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SB-843 Energy: electrical corporations: City of Davis PVUSA solar facility: Community-Based Renewable Energy Self-Generation Program.(2011-2012)

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Amended  IN  Assembly  August 24, 2012
Amended  IN  Assembly  August 06, 2012
Amended  IN  Assembly  May 09, 2012
Amended  IN  Assembly  April 30, 2012
Amended  IN  Assembly  June 21, 2011
Amended  IN  Senate  March 24, 2011

CALIFORNIA LEGISLATURE— 2011–2012 REGULAR SESSION

Senate Bill
No. 843


Introduced  by  Senator Wolk
(Coauthor(s): Senator Corbett, Pavley)
(Coauthor(s): Assembly Member Huffman, Skinner)

February 18, 2011


An act to amend Section 25019 of the Corporations Code, and to amend Sections 216 and 218 of, to add Chapter 7.6 (commencing with Section 2832) to Part 2 of Division 1 of, and to repeal Section 2826.5 of, and to repeal and add Chapter 7.5 (commencing with Section 2830) of Part 2 of Division 1 of, the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 843, as amended, Wolk. Energy: electrical corporations: City of Davis PVUSA solar facility: Community-Based Renewable Energy Self-Generation Program.
(1) Under existing law, the Public Utilities Commission has regulatory jurisdiction over public utilities, including electrical corporations, as defined. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Under existing law, the local government renewable energy self-generation program authorizes a local government, as defined, to receive a bill credit, as defined, to be applied to a designated benefiting account for electricity exported to the electrical grid by an eligible renewable generating facility, as defined, and requires the commission to adopt a rate tariff for the benefiting account.
This bill would repeal the local government renewable energy self-generation program and enact the Community-Based Renewable Energy Self-Generation Program. The program would authorize a retail customer of an electrical corporation (participant) to acquire an interest, as defined, in a community renewable energy facility, as defined, for the purpose of receiving a bill credit, as defined, to offset all or a portion of the participant’s electricity usage, consistent with specified requirements.
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 the bill would require action by the commission to implement its requirements, a violation of these provisions would impose a state-mandated local program by expanding the definition of a crime.
(2) The bill would provide that any corporation or person engaged directly or indirectly in developing, producing, delivering, participating in, or selling interests in, a community renewable energy facility is not a public utility or electrical corporation solely by reason of engaging in any of those activities.
(3) Existing law authorizes the City of Davis to receive a bill credit, as defined, to a benefiting account, as defined, for electricity supplied to the electrical grid by a photovoltaic electricity generation facility located within, and partially owned by, the city (PVUSA solar facility) and requires the commission to adopt a rate tariff for the benefiting account.
This bill would repeal these provisions relating to the City of Davis, but would require an award be made allocating 30 megawatts of alternating current to the City of Davis for use at PVUSA, and other locations of their designation, as directed by the City of Davis, pursuant to the Community-Based Renewable Energy Self-Generation Program.
(4) 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   Local Program: YES  

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


SECTION 1.

 Section 25019 of the Corporations Code is amended to read:

25019.
 (a) “Security” means any note; stock; treasury stock; membership in an incorporated or unincorporated association; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; collateral trust certificate; preorganization certificate or subscription; transferable share; investment contract; viatical settlement contract or a fractionalized or pooled interest therein; life settlement contract or a fractionalized or pooled interest therein; voting trust certificate; certificate of deposit for a security; interest in a limited liability company and any class or series of those interests (including any fractional or other interest in that interest), except a membership interest in a limited liability company in which the person claiming this exception can prove that all of the members are actively engaged in the management of the limited liability company; provided that evidence that members vote or have the right to vote, or the right to information concerning the business and affairs of the limited liability company, or the right to participate in management, shall not establish, without more, that all members are actively engaged in the management of the limited liability company; certificate of interest or participation in an oil, gas, or mining title or lease or in payments out of production under that title or lease; put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof); or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency; any beneficial interest or other security issued in connection with a funded employees’ pension, profit sharing, stock bonus, or similar benefit plan; or, in general, any interest or instrument commonly known as a “security”; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. All of the foregoing are securities whether or not evidenced by a written document.
(b) “Security” does not include: (1) any beneficial interest in any voluntary inter vivos trust which is not created for the purpose of carrying on any business or solely for the purpose of voting, or (2) any beneficial interest in any testamentary trust, or (3) any insurance or endowment policy or annuity contract under which an insurance company admitted in this state promises to pay a sum of money (whether or not based upon the investment performance of a segregated fund) either in a lump sum or periodically for life or some other specified period, or (4) any franchise subject to registration under the Franchise Investment Law (Division 5 (commencing with Section 31000)), or exempted from registration by Section 31100 or 31101, or (5) any right to a bill credit or interest of a participant in a community renewable energy facility pursuant to Chapter 7.5 (commencing with Section 2830) of Part 2 of Division 1 of the Public Utilities Code.

SEC. 2.

 Section 216 of the Public Utilities Code is amended to read:

216.
 (a) “Public utility” includes every common carrier, toll bridge corporation, pipeline corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, sewer system corporation, and heat corporation, where the service is performed for, or the commodity is delivered to, the public or any portion thereof.
(b) Whenever any common carrier, toll bridge corporation, pipeline corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, sewer system corporation, or heat corporation performs a service for, or delivers a commodity to, the public or any portion thereof for which any compensation or payment whatsoever is received, that common carrier, toll bridge corporation, pipeline corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, sewer system corporation, or heat corporation, is a public utility subject to the jurisdiction, control, and regulation of the commission and the provisions of this part.
(c) When any person or corporation performs any service for, or delivers any commodity to, any person, private corporation, municipality, or other political subdivision of the state, that in turn either directly or indirectly, mediately or immediately, performs that service for, or delivers that commodity to, the public or any portion thereof, that person or corporation is a public utility subject to the jurisdiction, control, and regulation of the commission and the provisions of this part.
(d) Ownership or operation of a facility that employs cogeneration technology or produces power from other than a conventional power source or the ownership or operation of a facility which employs landfill gas technology does not make a corporation or person a public utility within the meaning of this section solely because of the ownership or operation of that facility.
(e) Any corporation or person engaged directly or indirectly in developing, producing, transmitting, distributing, delivering, or selling any form of heat derived from geothermal or solar resources or from cogeneration technology to any privately owned or publicly owned public utility, or to the public or any portion thereof, is not a public utility within the meaning of this section solely by reason of engaging in any of those activities.
(f) The ownership or operation of a facility that sells compressed natural gas at retail to the public for use only as a motor vehicle fuel, and the selling of compressed natural gas at retail from that facility to the public for use only as a motor vehicle fuel, does not make the corporation or person a public utility within the meaning of this section solely because of that ownership, operation, or sale.
(g) Ownership or operation of a facility that is an exempt wholesale generator, as defined in the Public Utility Holding Company Act of 2005 (42 U.S.C. Sec. 16451(6)), does not make a corporation or person a public utility within the meaning of this section, solely due to the ownership or operation of that facility.
(h) The ownership, control, operation, or management of an electric plant used for direct transactions or participation directly or indirectly in direct transactions, as permitted by subdivision (b) of Section 365, sales into a market established and operated by the Independent System Operator or any other wholesale electricity market, or the use or sale as permitted under subdivisions (b) to (d), inclusive, of Section 218, shall not make a corporation or person a public utility within the meaning of this section solely because of that ownership, participation, or sale.
(i) The ownership, control, operation, or management of a facility that supplies electricity to the public only for use to charge light duty plug-in electric vehicles does not make the corporation or person a public utility within the meaning of this section solely because of that ownership, control, operation, or management. For purposes of this subdivision, “light duty plug-in electric vehicles” includes light duty battery electric and plug-in hybrid electric vehicles. This subdivision does not affect the commission’s authority under Section 454 or 740.2 or any other applicable statute.
(j) A corporation or person engaged directly or indirectly in developing, producing, delivering, participating in, or selling interests in a community renewable energy facility, pursuant to Chapter 7.5 (commencing with Section 2830) of Part 2, is not a public utility within the meaning of this section solely by reason of engaging in any of those activities.

SEC. 3.

 Section 218 of the Public Utilities Code is amended to read:

218.
 (a) “Electrical corporation” includes every corporation or person owning, controlling, operating, or managing any electric plant for compensation within this state, except where electricity is generated on or distributed by the producer through private property solely for its own use or the use of its tenants and not for sale or transmission to others.
(b) “Electrical corporation” does not include a corporation or person employing cogeneration technology or producing power from other than a conventional power source for the generation of electricity solely for any one or more of the following purposes:
(1) Its own use or the use of its tenants.
(2) The use of or sale to not more than two other corporations or persons solely for use on the real property on which the electricity is generated or on real property immediately adjacent thereto, unless there is an intervening public street constituting the boundary between the real property on which the electricity is generated and the immediately adjacent property and one or more of the following applies:
(A) The real property on which the electricity is generated and the immediately adjacent real property is not under common ownership or control, or that common ownership or control was gained solely for purposes of sale of the electricity so generated and not for other business purposes.
(B) The useful thermal output of the facility generating the electricity is not used on the immediately adjacent property for petroleum production or refining.
(C) The electricity furnished to the immediately adjacent property is not utilized by a subsidiary or affiliate of the corporation or person generating the electricity.
(3) Sale or transmission to an electrical corporation or state or local public agency, but not for sale or transmission to others, unless the corporation or person is otherwise an electrical corporation.
(c) “Electrical corporation” does not include a corporation or person employing landfill gas technology for the generation of electricity for any one or more of the following purposes:
(1) Its own use or the use of not more than two of its tenants located on the real property on which the electricity is generated.
(2) The use of or sale to not more than two other corporations or persons solely for use on the real property on which the electricity is generated.
(3) Sale or transmission to an electrical corporation or state or local public agency.
(d) “Electrical corporation” does not include a corporation or person employing digester gas technology for the generation of electricity for any one or more of the following purposes:
(1) Its own use or the use of not more than two of its tenants located on the real property on which the electricity is generated.
(2) The use of or sale to not more than two other corporations or persons solely for use on the real property on which the electricity is generated.
(3) Sale or transmission to an electrical corporation or state or local public agency, if the sale or transmission of the electricity service to a retail customer is provided through the transmission system of the existing local publicly owned electric utility or electrical corporation of that retail customer.
(e) “Electrical corporation” does not include an independent solar energy producer, as defined in Article 3 (commencing with Section 2868) of Chapter 9 of Part 2.
(f) The amendments made to this section at the 1987 portion of the 1987–88 Regular Session of the Legislature do not apply to any corporation or person employing cogeneration technology or producing power from other than a conventional power source for the generation of electricity that physically produced electricity prior to January 1, 1989, and furnished that electricity to immediately adjacent real property for use thereon prior to January 1, 1989.
(g) A corporation or person engaged directly or indirectly in developing, owning, producing, delivering, participating in, or selling interests in, a community renewable energy facility pursuant to Chapter 7.5 (commencing with Section 2830) of Part 2, is not an electrical corporation within the meaning of this section solely by reason of engaging in any of those activities.

SEC. 4.

 Section 2826.5 of the Public Utilities Code is repealed.
SEC. 5.Chapter 7.5 (commencing with Section 2830) of Part 2 of Division 1 of the Public Utilities Code is repealed.

SEC. 6.SEC. 5.

 Chapter 7.5 7.6 (commencing with Section 2830) 2832) is added to Part 2 of Division 1 of the Public Utilities Code, to read:
CHAPTER   7.6. Community-Based Renewable Energy Self-Generation Program

2830.2832.
 The Legislature finds and declares all of the following:
(a) The Governor has proposed a Clean Energy Jobs Plan calling for the development of 12,000 megawatts of generation from distributed eligible renewable energy resources of up to 20 megawatts in size by 2020. There is widespread interest from many large institutional customers, including schools, colleges, universities, local governments, businesses, and the military, for development of distributed energy generation facilities to serve their energy needs. For these reasons the Legislature agrees that the Governor’s distributed energy program Clean Energy Jobs Plan represents a desired policy direction for the state. It is the intent of the Legislature that distributed generation that comes online as part of the Community-Based Renewable Energy Self-Generation Program is counted toward an electrical corporation’s efforts to implement the Governor’s Clean Energy Jobs Plan.
(b) Community-based renewable energy self-generation creates jobs, reduces emissions of greenhouse gases, and promotes energy independence. Further, community-based renewable energy self-generation will enable schools, colleges, universities, local governments, businesses, and consumers to save money on their electricity bills, thereby helping to fund educational programs, social services, and new hiring.
(c) The California Solar Initiative has been extremely successful, resulting in over 100,000 residential and commercial onsite installations of solar energy systems. The Community-Based Renewable Energy Self-Generation Program seeks to build on this success by dramatically expanding the market for eligible renewable energy resources to include residential and commercial renters, residential and commercial buildings with shaded or improperly oriented roofs, and other groups who are unable to access the benefits of onsite generation.
(d) Many institutional customers in California have been focused on distributed energy programs of their own. For example, the Secretary of the Navy established as policy that 50 percent of the on-shore electricity for naval and Marine Corps installations in the United States be from renewable sources by 2020. To implement this policy the Navy and Marine Corps have been working on a variety of renewable generation projects within the 1 megawatt to 20 megawatt range. The military installations, and other institutional users, have identified a number of regulatory barriers to implementing distributed generation projects. The enactment of this chapter will create a mechanism whereby institutional customers such as military installations, universities, and local governments, as well as groups of individuals, can efficiently invest in generating electricity from eligible renewable energy resources.
(e) It is the intent of the Legislature that public schools have the authority to invest in community renewable energy facilities to generate electricity as provided in this chapter. Electricity usage is one of the most significant cost pressures facing public schools at a time when schools have been forced to cut essential programs, increase classroom sizes, and send pink slips to teachers throughout the state. Schools may use the savings for restoring funds for salaries, student achievement, facility maintenance, and other budgetary needs. The community renewable energy facility projects that go forward pursuant to this chapter will create new construction jobs, stimulate the economy, generate funding, and provide more electricity generated by clean, renewable sources to customers.
(f) It is the further intent of the Legislature that, as the commission works to implement this chapter, the commission carefully consider regulatory barriers to distributed generation projects already identified and those not yet identified, and quickly address those barriers in a manner that is conducive to the development of distributed generation projects consistent with appropriate ratepayer protections.
(g) It is further the intent of the Legislature that the commission work to maintain ratepayer indifference to nonbeneficiaries, reflecting both the costs and benefits such systems provide to the residents of California minimize the rate impact the Community-Based Renewable Energy Self-Generation Program has on customers not participating in the program. To the extent that the program imposes incremental increases in rates, the commission shall ensure that these cost increases are equitably allocated to all customers on a nonbypassable basis, reflecting both the costs and benefits that community renewable energy facilities provide to the residents of California.

2831.2833.
 As used in this chapter, the following terms have the following meanings:
(a) “Benefiting account” means one or more accounts designated to receive a bill credit pursuant to Section 2832 2834.
(b) “Bill credit” means an amount of money credited each month, or in an otherwise applicable billing period, to one or more benefiting accounts based on the percentage share of the electrical output of a community renewable energy facility that is assigned to the account pursuant to the methodology described in Section 2832 2834.
(c) “Community renewable energy facility” means a facility for the generation of electricity that meets all of the following requirements:
(1) Has a nameplate generating capacity of no more than 20 megawatts of alternating current.
(2) Is an eligible renewable energy resource pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1).
(3) The electrical output of the facility is measured by a production meter owned by the electrical corporation, that meets the tariff requirements of the electrical corporation and the Independent System Operator, and that independently measures the electricity delivered to the grid by the facility, and only that facility.
(4) Is located within the service territory of an electrical corporation, or in the service territory of a local publicly owned electric utility that receives distribution service from an electrical corporation, having 100,000 or more service connections in California.

(5)Has complied with standard interconnection operation requirements of the electrical corporation, and where applicable, the Independent System Operator, consistent with any applicable tariffs.

(5) Has been interconnected with the electrical grid in compliance with the tariffs of the applicable interconnection authority.
(6) Unless the facility has a bill credit arrangement in place by December 31, 2012, it achieves initial commercial operation on January 1, 2013, or thereafter.
(7) The participant organization has, where applicable, complied with all program rules and written notice procedures that may be required by the commission.
(d) “Default load aggregation point price” means a calculation, as determined by the commission, of avoided cost derived from an hourly day-ahead electricity market price that reflects the costs the electrical corporation avoids in procuring electricity during the time period a community renewable energy facility generates electricity.
(e) “Facility rate” means the per kilowatthour rate. The facility rate shall be set using used to calculate the bill credit pursuant to the method described in subparagraph (A) of paragraph (6) (7) of subdivision (a) of Section 2832 2834. That method shall be used to calculate the minimum value for the bill credit for each participant with an interest in the community renewable energy facility. This minimum value may be replaced by the methodology for calculating the added value of the generation, when applicable, pursuant to subparagraph (B) of paragraph (6) of subdivision (a) of Section 2832. For a community renewable energy facility that has an established facility value for the bill credit, that value may be replaced by a commission-determined replacement methodology, provided both of the following are true:
(1) The commission determines that the replacement methodology provides a more accurate measure of the value of the generation provided by the community renewable energy facility.
(2) The replacement methodology results in a greater bill credit to the participant.
(f) “Interest” means a direct or indirect ownership, lease, subscription, or financing interest in a community renewable energy facility that enables the participant to receive a bill credit for a retail account with the electrical corporation.
(g) “Local government” means a city, county, city and county, special district, school district, public water district, public irrigation district, county office of education, political subdivision, or other local governmental entity. For the purposes of this chapter, “water district” has the same meaning as defined in Section 20200 of the Water Code, and “irrigation district” means an entity formed pursuant to the Irrigation District Law set forth in Division 11 (commencing with Section 20500) of the Water Code.
(h) “Locational value” means any costs or benefits, quantified on a dollar per kilowatt or kilowatthour basis, that are associated with a community renewable energy facility including, but not limited to, avoided transmission line losses, avoided transmission and distribution infrastructure costs, reduction in operating and maintenance costs, and the offset of peak demand or shifting load.

(h)

(i) “Participant” means a retail customer of an electrical corporation who owns, leases, finances, or subscribes to an interest in a community renewable energy facility and who has designated one or more of its own retail accounts as a benefiting account to which the subscription interest shall be attributed.

(i)

(j) “Participant organization” means any entity whose purpose is to beneficially own or operate a community renewable energy facility for the participants or owners of that facility. A “participant organization” can also be a “participant” as defined in subdivision (h) (i).
(k) “Program” means the Community-Based Renewable Energy Self-Generation Program established pursuant to this chapter.
(l) “Project” means the cumulative activities to build and make operational a community renewable energy facility.
(m) “Renewable energy credit” has the same meaning as defined in Section 399.12.

2832.2834.
 (a) (1) A retail customer of an electrical corporation having 100,000 or more service connections within the state may acquire an interest in a community renewable energy facility for the purpose of becoming a participant and receiving a bill credit to offset all or a portion of the customer’s bill for the generation energy component of that customer’s electrical service, as provided in this chapter and in accordance with those rules that the commission may adopt. The commission shall determine what charges represent the energy component of the customer’s electrical service to account for all portions of a customer’s bill that relate to usage of electricity. The participant shall designate one or more benefiting accounts to which the interest shall be attributed.
(2) To be eligible to be designated as a benefiting account, the account shall be for service to premises located within the geographical boundaries of the service territory of the electrical corporation containing the community renewable energy facility, or within the geographical boundaries of a contiguous service territory, if the electrical corporation or local publicly owned electric utility for that service territory have entered into an agreement enabling the connection of the benefiting account to the community renewable energy facility.
(3) A participant organization may construct a community renewable energy facility on a site chosen by the participant organization and may beneficially own or operate a community renewable energy facility for the participants of that facility. A community renewable energy facility may be built, owned, or operated by a third party under contract with a participant organization.
(4) (A) The combined statewide cumulative rated nameplate generating capacity of community renewable energy facilities under this program shall not exceed two gigawatts of alternating current, except as provided by in subparagraph (B). with not less than 250 megawatts of cumulative rated generating capacity being made available during the six-month period beginning January 1, 2013, and ending December 31, 2013. On or before April 1, 2013, each electrical corporation participating in the program shall submit a proposal to the commission for whether and, if so, how, to allocate the initial available capacity amongst the electrical corporations and for the establishment of a fair and transparent process for evaluating and ranking applications for community renewable energy facilities and awarding capacity to those facilities, until all available initial capacity has been reserved. Two or more participating electrical corporations may submit a joint proposal to the commission. By June 30, 2013, the commission shall review the proposals and adopt rules for the allocation of the initial available capacity amongst the electrical corporations and to establishment a transparent process for evaluating and ranking applications for community renewable energy facility projects and awarding the initial capacity to those projects. Of the initial cumulative rated generating capacity made available pursuant to this paragraph, an award allocating 30 megawatts of alternating current shall be made to the City of Davis for use at PVUSA, and other locations of their designation, as directed by the City of Davis. For purposes of this subparagraph, “PVUSA” means the photovoltaic electricity generation facility selected by the City of Davis, located at 24662 County Road, Davis, California.

(B)The commission shall maintain a publicly available database of existing and proposed community renewable energy facilities. Proposed community renewable energy facilities shall report their expected size, location, and commercial operation date no less than six months prior to their commercial operation date. When the statewide cumulative rated generation capacity of community renewable energy facilities reaches one and one-half gigawatts, the commission shall begin a process to determine if the gigawatt limitation in subparagraph (A) is necessary. Unless the commission determines that removal of the gigawatt limitation in subparagraph (A) would have a significant negative effect on electrical corporation ratepayers, the commission shall order that the gigawatt limitation is no longer applicable. If the commission decides that the removal of the gigawatt limitation in subparagraph (A) would have a significant negative effect on the ratepayers of the electrical corporations, the commission shall decide if the limitation should remain at two gigawatts or if it should be raised to some other level. For the purposes of this subparagraph, the rated generating capacity of a community renewable energy facility shall, where available, use the Energy Commission’s alternating current rating for the facility. If the commission determines that the two gigawatt cap shall remain in effect, the commission shall establish a process for allocating the remaining 500 megawatts of capacity to ensure the cap established in subparagraph (A) is not exceeded.

(B) Once the initial 250 megawatts of cumulative rated generating capacity has been awarded for community renewable energy facility projects, the commission shall evaluate the functioning of the program. The commission shall adopt or modify rules for making additional cumulative rated generating capacity available pursuant to the program and may halt making further capacity available for additional community renewable energy facility projects. The rules adopted or modified by the commission may include, but are not limited to, rules establishing annual capacity authorization targets, establishment of capacity set asides based upon customer class or other criteria the commission determines to be reasonable, establishment of capacity set-asides based upon community renewable energy facility project types or sizes, disclosures to be made to participants and potential participants and other safeguards to ensure the protection of consumers. The commission may evaluate the program at any time, either on its own motion or upon motion by an interested party, and may modify or adopt any rules it determines to be necessary or convenient to ensure that program goals can be met.
(C) Not later than upon the statewide cumulative rated generation capacity of community renewable energy facilities reaching 250 megawatts or January 1, 2015, whichever comes later, the commission shall commence or expand a proceeding to evaluate the bill credit mechanism of the program and whether an additional value shall be added to the bill credit mechanism to reflect the locational value of a community renewable energy facility. As part of this revision, the commission shall consider whether it is reasonable to adopt a bill credit methodology that ensures a participant’s bill credit retains its value as energy rates increase. The commission may revise the bill credit mechanism at any time that it concludes that the existing mechanism does not provide program participates with the fair value of electricity and other benefits produced by the community renewable energy facility or overvalues the benefits to nonparticipating customers of the electrical corporation for the electricity generated by a community renewable energy facility. Any revision to the methodology for calculating the facility rate shall apply only to rated generating capacity made available after the commission adopts a new bill credit methodology.
(5) Each electrical corporation shall make awards allocating rated generating capacity pursuant to the program in the following manner:
(A) A participant organization wishing to build a community renewable energy facility shall remit a nonrefundable administrative fee of one dollar and fifty cents ($1.50) per kilowatt of rated generating capacity to the electrical corporation to which they are applying for an allocation of capacity. At any time, the commission shall have the authority to modify the rated generating capacity allocation mechanism, including, but not limited to, creating project ranking criteria, setting deposit requirements, and creating an award allocation methodology for prospective projects.
(B) A participant organization shall meet the following benchmarks and timelines for construction and operation of a community renewable energy facility. Failure to do so shall result in the participant organization forfeiting the rated generating capacity awarded to it. Any forfeited rated generating capacity shall be added to the capacity made available to applicants pursuant to paragraph (4).
(i) The participant organization shall issue an unrestricted notice to proceed with construction of the community renewable energy facility within 180 days of the participant organization receiving an award allocating rated generating capacity from the electrical corporation.
(ii) The community renewable energy facility shall achieve commercial operation within 18 months of receiving an award allocating rated generating capacity pursuant to this paragraph.
(iii) A participant organization shall receive an extension because the participant organization faced interconnection delays that are outside the participant organization’s control. This extension shall not exceed the number of days it takes it to interconnect, for a maximum extension of six months.
(iv) A participant organization may receive a six-month extension for factors outside the control of the participant organization.
(C) The electrical corporation shall ensure that no single entity or its affiliates or subsidiaries is awarded more than 20 percent of any single calendar year’s total cumulative rated generating capacity made available pursuant to paragraph (4).

(5)

(6) (A) The commission shall maintain a public database of the annualized average generation energy component of electric service rates for each customer class and tier for each electrical corporation participating in the program and a public database of facility rates for community renewable energy facilities that have achieved commercial operation.
(B) The tariff applicable to a participant shall be identical, with respect to rate structure, all retail rate components, and any monthly charges, to the charges that the participant would be assigned if the participant did not receive a bill credit. Participants shall not be assessed standby charges on the community renewable energy facility or the kilowatthour generation of a community renewable energy facility.
(C) To ensure that any incremental impact on rates caused by the bill credits pursuant to the program are allocated equitably to all customers, on or before June 30, 2014, the commission shall complete an evaluation of whether, and, if so, the extent to which, any incremental rate impacts resulting from the program shall be recovered on a fully nonbypassable basis from all customers receiving distribution service from an electrical corporation, including ratepayers with rates that are otherwise subject to rate increase limitations pursuant to Sections 739.1 and 739.9, but excluding customers in the California Alternate Rates for Energy (CARE) or family electric rate assistance (FERA) programs. On or before July 1, 2014, the commission shall require each electrical corporation to file with the commission, for its approval, any revisions to its tariffs, rates, and rate design as are necessary to ensure an equitable allocation to all customers, consistent with the commission’s evaluation. As part of the evaluation, the commission shall also consider whether any incremental rate impact shall be subject to upper rate limitations and whether the commission shall establish rate structures as may be necessary to ensure that customers subject to billing pursuant to Sections 2827, 2827.8, and 2827.10 and other self-generating customers pay the same share of the nonbypassable costs as a similar customer that did not self-generate. Notwithstanding Section 2827, 2827.8, 2827.10, or other provision of law, the commission may require changes in tariffs, rates, and rate design for self-generating on net metering customers to ensure an equitable allocation to all customers, consistent with the commission’s evaluation.

(6)

(7) The commission shall establish a facility rate for each community renewable energy facility, as follows:
(A) The facility rate shall be set at the weighted average time-of-delivery adjusted cost of electricity established in the commission’s Renewables Portfolio Standard Quarterly Report, 4th Quarter 2011, Cost Reporting in Compliance with SB 836 report, published in the first quarter of the previous that year pursuant to Section 911, for eligible renewable energy resources of comparable size to, and utilizing the same generating technology as, the community renewable energy facility, and that are under contract with the electrical corporation. Where data is not available for a comparable resource and facility size for the previous year, the most recent data shall be used that year, the facility rate shall be set using the price available for the next larger size facility category utilizing the same generating technology. The facility rate shall be the price per kilowatthour of electricity and shall be determined as of the time that the community renewable energy facility becomes operational the participant organization applied for an award of rated generating capacity for the community renewable energy facility pursuant to the program. Once established, a facility rate shall be applicable to that facility for the operational life of the facility, unless the commission adopts a methodology to calculate the locational value of the facility pursuant to subparagraph (B). A subsequent facility or a subsequent modification to a facility placed in service on or after January 1, 2013, that results in an increase in the facility’s capacity to produce electricity shall be subject to the facility rate in effect on the date the participant organization applied for an award of rated generating capacity for the subsequent facility or increase the facility’s capacity commences commercial operation. The commission shall publish an individual facility rate tariff applicable to all participants per electrical corporation no later than 90 days following the enactment of the act that created this subparagraph.

(B)Not later than December 31, 2014, the commission shall determine the methodology for calculating the added value used to determine the participant’s bill credit. In determining the added value, the commission shall determine the amount of monetary costs and benefits a community renewable energy facility brings to the electrical corporation, other nonparticipating ratepayers, and the grid. In determining the added value, the commission shall analyze the costs and benefits, including, but not limited to, avoided transmission line loss, avoided transmission and distribution infrastructure costs, any reduction in fixed operations and maintenance costs, the offset of peak demand or shifting load, and the reduction of environmental compliance costs, including costs that would otherwise be incurred for reducing emissions of greenhouse gases. The net value of the costs and benefits derived from a community renewable energy facility shall be denominated in a monetary amount per kilowatthour of production and shall be added to the otherwise applicable generation component of the participant’s electric service rate. Once the commission determines the monetary amount of the net costs and benefits of a community renewable energy facility, that value shall be set for the operational life of that facility. This value shall be multiplied by a participant’s interest in a community renewable energy facility to determine the participant’s bill credit, if both of the following are true:

(i)The commission has determined an added value for the community renewable energy facility using the added value method.

(ii)The bill credit that will be provided to a participant using the added value method is greater than the credit provided by continued use of the facility rate.

(C)The commission shall reevaluate the added value methodology every three years.

(D)The commission shall endeavor to calculate the added value bill credit so that the program goals, including nonbeneficiary ratepayer indifference, can reasonably be expected to be met.

(B) If the commission adopts a methodology to calculate the locational value of distributed energy resources, then the commission shall order the electrical corporations to apply this methodology to calculate the locational value of community renewable energy facilities in the program, if this methodology results in an increased bill credit.
(b) (1) A participant shall not acquire an interest in a community renewable energy facility that represents more than two megawatts of generating capacity or the equivalent amount, as denominated in kilowatthours. This limitation does not apply to a federal, state, or local government, school, school district, county office of education, the California Community Colleges, the California State University, or the University of California.
(2) The commission shall not regulate the prices paid for an interest in a community renewable energy facility, but may enforce the required disclosures, and may establish rules applicable to participant organizations to ensure consumer protection. Any interested person or corporation may file a complaint with the commission contending that a participant organization or electrical corporation is not complying with any requirement of this chapter and seek an order of the commission to enforce the requirements of this chapter and to take whatever steps are necessary to ensure consumer protection and compliance with the requirements of this chapter.

(3)Participants may aggregate their loads for the purpose of participating in a community renewable energy facility pursuant to this section.

(4)For a participant that elects to aggregate its loads for the purpose of acquiring an interest in a community renewable energy facility, the participant shall designate the benefiting accounts and the allocation of the bill credit to those accounts.

(c) (1) A participant organization shall provide to the electrical corporation information on the identity of the benefiting accounts that will receive a bill credit pursuant to this section not less then than 30 days prior to the billing cycle for which the participant’s account will receive a bill credit. The participant organization shall provide the electrical corporation with not less than 30 days’ notice whenever a participant’s facility rate changes from the RPS solicitation method to the added value method.
(2) Prior to the sale or resale of an interest in a community renewable energy facility, the participant organization or the participant, or both, shall provide a disclosure to the potential participant that, at a minimum, includes all of the following:
(A) A good faith estimate of the annual kilowatthours to be delivered by the community renewable energy facility based on the size of the interest.
(B) A plain language explanation of the terms under which the bill credits will be calculated.
(C) A plain language explanation of the contract provisions regulating the disposition or transfer of the interest.
(D) A plain language explanation of the costs and benefits to the potential participant based on their current usage and applicable tariff, for the term of the proposed contract.
(3) Not more frequently than once per month, and upon providing the electrical corporation with a minimum of 30 days’ notice, the participant organization may change, add, or remove a benefiting account. If the owner of a benefiting account transfers service to a new address or benefiting account, the electrical corporation shall transfer any credit remaining from the previous account to the new account.
(4) A participant organization shall be responsible for providing to the electrical corporation, on a monthly basis, a statement of the percentage shares kilowatthours allocated to each participant to be used to determine the bill credit to each benefiting account and the names and account numbers of those participants whose bill credit is to be calculated using the added value method instead of the facility rate. If there has been no change in the allocations from the previous submission or in the method of calculating the bill credit of participants, the participant organization is not required to submit a new statement. An electrical corporation may rely on the statement of kilowatthours allocated to each participant, as provided by the participant organization, in implementing the requirements of this chapter.
(5) The If required by the electrical corporation, the participant organization shall provide real-time meter data to the electrical corporation and shall make the data available to a participant upon request. A participant organization shall be responsible for all costs of metering and shall retain production data for a period of 36 months.
(6) A participant organization shall provide not less than 120 days’ notice to the electrical corporation and the commission prior to the date the community renewable energy facility becomes operational and shall execute all necessary interconnection agreements, participation, and surplus sale agreements with the electrical corporation and the Independent System Operator on a schedule required by those entities.
(7) The Unless the electrical corporation will be registering renewable energy credits on behalf of the participant, the participant organization shall establish an account and register the community renewable energy facility with the Western Renewable Energy Generation Information System or its successor.
(8) The participant organization’s interconnection process and cost allocation for facilities built under this section shall be determined by applicable rules for interconnection established by the commission. The facility owner shall be responsible for normal, applicable grid use and management fees, imbalance charges, or other costs allocated by the Independent System Operator transmission or distribution system operator.
(9) (A) The participant organization, or the contractors, subcontractors, or agents of a participant organization, that are engaged in work performed in the construction or operation of a community renewable energy facility that is larger than one megawatt shall make a good faith effort to fill 25 percent of new entry level positions created for the construction or operation of the facility with persons referred by the local workforce investment board for the workforce investment area where the facility is located. For purposes of this paragraph, “entry level position” includes temporary and permanent jobs, and construction jobs related to the development of a community renewable energy facility. For the purposes of this paragraph, “new entry level position” means a position that did not previously exist in the employer’s organization and that requires any of the following:
(i) No education above a high school diploma or certified equivalency.
(ii) Less than two years of training or specific preparation.
(iii) A college, university, or postgraduate degree.
(iv) A license or a permit.
(B) The participant organization shall certify, to the satisfaction of the local workforce investment board, both of the following:
(i) Notice for the hiring of new entry level positions created by the employers for the construction or operation of the facility has been provided to the local workforce investment board at least 10 days prior to any other public notice for the positions.
(ii) Persons referred to the participant organization, or the contractors, subcontractors, or agents of a participant organization by the local workforce investment board has been considered for hire.
(C) The participant organization, or the contractors, subcontractors, or agents of a participant organization, shall make the final determination whether a person referred by the local workforce development board is qualified and hired.
(D) Any qualified person referred by the local workforce development board who is hired by the participant organization, or the contractors, subcontractors, or agents of a participant organization, shall have the same rights and obligations as all other employees in similar positions.
(E) (i) If this paragraph conflicts with an existing collective bargaining agreement to which an employer is a party, the collective bargaining agreement shall prevail.
(ii) If this paragraph conflicts with federal laws or regulations, the federal laws or regulations shall prevail.
(d) (1) An electrical corporation shall ensure that requests for establishment of bill credits and changes to benefiting accounts are processed in a time period not to exceed 30 days from the date it receives the request.
(2) An electrical corporation shall cooperate fully with community renewable energy facilities to implement this chapter.
(3) An electrical corporation shall comply with the requirements applicable to protection of the right to commercial free speech described in Commission Decision 10-05-050 as applied to the development, sale of subscriptions, and operation of community renewable energy facilities. Community renewable energy facilities may file a complaint with the commission for violation of this paragraph.
(4) For energy that is unallocated to a benefiting account during the previous billing period, the recipient electrical corporation shall pay the participant organization the current default load aggregation point price and receive any renewable energy credits associated with that energy.
(5) If requested by a city, county, or city and county, an electrical corporation shall annually provide the city, county, or city and county with the annual total generation of each community renewable energy facility in that local jurisdiction and the annual aggregated total generation, by fuel type, allocated to benefitting accounts in that local jurisdiction from all community renewable energy facilities, regardless of their location. The benefitting account data shall be aggregated in a manner determined by the commission to protect customer privacy and to provide a city, county, or city and county with the information necessary to calculate greenhouse gas emissions from energy consumption within its jurisdiction supplied by community renewable energy facilities. The commission may develop alternative methods to enable the sharing of annual total generation information.
(6) (A) A participating electrical corporation shall, by March 1, 2013, submit a proposed standard contract with participant organizations for commission approval. The commission shall utilize the advice letter procedure for approval of a standard contract submitted by an electrical corporation.
(B) The proposed standard contract shall be based on the electrical corporation’s standard contract used for the commission’s most recently approved renewable auction mechanism program. Each electrical corporation shall modify its renewable auction mechanism standard contract to eliminate language irrelevant to the program, including, but not limited to, compensation and monthly payments, operating and development security, and time-of-day periods.
(C) The commission shall ensure that the public has a reasonable opportunity to review and comment on the electrical corporation’s proposed standard contract prior to approving the contract.
(e) The Unless the electrical corporation elects to provide the service of incorporating in its bill those charges by the participant organization to the participant pursuant to paragraph (5), the following process shall be used when billing and crediting a benefiting account:
(1) An electrical corporation shall bill a benefiting account for all electricity usage, and for each applicable bill component, including but not limited to transmission and distribution charges, at the rate schedule applicable to the benefiting account, including any cost-responsibility surcharge or other cost recovery mechanism, as determined by the commission, to reimburse the Department of Water Resources for purchases of electricity pursuant to Division 27 (commencing with Section 80000) of the Water Code. Participants shall not be subject to any departing load charge.
(2) An electrical corporation shall subtract the bill credit applicable to the benefiting account. The electrical corporation shall ensure that the participant receives the full bill credit to which it is entitled. The information and line items on a participant’s bill statement will be unchanged, except one or more entries detailing the bill credit shall be added to a participant’s bill.
(3) If, at the end of each billing cycle, the total otherwise applicable generation energy component of the bill exceeds the bill credit, the benefiting account shall be billed for the difference.
(4) (A) If, at the end of a billing cycle, the bill credit exceeds the generation energy component of the amount billed to the account, the difference shall be carried forward as a dollar credit to the next billing cycle. Any earned credit that exceeds the energy component of the bill shall roll over to the subsequent billing period and shall continue to roll over until used or until the annual anniversary date of the participant’s initial bill credit, whichever occurs first. On the annual anniversary date of the participant’s initial bill credit, any remaining bill credit earned during the previous year and that remains after the application of bill credits to the energy component of a participant’s bills shall cease to roll over and will be subject to a default load aggregation point price true-up. The default load aggregation point price true-up shall be calculated by converting the remaining unused bill credits to kilowatthours, by dividing the unused bill credits by the monetary value of a bill credit, and then multiplying the kilowatthours by the default load aggregation point price. The amount calculated doing the default load aggregation point price true-up is owed by the electrical corporation to the participant. The commission shall determine whether the default load aggregation point price true-up is to be paid to participants or credited to future billings and, if so, the manner of crediting.
(B) If the commission has determined a locational value, the participant’s bill credit is calculated based on the added value method pursuant to subparagraph (B) of paragraph (6) of subdivision (a), the bill credit may exceed the generation energy component of the bill, but only by the amount of the added locational value. The added locational value shall be subtracted from the balance of the participant’s bill remaining after credits are applied to the generation energy component of the bill. Any earned credit that exceeds the generation energy component of the bill shall roll over to the subsequent billing period and shall continue to roll over until used or until the annual anniversary date of the participant’s initial bill credit, whichever occurs first. On the annual anniversary date of the participant’s initial bill credit, any remaining bill credit earned during the previous year and that remains after the application of bill credits to the generation energy component of a participant’s bills shall cease to roll over and will be subject to a default load aggregation point price true-up. The default load aggregation point price true-up shall be calculated by converting the remaining unused bill credits to kilowatthours, by dividing the unused bill credits by whichever is applicable on the anniversary date, either the facility rate, or the sum of added value and the participant’s otherwise applicable generation component the monetary value of a bill credit, and then multiplying the kilowatthours by the default load aggregation point price. The amount calculated doing the default load aggregation point price true-up is owed by the electrical corporation to the participant. The commission shall determine whether the default load aggregation point price true-up is to be paid to participants or credited to future billings and, if so, the manner of crediting.
(5) If the electrical corporation elects to incorporate in its bill those charges by the participant organization to the participant, the following process shall be used for the bundled electric service customers of the electrical corporation:
(A) The participant organization shall convey ownership of the electricity generated by the community renewable energy facility that passes through the meter and is delivered to the transmission or distribution grid (delivered electricity) to the electrical corporation under terms and conditions determined between the participant organization and the electrical corporation, pursuant paragraph (6) of subdivision (d).
(B) Unsubscribed delivered electricity shall be sold to the electrical corporation at the default load aggregation point price. The electrical corporation shall receive credit under the California Renewable Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1) for all delivered electricity purchased pursuant to this subparagraph, without the need for further qualifying action.
(C) The electrical corporation shall charge the participant for service under each benefitting account at the electrical corporation’s otherwise applicable tariff.
(D) The electrical corporation shall provide the participant with a bill credit based on the allocated share of delivered electricity and shall collect revenue from the participant commensurate with the participant’s contract with the participant organization.
(E) The electrical corporation, within 60 days, shall remit to the participant organization the revenue collected from participants through billings pursuant to subparagraph (D).
(6) Nothing in paragraph (5) requires a particular bill format or the inclusion of any specific separate billing line items.
(7) The commission shall, by January 1, 2014, determine whether customers participating in direct transactions, including those with an electric service provider that does not provide distribution services, customers receiving electric service through a community choice aggregation program, and customers of a local publicly owned electric utility that receive distribution service from an electrical corporation having 100,000 or more service connections in California, may receive bill credits equivalent to what would be provided to bundled electric service customers of a participating electrical corporation pursuant to this chapter, and, if so, shall implement rules and procedures for enabling those transactions.
(f) Any renewable energy credits associated with an interest shall either be retired by either the participant organization or electrical corporation, as they may agree, on behalf of the participant or transferred to the Western Renewable Energy Generation Information System account of that participant, for the purpose of demonstrating the purchase of renewable energy. Those renewable energy credits shall not be further sold, transferred, or otherwise monetized by a party for any purpose. Renewable energy credits associated with electricity paid for by the electrical corporation shall be counted toward meeting that electrical corporation’s renewables portfolio standard. For purposes of this subdivision, “renewable energy credit” and “renewables portfolio standard” have the same meanings as defined in Section 399.12.
(g) In calculating its procurement requirements to meet the requirements of the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1), an electrical corporation may exclude from total retail sales the kilowatthours generated by a community renewable energy facility commencing with the point in time at which the facility achieves commercial operation.
(h) The resource adequacy value attributable to a community renewable energy facility, as determined by the commission pursuant to Section 380, shall be assigned to the electrical corporation to which the facility is interconnected.
(i) Notwithstanding the requirement of paragraph (2) of subdivision (c) of Section 2833, the commission may expand the technologies that are eligible to be a community renewable energy facility to include other technologies for the generation of electricity that the commission, in consultation with the State Air Resources Board, determines will achieve reductions in emissions of greenhouse gases pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code) and meets the emissions standards adopted by the board for reducing emissions of greenhouse gases pursuant to the distributed generation certification program requirements of Article 3 (commencing with Section 94200) of Subchapter 8 of Chapter 1 of Division 3 of Title 17 of the California Code of Regulations.
(j) The commission shall ensure full and timely recovery of all reasonable costs incurred by an electrical corporation to implement the program, including reasonable expenses for changes to their billing system and handling of collections, and shall determine the appropriate method of allocating those costs. The electrical corporation shall have the discretion, but not the obligation, to incorporate in its bill those charges by the participant organization to participants, provided that the electrical corporation recovers all incremental costs of providing that service. The commission shall approve a memorandum account to track billing system and implementation costs and may not direct an electrical corporation to conduct any billing system work prior to approval of the memorandum account.

SEC. 7.SEC. 6.

 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.