) of subdivision
(a) shall be limited to fuel
(b) Distributed energy resources that
are eligible for the program shall be limited to the
following:
(1) Fuel cells and wind
distributed generation technologies that meet or exceed the emissions
standards required under the distributed generation certification
program requirements of Article 3 (commencing with Section 94200) of
Subchapter 8 of Chapter 1 of Division 3 of Title 17 of the California
Code of Regulations.
(c) Eligibility for the self-generation incentive program's level
3 incentive category shall be subject to the following conditions:
(1) Commencing January 1, 2007, all combustion-operated
distributed generation projects using fossil fuel shall meet an
oxides of nitrogen (NOx) emissions rate standard of 0.07 pounds per
megawatthour and a minimum efficiency of 60 percent. A minimum
efficiency of 60 percent shall be measured as useful energy output
divided by fuel input. The efficiency determination shall be based on
100 percent load.
(2) Combined heat and power units that meet the 60-percent
efficiency standard may take a credit to meet the applicable NOx
emissions standard of 0.07 pounds per megawatthour. Credit shall be
at the rate of one megawatthour for each 3.4 million British thermal
units (Btus) of heat recovered.
(3) Notwithstanding paragraph (1), a project that does not meet
the applicable NOx emissions standard is eligible if it meets both of
the following requirements:
(A) The project operates solely on waste gas. The commission shall
require a customer that applies for an incentive pursuant to this
paragraph to provide an affidavit or other form of proof, that
specifies that the project shall be operated solely on waste gas.
Incentives awarded pursuant to this paragraph shall be subject to
refund and shall be refunded by the recipient to the extent the
project does not operate on waste gas. As used in this paragraph,
"waste gas" means natural gas that is generated as a byproduct of
petroleum production operations and is not eligible for delivery to
the utility pipeline system.
(B) The air quality management district or air pollution control
district, in issuing a permit to operate the project, determines that
operation of the project will produce an onsite net air emissions
benefit, compared to permitted onsite emissions if the project does
not operate. The commission shall require the customer to secure the
permit prior to receiving incentives.
(d) In determining the eligibility for the self-generation
incentive program, minimum system efficiency shall be determined
either by calculating electrical and process heat efficiency as set
forth in Section 218.5, or by calculating overall electrical
efficiency.
(2) Energy storage systems with a storage capacity of 10 megawatts
or less that meet any of the following requirements:
(A) The energy storage system supports the integration of an
eligible renewable energy resource pursuant to Article 16 (commencing
with Section 399.11) of Chapter 2.3.
(B) The energy storage system is capable of responding to dispatch
and market protocols for grid reliability and stability.
(C) The energy storage system is capable of providing frequency or
area control error regulation required to integrate intermittent
eligible renewable energy resources and maintain reliable operation
of the electrical grid.
(D) The energy storage system stores energy to be dispatched at a
later time.
(c) Energy storage systems that have a storage capacity of more
than 10 megawatts are not eligible for the program.
(e)
(d) (1) In administering the
self-generation distributed energy resources
incentive program, the commission may adjust the amount of
rebates , include other ultraclean and low-emission
distributed generation technologies, as defined in Section 353.2,
and evaluate other public policy interests, including, but
not limited to, ratepayers, and energy efficiency and environmental
interests.
(f) On or before November 1, 2008, the State Energy Resources
Conservation and Development Commission, in consultation with the
commission and the State Air Resources Board, shall evaluate the
costs and benefits, including air pollution, efficiency, and
transmission and distribution system improvements, of providing
ratepayer subsidies for renewable and fossil fuel "ultraclean and
low-emission distributed generation," as defined in Section 353.2, as
part of the integrated energy policy report adopted pursuant to
Chapter 4 (commencing with Section 25300) of Division 15 of the
Public Resources Code. The State Energy Resources Conservation and
Development Commission shall include recommendations for changes in
the eligibility of technologies and fuels under the program, and
whether the level of subsidy should be adjusted, after considering
its conclusions on costs and benefits pursuant to this subdivision.
(2) Notwithstanding paragraph (1), the commission may authorize
the expenditure of not more than eighty-three million dollars
($83,000,000) per year for the program, including incentive payments
and program administrative costs.
(g)
(e) (1) In administering the self-generation
distributed energy resources incentive program,
the commission shall provide an additional incentive of 20 percent
from existing program funds for the installation of eligible
distributed generation distributed energy
resources from a California supplier.
(2) "California supplier" as used in this subdivision means any
sole proprietorship, partnership, joint venture, corporation, or
other business entity that manufactures eligible distributed
generation distributed energy resources in
California and that meets either of the following criteria:
(A) The owners or policymaking officers are domiciled in
California and the permanent principal office, or place of business
from which the supplier's trade is directed or managed, is located in
California.
(B) A business or corporation, including those owned by, or under
common control of, a corporation, that meets all of the following
criteria continuously during the five years prior to providing
eligible distributed generation distributed
energy resources to a self-generation
distributed energy resources incentive program recipient:
(i) Owns and operates a manufacturing facility located in
California that builds or manufactures eligible distributed
generation distributed energy resources.
(ii) Is licensed by the state to conduct business within the
state.
(iii) Employs California residents for work within the state.
(3) For purposes of qualifying as a California supplier, a
distribution or sales management office or facility does not qualify
as a manufacturing facility.
SECTION 1. Section 379.6 of the Public
Utilities Code is amended to read:
379.6. (a) (1) The commission, in consultation with the Energy
Commission, shall administer, until January 1, 2012, the clean
technology incentive program for distributed energy resources
specified in subdivision (b). The purposes of the program are to
deploy distributed generation technologies that the commission
determines require ratepayer incentives to achieve commercialization
and produce benefits for ratepayers commensurate with their
contribution to the costs of the program.
(2) The commission shall administer solar technologies separately
pursuant to the California Solar Initiative adopted by the commission
in Decision 06-01-024, as modified by Chapter 8.8 (commencing with
Section 25780) of Division 15 of the Public Resources Code and
Article 1 (commencing with Section 2851) of Chapter 9 of Part 2.
(b) Distributed generation technologies that are eligible for the
program shall be limited to the following:
(1) Fuel cells and wind distributed generation technologies that
meet or exceed the emissions standards required under the distributed
generation certification program requirements of Article 3
(commencing with Section 94200) of Subchapter 8 of Chapter 1 of
Division 3 of Title 17 of the California Code of Regulations.
(2) Energy storage facilities that use emerging technologies not
in commercial use and meet any of the following requirements:
(A) The facility stores energy generated from an eligible
renewable energy resource pursuant to Article 16 (commencing with
Section 399.11).
(B) The facility is capable of responding to Independent System
Operator commands to either absorb or dispatch electricity from the
electrical grid and is capable of storing the electricity for a
minimum of two hours.
(C) The facility is capable of providing frequency or area control
error regulation required to integrate intermittent eligible
renewable energy resources and maintain reliable operation of the
electrical grid.
(D) The facility stores energy during off-peak periods and
dispatches electricity during peak periods.
(c) Hydroelectric facilities are not eligible for the program
described in this section.
(d) In administering the clean technology incentive program, the
commission may adjust the amount of rebates and evaluate other public
policy interests, including, but not limited to, ratepayers, and
energy efficiency and environmental interests.
(e) (1) In administering the clean technology incentive program,
the commission shall provide an additional incentive of 20 percent
from existing program funds for the installation of eligible
distributed generation resources from a California supplier.
(2) "California supplier" as used in this subdivision means any
sole proprietorship, partnership, joint venture, corporation, or
other business entity that manufactures eligible distributed
generation resources in California and that meets either of the
following criteria:
(A) The owners or policymaking officers are domiciled in
California and the permanent principal office, or place of business
from which the supplier's trade is directed or managed, is located in
California.
(B) A business or corporation, including those owned by, or under
common control of, a corporation, that meets all of the following
criteria continuously during the five years prior to providing
eligible distributed generation resources to a self-generation
incentive program recipient:
(i) Owns and operates a manufacturing facility located in
California that builds or manufactures eligible distributed
generation resources.
(ii) Is licensed by the state to conduct business within the
state.
(iii) Employs California residents for work within the state.
(3) For purposes of qualifying as a California supplier, a
distribution or sales management office or facility does not qualify
as a manufacturing facility.
(f) The commission may authorize the expenditure of no more than
seventy-five million dollars ($75,000,000) per year for the program,
including incentive payments and program administrative costs.