Bill Text: CA SB1032 | 2021-2022 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: State Energy Resources Conservation and Development Commission: electrical transmission grid development and expansion: study.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2022-08-11 - August 11 hearing: Held in committee and under submission. [SB1032 Detail]

Download: California-2021-SB1032-Amended.html

Amended  IN  Senate  March 16, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 1032


Introduced by Senator Becker

February 15, 2022


An act to amend Section 3320 of add Division 1.8 (commencing with Section 3600) to the Public Utilities Code, relating to energy. electricity.


LEGISLATIVE COUNSEL'S DIGEST


SB 1032, as amended, Becker. California Consumer Power and Conservation Financing Authority. Clean Energy Infrastructure Authority Act.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations, while local publicly owned electric utilities are under the direction of their governing boards. Existing law requires the commission to ensure that facilities needed to maintain the reliability of the electrical supply remain available and operational.
Existing law establishes an Independent System Operator (ISO) as a nonprofit public benefit corporation and requires the ISO to ensure efficient use and reliable operation of the electrical transmission grid consistent with achieving planning and operating reserve criteria no less stringent than those established by the Western Electricity Coordinating Council and the North American Electric Reliability Corporation.
Under existing law, it is the policy of the state that eligible renewable energy resources and zero-carbon resources supply 100% of all retail sales of electricity to California end-use customers and 100% of electricity procured to serve all state agencies by December 31, 2045.
This bill would create the Clean Energy Infrastructure Authority as a public instrumentality of the state for the purpose of leading the state’s efforts to build critical electrical transmission infrastructure necessary to enable the state to transition to 100% clean energy, as specified. The bill would require the authority to do any and all things necessary or proper to accomplish that purpose. The bill would authorize the authority, among other things, to identify and establish corridors for the transmission of electricity within the state, to coordinate, investigate, plan, prioritize, and negotiate with entities within and outside the state to establish interstate transmission corridors, to finance, plan, develop, acquire, own, maintain, or operate electrical transmission infrastructure and energy storage systems, to exercise the power of eminent domain to acquire property or rights-of-way for public use, to issue bonds as necessary to undertake an electrical transmission infrastructure or energy storage system project, and to act as the lead agency for purposes of the California Environmental Quality Act and other environmental reviews, as specified. Before beginning construction of electrical transmission infrastructure that will be located in the service territory of, or connected directly to the electrical transmission infrastructure of, an electrical corporation with 250,000 or more customer accounts within the state and owned by the authority, the bill would require the authority to enter into a lease or other agreement with that electrical corporation to construct, operate, and maintain the electrical transmission infrastructure. The bill would authorize the authority to propose, and plan for, new electrical transmission infrastructure, but would prohibit the authority from developing electrical transmission infrastructure unless the applicable California balancing authority, including the ISO, has approved the project, in which case the approval of the commission would not be required. The bill would provide that county and city zoning ordinances do not apply to the location or development of the electrical transmission infrastructure and energy storage systems, and that the authority is not subject to the supervision or control of the commission or any other board, bureau, department, or agency of the state, except as specifically provided. The bill would require the authority to annually report to the Legislature on the authority’s activities, including a complete operating and financial statement covering its operations.
The bill would require the California Infrastructure and Economic Development Bank (I-Bank), upon request by the authority, to issue taxable or tax-exempt revenue bonds on behalf of the authority, as specified.
The bill would require the Department of Finance, among other things, to monitor and oversee the authority’s operations, to receive and review reports from the authority, and to annually report its findings and recommendations to the Governor, commission, and Legislature.
The bill would require the California State Auditor, or its designee, to conduct an annual financial and legal compliance audit of the accounts of the authority and file copies with the Governor and the Legislature.
The bill would require that information obtained by the authority that is proprietary technical or business information be confidential and not subject to inspection pursuant to the California Public Records Act.
Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

Existing law creates the California Consumer Power and Conservation Financing Authority with the responsibility to implement certain purposes related generally to the financing of energy generating facilities.

This bill would make a technical, nonsubstantive change to the statute creating the authority.

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

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


SECTION 1.

 (a) This act shall be known, and may be cited, as the Clean Energy Infrastructure Authority Act of 2022.
(b) The Legislature finds and declares all the following:
(1) The 2021 SB 100 Joint Agency Report estimated that the state will need to add 175 gigawatts of new renewable or zero-carbon capacity to the electrical grid by 2045 to achieve the goal of serving 100 percent of retail sales of electricity from renewable or zero-carbon sources. This represents an increase of nearly three times the electrical grid’s current capacity.
(2) The Independent System Operator, in its 20-Year Transmission Outlook from January 2021, estimated that $30,500,000,000 will need to be invested in new transmission capacity by 2040 in order to support the increase in new clean energy generation and projected increases in electrical demand.
(3) New transmission lines require completing many time-consuming steps before they come online and deliver electricity, including acquiring rights-of-way, obtaining land use and environmental permits, and constructing the transmission lines and related infrastructure. Major new transmission lines can take more than a decade from their initial planning stage to operation.
(4) While large investments in clean energy generation and transmission infrastructure are necessary to achieve the state’s goals for reducing the emissions of greenhouse gases, concerns about the affordability of energy require the state to seek ways to reduce the cost and risk of building this infrastructure.
(5) A state infrastructure authority would be able to reduce the cost of building new transmission infrastructure because the state is usually able to raise debt to finance projects at lower interest rates than would be available to private entities or local publicly owned utilities.
(6) A state infrastructure authority would be able to spread the impacts of new infrastructure fairly across the state and ensure that state-supported infrastructure projects are aligned with a comprehensive plan for meeting the state’s clean energy needs, rather than having each proposed project considered in isolation.
(7) A state infrastructure authority would be able to reduce risk and accelerate the completion of critical projects by leveraging the state’s authority to facilitate the acquisition of rights-of-way and thorough, but efficient, permitting processes.

SEC. 2.

 Division 1.8 (commencing with Section 3600) is added to the Public Utilities Code, to read:

DIVISION 1.8. Clean Energy Infrastructure Authority Act

PART 1. General Provisions

3600.
 This division shall be known, and may be cited, as the Clean Energy Infrastructure Authority Act.

3601.
 For purposes of this division, the following definitions apply:
(a) “Acquire” means to obtain eligible clean energy infrastructure by lease, construction, reconstruction, partnership, or purchase.
(b) “Authority” means the Clean Energy Infrastructure Authority created pursuant to Section 3605.
(c) “Bank” means the California Infrastructure and Economic Development Bank.
(d) “Bond” means a clean energy infrastructure bond, note, commercial paper, fixed or variable interest rate obligations or variable maturity security, and any other evidence of indebtedness issued pursuant to this division.
(e) “California balancing authority” has the same meaning as defined in Section 399.12.
(f) “Eligible clean energy infrastructure” means electrical transmission infrastructure, an energy storage system connected to electrical transmission infrastructure, and all related structures, properties, and supporting infrastructure, including any interests therein, that furthers the state’s efforts to reduce its net emissions of greenhouse gases.
(g) “Eligible facility” means eligible clean energy infrastructure to be financed or acquired by the authority pursuant to this division.
(h) “Finance” means the lending of bond proceeds by the authority to a public utility, publicly owned utility, or other private person for the purpose of that public utility, publicly owned utility, or other private person, in whole or in part, planning, acquiring, operating, and maintaining eligible clean energy infrastructure.
(i) “Fund” means the Clean Energy Infrastructure Authority Fund established pursuant to Section 3620.
(j) “Large electrical corporation” has the same meaning as defined in Section 3280.
(k) “Project” means an undertaking by the authority to finance or plan, develop, acquire, own, maintain, and operate an eligible facility located, in part or in whole, within the state.
(l) “Publicly owned utility” means a local publicly owned electric utility, as defined in Section 224.3.
(m) “Public utility” has the same meaning as defined in Section 216.

3602.
 The purpose of this division is to create the Clean Energy Infrastructure Authority to lead the state’s efforts to build critical electrical transmission infrastructure necessary to enable the state to transition to 100 percent clean energy.

PART 2. Governance

3605.
 (a) The Clean Energy Infrastructure Authority is hereby created as a public instrumentality of the state.
(b) The authority’s board shall be composed of seven members as follows:
(1) Three members appointed by the Governor with the advice and consent of the Senate. These initial appointments shall be for staggered terms of one, two, and three years, and subsequent appointments shall be for three-year terms.
(2) The Treasurer or the Treasurer’s designee.
(3) One member appointed by the Speaker of the Assembly. The initial appointment shall be for two years, and subsequent appointments shall be for four-year terms.
(4) One member appointed by the Senate Committee on Rules. An appointment made pursuant to this paragraph shall be for a four-year term.
(5) The Secretary of the Natural Resources Agency shall serve as an ex officio nonvoting member.
(c) The appointments made pursuant to subdivision (b) shall be consistent with both of the following requirements:
(1) One member appointed by the Governor shall have expertise in financial matters involving eligible clean energy infrastructure.
(2) The other four appointed members shall have both of the following:
(A) Special knowledge of the utility industry, as evidenced by college degrees or by experience, at least five years of which must have been within the utility industry.
(B) Knowledge of renewable energy development.
(3) An appointed member shall not represent a public utility, publicly owned utility, or other private person that owns or operates electrical transmission infrastructure, except in their capacity as a member of the board.
(d) The Governor shall designate an appointed member of the authority to serve as chair, and the authority’s board may annually elect other officers as it deems necessary.
(e) The authority’s board shall meet at the call of the chair or whenever four members request in writing to meet.
(f) A majority of the authority’s board members constitutes a quorum for the transaction of business, but the affirmative vote of at least four members is necessary for any action to be taken by the authority.
(g) The authority is not created or organized, and its operations are not conducted, for the purpose of making a profit, but the authority is expected to recover its operating costs.
(h) The authority’s revenues and assets shall not benefit or be distributable to its members, officers, or other private persons.
(i) The authority’s board members who are not salaried state service employees shall be eligible for reasonable compensation, not to exceed a per diem of four hundred dollars ($400), for attendance at board meetings.

3606.
 (a) The authority shall hire an executive director and any other employees or agents, including consultants, financial advisors, and legal advisors, as it deems necessary for the performance of the authority’s powers and duties, and prescribe the powers and duties of, and fix the compensation of, the employees and agents.
(b) The executive director of the authority shall direct the affairs and business of the authority, subject to the policies, control, and direction of the authority’s board.

PART 3. Powers and Duties

3610.
 The authority shall do all of the following:
(a) Any and all things necessary or proper to accomplish the purpose of this division or to comply with state and federal law.
(b) Maintain records and accounts of revenues and expenditures as required by the California State Auditor.
(c) Coordinate with California balancing authorities, including the Independent System Operator, and the Federal Energy Regulatory Commission, as necessary.

3611.
 The authority may do any of the following:
(a) Make and execute agreements, contracts, and other instruments necessary or convenient in the exercise of its powers and functions with any person or governmental entity.
(b) Enter into contractual agreements upon terms and conditions the authority considers advisable.
(c) Use the services of executive branch departments of the state upon mutually agreeable terms and conditions.
(d) Enter into partnerships with public and private entities.
(e) Identify and establish corridors for the transmission of electricity within the state.
(f) Through participation in appropriate regional transmission forums, coordinate, investigate, plan, prioritize, and negotiate with entities within and outside the state to establish interstate transmission corridors.
(g) Finance, plan, develop, acquire, own, maintain, or operate eligible clean energy infrastructure necessary or useful for the accomplishment of the purpose of this division.
(h) Exercise the power of eminent domain to acquire property or rights-of-way for public use if both necessary for a project and if doing so would not involve taking the property of a public utility or publicly owned utility or materially diminishing the reliability of the electrical transmission system in the state, as determined by the commission.
(i) Receive by gift, grant, donation, or otherwise, any sum of money, aid, or assistance from the United States, any other state, any political subdivision of the state, or any other public or private entity.
(j) For any project, provide information and training to employees regarding any unique hazards that may be posed by the project, safety work practices, and emergency procedures.
(k) Issue bonds pursuant to this division as necessary to undertake a project.
(l) Collect payments of reasonable rates, fees, interest, or other charges from persons using eligible facilities to finance eligible facilities and for other services rendered by the authority if any revenue derived from payments made to the authority is deposited into the fund.
(m) Borrow moneys as necessary to carry out the purpose of this division, and mortgage and pledge any leases, loans, or contracts executed and delivered by the authority.
(n) Sue and be sued.
(o) Adopt reasonable administrative and procedural rules as may be necessary or appropriate for the purpose of this division.
(p) Make agreements with local governments to provide community benefits in areas affected by eligible facilities.
(q) Act as the lead agency for purposes of the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) and other environmental reviews.

3612.
 (a) This section shall only apply to electrical transmission infrastructure that will be located in the service territory of, or connected directly to the electrical transmission infrastructure of, a large electrical corporation and owned by the authority.
(b) Before the construction of electrical transmission infrastructure described in subdivision (a) has begun, the authority shall enter into a lease or other agreement with the large electrical corporation described in subdivision (a) to construct, operate, and maintain the electrical transmission infrastructure.

3613.
 The authority shall not enter into a project if a public utility, publicly owned utility, or private person is constructing, or already providing, equivalent electrical transmission infrastructure for the services contemplated by the authority.

3614.
 The authority may propose, and plan for, new electrical transmission infrastructure, but shall not develop electrical transmission infrastructure unless the California balancing authority with control over the area in which the electrical transmission infrastructure will be developed has approved the project.

3615.
 Notwithstanding any other law, upon a project being approved by the California balancing authority with control over the area in which the electrical transmission infrastructure will be developed, approval of the project by the commission shall not be required.

3616.
 Notwithstanding any other law, county and city zoning ordinances shall not apply to the location or development of eligible clean energy infrastructure pursuant to this division.

3617.
 Notwithstanding any other law, the authority is not subject to the supervision or control of the commission or any other board, bureau, department, or agency of the state, except as specifically provided in this division.

PART 4. Financial Provisions

3620.
 There is hereby created the Clean Energy Infrastructure Authority Fund in the State Treasury for the purpose of financing projects pursuant to this division.

3621.
 (a) Revenues of, and all other income collected by, the authority pursuant to this division shall be deposited into the fund.
(b) Proceeds of revenue bonds issued pursuant to this division shall be deposited into the fund.

3622.
 Upon appropriation, the authority may use moneys in the fund for any of the following purposes:
(a) Capital costs.
(b) Costs incurred by the authority pursuant to this division for its operations and administration.
(c) Debt service and other costs associated with bonds issued pursuant to this division.
(d) Administrative costs incurred in implementing this division in an amount determined by the authority and approved by the Department of Finance.
(e) Other costs to further the purpose of this division.

PART 5. Revenue Bonds

3625.
 (a) (1) Upon request by the authority, the bank shall, on behalf of the authority, issue taxable or tax-exempt revenue bonds pursuant to Chapter 5 (commencing with Section 63070) of Division 1 of Title 6.7 of the Government Code and deposit the proceeds from the bonds into the fund or, with authority approval, use the proceeds to refund bonds previously issued under this part. Bond proceeds may also be used to fund necessary reserves, capitalized interest, or costs of issuance.
(2) Except as may be provided in the governing documents with respect to bond anticipation notes, each of the bonds issued under this part shall, to the extent provided in the governing documents, be payable from, and secured by, all or a portion of the revenues in, and assets of, the fund, to the extent the revenues and assets are pledged by the authority for those purposes.
(3) Bonds issued pursuant to this part shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the bank, or a pledge of the faith and credit of the state or of any political subdivision, but shall be payable solely from the fund, the assets of the fund, and the security provided by the fund. All bonds issued under this part shall contain on the face of the bonds a statement to the same effect.
(b) The financing provided pursuant to this division shall not exceed the total value of the projects being financed pursuant to this division.
(c) All moneys received for repayment of a loan, and any penalties, interest, and fees in connection with a loan, provided for the purpose of this division shall be deposited into the fund.

3626.
 (a) The authority may pledge all or any part of the revenues of, and all other income collected by, the authority, and other lawfully available moneys of the authority, to bonds entered into pursuant to this division and any repayment or reimbursement obligations of the authority to any provider of bond insurance, letter of credit, line of credit, reserve fund surety, or other facility providing credit or liquidity support for any revenue bonds.
(b) The state hereby pledges to, and agrees with, the holders of the revenue bonds that the state will not limit, alter, or restrict the rights hereby vested in the authority to fulfill each pledge of revenues and any other terms of any agreement made with or for the benefit of the bondholders or in any way impair the rights or remedies of the bondholders or the providers of bond insurance, letter of credit, or line of credit facilities.

3627.
 (a) The authority may request that the bank issue revenue bonds pursuant to this part through a resolution adopted by the authority’s board by majority vote.
(b) A resolution to request the issuance of revenue bonds shall specify all of the following:
(1) The purposes for which the revenue bonds are to be issued.
(2) The maximum principal amount of the revenue bonds.
(3) The maximum term for the revenue bonds.
(4) The maximum rate of interest to be payable on the revenue bonds. That interest rate shall not exceed the maximum rate specified in Section 53531 of the Government Code. The interest rate may be either fixed or variable and shall be payable at the times and in the manner specified in the resolution.

PART 6. Oversight

3630.
 The Department of Finance shall do all of the following:
(a) Monitor and oversee the authority’s operations.
(b) Receive and review reports from the authority on implementation of this division and review rules proposed for adoption pursuant to this division.
(c) Review and provide assistance and advice to the authority before the authority enters into a project.
(d) Undertake an ongoing examination of the statutes, constitutional provisions, regulations, and court decisions governing energy transmission and renewable energy development.
(e) On or before December 15, annually report its findings and recommendations pursuant to this section, including recommended legislation or necessary changes, to the Governor, commission, and Legislature.

3631.
 Once each calendar quarter, the authority shall report to the Legislature on all expenditures made and activities conducted in the fiscal year to date pursuant to this division.

3632.
 The authority, on or before December 1, shall annually submit to the Legislature a report of its activities. Each report shall set forth a complete operating and financial statement covering its operations for the previous fiscal year.

3633.
 The California State Auditor, or the California State Auditor’s designee, shall conduct an annual financial and legal compliance audit of the accounts of the authority and file copies with the Governor and the Legislature.

3634.
 A report to be submitted pursuant to this part shall be submitted in compliance with Section 9795 of the Government Code.

PART 7. Miscellaneous Provisions

3640.
 (a) A public utility may recover the capital costs of a project undertaken in partnership with the authority pursuant to this division from its retail customers only if the project has been approved by the commission and the commission has determined that the recovery of those costs is just and reasonable.
(b) A publicly owned utility may recover the capital costs of a project undertaken in partnership with the authority pursuant to this division only if the project has been approved by the governing body of the publicly owned utility.

3641.
 Information obtained by the authority that is proprietary technical or business information shall be confidential and not subject to inspection pursuant to the California Public Records Act. “Proprietary technical or business information” includes, but is not limited to, power purchase agreements, costs of production, costs of transmission, transmission service agreements, credit reviews, detailed power models, and financing statements.

SEC. 3.

 The Legislature finds and declares that Section 2 of this act, which adds Section 3641 to the Public Utilities Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:
The benefits of authorizing the Clean Energy Infrastructure Authority to partner with public utilities, local publicly owned utilities, and private persons in order to accelerate the development of clean energy infrastructure, and of maintaining the confidentiality of the proprietary technical and business information shared with the authority for that purpose, outweigh the benefits of public disclosure of that information.

SEC. 4.

 The Legislature finds and declares that enabling the financing, planning, development, acquisition, ownership, maintenance, and operation of electrical transmission infrastructure and energy storage systems throughout the state in order to reduce costs, increase electrical reliability, and streamline project deployment is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, Section 2 of this act adding Section 3616 to the Public Utilities Code applies to all cities, including charter cities.
SECTION 1.Section 3320 of the Public Utilities Code is amended to read:
3320.

(a)There is hereby created in the state government the California Consumer Power and Conservation Financing Authority, which shall be responsible for administering this division.

(b)The authority shall implement the purposes of Chapter 2 (commencing with Section 3310), and to that end finance projects and programs in accordance with this division, for the mutual benefit of the people of the state and to protect their health, welfare, and safety.

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