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AB-920 Electricity: procurement plans: integrated resource plans.(2017-2018)

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Date Published: 07/17/2017 10:00 AM
AB920:v93#DOCUMENT

Amended  IN  Senate  July 17, 2017
Amended  IN  Senate  June 28, 2017
Amended  IN  Assembly  May 01, 2017
Amended  IN  Assembly  April 26, 2017
Amended  IN  Assembly  April 17, 2017
Amended  IN  Assembly  March 27, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 920


Introduced by Assembly Member Aguiar-Curry
(Principal coauthor: Senator McGuire)
(Coauthors: Assembly Members Bigelow, Dahle, Eggman, Gallagher, Eduardo Garcia, and Wood)
(Coauthor: Senator Bradford)

February 16, 2017


An act to amend Sections 454.51 and 454.52 454.51, 454.52, and 9621 of the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


AB 920, as amended, Aguiar-Curry. Electricity: procurement plans: integrated resource plans.
Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations. corporations, while local publicly owned electric utilities, as defined, are under the direction of their governing boards. The Public Utilities Act requires the commission PUC to review and accept, modify, or reject a procurement plan for each electrical corporation and requires the procurement plan to include specified elements, among them a showing that it will achieve certain objectives. Existing law requires the commission PUC to identify a diverse and balanced portfolio of resources needed to ensure a reliable electricity supply that provides optimal integration of renewable energy in a cost-effective manner, and specifies the respective roles of electrical corporations and community choice aggregators in satisfying the portfolio needs for renewable integration.
This bill would specify that a “diverse and balanced portfolio of resources” includes an appropriate mix of renewable capacity, including peaking, dispatchable, baseload, firm, and as-available capacity. The bill would additionally require the commission PUC to assess the need for, and benefits of, existing and future renewable baseload generation, and determine whether a procurement requirement for renewable baseload generation is necessary to meet the portfolio needs for renewable integration.
Existing law requires the commission PUC to adopt a process for each load-serving entity, defined as including electrical corporations, electric service providers, and community choice aggregators, to file an integrated resource plan and a schedule for periodic updates to the plan to ensure that load-serving entities accomplish specified objectives. Existing law requires each load-serving entity to prepare and file an integrated resource plan consistent with those objectives on a time schedule directed by the commission PUC and subject to commission PUC review.
This bill would require that an integrated resource plan ensure that the load-serving entity procures a balanced resource portfolio with an appropriate mix of renewable capacity, including peaking, dispatchable, baseload, firm, and as-available capacity.
Existing law requires that the governing board of a local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours adopt an integrated resource plan and a process for updating the plan at least once every 5 years to ensure the utility achieves specified objectives. Existing law requires that the integrated resource plan and any updates be filed with the State Energy Resources Conservation and Development Commission (Energy Commission), requires the Energy Commission to review the plans and plan updates, and, if the Energy Commission determines a plan or plan update is deficient, to provide recommendations to correct the deficiencies.
This bill would require the governing board, when reviewing the local publicly owned electric utility’s integrated resource plan, to evaluate the mix of resources in the utility’s total resource and renewable resource portfolios to ensure balanced portfolios with an appropriate mix of renewable capacity, including peaking, dispatchable, baseload, firm, and as-available capacity. The bill would require the governing board to assess the need for, and benefits of, existing and new renewable baseload generation and consider whether to procure renewable baseload generation for the utility. By placing additional requirements upon local publicly owned electric utilities, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NOYES  

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


SECTION 1.

 Section 454.51 of the Public Utilities Code is amended to read:

454.51.
 The commission shall do all of the following:
(a) (1) Identify a diverse and balanced portfolio of resources needed to ensure a reliable electricity supply that provides optimal integration of renewable energy in a cost-effective manner. The portfolio shall rely upon zero carbon-emitting resources to the maximum extent reasonable and be designed to achieve any statewide greenhouse gas emissions limit established pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code) or any successor legislation.
(2) A “diverse and balanced portfolio of resources” shall include an appropriate mix of renewable capacity, including peaking, dispatchable, baseload, firm, and as-available capacity.
(3) The commission shall assess the need for, and benefits of, existing and future renewable baseload generation, and determine whether a procurement requirement for renewable baseload generation is necessary to meet the need identified in paragraph (1).
(b) Direct each electrical corporation to include, as part of its proposed procurement plan, a strategy for procuring best-fit and least-cost resources to satisfy the portfolio needs identified by the commission pursuant to subdivision (a).
(c) Ensure that the net costs of any incremental renewable energy integration resources procured by an electrical corporation to satisfy the need identified in subdivision (a) are allocated on a fully nonbypassable basis consistent with the treatment of costs identified in paragraph (2) of subdivision (c) of Section 365.1.
(d) Permit community choice aggregators to submit proposals for satisfying their portion of the renewable integration need identified in subdivision (a). If the commission finds this need is best met through long-term procurement commitments for resources, community choice aggregators shall also be required to make long-term commitments for resources. The commission shall approve proposals pursuant to this subdivision if it finds all of the following:
(1) The resources proposed by a community choice aggregator will provide equivalent integration of renewable energy.
(2) The resources proposed by a community choice aggregator will promote the efficient achievement of state energy policy objectives, including reductions in greenhouse gas emissions.
(3) Bundled customers of an electrical corporation will be indifferent from the approval of the community choice aggregator proposals.
(e) Ensure that all costs resulting from nonperformance to satisfy the need in subdivision (a) or (d), as applicable, shall be borne by the electrical corporation or community choice aggregator that failed to perform.

SEC. 2.

 Section 454.52 of the Public Utilities Code is amended to read:

454.52.
 (a) (1) Commencing in 2017, and to be updated regularly thereafter, the commission shall adopt a process for each load-serving entity, as defined in Section 380, to file an integrated resource plan, and a schedule for periodic updates to the plan, to ensure that load-serving entities do the following:
(A) Meet the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each load-serving entity that reflect the electricity sector’s percentage in achieving the economywide greenhouse gas emissions reductions of 40 percent from 1990 levels by 2030.
(B) Procure at least 50 percent eligible renewable energy resources by December 31, 2030, consistent with Article 16 (commencing with Section 399.11) of Chapter 2.3.
(C) Enable each electrical corporation to fulfill its obligation to serve its customers at just and reasonable rates.
(D) Minimize impacts on ratepayers’ bills.
(E) Ensure system and local reliability.
(F) Strengthen the diversity, sustainability, and resilience of the bulk transmission and distribution systems, and local communities.
(G) Enhance distribution systems and demand-side energy management.
(H) Minimize localized air pollutants and other greenhouse gas emissions, with early priority on disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.
(I) Procure a balanced resource portfolio with an appropriate mix of renewable capacity, including peaking, dispatchable, baseload, firm, and as-available capacity.
(2) (A) The commission may authorize all source procurement for electrical corporations that includes various resource types including demand-side resources, supply side resources, and resources that may be either demand-side resources or supply side resources, taking into account the differing electrical corporations’ geographic service areas, to ensure that each load-serving entity meets the goals set forth in paragraph (1).
(B) The commission may approve procurement of resource types that will reduce overall greenhouse gas emissions from the electricity sector and meet the other goals specified in paragraph (1), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.
(b) (1) Each load-serving entity shall prepare and file an integrated resource plan consistent with paragraph (2) of subdivision (a) on a time schedule directed by the commission and subject to commission review.
(2) Each electrical corporation’s plan shall follow the provisions of Section 454.5.
(3) The plan of a community choice aggregator shall be submitted to its governing board for approval and provided to the commission for certification, consistent with paragraph (5) of subdivision (a) of Section 366.2, and shall achieve the following:
(A) Economic, reliability, environmental, security, and other benefits and performance characteristics that are consistent with the goals set forth in paragraph (1) of subdivision (a).
(B) A diversified procurement portfolio consisting of both short-term and long-term electricity and electricity-related and demand reduction products.
(C) The resource adequacy requirements established pursuant to Section 380.
(4) The plan of an electric service provider shall achieve the goals set forth in paragraph (1) of subdivision (a) through a diversified portfolio consisting of both short-term and long-term electricity, electricity-related, and demand reduction products.
(c) To the extent that additional procurement is authorized for the electrical corporation in the integrated resource plan or the procurement process authorized pursuant to Section 454.5, the commission shall ensure that the costs are allocated in a fair and equitable manner to all customers consistent with 454.51, that there is no cost-shifting among customers of load-serving entities, and that community choice aggregators may self-provide renewable integration resources consistent with Section 454.51.
(d) In order to eliminate redundancy and increase efficiency, the process adopted pursuant to subdivision (a) shall incorporate, and not duplicate, any other planning processes of the commission.

SEC. 3.

 Section 9621 of the Public Utilities Code is amended to read:

9621.
 (a) This section shall apply to a local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours, as determined on a three-year average commencing January 1, 2013.
(b) On or before January 1, 2019, the governing board of a local publicly owned electric utility shall adopt an integrated resource plan and a process for updating the plan at least once every five years to ensure the utility achieves all of the following:
(1) Meets the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each local publicly-owned electric utility that reflect the electricity sector’s percentage in achieving the economywide greenhouse gas emissions reductions of 40 percent from 1990 levels by 2030.
(2) Ensures procurement of at least 50 percent eligible renewable energy resources by 2030 consistent with Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1.
(3) Meets the goals specified in subparagraphs (D) to (H), inclusive, of paragraph (1) of subdivision (a) of Section 454.52, and the goal specified in subparagraph (C) of paragraph (1) of subdivision (a) of Section 454.52, as that goal is applicable to each local publicly owned electric utility. A local publicly owned electric utility shall not, solely by reason of this paragraph, be subject to requirements otherwise imposed on electrical corporations.
(c) (1) The integrated resource plan shall address procurement for the following:
(A) Energy efficiency and demand response resources pursuant to Section 9615.
(B) Energy storage requirements pursuant to Chapter 7.7 (commencing with Section 2835) of Part 2 of Division 1.
(C) Transportation electrification.
(D) A diversified procurement portfolio consisting of both short-term and long-term electricity, electricity-related, and demand response products.
(E) The resource adequacy requirements established pursuant to Section 9620.
(2) (A) The governing board of the local publicly owned electric utility may authorize all source procurement that includes various resource types, including demand-side resources, supply side resources, and resources that may be either demand-side resources or supply side resources, to ensure that the local publicly owned electric utility procures the optimum resource mix that meets the objectives of subdivision (b).
(B) The governing board may authorize procurement of resource types that will reduce overall greenhouse gas emissions from the electricity sector and meet the other goals specified in subdivision (b), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.
(C) The governing board shall evaluate the mix of resources in its total resource and renewable resource portfolios to ensure a balanced portfolio with an appropriate mix of renewable capacity, including peaking, dispatchable, baseload, firm, and as-available capacity. The governing board shall assess the need for, and benefits of, existing and new renewable baseload generation and consider whether to procure renewable baseload generation that meets the objectives specified in subdivision (b).
(d) A local publicly owned electric utility shall satisfy the notice and public disclosure requirements of subdivision (f) of Section 399.30 with respect to any integrated resource plan or plan update it considers.

SEC. 4.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.