Bill Text: CA SB1174 | 2021-2022 | Regular Session | Amended
Bill Title: Electricity: eligible renewable energy or energy storage resources: transmission and interconnection.
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Passed) 2022-09-02 - Chaptered by Secretary of State. Chapter 229, Statutes of 2022. [SB1174 Detail]
Download: California-2021-SB1174-Amended.html
Amended
IN
Senate
April 06, 2022 |
Introduced by Senator Hertzberg |
February 17, 2022 |
LEGISLATIVE COUNSEL'S DIGEST
(1)Existing law vests the Public Utilities Commission (PUC) with regulatory authority over public utilities, including electrical corporations. Existing law requires the PUC, in consultation with the Independent System Operator, to establish resource adequacy requirements for electrical corporations, electric service providers, and community choice aggregators to ensure the reliability of electrical service in California, while advancing the state’s goals for clean energy, reducing air pollution, and reducing emissions of greenhouse gases. Existing law requires the PUC to exercise its enforcement powers to ensure that electrical corporations, electric service providers, and community choice aggregators comply with the resource adequacy requirements.
This bill would require the PUC to waive any otherwise applicable penalty
for noncompliance with the resource adequacy requirements if it finds that certain conditions have been met, including that the electrical corporation, electric service provider, or community choice aggregator has contracted for adequate resources to meet its resource adequacy requirements and that the contracted-for resources would otherwise be supplied, but for delays in the completion of a third-party transmission owner’s deliverability network upgrades, as specified.
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Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
(a)The commission, in consultation with the Independent System Operator, shall establish resource adequacy requirements for all load-serving entities.
(b)In establishing resource adequacy requirements, the commission shall ensure the reliability of electrical service in California while advancing, to the extent possible, the state’s goals for clean energy, reducing air pollution, and reducing emissions of greenhouse gases. The resource adequacy program shall achieve all of the following objectives:
(1)Facilitate development of new generating, nongenerating, and hybrid capacity and retention of existing generating, nongenerating, and hybrid capacity that is economic and needed.
(2)Establish
new, or maintain existing, demand response products and tariffs that facilitate the economic dispatch and use of demand response that can either meet or reduce an electrical corporation’s resource adequacy requirements, as determined by the commission.
(3)Equitably allocate the cost of generating capacity and demand response in a manner that prevents the shifting of costs between customer classes.
(4)Minimize enforcement requirements and costs.
(5)Maximize the ability of community choice aggregators to determine the generation resources used to serve their customers.
(c)Each load-serving entity shall maintain physical generating capacity and electrical demand response adequate to meet its load requirements, including, but not limited to, peak demand and planning and operating reserves. The generating capacity or electrical demand response shall be deliverable to locations and at times as may be necessary to maintain electrical service system reliability, local area reliability, and flexibility.
(d)Each load-serving entity shall, at a minimum, meet the most recent minimum planning reserve and reliability criteria approved by the
board of directors of the Western Systems Coordinating Council or the Western Electricity Coordinating Council.
(e)(1)The commission shall implement and enforce the resource adequacy requirements established in accordance with this section in a nondiscriminatory manner. Each load-serving entity shall be subject to the same requirements for resource adequacy and the renewables portfolio standard program that are applicable to electrical corporations pursuant to this section, or otherwise required by law, or by order or decision of the commission. The commission shall exercise its enforcement powers to ensure compliance by all load-serving entities.
(2)The commission shall waive any otherwise applicable penalty for noncompliance with the resource adequacy requirements established pursuant to this section if it finds that all of the following conditions have been met:
(A)The load-serving entity has contracted for adequate resources to meet its resource adequacy requirements.
(B)Each entity contracted to supply the load-serving entity with those resources has, on or before the deadline specified in the supply agreement, completed construction of the associated generation and interconnection facilities that the entity is responsible for under its generator interconnection agreement.
(C)The load-serving entity and entity contracted to supply the load-serving entity with those resources have met all contractual and other requirements necessary to
supply the contracted-for resources.
(D)(i)The contracted-for resources would otherwise be supplied and the load-serving entity would be in compliance with the resource adequacy requirements established pursuant to this section, but for delays in the completion of a third-party transmission owner’s deliverability network upgrades, as identified in the associated generator interconnection agreement.
(ii)With respect to a load-serving entity that owns relevant transmission facilities, in determining if the condition described in clause (i) has been met, the commission shall consider whether the load-serving entity has undertaken, in a timely fashion, reasonable measures under its control and consistent with its obligations under local, state, and federal laws and regulations to develop and construct new transmission facilities or perform upgrades to existing
facilities necessary to enable generation resources to interconnect and provide contracted-for resources. In determining the reasonableness of a load-serving entity’s actions, the commission shall consider the load-serving entity’s expectations for full-cost recovery for these transmission facilities and upgrades.
(f)The commission shall require sufficient information, including, but not limited to, anticipated load, actual load, and measures undertaken by a load-serving entity to ensure resource adequacy, to be reported to enable the commission to determine compliance with the resource adequacy requirements established by the commission.
(g)An electrical corporation’s costs of meeting or reducing resource adequacy requirements, including, but not limited to, the costs associated with system reliability, local area reliability, and flexibility, that are
determined to be reasonable by the commission, or are otherwise recoverable under a procurement plan approved by the commission pursuant to Section 454.5, shall be fully recoverable from those customers on whose behalf the costs are incurred, as determined by the commission, at the time the commitment to incur the cost is made, on a fully nonbypassable basis, as determined by the commission. The commission shall exclude any amounts authorized to be recovered pursuant to Section 366.2 when authorizing the amount of costs to be recovered from customers of a community choice aggregator or from customers that purchase electricity through a direct transaction pursuant to this subdivision.
(h)The commission shall determine and authorize the most efficient and equitable means for achieving all of the following:
(1)Meeting the objectives of this section.
(2)Ensuring that investment is made in new generating capacity.
(3)Ensuring that existing generating capacity that is economic is retained.
(4)Ensuring that the cost of generating capacity and demand response is allocated equitably.
(5)Ensuring that community choice aggregators can determine the generation resources used to serve their customers.
(6)Ensuring that investments are made in new and existing demand response resources that are cost effective and help to achieve electrical grid reliability and the state’s goals for reducing emissions of greenhouse gases.
(7)Minimizing the need for backstop procurement by the
Independent System Operator.
(i)In making the determination pursuant to subdivision (h), the commission may consider a centralized resource adequacy mechanism among other options.
(j)The commission shall ensure appropriate valuation of both supply and load modifying demand response resources. The commission, in an existing or new proceeding, shall establish a mechanism to value load modifying demand response resources, including, but not limited to, the ability of demand response resources to help meet distribution needs and transmission system needs and to help reduce a load-serving entity’s resource adequacy obligation pursuant to this section. In determining this value, the commission shall consider how these resources further the state’s electrical grid reliability and the state’s goals for reducing emissions of greenhouse gases. The commission, Energy Commission, and
Independent System Operator shall jointly ensure that changes in demand caused by load modifying demand response are expeditiously and comprehensively reflected in the Energy Commission’s Integrated Energy Policy Report forecast, and in planning proceedings and associated analyses, and shall encourage reflection of these changes in demand in the operation of the grid.
(k)For purposes of this section, “load-serving entity” means an electrical corporation, electric service provider, or community choice aggregator. “Load-serving entity” does not include any of the following:
(1)A local publicly owned electric utility.
(2)The State Water Resources Development System commonly known as the State Water Project.
(3)Customer generation located on the customer’s site or providing electric service through arrangements authorized by Section 218, if the customer generation, or the load it serves, meets one of the following criteria:
(A)It takes standby service from the electrical corporation on a commission-approved rate schedule that provides for adequate backup planning and operating reserves for the standby customer class.
(B)It is not physically interconnected to the electrical transmission or distribution grid, so that, if the customer generation fails, backup electricity is not supplied from the electrical grid.
(C)There is physical assurance that the
load served by the customer generation will be curtailed concurrently and commensurately with an outage of the customer generation.
SEC. 2.SECTION 1.
Section 399.13 of the Public Utilities Code is amended to read:399.13.
(a) (1) The commission shall direct each electrical corporation to annually prepare a renewable energy procurement plan that includes the elements specified in paragraph (6), to satisfy its obligations under the renewables portfolio standard. To the extent feasible, this procurement plan shall be proposed, reviewed, and adopted by the commission as part of, and pursuant to, a general procurement plan process. The commission shall require each electrical corporation to review and update its renewable energy procurement plan as it determines to be necessary. The commission shall require all other retail sellers to prepare and submit renewable energy procurement plans that address the requirements identified in paragraph (6).(h)Construction, alteration, demolition, installation, and repair work on an eligible renewable energy resource that receives production incentives pursuant to Section 25742 of the Public Resources Code, including work performed to qualify, receive, or maintain production incentives, are “public works” for the purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.