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SB-1269 Powerplant site and facility certification.(2001-2002)

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SB1269:v92#DOCUMENT

Senate Bill No. 1269
CHAPTER 567

An act to amend Section 25534 of the Public Resources Code, relating to energy resources.

[ Filed with Secretary of State  September 15, 2002. Approved by Governor  September 14, 2002. ]

LEGISLATIVE COUNSEL'S DIGEST


SB 1269, Peace. Powerplant site and facility certification.
The existing Warren-Alquist State Energy Resources Conservation and Development Act requires the State Energy Resources Conservation and Development Commission to certify sufficient sites and related facilities that are required to provide a supply of electric power sufficient to accommodate projected demand for power statewide. Existing law authorizes the commission, after hearings, to amend the conditions of, or revoke the certification for, any facility for specified reasons and to administratively impose a civil penalty for specified violations of a certification of up to $50,000 per violation, as prescribed.
Existing law establishes in state government the California Consumer Power and Conservation Financing Authority, with powers and responsibilities as prescribed, including the power to issue revenue bonds for the purpose of augmenting electric generating facilities and to ensure a sufficient and reliable supply of electricity, financing incentives for investment in cost-effective, energy-efficient appliances and energy demand reduction, achieving a specified energy capacity reserve level, providing financing for the retrofit of inefficient electric powerplants, renewable energy and conservation, and, where appropriate, developing strategies for the authority to facilitate a dependable supply of natural gas at reasonable prices to the public.
This bill would authorize the commission to administratively impose a civil penalty for specified violations of up to $75,000, as prescribed.
This bill would require a project owner to commence construction of a project within 12 months after the project has been certified by the commission and all accompanying project permits are final and administrative and judicial appeals have been completed. The bill would require a project owner to submit construction and commercial operation milestones within 30 days after project certification. If that 30-day deadline is not met, the bill would require the commission to establish construction milestones for the project. The bill would specify that the failure of the project owner to meet construction or commercial operation milestones, without a finding of good cause, is cause for revocation of certification or the imposition of other penalties. The bill would require the commission to extend the start of construction by 24 months under certain circumstances.
This bill would require the commission to provide immediate notice to the authority if the project owner fails to commence construction, without good cause, within 12 months after the project has been certified and the project owner has not received an extension. The bill would require the authority to evaluate whether to pursue the project independently or in conjunction with any other public or private entity, including the original certificate holder. If the authority demonstrates to the commission that it is willing and able to construct the project, the bill would authorize the commission to revoke the original certification and issue a new certification for the project to the authority, unless the authority’s statutory authorization to finance or approve new programs, enterprises, or projects has expired. The bill would require the commission, if it issues a new certification, to adopt new deadlines and milestones for the project that allow the authority up to 24 months to start construction or to start to meet the applicable deadlines and milestones. The bill would specify that those provisions do not apply to specified qualifying small power production facilities or qualifying cogeneration facilities, as provided, any other generation units installed, operated, and maintained at a customer site exclusively to serve that facility’s load, or specified licenses issued to local publicly owned electric utilities that make a specified certification.
The bill would authorize the commission and authority, in consultation with each other, to adopt emergency regulations for the purposes of the bill.

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


SECTION 1.

 The Legislature finds and declares all of the following:
(a) Reliable, reasonably priced electricity service is essential for California’s economic growth and for the health and welfare of its citizens.
(b) The Legislature, through Assembly Bill 970 of the 1999-2000 Regular Session and Senate Bill 28 of the 2001–02 First Extraordinary Session, and the Governor, through Executive orders issued pursuant to his emergency powers, have acted to expedite the construction of in-state electric generation facilities by accelerating the State Energy Resources Conservation and Development Commission’s powerplant certification process, signing long-term contracts for the electricity production of planned facilities, and offering incentives for rapid powerplant construction.
(c) However, because it is critical for the welfare of the state and its citizens that entities that obtain certification to construct new powerplants do so with all due speed, it is the policy of the state to condition the issuance of powerplant certification to require prompt, continuous, good faith efforts to construct the certified project within its original construction schedule.
(d) It is further the policy of the state that, in the event a certificate holder fails to demonstrate prompt, continuous, good faith efforts to construct new powerplants, the commission may revoke the certification of the original project owner and issue a new certification to the California Consumer Power and Conservation Financing Authority to construct the project if the authority demonstrates to the commission that it is willing and able to construct the project either independently or in conjunction with any other public or private entity, including the original licensee.

SEC. 2.

 Section 25534 of the Public Resources Code is amended to read:

25534.
 (a) The commission may, after one or more hearings, amend the conditions of, or revoke the certification for, any facility for any of the following reasons:
(1) Any material false statement set forth in the application, presented in proceedings of the commission, or included in supplemental documentation provided by the applicant.
(2) Any significant failure to comply with the terms or conditions of approval of the application, as specified by the commission in its written decision.
(3) A violation of this division or any regulation or order issued by the commission under this division.
(4) The owner of a project does not start construction of the project within 12 months after the date all permits necessary for the project become final and all administrative and judicial appeals have been resolved provided the California Consumer Power and Conservation Financing Authority notifies the commission that it is willing and able to construct the project pursuant to subdivision (g). The project owner may extend the 12-month period by 24 additional months pursuant to subdivision (f). This paragraph applies only to projects with a project permit application deemed complete by the commission after January 1, 2003.
(b) The commission may also administratively impose a civil penalty for a violation of paragraph (1) or (2) of subdivision (a). Any civil penalty shall be imposed in accordance with Section 25534.1 and may not exceed seventy-five thousand dollars ($75,000) per violation, except that the civil penalty may be increased by an amount not to exceed one thousand five hundred dollars ($1,500) per day for each day in which the violation occurs or persists, but the total of the per day penalties may not exceed fifty thousand dollars ($50,000).
(c) A project owner shall commence construction of a project subject to the start-of-construction deadline provided by paragraph (4) of subdivision (a) within 12 months after the project has been certified by the commission and after all accompanying project permits are final and administrative and judicial appeals have been completed. The project owner shall submit construction and commercial operation milestones to the commission within 30 days after project certification. Construction milestones shall require the start of construction within the 12-month period established by this subdivision. The commission shall approve milestones within 60 days after project certification. If the 30-day deadline to submit construction milestones to the commission is not met, the commission shall establish milestones for the project.
(d) The failure of the owner of a project subject to the start-of-construction deadline provided by paragraph (4) of subdivision (a) to meet construction or commercial operation milestones, without a finding by the commission of good cause, shall be cause for revocation of certification or the imposition of other penalties by the commission.
(e) A finding by the commission that there is good cause for failure to meet the start-of-construction deadline required by paragraph (4) of subdivision (a) or any subsequent milestones of subdivision (c) shall be made if the commission determines that any of the following criteria are met:
(1) The change in any deadline or milestone does not change the established deadline or milestone for the start of commercial operation.
(2) The deadline or milestone is changed due to circumstances beyond the project owner’s control, including, but not limited to, administrative and legal appeals.
(3) The deadline or milestone will be missed but the project owner demonstrates a good faith effort to meet the project deadline or milestone.
(4) The deadline or milestone will be missed due to unforeseen natural disasters or acts of God that prevent timely completion of the project deadline or milestone.
(5) The deadline or milestone will be missed for any other reason determined reasonable by the commission.
(f) The commission shall extend the start of the construction deadline required by paragraph (4) of subdivision (a) by an additional 24 months, if the owner reimburses the commission’s actual cost of licensing the project. For the purposes of this section, the commission’s actual cost of licensing the project shall be based on a certified audit report filed by the commission staff within 180 days of the commission’s certification of the project. The certified audit shall be filed and served on all parties to the proceeding, is subject to public review and comment, and is subject to at least one public hearing if requested by the project owner. Any reimbursement received by the commission pursuant to this subdivision shall be deposited in the General Fund.
(g) If the owner of a project subject to the start-of-construction deadline provided by paragraph (4) of subdivision (a) fails to commence construction, without good cause, within 12 months after the project has been certified by the commission and has not received an extension pursuant to subdivision (f), the commission shall provide immediate notice to the California Consumer Power and Conservation Financing Authority. The authority shall evaluate whether to pursue the project independently or in conjunction with any other public or private entity, including the original certificate holder. If the authority demonstrates to the commission that it is willing and able to construct the project either independently or in conjunction with any other public or private entity, including the original certificate holder, the commission may revoke the original certification and issue a new certification for the project to the authority, unless the authority’s statutory authorization to finance or approve new programs, enterprises, or projects has expired. If the authority declines to pursue the project, the permit shall remain with the current project owner until it expires pursuant to the regulations adopted by the commission.
(h) If the commission issues a new certification for a project subject to the start-of-construction deadline provided by paragraph (4) of subdivision (a) to the authority, the commission shall adopt new milestones for the project that allow the authority up to 24 months to start construction of the project or to start to meet the applicable deadlines or milestones. If the authority fails to begin construction in conformity with the deadlines or milestones adopted by the commission, without good cause, the certification may be revoked.
(i) (1) If the commission issues a new certification for a project subject to the start-of-construction deadline provided by paragraph (4) of subdivision (a) to the authority and the authority pursues the project, without participation of the original certificate holder, the authority shall offer to reimburse the original certificate holder for the actual costs the original certificate holder incurred in permitting the project and in procuring assets associated with the license, including, but not limited to, major equipment and the emission offsets. In order to receive reimbursement, the original certificate holder shall provide to the commission documentation of the actual costs incurred in permitting the project. The commission shall validate those costs. The certificate holder may refuse to accept the offer of reimbursement for any asset associated with the license and retain the asset. To the extent the certificate holder chooses to accept the offer for an asset, it shall provide the authority with the asset.
(2) If the authority reimburses the original certificate holder for the costs described in paragraph (1), the original certificate holder shall provide the authority with all of the assets for which the original certificate holder received reimbursement.
(j) This section does not prevent a certificate holder from selling its license to construct and operate a project prior to its revocation by the commission. In the event of a sale to an entity that is not an affiliate of the certificate holder, the commission shall adopt new deadlines or milestones for the project that allow the new certificate holder up to 12 months to start construction of the project or to start to meet the applicable deadlines or milestones.
(k) Paragraph (4) of subdivision (a) and subdivisions (c) to (j), inclusive, do not apply to licenses issued for the modernization, repowering, replacement, or refurbishment of existing facilities or to a qualifying small power production facility or a qualifying cogeneration facility within the meaning of Sections 201 and 210 of Title II of the federal Public Utility Regulatory Policies Act of 1978 (16 U.S.C. Secs. 796(17), 796(18), and 824a-3), and the regulations adopted pursuant to those sections by the Federal Energy Regulatory Commission (18 C.F.R. Parts 292.101 to 292.602, inclusive), nor shall those provisions apply to any other generation units installed, operated, and maintained at a customer site exclusively to serve that facility’s load. For the purposes of this subdivision, “replacement” of an existing facility includes, but is not limited to, a comparable project at a location different than the facility being replaced, provided that the commission certifies that the new project will result in the decommissioning of the existing facility.
(l) Paragraph (4) of subdivision (a) and subdivisions (c) to (j), inclusive, do not apply to licenses issued to “local publicly owned electric utilities” as defined in subdivision (d) of Section 9604 of the Public Utilities Code whose governing bodies certify to the commission that the project is needed to meet the projected native load of the local publicly owned utility.
(m) To implement this section, the commission and the California Consumer Power and Conservation Financing Authority may, in consultation with each other, adopt emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. For purposes of that chapter, including, without limitation, Section 11349.6 of the Government Code, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, or general welfare.