Bill Text: CA AB2724 | 2009-2010 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Renewable energy resources.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2010-09-29 - Chaptered by Secretary of State - Chapter 474, Statutes of 2010. [AB2724 Detail]
Download: California-2009-AB2724-Amended.html
Bill Title: Renewable energy resources.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2010-09-29 - Chaptered by Secretary of State - Chapter 474, Statutes of 2010. [AB2724 Detail]
Download: California-2009-AB2724-Amended.html
BILL NUMBER: AB 2724 AMENDED BILL TEXT AMENDED IN ASSEMBLY MARCH 23, 2010 INTRODUCED BY Assembly Member Blumenfield FEBRUARY 19, 2010An act to amend Section 2863 of the Public Utilities Code, relating to solar energy.An act to amend Sections 2830 and 2851 of, to amend the heading of Chapter 7.5 (commencing with Section 2830) of Part 2 of Division 1 of, and to add Section 2831 to, the Public Utilities Code, relating to energy. LEGISLATIVE COUNSEL'S DIGEST AB 2724, as amended, Blumenfield.Solar water heating.Governmental Renewable Energy Self-generation Program. (1) Under existing law, the Public Utilities Commission (CPUC) has regulatory authority over public utilities, including electrical corporations, as defined. The Local Government Renewable Energy Self-Generation Program authorizes a local government, as defined, to receive a bill credit, as defined, to be applied to a designated benefiting account for electricity exported to the electrical grid by an eligible renewable generating facility, as defined, and requires the commission to adopt a rate tariff for the benefiting account. This bill would rename the program the Governmental Renewable Energy Self-Generation Program. The bill would authorize a state agency, as defined, to receive a bill credit to be applied to a designated benefiting account for electricity exported to the electrical grid by an eligible state renewable generating facility, as defined, and would require the CPUC to adopt a rate tariff for the benefiting account. (2) Decisions of the CPUC adopted the California Solar Initiative. Existing law requires the CPUC to undertake certain steps in implementing the California Solar Initiative including the requirement that the CPUC authorize the award of monetary incentives for up to the first megawatt of alternating current generated by solar energy systems, as defined, that meet the eligibility criteria established by the State Energy Resources Conservation and Development Commission (Energy Commission). This bill would require the CPUC to authorize the award of monetary incentives for up to 5 megawatts of alternating current generated by an eligible state renewable generating facility that meets the eligibility criteria established by the Energy Commission for the California Solar Initiative. (3) Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the CPUC is a crime. Because certain of the provisions of this bill require action by the CPUC to implement, a violation of these CPUC-imposed requirements would impose a state-mandated local program by creating a new crime. (4) 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.The Solar Water Heating and Efficiency Act of 2007 requires the Public Utilities Commission to evaluate the data available from a specified pilot program, and, if it makes a specified determination, to design and implement a program of incentives for the installation of 200,000 solar water heating systems in homes and businesses throughout the state by 2017. The act requires the commission to fund the program through the use of a surcharge applied to gas customers based upon the amount of natural gas consumed.This bill would require the commission, in order to encourage the installation of solar water heating systems in buildings owned and occupied by public agencies, to consider additional incentives for the installation of solar water heating systems by public entities, including, but not limited to, exemptions or partial exemptions from the surcharge. The bill would require the commission to give special consideration to large users of hot water such as jails, prisons, and public hospitals.Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:noyes . THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The heading of Chapter 7.5 (commencing with Section 2830) of Part 2 of Division 1 of the Public Utilities Code is amended to read: CHAPTER 7.5.LOCAL GOVERNMENTGOVERNMENTAL RENEWABLE ENERGY SELF-GENERATION PROGRAM SEC. 2. Section 2830 of the Public Utilities Code is amended to read: 2830. (a) As used in this section, the following terms have the following meanings: (1) "Benefiting account" means anelectricityelectric service account, or more than one account, located within a the geographical boundaries of a local government or, for a campus, within the geographical boundary of the city, county, or city and county in which the campus is located, that is mutually agreed upon by the local government or campus and an electrical corporation. (2) "Bill credit" means an amount of money credited to a benefiting account that is calculated based upon the time-of-use electricity generation component of the electricity usage charge of the generating account, multiplied by the quantities of electricity generated by an eligible local government renewable generating facility that are exported to the grid during the corresponding time period. Electricity is exported to the grid if it is generated by an eligible local government renewable generating facility, is not utilized onsite by the local government, and the electricity flows through the meter site and on to the electrical corporation's distribution or transmission infrastructure. (3) "Campus" means an individual community college campus, individual California State University campus, or individual University of California campus. (4) "Eligible local government renewable generating facility" means a generation facility that meets all of the following requirements: (A) Has a generating capacity of no more than one megawatt. (B) Is an eligible renewable energy resource, as defined in Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1. (C) Is located within the geographical boundary of the local government or, for a campus, within the geographical boundary of the city or city and county, if the campus is located in an incorporated area, or county, if the campus is located in an unincorporated area. (D) Is owned by, operated by, or on property under the control of, the local government or campus. For these purposes, premises that are leased by a local government or campus are under the control of the local government or campus. (E) Is sized to offset all or part of the electrical load of the benefiting account.For these purposes, premises that are leased by a local government or campus are under the control of the local government or campus.(5) "Generating account" means the time-of-use electric service account of the local government or campus where the eligible local government renewable generating facility is located. (6) "Local government" means a city, county, whether general law or chartered, city and county, special district, school district, political subdivision, or other local public agency, but shall not mean a joint powers authority, the state or any agency or department of the state, other than an individual campus of the University of California or the California State University. (b) Subject to the limitation in subdivision (h), a local government may elect to receive electric service pursuant to this section, if all of the following conditions are met: (1) The local government designates one or more benefiting accounts to receive a bill credit. (2) A benefiting account receives service under a time-of-use rate schedule. (3) The benefiting account is the responsibility of, and serves property that is owned, operated, or on property under the control of the same local government that owns, operates, or controls the eligible local government renewable generating facility. (4) The electrical output of the eligible local government renewable generating facility is metered for time of use to allow calculation of the bill credit based upon when the electricity is exported to the grid. (5) All costs associated with the metering requirements of paragraphs (2) and (4) are the responsibility of the local government. (6) All costs associated with interconnection are the responsibility of the local government. For purposes of this paragraph, "interconnection" has the same meaning as defined in Section 2803, except that it applies to the interconnection of an eligible local government renewable generating facility rather than the energy source of a private energy producer. (7) The local government does not sell electricity exported to the electrical grid to a third party. (8) All electricity exported to the grid by the local government that is generated by the eligible local government renewable generating facility becomes the property of the electrical corporation to which the facility is interconnected, but shall not be counted toward the electrical corporation's total retail sales for purposes of Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1. Ownership of the renewable energy credits, as defined in Section 399.12, shall be the same as the ownership of the renewable energy credits associated with electricity that is net metered pursuant to Section 2827. (c) (1) A benefiting account shall be billed for all electricity usage, and for each bill component, at the rate schedule applicable to the benefiting account, including any cost-responsibility surcharge or other cost recovery mechanism, as determined by the commission, to reimburse the Department of Water Resources for purchases of electricity, pursuant to Division 27 (commencing with Section 80000) of the Water Code. (2) The bill shall then subtract the bill credit applicable to the benefiting account. The generation component credited to the benefiting accountmayshall not include the cost-responsibility surcharge or other cost recovery mechanism, as determined by the commission, to reimburse the Department of Water Resources for purchases of electricity, pursuant to Division 27 (commencing with Section 80000) of the Water Code. The electrical corporation shall ensure that the local government receives the full bill credit. (3) If, during the billing cycle, the generation component of the electricity usage charges exceeds the bill credit, the benefiting account shall be billed for the difference. (4) If, during the billing cycle, the bill credit applied pursuant to paragraph (2) exceeds the generation component of the electricity usage charges, the difference shall be carried forward as a financial credit to the next billing cycle. (5) After the electricity usage charge pursuant to paragraph (1) and the credit pursuant to paragraph (2) are determined for the last billing cycle of a 12-month period, any remaining credit resulting from the application of this section shall be reset to zero. (d) The commission shall ensure that the transfer of a bill credit to a benefiting account does not result in a shifting of costs to bundled service subscribers. The costs associated with the transfer of a bill credit shall include all billing-related expenses. (e) Not more frequently than once per year, and upon providing the electrical corporation with a minimum of 60 days' notice, the local government may elect to change a benefiting account. Any credit resulting from the application of this section earned prior to the change in a benefiting account that has not been used as of the date of the change in the benefiting account, shall be applied, and may only be applied, to a benefiting account as changed. (f) A local government shall provide the electrical corporation to which the eligible local government renewable generating facility will be interconnected with not less than 60 days' notice prior to the eligible local government renewable generating facility becoming operational. The electrical corporation shall file an advice letter with the commission, that complies with this section, not later than 30 days after receipt of the notice, proposing a rate tariff for a benefiting account. The commission, within 30 days of the date of filing, shall approve the proposed tariff, or specify conforming changes to be made by the electrical corporation to be filed in a new advice letter. (g) The local government may terminate its election pursuant to subdivision (b), upon providing the electrical corporation with a minimum of 60 days' notice. Should the local government sell its interest in the eligible local government renewable generating facility, or sell the electricity generated by the eligible local government renewable generating facility, in a manner other than as required by this section, upon the date of either event, and the earliest date if both events occur, no further bill credit pursuant toparagraph (3) ofsubdivision(b)(c) may be earned. Only credit earned prior to that date shall be made to a benefiting account. (h) An electrical corporation is not obligated to provide a bill credit to a benefiting account that is not designated by a local government prior to the point in time that the combined statewide cumulative rated generating capacity of all eligible local government renewable generating facilities within the service territories of the state's three largest electrical corporations reaches 250 megawatts. Only those eligible local government renewable generating facilities that are providing bill credits to benefiting accounts pursuant to this section shall count toward reaching this 250-megawatt limitation. Each electrical corporation shall only be required to offer service or contracts under this section until that electrical corporation reaches its proportionate share of the 250-megawatt limitation based on the ratio of its peak demand to the total statewide peak demand of all electrical corporations. SEC. 3. Section 2831 is added to the Public Utilities Code , to read: 2831. (a) As used in this section, the following terms have the following meanings: (1) "Benefiting account" means an electric service account, or more than one account, that is the responsibility of, or serves property that is owned, operated, or under the control of any state agency, that is located within the service territory of an electrical corporation in which the eligible renewable state generating facility is located, and which is designated by a state agency pursuant to this section. (2) "Bill credit" means an amount of money credited to a benefiting account that is calculated based upon the time-of-use electricity generation component of the electricity usage charge of the generating account, multiplied by the quantities of electricity generated by an eligible state renewable generating facility that are exported to the grid during the corresponding time period. Electricity is exported to the grid if it is generated by an eligible state renewable generating facility, is not utilized onsite by the local government, and the electricity flows through the meter site and on to the electrical corporation's distribution or transmission infrastructure. (3) "Eligible state renewable generating facility" means a generation facility that meets all of the following requirements: (A) Is an eligible renewable energy resource pursuant to Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1. (B) Is located within the service territory of an electrical corporation within the state. (C) Is owned by, operated by, or on property under the control of a state agency. For these purposes, premises that are leased by a state agency are under the control of the state agency. (D) Is sized to offset all or part of the electrical load of the benefiting account. (4) "Generating account" means the time-of-use electric service account of the state agency where the eligible state renewable generating facility is located. (5) "State agency" means every state office, officer, agency, department, division, bureau, board, and commission or other state body, except those agencies provided for in Article IV (except Section 20 thereof) or Article VI of the California Constitution. (b) Subject to the limitation in subdivision (h), a state agency may elect to receive electric service pursuant to this section, if all of the following conditions are met: (1) A state agency designates one or more benefiting accounts to receive a bill credit. (2) A benefiting account receives service under a time-of-use rate schedule. (3) The benefiting account is the responsibility of, and serves property that is owned, operated, or on property under the control of a state agency. (4) The electrical output of the eligible state renewable generating facility is metered for time of use to allow calculation of the bill credit based upon when the electricity is exported to the grid. (5) All costs associated with the metering requirements of paragraphs (2) and (4) are the responsibility of a state agency. (6) All costs associated with interconnection are the responsibility of a state agency. For purposes of this paragraph, "interconnection" has the same meaning as defined in Section 2803, except that it applies to the interconnection of an eligible state renewable generating facility rather than the energy source of a private energy producer. (7) The state agency does not sell electricity exported to the electrical grid to a third party. (8) All electricity exported to the grid by the state agency that is generated by the eligible state renewable generating facility becomes the property of the electrical corporation to which the facility is interconnected, but shall not be counted toward the electrical corporation's total retail sales for purposes of Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1. Ownership of the renewable energy credits, as defined in Section 399.12, shall be the same as the ownership of the renewable energy credits associated with electricity that is net metered pursuant to Section 2827. (c) (1) A benefiting account shall be billed for all electricity usage, and for each bill component, at the rate schedule applicable to the benefiting account, including any cost-responsibility surcharge or other cost recovery mechanism, as determined by the commission, to reimburse the Department of Water Resources for purchases of electricity, pursuant to Division 27 (commencing with Section 80000) of the Water Code. (2) The bill shall then subtract the bill credit applicable to the benefiting account. The generation component credited to the benefiting account shall not include the cost-responsibility surcharge or other cost recovery mechanism, as determined by the commission, to reimburse the Department of Water Resources for purchases of electricity, pursuant to Division 27 (commencing with Section 80000) of the Water Code. The electrical corporation shall ensure that the benefiting account receives the full bill credit. (3) If, during the billing cycle, the generation component of the electricity usage charges exceeds the bill credit, the benefiting account shall be billed for the difference. (4) If, during the billing cycle, the bill credit applied pursuant to paragraph (2) exceeds the generation component of the electricity usage charges, the difference shall be carried forward as a financial credit to the next billing cycle. (5) After the electricity usage charge pursuant to paragraph (1) and the credit pursuant to paragraph (2) are determined for the last billing cycle of a 12-month period, any remaining credit resulting from the application of this section shall be reset to zero. (d) The commission shall ensure that the transfer of a bill credit to a benefiting account does not result in a shifting of costs to bundled service subscribers. The costs associated with the transfer of a bill credit shall include all billing-related expenses. (e) Not more frequently than once per year, and upon providing the electrical corporation with a minimum of 60 days' notice, the state agency may elect to change a benefiting account. Any credit resulting from the application of this section earned prior to the change in a benefiting account that has not been used as of the date of the change in the benefiting account, shall be applied, and may only be applied, to a benefiting account as changed. (f) A state agency shall provide the electrical corporation to which the eligible state renewable generating facility will be interconnected with not less than 60 days' notice prior to the eligible state renewable generating facility becoming operational. The electrical corporation shall file an advice letter with the commission, that complies with this section, not later than 30 days after receipt of the notice, proposing a rate tariff for a benefiting account. The commission, within 30 days of the date of filing, shall approve the proposed tariff, or specify conforming changes to be made by the electrical corporation to be filed in a new advice letter. (g) The state agency may terminate its election pursuant to subdivision (b), upon providing the electrical corporation with a minimum of 60 days' notice. Should the state agency sell its interest in the eligible state renewable generating facility, or sell the electricity generated by the eligible state renewable generating facility, in a manner other than as required by this section, upon the date of either event, and the earliest date if both events occur, no further bill credit pursuant to subdivision (c) may be earned. Only credit earned prior to that date shall be made to a benefiting account. (h) An electrical corporation is not obligated to provide a bill credit to a benefiting account that is not designated by a state agency prior to the point in time that the combined statewide cumulative rated generating capacity of all eligible state renewable generating facilities within the service territories of the state's three largest electrical corporations reaches 500 megawatts. Only those eligible state renewable generating facilities that are providing bill credits to benefiting accounts pursuant to this section shall count toward reaching this 500-megawatt limitation. Each electrical corporation shall only be required to offer service or contracts under this section until that electrical corporation reaches its proportionate share of the 500-megawatt limitation based on the ratio of its peak demand to the total statewide peak demand of all electrical corporations. SEC. 4. Section 2851 of the Public Utilities Code is amended to read: 2851. (a) In implementing the California Solar Initiative, the commission shall do all of the following: (1) The commission shall authorize the award of monetary incentives for up to the first megawatt of alternating current generated by solar energy systems that meet the eligibility criteria established by theState Energy Resources Conservation and DevelopmentEnergy Commission pursuant to Chapter 8.8 (commencing with Section 25780) of Division 15 of the Public Resources Code. For an eligible state renewable generating facility authorized by Section 2831, the commission shall authorize the award of monetary incentives for up to five megawatts of alternating current generated by solar energy systems that meet the eligibility criteria established by the Energy Commission. The commission shall determine the eligibility of a solar energy system, as defined in Section 25781 of the Public Resources Code, to receive monetary incentives until the time theState Energy Resources Conservation and DevelopmentEnergy Commission establishes eligibility criteria pursuant to Section 25782. Monetary incentives shall not be awarded for solar energy systems that do not meet the eligibility criteria. The incentive level authorized by the commission shall decline each year following implementation of the California Solar Initiative, at a rate of no less than an average of 7 percent per year, and shall be zero as of December 31, 2016. The commission shall adopt and publish a schedule of declining incentive levels no less than 30 days in advance of the first decline in incentive levels. The commission may develop incentives based upon the output of electricity from the system, provided those incentives are consistent with the declining incentive levels of this paragraph and the incentives apply to only the first megawatt of electricity generated by the system. (2) The commission shall adopt a performance-based incentive program so that by January 1, 2008, 100 percent of incentives for solar energy systems of 100 kilowatts or greater and at least 50 percent of incentives for solar energy systems of 30 kilowatts or greater are earned based on the actual electrical output of the solar energy systems. The commission shall encourage, and may require, performance-based incentives for solar energy systems of less than 30 kilowatts. Performance-based incentives shall decline at a rate of no less than an average of 7 percent per year. In developing the performance-based incentives, the commission may: (A) Apply performance-based incentives only to customer classes designated by the commission. (B) Design the performance-based incentives so that customers may receive a higher level of incentives than under incentives based on installed electrical capacity. (C) Develop financing options that help offset the installation costs of the solar energy system, provided that this financing is ultimately repaid in full by the consumer or through the application of the performance-based rebates. (3) By January 1, 2008, the commission, in consultation with theState Energy Resources Conservation and DevelopmentEnergy Commission, shall require reasonable and cost-effective energy efficiency improvements in existing buildings as a condition of providing incentives for eligible solar energy systems, with appropriate exemptions or limitations to accommodate the limited financial resources of low-income residential housing. (4) Notwithstanding subdivision (g) of Section 2827, the commission may develop a time-variant tariff that creates the maximum incentive for ratepayers to install solar energy systems so that the system's peak electricity production coincides with California's peak electricity demands and that assures that ratepayers receive due value for their contribution to the purchase of solar energy systems and customers with solar energy systems continue to have an incentive to use electricity efficiently. In developing the time-variant tariff, the commission may exclude customers participating in the tariff from the rate cap for residential customers for existing baseline quantities or usage by those customers of up to 130 percent of existing baseline quantities, as required by Section 80110 of the Water Code. Nothing in this paragraph authorizes the commission to require time-variant pricing for ratepayers without a solar energy system. (b) Notwithstanding subdivision (a), in implementing the California Solar Initiative, the commission may authorize the award of monetary incentives for solar thermal and solar water heating devices, in a total amount up to one hundred million eight hundred thousand dollars ($100,800,000). (c) (1) In implementing the California Solar Initiative, the commission shall not allocate more than fifty million dollars ($50,000,000) to research, development, and demonstration that explores solar technologies and other distributed generation technologies that employ or could employ solar energy for generation or storage of electricity or to offset natural gas usage. Any program that allocates additional moneys to research, development, and demonstration shall be developed in collaboration with the Energy Commission to ensure there is no duplication of efforts, and adopted by the commission through a rulemaking or other appropriate public proceeding. Any grant awarded by the commission for research, development, and demonstration shall be approved by the full commission at a public meeting. This subdivision does not prohibit the commission from continuing to allocate moneys to research, development, and demonstration pursuant to the self-generation incentive program for distributed generation resources originally established pursuant to Chapter 329 of the Statutes of 2000, as modified pursuant to Section 379.6. (2) The Legislature finds and declares that a program that provides a stable source of monetary incentives for eligible solar energy systems will encourage private investment sufficient to make solar technologies cost effective. (3) On or before June 30, 2009, and by June 30th of every year thereafter, the commission shall submit to the Legislature an assessment of the success of the California Solar Initiative program. That assessment shall include the number of residential and commercial sites that have installed solar thermal devices for which an award was made pursuant to subdivision (b) and the dollar value of the award, the number of residential and commercial sites that have installed solar energy systems, the electrical generating capacity of the installed solar energy systems, the cost of the program, total electrical system benefits, including the effect on electrical service rates, environmental benefits, how the program affects the operation and reliability of the electrical grid, how the program has affected peak demand for electricity, the progress made toward reaching the goals of the program, whether the program is on schedule to meet the program goals, and recommendations for improving the program to meet its goals. If the commission allocates additional moneys to research, development, and demonstration that explores solar technologies and other distributed generation technologies pursuant to paragraph (1), the commission shall include in the assessment submitted to the Legislature, a description of the program, a summary of each award made or project funded pursuant to the program, including the intended purposes to be achieved by the particular award or project, and the results of each award or project. (d) (1) The commission shall not impose any charge upon the consumption of natural gas, or upon natural gas ratepayers, to fund the California Solar Initiative. (2) Notwithstanding any otherprovision oflaw, any charge imposed to fund the program adopted and implemented pursuant to this section shall be imposed upon all customers not participating in the California Alternate Rates for Energy (CARE) or family electric rate assistance (FERA) programs as provided in paragraph (2), including those residential customers subject to the rate cap required by Section 80110 of the Water Code for existing baseline quantities or usage up to 130 percent of existing baseline quantities of electricity. (3) The costs of the program adopted and implemented pursuant to this sectionmayshall not be recovered from customers participating in the California Alternate Rates for Energy or CARE program established pursuant to Section 739.1, except to the extent that program costs are recovered out of the nonbypassable system benefits charge authorized pursuant to Section 399.8. (e) In implementing the California Solar Initiative, the commission shall ensure that the total cost over the duration of the program does not exceed three billion three hundred fifty million eight hundred thousand dollars ($3,350,800,000). The financial components of the California Solar Initiative shall consist of the following: (1) Programs under the supervision of the commission funded by charges collected from customers of San Diego Gas and Electric Company, Southern California Edison Company, and Pacific Gas and Electric Company. The total cost over the duration of these programs shall not exceed two billion one hundred sixty-six million eight hundred thousand dollars ($2,166,800,000) and includes moneys collected directly into a tracking account for support of the California Solar Initiative and moneys collected into other accounts that are used to further the goals of the California Solar Initiative. (2) Programs adopted, implemented, and financed in the amount of seven hundred eighty-four million dollars ($784,000,000), by charges collected by local publicly owned electric utilities pursuant to Section 387.5. Nothing in this subdivision shall give the commission power and jurisdiction with respect to a local publicly owned electric utility or its customers. (3) Programs for the installation of solar energy systems on new construction, administered by theState Energy Resources Conservation and DevelopmentEnergy Commission pursuant to Chapter 8.6 (commencing with Section 25740) of Division 15 of the Public Resources Code, and funded by nonbypassable charges in the amount of four hundred million dollars ($400,000,000), collected from customers of San Diego Gas and Electric Company, Southern California Edison Company, and Pacific Gas and Electric Company pursuant to Article 15 (commencing with Section 399) of Chapter 2.3 of Part 1 . SEC. 5. 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.Section 2863 of the Public Utilities Code is amended to read: 2863. (a) (1) The commission shall evaluate the data available from the Solar Water Heating Pilot Project conducted by the California Center for Sustainable Energy. If, after a public hearing, the commission determines that a solar water heating program is cost effective for ratepayers and in the public interest, the commission shall design and implement a program applicable to the service territories of a gas corporation, to achieve the goal of the Legislature to promote the installation of 200,000 solar water heating systems in homes and businesses throughout the state by 2017. (2) The program shall be administered by gas corporations or third-party administrators, as determined by the commission, and subject to the supervision of the commission. (3) The commission shall coordinate the program with the Energy Commission's New Solar Homes Partnership to achieve the goal of building zero-energy homes. (4) To encourage the installation of solar water heating systems in buildings owned and occupied by public agencies, the commission shall consider additional incentives for the installation of solar water heating systems by public entities, including, but not limited to, exemptions or partial exemptions from the surcharge imposed pursuant to subdivision (b). The commission shall give special consideration to large users of hot water such as jails, prisons, and public hospitals. (b) (1) The commission shall fund the program through the use of a surcharge applied to gas customers based upon the amount of natural gas consumed. The surcharge shall be in addition to any other charges for natural gas sold or transported for consumption in this state. (2) The commission shall impose the surcharge at a level that is necessary to meet the goal of installing 200,000 solar water heating systems, or the equivalent output of 200,000 solar water heating systems, on homes and businesses in California by 2017. Funding for the program established by this article shall not, for the collective service territories of all gas corporations, exceed two hundred fifty million dollars ($250,000,000) over the course of the 10-year program. (3) The commission shall annually establish a surcharge rate for each class of gas customers. Any gas customer participating in the California Alternate Rates for Energy (CARE) or Family Electric Rate Assistance (FERA) programs shall be exempt from paying any surcharge imposed to fund the program designed and implemented pursuant to this article. (4) Any surcharge imposed to fund the program designed and implemented pursuant to this article shall not be imposed upon the portion of any gas customer's procurement of natural gas that is used or employed for a purpose that Section 896 excludes from being categorized as the consumption of natural gas. (5) The gas corporation or other person or entity providing revenue cycle services, as defined in Section 328.1, shall be responsible for collecting the surcharge. (c) Funds shall be allocated for the benefit of gas customers to promote utilization of solar water heating systems. (d) In designing and implementing the program required by this article, no moneys shall be diverted from any existing programs for low-income ratepayers or cost-effective energy efficiency programs.