Amended in Assembly January 6, 2014

Amended in Assembly April 22, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 427

Introduced by Assembly Member Mullin

February 15, 2013

An act to amend Section 371 of the Public Utilities Code, relating to electrical corporations.

LEGISLATIVE COUNSEL’S DIGEST

AB 427, as amended, Mullin. Electrical corporations: uneconomic cost recovery: bottoming cycle waste heat recovery.

Existing law specifies that, in recognition of statutory authority and past investments existing as of December 20, 1995, and subject to a specified fire wall, the uneconomic costs of specified energy-generation-related assets and obligations are applied to each customer based on the amount of electricity purchased by the customer from an electrical corporation, subject to changes in usage occurring in the normal course of business. Existing law specifies those changes that constitute “changes in usage occurring in the normal course of business” to include, among others, changes in fuel switching.

This bill would additionally include the production of electricity using begin delete bottom end delete begin insert bottoming end insert cycle waste heat recovery, as defined, as changes in fuel switching. The bill would exempt from all nonbypassable charges approved by the Public Utilities Commission changes in usage occurring in the normal course of business begin insert , and would require the commission ensure that the customers made exempt from paying those charges pay their cost of receiving service from an electrical corporation end insert . begin insert With respect to electricity produced using bottoming cycle waste heat recovery, the bill would limit the amount of electricity exempt from those nonbypassable charges to a cumulative total of 200 megawatts of load within all service areas of electrical corporations and would prohibit nonbypassable charges avoided in this manner from being recovered from residential ratepayers and ratepayers with an average monthly usage of 500 kilowatthours of electricity or less. end insert

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 371 of the Public Utilities Code is
amended to read:

371.  

(a) Except as provided in Sections 372 and 374, the
uneconomic costs provided in Sections 367, 368, 375, and 376
shall be applied to each customer based on the amount of electricity
purchased by the customer from an electrical corporation or
alternate supplier of electricity, subject to changes in usage
occurring in the normal course of business.

(b) (1) Changes in usage occurring in the normal course of
business are those resulting from changes in business cycles,
termination of operations, departure from the utility service
territory, weather, reduced production, modifications to production
equipment or operations, changes in production or manufacturing
processes, fuel switching, including installation of fuel cells,
enhancement or increased efficiency of equipment or performance
of existing self-cogeneration equipment, the production of
electricity using bottoming cycle waste heat recovery, replacement
of existing cogeneration equipment with new power generation
equipment of similar size as described in paragraph (1) of
subdivision (a) of Section 372, installation of demand-side
management equipment or facilities, energy conservation efforts,
or other similar factors.

(2) For the purposes of this begin delete subdivision, end delete begin insert section, end insert “bottoming
cycle waste heat recovery” means begin delete a form of energy efficiency by
which end delete begin insert the use of end insert waste heat from a commercial or industrial process
begin delete is used end delete to produce begin delete electricity, excluding any electricity produced
as a result of combusting fossil fuels to supplement the waste heat. end delete
begin insert electricity without consuming fuel to supplement the waste heat
and to supply electricity for onsite use without exporting electricity
to the electrical grid. end insert

(c)  begin delete Changes end delete begin insert (1) end insert begin insert   end insert begin insert Except as provided in paragraph (2), changes end insert
in usage occurring in the normal course of business as described
in subdivision (b) are exempt from all nonbypassable charges
approved by the commission.

begin insert

(2) For electricity produced using bottoming cycle waste heat
recovery, the exemption specified in paragraph (1) applies only
to the cumulative total of 200 megawatts of load within all service
areas of electrical corporations.

end insert begin insert

(d) A nonbypassable charge avoided pursuant to subdivision
(c) as a result of the use of electricity produced using bottoming
cycle waste heat recovery shall not be recovered from residential
ratepayers and ratepayers with an average monthly usage of 500
kilowatthours of electricity or less.

end insert begin insert

(e) The commission shall ensure that customers exempt from
the nonbypassable charges pursuant to subdivision (c) pay their
cost of receiving service from an electrical corporation.

end insert begin delete

(d)

end delete

begin insert (f) end insert  This section does not exempt or alter the obligation of a
customer to comply with Chapter 5 (commencing with Section
119075) of Part 15 of Division 104 of the Health and Safety Code.
Nothing in this section shall be construed as a limitation on the
ability of residential customers to alter their pattern of electricity
purchases by activities on the customer side of the meter.