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SB-1339 Electricity: electrical grid resiliency deployment plans: microgrids.(2017-2018)

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Date Published: 04/26/2018 09:00 PM
SB1339:v97#DOCUMENT

Amended  IN  Senate  April 26, 2018
Amended  IN  Senate  April 10, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 1339


Introduced by Senator Stern

February 16, 2018


An act to add Chapter 4.5 (commencing with Section 8370) to Division 4.1 of the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


SB 1339, as amended, Stern. Electricity: electrical grid resiliency deployment plans: microgrids.
(1) Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, while local publicly owned electric utilities, as defined, are under the direction of their governing boards. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable.
This bill would require each electrical corporation and local publicly owned electric utility, before an unspecified date, to develop and submit an electrical grid resiliency deployment plan to the commission and to establish a tariff or rate schedule for 3rd-party electrical grid resiliency investments. commission or, for each local publicly owned electric utility, to its governing board. The bill would require the commission or governing board, in consultation with certain entities, to approve plans that review the plan. The bill would require the plan to identify the investments necessary to increase the resiliency of the electrical grid and to reduce the risk of electrical outages affecting emergency services, critical circuits, and critical infrastructure, and that to explain how execution of the plan would increase resiliency in a manner that maximizes the benefits, and minimizes the costs, to ratepayers. The bill would, to the extent the commission determines that the installation and operation of a microgrid by a load-serving entity is in the public interest, authorize the recovery of those costs in rates.
This bill would require each electrical corporation and local publicly owned electric utility, the commission, before July 1, 2019, to establish a tariff or rate schedule by which a microgrid that can demonstrate grid islanding capacity, as defined, may expeditiously interconnect to, and nondiscriminatorily access, the electrical distribution grid. complete a proceeding to consider the role of microgrids in providing grid resiliency and would require specified issues to be addressed in the proceeding. The bill would require the commission to direct each electrical corporation to file an application with the commission to establish a tariff for the use of microgrids to provide electrical grid resiliency, and to approve only those applications that minimize costs and maximize benefits to all ratepayers and that meet the requirements of the commission’s completed proceeding.
This bill would require each state agency to consider integrating microgrids into its infrastructure.
Under existing law, a violation of any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because the provisions of this bill would require an order or other action of the commission to implement, and a violation of that order or action would be a crime, the bill would impose a state-mandated local program.
In addition, by placing requirements upon local publicly owned electric utilities, the bill would impose a state-mandated local program.

(2)The California Global Warming Solutions Act of 2006 establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. Existing law requires the state board, on or before January 1, 2003, to adopt a certification program and uniform emission standards for electrical generation technologies that are exempt from district permitting requirements, as specified.

This bill would require the state board, before June 1, 2020, to update those standards to include a standard for oxides of sulfur and to update the standards for oxides of nitrogen and particulate matter.

(3)

(2) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for specified reasons.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 The Legislature finds and declares all of the following:
(a) Climate change impacts California’s economy and residents in many ways, including by threatening critical infrastructure, increasing the frequency and severity of climate-related natural disasters, and interrupting critical services, such as the delivery of water, goods, and electricity.
(b) Critical infrastructure, including, but not limited to, hospitals, health centers, data centers, and telecommunications, energy, financial service, water, and transportation infrastructure, comprises physical and virtual systems and assets so vital to California, especially in situations requiring a rapid emergency response or asset deployment, that the incapacity or destruction of them would have a debilitating impact on national and local security, public health and safety, and economic security.
(c) The Office of Emergency Services’ “State of California Threat and Hazard Identification and Risk Assessment” outlined capability targets for infrastructure systems, including to stabilize critical infrastructure functions, such as energy, transportation, telecommunications, water and wastewater services, and public health and medical systems, within the first 72 hours after an incident.
(d) A resilient energy system that is built with the capacity to withstand and rapidly recover from a service disruption, including, but not limited to, a deliberate attack, or an accident, fire, flood, mudslide, or other natural disaster, is necessary to preserve the economic vitality, public health and safety, and well-being of California’s citizenry in the face of natural threats to, or other interruptions of, California’s electrical supply.
(e) Microgrids, and other distributed energy resources and transmission improvements, can make the electrical grid more resilient during and after disruptive events, as a potential source of backup generation and durable supply, to support and aid in the recovery of critical infrastructure functions in emergencies or during disruptions to the electrical supply. Generally, microgrids can enhance system reliability, provide economic benefits, and help the state meet its clean energy and greenhouse gas emissions reduction goals.
(f) Microgrids can also reduce California’s reliance on diesel-fired backup generation resources and thereby help to achieve the state’s aggressive air quality goals, which were furthered by the enactment of Chapters 135 and 136 of the Statutes of 2017, and to ensure all communities achieve high air quality levels. The effects noted in subdivision (e) and this subdivision motivate the adoption of technology solutions with minimal negative impacts to local air pollution, like microgrids.
(g) California could benefit from the implementation of microgrids at state-owned facilities and other critical infrastructure sites.

SEC. 2.

 Chapter 4.5 (commencing with Section 8370) is added to Division 4.1 of the Public Utilities Code, to read:
CHAPTER  4.5. Microgrids

8370.
 For purposes of this chapter, the following definitions shall apply:
(a) “Customer” means a customer of a local publicly owned electric utility or an electrical corporation. A person or entity is a customer of an electrical corporation if the customer is physically located within the service territory of the electrical corporation and receives bundled service, distribution service, or transmission service from the electrical corporation.
(b) “Distributed energy resource” means an electric generation or storage technology that complies with the emissions standards adopted by the State Air Resources Board pursuant to the distributed generation certification program requirements of Section 94203 of Title 17 of the California Code of Regulations, or any successor regulation.
(c) “Grid islanding capacity” means the capability of a microgrid to continue to provide electricity within its electrical boundary when the electrical grid is not providing the microgrid with electricity.

(d)“Load-serving entity” means an electrical corporation or local publicly owned electric utility.

(e)

(d) (1) “Microgrid” means an interconnected system of loads and energy resources, including, but not limited to, distributed energy resources, energy storage, demand response tools, and other management, forecasting, and analytical tools, within a clearly defined electrical boundary that can act as a single, controllable, and grid-independent entity, can connect to, disconnect from, or run in parallel with, larger portions of the electrical grid, or can be managed and isolated to withstand larger disturbances and maintain electrical supply to connected critical infrastructure.
(2) A microgrid may be owned by a load-serving entity an electrical corporation, local publicly owned electric utility, or customer.

(f)

(e) “Resiliency,” as it relates to the electrical grid, means the ability of the electrical grid to adapt to changing weather or other conditions, and to withstand and rapidly recover from disruptions caused by an emergency, natural disaster, or other disturbance.

8371.
 (a) Before ____, each load-serving entity electrical corporation shall develop and submit an electrical grid resiliency deployment plan, including proposals to build, own, operate, and maintain resiliency investments, plan to the commission, which the commission shall approve or reject within 18 months of its submission, and shall establish a tariff or rate schedule for third-party resiliency investments. submission.
(b) The commission shall, based on the best available data, in consultation with other agencies or entities as appropriate, including, but not limited to, the Office of Emergency Services, Energy Commission, Independent System Operator, and United States Department of Homeland Security, approve a load-serving entity’s review the electrical corporation’s electrical grid resiliency deployment plan that identifies plan.
(c) The electrical grid resiliency deployment plan shall identify the investments necessary to increase the resiliency of the electrical grid and to reduce the risk of electrical outages effecting affecting emergency services, critical circuits, and critical infrastructure, and that shall explain how execution of the plan would increase resiliency in a manner that both maximizes the benefits and minimizes the costs to ratepayers.

(c)To the extent the commission determines that the installation and operation of a microgrid by a load-serving entity is in the public interest, the commission may authorize the recovery of those costs in rates.

(d) (1) Before July 1, 2019, each load-serving entity shall establish the commission shall complete a proceeding to consider the role of microgrids in providing grid resiliency. The commission shall not permit microgrids that use diesel backup or gas-combustion generation.
(2) The issues to be addressed in the proceeding shall include, but shall not be limited to, all of the following:
(A) The size limitations of microgrids, including megawatts, customers served, and other criteria.
(B) The criteria for establishing a tariff or rate schedule by which a microgrid that can demonstrate grid islanding capacity may expeditiously interconnect to, and nondiscriminatorily access, the load-serving entity’s an electrical corporation’s electrical distribution grid. The
(C) The criteria to inform the establishment of a tariff or rate schedule shall be fair and reasonable, accounting that accounts for the operational and societal benefits of microgrids generally. generally and ratepayer benefits specifically.

(e)Each

(D) The potential terms of microgrid contract contracts or tariff shall be identical, tariffs with respect to rate structure, retail rate components, and monthly charges, to and the potential to conform some portion of those terms with the corresponding terms in the contract or tariff to which the a customer would be assigned if the customer was not an eligible microgrid resource. The commission shall not, as part of a microgrid contract or tariff, approve any new or additional
(E) The use of a demand charge, standby charge, customer charge, minimum monthly charge, interconnection charge, or other charge that would increase a microgrid’s costs beyond the rate class to which the eligible customer-generator would otherwise be assigned. costs.

(f)A

(F) The conditions under which a microgrid customer shall receive the net energy metering benefits established pursuant to Section 2827 2827.1 for any excess generation the customer exports to the electrical grid.

(g)Each state agency shall consider integrating microgrids into its infrastructure.

(e) The commission, in consultation with the Energy Commission, shall direct each electrical corporation to file an application with the commission to establish a tariff for the use of microgrids to provide electrical grid resiliency, as defined by the commission. The commission shall approve only those applications that minimize costs and maximize benefits to all ratepayers and that meet the requirements of the proceeding described in subdivision (d). For an application filed by an electrical corporation pursuant to this section by July 31, 2019, the commission shall approve, reject, or modify and approve the application before January 1, 2020.

8372.
 (a) Before ____, each local publicly owned electric utility shall develop and submit an electrical grid resiliency deployment plan to its governing board.
(b) The governing board shall, based on the best available data, in consultation with other agencies or entities as appropriate, including, but not limited to, the Office of Emergency Services, Energy Commission, Independent System Operator, and United States Department of Homeland Security, review the local publicly owned electric utility’s electrical grid resiliency deployment plan.
(c) The electrical grid resiliency deployment plan shall identify the investments necessary to increase the resiliency of the electrical grid and to reduce the risk of electrical outages affecting emergency services, critical circuits, and critical infrastructure, and shall explain how execution of the plan would increase resiliency in a manner that both maximizes the benefits and minimizes the costs to ratepayers.

8373.
 Each state agency shall consider integrating microgrids into its infrastructure.

SEC. 3.

Before June 1, 2020, the State Air Resources Board shall update the uniform emission standards for electrical generation technologies adopted pursuant to subdivision (a) of Section 41514.9 of the Health and Safety Code to include a standard for oxides of sulfur and to update the standards for oxides of nitrogen and particulate matter.

SEC. 4.SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.