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SB-1240 Electricity: distribution system: open access.(2019-2020)

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Date Published: 02/20/2020 09:00 PM
SB1240:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 1240


Introduced by Senator Skinner

February 20, 2020


An act to add Section 25328 to the Public Resources Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


SB 1240, as introduced, Skinner. Electricity: distribution system: open access.
Existing law requires the State Energy Resources Conservation and Development Commission, at least every 2 years, to conduct assessments and forecasts of all aspects of energy industry supply, production, transportation, delivery and distribution, demand, and prices.
This bill would require the commission, in consultation with the Independent System Operator, to identify and evaluate options for transforming the electrical corporations’ distribution grids into more open access platforms that would allow local governments and other third parties to participate more easily in grid activities, as provided. The bill would require the commission to update the identification and evaluation at least once every 2 years. The bill would require the commission, beginning January 1, 2022, and biennially thereafter, to submit to the Legislature a report on the identification and evaluation of options.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) Climate change is already having dramatic effects on the operations of the electrical grid and the continuity of electric service to customers in California. High winds, dry weather conditions, and large-scale tree die-offs associated with a changing climate have contributed to increased risk of fires from electrical operations. Under these climate change-related conditions, utility infrastructure has already sparked several catastrophic wildfires, including the Camp Fire, Thomas Fire, North Bay Fires, and others.
(2) This increased fire risk has, in turn, lead to numerous intentional deenergizations of the electrical corporations’ distribution grids, commonly known as public safety power shutoffs, in late 2019 to prevent fires from occurring. In 2019, all three of the state’s largest electrical corporations experienced multiple public safety power shutoffs, resulting in over 2,000,000 customers experiencing blackouts in October alone.
(3) In addition, California has set a goal of generating 33 percent of total retail sales of electricity in the state from eligible renewable energy resources by December 31, 2020, and 60 percent by December 31, 2030.
(4) California has also set a goal of doubling the energy efficiency of the state’s buildings by 2030.
(5) Local governments and agencies and tribal authorities in California are increasingly adopting climate-related goals for resiliency and decarbonization, and developing local programs to achieve these goals.
(6) Energy technologies are rapidly advancing in performance and scalability while declining in cost to enable locally driven projects to contribute to a more decentralized, more resilient, and more cost-effective electrical grid.
(7) The legacy 20th-century operational and regulatory frameworks of the electrical corporations were not designed for smart, dispatchable resources at the distribution level, or for high penetration of local energy resources and locally driven energy projects, and therefore present significant barriers to participation by local governments and diverse third parties to contribute to the needed grid transformation.
(8) Open access to the grid can pave the way for local governments, large energy users, local energy generators, homeowners, and other third parties to participate in projects and behaviors that increase the safety, reliability, and resiliency of the electrical grid, particularly during emergencies and public safety power shutoffs, while helping the state meet its clean energy and energy efficiency goals.
(9) More open access to the electrical grid also increases the pace and degree of innovation, economic development, and job growth resulting in new technologies that can lower the cost of renewable energy integration into the grid and lower costs for ratepayers in meeting the state’s energy goals.
(10) As third parties participate more in grid-related activities, the state will need to increase accountability for all industry participants and help all parties in the market make informed decisions about when, where, and how to provide electricity in a way that increases the safety, reliability, and resiliency of the electricity grid and reduces the need to build additional powerplants and transmission lines, resulting in lower costs for the ratepayer.
(b) It is the intent of the Legislature to identify regulatory and industry barriers and assess potential solutions to creating more open access to the electrical distribution grid and facilitating local government and third-party participation in various aspects of powering and operating the distribution grid to increase the safety, reliability, and resiliency of the electrical grid.

SEC. 2.

 Section 25328 is added to the Public Resources Code, to read:

25328.
 (a) The commission, in consultation with the Independent System Operator, shall identify and evaluate options for transforming the electrical corporations’ distribution grids into more open access platforms that would allow for local governments and other third parties to participate more easily in grid activities to accomplish all of the following:
(1) Assist in creating greater grid safety, reliability, and resiliency, and address issues caused by climate change in California.
(2) Allow for greater segmentation of the distribution grid so as to enable individual segments of the grid to provide electricity to end-use customers during power shutoffs and deenergization caused by natural disasters or other events.
(3) Better integrate local distributed renewable energy generation, storage, and load management resources into the distribution grid.
(4) Increase the deployment of energy efficiency, demand management, and other local energy resources to reduce load growth, particularly during times of peak electricity demand on the electrical grid, and to help meet the state’s climate and energy efficiency goals.
(b) As a part of the evaluation pursuant to subdivision (a), the commission shall consider all of the following:
(1) (A) Methods by which electrical corporations can organizationally separate their distribution functions and assets from their other functions and assets to align their distribution functions to better and more cost-effectively accommodate third-party participation in disaster preparedness, electrical generation, storage, energy efficiency, and load management.
(B) As a part of the consideration given pursuant to subparagraph (A), the commission shall examine the value and cost of the electrical corporation, as defined in Section 218 of the Public Utilities Code, in providing the retail energy supply function.
(2) Standards for third-party planning, operation, and communication to ensure grid reliability, and the type of performance metrics, if appropriate, to ensure that the third party and the electrical corporations are performing their roles and responsibilities identified pursuant to subdivision (a).
(3) Open-access principles for the coordination of transmission-distribution interface operations between the electrical corporations and the Independent System Operator.
(4) Regulatory changes necessary to properly facilitate and oversee increased third-party participation in distribution grid operations.
(c) The commission shall update the identification and evaluation of options at least once every two years.
(d) On or before January 1, 2022, and biennially thereafter, the commission shall, in accordance with Section 9795 of the Government Code, submit to the Legislature a report on the options identified and evaluated pursuant to subdivision (a).