Bill Text: CA SB1109 | 2021-2022 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: California Renewables Portfolio Standard Program: bioenergy projects.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Passed) 2022-09-16 - Chaptered by Secretary of State. Chapter 364, Statutes of 2022. [SB1109 Detail]
Download: California-2021-SB1109-Amended.html
Bill Title: California Renewables Portfolio Standard Program: bioenergy projects.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Passed) 2022-09-16 - Chaptered by Secretary of State. Chapter 364, Statutes of 2022. [SB1109 Detail]
Download: California-2021-SB1109-Amended.html
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Amended
IN
Senate
May 04, 2022 |
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Amended
IN
Senate
March 14, 2022 |
CALIFORNIA LEGISLATURE—
2021–2022 REGULAR SESSION
Senate Bill
No. 1109
| Introduced by Senator Caballero |
February 16, 2022 |
An act to amend Sections 399.20.3 and 8388 of the Public Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 1109, as amended, Caballero.
California Renewables Portfolio Standard Program: bioenergy projects.
Under existing law, the Public Utilities Commission has 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 electrical corporations, by December 1, 2016, to collectively procure, through financial commitments of 5 years, their proportionate share of 125 megawatts of cumulative rated generating capacity from bioenergy projects commencing operation before June 1, 2013. Existing law requires at least 80% of the feedstock of a bioenergy project, on an annual basis, to be a byproduct of sustainable forestry management, which includes removal of dead and dying trees from Tier 1 and Tier 2 high hazard zones, and requires at least 60% of that feedstock to be from Tier
1 and Tier 2 high hazard zones. If, on a monthly basis, a bioenergy facility opts out of, or misses, the mandated fuel or feedstock usage levels or targets, existing law specifies the price to be paid for the output from the facility for that month. Existing law additionally requires a local publicly owned electric utility serving more than 100,000 customers to procure their proportionate shares of 125 megawatts of cumulative rated generating capacity from those kinds of bioenergy projects subject to terms of at least 5 years.
This bill would increase extend the electrical corporations’ obligation to collectively procure their proportionate share of 125 megawatts of
cumulative rated generating capacity from bioenergy projects to 225 megawatts and would require electrical corporations collectively to procure that amount by December 31, 2023. The bill would revise the financial commitments by which electrical corporations collectively procure their proportionate share of the cumulative rated generating capacity to 5 to 15 years, inclusive. For contracts that are entered into or extended on or after January 1, 2023, the bill would revise the prices paid for the output from a bioenergy facility if the mandated feedstock targets are missed by the facility, as provided. The bill would require local publicly owned electric utilities serving more than 100,000 customers to procure their proportionate shares of 225 megawatts of cumulative rated generating capacity from those kinds of bioenergy
projects. By imposing additional duties on local publicly owned electric utilities, the bill would impose a state-mandated local program. The bill would require any incremental procurement of electricity products from bioenergy resources by a new contract or contract extension of 10 years or longer in duration to be from a resource that meets emission limits equivalent to, or more stringent than, the best available retrofit control technology determined at the time of procurement.
Existing law requires an electrical corporation, local publicly owned electric utility, or community choice aggregator with a contract to procure electricity generated from biomass that is operative at any time in 2018, and expires or expired on or before December 31, 2023, to seek to amend the contract to include, or seek approval for a new contract that includes, an expiration date 5 years later than the expiration date in the contract that was operative in 2018, so long as the
contract extension follows the a certain feedstock requirement described above. requirement. Existing law prohibits this requirement from applying to facilities located in federal severe or extreme nonattainment areas for particulate matter or ozone.
This bill would require those entities with a contract to procure electricity generated from biomass that expires or expired on or before December 31, 2028, to seek to amend the contract to include, or seek approval for a new contract that includes, an expiration date 5 years later than the expiration of the date in the contract that was
operative in 2022. By imposing additional duties on community choice aggregators and local publicly owned electric utilities, the bill would impose a state-mandated local program.
Under existing law, a violation of the Public Utilities Act or an order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because certain 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.
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 specified reasons.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 399.20.3 of the Public Utilities Code is amended to read:399.20.3.
(a) For purposes of this section, the following definitions apply:(1) “Bioenergy” has the same meaning as set forth in paragraph (6) of subdivision (f) of Section 399.20.
(2) “Tier 1 high hazard zone” includes areas where wildlife and falling trees threaten electrical transmission and distribution lines, roads, and other evacuation corridors, critical community infrastructure, or other existing structures, as designated by the Department of Forestry and Fire Protection pursuant to the Proclamation of a State of Emergency on Tree Mortality declared by the Governor on October 30, 2015.
(3) “Tier 2 high hazard zone” includes watersheds that have significant tree mortality combined with community and natural resource assets, as designated by the Department of Forestry and Fire Protection pursuant to the Proclamation of a State of Emergency on Tree Mortality declared by the Governor on October 30, 2015.
(b) In addition to the requirements of subdivision (f) of Section 399.20, by December 1, 2023, electrical corporations shall collectively procure, through financial commitments of 5 to 15 years, inclusive, their proportionate share of 225 125 megawatts of cumulative rated generating capacity from existing bioenergy projects that commenced
operations before June 1, 2013. At least 80 percent of the feedstock of an eligible facility, on an annual basis, shall be a byproduct of sustainable forestry management, which includes removal of dead and dying trees from Tier 1 and Tier 2 high hazard zones and is not that from lands that have been clear cut. At least 60 percent of this feedstock shall be from Tier 1 and Tier 2 high hazard zones.
(c) For the purpose of contracts entered into pursuant to subdivision (b), commission Resolution E-4770 (March 17, 2016), and commission Resolution E-4805 (October 13, 2016), Tier 1 and Tier 2 high hazard zone fuel or feedstock shall also include biomass fuels removed from fuel reduction operations exempt from timber harvesting plan requirements pursuant to subdivisions (a), (f), (j), and (k) of Section 4584 of the Public Resources Code.
(d) (1)The commission shall require an electrical corporation that has entered into a contract pursuant to subdivision (b), commission Resolution E-4770 (March 17, 2016), or commission Resolution E-4805 (October 13, 2016) to allow fuel or feedstock reporting requirements to be based on a monthly or annual basis, and a bioenergy facility providing generation pursuant to that contract shall have the right to opt out of the mandated fuel or feedstock usage levels in any particular month upon providing written notice to the electrical corporation in the month of operation. For months in which a bioenergy facility
opts out of the mandated fuel or feedstock usage levels or misses the mandated fuel or feedstock targets, that facility shall be paid the alternate price adopted by the commission in commission Resolution E-4770 for all megawatthours generated during that month. Contracts shall continue in force through the end of the contracted term without creating an event of default for missing mandated fuel or feedstock usage levels and without giving rise to a termination right in favor of the electrical corporation.
(2)(A)Except as provided in subparagraph (B), for months in which a bioenergy facility opts out of the mandated fuel or feedstock usage levels or misses the mandated fuel or feedstock targets, that facility shall be paid the alternate price adopted by the commission in commission Resolution E-4770 for all
megawatthours generated during that month.
(B)On or after January 1, 2023, for a contract entered into, or extended, pursuant to subdivision (b) of Section 8388, as applicable, or an amendment to a contract in existence as of January 1, 2023, for any calendar year in which a bioenergy facility misses the mandated feedstock targets, the price paid to that facility for that calendar year shall be adjusted on a pro-rata basis so that the proportion of the output paid at the contract price shall be the total output multiplied by the percentage of the feedstock target that was achieved and the balance of the output shall be compensated at the alternative price adopted in commission Resolution E-4770. For example, if the facility missed the 80 percent
feedstock target for byproduct of sustainable forestry management for a calendar year and 72 percent is achieved, this represents a 10-percent shortfall and only 90 percent of the output will be compensated at the contract price and 10 percent will be compensated at the alternative price. If a facility has two feedstock targets and both targets are missed, the target that is missed by the greater percentage shall be the one that is used in discounting the percentage of output to be compensated at the contract price. The adjustment shall occur once per year following the calendar year in which the target is missed.
(3)Contracts shall continue in force through the end of the contracted term without creating an event of
default for missing mandated fuel or feedstock usage levels and without giving rise to a termination right in favor of the electrical corporation.
(e) (1) For each electrical corporation, the commission shall allocate its proportionate share of the 225 125 megawatts based on the ratio of the electrical corporation’s peak demand to the total statewide peak demand.
(2) Procurement by an electrical corporation of generation capacity pursuant to a contract under the commission’s Resolution E-4770 (March 17, 2016) that is in excess of the requirement of that
electrical corporation under that resolution shall count towards meeting the electrical corporation’s proportionate share allocated pursuant to paragraph (1).
(f) The commission may direct each electrical corporation to develop standard contract terms and conditions that reflect the operational characteristics of the bioenergy projects and to provide a streamlined contracting process or may require the electrical corporations to use the mechanism established pursuant to the commission’s Resolution E-4770 (March 17, 2016) to meet the requirements of subdivision (e). The standard contract terms and conditions shall include the option to index the contract price for inflation. The procurement pursuant to the developed standard contract shall occur on an expedited basis due to the Proclamation of a State of Emergency on Tree Mortality
declared by the Governor on October 30, 2015.
(g) A local publicly owned electric utility serving more than 100,000 customers shall procure its proportionate share, based on the ratio of the utility’s peak demand to the total statewide peak demand, of 225 125 megawatts of cumulative rated capacity from existing bioenergy projects described in subdivision (b) subject to terms of at least five years.
(h) The commission shall ensure that the costs of any contract procured by an electrical corporation to satisfy the requirements of this section are recoverable from all customers on a nonbypassable basis.
(i) The Procurement Review Group within the commission shall advise the commission on the cost of the generation procured pursuant to this section and its impact on ratepayers.
(j) For purposes of this section, any incremental procurement of electricity products from bioenergy resources by a new contract or contract extension of 10 years or longer in duration shall be from a resource that meets emission limits equivalent to, or more stringent than, the best available retrofit control technology determined at the time of procurement.
