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AB-1513 Energy: energy efficiency financing: public utility contracting.(2019-2020)

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Date Published: 05/07/2019 09:00 PM
AB1513:v97#DOCUMENT

Amended  IN  Assembly  May 07, 2019
Amended  IN  Assembly  March 25, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1513


Introduced by Assembly Member Holden

February 22, 2019


An act to amend Sections 16480.45 and 20194.5 of the Government Code, to amend Section 11797 of the Insurance Code, and to amend Sections 336, 371, 374, 379.5, 384, 394.25, 399.20, 701.1, 714, 715, 740.3, 773, 785, 895, 1822, 2774.6, 2840.2, 2854, and 9607 of the Public Utilities Code, relating to public utilities.


LEGISLATIVE COUNSEL'S DIGEST


AB 1513, as amended, Holden. Energy: energy efficiency financing: public utility contracting.
Existing law provides for the financing of energy or water efficiency improvements through the issuance of Property Assessed Clean Energy (PACE) bonds that are secured by a voluntary contractual assessment on property or a special tax on property.
This bill would update references to the definition of PACE bonds.
The Public Utilities Code defines “Energy Commission” to mean the State Energy Resources Conservation and Development Commission for purposes of that code.
This bill would change existing references to the State Energy Resources Conservation and Development Commission or the California Energy Resources Conservation and Development Commission in the Public Utilities Code to Energy Commission.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities. Existing law purports to exempt a public utility under the jurisdiction of the Public Utilities Commission from a repealed statute, which used to require that a person awarded a contract involving an expenditure in excess of $2,500 to construct certain public works file a bond with the public body awarding the contract before commencing work. Existing law, which replaced the repealed statute, requires that a direct contractor that is awarded a public works contract involving an expenditure in excess of $25,000 file a bond with the public entity awarding the contract before commencing work.

By changing a cross reference, this bill would explicitly exempt a public utility under the jurisdiction of the Public Utilities Commission from the requirement that a direct contractor that is awarded a public works contract involving an expenditure in excess of $25,000 file a bond with the public entity awarding the contract before commencing work.

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

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


SECTION 1.

 Section 16480.45 of the Government Code is amended to read:

16480.45.
 In addition to any other investment authorized by this article, the Treasurer may invest in Property Assessed Clean Energy (PACE) bonds, as defined in Section 26054 of the Public Resources Code.

SEC. 2.

 Section 20194.5 of the Government Code is amended to read:

20194.5.
 In addition to the other investments authorized by this article, the board may invest in Property Assessed Clean Energy (PACE) bonds, as defined in Section 26054 of the Public Resources Code.

SEC. 3.

 Section 11797 of the Insurance Code, as amended by Section 1 of Chapter 839 of the Statutes of 2012, is amended to read:

11797.
 (a) The board of directors shall cause all moneys in the State Compensation Insurance Fund that are in excess of current requirements to be invested and reinvested, from time to time, in the same manner as provided for private insurance carriers pursuant to Article 3 (commencing with Section 1170) and Article 4 (commencing with Section 1190) of Chapter 2 of Part 2 of Division 1, but excluding Sections 1191, 1191.1, 1191.5, 1192.2, 1192.4, 1192.6, 1192.7, 1192.9, 1192.95, 1192.10, 1194.7, 1194.8, 1194.81, 1194.82, 1194.85, 1198, and 1199. Notwithstanding the foregoing, the State Compensation Insurance Fund may invest or reinvest an aggregated maximum of 20 percent of moneys that are in excess of the admitted assets over the liabilities and required reserves in the investments allowed pursuant to Sections 1191, 1192.4, 1192.6, 1192.10, 1194.7, and 1198.
(b) (1) (A) Notwithstanding any other law, the State Compensation Insurance Fund may purchase general obligation bonds or other evidence of indebtedness issued by the state, including, but not limited to, warrants issued pursuant to Part 4 (commencing with Section 17000) of Division 4 of Title 2 of the Government Code or notes issued pursuant to Part 5 (commencing with Section 17300) of Division 4 of Title 2 of the Government Code, in any amount and to enter into purchase contracts with the state for this purpose.
(B) Notwithstanding any other law, the State Compensation Insurance Fund may purchase Property Assessed Clean Energy (PACE) bonds, as defined in Section 26054 of the Public Resources Code.
(2) The bonds or other evidence of indebtedness specified in paragraph (1), upon delivery to the State Compensation Insurance Fund, shall, for all purposes, be valid and binding obligations of the issuer thereof, be validly issued and outstanding in accordance with their stated terms, and not be deemed to be owned by or on behalf of the issuer thereof.
(c) The Department of Insurance shall submit to the Legislature by January 31, 2019, a report that assesses the benefit and risk of the State Compensation Insurance Fund’s equities investment history by measuring the volatility and total return of the State Compensation Insurance Fund’s investment portfolio with and without equities. The report shall be submitted pursuant to Section 9795 of the Government Code.
(d) This section shall remain in effect only until January 1, 2025, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2025, deletes or extends that date.

SEC. 4.

 Section 11797 of the Insurance Code, as added by Section 2 of Chapter 839 of the Statutes of 2012, is amended to read:

11797.
 (a) The board of directors shall cause all moneys in the State Compensation Insurance Fund that are in excess of current requirements to be invested and reinvested, from time to time, in the same manner as provided for private insurance carriers pursuant to Article 3 (commencing with Section 1170) and Article 4 (commencing with Section 1190) of Chapter 2 of Part 2 of Division 1, but excluding Sections 1191, 1191.1, 1191.5, 1192.2, 1192.4, 1192.6, 1192.7, 1192.9, 1192.95, 1192.10, 1194.7, 1194.8, 1194.81, 1194.82, 1194.85, 1198, and 1199.
(b) (1) (A) Notwithstanding any other law, the State Compensation Insurance Fund may purchase general obligation bonds or other evidence of indebtedness issued by the state, including, but not limited to, notes issued pursuant to Part 5 (commencing with Section 17300) of Division 4 of Title 2 of the Government Code or warrants issued pursuant to Part 4 (commencing with Section 17000) of Division 4 of Title 2 of the Government Code, in any amount and to enter into purchase contracts with the state for this purpose.
(B) Notwithstanding any other law, the State Compensation Insurance Fund may purchase Property Assessed Clean Energy (PACE) bonds, as defined in Section 26054 of the Public Resources Code.
(2) The bonds or other evidence of indebtedness specified in paragraph (1), upon delivery to the State Compensation Insurance Fund, shall, for all purposes, be valid and binding obligations of the issuer thereof, be validly issued and outstanding in accordance with their stated terms, and not be deemed to be owned by or on behalf of the issuer thereof.
(c) This section shall become operative on January 1, 2025.

SEC. 5.

 Section 336 of the Public Utilities Code is amended to read:

336.
 (a) The five-member Oversight Board shall be comprised as follows:
(1) Three members, who are California residents and electricity ratepayers, appointed by the Governor from a list jointly provided by the Energy Commission and the Public Utilities Commission, and subject to confirmation by the Senate.
(2) One member of the Assembly appointed by the Speaker of the Assembly.
(3) One member of the Senate appointed by the Senate Committee on Rules.
(b) Legislative members shall be nonvoting members, however, they are otherwise full members of the board with all rights and privileges pertaining thereto.
(c) Oversight Board members shall serve three-year terms with no limit on reappointment. For purposes of the initial appointments set forth in paragraph (1), the Governor shall appoint one member to a one-year term, one to a two-year term, and one to a three-year term.
(d) The Governor shall designate one of the voting members as the chairperson of the Oversight Board who shall preside over meetings and direct the executive director in the routine administration of the Oversight Board’s business. The chairperson may designate one of the other voting members to preside over meetings in the absence of the chairperson.
(e) Two voting members shall constitute a quorum. Any decision or action of the Oversight Board shall be by majority vote of the voting members.
(f) The members of the Oversight Board shall serve without compensation, but shall be reimbursed for all necessary expenses incurred in the performance of their duties.

SEC. 6.

 Section 371 of the Public Utilities Code is amended to read:

371.
 (a) Except as provided in Sections 372 and 374, the uneconomic costs provided in Sections 367, 368, 375, and 376 shall be applied to each customer based on the amount of electricity purchased by the customer from an electrical corporation or alternate supplier of electricity, subject to changes in usage occurring in the normal course of business.
(b) Changes in usage occurring in the normal course of business are those resulting from changes in business cycles, termination of operations, departure from the utility service territory, weather, reduced production, modifications to production equipment or operations, changes in production or manufacturing processes, fuel switching, including installation of fuel cells pending a contrary determination by the Energy Commission, enhancement or increased efficiency of equipment or performance of existing self-cogeneration equipment, replacement of existing cogeneration equipment with new power generation equipment of similar size as described in paragraph (1) of subdivision (a) of Section 372, installation of demand-side management equipment or facilities, energy conservation efforts, or other similar factors.
(c) Nothing in this section shall be interpreted to exempt or alter the obligation of a customer to comply with Chapter 5 (commencing with Section 119075) of Part 15 of Division 104 of the Health and Safety Code. Nothing in this section shall be construed as a limitation on the ability of residential customers to alter their pattern of electricity purchases by activities on the customer side of the meter.

SEC. 7.

 Section 374 of the Public Utilities Code is amended to read:

374.
 (a) In recognition of statutory authority and past investments existing as of December 20, 1995, and subject to the firewall specified in subdivision (e) of Section 367, the obligation to pay the uneconomic costs identified in Sections 367, 368, 375, and 376 shall not apply to the following:
(1) One hundred ten megawatts of load served by irrigation districts, as hereafter allocated by this paragraph:
(A) The 110 megawatts of load shall be allocated among the service territories of the three largest electrical corporations in the ratio of the number of irrigation districts in the service territory of each utility to the total number of irrigation districts in the service territories of all three utilities.
(B) The total amount of load allocated to each utility service area shall be phased in over five years beginning January 1, 1997, so that one-fifth of the allocation is allocated in each of the five years. Any allocation that remains unused at the end of any year shall be carried over to the succeeding year and added to the allocation for that year.
(C) The load allocated to each utility service territory pursuant to subparagraph (A) shall be further allocated among the respective irrigation districts within that service territory by the Energy Commission. An individual irrigation district requesting an allocation shall submit to the commission by January 31, 1997, detailed plans that show the load that it serves or will serve and for which it intends to utilize use the allocation within the timeframe requested. These plans shall include specific information on the irrigation districts’ organization for electric distribution, contracts, financing and engineering plans for capital facilities, as well as detailed information about the loads to be served, and shall not be less than eight megawatts or more than 40 megawatts, provided, however, that any portion of the 110 megawatts that remains unallocated may be reallocated to projects without regard to the 40 megawatts limitation. In making an allocation among irrigation districts, the Energy Commission shall assess the viability of each submission and whether it can be accomplished in the timeframe proposed. The Energy Commission shall have the discretion to allocate the load covered by this section in a manner that best ensures its usage within the allocation period.
(D) At least 50 percent of each year’s allocation to a district shall be applied to that portion of load that is used to power pumps for agricultural purposes.
(E) Any load pursuant to this subdivision shall be served by distribution facilities owned by, or leased to, the district in question.
(F) Any load allocated pursuant to this paragraph (1) shall be located within the boundaries of the affected irrigation district, or within the boundaries specified in an applicable service territory boundary agreement between an electrical corporation and the affected irrigation district; additionally, the provisions of subparagraph (C) of this paragraph (1) shall be applicable to any load within the Counties of Stanislaus or San Joaquin, or both, served by any irrigation district that is currently serving or will be serving retail customers.
(2) Seventy-five megawatts of load served by the Merced Irrigation District hereafter prescribed in this paragraph:
(A) The total allocation provided by this paragraph shall be phased in over five years beginning January 1, 1997, so that one-fifth of the allocation is received in each of the five years. Any allocation that remains unused at the end of any year shall be carried over to the succeeding year and added to the allocation for that year.
(B) Any load to which the provision of this paragraph is applicable shall be served by distribution facilities owned by, or leased to, Merced Irrigation District.
(C) A load to which the provisions of this paragraph are applicable shall be located within the boundaries of Merced Irrigation District as those boundaries existed on December 20, 1995, together with the territory of Castle Air Force Base that was located outside of the district on that date.
(D) The total allocation provided by this paragraph shall be phased in over five years beginning January 1, 1997, with the exception of load already being served by the district as of June 1, 1996, which shall be deducted from the total allocation and shall not be subject to the costs provided in Sections 367, 368, 375, and 376.
(3) To loads served by irrigation districts, water districts, water storage districts, municipal utility districts, and other water agencies that, on December 20, 1995, were members of the Southern San Joaquin Valley Power Authority, or the Eastside Power Authority, provided, however, that this paragraph shall be applicable only to that portion of each district or agency’s load that is used to power pumps that are owned by that district or agency as of December 20, 1995, or replacements thereof, and is being used to pump water for district purposes. The rates applicable to these districts and agencies shall be adjusted as of January 1, 1997.
(4) The provisions of this subdivision shall no longer be operative after March 31, 2002.
(5) The provisions of paragraph (1) shall not be applicable to any irrigation district, water district, or water agency described in paragraph (2) or (3).
(6) Transmission services provided to any irrigation district described in paragraph (1) or (2) shall be provided pursuant to otherwise applicable tariffs.
(7) Nothing in this chapter shall be deemed to grant the commission any jurisdiction over irrigation districts not already granted to the commission by existing law.
(b) To give the full effect to the legislative intent in enacting Section 701.8, the costs provided in Sections 367, 368, 375, and 376 shall not apply to the load served by preference power purchased from a federal power marketing agency, or its successor, pursuant to Section 701.8 as it existed on January 1, 1996, provided that the power is used solely for the customer’s own systems load and not for sale. The costs of this provision shall be borne by all ratepayers in the affected service territory, notwithstanding the firewall established in subdivision (e) of Section 367.
(c) To give effect to an existing relationship, the obligation to pay the uneconomic costs specified in Sections 367, 368, 375, and 376 shall not apply to that portion of the load of the University of California campus situated in the County of Yolo County that was being served as of May 31, 1996, by preference power purchased from a federal marketing agency, or its successor, provided that the power is used solely for the facility load of that campus and not, directly or indirectly, for sale.

SEC. 8.

 Section 379.5 of the Public Utilities Code is amended to read:

379.5.
 Notwithstanding any other provision of law, on or before March 7, 2001, the commission, in consultation with the Independent System Operator, shall take all of the following actions, and shall include the reasonable costs involved in taking those actions in the distribution revenue requirements of utilities regulated by the commission, as appropriate:
(a) (1) Identify and undertake those actions necessary to reduce or remove constraints on the state’s existing electrical transmission and distribution system, including, but not limited to, reconductoring of transmission lines, the addition of capacitors to increase voltage, the reinforcement of existing transmission capacity, and the installation of new transformer banks. The commission shall, in consultation with the Independent System Operator, give first priority to those geographical regions where congestion reduces or impedes electrical transmission and supply.
(2) Consistent with the existing statutory authority of the commission, afford electrical corporations a reasonable opportunity to fully recover costs it determines are reasonable and prudent to plan, finance, construct, operate, and maintain any facilities under its jurisdiction required by this section.
(b) In consultation with the Energy Commission, adopt energy conservation demand-side management and other initiatives in order to reduce demand for electricity and reduce load during peak demand periods. Those initiatives shall include, but not be limited to, all of the following:
(1) Expansion and acceleration of residential and commercial weatherization programs.
(2) Expansion and acceleration of programs to inspect and improve the operating efficiency of heating, ventilation, and air-conditioning equipment in new and existing buildings, to ensure that these systems achieve the maximum feasible cost-effective energy efficiency.
(3) Expansion and acceleration of programs to improve energy efficiency in new buildings, in order to achieve the maximum feasible reductions in uneconomic energy and peak electricity consumption.
(4) Incentives to equip commercial buildings with the capacity to automatically shut down or dim nonessential lighting and incrementally raise thermostats during a peak electricity demand period.
(5) Evaluation of installing local infrastructure to link temperature setback thermostats to real-time price signals.
(6) Incentives for load control and distributed generation to be paid for enhancing reliability.
(7) Differential incentives for renewable or super clean distributed generation resources pursuant to Section 379.6.
(8) Reevaluation of all efficiency cost-effectiveness tests in light of increases in wholesale electricity costs and of natural gas costs to explicitly include the system value of reduced load on reducing market clearing prices and volatility.
(c) In consultation with the Energy Commission, adopt and implement a residential, commercial, and industrial peak reduction program that encourages electric customers to reduce electricity consumption during peak power periods.

SEC. 9.

 Section 384 of the Public Utilities Code is amended to read:

384.
 (a) Funds transferred to the Energy Commission pursuant to this article for purposes of public interest research, development, and demonstration shall be transferred to the Public Interest Research, Development, and Demonstration Fund, which is hereby created in the State Treasury. The fund is a trust fund and shall contain money from all interest, repayments, disencumbrances, royalties, and any other proceeds appropriated, transferred, or otherwise received for purposes pertaining to public interest research, development, and demonstration. Any appropriations that are made from the fund shall have an encumbrance period of not longer than two years, and a liquidation period of not longer than four years.
(b) Funds deposited in the Public Interest Research, Development, and Demonstration Fund may be expended for projects that serve the energy needs of both stationary and transportation purposes if the research provides an electricity ratepayer benefit.
(c) The Energy Commission shall report annually to the appropriate budget committees of the Legislature on any encumbrances or liquidations that are outstanding at the time the commission’s budget is submitted to the Legislature for review.

SEC. 10.

 Section 394.25 of the Public Utilities Code is amended to read:

394.25.
 (a) The commission may enforce the provisions of Sections 2102, 2103, 2104, 2105, 2107, 2108, and 2114 against electric service providers as if those electric service providers were public utilities as defined in these code sections. Notwithstanding the above, nothing in this section grants the commission jurisdiction to regulate electric service providers other than as specifically set forth in this part. Electric service providers shall continue to be subject to the provisions of Sections 2111 and 2112. Upon a finding by the commission’s executive director that there is evidence to support a finding that the electric service provider has committed an act constituting grounds for suspension or revocation of registration as set forth in subdivision (b) of Section 394.25, the commission shall notify the electric service provider in writing and notice an expedited hearing on the suspension or revocation of the electric service provider’s registration to be held within 30 days of the notification to the electric service provider of the executive director’s finding of evidence to support suspension or revocation of registration. The commission shall, within 45 days after holding the hearing, issue a decision on the suspension or revocation of registration, which shall be based on findings of fact and conclusions of law based on the evidence presented at the hearing. The decision shall include the findings of fact and the conclusions of law relied upon.
(b) An electric service provider may have its registration suspended or revoked, immediately or prospectively, in whole or in part, for any of the following acts:
(1) Making material misrepresentations in the course of soliciting customers, entering into service agreements with those customers, or administering those service agreements.
(2) Dishonesty, fraud, or deceit with the intent to substantially benefit the electric service provider or its employees, agents, or representatives, or to disadvantage retail electricity customers.
(3) Where the commission finds that there is evidence that the electric service provider is not financially or operationally capable of providing the offered electric service.
(4) The misrepresentation of a material fact by an applicant in obtaining a registration pursuant to Section 394.
(c) Pursuant to its authority to revoke or suspend registration, the commission may suspend a registration for a specified period or revoke the registration, or in lieu of suspension or revocation, impose a moratorium on adding or soliciting additional customers. Any suspension or revocation of a registration shall require the electric service provider to cease serving customers within the boundaries of investor-owned electrical corporations, and the affected customers shall be served by the electrical corporation until the time when they may select service from another service provider. Customers shall not be liable for the payment of any early termination fees or other penalties to any electric service provider under the service agreement if the serving electric service provider’s registration is suspended or revoked.
(d) The commission shall require any electric service provider whose registration is revoked pursuant to paragraph (4) of subdivision (b) to refund all of the customer credit funds that the electric service provider received from the Energy Commission pursuant to subdivision (a) of Section 25744 of the Public Resources Code. The repayment of these funds shall be in addition to all other penalties and fines appropriately assessed the electric service provider for committing those acts under other provisions of law. All customer credit funds refunded under this subdivision shall be deposited in the Renewable Resource Trust Fund for redistribution by the Energy Commission pursuant to Chapter 8.6 (commencing with Section 25740) of Division 15 of the Public Resources Code. This subdivision may not be construed to apply retroactively.
(e) If a customer of an electric service provider or a community choice aggregator is involuntarily returned to service provided by an electrical corporation, any reentry fee imposed on that customer that the commission deems is necessary to avoid imposing costs on other customers of the electrical corporation shall be the obligation of the electric service provider or a community choice aggregator, except in the case of a customer returned due to default in payment or other contractual obligations or because the customer’s contract has expired. As a condition of its registration, an electric service provider or a community choice aggregator shall post a bond or demonstrate insurance sufficient to cover those reentry fees. In the event that an electric service provider becomes insolvent and is unable to discharge its obligation to pay reentry fees, the fees shall be allocated to the returning customers.

SEC. 11.

 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, with the exception of those facilities participating in a tariff made available pursuant to paragraph (2) of subdivision (f).
(2) Is interconnected and operates in parallel with the electrical transmission and distribution grid.
(3) (A) Except as provided in subparagraph (B), 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.
(B) For purposes of paragraph (2) of subdivision (f), 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 or is interconnected to an existing transmission line.
(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) (1) 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 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.
(2) By June 1, 2013, the commission shall, in addition to the 750 megawatts identified in paragraph (1), direct the electrical corporations to collectively procure at least 250 megawatts of cumulative rated generating capacity from developers of bioenergy projects that commence operation on or after June 1, 2013. The commission shall, for each electrical corporation, allocate shares of the additional 250 megawatts based on the ratio of each electrical corporation’s peak demand compared to the total statewide peak demand. In implementing this paragraph, the commission shall do all of the following:
(A) Allocate the 250 megawatts identified in this paragraph among the electrical corporations based on the following categories:
(i) For biogas from wastewater treatment, municipal organic waste diversion, food processing, and codigestion, 110 megawatts.
(ii) For dairy and other agricultural bioenergy, 90 megawatts.
(iii) For bioenergy using byproducts of sustainable forest management, 50 megawatts. Allocations under this category shall be determined based on the proportion of bioenergy that sustainable forest management providers derive from sustainable forest management in fire threat treatment areas, as designated by the Department of Forestry and Fire Protection.
(B) Direct the electrical corporations to develop standard contract terms and conditions that reflect the operational characteristics of the projects, and to provide a streamlined contracting process.
(C) Coordinate, to the maximum extent feasible, any incentive or subsidy programs for bioenergy with the agencies listed in subparagraph (A) of paragraph (3) in order to provide maximum benefits to ratepayers and to ensure that incentives are used to reduce contract prices.
(D) The commission shall encourage gas and electrical corporations to develop and offer programs and services to facilitate development of in-state biogas for a broad range of purposes.
(E) Direct the electrical corporations to authorize a bioenergy electric generation facility with an effective capacity of up to five megawatts to participate in the tariff made available pursuant to this paragraph, if it meets the following conditions:
(i) It delivers no more than three megawatts to the grid at any time.
(ii) It complies with the electrical corporation’s Electric Rule 21 tariff or other distribution access tariff.
(F) Payment is made pursuant to paragraph (1) of subdivision (d) and no payment is made for any electricity delivered to the grid in excess of three megawatts at any time.
(3) (A) The commission, in consultation with the Energy Commission, the State Air Resources Board, the Department of Forestry and Fire Protection, the Department of Food and Agriculture, and the Department of Resources Recycling and Recovery, may review the allocations of the 250 additional megawatts identified in paragraph (2) to determine if those allocations are appropriate.
(B) If the commission finds that the allocations of the 250 additional megawatts identified in paragraph (2) are not appropriate, the commission may reallocate the 250 megawatts among the categories established in subparagraph (A) of paragraph (2).
(4) (A) A project identified in clause (iii) of subparagraph (A) of paragraph (2) is eligible, in regards to interconnection, for the tariff established to implement paragraph (2) or to participate in any program or auction established to implement paragraph (2), if it meets at least one of the following requirements:
(i) The project is already interconnected.
(ii) The project has been found to be eligible for interconnection pursuant to the fast track process under the relevant tariff.
(iii) A system impact study or other interconnection study has been completed for the project under the relevant tariff, and there was no determination in the study that, with the identified interconnection upgrades, if any, a condition specified in paragraph (2), (3), or (4) of subdivision (n) would exist. Such a project is not required to have a pending, active interconnection application to be eligible.
(B) For a project meeting the eligibility requirements pursuant to clause (iii) of subparagraph (A) of this paragraph, both of the following apply:
(i) The project is hereby deemed to be able to interconnect within the required time limits for the purpose of determining eligibility for the tariff.
(ii) The project shall submit a new application for interconnection within 30 days of execution of a standard contract pursuant to the tariff if it does not have a pending, active interconnection application or a completed interconnection. For those projects, the time to achieve commercial operation shall begin to run from the date when the new system impact study or other interconnection study is completed rather than from the date of execution of the standard contract.
(5) For the purposes of this subdivision, “bioenergy” means biogas and biomass.
(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 before 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 website. The information posted on the internet website 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. 12.

 Section 701.1 of the Public Utilities Code is amended to read:

701.1.
 (a) (1) The Legislature finds and declares that, in addition to other ratepayer protection objectives, a principal goal of electric and natural gas utilities’ resource planning and investment shall be to minimize the cost to society of the reliable energy services that are provided by natural gas and electricity, and to improve the environment and to encourage the diversity of energy sources through improvements in energy efficiency, development of renewable energy resources, such as wind, solar, biomass, and geothermal energy, and widespread transportation electrification.
(2) The amendment made to this subdivision by the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015) does not expand the authority of the commission beyond that provided by other law.
(b) The Legislature further finds and declares that, in addition to any appropriate investments in energy production, electrical and natural gas utilities should seek to exploit all practicable and cost-effective conservation and improvements in the efficiency of energy use and distribution that offer equivalent or better system reliability, reliability and which that are not being exploited by any other entity.
(c) In calculating the cost-effectiveness of energy resources, including conservation and load management options, the commission shall include, in addition to other ratepayer protection objectives, a value for any costs and benefits to the environment, including air quality. The commission shall ensure that any values it develops pursuant to this section are consistent with values developed by the Energy Commission pursuant to Section 25000.1 of the Public Resources Code. However, if the commission determines that a value developed pursuant to this subdivision is not consistent with a value developed by the Energy Commission pursuant to subdivision (c) of Section 25000.1 of the Public Resources Code, the commission may nonetheless use this value if, in the appropriate record of its proceedings, it states its reasons for using the value it has selected.
(d) In determining the emission values associated with the current operating capacity of existing electric powerplants pursuant to subdivision (c), the commission shall adhere to the following protocol in determining values for air quality costs and benefits to the environment. If the commission finds that an air pollutant that is subject to regulation is a component of residual emissions from an electric powerplant and that the owner of that powerplant is either of the following:
(1) Using a tradable emission allowance, right, or offset for that pollutant, which (A) has been approved by the air quality district regulating the powerplant, (B) is consistent with federal and state law, and (C) has been obtained, authorized, or acquired in a market-based system.
(2) Paying a tax per measured unit of that pollutant.
The commission shall not assign a value or cost to that residual pollutant for the current operating capacity of that powerplant because the alternative protocol for dealing with the pollutant operates to internalize its cost for the purpose of planning for and acquiring new generating resources.
(e) (1) The values determined pursuant to subdivision (c) to represent costs and benefits to the environment shall not be used by the commission, in and of themselves, to require early decommissioning or retirement of an electric utility powerplant that complies with applicable prevailing environmental regulations.
(2) Further, the environmental values determined pursuant to subdivision (c) shall not be used by the commission in a manner which, that, when those values are aggregated, will result in advancing an electric utility’s need for new powerplant capacity by more than 15 months.
(f) This subdivision shall apply whenever a powerplant bid solicitation is required by the commission for an electric utility and a portion of the amount of new powerplant capacity, which is the subject of the bid solicitation, is the result of the commission’s use of environmental values to advance that electric utility’s need for new powerplant capacity in the manner authorized by paragraph (2) of subdivision (e). The affected electric utility may propose to the commission any combination of alternatives to that portion of the new powerplant capacity that is the result of the commission’s use of environmental values as authorized by paragraph (2) of subdivision (c). The commission shall approve an alternative in place of the new powerplant capacity if it finds all of the following:
(1) The alternative has been approved by the relevant air quality district.
(2) The alternative is consistent with federal and state law.
(3) The alternative will result in needed system reliability for the electric utility at least equivalent to that which would result from bidding for new powerplant capacity.
(4) The alternative will result in reducing system operating costs for the electric utility over those which that would result from the process of bidding for new powerplant capacity.
(5) The alternative will result in equivalent or better environmental improvements at a lower cost than would result from bidding for new powerplant capacity.
(g) This section does not require an electric utility to alter the dispatch of its powerplants for environmental purposes.
(h) This section does not preclude an electric utility from submitting to the commission any combination of alternatives to meet a commission-identified need for new capacity, if the submission is otherwise authorized by the commission.
(i) This section does not change or alter any provision of commission decision 92-04-045, dated April 22, 1992. Decision 92-04-045 (April 22, 1992), Application of Pacific Gas and Electric Company for an Ex Parte Order Approving Settlement Agreements Between Pacific Gas and Electric Company and Certain Winning Bidders in Pacific Gas and Electric Company’s Biennial Resource Plan Update Auction.

SEC. 13.

 Section 714 of the Public Utilities Code is amended to read:

714.
 (a) The commission, no later than July 1, 2017, shall open a proceeding to determine the feasibility of minimizing or eliminating use of the Aliso Canyon natural gas storage facility located in the County of Los Angeles while still maintaining energy and electric reliability for the region. This determination shall be consistent with the Clean Energy and Pollution Reduction Act of 2015 (Ch. 547, Stats. (Chapter 547 of the Statutes of 2015) and Executive Order B-30-2015. The commission shall consult with the Energy Commission, the Independent System Operator, the local publicly owned utilities that rely on natural gas for electricity generation, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation, affected balancing authorities, and other relevant government entities, in making its determination.
(b) This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.

SEC. 14.

 Section 715 of the Public Utilities Code is amended to read:

715.
 (a) The commission shall direct the operator of the Aliso Canyon natural gas storage facility located in the County of Los Angeles to provide all information the commission deems necessary for the commission to determine, in consultation with the Energy Commission, the Independent System Operator, and affected publicly owned utilities, the range of working gas necessary to ensure safety and reliability for the region and just and reasonable rates in California. The determination shall be based on best available data, and shall incorporate data from recent and ongoing studies being conducted to determine energy and gas use in the region by the commission, the Energy Commission, the Independent System Operator, and affected publicly owned utilities.
(b) Within 30 days of the effective date of the act adding this section, the commission shall publish a report that includes, but is not limited to, all of the following:
(1) The range of working gas necessary at the facility to ensure safety and reliability and just and reasonable rates in California determined pursuant to subdivision (a).
(2) The amount of natural gas production at the facility needed to meet safety and reliability requirements.
(3) The number of wells and associated injection and production capacity required.
(4) The availability of sufficient natural gas production using gas storage wells that have satisfactorily completed testing and remediation required under subparagraph (B) of paragraph (4) of subdivision (c) of Section 3217 of the Public Resources Code.
(c) The commission shall make the report required under subdivision (b) available on its internet website and seek, either through written comments or a workshop, public comments on the report.
(d) The executive director of the commission, in consultation with the State Oil and Gas Supervisor, shall direct the operator to maintain the specified range of working gas, determined pursuant to subdivision (a), at the facility to ensure reliability and just and reasonable rates in California, after all of the following occur:
(1) The gas storage well comprehensive safety review is complete pursuant to paragraph (5) of subdivision (c) of Section 3217 of the Public Resources Code.
(2) The State Oil and Gas Supervisor has approved the maximum and minimum reservoir pressure pursuant to subdivision (e) of Section 3217 of the Public Resources Code.
(3) The State Oil and Gas Supervisor has allowed injections of natural gas at the facility, pursuant to subdivision (f) of Section 3217 of the Public Resources Code.
(4) The commission has allowed, and received, public comment on the report pursuant to subdivision (c).
(e) In no case may the volume of working gas set by the executive director of the commission result in reservoir pressures that fall out of the range established pursuant to subdivision (e) of Section 3217 of the Public Resources Code.
(f) This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.

SEC. 15.

 Section 740.3 of the Public Utilities Code is amended to read:

740.3.
 (a) The commission, in cooperation with the Energy Commission, the State Air Resources Board, air quality management districts and air pollution control districts, regulated electrical and gas corporations, and the motor vehicle industry, shall evaluate and implement policies to promote the development of equipment and infrastructure needed to facilitate the use of electric power and natural gas to fuel low-emission vehicles. Policies to be considered shall include both of the following:
(1) The sale-for-resale and the rate-basing of low-emission vehicles and supporting equipment such as batteries for electric vehicles and compressor stations for natural gas fueled vehicles.
(2) The development of statewide standards for electric vehicle charger connections and compressed natural gas vehicle fueling connections, including installation procedures and technical assistance to installers.
(b) The commission shall hold public hearings as part of its effort to evaluate and implement the new policies considered in subdivision (a).
(c) The commission’s policies authorizing utilities to develop equipment or infrastructure needed for electric-powered and natural gas-fueled low-emission vehicles shall ensure that the costs and expenses of those programs are not passed through to electric or gas ratepayers unless the commission finds and determines that those programs are in the ratepayers’ interest. The commission’s policies shall also ensure that utilities do not unfairly compete with nonutility enterprises.

SEC. 16.Section 773 of the Public Utilities Code is amended to read:
773.

Section 9550 of the Civil Code shall not apply to a public utility under the jurisdiction of the Public Utilities Commission of the State of California.

SEC. 17.SEC. 16.

 Section 785 of the Public Utilities Code is amended to read:

785.
 To the extent consistent with federal law and regulation and contractual obligations regarding other available gas, the commission shall, in consultation with the Division of Oil and Gas of the Department of Conservation and with the Energy Commission, encourage, as a first priority, the increased production of gas in this state, including gas produced from that area of the Pacific Ocean along the coast of California commonly known as the outer continental shelf, and shall require, after a hearing, every gas corporation to purchase that gas which is compatible with the corporation’s gas plant and which is produced in this state having an actual delivered cost, measured in equivalent heat units, equal to or less than other available gas, unless this requirement will result in higher overall costs of gas or other consequences adverse to the interests of gas customers.

SEC. 18.SEC. 17.

 Section 895 of the Public Utilities Code is amended to read:

895.
 Notwithstanding Section 13340 of the Government Code, moneys in the Gas Consumption Surcharge Fund are continuously appropriated, without regard to fiscal years, as follows:
(a) To the commission or an entity designated by the commission to fund programs described in subdivision (a) of Section 890. If the commission designates the Energy Commission to receive funds for public interest research and development, both of the following shall apply:
(1) The Controller shall transfer funds to a separate subaccount within the Public Interest Research, Development, and Demonstration Fund to pay the Energy Commission for its costs in carrying out its duties and responsibilities under this article.
(2) The Energy Commission may administer the program pursuant to Chapter 7.1 (commencing with Section 25620) of Division 15 of the Public Resources Code.
(b) To pay the commission for its costs in carrying out its duties and responsibilities under this article.
(c) To pay the State Board of Equalization for its costs in administering this article.

SEC. 19.SEC. 18.

 Section 1822 of the Public Utilities Code is amended to read:

1822.
 (a) Any computer model that is the basis for any testimony or exhibit in a hearing or proceeding before the commission shall be available to, and subject to verification by, the commission and parties to the hearing or proceedings to the extent necessary for cross-examination or rebuttal, subject to applicable rules of evidence, except that verification is not required for any electricity demand model or forecast prepared by the Energy Commission pursuant to Section 25309 or 25402.1 of the Public Resources Code and approved and adopted after a hearing during which testimony was offered subject to cross-examination. The commission shall afford each of these electricity demand models or forecasts the evidentiary weight it determines appropriate. Nothing in this subdivision requires the Energy Commission to approve or adopt any electricity demand model or forecast.
(b) Any testimony presented in a hearing or proceeding before the commission that is based in whole, or in part, on a computer model shall include a listing of all the equations and assumptions built into the model.
(c) Any data base database that is used for any testimony or exhibit in a hearing or proceeding before the commission shall be reasonably accessible to the commission staff and parties to the hearing or proceeding to the extent necessary for cross-examination or rebuttal, subject to applicable rules of evidence, as applied in commission proceedings.
(d) The commission shall adopt rules and procedures to meet the requirements specified in subdivisions (a), (b), and (c). These rules shall include procedural safeguards that protect data bases and models not owned by the public utility.
(e) The commission shall establish appropriate procedures for determining the appropriate level of compensation for a party’s access.
(f) Each party shall have access to the computer programs and models of each other party to the extent provided by Section 1822. The commission shall not require a utility to provide a remote terminal or other direct physical link to the computer systems of a utility to a third party.
(g) The commission shall verify, validate, and review the computer models of any electrical corporation that are used for the purpose of planning, operating, constructing, or maintaining the corporation’s electrical transmission system, and that are the basis for testimony and exhibits in hearings and proceedings before the commission.
(h) The transmission computer models shall be available to, and subject to verification by, each party to a commission proceeding in accordance with subdivision (a) of Section 1822, and regulations adopted pursuant to subdivision (d) of Section 1822.

SEC. 20.SEC. 19.

 Section 2774.6 of the Public Utilities Code is amended to read:

2774.6.
 The commission, in consultation with the Energy Commission, shall develop a program for residential and commercial customer air-conditioning load control, as an element of each electrical corporation’s tariffed service offerings paid for with electrical service rates. The goal of the program shall be to contribute to the adequacy of electricity supply and to help customers reduce their electrical service bills in a cost-effective manner. The program may include peak load reduction programs for residential and commercial air-conditioning systems, if the commission determines that the inclusion would be cost-effective.

SEC. 21.SEC. 20.

 Section 2840.2 of the Public Utilities Code is amended to read:

2840.2.
 For purposes of this article, the following terms have the following meanings:
(a) “Combined heat and power system” means a system that produces both electricity and thermal energy for heating or cooling from a single fuel input that meets all of the following:
(1) Is interconnected to, and operates in parallel with, the electrical transmission and distribution grid.
(2) Is sized to meet the eligible customer-generator’s onsite thermal demand.
(3) Meets the efficiency standards of subdivisions (a) and (d), (d) of, and the greenhouse gases emissions performance standard of subdivision (f) of of, Section 2843.
(b) “Eligible customer-generator” means a customer of an electrical corporation that meets both of the following requirements:
(1) Uses a combined heat and power system with a generating capacity of not more than 20 megawatts, that first commences operation on or after January 1, 2008.
(2) Uses a time-of-use meter capable of registering the flow of electricity in two directions. If the existing electrical meter of an eligible customer-generator is not capable of measuring the flow of electricity in two directions, the eligible customer-generator shall be responsible for all expenses involved in purchasing and installing a meter that is able to measure electricity flow in two directions. If an additional meter or meters are installed, the electricity flow calculations shall yield a result identical to that of a time-of-use meter.
(c) “Excess electricity” means the net electricity exported to the electrical grid, generated by a combined heat and power system that is in compliance with Section 2843.
(d) “Greenhouse gas” or “greenhouse gases” includes all of the following gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.

SEC. 22.SEC. 21.

 Section 2854 of the Public Utilities Code is amended to read:

2854.
 (a) In order to further the state goal of encouraging the installation of 3,000 megawatts of photovoltaic solar energy in California within 10 years, the governing body of a local publicly owned electric utility that sells electricity at retail, shall adopt, implement, and finance a solar initiative program, funded in accordance with subdivision (b), for the purpose of investing in, and encouraging the increased installation of, residential and commercial solar energy systems.
(b) On or before January 1, 2008, a local publicly owned electric utility shall offer monetary incentives for the installation of solar energy systems of at least two dollars and eighty cents ($2.80) per installed watt, or for the electricity produced by the solar energy system, measured in kilowatthours, as determined by the governing board of a local publicly owned electric utility, for photovoltaic solar energy systems. The incentive level shall decline each year thereafter at a rate of no less than an average of 7 percent per year.
(c) A local publicly owned electric utility shall initiate a public proceeding to fund a solar energy program to adequately support the goal of installing 3,000 megawatts of photovoltaic solar energy in California. The proceeding shall determine what additional funding, if any, is necessary to provide the incentives pursuant to subdivision (b). The public proceeding shall be completed and the comprehensive solar energy program established by January 1, 2008.
(d) The solar energy program of a local publicly owned electric utility shall be consistent with all of the following:
(1) That a solar energy system receiving monetary incentives comply with the eligibility criteria, design, installation, and electrical output standards or incentives established by the Energy Commission pursuant to Section 25782 of the Public Resources Code.
(2) That solar energy systems receiving monetary incentives are intended primarily to offset part or all of the consumer’s own electricity demand.
(3) That all components in the solar energy system are new and unused, and have not previously been placed in service in any other location or for any other application.
(4) That the solar energy system has a warranty of not less than 10 years to protect against defects and undue degradation of electrical generation output.
(5) That the solar energy system be located on the same premises of the end-use consumer where the consumer’s own electricity demand is located.
(6) That the solar energy system be connected to the electric utility’s electrical distribution system within the state.
(7) That the solar energy system has meters or other devices in place to monitor and measure the system’s performance and the quantity of electricity generated by the system.
(8) That the solar energy system be installed in conformance with the manufacturer’s specifications and in compliance with all applicable electrical and building code standards.
(e) In establishing the program required by this section, no moneys shall be diverted from any existing programs for low-income ratepayers, or from cost-effective energy efficiency or demand response programs.
(f) The statewide expenditures for solar programs adopted, implemented, and financed by local publicly owned electric utilities shall be seven hundred eighty-four million dollars ($784,000,000). The expenditure level for each local publicly owned electric utility shall be based on that utility’s percentage of the total statewide load served by all local publicly owned electric utilities. Expenditures by a local publicly owned electric utility may be less than the utility’s cap amount, provided that funding is adequate to provide the incentives required by subdivisions (a) and (b).

SEC. 23.SEC. 22.

 Section 9607 of the Public Utilities Code is amended to read:

9607.
 (a) The intent of this section is to avoid cost-shifting to customers of an electrical corporation resulting from the transfer of distribution services from an electrical corporation to an irrigation district.
(b) Except as otherwise provided in this section and Section 9608, and notwithstanding any other provision of law, an irrigation district that offered electric service to retail customers as of January 1, 1999, may not construct, lease, acquire, install, or operate facilities for the distribution or transmission of electricity to retail customers located in the service territory of an electrical corporation providing electrical distribution services, unless the district has first applied for and received the approval of the commission and implements its service consistent with the commission’s order. The commission shall find that service to be in the public interest and shall approve the request of a district to provide distribution or transmission of electricity to retail customers located in the service territory of an electrical corporation providing electrical distribution service if, after notice and hearing, the commission determines all of the following:
(1) The district will provide universal service to all retail customers who request service within the area to be served, at published tariff rates and on a just, reasonable, and nondiscriminatory basis, comparable to that provided by the current retail service provider.
(2) If the area the district is proposing to serve is either of the following:
(A) Is within the district’s boundaries but less than the entire district, the area to be served includes a percentage of residential customers and small customers, based on load, comparable to the percentage of residential and small customers in the district, based on load.
(B) Includes territory outside the district’s boundaries, in which case the territory outside the district’s boundaries must include a percentage of residential customers and small customers, based on load, comparable to the percentage of residential and small customers in the county or counties where service is to be provided, based on load.
(3) Service by the district will be consistent with the intent of the state to avoid economic waste caused by duplication of facilities as set forth in Section 8101.
(4) Service by the district will include reasonable mitigation of any adverse effects on the reliability of an existing service by the electrical corporation.
(5) The district has established, funded, and is carrying out public purpose and low-income programs comparable to those provided by the current electric retail service provider.
(6) That district’s tariffed electrical service rates, exclusive of commodity costs, will be at least 15 percent below the tariffed electrical service rates, exclusive of commodity costs and nonbypassable charges under Sections 367, 368, 375, 376, and 379, of the electrical corporation for comparable services.
(7) Service by the district is in the public interest.
(c) An irrigation district that obtains the approval of the commission under this section to serve an area shall prepare an annual report available to the public on the total load and number of accounts of residential, low-income, agricultural, commercial, and industrial customers served by the irrigation district in the approved service area.
(d) The commission shall have jurisdiction to resolve and adjudicate complaint cases brought against an irrigation district that offered electric service to retail customers as of January 1, 1999, by an interested party where the complaint concerns retail electric service outside the boundaries of the district and within the service territory of an electrical corporation. Nothing in this section grants the commission jurisdiction to adjudicate complaint cases involving retail electric service by an irrigation district inside its boundaries or inside an irrigation district’s exclusive service territory.
(e) Any project involving electrical transmission or distribution facilities to be constructed or installed by an irrigation district to serve retail customers located in the service territory of an electrical corporation providing electrical distribution services shall comply with the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code). The county in which the construction or installation is to occur shall act as the lead agency. If a project involves the construction or installation of electrical transmission or distribution facilities in more than one county, the county where the majority of the construction is anticipated to occur shall act as the lead agency.
(f) An irrigation district may not offer service to customers outside of its district boundaries before offering service to all customers within its district boundaries.
(g) This section does not apply to electrical distribution service provided by Modesto Irrigation District to those customers or within those areas described in subdivisions (a), (b), and (c) of Section 9610.
(h) The provisions of this section shall not apply to (1) a cumulative 90 megawatts of load served by the Merced Irrigation District that is located within the boundaries of Merced Irrigation District, as those boundaries existed on December 20, 1995, together with the territory of Castle Air Force Base which that was located outside the District on that date, or (2) electric load served by the District which that was not previously served by an electrical corporation that is located within the boundaries of Merced Irrigation District, as those boundaries existed on December 20, 1995, together with the territory of Castle Air Force Base which that was located outside the District on that date.
(i) For purposes of this section, a megawatt of load shall be calculated in accordance with the methodology established by the Energy Commission in its Docket No. 96-IRR-1890, but the 90 megawatts shall not include electrical usage by customers that move to the areas described in paragraph (1) after December 31, 2000.
(j) Subdivision (a) of this section shall not apply to the construction, modification, lease, acquisition, installation, or operation of facilities for the distribution or transmission of electricity to customers electrically connected to a district as of December 31, 2000, or to other customers who subsequently locate at the same premises.
(k) In recognition of contractual arrangements and settlements existing as of June 1, 2000, this section does not apply to the acquisition or operation of the electrical distribution facilities that are the subject of the Settlement Agreement dated May 1, 2000, between Pacific Gas and Electric Company and the San Joaquin Irrigation District.
(l) For purposes of this section, retail customers do not include an irrigation district’s own electric load being served of retail by an electrical corporation.