BILL NUMBER: AB 1536 AMENDED
BILL TEXT
AMENDED IN SENATE OCTOBER 14, 2009
AMENDED IN SENATE SEPTEMBER 10, 2009
AMENDED IN SENATE SEPTEMBER 8, 2009
AMENDED IN SENATE SEPTEMBER 2, 2009
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 add and repeal Sections 6245 and 6246 of the
Public Resources Code, relating to public resources, and making an
appropriation therefor. An act to amend Section 379.6
of the Public Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1536, as amended, Blakeslee. Oil and gas leases.
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 distributed energy resources
incentive program for distributed generation until January 1, 2012,
for the purposes of deploying distributed generation technologies
that the 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 systems meeting certain requirements 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 $83,000,000 per year.
(1) Existing law authorizes the State Lands Commission to enter
into a lease for the extraction of oil or gas from state-owned tide
and submerged lands in the California Coastal Sanctuary if the
commission determines that those oil and gas deposits are being
drained by means of producing wells upon adjacent federal lands and
if the lease is in the best interests of the state.
This bill would create the Interim Resources Management Board,
consisting of the Secretary of the Natural Resources Agency, the
Secretary for Environmental Protection, and the Controller. The bill
would authorize the board to consider a lease, lease application, or
revised lease application filed with the State Lands Commission
pursuant to that provision and subsequently rejected by the
commission. The bill would authorize the board to approve that lease
if specified terms and conditions are met.
The bill would provide for the repeal of these provisions on
January 1, 2011. The bill would set forth related declarations and
findings.
(2) The bill would annually appropriate, commencing with the
2010-11 fiscal year, up to $50,000,000 from any amounts received
annually by the state from royalty payments made according to a lease
or leases executed pursuant to the bill, as scheduled. The bill
would provide that $34,000,000 would be allocated to the Department
of Conservation for purposes of making subvention payments under the
Open Space Subvention Act of 1971 to eligible counties participating
in the California Land Conservation Act of 1965, and that $16,000,000
would be allocated to the Department of Parks and Recreation for the
acquisition and operation of state parks along the coast.
(3) The bill would appropriate, for the 2009-10 fiscal year, up to
$50,000,000 from any amounts received during that fiscal year by the
state from prepaid royalty payments required to be made according to
a lease executed pursuant to the bill to the State Department of
Public Health, as scheduled.
Vote: 2/3 majority . Appropriation:
yes 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
State Energy Resources Conservation and
Development Commission, shall administer, until January 1,
2012, the self-generation incentive program for distributed
generation resources distributed energy resources
initiative 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 05-12-044 and 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. All matter omitted in this version of
the bill appears in the bill as amended in the Senate September 10,
2009 (JR11)