Bill Text: CA AB1868 | 2011-2012 | Regular Session | Introduced
Bill Title: Renewable energy resources.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-04-16 - In committee: Set, first hearing. Hearing canceled at the request of author. [AB1868 Detail]
Download: California-2011-AB1868-Introduced.html
BILL NUMBER: AB 1868 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Pan
FEBRUARY 22, 2012
An act to amend Sections 399.13, 399.15, and 399.30 of the Public
Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1868, as introduced, Pan. Renewable energy resources.
Under existing law, the Public Utilities Commission (PUC) has
regulatory authority over public utilities, including electrical
corporations, as defined, while local publicly owned electric
utilities, as defined, are under the direction of their governing
board. The existing California Renewables Portfolio Standard Program
(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 20% of retail sales
for the period January 1, 2011, to December 31, 2013, inclusive, 25%
of retail sales by December 31, 2016, and 33% of retail sales by
December 31, 2020, and in all subsequent years. The RPS program,
consistent with the goals of procuring the least-cost and best-fit
eligible renewable energy resources that meet project viability
principles, requires that all retail sellers procure a balanced
portfolio of electricity products from eligible renewable energy
resources, as specified (portfolio content requirements). The RPS
program requires the PUC to adopt rules permitting retail sellers,
beginning January 1, 2011, to accumulate excess procurement in one
compliance period to be applied to any subsequent compliance period
(banking rules). The RPS program requires the governing board of a
local publicly owned electric utility to adopt rules for banking in
the same manner as the rules adopted by the PUC for retail sellers.
This bill would recast the requirement that the PUC adopt banking
rules and would expand the banking rules to authorize excess
procurement accumulated through December 31, 2010, to be applied to
subsequent compliance periods if specified conditions are met. The
bill would require the governing board of a local publicly owned
electric utility to adopt rules for banking in the same manner as the
recast and expanded rules adopted by the PUC for retail sellers.
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. Section 399.13 of the Public Utilities Code is amended
to read:
399.13. (a) (1) The commission shall direct each electrical
corporation to annually prepare a renewable energy procurement plan
that includes the matter in paragraph (5), to satisfy its obligations
under the renewables portfolio standard. To the extent feasible,
this procurement plan shall be proposed, reviewed, and adopted by the
commission as part of, and pursuant to, a general procurement plan
process. The commission shall require each electrical corporation to
review and update its renewable energy procurement plan as it
determines to be necessary.
(2) Every electrical corporation that owns electrical transmission
facilities shall annually prepare, as part of the Federal Energy
Regulatory Commission Order 890 process, and submit to the
commission, a report identifying any electrical transmission
facility, upgrade, or enhancement that is reasonably necessary to
achieve the renewables portfolio standard procurement requirements of
this article. Each report shall look forward at least five years
and, to ensure that adequate investments are made in a timely manner,
shall include a preliminary schedule when an application for a
certificate of public convenience and necessity will be made,
pursuant to Chapter 5 (commencing with Section 1001), for any
electrical transmission facility identified as being reasonably
necessary to achieve the renewable energy resources procurement
requirements of this article. Each electrical corporation that owns
electrical transmission facilities shall ensure that project-specific
interconnection studies are completed in a timely manner.
(3) The commission shall direct each retail seller to prepare and
submit an annual compliance report that includes all of the
following:
(A) The current status and progress made during the prior year
toward procurement of eligible renewable energy resources as a
percentage of retail sales, including, if applicable, the status of
any necessary siting and permitting approvals from federal, state,
and local agencies for those eligible renewable energy resources
procured by the retail seller, and the current status of compliance
with the portfolio content requirements of subdivision (c) of Section
399.16, including procurement of eligible renewable energy resources
located outside the state and within the WECC and unbundled
renewable energy credits.
(B) If the retail seller is an electrical corporation, the current
status and progress made during the prior year toward construction
of, and upgrades to, transmission and distribution facilities and
other electrical system components it owns to interconnect eligible
renewable energy resources and to supply the electricity generated by
those resources to load, including the status of planning, siting,
and permitting transmission facilities by federal, state, and local
agencies.
(C) Recommendations to remove impediments to making progress
toward achieving the renewable energy resources procurement
requirements established pursuant to this article.
(4) The commission shall adopt, by rulemaking, all of the
following:
(A) A process that provides criteria for the rank ordering and
selection of least-cost and best-fit eligible renewable energy
resources to comply with the California Renewables Portfolio Standard
Program obligations on a total cost basis. This process shall take
into account all of the following:
(i) Estimates of indirect costs associated with needed
transmission investments and ongoing electrical corporation expenses
resulting from integrating and operating eligible renewable energy
resources.
(ii) The cost impact of procuring the eligible renewable energy
resources on the electrical corporation's electricity portfolio.
(iii) The viability of the project to construct and reliably
operate the eligible renewable energy resource, including the
developer's experience, the feasibility of the technology used to
generate electricity, and the risk that the facility will not be
built, or that construction will be delayed, with the result that
electricity will not be supplied as required by the contract.
(iv) Workforce recruitment, training, and retention efforts,
including the employment growth associated with the construction and
operation of eligible renewable energy resources and goals for
recruitment and training of women, minorities, and disabled veterans.
(B) Rules permitting retail sellers to accumulate, beginning
January 1, 2011, excess procurement in one compliance period to be
applied to any subsequent compliance period. The rules shall apply
equally to all retail sellers. In determining the quantity of excess
procurement for the applicable compliance period, the commission
shall deduct from actual procurement quantities, the total amount of
procurement associated with contracts of less than 10 years in
duration. In no event shall electricity products meeting the
portfolio content of paragraph (3) of subdivision (b) of Section
399.16 be counted as excess procurement.
(C)
(B) Standard terms and conditions to be used by all
electrical corporations in contracting for eligible renewable energy
resources, including performance requirements for renewable
generators. A contract for the purchase of electricity generated by
an eligible renewable energy resource, at a minimum, shall include
the renewable energy credits associated with all electricity
generation specified under the contract. The standard terms and
conditions shall include the requirement that, no later than six
months after the commission's approval of an electricity purchase
agreement entered into pursuant to this article, the following
information about the agreement shall be disclosed by the commission:
party names, resource type, project location, and project capacity.
(D)
(C) An appropriate minimum margin of procurement above
the minimum procurement level necessary to comply with the renewables
portfolio standard to mitigate the risk that renewable projects
planned or under contract are delayed or canceled. This paragraph
does not preclude an electrical corporation from voluntarily
proposing a margin of procurement above the appropriate minimum
margin established by the commission.
(5) Consistent with the goal of increasing California's reliance
on eligible renewable energy resources, the renewable energy
procurement plan submitted by an electrical corporation shall include
all of the following:
(A) An assessment of annual or multiyear portfolio supplies and
demand to determine the optimal mix of eligible renewable energy
resources with deliverability characteristics that may include
peaking, dispatchable, baseload, firm, and as-available capacity.
(B) Potential compliance delays related to the conditions
described in paragraph (4) of subdivision (b) of Section 399.15.
(C) A bid solicitation setting forth the need for eligible
renewable energy resources of each deliverability characteristic,
required online dates, and locational preferences, if any.
(D) A status update on the development schedule of all eligible
renewable energy resources currently under contract.
(E) Consideration of mechanisms for price adjustments associated
with the costs of key components for eligible renewable energy
resource projects with online dates more than 24 months after the
date of contract execution.
(F) An assessment of the risk that an eligible renewable energy
resource will not be built, or that construction will be delayed,
with the result that electricity will not be delivered as required by
the contract.
(6) In soliciting and procuring eligible renewable energy
resources, each electrical corporation shall offer contracts of no
less than 10 years duration, unless the commission approves of a
contract of shorter duration.
(7) In soliciting and procuring eligible renewable energy
resources for California-based projects, each electrical corporation
shall give preference to renewable energy projects that provide
environmental and economic benefits to communities afflicted with
poverty or high unemployment, or that suffer from high emission
levels of toxic air contaminants, criteria air pollutants, and
greenhouse gases.
(b) A retail seller may enter into a combination of long- and
short-term contracts for electricity and associated renewable energy
credits. The commission may authorize a retail seller to enter into a
contract of less than 10 years' duration with an eligible renewable
energy resource, if the commission has established, for each retail
seller, minimum quantities of eligible renewable energy resources to
be procured through contracts of at least 10 years' duration.
(c) The commission shall review and accept, modify, or reject each
electrical corporation's renewable energy resource procurement plan
prior to the commencement of renewable energy procurement pursuant to
this article by an electrical corporation.
(d) Unless previously preapproved by the commission, an electrical
corporation shall submit a contract for the generation of an
eligible renewable energy resource to the commission for review and
approval consistent with an approved renewable energy resource
procurement plan. If the commission determines that the bid prices
are elevated due to a lack of effective competition among the
bidders, the commission shall direct the electrical corporation to
renegotiate the contracts or conduct a new solicitation.
(e) If an electrical corporation fails to comply with a commission
order adopting a renewable energy resource procurement plan, the
commission shall exercise its authority pursuant to Section 2113 to
require compliance. The commission shall enforce comparable penalties
on any retail seller that is not an electrical corporation that
fails to meet the procurement targets established pursuant to Section
399.15.
(f) (1) The commission may authorize a procurement entity to enter
into contracts on behalf of customers of a retail seller for
electricity products from eligible renewable energy resources to
satisfy the retail seller's renewables portfolio standard procurement
requirements. The commission shall not require any person or
corporation to act as a procurement entity or require any party to
purchase eligible renewable energy resources from a procurement
entity.
(2) Subject to review and approval by the commission, the
procurement entity shall be permitted to recover reasonable
administrative and procurement costs through the retail rates of
end-use customers that are served by the procurement entity and are
directly benefiting from the procurement of eligible renewable energy
resources.
(g) Procurement and administrative costs associated with contracts
entered into by an electrical corporation for eligible renewable
energy resources pursuant to this article and approved by the
commission are reasonable and prudent and shall be recoverable in
rates.
(h) Construction, alteration, demolition, installation, and repair
work on an eligible renewable energy resource that receives
production incentives pursuant to Section 25742 of the Public
Resources Code, including work performed to qualify, receive, or
maintain production incentives, are "public works" for the purposes
of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2
of the Labor Code.
SEC. 2. Section 399.15 of the Public Utilities Code is amended to
read:
399.15. (a) In order to fulfill unmet long-term resource needs,
the commission shall establish a renewables portfolio standard
requiring all retail sellers to procure a minimum quantity of
electricity products from eligible renewable energy resources as a
specified percentage of total kilowatthours sold to their retail
end-use customers each compliance period to achieve the targets
established under this article. For any retail seller procuring at
least 14 percent of retail sales from eligible renewable energy
resources in 2010, the deficits associated with any previous
renewables portfolio standard shall not be added to any procurement
requirement pursuant to this article.
(b) The commission shall implement renewables portfolio standard
procurement requirements only as follows:
(1) Each retail seller shall procure a minimum quantity of
eligible renewable energy resources for each of the following
compliance periods:
(A) January 1, 2011, to December 31, 2013, inclusive.
(B) January 1, 2014, to December 31, 2016, inclusive.
(C) January 1, 2017, to December 31, 2020, inclusive.
(2) (A) No later than January 1, 2012, the commission shall
establish the quantity of electricity products from eligible
renewable energy resources to be procured by the retail seller for
each compliance period. These quantities shall be established in the
same manner for all retail sellers and result in the same percentages
used to establish compliance period quantities for all retail
sellers.
(B) In establishing quantities for the compliance period from
January 1, 2011, to December 31, 2013, inclusive, the commission
shall require procurement for each retail seller equal to an average
of 20 percent of retail sales. For the following compliance periods,
the quantities shall reflect reasonable progress in each of the
intervening years sufficient to ensure that the procurement of
electricity products from eligible renewable energy resources
achieves 25 percent of retail sales by December 31, 2016, and 33
percent of retail sales by December 31, 2020. The commission shall
require retail sellers to procure not less than 33 percent of retail
sales of electricity products from eligible renewable energy
resources in all subsequent years.
(C) Retail sellers shall be obligated to procure no less than the
quantities associated with all intervening years by the end of each
compliance period. Retail sellers shall not be required to
demonstrate a specific quantity of procurement for any individual
intervening year.
(3) The commission shall not require the procurement of eligible
renewable energy resources in excess of the quantities identified in
paragraph (2). A retail seller may voluntarily increase its
procurement of eligible renewable energy resources beyond the
renewables portfolio standard procurement requirements.
(4) Only for purposes of establishing the renewables portfolio
standard procurement requirements of paragraph (1) and determining
the quantities pursuant to paragraph (2), the commission shall
include all electricity sold to retail customers by the Department of
Water Resources pursuant to Division 27 (commencing with Section
80000) of the Water Code in the calculation of retail sales by an
electrical corporation.
(5) The commission shall adopt rules permitting a retail seller to
apply excess procurement in one period to subsequent compliance
periods, consistent with the following:
(A) Beginning January 1, 2011, excess procurement in one
compliance period may be applied to any subsequent compliance period.
The rules shall apply equally to all retail sellers. In determining
the quantity of excess procurement for the applicable compliance
period, the retail seller shall deduct from actual procurement
quantities, the total amount of procurement associated with contracts
of less than 10 years in duration, unless the contract was executed
prior to January 1, 2010, in which event, the retail seller shall
deduct procurement associated with a contract of less than seven
years in duration. Electricity products meeting the portfolio content
of paragraph (3) of subdivision (b) of Section 399.16 shall not be
counted as excess procurement.
(B) Excess procurement accumulated through December 31, 2010, may
be applied to subsequent compliance periods if all of the following
conditions are met:
(i) The excess procurement is calculated based upon annual targets
for the procurement of eligible renewable energy resources in effect
for the retail seller beginning January 1, 2006.
(ii) The targets for the procurement of eligible renewable energy
resources adopted for the retail seller specified achieving a 20
percent renewables portfolio standard by no later than December 31,
2010.
(iii) The targets for the procurement of eligible renewable energy
resources adopted for the retail seller increased for each year
prior to the year beginning January 1, 2011.
(iv) The rules shall apply equally to all retail sellers.
(v) In determining the quantity of excess procurement, the retail
seller shall deduct from actual procurement quantities the total
amount of procurement associated with contracts of less than seven
years in duration.
(vi) Electricity products meeting the portfolio content of
paragraph (3) of subdivision (b) of Section 399.16 shall not be
counted as excess procurement.
(5)
(6) The commission shall waive enforcement of this
section if it finds that the retail seller has demonstrated any of
the following conditions are beyond the control of the retail seller
and will prevent compliance:
(A) There is inadequate transmission capacity to allow for
sufficient electricity to be delivered from proposed eligible
renewable energy resource projects using the current operational
protocols of the Independent System Operator. In making its findings
relative to the existence of this condition with respect to a retail
seller that owns transmission lines, the commission shall consider
both of the following:
(i) Whether the retail seller has undertaken, in a timely fashion,
reasonable measures under its control and consistent with its
obligations under local, state, and federal laws and regulations, to
develop and construct new transmission lines or upgrades to existing
lines intended to transmit electricity generated by eligible
renewable energy resources. In determining the reasonableness of a
retail seller's actions, the commission shall consider the retail
seller's expectations for full-cost recovery for these transmission
lines and upgrades.
(ii) Whether the retail seller has taken all reasonable
operational measures to maximize cost-effective deliveries of
electricity from eligible renewable energy resources in advance of
transmission availability.
(B) Permitting, interconnection, or other circumstances that delay
procured eligible renewable energy resource projects, or there is an
insufficient supply of eligible renewable energy resources available
to the retail seller. In making a finding that this condition
prevents timely compliance, the commission shall consider whether the
retail seller has done all of the following:
(i) Prudently managed portfolio risks, including relying on a
sufficient number of viable projects.
(ii) Sought to develop one of the following: its own eligible
renewable energy resources, transmission to interconnect to eligible
renewable energy resources, or energy storage used to integrate
eligible renewable energy resources. This clause shall not require an
electrical corporation to pursue development of eligible renewable
energy resources pursuant to Section 399.14.
(iii) Procured an appropriate minimum margin of procurement above
the minimum procurement level necessary to comply with the renewables
portfolio standard to compensate for foreseeable delays or
insufficient supply.
(iv) Taken reasonable measures, under the control of the retail
seller, to procure cost-effective distributed generation and
allowable unbundled renewable energy credits.
(C) Unanticipated curtailment of eligible renewable energy
resources necessary to address the needs of a balancing authority.
(6)
(7) If the commission waives the compliance
requirements of this section, the commission shall establish
additional reporting requirements on the retail seller to demonstrate
that all reasonable actions under the control of the retail seller
are taken in each of the intervening years sufficient to satisfy
future procurement requirements.
(7)
(8) The commission shall not waive enforcement pursuant
to this section, unless the retail seller demonstrates that it has
taken all reasonable actions under its control, as set forth in
paragraph (5), to achieve full compliance.
(8)
(9) If a retail seller fails to procure sufficient
eligible renewable energy resources to comply with a procurement
requirement pursuant to paragraphs (1) and (2) and fails to obtain an
order from the commission waiving enforcement pursuant to paragraph
(5), the commission shall exercise its authority pursuant to Section
2113.
(9)
(10) Deficits associated with the compliance period
shall not be added to a future compliance period.
(c) The commission shall establish a limitation for each
electrical corporation on the procurement expenditures for all
eligible renewable energy resources used to comply with the
renewables portfolio standard. In establishing this limitation, the
commission shall rely on the following:
(1) The most recent renewable energy procurement plan.
(2) Procurement expenditures that approximate the expected cost of
building, owning, and operating eligible renewable energy resources.
(3) The potential that some planned resource additions may be
delayed or canceled.
(d) In developing the limitation pursuant to subdivision (c), the
commission shall ensure all of the following:
(1) The limitation is set at a level that prevents
disproportionate rate impacts.
(2) The costs of all procurement credited toward achieving the
renewables portfolio standard are counted towards the limitation.
(3) Procurement expenditures do not include any indirect expenses,
including imbalance energy charges, sale of excess energy, decreased
generation from existing resources, transmission upgrades, or the
costs associated with relicensing any utility-owned hydroelectric
facilities.
(e) (1) No later than January 1, 2016, the commission shall
prepare a report to the Legislature assessing whether each electrical
corporation can achieve a 33-percent renewables portfolio standard
by December 31, 2020, and maintain that level thereafter, within the
adopted cost limitations. If the commission determines that it is
necessary to change the limitation for procurement costs incurred by
any electrical corporation after that date, it may propose a revised
cap consistent with the criteria in subdivisions (c) and (d). The
proposed modifications shall take effect no earlier than January 1,
2017.
(2) Notwithstanding Section 10231.5 of the Government Code, the
requirement for submitting a report imposed under paragraph (1) is
inoperative on January 1, 2021.
(3) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code.
(f) If the cost limitation for an electrical corporation is
insufficient to support the projected costs of meeting the renewables
portfolio standard procurement requirements, the electrical
corporation may refrain from entering into new contracts or
constructing facilities beyond the quantity that can be procured
within the limitation, unless eligible renewable energy resources can
be procured without exceeding a de minimis increase in rates,
consistent with the long-term procurement plan established for the
electrical corporation pursuant to Section 454.5.
(g) (1) The commission shall monitor the status of the cost
limitation for each electrical corporation in order to ensure
compliance with this article.
(2) If the commission determines that an electrical corporation
may exceed its cost limitation prior to achieving the renewables
portfolio standard procurement requirements, the commission shall do
both of the following within 60 days of making that determination:
(A) Investigate and identify the reasons why the electrical
corporation may exceed its annual cost limitation.
(B) Notify the appropriate policy and fiscal committees of the
Legislature that the electrical corporation may exceed its cost
limitation, and include the reasons why the electrical corporation
may exceed its cost limitation.
(h) The establishment of a renewables portfolio standard shall not
constitute implementation by the commission of the federal Public
Utility Regulatory Policies Act of 1978 (Public Law 95-617).
SEC. 3. Section 399.30 of the Public Utilities Code is amended to
read:
399.30. (a) In order to fulfill unmet long-term generation
resource needs, each local publicly owned electric utility shall
adopt and implement a renewable energy resources procurement plan
that requires the utility to procure a minimum quantity of
electricity products from eligible renewable energy resources,
including renewable energy credits, as a specified percentage of
total kilowatthours sold to the utility's retail end-use customers,
each compliance period, to achieve the targets of subdivision (c).
(b) The governing board shall implement procurement targets for a
local publicly owned electric utility that require the utility to
procure a minimum quantity of eligible renewable energy resources for
each of the following compliance periods:
(1) January 1, 2011, to December 31, 2013, inclusive.
(2) January 1, 2014, to December 31, 2016, inclusive.
(3) January 1, 2017, to December 31, 2020, inclusive.
(c) The governing board of a local publicly owned electric utility
shall ensure all of the following:
(1) The quantities of eligible renewable energy resources to be
procured for the compliance period from January 1, 2011, to December
31, 2013, inclusive, are equal to an average of 20 percent of retail
sales.
(2) The quantities of eligible renewable energy resources to be
procured for all other compliance periods reflect reasonable progress
in each of the intervening years sufficient to ensure that the
procurement of electricity products from eligible renewable energy
resources achieves 25 percent of retail sales by December 31, 2016,
and 33 percent of retail sales by December 31, 2020. The local
governing board shall require the local publicly owned utilities to
procure not less than 33 percent of retail sales of electricity
products from eligible renewable energy resources in all subsequent
years.
(3) A local publicly owned electric utility shall adopt
procurement requirements consistent with Section 399.16.
(d)
The governing board of a local publicly owned electric utility may
adopt the following measures:
(1) Rules permitting the utility to apply excess procurement in
one compliance period to subsequent compliance periods in the same
manner as allowed for retail sellers pursuant to subdivision (b)
of Section 399.13 399.15 .
(2) Conditions that allow for delaying timely compliance
consistent with subdivision (b) of Section 399.15.
(3) Cost limitations for procurement expenditures consistent with
subdivision (c) of Section 399.15.
(e) The governing board of the local publicly owned electric
utility shall adopt a program for the enforcement of this article on
or before January 1, 2012. The program shall be adopted at a publicly
noticed meeting offering all interested parties an opportunity to
comment. Not less than 30 days' notice shall be given to the public
of any meeting held for purposes of adopting the program. Not less
than 10 days' notice shall be given to the public before any meeting
is held to make a substantive change to the program.
(f) (1) Each local publicly owned electric utility shall annually
post notice, in accordance with Chapter 9 (commencing with Section
54950) of Part 1 of Division 2 of Title 5 of the Government Code,
whenever its governing body will deliberate in public on its
renewable energy resources procurement plan.
(2) Contemporaneous with the posting of the notice of a public
meeting to consider the renewable energy resources procurement plan,
the local publicly owned electric utility shall notify the Energy
Commission of the date, time, and location of the meeting in order to
enable the Energy Commission to post the information on its Internet
Web site. This requirement is satisfied if the local publicly owned
electric utility provides the uniform resource locator (URL) that
links to this information.
(3) Upon distribution to its governing body of information related
to its renewable energy resources procurement status and future
plans, for its consideration at a noticed public meeting, the local
publicly owned electric utility shall make that information available
to the public and shall provide the Energy Commission with an
electronic copy of the documents for posting on the Energy Commission'
s Internet Web site. This requirement is satisfied if the local
publicly owned electric utility provides the uniform resource locator
(URL) that links to the documents or information regarding other
manners of access to the documents.
(g) A local publicly owned electric utility shall annually submit
to the Energy Commission documentation regarding eligible renewable
energy resources procurement contracts that it executed during the
prior year, as follows:
(1) A description of the eligible renewable energy resource,
including the duration of the contract or electricity purchase
agreement.
(2) A description and identification of the electrical generating
facility providing the eligible renewable energy resource under the
contract.
(3) An estimate of the percentage increase in the utility's total
retail sales of electricity from eligible renewable energy resources
that will result from the contract.
(h) A public utility district that receives all of its electricity
pursuant to a preference right adopted and authorized by the United
States Congress pursuant to Section 4 of the Trinity River Division
Act of August 12, 1955 (Public Law 84-386) shall be in compliance
with the renewable energy procurement requirements of this article.
(i) For a local publicly owned electric utility that was in
existence on or before January 1, 2009, that provides retail electric
service to 15,000 or fewer customer accounts in California, and is
interconnected to a balancing authority located outside this state
but within the WECC, an eligible renewable energy resource includes a
facility that is located outside California that is connected to the
WECC transmission system, if all of the following conditions are
met:
(1) The electricity generated by the facility is procured by the
local publicly owned electric utility, is delivered to the balancing
authority area in which the local publicly owned electric utility is
located, and is not used to fulfill renewable energy procurement
requirements of other states.
(2) The local publicly owned electric utility participates in, and
complies with, the accounting system administered by the Energy
Commission pursuant to this article.
(3) The Energy Commission verifies that the electricity generated
by the facility is eligible to meet the renewables portfolio standard
procurement requirements.
(j) Notwithstanding subdivision (a), for a local publicly owned
electric utility that is a joint powers authority of districts
established pursuant to state law on or before January 1, 2005, that
furnish electric services other than to residential customers, and is
formed pursuant to the Irrigation District Law (Division 11
(commencing with Section 20500) of the Water Code), the percentage of
total kilowatthours sold to the district's retail end-use customers,
upon which the renewables portfolio standard procurement
requirements in subdivision (b) are calculated, shall be based on the
authority's average retail sales over the previous seven years. If
the authority has not furnished electric service for seven years,
then the calculation shall be based on average retail sales over the
number of completed years during which the authority has provided
electric service.
(k) A local publicly owned electric utility in a city and county
that only receives greater than 67 percent of its electricity sources
from hydroelectric generation located within the state that it owns
and operates, and that does not meet the definition of a "renewable
electrical generation facility" pursuant to Section 25741 of the
Public Resources Code, shall be required to procure eligible
renewable energy resources, including renewable energy credits, to
meet only the electricity demands unsatisfied by its hydroelectric
generation in any given year, in order to satisfy its renewable
energy procurement requirements.
(l) Each local publicly owned electric utility shall report, on an
annual basis, to its customers and to the Energy Commission, all of
the following:
(1) Expenditures of public goods funds collected pursuant to
Section 385 for eligible renewable energy resource development.
Reports shall contain a description of programs, expenditures, and
expected or actual results.
(2) The resource mix used to serve its customers by energy source.
(3) The utility's status in implementing a renewables portfolio
standard pursuant to subdivision (a) and the utility's progress
toward attaining the standard following implementation.
(m) A local publicly owned electric utility shall retain
discretion over both of the following:
(1) The mix of eligible renewable energy resources procured by the
utility and those additional generation resources procured by the
utility for purposes of ensuring resource adequacy and reliability.
(2) The reasonable costs incurred by the utility for eligible
renewable energy resources owned by the utility.
(n) On or before July 1, 2011, the Energy Commission shall adopt
regulations specifying procedures for enforcement of this article.
The regulations shall include a public process under which the Energy
Commission may issue a notice of violation and correction against a
local publicly owned electric utility for failure to comply with this
article, and for referral of violations to the State Air Resources
Board for penalties pursuant to subdivision (o).
(o) (1) Upon a determination by the Energy Commission that a local
publicly owned electric utility has failed to comply with this
article, the Energy Commission shall refer the failure to comply with
this article to the State Air Resources Board, which may impose
penalties to enforce this article consistent with Part 6 (commencing
with Section 38580) of Division 25.5 of the Health and Safety Code.
Any penalties imposed shall be comparable to those adopted by the
commission for noncompliance by retail sellers.
(2) If Division 25.5 (commencing with Section 38500) of the Health
and Safety Code is suspended or repealed, the State Air Resources
Board may take action to enforce this article on local publicly owned
electric utilities consistent with Section 41513 of the Health and
Safety Code, and impose penalties on a local publicly owned electric
utility consistent with Article 3 (commencing with Section 42400) of
Chapter 4 of Part 4 of, and Chapter 1.5 (commencing with Section
43025) of Part 5 of, Division 26 of the Health and Safety Code.
(3) For the purpose of this subdivision, this section is an
emissions reduction measure pursuant to Section 38580 of the Health
and Safety Code.
(4) If the State Air Resources Board has imposed a penalty upon a
local publicly owned electric utility for the utility's failure to
comply with this article, the State Air Resources Board shall not
impose an additional penalty for the same infraction, or the same
failure to comply, with any renewables procurement requirement
imposed upon the utility pursuant to the California Global Warming
Solutions Act of 2006 (Division 25.5 (commencing with Section 38500)
of the Health and Safety Code).
(5) Any penalties collected by the State Air Resources Board
pursuant to this article shall be deposited in the Air Pollution
Control Fund and, upon appropriation by the Legislature, shall be
expended for reducing emissions of air pollution or greenhouse gases
within the same geographic area as the local publicly owned electric
utility.
(p) The commission has no authority or jurisdiction to enforce any
of the requirements of this article on a local publicly owned
electric utility.
