Amended in Senate May 27, 2014

Amended in Senate May 6, 2014

Amended in Senate April 21, 2014

Amended in Senate April 2, 2014

Senate Bill No. 1139

Introduced by Senator Hueso

(Principal coauthor: Assembly Member V. Manuel Pérez)

February 20, 2014

An act to add Section 399.35 to the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

SB 1139, as amended, Hueso. California Renewables Portfolio Standard Program.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as begin delete defined, while local publicly owned electric utilities, as defined, are under the direction of their governing boards. end delete begin insert defined. end insert The Public Utilities Act imposes various duties and responsibilities on the commission with respect to the purchase of electricity and requires the commission to review and adopt a renewable energy procurement plan for each electrical corporation pursuant to the California Renewables Portfolio Standard Program. The California Renewables Portfolio Standard Program requires a retail seller, as defined, begin delete and local publicly owned electric utilities end delete to purchase specified minimum quantities of electricity products from eligible renewable energy resources, as defined, for specified compliance periods. Existing law requires the State Energy Resources Conservation and Development Commission (Energy Commission) to certify eligible renewable energy resources that it determines meet specified statutory criteria. A violation of the Public Utilities Act is a crime.

This bill would require, no later than December 31, 2024, each retail seller of electricity begin delete and local publicly owned electric utility end delete to procure a proportionate share, as determined by the Energy Commission, of a statewide total of 500 megawatts of electricity generated by specified baseload geothermal powerplants. begin delete The bill would exempt a local publicly owned electric utility serving fewer than 75,000 customers from the procurement requirement. The bill would provide that the obligation of a local publicly owned electric utility to procure its proportionate share is deemed satisfied if one or more local publicly owned electric utilities procures in the aggregate generation capacity in an amount to satisfy the entire proportionate share of all the local publicly owned electric utilities. end delete The bill would require, no later than January 1, 2016, each retail seller to file with the Public Utilities begin delete Commission, and each local publicly owned electric utility to file with the Energy Commission, end delete begin insert Commission end insert a plan for complying with the procurement requirement. The bill would provide that the electricity procured by retail sellers begin delete and local publicly owned electric utilities end delete from these baseload geothermal powerplants does not count towards meeting their obligations under the California Renewables Portfolio Standard Program to purchase specified minimum quantities of electricity products from eligible renewable energy resources. Because a violation of these provisions would be a crime under the Public Utilities Act, 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 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.  

The Legislature finds and declares all of the
following:

(a) The California Global Warming Solutions Act of 2006 (AB
32) established a policy to reduce emissions of greenhouse gases
to 1990 levels by 2020 and to continue reductions of emissions of
greenhouse gases beyond 2020.

(b) Executive Order S-3-05 set a policy to reduce emissions of
greenhouse gases by 80 percent from 1990 levels by 2050.
Decarbonizing the electrical generation sector is a key part of
achieving California’s policy goals for reducing emissions of
greenhouse gases.

(c) California’s electrical supply portfolio must move from
merely increasing the proportion of generation from eligible
renewable energy resources to a portfolio of resources that supply
all types of needed generation, including baseload generation,
ramping generation, and peakload generation.

(d) Recent shortages in the supply of natural gas and the historic
price volatility of natural gas provide additional confirmation of
the need to reduce reliance on natural gas for electrical generation.

(e) California and the western United States have unique,
high-quality solar and geothermal resources. California utilities
are dramatically increasing their utilization of solar resources to
generate electricity, but not effectively increasing the utilization
of geothermal resources. California’s long-term electrical supply
portfolio should include much greater reliance on geothermal
resources.

(f) Only a fraction of the geothermal resources that could be
supplying California consumers are currently being utilized, and
there has been very little increase in geothermal generation capacity
during the past decade.

(g) The current process used to procure new energy resources
eligible under the California Renewables Portfolio Standard
Program does not adequately value the diverse types of renewable
resources needed to supply California with mostly carbon-free
electricity after 2020 while maintaining reliability. Almost no new
baseload eligible renewable energy resources have been procured
during the past decade.

(h) To maintain electrical system reliability relying on generation
that, for the most part, emits no greenhouse gases, that generation
must be deliverable to retail customers in real time.

(i) California’s retail sellers begin delete and local publicly owned electric
utilities end delete should add at least 500 megawatts of electricity from new
baseload geothermal generation by the end of 2024.

(j) Many geothermal resources have the additional benefit of
supplying lithium and other strategic minerals. Currently, the
United States is dependent on foreign supplies for these minerals.
Lithium is needed for electric vehicle batteries. The State Air
Resources Board has identified increasing electric vehicles as a
California and national priority as part of implementing AB 32
and reaching goals for reducing emissions of greenhouse gases.
Thus, increasing production of lithium and other strategic minerals
as a cobenefit of increased production of baseload geothermal
power is in the national interest of the United States.

SEC. 2.  

Section 399.35 is added to the Public Utilities Code,
to read:

399.35.  

(a) No later than December 31, 2024, each retail seller
begin delete and local publicly owned electric utility end delete shall procure a
proportionate share of a statewide total of 500 megawatts of
electricity generated by baseload geothermal powerplants that
began being constructed after January 1, 2015, and that meet the
requirements of paragraph (1) of subdivision (b) of Section 399.16.
begin delete A local publicly owned electric utility serving fewer than 75,000
customers shall not be required to procure a proportionate share. end delete

(b)  begin delete (1) end delete begin delete   end delete No later than June 30, 2015, the Energy Commission
shall determine the proportionate share of the 500 megawatts of
electricity that each retail seller begin delete and local publicly owned electric
utility end delete is required to procure pursuant to subdivision (a). For
purposes of this section, “proportionate share” shall be based on
the forecast retail sales for the year 2018.

begin delete

(2) The obligation for a local publicly owned electric utility to
procure its proportionate share of a statewide total of 500
megawatts of electricity generated by baseload geothermal
powerplants pursuant to this section is deemed satisfied if one or
more local publicly owned electric utilities procures in the
aggregate generation capacity from baseload geothermal
powerplants in an amount sufficient to satisfy the total
proportionate share of all local publicly owned electric utilities
under this section.

end delete

(c) No later than January 1, 2016, each retail seller shall file
with the begin delete commission, and each local publicly owned electric utility
shall file with the Energy Commission, end delete begin insert commission end insert a plan for
complying with subdivision (a). Those plans shall require each
retail seller begin delete and local publicly owned electric utility end delete to procure at
least one-half of its proportionate share by December 31, 2019.
Those plans may authorize a retail seller begin delete or local publicly owned
electric utility end delete to aggregate its proportionate share with the
proportionate share of another retail seller begin delete or local publicly owned
electric utility end delete in order to minimize administrative and contracting
costs. The commission shall review and approve, modify, or reject
plans filed by retail sellers.

(d) The electricity procured pursuant to this section shall not
count towards meeting the requirements specified in subparagraph
(B) of paragraph (2) of subdivision (b) of Section begin delete 399.15 or
paragraph (2) of subdivision (c) of Section 399.30. end delete begin insert 399.15. end insert

(e) The electricity procured pursuant to this section shall be
procured to reasonably minimize costs. Subdivision (c) of Section
399.15 shall not apply to electricity procured pursuant to this
section.

SEC. 3.  

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.