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

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Date Published: 05/01/2017 09:00 PM
AB920:v95#DOCUMENT

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 add Section 399.16.5 to amend Sections 454.52 and 9621 of the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


AB 920, as amended, Aguiar-Curry. California Renewables Portfolio Standard Program. Electricity: integrated resource plans.
Under existing law, the Public Utilities Commission (CPUC) has regulatory authority over public utilities, including electrical corporations, while local publicly owned electric utilities, as defined, are under the direction of their governing boards. Existing law requires the CPUC 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 CPUC and subject to CPUC review.
This bill would require the CPUC, when reviewing each load-serving entity’s integrated resource plan, to evaluate the mix of resources in the load-serving entity’s total resource and renewable resource portfolios to ensure balanced portfolios with an appropriate mix of peaking, dispatchable, baseload, firm, and as-available capacity and would require the CPUC to assess the need for, and benefits of, existing and new renewable baseload generation and consider whether to establish procurement requirements for renewable baseload generation.
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 peaking, dispatchable, baseload, firm, and as-available capacity and would require the governing board to assess the need for, and benefits of, existing and new renewable baseload generation and consider whether to establish procurement requirements for 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.

The California Renewables Portfolio Standard Program requires the Public Utilities Commission to establish a renewables portfolio standard requiring all retail sellers, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources, as defined, so that the total kilowatthours of those products sold to their retail end-use customers achieves 25% of retail sales by December 31, 2016, 33% by December 31, 2020, 40% by December 31, 2024, 45% by December 31, 2027, and 50% by December 31, 2030. The program additionally requires each local publicly owned electric utility, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources to achieve the procurement requirements established by the program. The program, consistent with the goals of procuring the least-cost and best-fit eligible renewable energy resources that meet project viability principles, requires that all retail sellers and local publicly owned electric utilities procure a balanced portfolio of electricity products from eligible renewable energy resources, as specified, referred to as the portfolio content requirements.

This bill would require each retail seller and local publicly owned electric utility to procure not less than 20% of the electricity products required to be procured for overall compliance with the Renewables Portfolio Standard through renewable energy resource contracts from baseload renewable generation.

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 this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime. By placing additional duties 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 specified reasons.

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

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


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) California is at the forefront of national and global efforts to address climate change through reducing emissions of greenhouse gases, and has prioritized reducing emissions of greenhouse gases in the electrical industry through the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 3.2 of Part 1 of Division 1 of the Public Utilities Code).
(2) The California Renewables Portfolio Standard Program has established an effective framework for increasing the use of electricity generated from renewable energy sources by requiring the state’s retail suppliers and local publicly owned electric utilities to obtain an increasing percentage of the electricity supplied to their retail customers from defined eligible renewable energy resources.
(3) The state is ahead of schedule to meet its 2020 goal of generating 33 percent of the electricity sold to retail end users from eligible renewable energy resources and has set the goal of generating 50 percent of the electricity sold to retail end users from those resources by 2030.
(4) Obtaining at least 50 percent of the electricity sold to retail end users in California from eligible renewable energy resources to meet the state’s objectives for clean energy, clean air, and pollution reduction depends on a reliable, resilient, and secure electrical grid.
(5) To meet the requirements of the California Renewables Portfolio Standard Program requires the development and procurement of a balanced portfolio of electricity products from eligible renewable energy resources that focuses on reliability, with incidental job creation and retention benefits.
(6) The California Renewables Portfolio Standard Program also requires that the renewables portfolio standard reflect an optimal mix of eligible renewable energy resources with deliverability characteristics that include peaking, dispatchable baseload, firm, and as-available capacity, a requirement that necessitates occasional adjustments to the optimal mix of resources as the renewables portfolio standard procurement requirements increase.
(7) The state’s Independent System Operator has noted increased spikes in the supply of electricity that are not aligned with when electricity is consumed, due to the high penetration of intermittent generation as the percentage of electricity supplied by eligible renewable energy resources has surpassed the 20 percent renewables portfolio standard requirement, and notes that this misalignment of electrical supply will increase as the state moves to a 33-percent and 50-percent renewables portfolio standard and beyond.
(8) The state has significant existing and potential sources of renewable energy that can provide baseload or flexible generation that not only can contribute to the achievement of the state’s clean energy goals, but will be needed to cost-effectively maintain electrical grid reliability and resiliency by counterbalancing increasing amounts of new, intermittent generation from eligible renewable energy resources.
(9) These existing and potential sources of renewable energy that offer baseload or flexible generation also provide significant, measurable, life-cycle reductions in emissions of greenhouse gases and short-lived climate pollutants by diversion of their fuel stocks from open burning or flaring and by preventing the discharge of treated wastewater into rivers by using it in energy production that would reduce overall emissions of greenhouse gases and short-lived climate pollutants before and during the generation of electricity.
(10) Many of the potential sources of renewable energy that offer baseload or flexible generation are located in areas of the state that are environmentally or economically challenged, including within the Counties of Lake, Sonoma, Imperial, and Inyo.
(11) These existing and potential sources of renewable energy that offer baseload or flexible generation are also major employers in the communities where projects are located, providing a diverse range of full-time employment opportunities as well as contractor jobs throughout all phases of development and operation.
(12) These existing and potential sources of renewable energy that offer baseload or flexible generation already or would make significant financial contributions to the local economies where they are located, including from the payment of property taxes, royalty payments, sales, and employment taxes.
(13) The state’s clean air and pollution reduction objectives have prioritized investment in, and achievement of, reductions in emissions of air contaminants and toxic air contaminants in environmentally and economically challenged regions of the state.
(14) The portfolio content requirements of the California Renewables Portfolio Standard Program place the highest priority upon procuring generation from eligible renewable energy resources that actually serve end users within California by establishing as the eligibility requirements for the first content category that the eligible renewable energy resource have a first point of interconnection with a California balancing authority, have a first point of interconnection with distribution facilities used to serve end users within a California balancing authority area, be scheduled from the eligible renewable energy resource into a California balancing authority without substituting electricity from another source, or have an agreement to dynamically transfer electricity to a California balancing authority.
(15) It is the intent of the Legislature that the objectives described in this act be achieved while protecting natural and working lands.
(b) This act shall be known, and may be cited, as the California Reliable Renewable Energy Act of 2017.

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.
(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. In reviewing each load-serving entity’s integrated resource plan, the commission shall evaluate the mix of resources in the load-serving entity’s total resource and renewable resource portfolios to ensure balanced portfolios with an appropriate mix of peaking, dispatchable, baseload, firm, and as-available capacity. The commission shall assess the need for, and benefits of, existing and new renewable baseload generation and consider whether to establish procurement requirements for renewable baseload generation that meets the goals specified in paragraph (1) of subdivision (a).
(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 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.
SEC. 2.Section 399.16.5 is added to the Public Utilities Code, to read:
399.16.5.

Each retail seller and local publicly owned electric utility shall procure not less than 20 percent of the electricity products required to be procured for overall compliance with the Renewables Portfolio Standard through renewable energy resource contracts from baseload renewable generation.

SEC. 3.

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 or because 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.