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AB-740 Electricity: microgrids. (2019-2020)

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Date Published: 06/30/2020 09:00 PM
AB740:v92#DOCUMENT

Amended  IN  Senate  June 30, 2020
Amended  IN  Senate  July 02, 2019
Amended  IN  Senate  June 18, 2019
Amended  IN  Assembly  May 28, 2019
Amended  IN  Assembly  May 20, 2019
Amended  IN  Assembly  April 12, 2019
Amended  IN  Assembly  April 01, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 740


Introduced by Assembly Member Burke
(Coauthors: Assembly Members Cooper, Flora, and Quirk)

February 19, 2019


An act to amend Section 10094.2 of the Insurance Code, relating to insurance, and declaring the urgency thereof, to take effect immediately. An act to amend Section 8372 of, and to add Section 8371.1 to, the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


AB 740, as amended, Burke. Property insurance: fire hazard severity zones. Electricity: microgrids.
Under existing law, the Public Utilities Commission (PUC) 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 PUC to fix the rates and charges for every public utility. Existing law requires the PUC, in consultation with the State Energy Resources Conservation and Development Commission and the Independent System Operator, to take specified actions by December 1, 2020, to facilitate the commercialization of microgrids for distribution customers of large electrical corporations, including developing microgrid service standards necessary to meet state and local permitting requirements and developing methods to reduce barriers for microgrid deployment without shifting costs between ratepayers. Existing law requires the governing board of a local publicly owned electric utility to develop and make available a standardized process for the interconnection of a customer-supported microgrid.
This bill would require the PUC to ensure that the standards established to facilitate the commercialization of microgrids for distribution customers of large electrical corporations do not impose a size cap on microgrid projects with specified characteristics. The bill would require the governing board of a local publicly owned electric utility to also ensure that its standardized process for the interconnection of a customer-supported microgrid does not impose a size cap on microgrid projects with those same specified characteristics.

Under existing law, the California FAIR Plan Association is a joint reinsurance association formed by state insurers licensed to write and engaged in writing basic property insurance within this state to assist persons in securing basic property insurance and to formulate and administer a program and FAIR Plan for the equitable apportionment among insurers of basic property insurance. Existing law requires each insurer to participate in the writings, expenses, and profits and losses of the association in the proportion that its premiums written bear to the aggregate premiums written by all insurers in the program, as specified, but requires the plan to provide for a method for insurers who voluntarily write basic property insurance on risks located in areas designated as brush hazard areas to be proportionately relieved of the liability to participate in the plan.

This bill would add to the insurers that are proportionately relieved of the liability to participate in the FAIR Plan those voluntarily writing basic property insurance on risks in high or very high fire hazard severity zones, as determined and mapped by the Department of Forestry and Fire Protection. The bill would also revise the similar provision relating to areas designated as brush hazard areas by making it specifically applicable to areas so designated at the time coverage begins.

This bill would declare that it is to take effect immediately as an urgency statute.

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

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


SECTION 1.

 Section 8371.1 is added to the Public Utilities Code, to read:

8371.1.
 Notwithstanding any other provision of this chapter, the commission shall ensure that the standards developed to facilitate the commercialization of microgrids pursuant to Section 8371 do not impose a size cap on a microgrid project that has both of the following characteristics:
(a) It does not use technologies operating by combustion.
(b) It is capable of continuous operation for 72 hours or longer.

SEC. 2.

 Section 8372 of the Public Utilities Code is amended to read:

8372.
 (a) Within 180 days of the first request from a customer or developer to establish a microgrid, the governing board of a local publicly owned electric utility shall develop and make available a standardized process for the interconnection of a customer-supported microgrid, including separate electrical rates and tariffs, as necessary. The separate rates and tariffs shall not compensate a customer for the use of diesel backup or natural gas generation, except as either of those sources is used pursuant to Section 41514.1 of the Health and Safety Code, or except for natural gas generation that is a distributed energy resource.
(b) The governing board shall ensure the microgrid rates and charges do not shift costs to, or from, a microgrid customer or nonmicrogrid customer, and shall ensure each microgrid and its components comply with the local publicly owned electric utility’s applicable regulatory requirements.
(c) Notwithstanding any other provision of this chapter, the governing board shall ensure that the standardized process established pursuant to this section does not impose a size cap on a microgrid project that has both of the following characteristics:
(1) It does not use technologies operating by combustion.
(2) It is capable of continuous operation for 72 hours or longer.

SECTION 1.Section 10094.2 of the Insurance Code is amended to read:
10094.2.

Notwithstanding subdivision (c) of Section 10095, the facility shall, pursuant to regulations adopted by the commissioner, provide for a method whereby insurers who voluntarily write basic property insurance on risks located in areas designated at the time coverage begins as brush hazard areas by the Insurance Services Office (ISO) or designated as high fire hazard severity zones as determined and mapped by the Department of Forestry and Fire Protection, or very high fire hazard severity zones as determined and mapped by the Department of Forestry and Fire Protection pursuant to Section 51178 of the Government Code will, to that extent, be proportionately relieved of the liability to participate in a plan adopted pursuant to this chapter. Furthermore, notwithstanding subdivision (c) of Section 10095, the facility shall, pursuant to regulations adopted by the commissioner, provide for a method whereby insurers who voluntarily write basic property insurance or business owners package insurance on risks located in areas designated as inner-city areas by the commissioner will, to that extent, be proportionately relieved of the liability to participate in a plan adopted pursuant to this chapter. This chapter does not preclude adoption of a plan or plans to allow proportionate credit for voluntary writings in other areas or for other classes of insurance.

SEC. 2.

This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:

In order to provide assistance as soon as possible to homeowners in high and very high fire hazard severity zones who are having difficulty obtaining insurance, it is necessary that this act take effect immediately.