Amended in Senate August 20, 2014

Amended in Senate June 11, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2441

Introduced by Assembly Member Mullin

February 21, 2014

An act to begin delete amend Section 5403 of the Business and Professions Code, relating to outdoor advertising. end delete begin insert add Section 354 to the Public Utilities Code, relating to electricity. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 2441, as amended, Mullin. begin delete Outdoor advertising. end delete begin insert Electricity: distributed generation. end insert

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Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as defined. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law requires the commission to require each electrical corporation under the operational control of the Independent System Operator as of January 1, 2001, to modify tariffs so that all customers that install new distributed energy resources, as defined, in accordance with specified criteria are served under rates, rules, and requirements identical to those of a customer within the same rate schedule that does not use distributed energy resources, and to withdraw any provisions in otherwise applicable tariffs that activate other tariffs, rates, or rules if a customer uses distributed energy resources. Existing law provides, notwithstanding these requirements, that a customer that installs new distributed energy resources not be exempted from (1) reasonable interconnection charges, (2) charges imposed pursuant to the Reliable Electric Service Investment Act, and (3) charges imposed to repay the Department of Water Resources for electricity procurement expenses incurred in response to the electricity crisis of 2000-01. Existing law requires the commission, in establishing the rates applicable to customers that install new distributed energy resources, to create a firewall that segregates distribution cost recovery so that any net costs, taking into account the actual costs and benefits of distributed energy resources, proportional to each customer class, as determined by the commission, resulting from the tariff modifications granted to members of each customer class may be recovered only from that class.

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This bill would make legislative findings and declarations as to clean onsite electricity generation and nonbypassable charges. The bill would, to the extent authorized by federal law, require the commission, by July 1, 2015, to establish a pilot program to do both of the following for those electrical corporation customers that have operational clean distributed energy resources, as defined: (1) require each electrical corporation to collect all applicable nonbypassable charges fixed or imposed by the commission based only on the actual metered consumption of electricity delivered to the customer through the electrical corporation’s transmission or distribution system, and (2) calculate a reservation capacity for standby service, if applicable, based on the capacity needed by an electrical corporation to serve a customer’s electrical demand during an outage of the clean distributed energy resource providing electric service for that customer. The bill would require the commission to suspend the eligibility of additional customers to participate in the pilot program when 500 megawatts of nameplate generating capacity from clean distributed energy resources has become operational statewide pursuant to the pilot program. The bill would require the State Energy Resources Conservation and Development Commission to report to the Legislature on the impact of the pilot program upon specified matter by July 1, 2020, or when 450 megawatts of nameplate generating capacity from clean distributed energy resources has become operational pursuant to the pilot program, whichever comes sooner.

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Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

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Because the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime.

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The Outdoor Advertising Act provides for the regulation of advertising displays visible from highways and prohibits, among others, advertising displays visible from a highway that simulate or imitate a directional, warning, danger, or informational sign, as specified. A violation of the act is a crime.

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This bill would, except as specified, prohibit an advertising display visible from a highway that appears to be an official public agency changeable message sign. Because a violation of this prohibition would be a crime, the bill would impose a state-mandated local program.

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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 a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

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begin insert SECTION 1. end insert   

end insert begin insert

The Legislature finds and declares all of the
following:

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(a) Clean onsite generation of electricity yields multiple benefits,
including increased electrical reliability, reduced emissions of
greenhouse gases and oxides of nitrogen (NOx), and electrical
grid resiliency.

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(b) Increased deployment of clean onsite electricity generation
reduces the need for generation that emits higher levels of
greenhouse gases that contribute to climate change and higher
levels of NOx that contribute to smog formation.

end insert begin insert

(c) Several types of clean onsite electrical generation
technologies currently exist and others are being developed, with
many being manufactured and developed in California.

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(d) Nonbypassable charges applied by electrical corporations
to electricity produced and consumed onsite are a major
impediment to broader deployment of clean onsite generation
technologies. Residential, commercial, and industrial customers
are willing to invest their own capital to install clean onsite
generation technologies. However, nonbypassable charges applied
to electricity produced and consumed onsite create an economic
barrier to these investments.

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(e) California is the only state that allows electrical corporations
to apply nonbypassable charges to electricity produced and
consumed onsite among those states with similarly high energy
prices and environmental goals, including New York, New Jersey,
Maryland, Vermont, Connecticut, and Hawaii.

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(f) A recent study shows that all ratepayers would see a net cost
savings from increased deployment of onsite electricity generation
at customer sites that pay nonbypassable charges only on their
electricity purchases from the grid. This ratepayer savings arises
because onsite electricity generation reduces demand on the
electrical grid, which reduces market electricity prices, and avoids
transmission and distribution costs and energy losses. On average,
all ratepayers in electrical corporation service areas would see
an energy rate savings of between seventeen cents ($0.17) and
thirty-seven cents ($0.37) per megawatt hour, which translates to
an average household savings of between nine cents ($0.09) and
eighteen cents ($0.18) per month.

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(g) Other cost-saving benefits to all ratepayers from clean onsite
electrical generation include reductions in future generating
capacity requirements, reductions in electrical grid congestion
prices, reductions in emissions of greenhouse gases and criteria
air pollutants, and increases in electrical grid resiliency and
security.

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(h) Nonbypassable charges create an economic barrier to the
installation of clean onsite electrical generation and, as a result,
prevent cost savings for all ratepayers and environmental benefits
for all Californians.

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begin insert SEC. 2. end insert   

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begin insert Section 354 is added to the end insert begin insert Public Utilities Code end insert begin insert , to
read: end insert

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begin insert 354. end insert   

(a) As used in this section, “clean distributed energy
resource” means a generating facility that is located on the
customer’s premises and generates electricity, or electricity and
useful heat, where the electricity generated is used for a purpose
described in paragraph (1) or (2) of subdivision (b) of Section
218, and that meets either of the following requirements:

(1) It meets all of the following criteria:

(A) Produces emissions of greenhouse gases at a rate per
megawatthour, accounting for waste heat recovery, where
applicable, and savings on transmission and distribution losses,
that is less than an emissions rate determined by the Energy
Commission by January 30, 2015, that represents the emissions
of greenhouse gases from the marginal generating unit dispatched
to meet the demand on the electrical grid that is avoided by the
electricity generated by the clean distributed energy resource.

(B) Has an oxide of nitrogen (NOx) emissions rate, including
credit for waste heat recovery, when applicable, that is no greater
than 0.07 pounds per megawatthour, or a lower NOx emissions
rate that the State Air Resources Board determines reflects the
best performance achieved in practice by existing electrical
generation technologies pursuant to Section 41514.9 of the Health
and Safety Code.

(C) Has a nameplate-rated generation capacity of 20 megawatts
or less.

(D) Is sized to meet the electrical demand of, or use the available
waste heat of, the customer that will be served by the generating
facility.

(2) It is an “eligible renewable energy resource” pursuant to
the California Renewables Portfolio Standard Program (Article
16 (commencing with Section 399.11)), has a nameplate-rated
generation capacity of 20 megawatts or less, is sized to meet the
electrical demand of the customer that will be served by the
generating facility, and will not otherwise be addressed in the
commission’s implementation of Sections 769 or 2827.1.

(b) To the extent authorized by federal law, by July 1, 2015, the
commission shall establish a pilot program to do both of the
following for those electrical corporation customers served by
clean distributed energy resources installed after July 1, 2015:

(1) Require each electrical corporation to collect all applicable
nonbypassable charges fixed or imposed by the commission based
only on the actual metered consumption of electricity delivered to
the customer through the electrical corporation’s transmission or
distribution system. All charges shall be at the same rate per
kilowatthour as paid by other customers that do not employ a clean
distributed energy resource under the electrical corporation’s
applicable rate schedule.

(2) (A) Calculate a reservation capacity for standby service, if
applicable, based on the capacity needed by an electrical
corporation to serve a customer’s electrical demand during an
outage of the clean distributed energy resource providing electric
service for that customer.

(B) Initial reservation capacity shall be established by the
customer for a minimum of 12 months based on the clean
distributed energy resource generation technology’s historical
operation, the number, size, and outage diversity of the clean
distributed energy resource, and the annual average reduction of
customer load that could occur during an outage.

(C) If after the initial 12-month period, the electrical corporation
reasonably determines that the reservation capacity does not reflect
the customer’s actual standby demand, averaged over the previous
12 months, the electrical corporation shall modify the reservation
capacity once every 12 months to reflect the customer’s actual
average annual reservation capacity based on the same criteria
used to establish the initial reservation capacity. Calculation of
actual average annual reservation capacity shall exclude the
customer’s electrical demand served by the electrical corporation
within 24 hours following an outage of the clean distributed energy
resource resulting from any event on the electrical corporation’s
transmission or distribution grid that is outside of the customer’s
control that requires the customer to reduce onsite generation.

(c) The commission shall suspend the eligibility of additional
customers to participate in the pilot program established pursuant
to subdivision (b) when 500 megawatts of nameplate generating
capacity from clean distributed energy resources has become
operational statewide pursuant to the pilot program.

(d) (1) By July 1, 2020, or when 450 megawatts of nameplate
generating capacity from clean distributed energy resources has
become operational pursuant to the pilot program established
pursuant to subdivision (b), whichever occurs first, the Energy
Commission, in consultation with the commission, shall report to
the Legislature, which report shall be made publically available,
examining the impact of the pilot program on all of the following:

(A) Avoided transmission and distribution costs.

(B) Avoided energy losses.

(C) Wholesale electricity market prices.

(D) Electricity costs to ratepayers.

(E) Air quality.

(F) Emissions of greenhouse gases.

(G) Job creation.

(H) Energy reliability.

(I) The extent to which the incentives provided by the pilot
program contribute to achieving the state’s distributed generation
and combined heat and power goals.

(2) The report to be submitted pursuant to this subdivision shall
be submitted in compliance with Section 9795 of the Government
Code.

(3) The requirement for submitting a report pursuant to this
subdivision is inoperative on July 1, 2024, pursuant to Section
10231.5 of the Government Code.

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begin insert SEC. 3. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only 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.

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SECTION 1.  

Section 5403 of the Business and Professions
Code is amended to read:

5403.  

No advertising display shall be placed or maintained in
any of the following locations or positions or under any of the
following conditions or if the advertising structure or sign is of
the following nature:

(a) If within the right-of-way of any highway.

(b) If visible from any highway and simulating or imitating any
directional, warning, danger, or information sign permitted under
the provisions of this chapter, or if likely to be mistaken for any
permitted sign, or if intended or likely to be construed as giving
warning to traffic, by, for example, the use of the words “stop” or
“slow down.”

(c) (1) If visible from any highway and appearing to be an
official public agency changeable message sign.

(2) This subdivision shall not apply to prohibit an advertising
display that utilizes changeable messages authorized pursuant to
subdivision (f) of Section 5272.

(d) If within any stream or drainage channel or below the
floodwater level of any stream or drainage channel where the
advertising display might be deluged by flood waters and swept
under any highway structure crossing the stream or drainage
channel or against the supports of the highway structure.

(e) If not maintained in safe condition.

(f) If visible from any highway and displaying any red or
blinking or intermittent light likely to be mistaken for a warning
or danger signal.

(g) If visible from any highway that is a part of the interstate or
primary systems, and is placed upon trees, or painted or drawn
upon rocks or other natural features.

(h) If any illumination shall impair the vision of travelers on
adjacent highways. Illuminations shall be considered vision
impairing when its brilliance exceeds the values set forth in Section
21466.5 of the Vehicle Code.

(i) If visible from a state regulated highway displaying any
flashing, intermittent, or moving light or lights.

(j) If, in order to enhance the display’s visibility, the owner of
the display or anyone acting on the owner’s behalf removes, cuts,
cuts down, injures, or destroys any tree, shrub, plant, or flower
growing on property owned by the department that is visible from
the highway without a permit issued pursuant to Section 670 of
the Streets and Highways Code.

SEC. 2.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only 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.

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