Bill Text: CA AB1624 | 2013-2014 | Regular Session | Amended

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

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Bill Title: Self-generation incentive program.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed - Dead) 2014-06-15 - In committee: Hearing postponed by committee. [AB1624 Detail]

Download: California-2013-AB1624-Amended.html

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BILL NUMBER: AB 1624	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 24, 2014
	AMENDED IN ASSEMBLY  APRIL 21, 2014

INTRODUCED BY   Assembly Member Gordon

                        FEBRUARY 10, 2014

   An act to amend Section 379.6 of the Public Utilities Code,
relating to electricity.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1624, as amended, Gordon. Self-generation incentive program.
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations,
as defined. Existing law, adopted during the energy crisis of
2000-01, required the Public Utilities Commission, in consultation
with the Independent System Operator and the State Energy Resources
Conservation and Development Commission, to adopt initiatives, on or
before March 7, 2001, to reduce demand for electricity and reduce
load during peak demand periods, including differential incentives
for renewable or super clean distributed generation resources.
Pursuant to this requirement, the commission adopted Decision
01-03-073, dated March 27, 2001, that established program incentives
for demand-responsiveness and self-generation that were modified in
later decisions.
   Existing law authorizes the Public Utilities Commission, in
consultation with the State Energy Resources Conservation and
Development Commission, to authorize the annual collection of not
more than the amount authorized for the self-generation incentive
program in the 2008 calendar year, through December 31, 2014.
Existing law requires the Public Utilities Commission to require
electrical corporations to administer the program for distributed
energy resources originally established pursuant to the
above-described law until January 1, 2016, and to separately
administer solar technologies pursuant to the California Solar
Initiative. Existing law requires the Public Utilities Commission to
provide repayment of all unallocated funds collected for the
self-generation incentive program on January 1, 2016, to reduce
ratepayer costs. 
   Existing law authorizes the Public Utilities Commission to
allocate up to 15% of revenues received by an electrical corporation
as a result of the direct allocation of greenhouse gas allowances to
electrical distribution utilities for clean energy and energy
efficiency projects that are administered by the electrical
corporation and are not otherwise funded by other funding source.

   This bill  would authorize the Public Utilities
Commission, in consultation with the State Energy Resources
Conservation and Development Commission, to authorize the annual
collection of not more than the amount authorized for the
self-generation incentive program in the 2008 calendar year, through
December 31, 2020, and  would require the Public Utilities
Commission to require electrical corporations to administer the
program for distributed energy resources originally established
pursuant to the above-described  former  law through
and including December 31, 2021. The bill would require the Public
Utilities Commission to  provide repayment of all unallocated
funds collected for the self-generation incentive program on January
1, 2022, to reduce ratepayer costs.   allocate $83
million from the above-described greenhouse gas allowance revenues
for the self-generation incentive program.  The bill would
require the Public Utilities Commission to evaluate the
self-generation incentive program's overall success and impact based
on specified performance measures and to evaluate the self-generation
incentive program's progress toward reducing barriers to the
adoption of distributed energy resources and the self-generation
incentive program's effectiveness in providing certain capabilities
generally related to grid reliability.  The bill would require
the commission, beginning March 1, 2017, and every year thereafter
for as long as the program is providing incentives, to review the
level of incentives and the costs of the technologies that are rec
  eiving incentives to ensure that the program is more
likely to fund those technologies that will improve the technologies'
ability to reduce greenhouse gas emission reduction costs and
produce electricity at a time and in a manner that reduces the peak
demand for electricity. 
   Existing law limits eligibility for incentives under the
self-generation incentive program to distributed energy resources
that the Public Utilities Commission, in consultation with the State
Air Resources Board, determines will achieve reductions in emissions
of greenhouse gases pursuant to the California Global Warming
Solutions Act of 2006.
   This bill would further limit eligibility for incentives under the
self-generation incentive program to distributed energy resource
technologies that the Public Utilities Commission determines meet
specified additional requirements. The bill would require the
commission to determine a capacity factor for each distributed
generation system in the program and to define a capacity factor for
energy storage systems in the program as the ratio of the total hours
the energy storage system is used for charging and discharging
throughout the year, as specified, to the total number of hours in
the year.
   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 the program that is extended under the provisions of this
bill is within the act and a decision or order of the commission
implements the program requirements, a violation of these provisions
would impose a state-mandated local program by expanding the
definition of a crime.
   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.  Section 379.6 of the Public Utilities Code is amended
to read:
   379.6.  (a) (1) It is the intent of the Legislature that the
self-generation incentive program increase deployment of distributed
generation and energy storage systems to facilitate the integration
of those resources into the electrical grid, improve efficiency and
reliability of the distribution and transmission system, and reduce
emissions of greenhouse gases, peak demand, and ratepayer costs. It
is the further intent of the Legislature that the commission, in
future proceedings, provide for an equitable distribution of the
costs and benefits of the program.
   (2)  (A)    The commission, in consultation with
the Energy Commission, may authorize the annual collection of not
more than the amount authorized for the self-generation incentive
program in the 2008 calendar year, through December 31, 
2020. The   2014. 
    (B)     The  commission shall require
the administration of the program for distributed energy resources
originally established pursuant to Chapter 329 of the Statutes of
2000 through and including December 31, 2021.  On January 1,
2022, the commission shall provide repayment of all unallocated funds
collected pursuant to this section to reduce ratepayer costs.
 
   (C) Beginning January 1, 2015, and each year thereafter until
December 31, 2021, the commission shall allocate up to eighty-three
million dollars ($83,000,000) from the funds allocated for clean
energy programs pursuant to subdivision (c) of Section 748.5 for the
self-generation incentive program.  
   (D) Beginning January 1, 2015, the commission shall authorize the
expenditure of unallocated funds collected pursuant to subparagraph
(A) before authorizing the expenditure of funds allocated pursuant to
subparagraph (C).  
   (E) On January 1, 2022, all unallocated funds allocated pursuant
to subparagraph (C) shall be subject to expenditure for the purposes
of subdivision (c) of Section 748.5. 
   (3) The commission shall administer solar technologies separately,
pursuant to the California Solar Initiative adopted by the
commission in Decisions 05-12-044 and 06-01-024, as modified by
Article 1 (commencing with Section 2851) of Chapter 9 of Part 2 of
Division 1 of this code and Chapter 8.8 (commencing with Section
25780) of Division 15 of the Public Resources Code.
   (b) Eligibility for incentives under the program shall be limited
to distributed energy resources that the commission, in consultation
with the State Air Resources Board, determines will achieve
reductions in emissions of greenhouse gases pursuant to the
California Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code).
   (c) Eligibility for the funding of any combustion-operated
distributed generation projects using fossil fuel is subject to all
of the following conditions:
   (1) An oxides of nitrogen (NOx) emissions rate standard of 0.07
pounds per megawatthour and a minimum efficiency of 60 percent, or
any other NOx emissions rate and minimum efficiency standard adopted
by the State Air Resources Board. A minimum efficiency of 60 percent
shall be measured as useful energy output divided by fuel input. The
efficiency determination shall be based on 100 percent load.
   (2) Combined heat and power units that meet the 60-percent
efficiency standard may take a credit to meet the applicable NOx
emissions standard of 0.07 pounds per megawatthour. Credit shall be
at the rate of one megawatthour for each 3.4 million British thermal
units (Btus) of heat recovered.
   (3) The customer receiving incentives shall adequately maintain
and service the combined heat and power units so that during
operation, the system continues to meet or exceed the efficiency and
emissions standards established pursuant to paragraphs (1) and (2).
   (4) Notwithstanding paragraph (1), a project that does not meet
the applicable NOx emissions standard is eligible if it meets both of
the following requirements:
   (A) The project operates solely on waste gas. The commission shall
require a customer that applies for an incentive pursuant to this
paragraph to provide an affidavit or other form of proof that
specifies that the project shall be operated solely on waste gas.
Incentives awarded pursuant to this paragraph shall be subject to
refund and shall be refunded by the recipient to the extent the
project does not operate on waste gas. As used in this paragraph,
"waste gas" means natural gas that is generated as a byproduct of
petroleum production operations and is not eligible for delivery to
the utility pipeline system.
   (B) The air quality management district or air pollution control
district, in issuing a permit to operate the project, determines that
operation of the project will produce an onsite net air emissions
benefit, compared to permitted onsite emissions if the project does
not operate. The commission shall require the customer to secure the
permit prior to receiving incentives.
   (d) In determining the eligibility for the self-generation
incentive program, minimum system efficiency shall be determined
either by calculating electrical and process heat efficiency as set
forth in Section 216.6, or by calculating overall electrical
efficiency.
   (e) In addition to the eligibility requirements specified in
subdivisions (b), (c), and (d), eligibility for incentives under the
program shall be limited to distributed energy resource technologies
that the commission determines meet all of the following
requirements:
   (1) The distributed energy resource technology is capable of
reducing demand from the grid by offsetting some or all of the
customer's onsite energy load, including, but not limited to, peak
electric demand.
   (2) The distributed energy resource technology is commercially
available.
   (3) The distributed energy resource technology safely utilizes the
existing transmission and distribution system.
   (4) The distributed energy resource technology reduces emissions
of greenhouse gases.
   (5) The distributed energy resource technology improves air
quality by reducing criteria air pollutants.
   (f) In administering the self-generation incentive program, the
commission shall do both of the following:
   (1) Determine a capacity factor for each distributed generation
system in the program.
   (2) Define a capacity factor for energy storage systems in the
program as the ratio of the total hours the energy storage system is
used for charging and discharging throughout the year, including the
hours when the energy storage system is available for capacity
applications even if not actively charging or discharging, to the
total number of hours in the year.
   (g) In administering the self-generation incentive program, the
commission may adjust the amount of rebates and evaluate other public
policy interests, including, but not limited to, ratepayers, energy
efficiency, peak load reduction, load management, and environmental
interests.
   (h) The commission shall ensure that distributed generation
resources are made available in the program for all ratepayers.
   (i) (1) In administering the self-generation incentive program,
the commission shall provide an additional incentive of 20 percent
from existing program funds for the installation of eligible
distributed generation resources from a California supplier.
   (2) "California supplier" as used in this subdivision means any
sole proprietorship, partnership, joint venture, corporation, or
other business entity that manufactures eligible distributed
generation resources in California and that meets either of the
following criteria:
   (A) The owners or policymaking officers are domiciled in
California and the permanent principal office, or place of business
from which the supplier's trade is directed or managed, is located in
California.
   (B) A business or corporation, including those owned by, or under
common control of, a corporation, that meets all of the following
criteria continuously during the five years prior to providing
eligible distributed generation resources to a self-generation
incentive program recipient:
   (i) Owns and operates a manufacturing facility located in
California that builds or manufactures eligible distributed
generation resources.
   (ii) Is licensed by the state to conduct business within the
state.
   (iii) Employs California residents for work within the state.
   (3) For purposes of qualifying as a California supplier, a
distribution or sales management office or facility does not qualify
as a manufacturing facility.
   (j) The costs of the program adopted and implemented pursuant to
this section shall not be recovered from customers participating in
the California Alternate Rates for Energy (CARE) program.
   (k) (1) The commission shall evaluate the overall success and
impact of the self-generation incentive program based on the
following performance measures:
   (A) The amount of reductions of emissions of greenhouse gases.
   (B) The amount of reductions of emissions of criteria air
pollutants measured in terms of avoided emissions and reductions of
criteria air pollutants represented by emissions credits secured for
project approval.
   (C) The amount of energy reductions measured in energy value.
   (D) The amount of reductions of aggregate noncoincident customer
peak demand.
   (E) The ratio of the electricity generated by distributed energy
resource projects receiving incentives from the program to the
electricity capable of being produced by those distributed energy
resource projects, commonly known as a capacity factor.
   (F) The value to the electrical transmission and distribution
system measured in avoided costs of transmission and distribution
upgrades and replacement.
   (G) The ability to improve onsite electricity reliability  as
compared to onsite electricity reliability before the self-generation
incentive program technology was placed in service  .
   (2) In addition to evaluating the program based on the performance
measures specified in paragraph (1), the commission shall also
evaluate  both of the following:   the program's
effectiveness in providing frequency regulation, voltage support,
demand reduction, peak shaving, ramp rate control, and other
wholesale ancillary and grid reliability services.  
   (A) The program's progress toward reducing barriers to the
adoption of distributed energy resources, including, but not limited
to, interconnection costs and the length of time to complete
interconnection.  
   (B) The program's effectiveness in providing frequency regulation,
voltage support, demand reduction, peak shaving, ramp rate control,
and other wholesale ancillary and grid reliability services.
 
   (l) To ensure that the self-generation incentive program is more
likely to fund those technologies that will improve in their ability
to reduce greenhouse gas emission reduction costs and produce
electricity at a time and in a manner that reduces the peak demand
for electricity, beginning in March 1, 2017, and each year
thereafter, as long as the SGIP program is providing incentives, the
commission shall review the level of incentives and the cost of the
technologies that are receiving incentives and (1) allow incentive
eligibility for new technologies or (2) remove incentive eligibility
or reduce incentives for technologies that have received incentives
but have not reduced greenhouse gas emission reduction costs or
provided a ratepayer benefit. 
  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.