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AB-1391 Energy Commission: penalties.(2011-2012)

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AB1391:v96#DOCUMENT

Amended  IN  Senate  September 09, 2011
Amended  IN  Senate  September 08, 2011
Amended  IN  Senate  September 02, 2011

CALIFORNIA LEGISLATURE— 2011–2012 REGULAR SESSION

Assembly Bill
No. 1391


Introduced  by  Assembly Member Bradford
(Principal Coauthor(s): Assembly Member Smyth)

February 23, 2011


An act to amend Section 399.30 of the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


AB 1391, as amended, Bradford. Energy Commission: penalties.
Existing law creates the California renewables portfolio standard program (RPS program) and the Renewable Energy Resources Program to increase the amount of electricity generated per year from eligible renewable resources, as defined.
Existing law, effective on _____, requires Effective on the 91st day after the adjournment of the 2011–12 First Extraordinary Session, the Energy Commission is required to refer a local publicly owned electric utility to the State Air Resources Board if the utility fails to comply with these programs and authorizes the state board to impose penalties.
This bill would delete these provisions and instead authorize the Energy Commission to impose certain civil penalties on a local publicly owned utility that fails to comply with these programs. The bill would require the Energy Commission to establish, by regulation, a prescribed penalty structure. The bill would subject any order imposing penalties to judicial review and enforcement.
Existing law requires the State Air Resources Board to deposit any penalties it collects to enforce these programs into the Air Pollution Control Fund.
This bill would delete this requirement and instead require the Energy Commission to deposit any civil penalties imposed on a local publicly owned utility in the Energy Resources Programs Account of the General Fund, to be available, upon appropriation, for the purposes of the program.
The bill would make conforming changes.
This bill would incorporate additional changes in Section 399.30 of the Public Utilities Code, proposed by SB 23, to be operative only if SB 23 and this bill are both chaptered and become effective January 1, 2012, and this bill is chaptered last.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 399.30 of the Public Utilities Code, as added by Section 29 of Chapter 1 of the First Extraordinary Session of the Statutes of 2011, is amended to read:

399.30.
 (a) In order 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).
(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.
(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, and 33 percent of retail sales by December 31, 2020. The local governing board shall require the local publicly owned utilities to procure not less than 33 percent of retail sales of electricity products from eligible renewable energy resources in all subsequent years.
(3) A local publicly owned electric utility shall adopt procurement requirements consistent with Section 399.16.
(d) The governing board of a local publicly owned electric utility may adopt the following measures:
(1) Rules permitting the utility to apply excess procurement in one compliance period to subsequent compliance periods in the same manner as allowed for retail sellers pursuant to Section 399.13.
(2) Conditions that allow for delaying timely compliance consistent with subdivision (b) of Section 399.15.
(3) 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 on or before January 1, 2012. 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) (1) 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.
(2) Contemporaneous with the posting of the notice of a public meeting to consider the renewable energy resources procurement plan, the local publicly owned electric utility shall notify the Energy Commission of the date, time, and location of the meeting in order to enable the Energy Commission to post the information on its Internet Web site. This requirement is satisfied if the local publicly owned electric utility provides the uniform resource locator (URL) that links to this information.
(3) Upon distribution to its governing body of information related to its renewable energy resources procurement status and future plans, for its consideration at a noticed public meeting, the local publicly owned electric utility shall make that information available to the public and shall provide the Energy Commission with an electronic copy of the documents for posting on the Energy Commission’s Internet Web site. This requirement is satisfied if the local publicly owned electric utility provides the uniform resource locator (URL) that links to the documents or information regarding other manners of access to the documents.
(g) 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.
(h) 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.
(i) 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.
(j) 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.
(k) 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.
(l) Each local publicly owned electric utility shall report, on an annual basis, to its customers and to the Energy Commission, all of the following:
(1) Expenditures of public goods funds collected pursuant to Section 385 for eligible renewable energy resource development. Reports shall contain a description of programs, expenditures, and expected or actual results.
(2) The resource mix used to serve its customers by energy source.
(3) The utility’s status in implementing a renewables portfolio standard pursuant to subdivision (a) and the utility’s progress toward attaining the standard following implementation.
(m) 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.
(n) On or before July 1, 2012, 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 the assessment of civil penalties pursuant to subdivision (o).
(o) (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 may impose penalties to enforce this article, consistent with this section. Any penalty imposed upon a local publicly owned electric utility pursuant to this section shall parallel those adopted by the commission for noncompliance with the requirements of this article by a retail seller. The Energy Commission has exclusive authority to assess penalties upon a local publicly owned electric utility for a failure to comply with this article.
(2) A local publicly owned electric utility that violates any order, rule, or regulation of the Energy Commission issued or adopted pursuant to this article, may be assessed a civil penalty in accordance with the procedures described in Section 25534.1 of the Public Resources Code. In lieu of the penalty structure set forth in Section 25534 of the Public Resources Code, the Energy Commission shall establish the penalty structure by regulation, which shall consider, in addition to other relevant factors, the penalty structure adopted by the commission for noncompliance by retail sellers.
(3) Any order of the Energy Commission that imposes penalties pursuant to this section shall be subject to judicial review and enforcement as specified in subdivisions (a) and (b) of Section 25534.2 of the Public Resources Code.
(4) Any civil penalties collected by the Energy Commission from a local publicly owned electric utility pursuant to this section shall be deposited in the Energy Resources Programs Account and, upon appropriation by the Legislature, shall be expended for the purposes of meeting the goals of this article. Those penalty revenues may be used by the Energy Commission for the administration of this article.
(p) The commission has no authority or jurisdiction to enforce any of the requirements of this article on a local publicly owned electric utility.

SEC. 1.5.

 Section 399.30 of the Public Utilities Code, as added by Section 29 of Chapter 1 of the First Extraordinary Session of the Statutes of 2011, is amended to read:

399.30.
 (a) In order 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).
(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.
(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, and 33 percent of retail sales by December 31, 2020. The local governing board shall require the local publicly owned utilities to procure not less than 33 percent of retail sales of electricity products from eligible renewable energy resources in all subsequent years.
(3) A local publicly owned electric utility shall adopt procurement requirements consistent with Section 399.16.
(d) The governing board of a local publicly owned electric utility may adopt the following measures:
(1) Rules permitting the utility to apply excess procurement of eligible renewable energy resources accumulated through December 31, 2010, or from one compliance period to subsequent compliance periods, in the same manner as allowed for retail sellers. Those rules shall ensure that excess procurement accumulated through December 31, 2010, is calculated based on annual eligible renewable energy resource procurement targets in effect since 2006, provided that the procurement targets, as amended, specified the achievement of not less than a 20 percent renewables portfolio standard by no later than December 31, 2010, and included increasing procurement targets for each intervening year. in one compliance period to subsequent compliance periods in the same manner as allowed for retail sellers pursuant to Section 399.13.
(2) Conditions that allow for delaying timely compliance consistent with subdivision (b) of Section 399.15.
(3) 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 on or before January 1, 2013. 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) (1) 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.
(2) Contemporaneous with the posting of the notice of a public meeting to consider the renewable energy resources procurement plan, the local publicly owned electric utility shall notify the Energy Commission of the date, time, and location of the meeting in order to enable the Energy Commission to post the information on its Internet Web site. This requirement is satisfied if the local publicly owned electric utility provides the uniform resource locator (URL) that links to this information.
(3) Upon distribution to its governing body of information related to its renewable energy resources procurement status and future plans, for its consideration at a noticed public meeting, the local publicly owned electric utility shall make that information available to the public and shall provide the Energy Commission with an electronic copy of the documents for posting on the Energy Commission’s Internet Web site. This requirement is satisfied if the local publicly owned electric utility provides the uniform resource locator (URL) that links to the documents or information regarding other manners of access to the documents.
(g) 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.
(h) 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.
(i) 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.
(j) 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.
(k) 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.
(l) Each local publicly owned electric utility shall report, on an annual basis, to its customers and to the Energy Commission, all of the following:
(1) Expenditures of public goods funds collected pursuant to Section 385 for eligible renewable energy resource development. Reports shall contain a description of programs, expenditures, and expected or actual results.
(2) The resource mix used to serve its customers by energy source.
(3) The utility’s status in implementing a renewables portfolio standard pursuant to subdivision (a) and the utility’s progress toward attaining the standard following implementation, including information that demonstrates the conditions, if any, delaying the utility’s timely compliance with the renewables portfolio standard consistent with paragraph (5) of subdivision (b) of Section 399.15.
(m) 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.
(n) On or before July 1, 2012, 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 the assessment of civil penalties pursuant to subdivision (o).
(o) (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 may impose penalties to enforce this article, consistent with this section. Any penalty imposed upon a local publicly owned electric utility pursuant to this section shall parallel those adopted by the commission for noncompliance with the requirements of this article by a retail seller. The Energy Commission has exclusive authority to assess penalties upon a local publicly owned electric utility for a failure to comply with this article.
(2) A local publicly owned electric utility that violates any order, rule, or regulation of the Energy Commission issued or adopted pursuant to this article, may be assessed a civil penalty in accordance with the procedures described in Section 25534.1 of the Public Resources Code. In lieu of the penalty structure set forth in Section 25534 of the Public Resources Code, the Energy Commission shall establish the penalty structure by regulation, which shall consider, in addition to other relevant factors, the penalty structure adopted by the commission for noncompliance by retail sellers.
(3) Any order of the Energy Commission that imposes penalties pursuant to this section shall be subject to judicial review and enforcement as specified in subdivisions (a) and (b) of Section 25534.2 of the Public Resources Code.
(4) Any civil penalties collected by the Energy Commission from a local publicly owned electric utility pursuant to this section shall be deposited in the Energy Resources Programs Account and, upon appropriation by the Legislature, shall be expended for the purposes of meeting the goals of this article. Those penalty revenues may be used by the Energy Commission for the administration of this article.
(p) The commission has no authority or jurisdiction to enforce any of the requirements of this article on a local publicly owned electric utility.

SEC. 2.

 Section 1.5 of this bill incorporates amendments to Section 399.30 of the Public Utilities Code proposed by both this bill and Senate Bill 23. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2012, (2) each bill amends Section 399.30 of the Public Utilities Code, and (3) this bill is enacted after Senate Bill 23, in which case Section 1 of this bill shall not become operative.