Bill Text: CA SB765 | 2015-2016 | Regular Session | Amended
Bill Title: Energy: California Market Transformation Administrator.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2016-11-30 - From Assembly without further action. [SB765 Detail]
Download: California-2015-SB765-Amended.html
BILL NUMBER: SB 765 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 18, 2015
AMENDED IN ASSEMBLY JULY 7, 2015
AMENDED IN SENATE JUNE 2, 2015
AMENDED IN SENATE APRIL 6, 2015
INTRODUCED BY Senator Wolk
FEBRUARY 27, 2015
An act to amend Section 399 of, and to add Sections
Section 399.5 and 399.6 to,
the Public Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 765, as amended, Wolk. Energy: California Market Transformation
Administrator.
The Reliable Electric Service Investments Act requires the Public
Utilities Commission (PUC), in evaluating energy efficiency
investments, to ensure that local and regional interests, multifamily
dwellings, and energy service industry capabilities are incorporated
into program portfolio design and that local governments,
community-based organizations, and energy efficiency service
providers are encouraged to participate in program implementation
where appropriate.
This bill would require the PUC, in ensuring that prudent
investments in energy efficiency are made and produce cost-effective
energy savings, reduce customer demand, and support the state's
greenhouse gas emissions reduction goals, to contract with an
independent entity to serve as the California Market Transformation
Administrator (CalMTA). The bill would require the PUC to require the
CalMTA to take certain actions, including, among other
actions, working work in concert with other
energy efficiency administrators that are carrying out energy
efficiency activities under the PUC's oversight to incorporate
long-term market transformation strategies into the state's energy
efficiency portfolio and to encourage
portfolio. The bill would requir e the PUC to modify the
energy efficiency programs that it adopts to incorporate a portfolio
of long-term market transformation initiatives on a statewide basis.
The bill would require the PUC, as part of the portfolio, to take
certain actions, including, among other actions, encouraging
local publicly owned electric utilities to voluntarily
participate in the CalMTA's planning efforts and
support the market transformation initiatives administered
by the CalMTA adopted by the PUC to ensure
statewide consistency and full market deployment. Because a violation
of these requirements would be a crime, this bill would impose a
state-mandated local program. The bill would require the PUC
to consult with the CalMTA regarding demand-side energy management
programs.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 399 of the Public Utilities Code is amended to
read:
399. (a) This article shall be known, and may be cited, as the
Reliable Electric Service Investments Act.
(b) The Legislature finds and declares that safe, reliable
electric service is of utmost importance to the citizens of this
state, and its economy.
(c) The Legislature further finds and declares that in order to
ensure that the citizens of this state continue to receive safe,
reliable, affordable, and environmentally sustainable electric
service, it is essential that prudent investments continue to be made
in all of the following areas:
(1) To protect the integrity of the electric distribution grid.
(2) To ensure an adequately sized and trained utility workforce.
(3) To ensure cost-effective energy efficiency improvements.
(4) To achieve a sustainable supply of renewable energy.
(5) To advance public interest research, development, and
demonstration programs not adequately provided by competitive and
regulated markets.
(d) It is the intent of the Legislature to reaffirm, without
requiring revision, California's doctrine, as reflected in regulatory
and judicial decisions, regarding electrical corporations'
reasonable opportunity to recover costs and investments associated
with their electric distribution grid and the reasonable opportunity
to attract capital for investment on reasonable terms.
(e) The Legislature further finds and declares all of the
following:
(1) Acting under applicable constitutional and statutory
authorities, the Public Utilities Commission and the boards of local
publicly owned electric utilities have included in regulated
electricity prices, investments that are essential to maintaining
system reliability, reducing California electricity users' bills, and
mitigating environmental costs of California users' electricity
consumption.
(2) Among the most important of these "system benefits"
investments categories are energy efficiency, renewable energy, and
public interest research, development and demonstration (RD&D).
(3) Energy efficiency investments funded from California's
usage-based charges on electricity distribution help improve
systemwide reliability by reducing demand in times and areas of
system congestion, and at the same time reduce all California
electricity users' costs. These investments also significantly reduce
environmental costs associated with California's electricity
consumption, including, but not limited to, degradation of the state'
s air, water, and land resources.
(4) California's in-state renewable energy resources help
alleviate supply deficits that could threaten electric system
reliability, reduce environmental costs associated with California's
electricity consumption, and increase the diversity of the
electricity system's fuel mix, reducing electricity users' exposure
to fossil fuel price volatility.
(5) California's public interest RD&D investments enhance private
and regulated sector investment in electricity system technologies,
and are designed specifically to help ensure sustained improvement in
the economic and environmental performance of the distribution,
transmission, and generation and end-use systems that serve
California electricity users.
(6) California has established a long tradition of recovering
system benefits investments through usage-based electricity charges,
which is reflected in at least two decades of electricity price
regulation by the commission, the boards of local publicly owned
electric utilities, and the mandate of the Legislature in Chapter 854
of the Statutes of 1996 (Assembly Bill 1890 of the 1995-96 Regular
Session of the Legislature) and Chapter 905 of the Statutes of 1997
(Senate Bill 90 of the 1997-98 Regular Session of the Legislature).
(7) Unless the Legislature acts to extend the mandate of this
article for minimum levels of usage based system benefits charges,
California electricity users are at substantial risk of higher
economic and environmental costs and degraded reliability.
(f) (1) The Legislature further finds and declares all of the
following:
(A) Targeted energy efficiency market transformation initiatives
aimed at long-term transformation of defined markets are a necessary
component of a comprehensive, balanced, and cost-effective energy
efficiency portfolio.
(B) Because tensions can exist between market transformation
initiatives and energy efficiency resource acquisition strategies, it
is important to recognize the differences between what each of these
strategies can accomplish and to pursue both in California.
(C) The existing energy efficiency portfolio overseen by the
commission focuses on energy efficiency resource acquisition.
(D) The creation of a single entity with responsibility for
planning, coordinating, and managing the execution of statewide
energy efficiency market transformation initiatives in concert with
other state energy efficiency activities, subject to the commission's
oversight and that carries out its duties in consultation with the
Energy Commission and all interested local publicly owned electric
utilities, would assist the state in advancing its energy efficiency
and greenhouse gas reduction goals without increasing the overall
funding for the energy efficiency portfolio overseen by the
commission.
(2) It is the intent of the Legislature that demand-side energy
management programs should be coordinated, to the extent practicable,
to support utility customers in making well-informed, cost-effective
decisions about investments in onsite energy efficiency, demand
response, and renewable distributed generation, and to provide
efficiencies in the administration and delivery of ratepayer-funded
demand-side energy management programs in California.
SEC. 2. Section 399.5 is added to the Public Utilities Code, to
read:
399.5. (a) For purposes of this section and Section
399.6, section, the following terms mean the
following:
(1) "Demand-side energy management programs" has the same meaning
as set forth in Section 323.5.
(2) "California Market Transformation Administrator" or "CalMTA"
means a private contractor selected by the commission to coordinate
the planning and execution of the state's efforts to advance
electricity and natural gas energy efficiency through long-term
market transformation strategies.
(3) "Energy efficiency" means delivering equal or more services
with less energy input from an energy source.
(3)
( 4) "Market transformation" means a
strategic process to intervene in a market to create lasting change
in market behavior by removing identified barriers or exploiting
opportunities to accelerate the adoption of all cost-effective energy
efficiency as a matter of standard practice. Targeted
intervention strategies that induce sustained adoption and market
penetration of energy efficient technologies and practices through
structural changes in the market and in behaviors of market actors
such that government intervention in the form of monetary inducements
is no longer necessary.
(4) "Resources acquisition" means the generation of electricity or
natural gas savings that are sufficiently reliable, predictable, and
measurable to replace electricity or natural gas supplies in the
utility energy resource planning process.
(b) (1) In carrying out its responsibilities to ensure that
prudent investments in energy efficiency are made and produce
cost-effective energy savings, reduce customer demand, and support
the state's greenhouse gas emissions reduction goals, the commission,
on or before July 1, 2017, shall contract with an independent entity
to serve as the California Market Transformation Administrator that
will coordinate the planning and execution of the state's efforts to
advance energy efficiency through long-term market transformation
strategies, as well as advise on and otherwise assist the commission
with the coordination of demand-side energy management programs under
the commission's jurisdiction.
(2) The initial CalMTA contract shall be for a period of not less
than five years and may be terminated if the CalMTA fails to meet the
performance benchmarks established in the contract.
(c) (1) An entity eligible to be a CalMTA shall have a mission
that is fully aligned with promoting energy efficiency and
conservation, including market transformation.
(2) The marketing, education, and outreach plans for the CalMTA's
market transformation initiatives shall be developed and implemented
as part of the Energy Upgrade California statewide marketing,
education, and outreach efforts, where practical.
(d) The commission shall require the CalMTA, at a minimum, to
do all of the following: work in concert with
other energy efficiency administrators carrying out energy
efficiency activities under the commission's oversight to incorporate
long-term market transformation strategies into the state's
portfolio.
(1) Work in concert with other energy efficiency administrators
carrying out energy efficiency activities under the commission's
oversight to incorporate long-term market transformation strategies
into the state's portfolio.
(e) The commission shall modify the energy efficiency programs
that it adopts to incorporate a portfolio of long-term market
transformation initiatives on a statewide basis, and, as part of the
portfolio, shall do all of the following, without increasing the
overall funding for the energy efficiency programs:
(2)
( 1) Create market conditions that will
accelerate and sustain the market adoption of emerging energy
efficiency products, services, and practices in California.
(3)
( 2) Meet interim and long-term targets
adopted by the commission related to the transformation of targeted
markets, as well as provide a cost-effective portfolio of market
transformation initiatives over the life of the contract.
initiatives.
(4) Submit to the commission quarterly reports detailing
expenditures and annual reports showing expenditures and progress
towards commission-established interim and long-term targets.
(5)
( 3) Contribute improved efficiencies in the
delivery of ratepayer-funded energy efficiency activities in
California by taking a statewide approach to defined markets targeted
for transformation.
(6)
( 4) Coordinate the planning for and
execution of market transformation initiatives, as appropriate, with
utility administered energy efficiency activities,
other energy efficiency activities under the commission's
jurisdiction, including, but not limited to, energy efficiency
activities administered by community choice aggregators pursuant to
Section 381.1, and low-income energy efficiency programs in
California, including the rate-payer funded program required by
Section 2790 and overseen by the commission, as well as the federal
Low-Income Home Energy Assistance Program administered by the
Department of Community Services and Development.
(7) Build upon the energy efficiency expertise and capabilities
developed in the state, such as by providing flexibility for other
energy efficiency administrators to carry out some of the market
transformation activities identified by the CalMTA, so as to minimize
confusion and leverage existing relationships between utilities,
community choice aggregators, and other providers of energy
efficiency services, and their customers.
(8)
( 5) Encourage local publicly owned electric
utilities to voluntarily participate in the
CalMTA's planning efforts in, and otherwise
support support, the market
transformation initiatives administered by the CalMTA
adopted by the commission to ensure statewide
consistency and full market deployment.
(9) Collaborate
(6) Collaborate, as necessary,
with regional and national energy efficiency entities on market
transformation efforts.
(e)
( f) The commission shall protect ratepayers
from performance risks inherent in market transformation initiatives
by, at a minimum, doing all of the following:
(1) Requiring a rigorous upfront vetting process for program
concepts, to be conducted either by the commission as part
of its oversight function or by the CalMTA. The CalMTA shall make a
convincing case that concepts to ensure each
proposed market intervention would produce lasting energy efficiency
benefits that would more than pay for the long-term costs of the
market intervention.
(2) Balancing the level of ratepayer investment in market
transformation initiatives against resources acquisition initiatives,
such that:
(A) The budget for market transformation initiatives, including
the budget to be managed by the CalMTA and the commission's costs
associated with managing the contract with the CalMTA, is initially
set by the commission at a level not more than 10 percent of the
total budget for energy efficiency activities overseen by the
commission, excluding low-income energy efficiency programs.
(B) The reasonableness of the initial funding level for market
transformation initiatives is evaluated by the commission over the
course of the initial contract term with the CalMTA and adjusted as
the commission deems appropriate to support the objectives of this
section.
(3)
( 2) Continuously evaluating the market
transformation initiatives administered by the CalMTA
and focusing on whether the targeted markets are evolving
in the manner intended, such that the initiatives can be corrected
mid-course or abandoned, as necessary, to maximize long-term energy
savings from the CalMTA's portfolio of
initiatives.
(f)
( g) In implementing this section, the
commission shall consult with the Energy Commission to ensure that
market transformation functions carried out by
the CalMTA are appropriately coordinated with the energy
efficiency related activities conducted or overseen by the Energy
Commission.
(g)
( h) The commission shall evaluate and
adopt, as necessary, new criteria to support and accurately evaluate
the benefits of market transformation.
(h) The commission, in consultation with the Energy Commission and
the CalMTA, shall determine when and how to reflect potentially
achievable cost-effective electricity and natural gas savings from
energy efficiency market transformation initiatives in carrying out
its obligations pursuant to Sections 454.55 and 454.56. In setting
energy efficiency targets for electrical or gas corporations pursuant
to Section 454.55 or 454.56, the commission shall consider whether
energy savings expected to be delivered through market transformation
initiatives administered by the CalMTA should be excluded from the
targets established for the electrical or gas corporations.
SEC. 3. Section 399.6 is added to the Public
Utilities Code, to read:
399.6. (a) The commission shall consult with the CalMTA on how
best to integrate demand-side energy management programs to support
utility customers in making well-informed, cost-effective decisions
about investment in onsite energy efficiency, demand response, and
renewable distributed generation, as well as customer-sited energy
storage systems, and to provide economic and organizational
efficiencies in the administration and delivery of ratepayer-funded
demand-side energy management programs in California.
(b) The commission shall consult with the CalMTA on how best to
design and deploy demand-side energy management programs and
encourage customer-sited energy storage systems so as to provide the
most cost-effective environmental and economic benefits from an
electric system planning and operation perspective.
(c) The commission shall include in the contract executed with a
CalMTA pursuant to Section 399.5 the advisory functions specified in
this section related to integrating demand-side energy management
programs.
SEC. 4. SEC. 3. 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.
