Bill Text: CA SB1432 | 2021-2022 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Electricity: resource adequacy requirements.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Vetoed) 2022-09-28 - In Senate. Consideration of Governor's veto pending. [SB1432 Detail]
Download: California-2021-SB1432-Amended.html
The (a) The commission, in coordination with the Independent System Operator, in a new or existing proceeding, shall develop a pilot program for aggregated customer-sited zero-emission distributed energy resources, as defined in Section 8370, resources to assess the value of potential energy exports from those resources for purposes of fulfilling the requirements of the resource adequacy program,
pursuant to Section 380. The commission shall, at a minimum, design the pilot program so that it addresses the eight issues outlined in Section 3.6 of commission Decision 22-06-050 (June 23, 2022) Decision Adopting Local Capacity Obligations for 2023–2025, Flexible Capacity Obligations for 2023, and Reform Track Framework. Framework. The commission may design the pilot program to test the reliability value and market revenue potentials of energy exports as compared to the value and potentials provided by nonexporting and load-modifying distributed energy resources used to enable demand response or peak load reduction.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
Bill Title: Electricity: resource adequacy requirements.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Vetoed) 2022-09-28 - In Senate. Consideration of Governor's veto pending. [SB1432 Detail]
Download: California-2021-SB1432-Amended.html
|
Amended
IN
Assembly
August 25, 2022 |
|
Amended
IN
Assembly
June 30, 2022 |
|
Amended
IN
Assembly
June 15, 2022 |
|
Amended
IN
Senate
March 16, 2022 |
CALIFORNIA LEGISLATURE—
2021–2022 REGULAR SESSION
Senate Bill
No. 1432
| Introduced by Senator Hueso |
February 18, 2022 |
An act to amend Section 380 of, and to add Section 380.3 to, the Public Utilities Code, relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
SB 1432, as amended, Hueso.
Electricity: resource adequacy requirements.
Existing law requires the Public Utilities Commission, in consultation with the Independent System Operator, to establish resource adequacy requirement requirements for all load-serving entities, defined as including electrical corporations, electric service providers, and community choice aggregators. Existing law requires the resource adequacy program to achieve certain objectives, including, among other objectives, maximizing the ability of community choice aggregators to determine the generation resources used to serve their customers.
This bill would revise and recast the objectives of the resource adequacy program. The bill would require the
commission to analyze, compile, and publish on its internet website an annual report on the compliance status of load-serving entities.
Existing law requires the commission to determine and authorize the most efficient and equitable means for ensuring that community choice aggregators can determine the generation resources used to service their customers.
This bill would additionally require the commission to determine and authorize the most efficient and equitable means for ensuring that electric service providers can determine the generation resources used to serve their customers. The bill would also require the Independent System Operator to ensure that the cost of backstop procurement and associated greenhouse gas attributes are equitably allocated.
This bill would require the commission, in coordination with the Independent System Operator, in a new or existing proceeding, to
develop a pilot program for aggregated customer-sited zero-emission distributed energy resources, as defined, to assess the value of potential energy exports from those resources for purposes of fulfilling the requirements of the resource adequacy program, as specified. The bill would exclude from participation in the pilot program customers taking service under a customer-generator tariff unless the customer is only compensated in a specified manner. The bill would authorize the commission to allocate certain funds to carry out the pilot program and would specify the resources eligible to participate in the pilot program, as provided.
This bill would incorporate additional changes to Section 380 of the Public Utilities Code proposed by SB 1158 to be operative
only if this bill and SB 1158 are enacted and this bill is enacted last.
Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.
To the extent that certain provisions of this bill would require an order, decision, rule, direction, demand, or requirement of the commission to implement, the bill would impose a state-mandated local program by creating new crimes.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
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 380 of the Public Utilities Code is amended to read:380.
(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 and distributed energy products and tariffs that facilitate the economic dispatch and use of demand response and distributed energy products that can either meet or reduce a load-serving entity’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 and electric service providers to determine the
resources used to serve their customers.
(6) Incorporate industry planning standards when setting compliance obligations.
(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 analyze, compile, and publish on its internet website an annual report on the compliance status of load-serving
entities.
(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 and electric service providers 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) The Independent System Operator shall ensure that the cost of backstop procurement and associated greenhouse gas attributes are equitably allocated.
(l) 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. 1.5.
Section 380 of the Public Utilities Code is amended to read:380.
(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
new, or maintain existing existing, demand response and distributed energy products and tariffs that facilitate the economic dispatch and use of demand response and distributed energy products that can either meet or reduce an electrical corporation’s a load-serving entity’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 and electric service providers to determine the generation resources used to serve their customers.
(6) Incorporate industry planning standards when setting compliance obligations.
(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 board of Directors
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 analyze, compile, and publish on its internet website an annual report on the compliance status of load-serving entities.
(f) (1) 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.
(2) The commission shall calculate and publish annually on its internet website, in a new report or as part of another report, the percentage of each
load-serving entity’s local and system resource adequacy requirements from the previous calendar year that was met with capacity from eligible renewable energy resources pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11)), other zero-carbon resources, including large hydroelectric and nuclear resources, or energy storage resources. In determining the percentage of each load-serving entity’s resource adequacy requirements, the commission shall include all directly owned or contracted resources and each load-serving entity’s allocation of any centrally procured resources or allocation of resources pursuant to any other mechanism that involves an assignment or allocation of resources purchased or owned by a single buyer, and shall exclude any share of a load-serving entity’s resources that were allocated to another load-serving entity.
(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 and electric service providers 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, as well as and in planning proceedings and associated analyses, and shall encourage reflection of these changes in demand in the operation of the grid.
(k) The Independent System Operator shall ensure that the cost of backstop procurement and associated greenhouse gas attributes are equitably allocated.
(k)
(l) 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 380.3 is added to the Public Utilities Code, to read:380.3.
(b) Customer
participation in the pilot program pursuant to subdivision (a) shall not include customers taking service under a customer-generator tariff pursuant to Sections 2827 or 2827.1 unless the customer is only compensated at avoided cost for the energy export and not avoided resource adequacy cost under the tariff.
(c) To carry out the pilot program pursuant to subdivision (a), the commission may allocate funds provided by the authorized annual collection pursuant to paragraph (2) of subdivision (a) of Section 379.6 or funds as appropriated by the Legislature, and shall encourage the participation of the Independent System Operator and different load-serving entity types.
(d) Resources eligible to participate in the pilot program pursuant to this section shall include, but are not limited to, any of the following provided that they also meet the emissions standards under subdivision (b)
of Section 8370:
(1) A “renewable electrical generation facility” as defined in Section 25741 of the Public Resources Code.
(2) A “zero-carbon resource” consistent with Section 454.53.
(3) Energy storage associated with paragraphs (1) and (2).
(e) For purposes of this section, the following definitions apply:
(1) “Distributed energy resource” has the same meaning as that term is defined in subdivision (b) of Section 8370.
(2) “Load-serving entity” has the same meaning as that term is defined in Section 380.
