Bill Text: CA SB1393 | 2015-2016 | Regular Session | Chaptered
Bill Title: Energy efficiency and pollution reduction.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2016-09-26 - Chaptered by Secretary of State. Chapter 677, Statutes of 2016. [SB1393 Detail]
Download: California-2015-SB1393-Chaptered.html
BILL NUMBER: SB 1393 CHAPTERED
BILL TEXT
CHAPTER 677
FILED WITH SECRETARY OF STATE SEPTEMBER 26, 2016
APPROVED BY GOVERNOR SEPTEMBER 26, 2016
PASSED THE SENATE AUGUST 31, 2016
PASSED THE ASSEMBLY AUGUST 31, 2016
AMENDED IN ASSEMBLY AUGUST 31, 2016
AMENDED IN SENATE APRIL 12, 2016
INTRODUCED BY Senator De León
FEBRUARY 19, 2016
An act to amend Section 44258.5 of the Health and Safety Code, to
amend Section 25302.2 of the Public Resources Code, and to amend
Sections 399.11, 399.12, 399.30, 400, 454.51, 9508, and 9621 of the
Public Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 1393, De León. Energy efficiency and pollution reduction.
(1) Existing law requires the State Energy Resources Conservation
and Development Commission (Energy Commission) to compile and adopt
an integrated energy policy report every 2 years and requires the
report to include an overview of major energy trends and issues
facing the state. As part of the 2019 edition of the report, existing
law requires the Energy Commission to evaluate the actual energy
efficiency savings from negative therm interactive effects generated
as a result of electricity efficiency improvements.
This bill would additionally require the Energy Commission to
include that evaluation in each integrated energy policy report
adopted after 2019.
(2) Existing law defines "eligible renewable energy resource" for
the purposes of the renewable energy portfolio standard. Existing law
provides that a facility engaged in the combustion of municipal
solid waste shall not be considered as an eligible renewable energy
resource. Existing law also provides that electricity generated by a
facility engaged in the combustion of municipal solid waste shall not
result in the creation of a renewable energy credit. However, these
provisions do not apply, under specified circumstances, to a facility
located in Stanislaus County.
This bill would modify the exception for the facility located in
Stanislaus County, as specified.
(3) Existing law requires each local publicly owned electric
utility to adopt and implement a renewable energy resources
procurement plan that requires the utility to procure a minimum
quantity of electricity products from eligible renewable energy
resources, with various required percentages applicable over time, as
specified. Existing law provides various exemptions from minimum
renewable energy resources procurement requirements for certain local
publicly owned electric utilities relying on hydroelectric
generation.
This bill would modify certain exemptions from the minimum
renewable energy resources procurement requirements relating to
hydroelectric generation, as specified.
(4) Existing law requires each local publicly owned electric
utility to post notice whenever its governing body will deliberate in
public on its renewable energy resources procurement plan, and
requires the utility to also notify and provide certain information
to the Energy Commission in that regard.
This bill would delete this requirement for a local publicly owned
electric utility to notify and report to the Energy Commission.
(5) Existing law requires the Public Utilities Commission and the
Energy Commission to review specified programs overseen by the Public
Utilities Commission and the Energy Commission and make
recommendations to advance state clean energy and pollution reduction
objectives and provide benefits to disadvantaged communities.
This bill would additionally require the Energy Commission to
review programs of the same type overseen by academia and the private
and nonprofit sectors.
(6) Existing law requires the Public Utilities Commission to
identify a diverse and balanced portfolio of resources needed to
ensure a reliable electricity supply that provides optimal
integration of renewable energy in a cost-effective manner, and
specifies the respective roles of electrical corporations and
community choice aggregators in satisfying the portfolio needs for
renewable integration. Existing law provides that all costs resulting
from nonperformance shall be borne by the electrical corporation or
community choice aggregator responsible for them.
This bill would require the commission to ensure that all costs
resulting from nonperformance to satisfy the need for renewable
integration shall be borne by the electrical corporation or community
choice aggregator that failed to perform.
(7) This bill would make various other changes to provisions
relating to energy efficiency and pollution reduction.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 44258.5 of the Health and Safety Code is
amended to read:
44258.5. (a) For the purposes of this section, the following
terms mean the following:
(1) "Local publicly owned electric utility" has the same meaning
as defined in Section 224.3 of the Public Utilities Code.
(2) "Retail seller" has the same meaning as set forth in
subdivision (j) of Section 399.12 of the Public Utilities Code.
(3) "Transportation electrification" has the same meaning as set
forth in Section 237.5 of the Public Utilities Code.
(b) The state board shall identify and adopt appropriate policies,
rules, or regulations to remove regulatory disincentives preventing
retail sellers and local publicly owned electric utilities from
facilitating the achievement of greenhouse gas emission reductions in
other sectors through increased investments in transportation
electrification. Policies to be considered shall include, but are not
limited to, an allocation of greenhouse gas emissions allowances to
retail sellers and local publicly owned electric utilities, or other
regulatory mechanisms, to account for increased greenhouse gas
emissions in the electric sector from transportation electrification.
SEC. 2. Section 25302.2 of the Public Resources Code is amended to
read:
25302.2. As part of the 2019 edition of the integrated energy
policy report, and as part of each integrated energy policy report
adopted biennially thereafter, the commission shall evaluate the
actual energy efficiency savings, as defined in Section 25310, from
negative therm interactive effects generated as a result of
electricity efficiency improvements.
SEC. 3. Section 399.11 of the Public Utilities Code is amended to
read:
399.11. The Legislature finds and declares all of the following:
(a) In order to attain a target of generating 20 percent of total
retail sales of electricity in California from eligible renewable
energy resources by December 31, 2013, 33 percent by December 31,
2020, and 50 percent by December 31, 2030, it is the intent of the
Legislature that the commission and the Energy Commission implement
the California Renewables Portfolio Standard Program described in
this article.
(b) Achieving the renewables portfolio standard through the
procurement of various electricity products from eligible renewable
energy resources is intended to provide unique benefits to
California, including all of the following, each of which
independently justifies the program:
(1) Displacing fossil fuel consumption within the state.
(2) Adding new electrical generating facilities in the
transmission network within the Western Electricity Coordinating
Council service area.
(3) Reducing air pollution, particularly criteria pollutant
emissions and toxic air contaminants, in the state.
(4) Meeting the state's climate change goals by reducing emissions
of greenhouse gases associated with electrical generation.
(5) Promoting stable retail rates for electric service.
(6) Meeting the state's need for a diversified and balanced energy
generation portfolio.
(7) Assistance with meeting the state's resource adequacy
requirements.
(8) Contributing to the safe and reliable operation of the
electrical grid, including providing predictable electrical supply,
voltage support, lower line losses, and congestion relief.
(9) Implementing the state's transmission and land use planning
activities related to development of eligible renewable energy
resources.
(c) The California Renewables Portfolio Standard Program is
intended to complement the Renewable Energy Resources Program
administered by the Energy Commission and established pursuant to
Chapter 8.6 (commencing with Section 25740) of Division 15 of the
Public Resources Code.
(d) New and modified electric transmission facilities may be
necessary to facilitate the state achieving its renewables portfolio
standard targets.
(e) (1) Supplying electricity to California end-use customers that
is generated by eligible renewable energy resources is necessary to
improve California's air quality and public health, particularly in
disadvantaged communities identified pursuant to Section 39711 of the
Health and Safety Code, and the commission shall ensure rates are
just and reasonable, and are not significantly affected by the
procurement requirements of this article. This electricity may be
generated anywhere in the interconnected grid that includes many
states, and areas of both Canada and Mexico.
(2) This article requires generating resources located outside of
California that are able to supply that electricity to California
end-use customers to be treated identically to generating resources
located within the state, without discrimination.
(3) California electrical corporations have already executed, and
the commission has approved, power purchase agreements with eligible
renewable energy resources located outside of California that will
supply electricity to California end-use customers. These resources
will fully count toward meeting the renewables portfolio standard
procurement requirements.
SEC. 4. Section 399.12 of the Public Utilities Code is amended to
read:
399.12. For purposes of this article, the following terms have
the following meanings:
(a) "Conduit hydroelectric facility" means a facility for the
generation of electricity that uses only the hydroelectric potential
of an existing pipe, ditch, flume, siphon, tunnel, canal, or other
manmade conduit that is operated to distribute water for a beneficial
use.
(b) "Balancing authority" means the responsible entity that
integrates resource plans ahead of time, maintains load-interchange
generation balance within a balancing authority area, and supports
interconnection frequency in real time.
(c) "Balancing authority area" means the collection of generation,
transmission, and loads within the metered boundaries of the area
within which the balancing authority maintains the electrical
load-resource balance.
(d) "California balancing authority" is a balancing authority with
control over a balancing authority area primarily located in this
state and operating for retail sellers and local publicly owned
electric utilities subject to the requirements of this article and
includes the Independent System Operator (ISO) and a local publicly
owned electric utility operating a transmission grid that is not
under the operational control of the ISO. A California balancing
authority is responsible for the operation of the transmission grid
within its metered boundaries which is not limited by the political
boundaries of the State of California.
(e) "Eligible renewable energy resource" means an electrical
generating facility that meets the definition of a "renewable
electrical generation facility" in Section 25741 of the Public
Resources Code, subject to the following:
(1) (A) An existing small hydroelectric generation facility of 30
megawatts or less shall be eligible only if a retail seller or local
publicly owned electric utility procured the electricity from the
facility as of December 31, 2005. A new hydroelectric facility that
commences generation of electricity after December 31, 2005, is not
an eligible renewable energy resource if it will cause an adverse
impact on instream beneficial uses or cause a change in the volume or
timing of streamflow.
(B) Notwithstanding subparagraph (A), a conduit hydroelectric
facility of 30 megawatts or less that commenced operation before
January 1, 2006, is an eligible renewable energy resource. A conduit
hydroelectric facility of 30 megawatts or less that commences
operation after December 31, 2005, is an eligible renewable energy
resource so long as it does not cause an adverse impact on instream
beneficial uses or cause a change in the volume or timing of
streamflow.
(C) A facility approved by the governing board of a local publicly
owned electric utility prior to June 1, 2010, for procurement to
satisfy renewable energy procurement obligations adopted pursuant to
former Section 387, shall be certified as an eligible renewable
energy resource by the Energy Commission pursuant to this article, if
the facility is a "renewable electrical generation facility" as
defined in Section 25741 of the Public Resources Code.
(D) (i) A small hydroelectric generation unit with a nameplate
capacity not exceeding 40 megawatts that is operated as part of a
water supply or conveyance system is an eligible renewable energy
resource only for the retail seller or local publicly owned electric
utility that procured the electricity from the unit as of December
31, 2005. No unit shall be eligible pursuant to this subparagraph if
an application for certification is submitted to the Energy
Commission after January 1, 2013. Only one retail seller or local
publicly owned electric utility shall be deemed to have procured
electricity from a given unit as of December 31, 2005.
(ii) Notwithstanding clause (i), a local publicly owned electric
utility that meets the criteria of subdivision (j) of Section 399.30
may sell to another local publicly owned electric utility electricity
from small hydroelectric generation units that qualify as eligible
renewable energy resources under clause (i), and that electricity may
be used by the local publicly owned electric utility that purchased
the electricity to meet its renewables portfolio standard procurement
requirements. The total of all those sales from the utility shall be
no greater than 100,000 megawatthours of electricity.
(iii) The amendments made to this subdivision by the act adding
this subparagraph are intended to clarify existing law and apply from
December 10, 2011.
(2) (A) A facility engaged in the combustion of municipal solid
waste shall not be considered an eligible renewable energy resource.
(B) Subparagraph (A) does not apply to generation before January
1, 2017, from a facility located in Stanislaus County that was
operational prior to September 26, 1996.
(f) "Procure" means to acquire through ownership or contract.
(g) "Procurement entity" means any person or corporation
authorized by the commission to enter into contracts to procure
eligible renewable energy resources on behalf of customers of a
retail seller pursuant to subdivision (f) of Section 399.13.
(h) (1) "Renewable energy credit" means a certificate of proof
associated with the generation of electricity from an eligible
renewable energy resource, issued through the accounting system
established by the Energy Commission pursuant to Section 399.25, that
one unit of electricity was generated and delivered by an eligible
renewable energy resource.
(2) "Renewable energy credit" includes all renewable and
environmental attributes associated with the production of
electricity from the eligible renewable energy resource, except for
an emissions reduction credit issued pursuant to Section 40709 of the
Health and Safety Code and any credits or payments associated with
the reduction of solid waste and treatment benefits created by the
utilization of biomass or biogas fuels.
(3) (A) Electricity generated by an eligible renewable energy
resource attributable to the use of nonrenewable fuels, beyond a de
minimis quantity used to generate electricity in the same process
through which the facility converts renewable fuel to electricity,
shall not result in the creation of a renewable energy credit. The
Energy Commission shall set the de minimis quantity of nonrenewable
fuels for each renewable energy technology at a level of no more than
2 percent of the total quantity of fuel used by the technology to
generate electricity. The Energy Commission may adjust the de minimis
quantity for an individual facility, up to a maximum of 5 percent,
if it finds that all of the following conditions are met:
(i) The facility demonstrates that the higher quantity of
nonrenewable fuel will lead to an increase in generation from the
eligible renewable energy facility that is significantly greater than
generation from the nonrenewable fuel alone.
(ii) The facility demonstrates that the higher quantity of
nonrenewable fuels will reduce the variability of its electrical
output in a manner that results in net environmental benefits to the
state.
(iii) The higher quantity of nonrenewable fuel is limited to
either natural gas or hydrogen derived by reformation of a fossil
fuel.
(B) Electricity generated by a small hydroelectric generation
facility shall not result in the creation of a renewable energy
credit unless the facility meets the requirements of subparagraph (A)
or (D) of paragraph (1) of subdivision (e).
(C) Electricity generated by a conduit hydroelectric generation
facility shall not result in the creation of a renewable energy
credit unless the facility meets the requirements of subparagraph (B)
of paragraph (1) of subdivision (e).
(D) Electricity generated by a facility engaged in the combustion
of municipal solid waste shall not result in the creation of a
renewable energy credit. This subparagraph does not apply to
renewable energy credits that were generated before January 1, 2017,
by a facility engaged in the combustion of municipal solid waste
located in Stanislaus County that was operational prior to September
26, 1996, and sold pursuant to contacts entered into before January
1, 2017.
(i) "Renewables portfolio standard" means the specified percentage
of electricity generated by eligible renewable energy resources that
a retail seller or a local publicly owned electric utility is
required to procure pursuant to this article.
(j) "Retail seller" means an entity engaged in the retail sale of
electricity to end-use customers located within the state, including
any of the following:
(1) An electrical corporation, as defined in Section 218.
(2) A community choice aggregator. A community choice aggregator
shall participate in the renewables portfolio standard program
subject to the same terms and conditions applicable to an electrical
corporation.
(3) An electric service provider, as defined in Section 218.3. The
electric service provider shall be subject to the same terms and
conditions applicable to an electrical corporation pursuant to this
article. This paragraph does not impair a contract entered into
between an electric service provider and a retail customer prior to
the suspension of direct access by the commission pursuant to Section
80110 of the Water Code.
(4) "Retail seller" does not include any of the following:
(A) A corporation or person employing cogeneration technology or
producing electricity consistent with subdivision (b) of Section 218.
(B) The Department of Water Resources acting in its capacity
pursuant to Division 27 (commencing with Section 80000) of the Water
Code.
(C) A local publicly owned electric utility.
(k) "WECC" means the Western Electricity Coordinating Council of
the North American Electric Reliability Corporation, or a successor
to the corporation.
SEC. 5. Section 399.30 of the Public Utilities Code is amended to
read:
399.30. (a) (1) To fulfill unmet long-term generation resource
needs, each local publicly owned electric utility shall adopt and
implement a renewable energy resources procurement plan that requires
the utility to procure a minimum quantity of electricity products
from eligible renewable energy resources, including renewable energy
credits, as a specified percentage of total kilowatthours sold to the
utility's retail end-use customers, each compliance period, to
achieve the targets of subdivision (c).
(2) Beginning January 1, 2019, a local publicly owned electric
utility subject to Section 9621 shall incorporate the renewable
energy resources procurement plan required by this section as part of
a broader integrated resource plan developed and adopted pursuant to
Section 9621.
(b) The governing board shall implement procurement targets for a
local publicly owned electric utility that require the utility to
procure a minimum quantity of eligible renewable energy resources for
each of the following compliance periods:
(1) January 1, 2011, to December 31, 2013, inclusive.
(2) January 1, 2014, to December 31, 2016, inclusive.
(3) January 1, 2017, to December 31, 2020, inclusive.
(4) January 1, 2021, to December 31, 2024, inclusive.
(5) January 1, 2025, to December 31, 2027, inclusive.
(6) January 1, 2028, to December 31, 2030, inclusive.
(c) The governing board of a local publicly owned electric utility
shall ensure all of the following:
(1) The quantities of eligible renewable energy resources to be
procured for the compliance period from January 1, 2011, to December
31, 2013, inclusive, are equal to an average of 20 percent of retail
sales.
(2) The quantities of eligible renewable energy resources to be
procured for all other compliance periods reflect reasonable progress
in each of the intervening years sufficient to ensure that the
procurement of electricity products from eligible renewable energy
resources achieves 25 percent of retail sales by December 31, 2016,
33 percent by December 31, 2020, 40 percent by December 31, 2024, 45
percent by December 31, 2027, and 50 percent by December 31, 2030.
The Energy Commission shall establish appropriate multiyear
compliance periods for all subsequent years that require the local
publicly owned electric utility to procure not less than 50 percent
of retail sales of electricity products from eligible renewable
energy resources.
(3) A local publicly owned electric utility shall adopt
procurement requirements consistent with Section 399.16.
(4) Beginning January 1, 2014, in calculating the procurement
requirements under this article, a local publicly owned electric
utility may exclude from its total retail sales the kilowatthours
generated by an eligible renewable energy resource that is credited
to a participating customer pursuant to a voluntary green pricing or
shared renewable generation program. Any exclusion shall be limited
to electricity products that do not meet the portfolio content
criteria set forth in paragraph (2) or (3) of subdivision (b) of
Section 399.16. Any renewable energy credits associated with
electricity credited to a participating customer shall not be used
for compliance with procurement requirements under this article,
shall be retired on behalf of the participating customer, and shall
not be further sold, transferred, or otherwise monetized for any
purpose. To the extent possible for generation that is excluded from
retail sales under this subdivision, a local publicly owned electric
utility shall seek to procure those eligible renewable energy
resources that are located in reasonable proximity to program
participants.
(d) (1) The governing board of a local publicly owned electric
utility shall adopt procurement requirements consistent with
subparagraph (B) of paragraph (4) of subdivision (a) of, and
subdivision (b) of, Section 399.13.
(2) The governing board of a local publicly owned electric utility
may adopt the following measures:
(A) Conditions that allow for delaying timely compliance
consistent with subdivision (b) of Section 399.15.
(B) Cost limitations for procurement expenditures consistent with
subdivision (c) of Section 399.15.
(e) The governing board of the local publicly owned electric
utility shall adopt a program for the enforcement of this article.
The program shall be adopted at a publicly noticed meeting offering
all interested parties an opportunity to comment. Not less than 30
days' notice shall be given to the public of any meeting held for
purposes of adopting the program. Not less than 10 days' notice shall
be given to the public before any meeting is held to make a
substantive change to the program.
(f) Each local publicly owned electric utility shall annually post
notice, in accordance with Chapter 9 (commencing with Section 54950)
of Part 1 of Division 2 of Title 5 of the Government Code, whenever
its governing body will deliberate in public on its renewable energy
resources procurement plan.
(g) A public utility district that receives all of its electricity
pursuant to a preference right adopted and authorized by the United
States Congress pursuant to Section 4 of the Trinity River Division
Act of August 12, 1955 (Public Law 84-386) shall be in compliance
with the renewable energy procurement requirements of this article.
(h) For a local publicly owned electric utility that was in
existence on or before January 1, 2009, that provides retail electric
service to 15,000 or fewer customer accounts in California, and is
interconnected to a balancing authority located outside this state
but within the WECC, an eligible renewable energy resource includes a
facility that is located outside California that is connected to the
WECC transmission system, if all of the following conditions are
met:
(1) The electricity generated by the facility is procured by the
local publicly owned electric utility, is delivered to the balancing
authority area in which the local publicly owned electric utility is
located, and is not used to fulfill renewable energy procurement
requirements of other states.
(2) The local publicly owned electric utility participates in, and
complies with, the accounting system administered by the Energy
Commission pursuant to this article.
(3) The Energy Commission verifies that the electricity generated
by the facility is eligible to meet the renewables portfolio standard
procurement requirements.
(i) Notwithstanding subdivision (a), for a local publicly owned
electric utility that is a joint powers authority of districts
established pursuant to state law on or before January 1, 2005, that
furnish electric services other than to residential customers, and is
formed pursuant to the Irrigation District Law (Division 11
(commencing with Section 20500) of the Water Code), the percentage of
total kilowatthours sold to the district's retail end-use customers,
upon which the renewables portfolio standard procurement
requirements in subdivision (b) are calculated, shall be based on the
authority's average retail sales over the previous seven years. If
the authority has not furnished electric service for seven years,
then the calculation shall be based on average retail sales over the
number of completed years during which the authority has provided
electric service.
(j) A local publicly owned electric utility in a city and county
that only receives greater than 67 percent of its electricity sources
from hydroelectric generation located within the state that it owns
and operates, and that does not meet the definition of a "renewable
electrical generation facility" pursuant to Section 25741 of the
Public Resources Code, shall be required to procure eligible
renewable energy resources, including renewable energy credits, to
meet only the electricity demands unsatisfied by its hydroelectric
generation in any given year, in order to satisfy its renewable
energy procurement requirements.
(k) (1) For the purposes of this subdivision, "hydroelectric
generation" means electricity generated from a hydroelectric facility
that satisfies all of the following:
(A) Is owned solely and operated by the local publicly owned
electric utility as of 1967.
(B) Serves a local publicly owned electric utility with a
distribution system demand of less than 150 megawatts.
(C) Involves a contract in which an electrical corporation
receives the benefit of the electric generation through June of 2014,
at which time the benefit reverts back to the ownership and control
of the local publicly owned electric utility.
(D) Has a maximum penstock flow capacity of no more than 3,200
cubic feet per second and includes a regulating reservoir with a
small hydroelectric generation facility producing fewer than 20
megawatts with a maximum penstock flow capacity of no more than 3,000
cubic feet per second.
(2) If, during a year within a compliance period set forth in
subdivision (b), a local publicly owned electric utility receives
greater than 50 percent of its retail sales from its own
hydroelectric generation, it is not required to procure eligible
renewable energy resources that exceed the lesser of the following
for that year:
(A) The portion of the local publicly owned electric utility's
retail sales unsatisfied by the local publicly owned electric utility'
s hydroelectric generation. For these purposes, retail sales supplied
by an increase in hydroelectric generation resulting from an
increase in the amount of water stored by a dam because the dam is
enlarged or otherwise modified after December 31, 2012, shall not
count as being retail sales supplied by the utility's own
hydroelectric generation.
(B) The soft target adopted by the Energy Commission for the
intervening years of the relevant compliance period.
(C) The cost limitation adopted pursuant to this section.
(3) This subdivision does not reduce or eliminate any renewable
procurement requirement for any compliance period ending prior to
January 1, 2014.
(4) This subdivision does not require a local publicly owned
electric utility to purchase additional eligible renewable energy
resources in excess of the procurement requirements of subdivision
(c).
(5) The Energy Commission shall adjust the total quantities of
eligible renewable energy resources to be procured by a local
publicly owned electric utility for a compliance period to reflect
any reductions required pursuant to paragraph (2).
(l) (1) For purposes of this subdivision, "large hydroelectric
generation" means electricity generated from a hydroelectric facility
that is not an eligible renewable energy resource and provides
electricity to a local publicly owned electric utility from
facilities owned by the federal government as a part of the federal
Central Valley Project or a joint powers agency formed and created
pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of
Title 1 of the Government Code.
(2) If, during a year within a compliance period set forth in
subdivision (b), a local publicly owned electric utility receives
greater than 50 percent of its retail sales from large hydroelectric
generation, it is not required to procure eligible renewable energy
resources that exceed the lesser of the following for that year:
(A) The portion of the local publicly owned electric utility's
retail sales unsatisfied by the local publicly owned electric utility'
s large hydroelectric generation.
(B) The soft target adopted by the Energy Commission for the
intervening years of the relevant compliance period.
(3) Except for an existing agreement effective as of January
1, 2015, or extension or renewal of that agreement, any new
procurement commitment shall not be eligible to count towards the
determination that the local publicly owned electric utility receives
more than 50 percent of its retail sales from large hydroelectric
generation in any year.
(4) The Energy Commission shall adjust the total quantities of
eligible renewable energy resources to be procured by a local
publicly owned electric utility for a compliance period to reflect
any reductions required pursuant to paragraph (2).
(5) This subdivision does not modify the compliance obligation of
a local publicly owned electric utility to satisfy the requirements
of subdivision (c) of Section 399.16.
(m) (1) (A) For purposes of this subdivision, "unavoidable
long-term contracts and ownership agreements" means commitments for
electricity from a coal-fired powerplant, located outside the state,
originally entered into by a local publicly owned electric utility
before June 1, 2010, that is not subsequently modified to result in
an extension of the duration of the agreement or result in an
increase in total quantities of energy delivered during any
compliance period set forth in subdivision (b).
(B) The governing board of a local publicly owned electric utility
shall demonstrate in its renewable energy resources procurement plan
required pursuant to subdivision (f) that any cancellation or
divestment of the commitment would result in significant economic
harm to its retail customers that cannot be substantially mitigated
through resale, transfer to another entity, early closure of the
facility, or other feasible measures.
(2) For the compliance period set forth in paragraph (4) of
subdivision (b), a local publicly owned electric utility meeting the
requirement of subparagraph (B) of paragraph (1) may adjust its
renewable energy procurement targets to ensure that the procurement
of additional electricity from eligible renewable energy resources,
in combination with the procurement of electricity from unavoidable
long-term contracts and ownership agreements, does not exceed the
total retail sales of the local publicly owned electric utility
during that compliance period. The local publicly owned electric
utility may limit its procurement of eligible renewable energy
resources for that compliance period to no less than an average of 33
percent of its retail sales.
(3) The Energy Commission shall approve any reductions in
procurement targets proposed by a local publicly owned electric
utility if it determines that the requirements of this subdivision
are satisfied.
(n) A local publicly owned electric utility shall retain
discretion over both of the following:
(1) The mix of eligible renewable energy resources procured by the
utility and those additional generation resources procured by the
utility for purposes of ensuring resource adequacy and reliability.
(2) The reasonable costs incurred by the utility for eligible
renewable energy resources owned by the utility.
(o) The Energy Commission shall adopt regulations specifying
procedures for enforcement of this article. The regulations shall
include a public process under which the Energy Commission may issue
a notice of violation and correction against a local publicly owned
electric utility for failure to comply with this article, and for
referral of violations to the State Air Resources Board for penalties
pursuant to subdivision (n).
(p) (1) Upon a determination by the Energy Commission that a local
publicly owned electric utility has failed to comply with this
article, the Energy Commission shall refer the failure to comply with
this article to the State Air Resources Board, which may impose
penalties to enforce this article consistent with Part 6 (commencing
with Section 38580) of Division 25.5 of the Health and Safety Code.
Any penalties imposed shall be comparable to those adopted by the
commission for noncompliance by retail sellers.
(2) Any penalties collected by the State Air Resources Board
pursuant to this article shall be deposited in the Air Pollution
Control Fund and, upon appropriation by the Legislature, shall be
expended for reducing emissions of air pollution or greenhouse gases
within the same geographic area as the local publicly owned electric
utility.
SEC. 6. Section 400 of the Public Utilities Code is amended to
read:
400. The commission and the Energy Commission shall do all of the
following in furtherance of meeting the state's clean energy and
pollution reduction objectives:
(a) Take into account the use of distributed generation to the
extent that it provides economic and environmental benefits in
disadvantaged communities identified pursuant to Section 39711 of the
Health and Safety Code.
(b) Take into account the opportunities to decrease costs and
increase benefits, including pollution reduction and grid
integration, using renewable and nonrenewable technologies with zero
or lowest feasible emissions of greenhouse gases, criteria
pollutants, and toxic air contaminants onsite in proceedings
associated with meeting the objectives.
(c) Where feasible, authorize procurement of resources to provide
grid reliability services that minimize reliance on system power and
fossil fuel resources and, where feasible, cost effective, and
consistent with other state policy objectives, increase the use of
large- and small-scale energy storage with a variety of technologies,
targeted energy efficiency, demand response, including, but not
limited to, automated demand response, eligible renewable energy
resources, or other renewable and nonrenewable technologies with zero
or lowest feasible emissions of greenhouse gases, criteria
pollutants, and toxic air contaminants onsite to protect system
reliability.
(d) (1) Review technology incentive, research, development,
deployment, and market facilitation programs overseen by the
commission and the Energy Commission and make recommendations to
advance state clean energy and pollution reduction objectives and
provide benefits to disadvantaged communities identified pursuant to
Section 39711 of the Health and Safety Code.
(2) The Energy Commission shall review technology incentive,
research, development, deployment, and market facilitation programs
operating in California and overseen by academia and the private and
nonprofit sectors, and make recommendations to advance state clean
energy and pollution reduction objectives and provide benefits to
disadvantaged communities identified pursuant to Section 39711 of the
Health and Safety Code.
(e) To the extent feasible and consistent with the state and
federal constitutions, give first priority to the manufacture and
deployment of clean energy and pollution reduction technologies that
create employment opportunities in California, including high wage,
highly skilled employment opportunities, and increased investment in
the state.
(f) Establish a publicly available tracking system to provide
up-to-date information at least once annually on progress toward
meeting the clean energy and pollution reduction goals of the Clean
Energy and Pollution Reduction Act of 2015.
(g) Establish an advisory group consisting of representatives from
disadvantaged communities identified pursuant to Section 39711 of
the Health and Safety Code. The advisory group shall review and
provide advice on programs proposed to achieve clean energy and
pollution reduction and determine whether those proposed programs
will be effective and useful in disadvantaged communities.
SEC. 7. Section 454.51 of the Public Utilities Code is amended to
read:
454.51. The commission shall do all of the following:
(a) Identify a diverse and balanced portfolio of resources needed
to ensure a reliable electricity supply that provides optimal
integration of renewable energy in a cost-effective manner. The
portfolio shall rely upon zero carbon-emitting resources to the
maximum extent reasonable and be designed to achieve any statewide
greenhouse gas emissions limit established pursuant to the California
Global Warming Solutions Act of 2006 (Division 25.5 (commencing with
Section 38500) of the Health and Safety Code) or any successor
legislation.
(b) Direct each electrical corporation to include, as part of its
proposed procurement plan, a strategy for procuring best-fit and
least-cost resources to satisfy the portfolio needs identified by the
commission pursuant to subdivision (a).
(c) Ensure that the net costs of any incremental renewable energy
integration resources procured by an electrical corporation to
satisfy the need identified in subdivision (a) are allocated on a
fully nonbypassable basis consistent with the treatment of costs
identified in paragraph (2) of subdivision (c) of Section 365.1.
(d) Permit community choice aggregators to submit proposals for
satisfying their portion of the renewable integration need identified
in subdivision (a). If the commission finds this need is best met
through long-term procurement commitments for resources, community
choice aggregators shall also be required to make long-term
commitments for resources. The commission shall approve proposals
pursuant to this subdivision if it finds all of the following:
(1) The resources proposed by a community choice aggregator will
provide equivalent integration of renewable energy.
(2) The resources proposed by a community choice aggregator will
promote the efficient achievement of state energy policy objectives,
including reductions in greenhouse gas emissions.
(3) Bundled customers of an electrical corporation will be
indifferent from the approval of the community choice aggregator
proposals.
(e) Ensure that all costs resulting from nonperformance to satisfy
the need in subdivision (a) or (d), as applicable, shall be borne by
the electrical corporation or community choice aggregator that
failed to perform.
SEC. 8. Section 9508 of the Public Utilities Code is amended to
read:
9508. (a) In developing the rules and procedures specified in
this section and in Section 9507, the Energy Commission shall seek to
minimize the reporting burden and cost of reporting that it imposes
on local publicly owned electric utilities.
(b) A local publicly owned electric utility shall annually submit
to the Energy Commission documentation regarding eligible renewable
energy resources procurement contracts that it executed during the
prior year, as follows:
(1) A description of the eligible renewable energy resource,
including the duration of the contract or electricity purchase
agreement.
(2) A description and identification of the electrical generating
facility providing the eligible renewable energy resource under the
contract.
(3) An estimate of the percentage increase in the utility's total
retail sales of electricity from eligible renewable energy resources
that will result from the contract.
(c) A local publicly owned electric utility shall annually submit
to the Energy Commission documentation regarding the utility's
progress toward attaining the renewables portfolio standard
established pursuant to Section 399.30.
(d) A local publicly owned electric utility shall, on an annual
basis, make available to the Legislature and the Energy Commission
information relating to the utility's solar initiative program
established pursuant to Section 2854, including the rated generating
capacity of installed solar energy systems receiving monetary
incentives through the utility's program, the total number of solar
energy systems installed, the total number of applications for the
utility's program, the amount of monetary incentives awarded, and the
contribution toward the program goals of the California Solar
Initiative (Article 1 (commencing with Section 2851) of Chapter 9 of
Part 2 of Division 1).
(e) For the purposes of this section, "eligible renewable energy
resource," "renewables portfolio standard," and "procure" have the
same meanings as these terms have in the California Renewables
Portfolio Standard Program (Article 16 (commencing with Section
399.11) of Chapter 2.3 of Part 1 of Division 1).
SEC. 9. Section 9621 of the Public Utilities Code is amended to
read:
9621. (a) This section shall apply to a local publicly owned
electric utility with an annual electrical demand exceeding 700
gigawatthours, as determined on a three-year average commencing
January 1, 2013.
(b) On or before January 1, 2019, the governing board of a local
publicly owned electric utility shall adopt an integrated resource
plan and a process for updating the plan at least once every five
years to ensure the utility achieves all of the following:
(1) Meets the greenhouse gas emissions reduction targets
established by the State Air Resources Board, in coordination with
the commission and the Energy Commission, for the electricity sector
and each local publicly-owned electric utility that reflect the
electricity sector's percentage in achieving the economywide
greenhouse gas emissions reductions of 40 percent from 1990 levels by
2030.
(2) Ensures procurement of at least 50 percent eligible renewable
energy resources by 2030 consistent with Article 16 (commencing with
Section 399.11) of Chapter 2.3 of Part 1 of Division 1.
(3) Meets the goals specified in subparagraphs (D) to (H),
inclusive, of paragraph (1) of subdivision (a) of Section 454.52, and
the goal specified in subparagraph (C) of paragraph (1) of
subdivision (a) of Section 454.52, as that goal is applicable to each
local publicly owned electric utility. A local publicly owned
electric utility shall not, solely by reason of this paragraph, be
subject to requirements otherwise imposed on electrical corporations.
(c) (1) The integrated resource plan shall address procurement for
the following:
(A) Energy efficiency and demand response resources pursuant to
Section 9615.
(B) Energy storage requirements pursuant to Chapter 7.7
(commencing with Section 2835) of Part 2 of Division 1.
(C) Transportation electrification.
(D) A diversified procurement portfolio consisting of both
short-term and long-term electricity, electricity-related, and demand
response products.
(E) The resource adequacy requirements established pursuant to
Section 9620.
(2) (A) The governing board of the local publicly owned electric
utility may authorize all source procurement that includes various
resource types, including demand-side resources, supply side
resources, and resources that may be either demand-side resources or
supply side resources, to ensure that the local publicly owned
electric utility procures the optimum resource mix that meets the
objectives of subdivision (b).
(B) The governing board may authorize procurement of resource
types that will reduce overall greenhouse gas emissions from the
electricity sector and meet the other goals specified in subdivision
(b), but due to the nature of the technology or fuel source may not
compete favorably in price against other resources over the time
period of the integrated resource plan.
(d) A local publicly owned electric utility shall satisfy the
notice and public disclosure requirements of subdivision (f) of
Section 399.30 with respect to any integrated resource plan or plan
update it considers.
