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AB-1664 Energy: self-generation incentive program: block grant.(2023-2024)

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Date Published: 03/15/2023 09:00 PM
AB1664:v98#DOCUMENT

Revised  April 13, 2023
Amended  IN  Assembly  March 15, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 1664

Introduced by Assembly Member Friedman Members Friedman and Garcia
(Coauthor: Assembly Member Schiavo)

February 17, 2023

An act to amend Section 769 of add Section 379.11 to the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


AB 1664, as amended, Friedman. Energy: distributed energy resources: distribution resources plans. self-generation incentive program: block grant.

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law requires each electrical corporation to submit to the commission a distribution resources plan proposal to identify optimal locations for the deployment of distributed resources, as defined. Existing law requires that each proposal, among other things, propose or identify mechanisms for the deployment of cost-effective distributed resources that satisfy distribution planning objectives and propose cost-effective methods of effectively coordinating existing commission-approved programs, incentives, and tariffs, as specified.

This bill would change the phrase “distributed resources” to “distributed energy resources” in the described-above provisions. The bill would require that each distribution resources plan proposal, among other things, propose or identify mechanisms for the deployment of cost-effective distributed energy resources that also satisfy resiliency objectives and propose cost-effective methods of effectively coordinating existing state-funded and ratepayer-funded, rather than commission-approved, programs, incentives, and tariffs, as specified.

Existing law requires the Public Utilities Commission to require the administration, until January 1, 2026, of a self-generation incentive program to increase the deployment of distributed generation resources and energy storage systems. Existing law requires the commission, in administering the program, to use funds that are appropriated by the Legislature, as provided, for the purposes of providing incentives to eligible residential customers who install behind-the-meter energy storage systems or solar photovoltaic systems paired with energy storage systems.
This bill would require, as part of administering the funds used to provide incentives to eligible residential customers, the commission to establish a block grant structure for eligible entities, as defined, to apply for grants on behalf of residential households to increase the resiliency of residential households, as specified. The bill would require the commission, in determining the block grant funding criteria, to consider and prioritize one or more specified requirements.
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 above provision would be a part of the act and a violation of a commission action implementing this bill’s requirements would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.Section 769 of the Public Utilities Code is amended to read:
769.

(a)For purposes of this section, “distributed energy resources” means distributed renewable generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies.

(b)Each electrical corporation shall submit to the commission a distribution resources plan proposal to identify optimal locations for the deployment of distributed energy resources. Each proposal shall do all of the following:

(1)Evaluate locational benefits and costs of distributed energy resources located on the distribution system. This evaluation shall be based on reductions or increases in local generation capacity needs, avoided or increased investments in distribution infrastructure, safety benefits, reliability benefits, and any other savings the distributed energy resources provide to the electrical grid or costs to ratepayers of the electrical corporation.

(2)Propose or identify standard tariffs, contracts, or other mechanisms for the deployment of cost-effective distributed energy resources that satisfy distribution planning and resiliency objectives.

(3)Propose cost-effective methods of effectively coordinating existing state-funded and ratepayer-funded programs, incentives, and tariffs to maximize the locational benefits and minimize the incremental costs of distributed energy resources.

(4)Identify any additional utility spending necessary to integrate cost-effective distributed energy resources into distribution planning consistent with the goal of yielding net benefits to ratepayers.

(5)Identify barriers to the deployment of distributed energy resources, including, but not limited to, safety standards related to technology or operation of the distribution circuit in a manner that ensures reliable service.

(c)The commission shall review each distribution resources plan proposal submitted by an electrical corporation and approve, or modify and approve, a distribution resources plan for the corporation. The commission may modify any plan as appropriate to minimize overall system costs and maximize ratepayer benefit from investments in distributed energy resources.

(d)Any electrical corporation spending on distribution infrastructure necessary to accomplish the distribution resources plan shall be proposed and considered as part of the next general rate case for the corporation. The commission may approve proposed spending if it concludes that ratepayers would realize net benefits and the associated costs are just and reasonable. The commission may also adopt criteria, benchmarks, and accountability mechanisms to evaluate the success of any investment authorized pursuant to a distribution resources plan.

SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) Extreme weather events, natural disasters, and global fuel commodity price volatility will require new approaches to increase electrical grid resiliency and energy affordability by using onsite renewable generation, energy storage, and innovative load management tools to support individual customers in managing their environmental footprint and energy costs.
(2) Diversifying customer choice in clean distributed energy resources empowers each customer to make decarbonization investments based on the customer’s needs and circumstances to achieve equitable access for all customers.
(3) The self-generation incentive program, funded through a ratepayer fee collected from ratepayers of electrical corporations, as implemented by the Public Utilities Commission, has supported the adoption of onsite distributed energy resources among customers of the electrical corporations.
(4) Existing self-generation incentive program implementation, however, has not provided equitable funding support to low-income residential customer households, which constitute only about 1 percent of program participants under current program administration.
(5) Customers of local publicly owned electric utilities have lacked an avenue to access support from the self-generation incentive program funds because the existing program administrative structure is designed to support only customers of the three largest electrical corporations.
(b) It is the intent of the Legislature that the existing program administration structure of the self-generation incentive program should not be relied on to achieve equitable statewide access for low-income California residents and customers of local publicly owned electric utilities.
(c) It is the further intent of the Legislature that General Fund moneys appropriated for the self-generation incentive program to support low-income households and customers of local publicly owned electric utilities should require a new programmatic design to achieve broad decarbonization and climate equity benefits.

SEC. 2.

 Section 379.11 is added to the Public Utilities Code, to read:

379.11.
 (a) As part of administering the funds pursuant to Section 379.10, the commission shall create a block grant structure for eligible entities to apply for grants on behalf of residential households to increase the resiliency of residential households with the ability to provide clean backup electricity or onsite energy management to help customers manage their household energy use. In determining the block grant funding criteria, the commission shall consider and prioritize one or more the following:
(1) Supporting electrical grid reliability through onsite load management and enabling demand flexibility.
(2) Achieving clean resiliency to electrical system interruptions and reducing reliance on portable fossil fuel-based generators.
(3) Facilitating decarbonization of buildings and transportation electrification.
(4) Reducing environmental pollution in disadvantaged communities or providing clean resiliency benefits to vulnerable communities, including the access and functional needs population, as defined in Section 8593.3 of the Government Code, and residential households currently lacking adequate electric infrastructure access.
(b) Eligible entities under subdivision (a) shall include local publicly owned electric utilities, as defined in Section 224.3, and California Indian tribes, as defined in subdivision (c) of Section 8012 of the Health and Safety Code.

SEC. 2.SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only 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.
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REVISIONS:
Heading—Lines 1 and 2.
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