CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 839

Introduced by Senator Dodd

January 10, 2022

An act to add Section 380.6 to, and to repeal Section 740.10 of, the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


SB 839, as introduced, Dodd. Electricity: demand response.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. Existing law requires each load-serving entity, defined as including electrical corporations, electric service providers, and community choice aggregators, to maintain physical generating capacity and electrical demand response adequate to meet its electrical demand requirements. Existing law requires the commission to establish rules for how and when backup generation may be used within a demand response program and to establish reporting and data collection requirements to verify compliance with those rules. Pursuant to existing law, the commission has authorized the state’s 3 largest electrical corporations to offer reliability-based demand response programs, including the base interruptible program, which is available to qualifying nonresidential customers of an electrical corporation.
This bill would expressly require each of those large electrical corporations to administer the base interruptible program, except as specified. The bill would require each of those large electrical corporations to make its base interruptible program available to its qualifying commercial and industrial customers regardless of the load-serving entity that is those customers’ supplier of electricity. Because the bill would require actions by those load-serving entities that are community choice aggregators, the bill would impose a state-mandated local program.
The bill would require the commission to implement a pilot economic demand response program or optional rate design, to be administered by those large electrical corporations, in which base interruptible program participants may elect to participate, to operate for a 4-year period, as specified.
Under existing law, the Scheduled Load Reduction Program requires each electrical corporation to develop and offer to its customers the opportunity to participate in a demand reduction program and requires the commission to develop appropriate incentives for customers to participate in the program.
This bill would repeal that program.
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.
Because the provisions of this bill would be a part of the act and because a violation of a commission action implementing its requirements would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for specified reasons.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) The rolling blackouts of August 2020 and the risk of rolling blackouts in the summer of 2022 are unacceptable and unbefitting the State of California.
(2) The people of California should not endure rolling blackouts and the possibility of electricity outages must be minimized.
(3) The risk of prolonged heat waves, like those that contributed to the electrical grid’s reliability emergencies in August and September 2020, and other extreme weather events will continue due to climate change.
(4) California’s commitment to preferred resources, such as energy efficiency, demand response, and clean energy and eligible renewable energy resources, as prioritized in the loading order established by the Public Utilities Commission and in Section 454.5 of the Public Utilities Code, remains unwavering and has been strengthened by the electrical grid’s reliability emergencies and risks of extreme weather events.
(5) The Public Utilities Commission has implemented near-term measures to address reliability concerns in the summers of 2021 and 2022, with a focus on demand-side resources, such as demand response.
(b) (1) It is the intent of the Legislature to protect, promote, and preserve demand response, and specifically the base interruptible program, which is a preferred resource with a long history of successfully preventing rolling blackouts, to enhance grid reliability.
(2) It is further the intent of the Legislature to exempt those large electrical corporations that had less than a five-megawatt load reduction from enrolled base interruptible program customers for the 2019 program year from the requirements of this act.

SEC. 2.

 Section 380.6 is added to the Public Utilities Code, to read:

380.6.
 (a) For purposes of this section, the following definitions apply:
(1) “Appropriate valuation” has the same meaning as that term is used in subdivision (j) of Section 380.
(2) “Base interruptible program” means a voluntary demand response program that is administered by a large electrical corporation and offers participating customers monthly capacity bill credits for committing to reduce their electricity use to a minimum predetermined level within an hour after receiving notice during emergency situations.
(3) “Demand response resource” means a resource used to respond to conditions of elevated load and includes both of the following:
(A) A supply resource that is integrated into the Independent System Operator energy markets and that provides local, flexible, or system capacity that is triggered when needed, and where needed, in response to elevated load.
(B) A load-modifying resource that reshapes or reduces the net load curve of an electrical corporation to manage load given the prevailing supply conditions.
(4) “Large electrical corporation” has the same meaning as defined in Section 3280.
(5) “Load-modifying demand response resource” means a demand response resource as defined in subparagraph (B) of paragraph (3).
(6) “Load-serving entity” has the same meaning as defined in Section 380.
(7) “Supply resource demand response” means a demand response by a demand response resource as defined in subparagraph (A) of paragraph (3).
(b) (1) The commission’s authority pursuant to Section 380 to establish resource adequacy requirements and to ensure appropriate valuation of demand response resources while considering how the demand response resources further the reliability of the state’s electrical grid and the state’s goals for reducing emissions of greenhouse gases is determinative, and the Independent System Operator’s role pursuant to Section 380 is advisory only.
(2) This subdivision is declaratory of existing law.
(c) (1) Except as specified in subdivision (e), each large electrical corporation shall administer a base interruptible program.
(2) Each large electrical corporation shall make its base interruptible program available to its qualifying commercial and industrial customers regardless of the load-serving entity that is those customers’ supplier of electricity.
(3) The commission shall consider revising the categorization of a base interruptible program from a supply resource demand response to a load-modifying demand response resource.
(d) The commission shall implement a pilot economic demand response program or optional rate design, to be administered by each large electrical corporation, in which base interruptible program participants may elect to participate. The pilot program shall be designed as part of a large electrical corporation’s Phase II application for its general rate case, demand response program application, or rate design window application, and made operational for a four-year period. The commission shall ensure that participation in the pilot program comports with reasonable dual participation rules to prevent double payments for the same demand response if events overlap. The pilot program shall be conducted in compliance with the requirements of Section 380.5.
(e) This section shall not apply to a large electrical corporation that had less than a five-megawatt load reduction from enrolled base interruptible program customers as reported by the electrical corporations in their program year 2019 ex-post load impact reports filed April 1, 2020.

SEC. 3.

 Section 740.10 of the Public Utilities Code is repealed.
740.10.

(a)Each public utility electrical corporation shall develop and offer its customers, on or before May 30, 2001, the opportunity to participate, in addition to other programs developed by the commission, in a demand reduction program as described in this section.

(b)The program required by this section shall identify specific periods coincident with morning or evening system peak conditions determined by the Independent System Operator within which the customer agrees to drop a preset amount of load. This program shall be known as the Scheduled Load Reduction Program. The commission shall develop appropriate incentives for customers to participate in the program.

SEC. 4.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because 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.