Bill Text: CA AB674 | 2015-2016 | Regular Session | Introduced

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

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Bill Title: Electricity: distributed generation.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2016-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB674 Detail]

Download: California-2015-AB674-Introduced.html

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BILL NUMBER: AB 674	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Mullin

                        FEBRUARY 25, 2015

   An act to add Section 354 to the Public Utilities Code, relating
to electricity.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 674, as introduced, Mullin. Electricity: distributed
generation.
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations,
as defined. Existing law authorizes the commission to fix the rates
and charges for every public utility, and requires that those rates
and charges be just and reasonable. Existing law requires the
commission to require each electrical corporation under the
operational control of the Independent System Operator as of January
1, 2001, to modify tariffs so that all customers that install new
distributed energy resources, as defined, in accordance with
specified criteria are served under rates, rules, and requirements
identical to those of a customer within the same rate schedule that
does not use distributed energy resources, and to withdraw any
provisions in otherwise applicable tariffs that activate other
tariffs, rates, or rules if a customer uses distributed energy
resources. Existing law provides, notwithstanding these requirements,
that a customer that installs new distributed energy resources not
be exempted from (1) reasonable interconnection charges, (2) charges
imposed pursuant to the Reliable Electric Service Investment Act, and
(3) charges imposed to repay the Department of Water Resources for
electricity procurement expenses incurred in response to the
electricity crisis of 2000-01. Existing law requires the commission,
in establishing the rates applicable to customers that install new
distributed energy resources, to create a firewall that segregates
distribution cost recovery so that any net costs, taking into account
the actual costs and benefits of distributed energy resources,
proportional to each customer class, as determined by the commission,
resulting from the tariff modifications granted to members of each
customer class may be recovered only from that class.
   This bill would, to the extent authorized by federal law, require
the commission, by July 1, 2016, to do both of the following for
those electrical corporation customers that have installed clean
distributed energy resources, as defined, prior to January 1, 2016:
(1) require each electrical corporation to collect all applicable
nonbypassable charges fixed, implemented, administered, or imposed by
the commission based only on the actual metered consumption of
electricity delivered to the customer through the electrical
corporation's transmission or distribution system, which charges are
to be at the same rate per kilowatthour as paid by other customers
that do not employ a clean distributed energy resource, and (2)
calculate a reservation capacity for standby service, if applicable,
based on the capacity needed by an electrical corporation to serve a
customer's electrical demand during an outage of the clean
distributed energy resource providing electric service for that
customer. The bill would require the State Energy Resources
Conservation and Development Commission to report to the Legislature
and the relevant policy committees of the Legislature on the impact
of the program upon specified matter by July 1, 2021.
   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 the provisions of this bill would be a part of the act and
because a violation of an order or decision of the commission
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.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Clean onsite generation of electricity yields multiple
benefits, including increased electrical reliability and efficiency,
reduced emissions of greenhouse gases and oxides of nitrogen (NOx),
and electrical grid resiliency.
   (b) In 2011, Governor Jerry Brown released a Clean Energy Jobs
Plan that called for 12,000 megawatts of localized electrical
generation, also known as distributed generation, to maximize energy
efficiency and minimize environmental impacts, while increasing
reliability and security.
   (c) Increased deployment of clean onsite electrical generation
reduces the need for generation that emits higher levels of
greenhouse gases that contribute to climate change and higher levels
of NOx that contribute to smog formation.
   (d) Several types of clean onsite electrical generation
technologies currently exist and others are being developed, with
many being developed and manufactured in California.
   (e) Residential, commercial, and industrial customers are willing
to invest their own capital to install clean onsite generation
technologies.
   (f) Nonbypassable charges create an economic barrier to the
installation of clean onsite electrical generation and, as a result,
prevent cost savings for all ratepayers and environmental benefits
for all Californians.
   (g) Among states with similarly high energy prices and
environmental goals, California is the only state that allows
electrical corporations to apply nonbypassable charges to electricity
produced and consumed onsite.
   (h) Ratepayers would see a net cost savings from increased
deployment of onsite electricity generation at customer sites that
pay nonbypassable charges only on their electricity purchases from
the grid. This ratepayer savings arises because onsite electricity
generation reduces demand on the electrical grid, which reduces
market electricity prices, and avoids transmission and distribution
costs and energy losses.
   (i) Other cost-saving benefits to all ratepayers from clean onsite
electrical generation include reductions in future generating
capacity requirements, reductions in electrical grid congestion
prices, reductions in emissions of greenhouse gases and criteria air
pollutants, and increases in electrical grid resiliency and security.

  SEC. 2.  Section 354 is added to the Public Utilities Code, to
read:
   354.  (a) As used in this section, "clean distributed energy
resource" means a facility that is located on the customer's premises
and generates electricity, or electricity and useful heat, where the
electricity generated is used for a purpose described in paragraph
(1) or (2) of subdivision (b) of Section 218, and that meets either
of the following requirements:
   (1) It meets all of the following criteria:
   (A) Has a carbon dioxide (CO2) emissions rate, including credit
for waste heat recovery, where applicable, and savings on
transmission and distribution losses, that is no greater than 437
kilograms per megawatthour.
   (B) Has an oxide of nitrogen (NOx) emissions rate, including
credit for waste heat recovery, when applicable, that is less than or
equal to 0.07 pounds per megawatthour, or a lower NOx emissions rate
that the State Air Resources Board determines reflects the best
performance achieved in practice by existing electrical generation
technologies pursuant to Section 41514.9 of the Health and Safety
Code.
   (C) Has a nameplate rated generation capacity of 20 megawatts or
less.
   (D) Is sized to meet the electrical demand of, or use the
available waste heat of, the customer that will be served by the
generating facility.
   (2) It is an "eligible renewable energy resource" pursuant to the
California Renewables Portfolio Standard Program (Article 16
(commencing with Section 399.11)), has a nameplate rated generation
capacity of 20 megawatts or less, is sized to meet the electrical
demand of the customer that will be served by the generating
facility, and will not otherwise be addressed in the commission's
implementation of Section 769 or 2827.1.
   (b) To the extent authorized by federal law, by July 1, 2016, the
commission shall require each electrical corporation to do the
following for customers served by clean distributed energy resources
installed prior to January 1, 2016:
   (1) Collect all applicable nonbypassable charges fixed,
implemented, administered, or imposed by the commission based only on
the actual metered consumption of electricity delivered to the
customer through the electrical corporation's transmission or
distribution system. All charges shall be at the same rate per
kilowatthour as paid by other customers that do not employ a clean
distributed energy resource under the electrical corporation's
applicable rate schedule.
   (2) (A) Calculate a reservation capacity for standby service, if
applicable, based on the capacity needed by an electrical corporation
to serve a customer's electrical demand during an outage of the
clean distributed energy resource providing electric service for that
customer.
   (B) Initial reservation capacity shall be established by the
customer for a minimum of 12 months based on the clean distributed
energy resource generation technology's historical operation, the
number, size, and outage diversity of the clean distributed energy
resource, and the annual average reduction of customer load that
could occur during an outage.
   (C) If after the initial 12-month period, the electrical
corporation reasonably determines that the reservation capacity does
not reflect the customer's actual standby demand, averaged over the
previous 12 months, the electrical corporation shall modify the
reservation capacity once every 12 months to reflect the customer's
actual average annual reservation capacity based on the same criteria
used to establish the initial reservation capacity. Calculation of
actual average annual reservation capacity shall exclude the customer'
s electrical demand served by the electrical corporation within 24
hours following an outage of the clean distributed energy resource
resulting from any event on the electrical corporation's transmission
or distribution grid that is outside of the customer's control that
requires the customer to reduce onsite generation.
   (c) (1) By July 1, 2021, the Energy Commission, in consultation
with the commission, shall report to the Legislature and the relevant
policy committees of the Legislature on all of the following:
   (A) Avoided transmission and distribution costs.
   (B) Avoided energy losses.
   (C) Wholesale electricity market prices.
   (D) Electricity costs to ratepayers.
   (E) Air quality.
   (F) Emissions of greenhouse gases.
   (G) Job creation.
   (H) Energy reliability.
   (I) The extent to which the incentives provided by the program
contribute to achieving the state's distributed generation and
combined heat and power goals.
   (2) The report to be submitted pursuant to this subdivision shall
be submitted in compliance with Section 9795 of the Government Code.
   (3) The requirement for submitting a report pursuant to this
subdivision is inoperative on July 1, 2025, pursuant to Section
10231.5 of the Government Code.
  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.