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SB-963 Renewable energy resources: local publicly owned electric utilities.(2011-2012)

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SB963:v98#DOCUMENT

Amended  IN  Senate  February 13, 2012

CALIFORNIA LEGISLATURE— 2011–2012 REGULAR SESSION

Senate Bill
No. 963

Introduced  by  Senator Cannella
OlsenBerryhillLa Malfa

January 11, 2012

An act to amend Sections 25740 and 25741 of, and to repeal Section 25740.5 of, the Public Resources Code, and to amend Sections 399.11, 399.12, 399.13, 399.14, 399.15, and 399.30 of, and repeal Section 399.12.5 Sections 399.20 and 399.22 of, and to amend and renumber Section 387.6 of, the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 963, as amended, Cannella. Renewable energy resources: local publicly owned electric utilities.
Existing law requires a local publicly owned electric utility that sells electricity at retail to 75,000 or more customers to adopt and implement a tariff for electricity purchased from an electric generation facility meeting certain size, deliverability, and interconnection requirements and to consider certain factors. Existing law requires the local publicly owned electric utility to make the tariff available to owners and operators of an electric generation facility within the service territory of the utility, upon request, on a first-come-first-served basis, until the utility meets its proportionate share of a statewide cap of 750 megawatts cumulative rated generation capacity served under the feed-in tariffs adopted pursuant to the above-described requirements. Existing law provides that the electricity purchased from an electric generation facility counts toward meeting the local publicly owned electric utility’s renewables portfolio standard annual procurement targets.
This bill would move these requirements to that portion of the Public Utilities Code concerning the California Renewables Portfolio Standard Program. The bill would make other technical and nonsubstantive changes.

Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations, as defined, while local publicly owned electric utilities, as defined, are under the direction of their governing board. The existing Renewables Portfolio Standard Program (RPS program) requires a retail seller of electricity, as defined, and local publicly owned electric utilities to purchase specified minimum quantities of electricity products from eligible renewable energy resources, as defined, for specified compliance periods. The specified minimum quantities of electricity products are based upon a percentage of the utility’s total retail sales of electricity in California. Pursuant to the RPS program, certain small, conduit, and repowered hydroelectric generation facilities are eligible renewable energy resources.

This bill would repeal those provisions of the RPS program making small, conduit, and repowered hydroelectric generation facilities eligible renewable energy resources. The bill would revise the RPS program so that the specified minimum quantities of electricity products required to be procured are based upon a percentage of the utility’s net program retail sales of electricity in California. The bill would define “net program retail sales” of electricity as being the total retail sales of electricity by the retail seller or local publicly owned electric utility within California, minus those retail sales where the load was met by generation from a hydroelectric generation facility. The bill would make other conforming changes.

The Renewable Energy Resources Program states the intent of the Legislature to increase the amount of electricity generated from eligible renewable energy resources per year so that amount equals at least 33% of total retail sales of electricity in California per year by December 31, 2020.

This bill would state the intent of the Legislature to increase the amount of electricity generated from eligible renewable energy resources per year so that amount equals at least 33% of net program retail sales of electricity in California per year by December 31, 2020.

Existing law requires the State Energy Resources Conservation and Development Commission, by June 30, 2011, to study and provide a report to the Legislature that analyzes run-of-river hydroelectric generating facilities, as defined, in British Columbia, including whether these facilities are, or should be, included as renewable electrical generation facilities for purposes of the Renewable Energy Resources Program administered by the Energy Commission or eligible renewable energy resources for purposes of the RPS program.

This bill would repeal that requirement.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YESNO   Local Program: NO  

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


SECTION 1.

 Section 387.6 of the Public Utilities Code is amended and renumbered to read:

387.6.399.32.
 (a) It is the policy of the state and the intent of the Legislature to encourage electrical generation from eligible renewable energy resources.
(b) As used in this section, “electric generation facility” means an electric generation facility located within the service territory of, and developed to sell electricity to, a local publicly owned electric utility, and that meets all of the following criteria:
(1) Has an effective capacity of not more than three megawatts.
(2) Is interconnected and operates in parallel with the electrical transmission and distribution grid.
(3) Is strategically located and interconnected to the electrical transmission and distribution grid in a manner that optimizes the deliverability of electricity generated at the facility to load centers.
(4) Is an eligible renewable energy resource pursuant to Article 16 (commencing with Section 399.11) this article.
(c) A local publicly owned electric utility that sells electricity at retail to 75,000 or more customers shall adopt a standard tariff for electricity purchased from an electric generation facility.
(d) The governing board of the local publicly owned electric utility shall ensure that the tariff adopted pursuant to subdivision (c) reflects the value of every kilowatthour of electricity generated on a time-of-delivery basis. The governing board may adjust this value based on the other attributes of renewable generation. The governing board shall ensure, with respect to rates and charges, that ratepayers that do not receive service pursuant to the tariff are indifferent to whether a ratepayer with an electric generation facility receives service pursuant to the tariff.
(e) A local publicly owned electric utility that sells electricity at retail to 75,000 or more customers shall make the tariff available to the owner or operator of an electric generation facility within the service territory of the utility, upon request, on a first-come-first-served basis, until the utility meets its proportionate share of a statewide cap of 750 megawatts cumulative rated generation capacity served under this section and Section 399.20. The proportionate share shall be calculated based on the ratio of the utility’s peak demand compared to the total statewide peak demand.
(f) The local publicly owned electric utility may make the terms of the tariff available to owners and operators of an electric generation facility in the form of a standard contract.
(g) Every kilowatthour of electricity purchased from an electric generation facility shall count toward meeting the local publicly owned electric utility’s renewables portfolio standard annual procurement targets for purposes of Section 387 399.30.
(h) (1) A local publicly owned electric utility may establish performance standards for any electric generation facility that has a capacity greater than one megawatt to ensure that those facilities are constructed, operated, and maintained to generate the expected annual net production of electricity and do not impact system reliability.
(2) A local publicly owned electric utility may reduce the three megawatt capacity limitation of paragraph (1) of subdivision (b) if the utility finds that a reduced capacity limitation is necessary.
(i) Within 10 days of receipt of a request for a tariff pursuant to this section from an owner or operator of an electric generation facility, the local publicly owned electric utility that receives the request shall post a copy of the request on its Internet Web site. The information posted on the Internet Web site shall include the name of the city in which the facility is located, but information that is proprietary and confidential, including, but not limited to, address information beyond the name of the city in which the facility is located, shall be redacted.
(j) A local publicly owned electric utility may deny a tariff request pursuant to this section if the local publicly owned electric utility makes any of the following findings:
(1) The electric generation facility does not meet the requirements of this section.
(2) The transmission or distribution grid that would serve as the point of interconnection is inadequate.
(3) The electric generation facility does not meet all applicable state and local laws and building standards, and utility interconnection requirements.
(4) The aggregate of all electric generating facilities on a distribution circuit would adversely impact utility operation and load restoration efforts of the distribution system.
(k) Upon receiving a notice of denial from a local publicly owned electric utility, the owner or operator of the electric generation facility denied a tariff pursuant to this section shall have the right to appeal that decision to the governing board of the local publicly owned electric utility.
(l) In order to ensure the safety and reliability of electric generation facilities, the owner of an electric generation facility receiving a tariff pursuant to this section shall provide an inspection and maintenance report to the local publicly owned electric utility at least once every other year. The inspection and maintenance report shall be prepared at the owner’s or operator’s expense by a California licensed California-licensed contractor who is not the owner or operator of the electric generation facility. A California licensed California-licensed electrician shall perform the inspection of the electrical portion of the generation facility.
(m) The contract between the electric generation facility receiving the tariff and the local publicly owned electric utility shall contain provisions that ensure that construction of the electric generating facility complies with all applicable state and local laws and building standards, and utility interconnection requirements.
(n) (1) All construction and installation of facilities of the local publicly owned electric utility, including at the point of the output meter or at the transmission or distribution grid, shall only be performed by that local publicly owned electric utility.
(2) All interconnection facilities installed on the local publicly owned electric utility’s side of the transfer point for electricity between the local publicly owned electric utility and the electrical conductors of the electric generation facility shall be owned, operated, and maintained only by the local publicly owned electric utility. The ownership, installation, operation, reading, and testing of revenue metering equipment for electric generating facilities shall only be performed only by the local publicly owned electric utility.

SEC. 2.

 Section 399.20 of the Public Utilities Code is amended to read:

399.20.
 (a) It is the policy of this state and the intent of the Legislature to encourage electrical generation from eligible renewable energy resources.
(b) As used in this section, “electric generation facility” means an electric generation facility located within the service territory of, and developed to sell electricity to, an electrical corporation that meets all of the following criteria:
(1) Has an effective capacity of not more than three megawatts.
(2) Is interconnected and operates in parallel with the electrical transmission and distribution grid.
(3) Is strategically located and interconnected to the electrical transmission and distribution grid in a manner that optimizes the deliverability of electricity generated at the facility to load centers.
(4) Is an eligible renewable energy resource.
(c) Every electrical corporation shall file with the commission a standard tariff for electricity purchased from an electric generation facility. The commission may modify or adjust the requirements of this section for any electrical corporation with less than 100,000 service connections, as individual circumstances merit.
(d) (1) The tariff shall provide for payment for every kilowatthour of electricity purchased from an electric generation facility for a period of 10, 15, or 20 years, as authorized by the commission. The payment shall be the market price determined by the commission pursuant to paragraph (2) and shall include all current and anticipated environmental compliance costs, including, but not limited to, mitigation of emissions of greenhouse gases and air pollution offsets associated with the operation of new generating facilities in the local air pollution control or air quality management district where the electric generation facility is located.
(2) The commission shall establish a methodology to determine the market price of electricity for terms corresponding to the length of contracts with an electric generation facility, in consideration of the following:
(A) The long-term market price of electricity for fixed price contracts, determined pursuant to an electrical corporation’s general procurement activities as authorized by the commission.
(B) The long-term ownership, operating, and fixed-price fuel costs associated with fixed-price electricity from new generating facilities.
(C) The value of different electricity products including baseload, peaking, and as-available electricity.
(3) The commission may adjust the payment rate to reflect the value of every kilowatthour of electricity generated on a time-of-delivery basis.
(4) The commission shall ensure, with respect to rates and charges, that ratepayers that do not receive service pursuant to the tariff are indifferent to whether a ratepayer with an electric generation facility receives service pursuant to the tariff.
(e) An electrical corporation shall provide expedited interconnection procedures to an electric generation facility located on a distribution circuit that generates electricity at a time and in a manner so as to offset the peak demand on the distribution circuit, if the electrical corporation determines that the electric generation facility will not adversely affect the distribution grid. The commission shall consider and may establish a value for an electric generation facility located on a distribution circuit that generates electricity at a time and in a manner so as to offset the peak demand on the distribution circuit.
(f) An electrical corporation shall make the tariff available to the owner or operator of an electric generation facility within the service territory of the electrical corporation, upon request, on a first-come-first-served basis, until the electrical corporation meets its proportionate share of a statewide cap of 750 megawatts cumulative rated generation capacity served under this section and Section 387.6 399.32. The proportionate share shall be calculated based on the ratio of the electrical corporation’s peak demand compared to the total statewide peak demand.
(g) The electrical corporation may make the terms of the tariff available to owners and operators of an electric generation facility in the form of a standard contract subject to commission approval.
(h) Every kilowatthour of electricity purchased from an electric generation facility shall count toward meeting the electrical corporation’s renewables portfolio standard annual procurement targets for purposes of paragraph (1) of subdivision (b) of Section 399.15.
(i) The physical generating capacity of an electric generation facility shall count toward the electrical corporation’s resource adequacy requirement for purposes of Section 380.
(j) (1) The commission shall establish performance standards for any electric generation facility that has a capacity greater than one megawatt to ensure that those facilities are constructed, operated, and maintained to generate the expected annual net production of electricity and do not impact system reliability.
(2) The commission may reduce the three megawatt capacity limitation of paragraph (1) of subdivision (b) if the commission finds that a reduced capacity limitation is necessary to maintain system reliability within that electrical corporation’s service territory.
(k) (1) Any owner or operator of an electric generation facility that received ratepayer-funded incentives in accordance with Section 379.6 of this code, or with Section 25782 of the Public Resources Code, and participated in a net metering program pursuant to Sections 2827, 2827.9, and 2827.10 of this code prior to January 1, 2010, shall be eligible for a tariff or standard contract filed by an electrical corporation pursuant to this section.
(2) In establishing the tariffs or standard contracts pursuant to this section, the commission shall consider ratepayer-funded incentive payments previously received by the generation facility pursuant to Section 379.6 of this code or Section 25782 of the Public Resources Code. The commission shall require reimbursement of any funds received from these incentive programs to an electric generation facility, in order for that facility to be eligible for a tariff or standard contract filed by an electrical corporation pursuant to this section, unless the commission determines ratepayers have received sufficient value from the incentives provided to the facility based on how long the project has been in operation and the amount of renewable electricity previously generated by the facility.
(3) A customer that receives service under a tariff or contract approved by the commission pursuant to this section is not eligible to participate in any net metering program.
(l) An owner or operator of an electric generation facility electing to receive service under a tariff or contract approved by the commission shall continue to receive service under the tariff or contract until either of the following occurs:
(1) The owner or operator of an electric generation facility no longer meets the eligibility requirements for receiving service pursuant to the tariff or contract.
(2) The period of service established by the commission pursuant to subdivision (d) is completed.
(m) Within 10 days of receipt of a request for a tariff pursuant to this section from an owner or operator of an electric generation facility, the electrical corporation that receives the request shall post a copy of the request on its Internet Web site. The information posted on the Internet Web site shall include the name of the city in which the facility is located, but information that is proprietary and confidential, including, but not limited to, address information beyond the name of the city in which the facility is located, shall be redacted.
(n) An electrical corporation may deny a tariff request pursuant to this section if the electrical corporation makes any of the following findings:
(1) The electric generation facility does not meet the requirements of this section.
(2) The transmission or distribution grid that would serve as the point of interconnection is inadequate.
(3) The electric generation facility does not meet all applicable state and local laws and building standards and utility interconnection requirements.
(4) The aggregate of all electric generating facilities on a distribution circuit would adversely impact utility operation and load restoration efforts of the distribution system.
(o) Upon receiving a notice of denial from an electrical corporation, the owner or operator of the electric generation facility denied a tariff pursuant to this section shall have the right to appeal that decision to the commission.
(p) In order to ensure the safety and reliability of electric generation facilities, the owner of an electric generation facility receiving a tariff pursuant to this section shall provide an inspection and maintenance report to the electrical corporation at least once every other year. The inspection and maintenance report shall be prepared at the owner’s or operator’s expense by a California-licensed contractor who is not the owner or operator of the electric generation facility. A California-licensed electrician shall perform the inspection of the electrical portion of the generation facility.
(q) The contract between the electric generation facility receiving the tariff and the electrical corporation shall contain provisions that ensure that construction of the electric generating facility complies with all applicable state and local laws and building standards, and utility interconnection requirements.
(r) (1) All construction and installation of facilities of the electrical corporation, including at the point of the output meter or at the transmission or distribution grid, shall be performed only by that electrical corporation.
(2) All interconnection facilities installed on the electrical corporation’s side of the transfer point for electricity between the electrical corporation and the electrical conductors of the electric generation facility shall be owned, operated, and maintained only by the electrical corporation. The ownership, installation, operation, reading, and testing of revenue metering equipment for electric generating facilities shall only be performed by the electrical corporation.

SEC. 3.

 Section 399.22 of the Public Utilities Code is amended to read:

399.22.
 (a) For purposes of this section, “state agency” means any state agency, board, department, or commission, including the entities specified in subdivision (a) of Section 15814.12 of the Government Code.
(b) A state agency generating electricity from an electric generation facility, as defined in Section 387.6 or 399.20 or 399.32, that operates under a tariff adopted pursuant to either of those sections, and that is owned by, operated by, or on property under the control of, the state agency shall take the total annual amount of kilowatthours exported to the grid into consideration when determining whether the state agency has achieved the policy goals and objectives established by law for the state agency.