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SB-386 California Renewables Portfolio Standard Program: irrigation districts.(2019-2020)

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Date Published: 05/29/2019 09:00 PM
SB386:v96#DOCUMENT

Amended  IN  Senate  May 29, 2019
Amended  IN  Senate  May 01, 2019
Amended  IN  Senate  April 10, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 386


Introduced by Senator Caballero
(Coauthor: Assembly Member Gray)

February 20, 2019


An act to amend Section 399.30 of the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 386, as amended, Caballero. California Renewables Portfolio Standard Program: irrigation districts.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, while local publicly owned electric utilities, including a district formed pursuant to the Irrigation District Law, are under the direction of their governing boards. The California Renewables Portfolio Standard Program requires the commission to establish a renewables portfolio standard requiring all retail sellers, defined as including electrical corporations, electric service providers, and community choice aggregators, to procure a minimum quantity of electricity products from eligible renewable energy resources, as defined, so that the total kilowatthours of those products sold to their retail end-use customers achieves 25% of retail sales by December 31, 2016, 33% by December 31, 2020, 44% by December 31, 2024, 52% by December 31, 2027, and 60% by December 31, 2030. The program additionally requires each local publicly owned electric utility to procure a minimum quantity of electricity products from eligible renewable energy resources to achieve the procurement requirements established by the program. For these purposes, eligible renewable energy resources include the incremental increase in the amount of electricity generated from a hydroelectric generation facility as a result of efficiency improvements at the facility, without regard to the electrical output of the facility, if specified conditions are met.
This bill would authorize a local publicly owned electric utility that is an irrigation district to elect to credit its share of the total electricity generated by the Don Pedro Hydroelectric Project, commensurate with its ownership share of that project, as meeting its renewables portfolio standard procurement requirements. The bill would require that an election by an irrigation district to apply its proportionate share of the electricity generated by the Don Pedro Hydroelectric Project to meet its renewables portfolio standard procurement requirements would be for all of its proportionate share of the generation, including any portion of the electricity that is an eligible renewable energy resource because it results from efficiency improvements at the project. The bill would prohibit any portion of that electricity to be unbundled from any renewable energy credit associated with the electricity, would prohibit any quantity of the electricity to be resold, and would require that all associated renewable energy credits be retired solely on behalf of customers of the irrigation district. electricity. The bill would require an irrigation district making the election to ensure that there is no double counting for electricity that is an eligible renewable energy resource resulting from efficiency improvements at the project. If an irrigation district elects to apply any generation from the Don Pedro Hydroelectric Project to meet its renewables portfolio standard procurement requirements, the bill would (1) prohibit any quantity of eligible renewable energy resources procured under ownership or contract by the district to be resold and require that all associated renewable energy credits be retired solely on behalf of customers of the district, and (2) require the district to procure energy storage systems commensurate with 1% of the district’s 2020 annual peak load, as specified, with project installation to be completed no later than December 31, 2030. The bill would require the State Energy Resources Conservation and Development Commission to report to the Legislature by February 1, 2020, and by February 1 of every year thereafter, on the progress of an irrigation district subject to these provisions towards satisfying its renewable portfolio standard obligations.
This bill would make legislative findings and declarations as to the necessity for special legislation.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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


SECTION 1.

 Section 399.30 of the Public Utilities Code is amended to read:

399.30.
 (a) (1) To fulfill unmet long-term generation resource needs, each local publicly owned electric utility shall adopt and implement a renewable energy resources procurement plan that requires the utility to procure a minimum quantity of electricity products from eligible renewable energy resources, including renewable energy credits, as a specified percentage of total kilowatthours sold to the utility’s retail end-use customers, each compliance period, to achieve the targets of subdivision (c).
(2) Beginning January 1, 2019, a local publicly owned electric utility subject to Section 9621 shall incorporate the renewable energy resources procurement plan required by this section as part of a broader integrated resource plan developed and adopted pursuant to Section 9621.
(b) The governing board shall implement procurement targets for a local publicly owned electric utility that require the utility to procure a minimum quantity of eligible renewable energy resources for each of the following compliance periods:
(1) January 1, 2011, to December 31, 2013, inclusive.
(2) January 1, 2014, to December 31, 2016, inclusive.
(3) January 1, 2017, to December 31, 2020, inclusive.
(4) January 1, 2021, to December 31, 2024, inclusive.
(5) January 1, 2025, to December 31, 2027, inclusive.
(6) January 1, 2028, to December 31, 2030, inclusive.
(c) The governing board of a local publicly owned electric utility shall ensure all of the following:
(1) The quantities of eligible renewable energy resources to be procured for the compliance period from January 1, 2011, to December 31, 2013, inclusive, are equal to an average of 20 percent of retail sales.
(2) The quantities of eligible renewable energy resources to be procured for all other compliance periods reflect reasonable progress in each of the intervening years sufficient to ensure that the procurement of electricity products from eligible renewable energy resources achieves 25 percent of retail sales by December 31, 2016, 33 percent by December 31, 2020, 44 percent by December 31, 2024, 52 percent by December 31, 2027, and 60 percent by December 31, 2030. The Energy Commission shall establish appropriate multiyear compliance periods for all subsequent years that require the local publicly owned electric utility to procure not less than 60 percent of retail sales of electricity products from eligible renewable energy resources.
(3) A local publicly owned electric utility shall adopt procurement requirements consistent with Section 399.16.
(4) Beginning January 1, 2014, in calculating the procurement requirements under this article, a local publicly owned electric utility may exclude from its total retail sales the kilowatthours generated by an eligible renewable energy resource that is credited to a participating customer pursuant to a voluntary green pricing or shared renewable generation program. Any exclusion shall be limited to electricity products that do not meet the portfolio content criteria set forth in paragraph (2) or (3) of subdivision (b) of Section 399.16. Any renewable energy credits associated with electricity credited to a participating customer shall not be used for compliance with procurement requirements under this article, shall be retired on behalf of the participating customer, and shall not be further sold, transferred, or otherwise monetized for any purpose. To the extent possible for generation that is excluded from retail sales under this subdivision, a local publicly owned electric utility shall seek to procure those eligible renewable energy resources that are located in reasonable proximity to program participants.
(5) (A) A local publicly owned electric utility that is an irrigation district formed pursuant to the Irrigation District Law (Division 11 (commencing with Section 20500) of the Water Code) may elect to credit its share of the total electricity generated by the Don Pedro Hydroelectric Project (Federal Energy Regulatory Commission Project Number 2299), commensurate with its ownership share of that project, as meeting its procurement requirements pursuant to paragraph (2). The electricity shall be credited as meeting the portfolio content requirements of paragraph (1) of subdivision (b) of Section 399.16 and no portion of the electricity may be unbundled from any renewable energy credit associated with the electricity.
(B) An election by an irrigation district to apply its proportionate share of the electricity generated by the Don Pedro Hydroelectric Project to meet its renewables portfolio standard procurement requirements pursuant to this subdivision shall be for all of its proportionate share of the generation, including any portion of the electricity that is an eligible renewable energy resource by operation of subdivision (b) of Section 399.12.5. The irrigation district shall ensure that there is no double counting for electricity that is an eligible renewable energy resource by operation of subdivision (b) of Section 399.12.5. If
(C) If an irrigation district applies any generation from the Don Pedro Hydroelectric Project to meet its renewable portfolio standard procurement requirements, no quantities of eligible renewable energy resources procured under ownership or contract by the irrigation district may be resold and all associated renewable energy credits shall be retired solely on behalf of customers of the irrigation district.
(D) If an irrigation district applies any generation from the Don Pedro Hydroelectric Project to meet its renewable portfolio standard procurement requirements, the district shall procure energy storage systems commensurate with 1 percent of the district’s 2020 annual peak load, with project installation to be completed no later than December 31, 2030. A district’s procurement obligation pursuant to this subparagraph shall be calculated consistent with the commission’s requirements for procurement of energy storage systems applicable to electric service providers and community choice aggregators adopted pursuant to commission Decision 13-10-040 (October 17, 2013) Decision Adopting Energy Storage Procurement Framework and Design Program, Part 4.8. For purposes of this subparagraph, energy storage system has the same meaning as defined in Section 2835.

(C)

(E) By February 1, 2020, and by February 1 of every year thereafter, the Energy Commission shall provide the Legislature with an annual update, in the form of a letter, on the progress of an irrigation district subject to this paragraph towards satisfying its renewable portfolio standard obligations, including distinguishing between its share of the total electricity generated by the Don Pedro Hydroelectric Project and all other eligible renewable energy resources.
(d) (1) The governing board of a local publicly owned electric utility shall adopt procurement requirements consistent with subparagraph (B) of paragraph (4) of subdivision (a) of, and subdivision (b) of, Section 399.13.
(2) The governing board of a local publicly owned electric utility may adopt the following measures:
(A) Conditions that allow for delaying timely compliance consistent with subdivision (b) of Section 399.15.
(B) Cost limitations for procurement expenditures consistent with subdivision (c) of Section 399.15.
(e) The governing board of the local publicly owned electric utility shall adopt a program for the enforcement of this article. The program shall be adopted at a publicly noticed meeting offering all interested parties an opportunity to comment. Not less than 30 days’ notice shall be given to the public of any meeting held for purposes of adopting the program. Not less than 10 days’ notice shall be given to the public before any meeting is held to make a substantive change to the program.
(f) Each local publicly owned electric utility shall annually post notice, in accordance with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), whenever its governing body will deliberate in public on its renewable energy resources procurement plan.
(g) A public utility district that receives all of its electricity pursuant to a preference right adopted and authorized by the United States Congress pursuant to Section 4 of the Trinity River Division Act of August 12, 1955 (Public Law 84-386), shall be in compliance with the renewable energy procurement requirements of this article.
(h) For a local publicly owned electric utility that was in existence on or before January 1, 2009, that provides retail electric service to 15,000 or fewer customer accounts in California, and is interconnected to a balancing authority located outside this state but within the WECC, an eligible renewable energy resource includes a facility that is located outside California that is connected to the WECC transmission system, if all of the following conditions are met:
(1) The electricity generated by the facility is procured by the local publicly owned electric utility, is delivered to the balancing authority area in which the local publicly owned electric utility is located, and is not used to fulfill renewable energy procurement requirements of other states.
(2) The local publicly owned electric utility participates in, and complies with, the accounting system administered by the Energy Commission pursuant to this article.
(3) The Energy Commission verifies that the electricity generated by the facility is eligible to meet the renewables portfolio standard procurement requirements.
(i) Notwithstanding subdivision (a), for a local publicly owned electric utility that is a joint powers authority of districts established pursuant to state law on or before January 1, 2005, that furnishes electric services other than to residential customers, and is formed pursuant to the Irrigation District Law (Division 11 (commencing with Section 20500) of the Water Code), the percentage of total kilowatthours sold to the district’s retail end-use customers, upon which the renewables portfolio standard procurement requirements in subdivision (b) are calculated, shall be based on the authority’s average retail sales over the previous seven years. If the authority has not furnished electric service for seven years, then the calculation shall be based on average retail sales over the number of completed years during which the authority has provided electric service.
(j) A local publicly owned electric utility in a city and county that only receives greater than 67 percent of its electricity sources from hydroelectric generation located within the state that it owns and operates, and that does not meet the definition of a “renewable electrical generation facility” pursuant to Section 25741 of the Public Resources Code, shall be required to procure eligible renewable energy resources, including renewable energy credits, to meet only the electricity demands unsatisfied by its hydroelectric generation in any given year, in order to satisfy its renewable energy procurement requirements.
(k) (1) For purposes of this subdivision, “large hydroelectric generation” means electricity generated from a hydroelectric facility located within the state that does not qualify as an eligible renewable energy resource and, as of January 1, 2018, was owned by a local publicly owned electric utility, the federal government as a part of the federal Central Valley Project, or a joint powers agency formed and created pursuant to the Joint Exercise of Powers Act (Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code). “Large hydroelectric generation” does not include electricity that is subject to the election authorized in paragraph (5) of subdivision (c) upon that election.
(2) If, during a year within a compliance period set forth in subdivision (b), a local publicly owned electric utility receives more than 40 percent of its retail sales from large hydroelectric generation under an ownership agreement or contract in effect as of January 1, 2018, it is not required to procure eligible renewable energy resources that exceed the lesser of the following for that year:
(A) The portion of the local publicly owned electric utility’s retail sales unsatisfied by the local publicly owned electric utility’s large hydroelectric generation.
(B) The soft target adopted by the Energy Commission for the intervening years of the relevant compliance period.
(3) An extension or renewal of a procurement agreement shall not be eligible to count towards the determination that the local publicly owned electric utility receives more than 40 percent of its retail sales from large hydroelectric generation in any year. This paragraph shall not apply to any agreement in effect on January 1, 2015, between a local publicly owned electric utility and the Western Area Power Administration or federal government as part of the federal Central Valley Project.
(4) The Energy Commission shall adjust the total quantities of eligible renewable energy resources to be procured by a local publicly owned electric utility for a compliance period to reflect any reductions required pursuant to paragraph (2).
(5) This subdivision does not modify the compliance obligation of a local publicly owned electric utility to satisfy the requirements of subdivision (c) of Section 399.16.
(l) (1) (A) For purposes of this subdivision, “unavoidable long-term contracts and ownership agreements” means commitments for electricity from a coal-fired powerplant, located outside the state, originally entered into by a local publicly owned electric utility before June 1, 2010, that is not subsequently modified to result in an extension of the duration of the agreement or result in an increase in total quantities of energy delivered during any compliance period set forth in subdivision (b).
(B) The governing board of a local publicly owned electric utility shall demonstrate in its renewable energy resources procurement plan required pursuant to subdivision (f) that any cancellation or divestment of the commitment would result in significant economic harm to its retail customers that cannot be substantially mitigated through resale, transfer to another entity, early closure of the facility, or other feasible measures.
(2) For the compliance period set forth in paragraph (4) of subdivision (b), a local publicly owned electric utility meeting the requirement of subparagraph (B) of paragraph (1) may adjust its renewable energy procurement targets to ensure that the procurement of additional electricity from eligible renewable energy resources, in combination with the procurement of electricity from unavoidable long-term contracts and ownership agreements, does not exceed the total retail sales of the local publicly owned electric utility during that compliance period. The local publicly owned electric utility may limit its procurement of eligible renewable energy resources for that compliance period to no less than an average of 33 percent of its retail sales.
(3) The Energy Commission shall approve any reductions in procurement targets proposed by a local publicly owned electric utility if it determines that the requirements of this subdivision are satisfied.
(m) A local publicly owned electric utility shall retain discretion over both of the following:
(1) The mix of eligible renewable energy resources procured by the utility and those additional generation resources procured by the utility for purposes of ensuring resource adequacy and reliability.
(2) The reasonable costs incurred by the utility for eligible renewable energy resources owned by the utility.
(n) The Energy Commission shall adopt regulations specifying procedures for enforcement of this article. The regulations shall include a public process under which the Energy Commission may issue a notice of violation and correction against a local publicly owned electric utility for failure to comply with this article, and for referral of violations to the State Air Resources Board for penalties pursuant to subdivision (o).
(o) (1) Upon a determination by the Energy Commission that a local publicly owned electric utility has failed to comply with this article, the Energy Commission shall refer the failure to comply with this article to the State Air Resources Board, which may impose penalties to enforce this article consistent with Part 6 (commencing with Section 38580) of Division 25.5 of the Health and Safety Code. Any penalties imposed shall be comparable to those adopted by the commission for noncompliance by retail sellers.
(2) Any penalties collected by the State Air Resources Board pursuant to this article shall be deposited in the Air Pollution Control Fund and, upon appropriation by the Legislature, shall be expended for reducing emissions of air pollution or greenhouse gases within the same geographic area as the local publicly owned electric utility.

SEC. 2.

 The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances involving the impact and application of the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code) and the 100 Percent Clean Energy Act of 2017 (Chapter 312 of the Statutes of 2018) upon those ratepayers served by the Turlock Irrigation District and Modesto Irrigation District and because of the need to balance environmental goals against the economic and social justice needs of uniquely situated, economically distressed communities in the central valley.