Bill Text: CA AB2667 | 2021-2022 | Regular Session | Amended

California Assembly Bill 2667 (Prior Session Legislation)

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

Bill Title: Distributed energy resources: incentives.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2022-08-30 - Read third time. Refused passage. (Ayes 16. Noes 10.). [AB2667 Detail]

Download: California-2021-AB2667-Amended.html

Amended IN Assembly March 15, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 2667

Introduced by Assembly Member Friedman

February 18, 2022

An act to ~~amend Section 379.6 of the Public Utilities Code, relating to electricity.~~ add Chapter 5.4 (commencing with Section 25440) to Division 15 of the Public Resources Code, relating to electricity.

LEGISLATIVE COUNSEL'S DIGEST

AB 2667, as amended, Friedman. ~~Electricity: self-generation incentive program.~~ Integrated Distributed Energy Resources Fund.

Existing law requires the Public Utilities Commission to require the administration, until January 1, 2026, of a self-generation incentive program to increase the development of distributed generation resources and energy storage technologies. In administering the program, existing law requires the commission to provide an additional incentive of 20% from existing program funds for the installation of eligible distributed generation resources manufactured in California.
Existing law establishes State Energy Resources Conservation and Development Commission (Energy Commission) with various responsibilities with respect to developing and implementing the state’s energy policies.
This bill would establish the Integrated Distributed Energy Resources Fund as a special fund in the State Treasury, the moneys in which would be available to the Energy Commission, upon appropriation by the Legislature, for purposes of the bill. The bill would require the Energy Commission to administer the fund in consultation with the Public Utilities Commission and the State Air Resources Board to provide incentives for eligible resources to support statewide customer adoption of clean distributed energy resources, as specified. The bill would require the commission to establish a system to equitably award incentives, as specified. The bill would require the commission to establish a process to allow a load-serving entity to apply for incentives on behalf of a customer or a set of customers as part of that load-serving entity’s customer program to reduce its resource adequacy requirement obligations.
Existing law requires the Public Utilities Commission to require the administration, until January 1, 2026, of a self-generation incentive program to increase the development of distributed generation resources and energy storage technologies. In administering the program, existing law requires the commission to provide an additional incentive of 20% from existing program funds for the installation of eligible distributed generation resources manufactured in California.
~~This bill would increase the additional incentive for the installation of eligible distributed generation resources manufactured in California to 30%.~~
~~Under existing law, a violation of an order, decision, rule, direction, demand, or requirement of the commission is a crime.~~
~~Because a violation of an order or decision of the commission implementing the requirements of the bill would be a crime, this bill would impose a state-mandated local program.~~
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
~~This bill would provide that no reimbursement is required by this act for a specified reason.~~

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: ~~YES~~NO

The people of the State of California do enact as follows:

SECTION 1.
(a) The Legislature finds and declares all the following:
(1) Extreme weather events, natural disasters, and cyber incursions will require new approaches to increase resiliency from power system interruptions by using clean distributed energy resources to maintain continuity of critical services and minimize customer impact from outages.
(2) Diversifying customer choice in clean distributed energy resources will create value for customers by empowering each customer to make decarbonization investments based on the customer’s needs and circumstances.
(3) Integration of clean distributed energy resources into the wholesale electricity market will support renewable integration, greenhouse gas reduction, and electrical grid reliability. Dispatch of customer-sited resources to support electrical grid operations will require improvements in customer experience and improved alignment between customer value and benefits to the grid.
(4) A statewide distributed energy resources incentive program will increase customer adoption of clean distributed energy resources, support decarbonization of California’s economy, increase resilience to power system interruptions, and improve reliability of the electrical grid.
(5) Local air pollution from medium- and heavy-duty vehicles disproportionately impacts California’s most vulnerable populations, and investments in clean distributed energy resources to facilitate charging at locations including, but not limited to, ports, warehouses, and transit corridors could potentially have a positive impact on reducing local pollution.
(b) It is the intent of the Legislature to support the statewide deployment of clean distributed energy resources, including customer-sited clean energy generation, storage, clean backup power, demand management, and managed charging of electric vehicles, to support the decarbonization of California’s economy.

SEC. 2.

Chapter 5.4 (commencing with Section 25440) is added to Division 15 of the Public Resources Code, to read:

CHAPTER 5.4. Integrated Distributed Energy Resources Fund
25440.
For purposes of this chapter, the following definitions apply:
(a) “Eligible customer” means a customer of a publicly owned electric utility or a distribution service customer of an electrical corporation.
(b) “Fund” means the Integrated Distributed Energy Resources Fund established pursuant to Section 25441.
(c) “Load-serving entity” has the same meaning as defined in Section 380 of the Public Utilities Code.
25441.
(a) The Integrated Distributed Energy Resources Fund is hereby created as a special fund in the State Treasury.
(b) Moneys in the fund shall be available to the commission, upon appropriation by the Legislature, for the implementation of this chapter.
25442.
(a) The commission shall administer the fund and implement this chapter in consultation with the Public Utilities Commission and the State Air Resources Board to provide incentives to support statewide customer adoption of clean distributed energy resources across the industrial, commercial, and residential sectors.
(b) Resources eligible for incentives under the fund shall include customer demand management, managed charging of electric vehicles, clean backup power, and other distributed energy resources that the commission, in consultation with the State Air Resources Board, determines will achieve greenhouse gas emissions reductions pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code).
(c) The commission shall establish a system to equitably award incentives to support adoption of commercially available distributed energy resources by eligible customers. In establishing the system, the commission shall set incentive levels and prioritize the following attributes and functionalities:
(1) The ability to support both local and system electrical grid reliability through managed operation of the distributed energy resource to meet distribution and transmission system needs.
(2) The ability to support resiliency during periods of power system disruptions via self-islanding with clean onsite generation or backup power technology.
(3) The ability to reduce environmental pollution in disadvantaged communities or provide resiliency benefits to vulnerable communities, including the access and functional needs population, as defined in Section 8593.3 of the Government Code.
(4) The ability to facilitate all types of clean vehicle charging with an emphasis on medium- and heavy-duty vehicles colocated at ports, warehouses, and in transit corridors.
(d) To streamline and improve customer experience, the commission shall establish a process to allow a load-serving entity to apply for incentives on behalf of a customer or a set of customers as part of that load-serving entity’s customer program to reduce its compliance obligations under Section 380 of the Public Utilities Code, if the customer is located within the distributed service area of an electrical corporation.
(e) The commission, to the extent possible, shall use existing expertise in implementing this chapter.

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)The commission, in consultation with the Energy Commission, may authorize the annual collection of not more than double the amount authorized for the self-generation incentive program in the 2008 calendar year, through December 31, 2024. The commission shall require the administration of the program for distributed energy resources originally established pursuant to Chapter 329 of the Statutes of 2000 until January 1, 2026. On January 1, 2026, the commission shall provide repayment of all unallocated funds collected pursuant to this section to reduce ratepayer costs.
(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)(1)Eligibility for incentives under the self-generation incentive 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).
(2)On or before July 1, 2015, the commission shall update the factor for avoided greenhouse gas emissions based on both the most recent data available to the State Air Resources Board for greenhouse gas emissions from electricity sales in the self-generation incentive program administrators’ service areas and current estimates of greenhouse gas emissions over the useful life of the distributed energy resource, including consideration of the effects of the California Renewables Portfolio Standard.
~~(3)The commission shall adopt requirements for energy storage systems to ensure that eligible energy storage systems reduce the emissions of greenhouse gases.~~
~~(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 (NO_x) emissions rate standard of 0.07 pounds per megawatthour and a minimum efficiency of 60 percent, or any other NO_x 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 NO_x emissions standard of 0.07 pounds per megawatthour. Credit shall be at the rate of one megawatthour for each 3,400,000 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 NO_x 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 before 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)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 shifts onsite energy use to off-peak time periods or reduces demand from the grid by offsetting some or all of the customer’s onsite energy load, including, but not limited to, peak electric load.
~~(2)The distributed energy resource technology is commercially available.~~
~~(3)The distributed energy resource technology safely uses the existing transmission and distribution system.~~
~~(4)The distributed energy resource technology improves air quality by reducing criteria air pollutants.~~
(f)Recipients of the self-generation incentive program funds shall provide relevant data to the commission and the State Air Resources Board, upon request, and shall be subject to onsite inspection to verify equipment operation and performance, including capacity, thermal output, and usage to verify criteria air pollutant and greenhouse gas emissions performance.
~~(g)In administering the self-generation incentive program, the commission shall determine a capacity factor for each distributed generation system energy resource technology in the program.~~
(h)(1)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.
(2)The commission shall consider the relative amount and the cost of greenhouse gas emissions reductions, peak demand reductions, system reliability benefits, and other measurable factors when allocating program funds between eligible technologies.
~~(i)The commission shall ensure that distributed generation resources are made available in the program for all ratepayers.~~
(j)In administering the self-generation incentive program, the commission shall provide an additional incentive of 30 percent from existing program funds for the installation of eligible distributed generation resources manufactured in California.
~~(k)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.~~
~~(l)The commission shall evaluate the overall success and impact of the self-generation incentive program based on the following performance measures:~~
~~(1)The amount of reductions of emissions of greenhouse gases.~~
(2)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.
~~(3)The amount of energy reductions measured in energy value.~~
~~(4)The amount of reductions of customer peak demand.~~
(5)The ratio of the electricity generated by distributed energy resource generation projects receiving incentives from the program to the electricity capable of being produced by those projects, commonly known as a capacity factor.
~~(6)The value to the electrical transmission and distribution system measured in avoided costs of transmission and distribution upgrades and replacement.~~
~~(7)The ability to improve onsite electricity reliability as compared to onsite electricity reliability before the self-generation incentive program technology was placed in service.~~
~~(m)On and after January 1, 2020, generation technologies using nonrenewable fuels shall not be eligible for incentives under the self-generation incentive program.~~
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.