Bill Text: CA SB48 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Public utilities: research and development projects.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2014-06-23 - Set, final hearing. Failed passage in committee. [SB48 Detail]

Download: California-2013-SB48-Amended.html

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BILL NUMBER: SB 48	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 18, 2014
	AMENDED IN ASSEMBLY  JUNE 19, 2013
	AMENDED IN SENATE  MAY 8, 2013
	AMENDED IN SENATE  APRIL 8, 2013

INTRODUCED BY   Senator Hill

                        DECEMBER 19, 2012

   An act  to amend Section 740.   1 of, and  to
add  Section 740.5 to  Sections 740.12 and
740.13 to,  the Public Utilities Code, relating to public
utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 48, as amended, Hill. Public utilities: research and
development projects.
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations,
gas corporations, heat corporations, and telephone 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 authorizes electrical
corporations, gas corporations, heat corporations, and telephone
corporations to voluntarily adopt certain research and development
programs and authorizes the commission to allow inclusion of expenses
for research and development in rates. Existing law requires the
commission to consider specified guidelines in evaluating the
research, development, and demonstration programs proposed by
electrical corporations and gas corporations.  Existing law
establishes the Energy Resources Programs Account and requires a
specified surcharge on electricity usage to be transferred to the
Energy Resources Programs Account. 
   This bill would  authorize the commission to establish an
advisory committee consisting of persons meeting specified
requirements to evaluate whether proposed research and development
projects meet the guidelines. The bill would, by July 1, 2016,
require an electrical corporation with more than 100,000 customer
accounts to cre   ate a peer review committee to evaluate
whether projects meet the guidelines and to evaluate specific
technical aspects of the proposed project. The bill would prohibit,
except under specified conditions, the commission from approving the
inclusion of expenses incurred by a project in electricity rates if
the proposed project is not supplemented by a  written
evaluation from the peer review committee. The bill would require the
commission, upon appropriation by the Legislature, to reimburse the
electrical corporation for costs incurred in creating and operating
the peer review committee from the Energy Resources Programs Account.
The bill would  require the commission, by  July 1,
  December 31,  2015, and  by December 31 of
 every 3 years thereafter, to  require electrical
corporations with more than 100,000 customer accounts, to file a
3-year research plan, which includes, among other things, proposals
for specific research and development projects and the estimated
costs of the projects to the ratepayers. The bill would require the
Legislative Analyst's Office to select members of a peer review to
evaluate the 3-year research plan of each electrical corporation and
would require that the peer review consider specified matters. The
bill would require the commission, by December 31, 2014, and by
December 31 of each 3rd year thereafter, to prepare and 
submit a report to the relevant policy and fiscal committees of the
Legislature listing all research and development projects where the
expenses of the project were or are recovered from ratepayers during
the previous 3 years, including for each project the citations of all
published papers, all oral and poster presentations given at public
meetings, and all patents awarded for the funded research. 
   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.  
   Because some electrical corporations would be required to create a
peer review committee, a violation of which would be a crime, this
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:  no   yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 740.1 of the   Public
Utilities Code   is amended to read: 
   740.1.   (a)    The commission shall consider
the following guidelines in evaluating the research, development, and
demonstration programs proposed by electrical and gas corporations:

   (a) 
    (1)  Projects should offer a reasonable probability of
providing benefits to ratepayers. 
   (b) 
    (2)  Expenditures on projects  which 
 that  have a low probability for success should be
minimized. 
   (c) 
    (3)  Projects should be consistent with the corporation'
s resource plan. 
   (d) 
    (4)  Projects should not unnecessarily duplicate
research currently, previously, or imminently undertaken by other
electrical or gas corporations or research organizations. 
   (e) 
    (5)  Each project should also support one or more of the
following objectives: 
   (1) 
    (A)  Environmental improvement. 
   (2) 
    (B)  Public and employee safety. 
   (3) 
    (C)  Conservation by efficient resource use or by
reducing or shifting system load. 
   (4) 
    (D)  Development of new resources and processes,
particularly renewable resources and processes  which
  that  further supply technologies. 
   (5) 
    (E)  Improve operating efficiency and reliability or
otherwise reduce operating costs. 
   (b) The commission may establish an advisory committee to evaluate
whether a research and development project meets the guidelines
described in subdivision (a). The advisory committee, if established,
shall be composed of persons who meet all of the following
requirements:  
   (1) Be independent of the person proposing the project.  

   (2) Be independent of the persons conducting the proposed project,
if different from those persons proposing the project.  
   (3) Be knowledgeable in the field of endeavor to which the
proposed project pertains.  
   (4) Be free of any financial or other interest that could
significantly impair the ability of the person serving on the
committee to be objective or that could create an unfair competitive
advantage of a person or organization.  
   (c) The establishment of an advisory committee is not an unlawful
delegation of the commission's authority. 
   SEC. 2.   Section 740.12 is added to the  
Public Utilities Code   , to read: 
   740.12.  (a) On or before July 1, 2016, an electrical corporation
with more than 100,000 customer accounts shall, in consultation with
the National Research Council, create a peer review committee to
evaluate whether a research and development project proposed in an
application for the inclusion of expenses for research and
development in rates pursuant to Section 740 meets the guidelines in
Section 740.1 and to evaluate all of the following technical aspects:

   (1) The overall scientific or technical merits of the proposed
project.
   (2) The extent to which the same or similar project could be
performed by entities that the electrical corporation does not
select.
   (3) The appropriateness of the level of requested funding in
comparison to other projects by similarly experienced individuals
using similar facilities performing in similar timeframes and
circumstances.
   (4) The likelihood that the proposed project can be accomplished
within the proposed time and budget by the investigators or the
technical staff, given their experience and expertise and available
resources.
   (b) The peer review committee shall have a membership of no more
than nine persons.
   (c) The composition and policies of the peer review committee
described in subdivision (a) shall ensure that the evaluation of an
application shall be performed by persons who meet all of the
following requirements:
   (1) Be independent of persons submitting the proposed project that
is included in the application.
   (2) Be independent of persons conducting the project, if different
from those persons proposing the project.
   (3) Be knowledgeable in the field of endeavor to which the
proposed project pertains.
   (4) Be free of any financial or other interest that could
significantly impair the ability of the person serving on the
committee to be objective or that could create an unfair competitive
advantage for a person or organization.
   (d) The commission shall, upon appropriation by the Legislature,
reimburse the electrical corporation for costs incurred by the
electrical corporation in consulting with the National Research
Council and in creating and operating the peer review committee from
the Energy Resources Programs Account.
   (e) The commission shall not approve the inclusion of expenses
incurred by a research and development project in electricity rates
pursuant to Section 740 for a proposed project that is not
supplemented by a written evaluation from the peer review committee.
In a decision to approve the inclusion of expenses incurred by
research and development projects in electricity rates pursuant to
Section 740, the commission shall make findings on how the written
evaluation by the peer review committee informed the decision,
including aspects of the proposed projects in which the opinion of
the commission differs from the opinion of the peer review committee.

   (f) The requirement for a written evaluation pursuant to
subdivision (e) may be waived by the commission for a proposed
project listed in an application submitted to the commission if both
of the following conditions are satisfied:
   (1) Substantial funding for the project is contingent upon
approval by a state or federal agency.
   (2) Funding for the project may be awarded by the state or federal
agency only after a review by persons who meet the criteria in
subdivision (c). 
   SEC. 3.    Section 740.13 is added to the  
Public Utilities Code   , to read:  
   740.13.  (a) On or before December 31, 2015, and, notwithstanding
Section 10231.5 of the Government Code, on or before December 31 of
every three years thereafter or more frequently as determined by the
commission, the commission shall submit to the fiscal and relevant
policy committees of the Legislature a report listing all research
and development projects for which the costs of the projects were or
are recovered from ratepayers during the previous three years,
including, for each project the citations of all published papers,
all oral and poster presentations given at public meetings, and all
patents awarded for the funded projects.
   (b) The report submitted pursuant to subdivision (a) shall be
submitted in compliance with Section 9795 of the Government Code.

   SEC. 4.    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.  
  SECTION 1.    Section 740.5 is added to the Public
Utilities Code, to read:
   740.5.  (a) For purposes of this section, the following terms have
the following meanings:
   (1) "Peer review" means a thorough, consistent, and objective
examination based on preestablished criteria by persons who are
independent of persons submitting an application, or conducting the
research and development, and who are knowledgeable in the field of
endeavor to which the application or research and development
pertains. Peer reviewers shall be free of any financial or other
interest which could significantly impair the individual's
objectivity or create an unfair competitive advantage for any person
or organization.
   (2) "Research and development project" includes a research,
development, and demonstration project or program.
   (b) The commission shall, no later than July 1, 2015, and
triennially thereafter, require electrical corporations with more
than 100,000 customer accounts to file a three-year research plan.
The plan shall include:
   (1) The research areas in which the utilities intend to engage.
   (2) Proposals for specific research and development projects, and
the estimated costs of the projects to the ratepayers.
   (3) A proposed amount allocated for unspecified research.
   (c) The Legislative Analyst's Office shall select members of a
peer review to evaluate the three-year research plan of each
electrical corporation. The peer review shall consider the electrical
corporation's research and development activities from the preceding
three years in evaluating the electrical corporation's proposed
research and development projects and in providing guidance to the
electrical corporation for improving the projects. Members of the
peer review may add supplemental reviewers on an ad hoc basis to
ensure the reviewers have sufficient technical expertise to evaluate
the projects. In their evaluation, the peer review shall consider the
technical aspects of the electrical corporation's project including,
but not limited to:
   (1) The overall scientific or technical merits of the proposed
research and development project.
   (2) The extent to which the same or similar research, development,
and demonstration work could be performed by entities that the
public utility does not select.
   (3) The appropriateness of the level of requested funding in
comparison to other projects by similarly experienced individuals
using similar facilities performing in similar timeframes and
circumstances.
   (4) The likelihood that the proposed work can be accomplished
within the proposed time and budget by the investigators or the
technical staff, given their experience and expertise and available
resources.
   (d) The commission may waive the peer review requirements in
subdivision (c) for a research and development project that was
selected through an open solicitation of proposals or if the project
is contingent upon a peer review by a public state or federal entity.

   (e) (1)  The commission shall prepare and submit a report to the
relevant policy and fiscal committees of the Legislature listing all
research and development projects where the expenses of the project
were or are recovered from ratepayers during the previous three
years, including for each project the citations of all published
papers, all oral and poster presentations given at public meetings,
and all patents awarded for the funded research. The first report
shall be submitted by December 31, 2014, and subsequent reports shall
be submitted by December 31 of every third year thereafter,
notwithstanding Section 10231.5 of the Government Code.
   (2) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code.