Bill Text: CA AB1536 | 2009-2010 | Regular Session | Amended
Bill Title: Electricity: resource adequacy distributed generation
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2010-06-03 - From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on E., U., & C. [AB1536 Detail]
Download: California-2009-AB1536-Amended.html
BILL NUMBER: AB 1536 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 3, 2010
AMENDED IN SENATE DECEMBER 17, 2009
AMENDED IN SENATE OCTOBER 14, 2009
AMENDED IN SENATE SEPTEMBER 10, 2009
AMENDED IN SENATE SEPTEMBER 8, 2009
AMENDED IN SENATE SEPTEMBER 2, 2009
AMENDED IN SENATE JUNE 23, 2009
AMENDED IN ASSEMBLY MAY 6, 2009
AMENDED IN ASSEMBLY APRIL 14, 2009
INTRODUCED BY Assembly Member Blakeslee
FEBRUARY 27, 2009
An act to add Section 565 to the Public Utilities Code,
relating to energy, and declaring the urgency thereof, to take effect
immediately. An act to add Chapter 6 (commencing with
Section 8400) to Division 4.1 of the Public Utilities Code, relating
to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1536, as amended, Blakeslee. Electricity: Pacific Gas
and Electric Company: seismic fault. resource adequacy
distributed generation program.
(1) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations, as defined. Existing law requires the commission, in
consultation with the Independent System Operator (ISO), to establish
resource adequacy requirements for all load-serving entities, as
defined, in accordance with specified objectives. This definition of
a "load-serving entity" excludes a local publicly owned electric
utility. However, other provisions of existing law require that each
local publicly owned electric utility serving end-use customers
prudently plan for and procure resources that are adequate to meet
its planning reserve margin and peak demand and operating reserves,
sufficient to provide reliable electric service to its customers.
This bill would authorize an eligible customer-generator, as
defined, to participate in resource adequacy distributed generation,
as specified. The bill would require each responsible load-serving
entity, as defined, to develop a standard offer contract for the
purchase of electricity generated by an eligible facility, as
defined, of an eligible customer-generator participating in resource
adequacy distributed generation, and would require that the standard
offer contract provide for payment for every kilowatthour delivered
to the electrical grid by the eligible facility at the generation
rate of the responsible load-serving entity. The bill would require
that the commission approve, or approve as modified, the standard
offer contract of a responsible load-serving entity that is an
electrical corporation, electric service provider, or community
choice aggregator, and would similarly require that the governing
board approve, or approve as modified, the standard offer contract of
a responsible load-serving entity that is a local publicly owned
electric utility. The bill would authorize an electrical corporation
or local publicly owned electric utility to offer resource adequacy
distributed generation pursuant to a tariff, and would authorize the
tariff to be offered in lieu of, or in addition to, the standard
offer contract. The bill would require every responsible load-serving
entity, upon approval of its standard offer contract or tariff, to
make the standard offer contract or tariff available to eligible
customer-generators within its service territory, or for an electric
service provider, to any eligible customer-generator with which it
has entered into a direct transaction. The bill would impose
additional requirements upon responsible load-serving entities, the
commission, and the governing board of a local publicly owned
electric utility for implementation of the resource adequacy
distributed generation program. The bill would provide that the
physical generating capacity of the eligible facility available to
the responsible load-serving entity pursuant to the program shall
count toward the resource adequacy requirements of those entities.
(2) Under existing law, a violation of the Public Utilities Act or
of any order, decision, rule, direction, demand, or requirement of
the commission is a crime.
Because the provisions of this bill would require action by the
commission to implement, a violation of these provisions would impose
a state-mandated local program by creating a new crime.
Because this bill would establish various requirements to be met
by local publicly owned utilities, 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 specified reasons.
(1) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities including electrical
corporations, as defined.
Existing law requires the State Energy Resources Conservation and
Development Commission (Energy Commission) to conduct various
assessments and forecasts on energy industry supply, production,
transportation, delivery and distribution, demand, and prices.
This bill would require Pacific Gas and Electric Company, in
furtherance of the recommendations made by the Energy Commission, to
conduct seismic fault studies or surveys in areas at or near the
Diablo Canyon Nuclear Power Plant in order to maintain reliable
operation of the electrical grid and mitigate impacts to customer
rates that could result from a seismic event. Because a violation of
this requirement would be a crime, this bill would impose a
state-mandated local program. The bill would require the commission,
in consultation with the California Geological Survey and the Seismic
Safety Commission, to conduct or facilitate a peer review of any
fault studies or surveys conducted pursuant to that requirement
within 120 days of receipt of a final study or survey. The bill would
require the Pacific Gas and Electric Company to fund all costs
associated with a peer review of any studies or surveys and would
require the commission to authorize the utility to fully recover, in
its generation procurement rates, all reasonable costs associated
with any studies, surveys, or peer review required pursuant to the
bill.
(2) 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.
(3) This bill would make legislative findings and declarations as
to the necessity of a special statute for legislation.
(4) This bill would declare that it is to take effect immediately
as an urgency statute.
Vote: 2/3 majority . Appropriation:
no. Fiscal committee: yes. State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 6 (commencing with Section
8400) is added to Division 4.1 of the Public Utilities
Code , to read:
CHAPTER 6. RESOURCE ADEQUACY DISTRIBUTED GENERATION PROGRAM
8400. For purposes of this chapter, the following terms have the
following meanings:
(a) "Eligible customer-generator" means a retail end-use customer
of a responsible load-serving entity that uses an eligible facility
that is intended to offset part or all of the customer's own
electrical requirements and provide generation capacity to the
responsible load-serving entity for the purposes of meeting resource
adequacy requirements pursuant to Section 380 or 9620.
(b) "Eligible facility" means a distributed generation facility
that meets all of the following requirements:
(1) Has a generating capacity of at least 200 kilowatts and no
more than 20 megawatts.
(2) Meets the conditions to be an advanced electrical distributed
generation technology, as defined in subdivision (a) of Section
379.8, or meets the conditions to be an eligible renewable energy
resource for purposes of the California Renewables Portfolio Standard
Program (Article 16 (commencing with Section 399.11) of Chapter 2.3
of Part 1 of Division 1).
(3) Is interconnected and operates in parallel with the electrical
transmission and distribution grid.
(4) Is strategically located and interconnected to the electrical
transmission and distribution grid in a manner that optimizes the
deliverability of electricity generated at the facility to load
centers.
(c) "Responsible load-serving entity" means an electrical
corporation, local publicly owned electric utility, electric service
provider, or community choice aggregator that provides electric
service to an eligible customer-generator and that is subject to
resource adequacy requirements adopted pursuant to Section 380 or
9620.
8402. (a) An eligible customer-generator may participate in
resource adequacy distributed generation pursuant to this chapter.
Resource adequacy distributed generation shall be accomplished by an
eligible customer-generator employing an eligible facility to serve
on-site electrical load if at least 60 percent of the facility's
generating capacity is available to the responsible load-serving
entity. Notwithstanding Sections 216 and 218, participation in
resource adequacy distributed generation pursuant to this chapter
does not make the eligible customer-generator a public utility or an
electrical corporation, or subject the eligible customer-generator to
the jurisdiction of the commission pursuant to Part 1 (commencing
with Section 201) of Division 1.
(b) (1) Each responsible load-serving entity shall develop a
standard offer contract for the purchase of electricity generated by
an eligible facility of an eligible customer-generator participating
in resource adequacy distributed generation. The standard offer
contract shall provide for payment for every kilowatthour delivered
to the electrical grid by the eligible facility at the generation
rate of the responsible load-serving entity.
(2) Each responsible load-serving entity that is subject to
resource adequacy requirements established by the commission pursuant
to Section 380 shall file the standard offer contract with the
commission. The commission shall approve the standard offer contract
or order modifications to the contract and approve the contract as
modified. An electrical corporation may offer resource adequacy
distributed generation pursuant to a tariff to be approved by the
commission, and the tariff may be offered in lieu of, or in addition
to, the standard offer contract. The commission shall ensure that
nonparticipating ratepayers are held indifferent to the existence of
the standard offer contract or tariff. The commission, in
consultation with the Independent System Operator, may establish a
limitation on the total rated generating capacity participating in
the resource adequacy distributed generation program for those
responsible load-serving entities for which the commission has
established resource adequacy requirements, and shall establish rules
that facilitate the implementation of this chapter and the reliable
operation of the grid. The commission shall implement and enforce
this chapter in a nondiscriminatory manner, but may modify or adjust
the requirements adopted by the commission for functional reasons as
individual circumstances merit for a responsible load-serving entity
with less than 100,000 service connections in California.
(3) Each responsible load-serving entity that is subject to
resource adequacy requirements established pursuant to Section 9620
shall file the standard offer contract with its governing board. The
governing board shall approve the standard offer contract or order
modifications to the contract and approve the contract as modified.
The responsible load-serving entity may offer resource adequacy
distributed generation pursuant to a tariff to be approved by its
governing board, and the tariff may be offered in lieu of, or in
addition to, the standard offer contract. The governing board shall
ensure that nonparticipating ratepayers are held indifferent to the
existence of the standard offer contract or tariff. The governing
board may establish a limitation on the total rated generating
capacity participating in the resource adequacy distributed
generation program for the responsible load-serving entity and shall
establish rules or other requirements that facilitate the
implementation of this chapter and the reliable operation of the
grid.
(c) Every responsible load-serving entity, upon approval of its
standard offer contract or tariff pursuant to subdivision (b), shall
make the standard offer contract or tariff available to eligible
customer-generators within its service territory, or for an electric
service provider, to any eligible customer-generator with which it
has entered into a direct transaction. Every responsible load-serving
entity that maintains an Internet Web site shall make all necessary
forms and contracts for participation in resource adequacy
distributed generation pursuant to this chapter available on its
Internet Web site.
(d) The physical generating capacity of the eligible facility
available to the responsible load-serving entity shall count toward
the resource adequacy requirements of those entities for purposes of
Sections 380 and 9620.
(e) Eligible customer-generators participating in the resource
adequacy distributed generation program shall not be subject to any
standby charges or departing load charges as a result of their
participation. Eligible customer-generators participating in the
resource adequacy distributed generation program may be subject to
contractually established liquidated damages or penalties for failure
to provide the contractual generation capacity to the responsible
load-serving entity when dispatched. This subdivision does not exempt
any eligible customer-generator from the enforcement authority of
the Independent System Operator.
(f) (1) Every responsible load-serving entity shall ensure that
requests for the establishment of resource adequacy distributed
generation services are processed in a time period not exceeding that
for similarly situated customers requesting new electric service,
but not to exceed 30 working days from the date it receives a
completed application form for resource adequacy distributed
generation, including a signed interconnection agreement from an
eligible customer-generator and the electrical inspection clearance
from the governmental authority having jurisdiction.
(2) Every responsible load-serving entity shall ensure that
requests for an interconnection agreement from an eligible
customer-generator are processed in a time period not to exceed 30
working days from the date it receives a completed application form
from the eligible customer-generator for an interconnection
agreement.
(3) If a responsible load-serving entity is unable to process a
request within the allowable timeframe pursuant to paragraph (1) or
(2), it shall notify the eligible customer-generator and the
commission, for those entities subject to paragraph (2) of
subdivision (b), or its governing board, for those entities subject
to paragraph (3) of subdivision (b), of the reason for its inability
to process the request and the expected completion date.
8406. (a) If the eligible facility meets the definition of an
eligible renewable energy resource, as defined in the California
Renewables Portfolio Standard Program (Article 16 (commencing with
Section 399.11) of Chapter 2.3 of Part 1 of Division 1, then all of
the following shall apply:
(1) The responsible load-serving entity shall receive the
renewable energy credits created by the electricity assigned to the
entity.
(2) The eligible customer-generator shall receive the renewable
energy credits created by the electricity used by the customer to
serve on-site load.
(b) Notwithstanding subdivision (d) of Section 2835.2, the
physical generating capacity of the electricity assigned to the
responsible load-serving entity shall count toward the resource
adequacy requirements of those entities for the purposes of Section
380 or 9620 consistent with the effective load carrying capacity
values established by the commission, for those entities subject to
paragraph (2) of subdivision (b), or its governing board, for those
entities subject to paragraph (3) of subdivision (b).
SEC. 2. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because a local agency or school district has the
authority to levy service charges, fees, or assessments sufficient to
pay for the program or level of service mandated by this act, or
because 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. The Legislature finds and declares
all of the following:
(a) In issuing Decision 07-03-044, the Public Utilities Commission
authorized an expenditure of sixteen million eight hundred thousand
dollars ($16,800,000) of ratepayer funds to explore the feasibility
of relicensing the Diablo Canyon Nuclear Power Plant.
(b) The Public Utilities Commission, regarding the expenditure of
those funds, said that Pacific Gas and Electric Company should defer,
to the extent feasible, its work, its own study, and associated
spending, until after the State Energy Resources Conservation and
Development Commission (Energy Commission) issues its findings and
conclusions pursuant to Section 25303 of the Pubic Resources Code,
and that Pacific Gas and Electric Company should incorporate the
findings and recommendations of that Energy Commission assessment in
its own work.
(c) The assessment made pursuant to Section 25303 of the Public
Resources Code included several findings and recommendations; in
particular, the Energy Commission found that Pacific Gas and Electric
Company should use three-dimensional geophysical seismic reflection
mapping and other advanced techniques to explore fault zones near
Diablo Canyon.
(d) The July 2007 magnitude 6.8 Japan Sea earthquake located 16
kilometers from Tokyo Electric Power Company's Kashiwazaki-Kariwa
Nuclear Power Plant shut down the facility at a cost of some hundreds
of millions of dollars per month.
(e) In November 2008, the United States Geological Survey
identified a previously unidentified offshore fault approximately one
kilometer west of Diablo Canyon Nuclear Power Plant with an
estimated ability to generate a magnitude 6.5 earthquake.
SEC. 2. Section 565 is added to the Public
Utilities Code, to read:
565. (a) (1) Pacific Gas and Electric Company shall, in
furtherance of the recommendations made by the Energy Commission
pursuant to paragraph (8) of subdivision (a) of Section 25303 of the
Public Resources Code, conduct seismic fault studies or surveys,
including, but not limited to, three-dimensional geophysical seismic
reflection mapping, in areas at or near the Diablo Canyon Nuclear
Power Plant, in order to maintain reliable operation of the
electrical grid and mitigate impacts to customer rates that could
result from a seismic event.
(2) The Energy Commission, in consultation with the California
Geological Survey and the Seismic Safety Commission, may participate
in the development of study or survey designs.
(b) (1) The Energy Commission, in consultation with the California
Geological Survey and the Seismic Safety Commission, shall conduct
or facilitate a peer review of any studies or surveys conducted
pursuant to subdivision (a) within 120 days of receipt of a final
study or survey.
(2) The Energy Commission may enter into agreements with qualified
scientists with expertise in fault imaging and character and
behavior studies to conduct an external scientific peer review of the
scientific basis for any fault study or survey.
(3) The Energy Commission shall include the findings and
recommendations of any studies or surveys conducted pursuant to
subdivision (a) in the integrated energy policy report as updates
pursuant to subparagraph (D) of paragraph (8) of subdivision (a) of
Section 25303 of the Public Resources Code.
(4) Pacific Gas and Electric Company shall be responsible for
funding all costs associated with a peer review of any studies or
surveys conducted pursuant to subdivision (a).
(c) The commission shall allow Pacific Gas and Electric Company to
fully recover, in its generation procurement rates, all reasonable
costs associated with any studies or surveys required pursuant to
subdivision (a) and the peer review required pursuant to subdivision
(b). The commission shall expedite issuance of its decision approving
the recovery of costs as specified in this section, so that the
decision is made within 120 days of filing the application.
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.
SEC. 4. The Legislature finds and declares that
a special law is necessary and that a general law cannot be made
applicable within the meaning of Section 16 of Article IV of the
California Constitution because of unique circumstances pertaining to
Pacific Gas and Electric Company.
SEC. 5. This act is an urgency statute
necessary for the immediate preservation of the public peace, health,
or safety within the meaning of Article IV of the Constitution and
shall go into immediate effect. The facts constituting the necessity
are:
Pacific Gas and Electric Company has recently announced that it
will seek federal approval for a license renewal to extend operation
of the Diablo Canyon Nuclear Power Plant. To ensure the ongoing safe
operation of the Diablo Canyon Nuclear Power Plant, it is critical
that Pacific Gas and Electric Company conduct the studies and surveys
required by this act as soon as possible before obtaining federal
relicensure for the power plant.
