Amended in Senate June 12, 2014

Amended in Assembly May 28, 2014

Amended in Assembly May 6, 2014

Amended in Assembly April 21, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2649

Introduced by Assembly Members Mullin, V. Manuel Pérez, and Gorell

(Coauthors: Assembly Members Allen, Atkins, Maienschein, Skinner, Ting, Wieckowski, and Williams)

(Coauthors: Senators Block, Correa, DeSaulnier, Fuller, Hill, Roth, and Vidak)

February 21, 2014

An act to add Article 9.5 (commencing with Section 389) to Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code, relating to public utilities.

LEGISLATIVE COUNSEL’S DIGEST

AB 2649, as amended, Mullin. Public utilities: federal facilities: electrical charges.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as defined. Existing law relative to restructuring of the electrical services industry requires the commission to establish an effective mechanism that ensures the recovery of certain uneconomic costs for generation-related assets and obligations incurred by electrical corporations in the transition to the restructured market (competition transition charges) and other specified nonbypassable charges. Existing law requires the commission to approve and establish standby charges and to review and adjust the standby charges to encourage the utilization of electricity generated from other than conventional power sources.

This bill would require the commission, on or before April 1, 2015, to require an electrical corporation to calculate the standby charges for military bases and facilities and privatized military housing, as specified. The bill would require the commission to require the electrical corporations to implement the above provision through advice letters submitted before April 1, 2015. The bill would begin delete require, for a facility with an independent generation facility, that certain costs be applied based on the amount of electricity purchased by the facility from an electrical corporation or alternative supplier of electricity that delivers electricity through the distribution system of an electrical corporation. end delete begin insert require that activities undertaken on facility premises that reduce demand for an electrical corporation’s supplied electricity not be subject to specified charges that would increase th e facilities’ costs beyond those of other customers within the rate class to which the facilities would be assigned if those activities were not undertaken. end insert

Under existing law, a violation of the Public Utilities Act or an order or direction of the commission is a crime.

This bill would be part of the act and an order or other action of the commission would be required to implement the bill. Because a violation of this bill or an order or other action of the commission implementing those provisions would be a crime, this bill would thereby impose a state-mandated local program by creating new crimes and by expanding the definition of existing crimes.

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:

SECTION 1.  

Article 9.5 (commencing with Section 389) is
added to Chapter 2.3 of Part 1 of Division 1 of the Public Utilities
Code, to read:

 

Article 9.5.  Federal Facilities

 

389.  

The Legislature finds and declares all of the following:

(a) The United States Department of Defense provides national
defense and global security that benefits Californians and
California’s economy.

(b) The United States Department of Defense facilities located
in California provide more than seventy billion dollars
($70,000,000,000) in direct spending and 300,000 jobs in
California.

(c) The United States Department of Defense is working to
achieve energy efficiency and renewable energy goals to meet
both presidential and departmental directives.

(d) The amount of electricity that the United States Department
of Defense facilities located in California seek to generate on their
own premises will serve their own electricity needs and will not
export electricity.

(e) Military bases approximate small cities in electrical load,
diversity of land uses, and size.

(f) Given the crucial contribution of our military, California
should assist military facilities in California in achieving their
energy independence goals.

(g) The military owns and maintains its electric distribution
system. Generation serving the military’s own electricity load
without export should not require upgrades to this distribution
system. Even if upgrades are necessary, the military, not the
ratepayers, will bear these costs.

(h) At the request of the Governor and the electrical
corporations, military bases have historically demonstrated their
commitment and ability to provide demand reduction management
at times of grid emergencies.

(i) Development of additional energy facilities on military bases
and military family housing will create opportunities for jobs for
veterans at a time when many California service members are
reentering the workforce and can provide skilled workers.
Established programs, such as “Helmets to Hardhats,” also provide
valuable and needed transition from the battlefield to the civilian
community.

389.3.  

(a) For the purposes of this article, the following shall
apply:

(1) “Facilities” means either of the following:

(A) Military bases and facilities.

(B) Privatized military housing.

(2) “Independent generation facility” means an electrical
generation installation located on a facility that is interconnected
and operated in parallel with an electrical corporation’s distribution
system, sized to offset part or all of the facility’s own electrical
requirements, and that contains equipment to prevent the export
of electricity to the interconnected electrical corporation’s
distribution system.

(3) “Military bases and facilities” mean those establishments
under the jurisdiction of the United States Army, United States
Air Force, United States Navy, United States Marine Corps, or the
United States Coast Guard.

(4) “Privatized military housing” means housing facilities
managed by a private entity for the purpose of providing housing
to active duty service members and their family members that are
not individually metered for purposes of calculating electricity
charges paid to an electrical corporation.

(5) “Standby demand” means the entire reserved capacity needed
to serve the electrical load of a facility that is regularly served by
the facility’s independent generation facility when that generation
facility experiences a partial or complete outage.

(b) To the extent authorized by federal law, an operator of an
independent generation facility shall notify the electrical
corporation pursuant to subdivision (b) of Section 119085 of the
Health and Safety Code.

(c) Notwithstanding the limitation on the maximum generation
capacity imposed pursuant to Section 2827, an electrical
corporation shall use the begin delete expedited end delete interconnection process
specified in subdivision (e) begin insert or (j) end insert of Section 2827 and any
commission order or rule implementing that provision for a facility
with an independent generation facility.

begin delete

(d) For a facility with an independent generation facility, the
costs provided in Sections 330, 366.1, 367, 368, 375, 376, 379.6,
and 381 shall be applied based on the amount of electricity
purchased from an electrical corporation or alternative supplier of
electricity that delivers electricity through the distribution system
of an electrical corporation.

end delete begin delete

(e)

end delete

begin insert (d) end insert  On or before April 1, 2015, and to the extent authorized by
federal law, the commission shall, for a facility, do both of the
following:

(1) (A) Require an electrical corporation to calculate the standby
charge for a facility that is currently subject to a standby charge
based on the facility’s standby demand. The standby demand shall
be designated by the facility and remain at that level for a minimum
of 12 months unless the electrical corporation determines that the
standby demand needs to be adjusted to meet the actual demand.

(B)  Upon an electrical corporation’s determination that the
facility’s designated standby demand is too low and does not reflect
the actual level of needed reserved capacity, over any 15-minute
period or through onsite verification, the electrical corporation
shall increase the standby demand to reflect the actual needed
reserve capacity.

(C) Upon an electrical corporation’s determination that the
facility’s designated standby demand is too high, over any
15-minute period or through onsite verification, the electrical
corporation shall decrease the standby demand to reflect the actual
needed reserve capacity.

(D) If the standby demand is adjusted by the electrical
corporation, another adjustment in the standby demand shall not
be made for 12 months from the begin delete adjustment. end delete begin insert adjustment unless
there are permanent or material changes to an independent
generation on, or additional wide pendant generation has been
installed at, the facility. end insert

(E) To the extent authorized by federal law, a facility shall notify
the electrical corporation of permanent or material changes in the
size, type, and operations of the facility for future adjustments to
the standby demand.

(2) Require electrical corporations to implement the provisions
of this subdivision through advice letters submitted prior to April
1, 2015.

begin delete

(f)

end delete

begin insert (e) end insert  Any activities undertaken on a facility’s premises that reduce
demand for an electrical corporation’s supplied electricity, such
as energy efficiency, load reduction, or independent generation
are not subject to charges assessed on electricity delivered from
the electrical corporation’s distribution system or other charges of
any kind that would increase the facility’s costs beyond those of
other customers in the rate class to which the facility would
otherwise be assigned if the begin delete independent generation facility end delete begin insert activity end insert
was not begin delete installed end delete begin insert undertaken end insert at the facility.

389.5.  

Notwithstanding this article, facilities, at their sole
discretion, may develop eligible energy generation projects
begin delete authorized pursuant to Section 2827 or 2827.1 or through an
electrical corporation’s Generation Facility Interconnection Rule
21, as applicable and end delete pursuant to applicable rules and tariffs.

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.