BILL NUMBER: AB 2514 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Skinner
FEBRUARY 19, 2010
An act to amend Section 25302 of the Public Resources Code, and to
amend Sections 454.3, 9615, and 9620 of, and to add Chapter 7.7
(commencing with Section 2835) to Part 2 of Division 1 of, the Public
Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2514, as introduced, Skinner. Energy storage systems.
Under existing law, the Public Utilities Commission (CPUC) has
regulatory authority over public utilities, including electrical
corporations, as defined. The existing Public Utilities Act requires
the CPUC to review and adopt a procurement plan for each electrical
corporation in accordance with specified elements, incentive
mechanisms, and objectives. The existing California Renewables
Portfolio Standard Program (RPS program) requires the CPUC to
implement annual procurement targets for the procurement of eligible
renewable energy resources, as defined, for all retail sellers,
including electrical corporations, community choice aggregators, and
electric service providers, but not including local publicly owned
electric utilities, to achieve the targets and goals of the program.
The existing Warren-Alquist State Energy Resources Conservation
and Development Act establishes the State Energy Resources
Conservation and Development Commission (Energy Commission) and
requires it to undertake a continuing assessment of trends in the
consumption of electricity and other forms of energy and to analyze
the social, economic, and environmental consequences of those trends
and to collect from electric utilities, gas utilities, and fuel
producers and wholesalers and other sources, forecasts of future
supplies and consumption of all forms of energy. Existing law
requires the Energy Commission, beginning November 1, 2003, and every
2 years thereafter, to adopt an integrated energy policy report
which includes an assessment and forecast of system reliability and
the need for resource additions, efficiency, and conservation.
Existing law requires that each local publicly owned electric
utility serving end-use customers to prudently plan for and procure
resources that are adequate to meet its planning reserve margin and
peak demand and operating reserves, sufficient to provide reliable
electric service to its customers. That law additionally requires the
utility, upon request, to provide the Energy Commission with any
information the Energy Commission determines is necessary to evaluate
the progress made by the local publicly owned electric utility in
meeting those planning requirements, and requires the Energy
Commission to report the progress made by each utility to the
Legislature, to be included in the integrated energy policy reports.
Under existing law the governing body of a local publicly owned
electric utility is responsible for implementing and enforcing a
renewables portfolio standard for the utility that recognizes the
intent of the Legislature to encourage renewable resources, while
taking into consideration the effect of the standard on rates,
reliability, and financial resources and the goal of environmental
improvement.
This bill would require each electrical corporation and local
publicly owned electric utility, commencing January 1, 2014, to
procure new energy storage systems, as defined, that are sufficient
to provide specified percentages of the utility's average peak
electrical demand using stored energy that was generated during
offpeak periods of electrical demand (energy storage portfolio). The
bill would additionally require each electrical corporation and local
publicly owned electric utility, commencing January 1, 2011, to
implement a 5-year program to employ distributed thermal, mechanical,
or electrochemical energy storage systems to maximize shifting of
electricity use for air-conditioning and refrigeration from peak
demand periods to offpeak periods. The bill would require each
electrical corporation and local publicly owned electric utility to
develop plans to meet the energy storage portfolio procurement
requirements and to report certain information to the Energy
Commission. The bill would make an electrical corporation or local
publicly owned electric utility liable for civil penalties of $5,000
to $25,000 per day for each day in which it failed to comply with
certain requirements added by the bill. The bill would require the
Energy Commission to include certain information relative to energy
storage systems in the integrated energy policy report, commencing
with the report to be made by November 1, 2011. The bill would make
other technical, nonsubstantive revisions to existing law.
Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the CPUC
is a crime.
Because certain of the provisions of this bill require action by
the CPUC to implement, a violation of these provisions would impose a
state-mandated local program by creating a new crime. Because
certain of the bill's requirements are applicable to local publicly
owned electric utilities, the bill would impose a state-mandated
local program.
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 specified reasons.
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 25302 of the Public Resources Code is amended
to read:
25302. (a) Beginning November 1, 2003, and every two years
thereafter, the commission shall adopt an integrated energy policy
report. This integrated report shall contain an overview of major
energy trends and issues facing the state, including, but not limited
to, supply, demand, pricing, reliability, efficiency, and impacts on
public health and safety, the economy, resources, and the
environment. Energy markets and systems shall be grouped and assessed
in three subsidiary volumes:
(1) Electricity and natural gas markets.
(2) Transportation fuels, technologies, and infrastructure.
(3) Public interest energy strategies.
(b) The commission shall compile the integrated energy policy
report prepared pursuant to subdivision (a) by consolidating the
analyses and findings of the subsidiary volumes in paragraphs (1),
(2), and (3) of subdivision (a). The integrated energy policy report
shall present policy recommendations based on an indepth and
integrated analysis of the most current and pressing energy issues
facing the state. The analyses supporting this integrated energy
policy report shall explicitly address interfuel and intermarket
effects to provide a more informed evaluation of potential tradeoffs
when developing energy policy across different markets and systems.
(c) The integrated energy policy report shall include an
assessment and forecast of system reliability and the need for
resource additions, efficiency, and conservation that considers all
aspects of energy industries and markets that are essential for the
state economy, general welfare, public health and safety, energy
diversity, and protection of the environment. This assessment shall
be based on determinations made pursuant to this chapter.
(d) Beginning November 1, 2004, and every two years thereafter,
the commission shall prepare an energy policy review to update
analyses from the integrated energy policy report prepared pursuant
to subdivisions (a), (b), and (c), or to raise energy issues that
have emerged since the release of the integrated energy policy
report. The commission may also periodically prepare and release
technical analyses and assessments of energy issues and concerns to
provide timely and relevant information for the Governor, the
Legislature, market participants, and the public.
(e) (1) For purposes of this subdivision, "energy storage system"
has the same meaning as in Section 2835.1 of the Public Utilities
Code.
(2) Beginning November 1, 2011, and every two years thereafter,
the energy policy review prepared by the commission, pursuant to
subdivision (d), to update the integrated energy policy report, shall
do all of the following:
(A) Identify, evaluate, and recommend the best technologies and
locations in the state for energy storage systems to achieve the
purposes set forth in subdivision (a) of Section 2837.
(B) Evaluate the potential capacity and benefits of energy storage
systems to the electrical transmission and distribution grid.
(C) Identify and recommend locations where the interconnection
costs for energy storage systems located on the transmission and
distribution grid would be minimized.
(e)
(f) In preparation of the report, the commission shall
consult with the following entities: the Public Utilities Commission,
the Office of Ratepayer Advocates, the State Air Resources Board,
the Electricity Oversight Board, the Independent System Operator, the
Department of Water Resources, the California Consumer Power and
Conservation Financing Authority, the Department of Transportation,
and the Department of Motor Vehicles, and any federal, state, and
local agencies it deems necessary in preparation of the integrated
energy policy report. To assure collaborative development of state
energy policies, these agencies shall make a good faith effort to
provide data, assessment, and proposed recommendations for review by
the commission.
(f)
(g) The commission shall provide the report to the
Public Utilities Commission, the Office of Ratepayer Advocates, the
State Air Resources Board, the Electricity Oversight Board, the
Independent System Operator, the Department of Water Resources, the
California Consumer Power and Conservation Financing Authority, and
the Department of Transportation. For the purpose of ensuring
consistency in the underlying information that forms the foundation
of energy policies and decisions affecting the state, those entities
shall carry out their energy-related duties and responsibilities
based upon the information and analyses contained in the report. If
an entity listed in this subdivision objects to information contained
in the report, and has a reasonable basis for that objection, the
entity shall not be required to consider that information in carrying
out its energy-related duties.
(g)
(h) The commission shall make the report accessible to
state, local, and federal entities and to the general public.
SEC. 2. Section 454.3 of the Public Utilities Code is amended to
read:
454.3. The commission may, after a hearing, approve an increase
of from one-half of 1 percent to 1 percent in the rate of return
otherwise allowed an electrical corporation on its electric plant for
investment by the corporation in facilities meeting one of the
following requirements:
(a) The facility is designed to generate electricity from a
renewable resource, including, but not limited to, solar energy,
geothermal steam, wind, and hydroelectric power at new or existing
dams; the facility is subject to Resources Agency review of its
environmental impacts and determination that the facility is
environmentally acceptable; its capital costs, when added to its
costs of operation and maintenance, result in a cost of electricity
generated over the useful life of the facility less than that of
electricity generated by existing facilities utilizing nuclear power
or fossil fuel; and the facility is used and useful.
(b) The facility is capable of meeting the then applicable
environmental pollution standards; its capital costs, when added to
its costs of operation and maintenance, result in a cost of
electricity generated over the useful life of the facility less than
that of electricity generated by existing facilities utilizing
nuclear power or fossil fuel; and the facility is used and useful.
(c) The facility is experimental and is, in the determination of
the commission, reasonably designed to improve or perfect technology
for the generation of electricity from renewable resources or to more
efficiently utilize other resources in a manner which will decrease
environmental pollution from and lower the costs of the electricity
generated.
(d) The facility is an "energy storage system," as defined in
Section 2835.1, and serves at least one of the purposes identified in
subdivision (a) of Section 2837.
SEC. 3. Chapter 7.7 (commencing with Section 2835) is added to
Part 2 of Division 1 of the Public Utilities Code, to read:
CHAPTER 7.7. ENERGY STORAGE SYSTEMS
2835. The Legislature finds and declares all of the following:
(a) Greatly expanded energy storage systems are necessary to
enable electrical corporations and local publicly owned electric
utilities to integrate increased amounts of renewable energy
resources into the electrical transmission and distribution grid in a
manner that minimizes emissions of greenhouse gases and reduces
costs to ratepayers.
(b) Additional energy storage systems are necessary to make full
and efficient use of the significant additional amounts of variable,
intermittent, and offpeak electrical generation from wind and solar
energy that will be entering the California power mix on an
accelerated basis.
(c) Expanded use of energy storage systems can reduce costs to
ratepayers by avoiding or deferring the need for new fossil-fuel
powered peaking powerplants and avoiding or deferring distribution
and transmission system upgrades and expansion of the grid.
(d) Expanded use of energy storage systems will reduce the use of
electricity generated from fossil-fuels to meet peak-load
requirements on days with high electricity demand and can avoid or
reduce the use of electricity that was generated by high
carbon-emitting electrical-generating facilities during those high
electricity demand periods. This will have substantial cobenefits
from reduced emissions of criteria pollutants.
(e) Use of energy storage systems to provide the ancillary
services otherwise provided by fossil-fueled generating facilities
will reduce emissions of carbon dioxide and criteria pollutants.
(f) There are significant barriers to obtaining the benefits of
energy storage systems including inadequate evaluation of the use of
energy storage to integrate renewable energy resources into the
transmission and distribution grid through long-term electricity
resource planning, lack of recognition of technological and
marketplace advancements, and inadequate statutory and regulatory
support.
2835.1. For purposes of this chapter, the following terms have
the following meanings:
(a) "Energy storage portfolio" means those requirements for an
electrical corporation or local publicly owned electric utility to
procure new energy storage systems established pursuant to Section
3836.
(b) (1) "Energy storage system" means commercially available
technology that is capable of absorbing energy, storing it for a
period of time, and thereafter dispatching the energy. An "energy
storage system" may have any of the characteristics in paragraph (2),
is required to accomplish one of the purposes in paragraph (3), and
is required to meet at least one of the characteristics in paragraph
(4).
(2) An "energy storage system" may have any of the following
characteristics:
(A) Be either centralized or distributed.
(B) Be either owned by an electrical corporation or local publicly
owned electric utility, a customer of an electrical corporation or
local publicly owned electric utility, or a third party, or is
jointly owned by two or more of the above.
(3) An "energy storage system" shall either reduce emissions of
greenhouse gases, reduce demand for peak electrical generation, or
improve the reliable operation of the electrical transmission or
distribution grid.
(4) An "energy storage system" shall, without substantial reliance
on fossil fuels, do one of the following:
(A) Use electromechanical, electrochemical, or electrothermal
processes to store energy for delivery as electricity to the
transmission or distribution grid at a later time.
(B) Store thermal energy either for use to generate electricity at
a later time, or for direct use for heating or cooling at a later
time in a manner that avoids the need to use electricity at that
time.
(c) "New" means, in reference to an energy storage system, a
system that is installed and first becomes operational after January
1, 2011.
(d) "Offpeak" means, in reference to electrical demand, a period
that is not within a peak demand period.
(e) "Peak demand period" means a period of high daily, weekly, or
seasonal demand for electricity. The peak demand period for a
particular utility will vary by season and climactic conditions, and
may vary by areas within the utility's service territory depending
upon possible transmission constraints. The peak demand period for an
electrical corporation shall be determined, or approved, by the
commission and shall be determined, or approved, for a local publicly
owned electric utility, by its governing body. Nothing in this
definition limits the authority of the commission or of a governing
body to designate and provide differing treatment to superpeak demand
periods and shoulder demand periods if those designations and
differentiations are consistent with the purposes of this chapter.
2835.2. (a) The commission may vary the requirements of this
chapter for an electrical corporation with 75,000 or fewer customer
connections, as the circumstances warrant.
(b) The requirements of this chapter apply to a local publicly
owned electric utility with more than 75,000 customer connections.
For a local publicly owned electric utility with 75,000 or fewer
customer connections, the governing body of the utility may vary the
requirements of this chapter, as the circumstances warrant.
(c) Each electrical cooperative shall adopt a policy for employing
energy storage systems for the utility.
2836. Each electrical corporation and local publicly owned
electric utility shall procure, through ownership or a contractual
right to purchase electricity from a customer or third party, new
energy storage systems that are sufficient to provide the following
percentages of electrical demand:
(a) (1) On or before January 1, 2014, and continuing through
December 31, 2019, the utility shall procure new energy storage
systems that are sufficient to provide at least 2.25 percent of the
utility's average peak electrical demand over the previous five
years, using stored energy that was generated during offpeak periods
of electrical demand.
(2) The energy storage system procurement requirement shall be
calculated on a calendar year basis. For example, for the calendar
year January 1, 2014, to December 31, 2014, the energy storage
portfolio procurement requirement shall be calculated based upon the
five year period commencing January 1, 2009, and ending December 31,
2013. For the calendar year January 1, 2015, to December 31, 2015,
the energy storage portfolio procurement requirement shall be
calculated based upon the five-year period commencing January 1,
2010, and ending December 31, 2014.
(b) (1) On or before January 1, 2020, and continuing through
December 31, 2024, the utility shall procure new energy storage
systems that are sufficient to provide at least 5 percent of the
utility's average peak electrical demand over the previous five
years, using stored energy that was generated during offpeak times of
electrical demand.
(2) The energy storage system procurement requirement shall be
calculated on a calendar year basis.
(c) Commencing January 1, 2012, each electrical corporation and
local publicly owned electric utility shall implement a five-year
program to employ distributed thermal, mechanical, or electrochemical
energy storage systems to maximize shifting of electricity use for
air-conditioning and refrigeration from peak demand periods to
offpeak periods. The program shall, at a minimum, implement the
actions identified in the plans required, for an electrical
corporation, by Section 2837.2, and for a local publicly owned
electric utility, by paragraph (2) of subdivision (f) of Section
9615.
2836.2. (a) The commission shall develop a program to use energy
storage systems to achieve all feasible, cost-effective
air-conditioning and refrigeration load shifting in new and existing
facilities. The purposes of the program shall include reducing
electricity demand during peak demand periods and reducing emissions
of oxides of nitrogen so as to mitigate adverse ozone and other air
quality impacts.
(b) Each electrical corporation shall implement the program by
January 1, 2016.
2837. Each electrical corporation's renewable energy procurement
plan, prepared and approved pursuant to Article 16 (commencing with
Section 399.11) of Chapter 2.3 of Part 1, shall do all of the
following:
(a) Require the utility to procure new energy storage systems that
are sufficient to allow the electrical corporation to meet the
energy storage portfolio procurement requirements of Section 2836.
Each of the attributes that an energy storage system would provide
shall be considered and valued when determining if a proposed energy
storage system is cost effective. The plan shall address the
acquisition and use of energy storage systems in order to achieve the
following purposes:
(1) Integrate intermittent generation from eligible renewable
energy resources into the reliable operation of the transmission and
distribution grid.
(2) Allow intermittent generation from eligible renewable energy
resources to operate at or near full capacity at offpeak times.
(3) Eliminate the need for new fossil-fuel powered peaking
generation facilities by using stored electricity to meet peak
demand.
(4) Reduce purchases of electricity generation sources with higher
emissions of greenhouse gases.
(5) Reduce transmission and distribution losses that occur when
there is congestion on the grid.
(6) Reduce the demand for electricity during peak periods and
achieve permanent load-shifting by using thermal storage to meet
air-conditioning needs.
(7) Avoid or defer investments in transmission and distribution
system upgrades.
(b) Consider and incorporate, where feasible, the Energy
Commission's evaluation of energy storage locations, technologies,
and benefits as identified in the most current Integrated Energy
Policy Report prepared pursuant to subdivision (e) of Section 25302
of the Public Resources Code.
2837.2. Each electrical corporation's procurement plan, prepared
and approved pursuant to Section 454.5, shall include a program, to
be implemented over the following five years, requiring the use of
distributed thermal, mechanical, or electrochemical energy storage
systems to maximize shifting of electricity use for air-conditioning
and refrigeration from peak, to offpeak periods. The purposes of the
program shall include reducing electricity demand during peak demand
periods and reducing emissions of oxides of nitrogen so as to
mitigate adverse ozone and other air quality impacts.
2838. (a) Each electrical corporation and each local publicly
owned electric utility, by January 30, 2013, shall submit a report to
the Energy Commission showing its progress toward complying with the
energy storage portfolio. Each electrical corporation shall submit a
copy of the report to the commission and the commission shall ensure
that a copy of the report, with any confidential information
redacted, is available either of the commission's Internet Web site
or upon an Internet Web site maintained by the electrical corporation
that can be accessed from the commission's Internet Web site.
(b) Each electrical corporation and each local publicly owned
electric utility, by January 30, 2014, shall submit to the Energy
Commission a report demonstrating that it has complied with the
energy storage portfolio procurement requirements of subdivision (a)
of Section 2836.
(c) Each electrical corporation and each local publicly owned
electric utility, by January 30, 2020, shall submit to the Energy
Commission a report demonstrating that it has complied with the
energy storage portfolio procurement requirements of subdivision (b)
of Section 2836.
(d) (1) The Energy Commission, within 60 days of receipt of a
report required by subdivision (b) or (c), shall notify an electrical
corporation or local publicly owned electric utility if the report
fails to demonstrate compliance with the energy storage portfolio
procurement requirements.
(2) An electrical corporation or local publicly owned electric
utility receiving a notice of deficiency pursuant to paragraph (1),
within 60 days of receiving the notice of deficiency, shall submit an
energy storage portfolio compliance plan to the Energy Commission
setting forth a program for compliance with the energy storage
portfolio within six months of the required date of submittal. The
compliance plan shall, at a minimum, set forth standard terms and
conditions of contracts of not less than 10 years' duration, for
procurement of energy storage systems, and provide for solicitations
to procure the energy storage systems necessary to achieve compliance
with the energy storage portfolio.
(3) The electrical corporation or local publicly owned electric
utility that submitted a compliance plan shall comply with the
applicable energy storage portfolio within six months from the
required date of submittal and shall submit proof of compliance to
the Energy Commission within 30 days of the expiration of the
six-month period.
(e) Each electrical corporation shall submit a copy to the
commission, of the reports to the Energy Commission required by
subdivisions (a), (b), and (c), and any compliance plan submitted to
the Energy Commission pursuant to paragraph (2) of subdivision (d).
The commission shall ensure that a copy of the report or plan, with
any confidential information redacted, is available either on the
commission's Internet Web site or upon an Internet Web site
maintained by the electrical corporation that can be accessed from
the commission's Internet Web site.
(f) Each electrical corporation, by January 1, 2012, shall report
to the Energy Commission the excess capacity levels, in kilowatts, of
the substations and local distribution circuits on its electrical
distribution system. The Energy Commission shall promptly make a
summary of this information available to the public on its Internet
Web site. Each electrical corporation shall at least annually, by
January 1 of each year, update the information reported to the Energy
Commission. The Energy Commission shall promptly make a summary of
updated information available to the public on its Internet Web site.
2839. (a) An electrical corporation or local publicly owned
electric utility shall be liable for civil penalties of five thousand
dollars ($5,000) to twenty-five thousand dollars ($25,000) per day
for each day in which it does any of the following:
(1) Fails to submit the report required by subdivision (a), (b) or
(c) of Section 2838.
(2) Fails to submit an energy storage portfolio compliance plan
required pursuant to paragraph (2) of subdivision (d) of Section
2838.
(3) Fails to comply with the energy storage portfolio within six
months after the required date of submittal of a compliance plan, as
required by paragraph (3) of subdivision (d) of Section 2838.
(4) Fails to remain in compliance with the energy portfolio
standard requirements of subdivisions (a) and (b) of Section 2836.
(b) The civil penalties authorized by subdivision (a) may be
imposed on an electrical corporation or local publicly owned electric
utility by any court of competent jurisdiction in an action brought
by the Attorney General.
(c) In determining the amount of civil penalties to impose, the
court shall consider equitable factors including the extent of
noncompliance, potential harm resulting from noncompliance, whether
there are valid reasons for noncompliance that are beyond the control
of the electric corporation or local publicly owned utility, and any
good faith efforts to achieve compliance.
(d) Any civil penalties imposed on an electrical corporation
pursuant to this section shall be the responsibility of the
corporation's shareholders and may not be recovered, directly or
indirectly, in rates or otherwise passed along to the ratepayers of
the utility.
SEC. 4. Section 9615 of the Public Utilities Code is amended to
read:
9615. (a) Each local publicly owned electric utility, in
procuring energy to serve the load of its retail end-use customers,
shall first acquire all available energy efficiency and demand
reduction resources that are cost effective, reliable, and feasible.
(b) On or before June 1, 2007, and by June 1 of every third year
thereafter, each local publicly owned electric utility shall identify
all potentially achievable cost-effective electricity efficiency
savings and shall establish annual targets for energy efficiency
savings and demand reduction for the next 10-year period. A local
publicly owned electric utility's determination of potentially
achievable cost-effective electricity efficiency savings shall be
made without regard to previous minimum investments undertaken
pursuant to Section 385. A local publicly owned electric utility
shall treat investments made to achieve energy efficiency savings and
demand reduction targets as procurement investments.
(c) Within 60 days of adopting annual targets pursuant to
subdivision (b), each local publicly owned electric utility shall
report those targets to the State Energy Resources
Conservation and Development Energy Commission,
and the basis for establishing those targets.
(d) Each local publicly owned electric utility shall report
annually to its customers and to the State Energy Resources
Conservation and Development Energy Commission.
The report shall contain, but is not limited to, both of the
following:
(1) Its investments in energy efficiency and demand reduction
programs.
(2) A description of programs, expenditures, cost-effectiveness,
and expected and actual energy efficiency savings and demand
reduction results.
(e) Each local publicly owned electric utility shall also annually
develop and submit to the State Energy Resources
Conservation and Development Energy Commission a
report containing all of the following:
(1) The sources of funding for its investments in energy
efficiency and demand reduction program investments.
(2) The methodologies and input assumptions used to determine
cost-effectiveness.
(3) The results of an independent evaluation that measures and
verifies the energy efficiency savings and reduction in energy demand
achieved by its energy efficiency and demand reduction programs.
(f) (1) Each local publicly owned electric utility, by January 1,
2011, shall develop and submit to the Energy Commission a plan to
procure new energy storage systems that are sufficient to allow the
utility to meet the energy portfolio requirements of subdivisions (a)
and (b) of Section 2836. The plan shall address the acquisition and
use of energy storage systems in order to achieve the following
purposes:
(A) Integrate intermittent generation from eligible renewable
energy resources into the reliable operation of the transmission and
distribution grid.
(B) Allow intermittent generation from eligible renewable energy
resources to operate at or near full capacity at offpeak times.
(C) Eliminate the need for new fossil-fuel powered peaking
generation facilities by using stored electricity to meet peak
demand.
(D) Reduce purchases of electricity generation sources with higher
emissions of greenhouse gases.
(E) Reduce
transmission and distribution losses that occur when there is
congestion on the grid.
(F) Reduce the demand for electricity during peak periods and
achieve permanent load-shifting by using thermal storage to meet
air-conditioning needs.
(G) Avoid or defer investments in transmission and distribution
system upgrades.
(2) Each local publicly owned electric utility, by January 1,
2011, sha1ll develop and submit to the Energy Commission the utility'
s plan setting forth a program, to be implemented over the following
five years, requiring the use of distributed thermal, mechanical, or
electrochemical energy storage systems to maximize shifting of
electricity use for air-conditioning and refrigeration from peak
demand periods to offpeak times pursuant to subdivision (c) of
Section 2836. The purposes of the program shall include reducing
electricity demand during peak demand periods and reducing emissions
of oxides of nitrogen so as to mitigate adverse ozone and other air
quality impacts.
(3) In developing and implementing the plans required by this
subdivision, each of the attributes that an energy storage system
would provide shall be considered and valued when determining if a
proposed energy storage system is cost effective.
(4) Each local publicly owned electric utility, within one year of
its issuance, shall consider and, where feasible, incorporate into
the utility's plans required by this subdivision, the Energy
Commission's evaluation of energy storage locations, technologies,
and benefits as identified in the most current Integrated Energy
Policy Report prepared pursuant to subdivision (e) of Section 25302
of the Public Resources Code.
(f)
(g) The State Energy Resources Conservation
and Development Energy Commission shall include
a summary of the information reported pursuant to subdivision (e) in
the integrated energy policy report prepared pursuant to Chapter 4
(commencing with Section 25300) of Division 15 of the Public
Resources Code. The State Energy Resources Conservation and
Development Energy Commission shall also
include, for each local publicly owned electric utility, a comparison
of the local publicly owned electric utility's annual targets
established in accordance with this section, and the local publicly
owned electric utility's actual energy efficiency savings and demand
reductions. If the State Energy Resources Conservation and
Development Energy Commission determines that
improvements can be made in either the level of a local publicly
owned electric utility's annual targets to achieve all
cost-effective, reliable, and feasible energy savings and demand
reductions and to enable the local publicly owned electric utilities,
in the aggregate, to achieve statewide targets established pursuant
to Section 25310, or in meeting each local publicly owned electric
utility's annual targets, the State Energy Resources
Conservation and Development Energy Commission
shall provide recommendations to the local publicly owned electric
utility, the Legislature, and the Governor on those improvements.
SEC. 5. Section 9620 of the Public Utilities Code is amended to
read:
9620. (a) Each local publicly owned electric utility serving
end-use customers, shall prudently plan for and procure resources
that are adequate to meet its planning reserve margin and peak demand
and operating reserves, sufficient to provide reliable electric
service to its customers. Customer generation located on the customer'
s site or providing electric service through arrangements authorized
by Section 218, shall not be subject to these requirements if the
customer generation, or the load it serves, meets one of the
following criteria:
(1) It takes standby service from the local publicly owned
electric utility on a rate schedule that provides for adequate backup
planning and operating reserves for the standby customer class.
(2) It is not physically interconnected to the electric
transmission or distribution grid, so that, if the customer
generation fails, backup power is not supplied from the electricity
grid.
(3) There is physical assurance that the load served by the
customer generation will be curtailed concurrently and commensurately
with an outage of the customer generation.
(b) Each local publicly owned electric utility serving end-use
customers shall, at a minimum, meet the most recent minimum planning
reserve and reliability criteria approved by the Board of Trustees of
the Western Systems Coordinating Council or the Western Electricity
Coordinating Council.
(c) Each local publicly owned electric utility shall prudently
plan for and procure energy storage systems that are adequate to meet
the requirements of Section 2836.
(c)
(d) A local publicly owned electric utility serving
end-use customers shall, upon request, provide the State
Energy Resources Conservation and Development Energy
Commission with any information the State Energy
Resources Conservation and Development Energy
Commission determines is necessary to evaluate the progress made by
the local publicly owned electric utility in meeting the requirements
of this section.
(d)
(e) The State Energy Resources Conservation
and Development Energy Commission shall report
to the Legislature, to be included in each integrated energy policy
report prepared pursuant to Section 25302 of the Public Resources
Code, regarding the progress made by each local publicly owned
electric utility serving end-use customers in meeting the
requirements of this section.
SEC. 6. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because a
local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act or because costs that may be
incurred by a local agency or school district will be incurred
because this act creates a new crime or infraction, eliminates a
crime or infraction, or changes the penalty for a crime or
infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIII B of the California Constitution.