Bill Text: CA AB2693 | 2017-2018 | Regular Session | Amended

California Assembly Bill 2693 (Prior Session Legislation)

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

Bill Title: Public Utilities Commission: telecommunications service: natural disasters: reports.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2018-08-16 - In committee: Held under submission. [AB2693 Detail]

Download: California-2017-AB2693-Amended.html

Amended IN Assembly March 21, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill

No. 2693

Introduced by Assembly Member Quirk

February 15, 2018

An act to add Section ~~454.57~~ 454.52.5 to the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL'S DIGEST

AB 2693, as amended, Quirk. Natural gas-fired powerplants.

Under existing law, the Public Utilities Commission has regulatory jurisdiction over electrical and gas corporations. Existing law authorizes the commission to fix the rates and charges for every public utility, including electrical and gas corporations, and requires that those rates and charges be just and reasonable.

This bill would require the ~~commission to analyze and determine which~~ commission, before January 1, 2020, and every 2 years thereafter, in consultation with the Independent System Operator, to analyze and determine for specified years which natural gas-fired electric generation powerplants in existence at the time of the analysis are needed to ensure short-term and long-term electric local and system reliability in the state. The bill would, after that analysis and determination, require the commission, in consultation with the State Air Resources Board, to identify from among those powerplants preferred powerplants. The bill would require the commission to direct electrical corporations to contract for those electrical services with those powerplants determined to be necessary and to authorize the electrical corporations to recover the costs of those contracts from their ratepayers. ensure that the preferred powerplants receive sufficient revenues to remain operational. The bill would require the commission to ~~require gas corporations to develop a~~ modify the gas supply tariff for natural gas-fired powerplants ~~authorizing~~ to authorize the collection of rate revenues mostly in demand charges, as specified.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because this bill would be a part of the act and because a violation of an order or decision of the PUC implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

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

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

SECTION 1.

Section 454.52.5 is added to the Public Utilities Code, to read:

454.52.5.
(a) (1) The Legislature finds and declares all of the following:
(A) The California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code) requires the state to reduce its emissions of greenhouse gases to 40 percent below 1990 levels by 2030.
(B) The California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3) requires that 50 percent of the state’s electricity come from renewable resources by 2030.
(C) By adopting these requirements, the Legislature expects load-serving entities to procure a greater quantity of renewable resources and to rely less on natural gas-fired powerplants. The variable generation profile of wind and solar generation changes the resource attributes needed for electric grid reliability and to date has been primarily addressed by relying on natural gas-fired powerplants that can quickly ramp up and down, and come online quickly during grid contingencies.
(D) The Legislature recognizes the need to prepare for reductions in the emissions of greenhouse gases.
(E) California should begin an orderly phase out of its natural gas-fired powerplants while preserving electric system reliability.
(F) There are zero-carbon emitting technologies that can provide some of the same grid reliability services that natural gas-fire powerplants currently provide.
(G) Criteria air pollutants associated with cycling and starting up a natural gas-fired powerplant are significantly higher than emissions associated with steady-state generation.
(H) There is a risk that gas-fire powerplants that may be needed for grid reliability will not remain in operation due to insufficient revenues.
(I) Requiring the state to analyze future grid reliability needs, and the appropriate role for natural gas in that future, will provide information needed to ensure sufficient revenue for necessary natural gas-fired powerplants to remain operational.
(2) It is the intent of the Legislature that the commission do all of the following:
(A) Periodically analyze, in consultation with the Independent System Operator, California’s future grid reliability needs.
(B) Determine, in consultation with the State Air Resources Board, which natural gas-fired powerplants can be retired and which units are needed to ensure local and system grid reliability, while minimizing emissions of greenhouse gases, criteria air pollutants, and toxic air contaminants.
(C) In performing the analysis and determination intended pursuant to subparagraphs (A) and (B), the commission should consider all relevant factors.
(D) Ensure that natural gas-fired powerplants determined to be necessary for grid reliability receive sufficient revenue to remain operational.
(E) Revise gas tariffs for natural gas-fired powerplants to allow a gas corporation to collect most of its revenues from rates through demand charges and the remaining revenues through volumetric charges.
(b) Before January 1, 2020, and every two years thereafter, the commission, in consultation with the Independent System Operator, shall analyze and determine for the years 2025 and 2030, and subsequent dates determined appropriate by the commission, which natural gas-fired powerplants in existence at the time of the analysis could be used to ensure short-term and long-term electric local and system reliability in the state, including during extreme weather events.
(c) Following the analysis and determination pursuant to subdivision (b), the commission, in consultation with the State Air Resources Board, shall determine from among the natural gas-fired powerplants identified in subdivision (b) which of those powerplants are preferred. In making this determination, the commission shall consider all of the following factors:
(1) Minimization of the systemwide emissions of greenhouse gases from the electrical system.
(2) Minimization of the emissions of criteria air pollutants and toxic air contaminants from natural gas-fired powerplants in steady-state operation, partial-load operation, startup, and shutdown.
(3) Minimization of impacts on disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.
(4) Efficiency of each natural gas-fired powerplant.
(5) The unit characteristics of each natural gas-fired powerplant, including, but not limited to, minimum load, ramping, and flexibility.
(6) Feasibility and cost of nonemitting resources.
(7) Minimization of the use of fresh water.
(d) The commission shall ensure that the preferred natural gas-fired powerplants identified pursuant to subdivision (c) receive sufficient revenue to remain operational while ensuring that owners or operators of powerplants do not exercise market power. The commission may use any of the following mechanisms to ensure this result:
(1) The mechanism described in paragraph (1) of subdivision (c) of Section 365.1.
(2) A resource adequacy program applicable to all load-serving entities that ensures all benefiting customers pay in proportion to their loads.
(3) Another mechanism determined appropriate by the commission that ensures that all benefiting customers pay in proportion to their loads.
(e) The commission shall modify the gas supply tariffs for natural gas-fired powerplants so that the gas corporation supplying the powerplant collects most of its revenue from rates through demand charges and the remaining revenue through volumetric charges.

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.

SECTION 1.
~~(a)The Legislature finds and declares all of the following:~~
(1)The California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code) requires the state to reduce its emissions of greenhouse gases to 40 percent below 1990 levels by 2030.
(2)The California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code) requires that 50 percent of the state’s electricity come from renewable resources by 2030.
(3)By adopting these requirements, the Legislature expects load-serving entities to procure a greater quantity of renewable resources and to rely less on natural gas-fired electricity generation. However, for reliability reasons, natural gas-fired generation cannot disappear entirely. Many renewable resources, including solar and wind, are intermittent resources, available only as conditions allow. This intermittency complicates electric grid reliability and to date is primarily addressed by relying on natural gas-fired powerplants that can quickly ramp up and down in their generation of power.
~~(4)California should begin an orderly phase out of it natural gas-fired powerplants to make room for more renewable generation.~~
(5)It is evident that many natural gas-fired powerplants are struggling to remain in operation because they are unable to earn sufficient revenues in the Independent System Operator’s wholesale market.
(6)Requiring electrical corporations to contract with natural gas-fired powerplants deemed essential by the Public Utilities Commission, and requiring all customers to pay those costs, will provide those powerplants with the financial assurances needed to remain in operation.
~~(b)It is the intent of the Legislature that the Public Utilities Commission should do all of the following:~~
(1)Analyze California’s existing natural gas-fired powerplants and the future electric supply from other resources to identify which powerplants should remain in on-demand operation to provide essential flexibility and which should be retired to make room for zero-carbon resources.
(2)Direct electrical corporations to procure electrical services from powerplants identified as essential and provide for cost recovery for those services from ratepayers on a fully nonbypassable basis.
(3)Revise gas tariffs for natural gas-fired powerplants to allow a gas corporation to collect most of its revenues from rates through demand charges and the remaining revenues through volumetric charges to adequately compensate the gas corporations’s fixed distribution costs associated with the delivery of natural gas to those powerplants.
SEC. 2.Section 454.57 is added to the Public Utilities Code, to read:
454.57.
~~The commission shall do all of the following:~~
~~(a)Analyze and determine which natural gas-fired electric generation powerplants in existence at the time of the analysis are needed to ensure long-term electric reliability in the state.~~
(b)Direct electrical corporations to procure electrical services from those powerplants determined to be needed pursuant to subdivision (a) and allow for cost recovery from ratepayers for those services on a fully nonbypassable basis pursuant to paragraph (2) of subdivision (c) of Section 365.1.
(c)Require each gas corporation to develop a gas tariff for natural gas-fired powerplants allowing the gas corporation supplying the powerplant to collect most of its revenue from rates through demand charges and the remaining revenue through volumetric charges to adequately compensate the gas corporation’s fixed distribution costs associated with the delivery of natural gas to those powerplants.
SEC. 3.
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.