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

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

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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

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Amended  IN  Senate  June 13, 2022

Amended  IN  Assembly  April 27, 2022

Amended  IN  Assembly  March 15, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 2667

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Introduced by Assembly Member Friedman

February 18, 2022

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An act to 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. 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 its generation service customer or a set of its generation service customers as part of that load-serving entity’s customer program to meet or reduce its resource adequacy requirement obligations. obligations, as specified.

Digest Key

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

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Bill Text

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 empowers 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)

(3) A statewide distributed energy resources incentive program will increase customer adoption of clean distributed energy resources, support decarbonization of California’s economy, and increase individual customer resilience to power system interruptions, and improve reliability of the electrical grid. interruptions.

(5)

(4) 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.

(5) The Public Utilities Commission regulates public utilities, including electrical corporations. Section 218 of the Public Utilities Code (Section 218) defines an electrical corporation as a corporation or person owning, controlling, operating, or managing any electric plant for compensation within California, except where electricity is generated on or distributed by the producer through private property solely for its own use or the use of its tenants and not for sale or transmission to others.

(6) Regulation by the Public Utilities Commission of electrical corporations as defined in Section 218 protects public and worker safety and ensures reliable electricity for all customers.

(7) Pointing to 100-year-old case law, some have argued that under the California Constitution, third-party owned and operated distributed energy resources that deliver electricity to neighbors are not governed by Section 218 because the distributed energy resources have not been dedicated to public use. They argue that resources must be dedicated to public use before being subject to public utility regulation by the Public Utilities Commission. However, Section 218 was enacted 30 years later to give the Public Utilities Commission broader responsibility to regulate public utilities than does the California Constitution.

(8) After Section 218 was enacted to cover a broader range of activities, California courts and the Public Utilities Commission have explained that the public dedication doctrine has little remaining applicability. In addition, subsequent amendments to Section 218 show that the Legislature understands that the scope of Section 218 is broader than that of the California Constitution. Those amendments show that the Legislature knows how to enact exemptions from Section 218 such as for direct transactions and sales into the wholesale electricity market.

(9) Because Section 218 has a broader scope than the California Constitution, under Section 218, the constitutional requirement of “dedication to the public” is not required. Instead, an entity distributing electricity to the public, whether or not the electric plant is dedicated to serving the general public, other than the electricity producer or its tenants is an electrical corporation subject to the jurisdiction of the Public Utilities Commission. The Public Utilities Commission is responsible for ensuring that all activities falling within the scope of Section 218 are regulated, including to protect public safety and electrical system reliability.

(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) “Generation service” means the sale of electricity to a customer by a load-serving entity, including energy, capacity, ancillary services, and all other energy commodity services to meet customer energy demand.

(c)

(d) “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) (1) Resources eligible for incentives under the fund shall include customer demand management, managed charging of electric vehicles, and clean backup power, including mobile and nonmobile energy storage storage, and onsite generation.

(2) To receive an incentive under the fund, any resource that generates electricity, or stores electricity from the electrical grid or another generation resource, shall meet one of the following conditions:

(A) Be a “renewable electrical generation facility” as defined in Section 25741.

(B) Be a “zero-carbon resource” pursuant to Section 454.53 of the Public Utilities Code.

(C) Be a mobile energy storage device that emits no air pollution or greenhouse gases when used to displace use of fossil-fueled portable generators.

(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. technology, with an emphasis on critical facilities such as public schools, community centers, clinics, and municipal water service, and providing critical services by emergency management officials during times of disaster.

(3) The ability to reduce environmental pollution in disadvantaged communities or provide resiliency benefits to vulnerable communities, including income-qualified renters, and 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

(d) The commission may allow incentives for different technology types to be combined within this program and with other state-mandated programs.

(e) The commission shall establish a process to allow a load-serving entity to apply for incentives on behalf of a its generation service customer or a set of its generation service customers as part of that load-serving entity’s customer program to meet or reduce its compliance obligations under Section 380 of the Public Utilities Code, if the customer is located within the distributed distribution service area of an electrical corporation. corporation, as follows:

(1) The distributed energy resource is dispatched by the scheduling coordinator as certified by the Independent System Operator under an operating agreement with the electrical corporation in its role as the distribution system operator.

(2) If an electrical corporation, in its role as a load-serving entity, applies for incentives on behalf of its bundled service customers, the Public Utilities Commission shall maintain oversight of the electrical corporation’s program design and evaluation.

(f) Except for the installation of residential generation of less than 15 kilowatts, all construction paid for, in part or in whole, with moneys from the fund shall be considered public works pursuant to Section 1720 of the Labor Code.

(e)

(g) The commission, to the extent possible, shall use existing expertise in implementing this chapter.