Bill Text: CA AB177 | 2013-2014 | Regular Session | Amended

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Bill Title: Renewable energy resources: electrical corporations: procurement plans.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2014-02-03 - Died on inactive file. [AB177 Detail]

Download: California-2013-AB177-Amended.html

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BILL NUMBER: AB 177	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JANUARY 27, 2014
	AMENDED IN ASSEMBLY  JANUARY 15, 2014
	AMENDED IN ASSEMBLY  JANUARY 8, 2014
	AMENDED IN ASSEMBLY  JANUARY 6, 2014
	AMENDED IN ASSEMBLY  JUNE 5, 2013
	AMENDED IN ASSEMBLY  APRIL 9, 2013
	AMENDED IN ASSEMBLY  MARCH 21, 2013

INTRODUCED BY   Assembly Member V. Manuel Pérez

                        JANUARY 24, 2013

   An act to add Section 25328 to the Public Resources  Code, and
to amend Sections 454.5, 911, and 8341 of the Public Utilities 
Code, relating to energy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 177, as amended, V. Manuel Pérez. Renewable energy resources:
 Salton Sea.   electrical corporations:
procurement plans. 
   The Warren-Alquist State Energy Resources Conservation and
Development Act establishes the State Energy Resources Conservation
and Development Commission. The act requires the State Energy
Resources Conservation and Development Commission, beginning November
1, 2003, and by November 1 of every odd year thereafter, to adopt an
integrated energy policy report which includes an overview of major
energy trends and issues facing the state, an assessment and forecast
of system reliability, and the need for resource additions,
efficiency, and conservation. The act requires the State Energy
Resources Conservation and Development Commission, beginning November
1, 2004, and by November 1 of each even year thereafter, to prepare
an energy policy review to update the analyses from the integrated
energy policy report or to raise energy issues that have emerged
since the release of the integrated energy policy report.
   The California Renewables Portfolio Standard Program, also known
as the RPS program, requires a retail seller of electricity, as
defined, and local publicly owned electric utilities to purchase
specified minimum quantities of electricity products from eligible
renewable energy resources, as defined, for specified compliance
periods, sufficient to ensure that the procurement of electricity
products from eligible renewable energy resources achieves 25% of
retail sales by December 31, 2016, and 33% of retail sales by
December 31, 2020, and in all subsequent years.
   This bill would require the State Energy Resources Conservation
and Development Commission, in cooperation and consultation with the
Public Utilities Commission, the Natural Resources Agency, and the
Salton Sea Authority, to convene a stakeholders group to advise the
commission on the steps that should be taken to properly develop,
integrate, and transmit the electricity generated by eligible
renewable energy resources located in and around the Salton Sea. The
bill would require the State Energy Resources Conservation and
Development Commission to hold workshops and public hearings and to
include its evaluations and recommendations in the next integrated
energy policy report or energy policy review update. 
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations,
as defined. The Public Utilities Act requires the Public Utilities
Commission to review and adopt a procurement plan for each electrical
corporation in accordance with specified elements, incentive
mechanisms, and objectives. The act requires that an electrical
corporation's proposed procurement plan include certain elements. The
act requires the Public Utilities Commission to review and accept,
modify, or reject each electrical corporation's procurement plan and
requires that each approved procurement plan accomplish specified
objectives.  
   This bill would require the Public Utilities Commission to
establish a value for assessing all procurement contracts for
eligible renewable energy resources that includes the cost of
integration of those resources into the operation of the electrical
grid and would authorize the commission to additionally include other
values including voltage support. The bill would require that a
procurement plan approved by the Public Utilities Commission
accomplish the objective of providing for procurement of preferred
resources in a manner that ensures electrical system reliability.

   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) There are substantial high-quality eligible renewable energy
resources located in and around the Salton Sea that can generate
electricity in a manner that will simultaneously do all of the
following:
   (1) Assist in maintaining grid reliability.
   (2) Provide lower costs for integrating eligible renewable energy
resources into the electrical grid.
   (3) Help meet California's renewables portfolio standard
procurement requirements and requirements for reducing emissions of
greenhouse gases.
   (4) Provide significant local and regional environmental and
economic development benefits.
   (b) There are similar high-quality eligible renewable energy
resources located in northern California that can generate
electricity in a manner that will simultaneously achieve the same
benefits as would be achieved by developing those resources near the
Salton Sea.
   (c) The County of Imperial and the Imperial Irrigation District
have signed a memorandum of understanding that pledges their mutual
efforts to advance the development of eligible renewable energy
resources and precious minerals extraction in the Imperial Irrigation
District balancing authority area and thereby provide a funding
source that will assist the state in meeting its mitigation and
restoration obligations pursuant to the Quantification Settlement
Agreement, as defined in subdivision (a) of Section 1 of Chapter 617
of the Statutes of 2002, and related and implementing agreements.
   (d) The Natural Resources Agency, in cooperation and consultation
with the Salton Sea Authority, is conducting a feasibility study that
will serve as the blueprint to guide future efforts to restore the
Salton Sea, develop the eligible renewable energy resources located
there, and provide direction to local, regional, and state agencies
responsible for the protection of the health of those who could
otherwise be subjected to the detrimental air quality effects from an
exposed lake bed.
  SEC. 2.  Section 25328 is added to the Public Resources Code, to
read:
   25328.  (a) The commission, in cooperation and consultation with
the Public Utilities Commission, the Natural Resources Agency, and
the Salton Sea Authority, shall convene a stakeholders group to
advise the commission on the steps that should be taken to properly
develop, integrate, and transmit the electricity generated by
eligible renewable energy resources, as defined in Section 399.12 of
the Public Utilities Code, located in and around the Salton Sea. The
commission shall hold workshops and public hearings to consider the
recommendations of the stakeholders group. At a minimum, the
commission and stakeholders shall do all of the following:
   (1) Consider methods to expedite transmission line development
from the Imperial Irrigation District balancing authority area to
utilities and regional independent system operators.
   (2) Analyze whether state loan guarantees, loans, or state funds
could be made available to assist developers of geothermal and other
eligible renewable energy resources to access capital and long-term
financing.
   (3) Identify permitting issues and agencies responsible for
issuing those permits.
   (4) Analyze the feasibility of granting blanket permits to
multiple geothermal project developments located near or under the
existing Salton Sea.
   (5) Analyze the effectiveness of the value for assessing
procurement contracts for eligible renewable energy resources 
established by the Public Utilities Commission   pursuant to
subdivision (c) of Section 454.5 of the Public Utilities Code 
that includes integration of those resources into the operation of
the electrical grid, analyze whether the value has resulted in
development of new eligible renewable energy resources located in and
around the Salton Sea, and make recommendations on whether other
measures are appropriate to ensure that eligible renewable energy
resources are appropriately developed in and around the Salton Sea.
   (6) Analyze the costs and the value provided by eligible renewable
energy resource projects located in and around the Salton Sea that
provide baseload generation.
   (7) Assist in the framing of a pilot project to evaluate algae and
solar energy facilities located on or near Salton Sea playa areas.
   (8) Analyze the benefits and costs of rare earth extraction in
consultation with the relevant state and federal agencies.
   (b) The commission shall include its evaluations and
recommendations in the next integrated energy policy report adopted
pursuant to subdivisions (a), (b), and (c) of, or energy policy
review update adopted pursuant to subdivision (d) of, Section 25302.
   SEC. 3.    Section 454.5 of the   Public
Utilities Code   is amended to read: 
   454.5.  (a) The commission shall specify the allocation of
electricity, including quantity, characteristics, and duration of
electricity delivery, that the Department of Water Resources shall
provide under its power purchase agreements to the customers of each
electrical corporation, which shall be reflected in the electrical
corporation's proposed procurement plan. Each electrical corporation
shall file a proposed procurement plan with the commission not later
than 60 days after the commission specifies the allocation of
electricity. The proposed procurement plan shall specify the date
that the electrical corporation intends to resume procurement of
electricity for its retail customers, consistent with its obligation
to serve. After the commission's adoption of a procurement plan, the
commission shall allow not less than 60 days before the electrical
corporation resumes procurement pursuant to this section.
   (b) An electrical corporation's proposed procurement plan shall
include, but not be limited to, all of the following:
   (1) An assessment of the price risk associated with the electrical
corporation's portfolio, including any utility-retained generation,
existing power purchase and exchange contracts, and proposed
contracts or purchases under which an electrical corporation will
procure electricity, electricity demand reductions, and
electricity-related products and the remaining open position to be
served by spot market transactions.
   (2) A definition of each electricity product, electricity-related
product, and procurement related financial product, including support
and justification for the product type and amount to be procured
under the plan.
   (3) The duration of the plan.
   (4) The duration, timing, and range of quantities of each product
to be procured.
   (5) A competitive procurement process under which the electrical
corporation may request bids for procurement-related services,
including the format and criteria of that procurement process.
   (6) An incentive mechanism, if any incentive mechanism is
proposed, including the type of transactions to be covered by that
mechanism, their respective procurement benchmarks, and other
parameters needed to determine the sharing of risks and benefits.
   (7) The upfront standards and criteria by which the acceptability
and eligibility for rate recovery of a proposed procurement
transaction will be known by the electrical corporation prior to
execution of the transaction. This shall include an expedited
approval process for the commission's review of proposed contracts
and subsequent approval or rejection thereof. The electrical
corporation shall propose alternative procurement choices in the
event a contract is rejected.
   (8) Procedures for updating the procurement plan.
   (9) A showing that the procurement plan will achieve the
following:
   (A) The electrical corporation, in order to fulfill its unmet
resource needs, shall procure resources from eligible renewable
energy resources in an amount sufficient to meet its procurement
requirements pursuant to the California Renewables Portfolio Standard
Program (Article 16 (commencing with Section 399.11) of Chapter
2.3).
   (B) The electrical corporation shall create or maintain a
diversified procurement portfolio consisting of both short-term and
long-term electricity and electricity-related and demand reduction
products.
   (C) The electrical corporation shall first meet its unmet resource
needs through all available energy efficiency and demand reduction
resources that are cost effective, reliable, and feasible.
   (10) The electrical corporation's risk management policy,
strategy, and practices, including specific measures of price
stability.
   (11) A plan to achieve appropriate increases in diversity of
ownership and diversity of fuel supply of nonutility electrical
generation.
   (12) A mechanism for recovery of reasonable administrative costs
related to procurement in the generation component of rates. 
   (c) The commission shall establish a value for assessing all
procurement contracts for eligible renewable energy resources that
includes the cost of integration of those resources into the
operation of the electrical grid. The commission may also include
other values including, but not limited to, voltage support. 

   (c) 
    (d)  The commission shall review and accept, modify, or
reject each electrical corporation's procurement plan. The commission'
s review shall consider each electrical corporation's individual
procurement situation, and shall give strong consideration to that
situation in determining which one or more of the features set forth
in this subdivision shall apply to that electrical corporation. A
procurement plan approved by the commission shall contain one or more
of the following features, provided that the commission may not
approve a feature or mechanism for an electrical corporation if it
finds that the feature or mechanism would impair the restoration of
an electrical corporation's creditworthiness or would lead to a
deterioration of an electrical corporation's creditworthiness:
   (1) A competitive procurement process under which the electrical
corporation may request bids for procurement-related services. The
commission shall specify the format of that procurement process, as
well as criteria to ensure that the auction process is open and
adequately subscribed. Any purchases made in compliance with the
commission-authorized process shall be recovered in the generation
component of rates.
   (2) An incentive mechanism that establishes a procurement
benchmark or benchmarks and authorizes the electrical corporation to
procure from the market, subject to comparing the electrical
corporation's performance to the commission-authorized benchmark or
benchmarks. The incentive mechanism shall be clear, achievable, and
contain quantifiable objectives and standards. The incentive
mechanism shall contain balanced risk and reward incentives that
limit the risk and reward of an electrical corporation.
   (3) Upfront achievable standards and criteria by which the
acceptability and eligibility for rate recovery of a proposed
procurement transaction will be known by the electrical corporation
prior to the execution of the bilateral contract for the transaction.
The commission shall provide for expedited review and either approve
or reject the individual contracts submitted by the electrical
corporation to ensure compliance with its procurement plan. To the
extent the commission rejects a proposed contract pursuant to this
criteria, the commission shall designate alternative procurement
choices obtained in the procurement plan that will be recoverable for
ratemaking purposes. 
   (d) 
    (e)  A procurement plan approved by the commission shall
accomplish each of the following objectives:
   (1) Enable the electrical corporation to fulfill its obligation to
serve its customers at just and reasonable rates.
   (2) Eliminate the need for after-the-fact reasonableness reviews
of an electrical corporation's actions in compliance with an approved
procurement plan, including resulting electricity procurement
contracts, practices, and related expenses. However, the commission
may establish a regulatory process to verify and ensure that each
contract was administered in accordance with the terms of the
contract, and contract disputes that may arise are reasonably
resolved.
   (3) Ensure timely recovery of prospective procurement costs
incurred pursuant to an approved procurement plan. The commission
shall establish rates based on forecasts of procurement costs adopted
by the commission, actual procurement costs incurred, or combination
thereof, as determined by the commission. The commission shall
establish power procurement balancing accounts to track the
differences between recorded revenues and costs incurred pursuant to
an approved procurement plan. The commission shall review the power
procurement balancing accounts, not less than semiannually, and shall
adjust rates or order refunds, as necessary, to promptly amortize a
balancing account, according to a schedule determined by the
commission. Until January 1, 2006, the commission shall ensure that
any overcollection or undercollection in the power procurement
balancing account does not exceed 5 percent of the electrical
corporation's actual recorded generation revenues for the prior
calendar year excluding revenues collected for the Department of
Water Resources. The commission shall determine the schedule for
amortizing the overcollection or undercollection in the balancing
account to ensure that the 5 percent threshold is not exceeded. After
January 1, 2006, this adjustment shall occur when deemed appropriate
by the commission consistent with the objectives of this section.
   (4) Moderate the price risk associated with serving its retail
customers, including the price risk embedded in its long-term supply
contracts, by authorizing an electrical corporation to enter into
financial and other electricity-related product contracts.
   (5) Provide for just and reasonable rates, with an appropriate
balancing of price stability and price level in the electrical
corporation's procurement plan. 
   (6) Provide for procurement of preferred resources in a manner
that ensures electrical system reliability.  
   (e) 
    (f)  The commission shall provide for the periodic
review and prospective modification of an electrical corporation's
procurement plan. 
   (f) 
    (g)  The commission may engage an independent consultant
or advisory service to evaluate risk management and strategy. The
reasonable costs of any consultant or advisory service is a
reimbursable expense and eligible for funding pursuant to Section
631. 
   (g) 
    (h)  The commission shall adopt appropriate procedures
to ensure the confidentiality of any market sensitive information
submitted in an electrical corporation's proposed procurement plan or
resulting from or related to its approved procurement plan,
including, but not limited to, proposed or executed power purchase
agreements, data request responses, or consultant reports, or any
combination, provided that the Office of Ratepayer Advocates and
other consumer groups that are nonmarket participants shall be
provided access to this information under confidentiality procedures
authorized by the commission. 
   (h) 
    (i)  Nothing in this section alters, modifies, or amends
the commission's oversight of affiliate transactions under its rules
and decisions or the commission's existing authority to investigate
and penalize an electrical corporation's alleged fraudulent
activities, or to disallow costs incurred as a result of gross
incompetence, fraud, abuse, or similar grounds. Nothing in this
section expands, modifies, or limits the State Energy Resources
Conservation and Development Commission's existing authority and
responsibilities as set forth in Sections 25216, 25216.5, and 25323
of the Public Resources Code. 
   (i) 
    (j)  An electrical corporation that serves less than
500,000 electric retail customers within the state may file with the
commission a request for exemption from this section, which the
commission shall grant upon a showing of good cause. 
   (j) 
    (k)  (1) Prior to its approval pursuant to Section 851
of any divestiture of generation assets owned by an electrical
corporation on or after the date of enactment of the act adding this
section, the commission shall determine the impact of the proposed
divestiture on the electrical corporation's procurement rates and
shall approve a divestiture only to the extent it finds, taking into
account the effect of the divestiture on procurement rates, that the
divestiture is in the public interest and will result in net
ratepayer benefits.
   (2) Any electrical corporation's procurement necessitated as a
result of the divestiture of generation assets on or after the
effective date of the act adding this subdivision shall be subject to
the mechanisms and procedures set forth in this section only if its
actual cost is less than the recent historical cost of the divested
generation assets.
   (3) Notwithstanding paragraph (2), the commission may deem
proposed procurement eligible to use the procedures in this section
upon its approval of asset divestiture pursuant to Section 851.
   SEC. 4.   Section 911 of the   Public
Utilities Code   is amended to read: 
   911.  (a) Notwithstanding subdivision  (g)  
(h)  of Section 454.5 and Section 583, no later than February 1,
2012, and annually thereafter, the commission shall release to the
Legislature the costs of all electricity procurement contracts for
eligible renewable energy resources, including unbundled renewable
energy credits, and all costs for utility-owned generation approved
by the commission. The first report shall include all costs
commencing January 1, 2003. Subsequent reports shall include only
costs for the preceding calendar year.
   (1) For power purchase contracts, the commission shall release
costs in an aggregated form categorized according to the year the
procurement transaction was approved by the commission, the eligible
renewable energy resource type, including bundled renewable energy
credits, the average executed contract price, and average actual
recorded costs for each kilowatthour of production. Within each
renewable energy resource type, the commission shall provide
aggregated costs for different project size thresholds.
   (2) For each utility-owned renewable generation project, the
commission shall release the costs forecast by the electrical
corporation at the time of initial approval and the actual recorded
costs for each kilowatthour of production during the preceding
calendar year.
   (b) This section does not require the release of the terms of any
individual electricity procurement contracts for eligible renewable
energy resources, including unbundled renewable energy credits,
approved by the commission. The commission shall aggregate data to
the extent required to ensure protection of the confidentiality of
individual contract costs even if this aggregation requires grouping
contracts of different energy resource type. The commission shall not
be required to release the data in any year when there are fewer
than three contracts approved.
   (c) The commission may combine the information required by this
section with the report prepared pursuant to Section 910, as added by
Chapter 1 of the First Extraordinary Session of the Statutes of
2011.
   SEC. 5.    Section 8341 of the   Public
Utilities Code   is amended to read: 
   8341.  (a) No load-serving entity or local publicly owned electric
utility may enter into a long-term financial commitment unless any
baseload generation supplied under the long-term financial commitment
complies with the greenhouse gases emission performance standard
established by the commission, pursuant to subdivision (d), for a
load-serving entity, or by the Energy Commission, pursuant to
subdivision (e), for a local publicly owned electric utility.
   (b) (1) The commission shall not approve a long-term financial
commitment by an electrical corporation unless any baseload
generation supplied under the long-term financial commitment complies
with the greenhouse gases emission performance standard established
by the commission pursuant to subdivision (d).
   (2) The commission may, in order to enforce this section, review
any long-term financial commitment proposed to be entered into by an
electric service provider or a community choice aggregator.
   (3) The commission shall adopt rules to enforce the requirements
of this section, for load-serving entities. The commission shall
adopt procedures, for all load-serving entities, to verify the
emissions of greenhouse gases from any baseload generation supplied
under a contract subject to the greenhouse gases emission performance
standard to ensure compliance with the standard.
   (4) In determining whether a long-term financial commitment is for
baseload generation, the commission shall consider the design of the
powerplant and the intended use of the powerplant, as determined by
the commission based upon the electricity purchase contract, any
certification received from the Energy Commission, any other permit
or certificate necessary for the operation of the powerplant,
including a certificate of public convenience and necessity, any
procurement approval decision for the load-serving entity, and any
other matter the commission determines is relevant under the
circumstances.
   (5) Costs incurred by an electrical corporation to comply with
this section, including those costs incurred for electricity purchase
agreements that are approved by the commission that comply with the
greenhouse gases emission performance standard, are to be treated as
procurement costs incurred pursuant to an approved procurement plan
and the commission shall ensure timely cost recovery of those costs
pursuant to paragraph (3) of subdivision  (d)  
(e)  of Section 454.5.
   (6) A long-term financial commitment entered into through a
contract approved by the commission, for electricity generated by a
zero- or low-carbon generating resource that is contracted for, on
behalf of consumers of this state on a cost-of-service basis, shall
be recoverable in rates, in a manner determined by the commission
consistent with Section 380. The commission may, after a hearing,
approve an increase from one-half to 1 percent in the return on
investment by the third party entering into the contract with an
electrical corporation with respect to investment in zero- or
low-carbon generation resources authorized pursuant to this
subdivision.
   (c) (1) The Energy Commission shall adopt regulations for the
enforcement of this chapter with respect to a local publicly owned
electric utility.
   (2) The Energy Commission may, in order to ensure compliance with
the greenhouse gases emission performance standard by local publicly
owned electric utilities, apply the procedures adopted by the
commission to verify the emissions of greenhouse gases from baseload
generation pursuant to subdivision (b).
   (3) In determining whether a long-term financial commitment is for
baseload generation, the Energy Commission shall consider the design
of the powerplant and the intended use of the powerplant, as
determined by the Energy Commission based upon the electricity
purchase contract, any certification received from the Energy
Commission, any other permit for the operation of the powerplant, any
procurement approval decision for the load-serving entity, and any
other matter the Energy Commission determines is relevant under the
circumstances.
   (d) (1) On or before February 1, 2007, the commission, through a
rulemaking proceeding, and in consultation with the Energy Commission
and the State Air Resources Board, shall establish a greenhouse
gases emission performance standard for all baseload generation of
load-serving entities, at a rate of emissions of greenhouse gases
that is no higher than the rate of emissions of greenhouse gases for
combined-cycle natural gas baseload generation. Enforcement of the
greenhouse gases emission performance standard shall begin
immediately upon the establishment of the standard. All
combined-cycle natural gas powerplants that are in operation, or that
have an Energy Commission final permit decision to operate as of
June 30, 2007, shall be deemed to be in compliance with the
greenhouse gases emission performance standard.
   (2) In determining the rate of emissions of greenhouse gases for
baseload generation, the commission shall include the net emissions
resulting from the production of electricity by the baseload
generation.
   (3) The commission shall establish an output-based methodology to
ensure that the calculation of emissions of greenhouse gases for
cogeneration recognizes the total usable energy output of the
process, and includes all greenhouse gases emitted by the facility in
the production of both electrical and thermal energy.
   (4) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the commission shall consider net emissions from the process of
growing, processing, and generating the electricity from the fuel
source.
   (5) Carbon dioxide that is injected in geological formations, so
as to prevent releases into the atmosphere, in compliance with
applicable laws and regulations shall not be counted as emissions of
the powerplant in determining compliance with the greenhouse gases
emissions performance standard.
   (6) In adopting and implementing the greenhouse gases emission
performance standard, the commission, in consultation with the
Independent System Operator shall consider the effects of the
standard on system reliability and overall costs to electricity
customers.
   (7) In developing and implementing the greenhouse gases emission
performance standard, the commission shall address long-term
purchases of electricity from unspecified sources in a manner
consistent with this chapter.
   (8) In developing and implementing the greenhouse gases emission
performance standard, the commission shall consider and act in a
manner consistent with any rules adopted pursuant to Section 824a-3
of Title 16 of the United States Code.
   (9) An electrical corporation that provides electric service to
75,000 or fewer retail end-use customers in California may file with
the commission a proposal for alternative compliance with this
section, which the commission may accept upon a showing by the
electrical corporation of both of the following:
   (A) A majority of the electrical corporation's retail end-use
customers for electric service are located outside of California.

         (B) The emissions of greenhouse gases to generate
electricity for the retail end-use customers of the electrical
corporation are subject to a review by the utility regulatory
commission of at least one other state in which the electrical
corporation provides regulated retail electric service.
   (e) (1) On or before June 30, 2007, the Energy Commission, at a
duly noticed public hearing and in consultation with the commission
and the State Air Resources Board, shall establish a greenhouse gases
emission performance standard for all baseload generation of local
publicly owned electric utilities at a rate of emissions of
greenhouse gases that is no higher than the rate of emissions of
greenhouse gases for combined-cycle natural gas baseload generation.
The greenhouse gases emission performance standard established by the
Energy Commission for local publicly owned electric utilities shall
be consistent with the standard adopted by the commission for
load-serving entities. Enforcement of the greenhouse gases emission
performance standard shall begin immediately upon the establishment
of the standard. All combined-cycle natural gas powerplants that are
in operation, or that have an Energy Commission final permit decision
to operate as of June 30, 2007, shall be deemed to be in compliance
with the greenhouse gases emission performance standard.
   (2) The greenhouse gases emission performance standard shall be
adopted by regulation pursuant to the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code).
   (3) In determining the rate of emissions of greenhouse gases for
baseload generation, the Energy Commission shall include the net
emissions resulting from the production of electricity by the
baseload generation.
   (4) The Energy Commission shall establish an output-based
methodology to ensure that the calculation of emissions of greenhouse
gases for cogeneration recognizes the total usable energy output of
the process, and includes all greenhouse gases emitted by the
facility in the production of both electrical and thermal energy.
   (5) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the Energy Commission shall consider net emissions from the process
of growing, processing, and generating the electricity from the fuel
source.
   (6) Carbon dioxide that is captured from the emissions of a
powerplant and that is permanently disposed of in geological
formations in compliance with applicable laws and regulations, shall
not be counted as emissions from the powerplant.
   (7) In adopting and implementing the greenhouse gases emission
performance standard, the Energy Commission, in consultation with the
Independent System Operator, shall consider the effects of the
standard on system reliability and overall costs to electricity
customers.
   (8) In developing and implementing the greenhouse gases emission
performance standard, the Energy Commission shall address long-term
purchases of electricity from unspecified sources in a manner
consistent with this chapter.
   (9) In developing and implementing the greenhouse gases emission
performance standard, the Energy Commission shall consider and act in
a manner consistent with any rules adopted pursuant to Section
824a-3 of Title 16 of the United States Code.
   (f) The Energy Commission, in a duly noticed public hearing and in
consultation with the commission and the State Air Resources Board,
shall reevaluate and continue, modify, or replace the greenhouse
gases emission performance standard when an enforceable greenhouse
gases emissions limit is established and in operation, that is
applicable to local publicly owned electric utilities.
   (g) The commission, through a rulemaking proceeding and in
consultation with the Energy Commission and the State Air Resources
Board, shall reevaluate and continue, modify, or replace the
greenhouse gases emission performance standard when an enforceable
greenhouse gases emissions limit is established and in operation,
that is applicable to load-serving entities.