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SB-67 Clean energy: California 24/7 Clean Energy Standard Program.(2021-2022)

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Date Published: 04/19/2021 09:00 PM
SB67:v97#DOCUMENT

Amended  IN  Senate  April 19, 2021
Amended  IN  Senate  March 03, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 67

Introduced by Senator Becker

December 07, 2020

An act to amend Section 25746 of the Public Resources Code, and to amend Sections 399.11, 399.12, 399.13, 399.21, 399.25, 399.26, 399.30, 399.31, 399.33, 454.52, and 454.53 of, to amend the heading of Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of, and to add Section 399.15.1 to, the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 67, as amended, Becker. Clean energy: California 24/7 Clean Energy Standard Program.
Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations. The California Renewables Portfolio Standard Program requires the PUC to establish a renewables portfolio standard requiring all retail sellers, as defined, 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 requires the PUC to establish appropriate 3-year compliance periods for all subsequent years that require retail sellers to procure not less than 60% of retail sales of electricity products from eligible renewable energy resources. The program additionally requires each local publicly owned electric utility, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources to achieve the procurement requirements established by the program. The program requires the State Energy Resources Conservation and Development Commission (Energy Commission) to establish appropriate multiyear compliance periods for all subsequent years that require the local publicly owned electric utility to procure not less than 60% of retail sales of electricity products from eligible renewable energy resources.
Existing law establishes as policy of the state that eligible renewable energy resources and zero-carbon resources supply 100% of retail sales of electricity to California end-use customers and 100% of electricity procured to serve all state agencies by December 31, 2045.
This bill would revise that policy to establish a goal that 100% of electrical load be supplied by eligible clean energy resources, as defined. The bill would establish the California 24/7 Clean Energy Standard Program, which would require that 85% of retail sales load, as defined, annually and at least 60% of retail sales load within certain subperiods by December 31, 2030, and 90% of retail sales load annually and at least 75% of retail sales load within certain subperiods by December 31, 2035, be supplied by eligible clean energy resources, as defined. The bill would require the Energy Commission, in consultation with the PUC and California balancing authorities, to establish compliance periods and subperiods that meet certain criteria. The bill would require the PUC to establish for each retail seller, and the Energy Commission for each local publicly owned electric utility, clean energy procurement requirements for each compliance period and subperiod, as provided. Because the bill would impose additional duties on local publicly owned electric utilities, this bill would impose a state-mandated local program.
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 provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime.
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.

 This act shall be known as the 24/7 Clean Energy Standard Act of 2021.

SEC. 2.

 (a) The Legislature finds and declares all of the following:
(1) A low-carbon, reliable, and resilient electrical grid is foundational to the state’s strategy for reducing emissions of greenhouse gases across most sectors of the economy, including the power, transportation, buildings, and industrial sectors.
(2) The Public Utilities Commission, State Energy Resources Conservation and Development Commission, and State Air Resources Board should plan for 100 percent of total electrical load in California to come from eligible clean energy resources, including renewables and other zero-carbon resources, by December 31, 2045, and encourage the development and deployment of a wide variety of clean energy resources, and especially from dispatchable resources, in order to give retail sellers and local publicly owned electric utilities as much flexibility as possible to meet the requirements for grid reliability and resiliency at the lowest cost to ratepayers.
(3) To be successful, it is important to establish a roadmap for getting to a 100 percent clean grid by 2045, including interim targets for the deployment of clean energy resources and incentives to align the supply of clean electricity with demand on an hourly basis year round.
(b) It is the intent of the Legislature in enacting this act to extend and expand policies established pursuant to 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) to include a larger set of zero-carbon resources and to establish interim targets and hourly accounting for this expanded set of clean energy resources, and that all of these changes be incorporated in long-term planning.

SECTION 1.SEC. 3.

 Section 25746 of the Public Resources Code is amended to read:

25746.
 If the commission provides funding for a regional accounting system to verify compliance with the renewables portfolio standard and clean energy standard by retail sellers, pursuant to subdivision (b) of Section 399.25 of the Public Utilities Code, the commission shall recover all costs from user fees.

SEC. 2.SEC. 4.

 The heading of Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is amended to read:
Article  16. California Renewables Portfolio Standard Program and California 24/7 Clean Energy Standard Program

SEC. 3.SEC. 5.

 Section 399.11 of the Public Utilities Code is amended to read:

399.11.
 The Legislature finds and declares all of the following:
(a) (1) To attain a target of generating 20 percent of total retail sales of electricity in California from eligible renewable energy resources by December 31, 2013, 33 percent by December 31, 2020, 50 percent by December 31, 2026, and 60 percent by December 31, 2030, it is the intent of the Legislature that the commission and the Energy Commission implement the California Renewables Portfolio Standard Program described in this article.
(2) To attain a target of having 100 percent of electrical loads in the state be supplied by eligible clean energy resources by December 31, 2045, with interim targets of 85 percent of retail sales annually and at least 60 percent of retail sales load within the net peak subperiod, by December 31, 2030, and 90 percent of retail sales load annually and at least 75 percent of retail sales load within the net peak subperiod by December 31, 2035, it is the intent of the Legislature that the commission and the Energy Commission implement the California 24/7 Clean Energy Standard Program described in this article.
(b) Achieving the renewables portfolio standard and clean energy standard through the procurement of various electricity products from eligible energy resources is intended to provide unique benefits to California, including all of the following, each of which independently justifies these programs:
(1) Displacing fossil fuel consumption within the state.
(2) Adding new electrical generating facilities in the transmission network within the WECC service area.
(3) Reducing air pollution, particularly criteria pollutant emissions and toxic air contaminants, in the state.
(4) Meeting the state’s climate change goals by reducing emissions of greenhouse gases associated with electrical generation.
(5) Promoting stable retail rates for electric service.
(6) Meeting the state’s need for a diversified and balanced energy generation portfolio.
(7) Assisting with meeting the state’s resource adequacy requirements.
(8) Contributing to the safe and reliable operation of the electrical grid, including providing predictable electrical supply, voltage support, lower line losses, and congestion relief.
(9) Implementing the state’s transmission and land use planning activities related to development of eligible renewable energy resources.
(c) The California Renewables Portfolio Standard Program is intended to complement the Renewable Energy Resources Program administered by the Energy Commission and established pursuant to Chapter 8.6 (commencing with Section 25740) of Division 15 of the Public Resources Code.
(d) New and modified electric transmission facilities may be necessary to facilitate the state achieving its renewables portfolio standard and clean energy standard targets.
(e) (1) Supplying electricity to California end-use customers that is generated by eligible clean energy resources is necessary to improve California’s air quality and public health, particularly in disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code, and the commission shall ensure rates are just and reasonable, and are not significantly affected by the procurement requirements of this article. This electricity may be generated anywhere in the interconnected grid that includes many states, and areas of both Canada and Mexico.
(2) This article requires generating resources located outside of California that are able to supply that electricity to California end-use customers to be treated identically to generating resources located within the state, without discrimination.
(3) California electrical corporations, local publicly owned electric utilities, community choice aggregators, and electric service providers have already executed power purchase agreements with eligible renewable energy resources, eligible clean energy resources, and clean energy storage resources located outside of California that will supply electricity to California end-use customers. These resources will fully count toward meeting the renewables portfolio standard and clean energy standard procurement requirements.

SEC. 4.SEC. 6.

 Section 399.12 of the Public Utilities Code is amended to read:

399.12.
 For purposes of this article, the following definitions apply:
(a) “Balancing authority” means the responsible entity that integrates resource plans ahead of time, maintains load-interchange generation balance within a balancing authority area, and supports interconnection frequency in real time.
(b) “Balancing authority area” means the collection of generation, transmission, and loads within the metered boundaries of the area within which the balancing authority maintains the electrical load-resource balance.
(c) “California balancing authority” is a balancing authority with control over a balancing authority area primarily located in this state and operating for retail sellers and local publicly owned electric utilities subject to the requirements of this article and includes the Independent System Operator (ISO) and a local publicly owned electric utility operating a transmission grid that is not under the operational control of the ISO. A California balancing authority is responsible for the operation of the transmission grid within its metered boundaries which is not limited by the political boundaries of the State of California.
(d) (1) “Clean energy credit” means a either of the following:
(i) A renewable energy credit.
(ii) A certificate of proof associated with the production of electricity from an eligible clean energy resource that is not also an eligible renewable energy resource, issued through the accounting system established by the Energy Commission pursuant to Section 399.25, that one unit of electricity was generated and delivered to a California balancing authority by an eligible clean energy resource.
(2) “Clean energy credit” includes all the same environmental attributes associated with the production of electricity from the eligible clean energy resource, except for an emissions reduction credit issued pursuant to Section 40709 of the Health and Safety Code and any credits or payments associated with the reduction of solid waste and treatment benefits created by the utilization of biomass or biogas fuels. as a renewable energy credit.
(e) “Clean energy standard” means the specified percentage of electricity from eligible clean energy resources that a retail seller or a local publicly owned electric utility is required to procure pursuant to this article.
(f) “Conduit hydroelectric facility” means a facility for the generation of electricity that uses only the hydroelectric potential of an existing pipe, ditch, flume, siphon, tunnel, canal, or other manmade conduit that is operated to distribute water for a beneficial use.
(g) “Eligible clean energy generation resource” means a facility that qualifies as an eligible renewable energy resource or a facility that satisfies all of the following:
(1) The facility is one either of the following:
(A) (i) The facility uses hydroelectric generation that is not an eligible renewable energy resource or the facility generates electricity using nuclear fission or nuclear fusion.
(ii) A hydroelectric generation facility or nuclear generating facility existing as of January 1, 2021, shall demonstrate either of the following:
(I) It was owned in whole or in part by the electrical corporation or the local publicly owned electric utility as of January 1, 2021. For facilities that were not wholly owned, only the portion of electrical energy corresponding to the percentage ownership by the electrical corporation or the local publicly owned utility as of January 1, 2021, may be counted as eligible clean energy.
(II) It provided electricity under the retail seller’s or the local publicly owned electric utility’s ownership agreement or contract as of January 1, 2021, with the Western Area Power Administration or the federal government as part of the federal Central Valley Project. For these facilities, only the quantity of electrical energy provided under these ownership agreements or contracts may be counted as eligible clean energy, including an extension or renewal of an agreement between a retail seller or local publicly owned electrical utility and the Western Area Power Administration or the federal government as part of the federal Central Valley Project that renews or extends the existing agreement as of January 1, 2021, for an equal amount or share of electrical energy.

(B)The facility generates electricity exclusively using hydrogen that meets all of the following:

(i)It is produced by an electrolytic or other process using only electricity products generated in the same hour by another eligible clean energy resource that satisfy the requirements of paragraph (1) of subdivision (b) of Section 399.16. All clean energy credits associated with electricity procured to produce the hydrogen must be retired.

(ii)It is not produced from fossil fuel feedstock sources.

(iii)No greenhouse gases are emitted as a result of producing the hydrogen.

(C)

(B) The facility uses any other method of generating electricity that does not emit greenhouse gases as part of electricity production and the creation of any fuel or feedstock used by the facility. uses any other qualified zero-carbon process for generating electricity, as determined by the Energy Commission pursuant to paragraph (3) of subdivision (a) of Section 399.25.
(2) The facility satisfies paragraphs (2), (3), and (4) of subdivision (a) of Section 25741 of the Public Resources Code.
(3) The electricity product provided by the facility meets the requirements of paragraph (1) of subdivision (b) of Section 399.16.
(h) “Eligible clean energy storage resource” means a facility consisting of an energy storage system, as defined in subdivision (a) of Section 2835, and 2835 that meets all of the following:
(1) The facility is metered separately from any generation facility.
(2) The facility consumes only electricity procured from an eligible clean energy generation resource for its stored energy, does not consume system power, and does not emit any greenhouse gases as part of storing energy or exporting electricity from that stored energy.
(3) All clean energy credits associated with the electricity procured for the facility must satisfy the requirements of paragraph (1) of subdivision (b) of Section 399.16 and be retired.
(4) The facility satisfies one of the following requirements:
(A) The facility is located in the state or near the border of the state with the first point of connection to the transmission network of a balancing authority area primarily located within the state.
(B) The facility has its first point of interconnection to the transmission network outside the state, within the WECC service area, and satisfies both of the following requirements:
(i) It will not cause or contribute to any violation of a California environmental quality standard or requirement.
(ii) It participates in the accounting system to verify compliance with the clean energy standard once established by the commission pursuant to subdivision (b) of Section 399.25 of the Public Utilities Code.
(5) If the facility is outside the United States, it is developed and operated in a manner that is as protective of the environment as a similar facility located in the state.
(i) “Eligible clean energy resource” means an eligible clean energy generation resource or an eligible clean energy storage resource.
(j) “Eligible energy resource” means collectively an eligible renewable energy resource or an eligible clean energy resource.
(k) “Eligible renewable energy resource” means an electrical generating facility that meets the definition of a “renewable electrical generation facility” in Section 25741 of the Public Resources Code, subject to the following:
(1) (A) An existing small hydroelectric generation facility of 30 megawatts or less shall be eligible only if a retail seller or local publicly owned electric utility procured the electricity from the facility as of December 31, 2005. A new hydroelectric facility that commences generation of electricity after December 31, 2005, is not an eligible renewable energy resource if it will cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.
(B) Notwithstanding subparagraph (A), a conduit hydroelectric facility of 30 megawatts or less that commenced operation before January 1, 2006, is an eligible renewable energy resource. A conduit hydroelectric facility of 30 megawatts or less that commences operation after December 31, 2005, is an eligible renewable energy resource so long as it does not cause an adverse impact on instream beneficial uses or cause a change in the volume or timing of streamflow.
(C) A facility approved by the governing board of a local publicly owned electric utility prior to June 1, 2010, for procurement to satisfy renewable energy procurement obligations adopted pursuant to former Section 387, shall be certified as an eligible renewable energy resource by the Energy Commission pursuant to this article, if the facility is a “renewable electrical generation facility” as defined in Section 25741 of the Public Resources Code.
(D) (i) A small hydroelectric generation unit with a nameplate capacity not exceeding 40 megawatts that is operated as part of a water supply or conveyance system is an eligible renewable energy resource only for the retail seller or local publicly owned electric utility that procured the electricity from the unit as of December 31, 2005. No unit shall be eligible pursuant to this subparagraph if an application for certification is submitted to the Energy Commission after January 1, 2013. Only one retail seller or local publicly owned electric utility shall be deemed to have procured electricity from a given unit as of December 31, 2005.
(ii) Notwithstanding clause (i), a local publicly owned electric utility that meets the criteria of subdivision (j) of Section 399.30 may sell to another local publicly owned electric utility electricity from small hydroelectric generation units that qualify as eligible renewable energy resources under clause (i), and that electricity may be used by the local publicly owned electric utility that purchased the electricity to meet its renewables portfolio standard procurement requirements. The total of all those sales from the utility shall be no greater than 100,000 megawatthours of electricity.
(iii) The amendments made to this subdivision by the act adding this subparagraph are intended to clarify existing law and apply from December 10, 2011.
(2) (A) A facility engaged in the combustion of municipal solid waste shall not be considered an eligible renewable energy resource.
(B) Subparagraph (A) does not apply to generation before January 1, 2017, from a facility located in Stanislaus County that was operational prior to September 26, 1996.
(l) “Energy credit” means the renewable energy credit or clean energy credit associated with electricity production by an eligible energy resource.
(m) “Load-modifying energy storage resource” means a facility consisting of an energy storage system, as defined in Section 2835, that meets all of the following:
(1) The facility is not an eligible clean energy storage resource.
(2) The facility is metered separately from a generation facility.
(3) The facility, in whole or in part, is under the control of or operated for the direct benefit of a retail seller or local publicly owned electric utility such that the facility increases the retail seller’s or local publicly owned electric utility’s total electrical load when storing energy procured by the retail seller or local publicly owned electric utility and decreases the retail seller’s or local publicly owned electric utility’s total electrical load when releasing energy from the energy storage system for their benefit.
(4) The facility is located in the state or near the border of the state with the first point of connection to the transmission network of a balancing authority area primarily located within the state.
(n) “Long-term energy contract” means a retail seller’s or local publicly owned electric utility’s contract of 10 years or more in duration or its ownership or ownership agreement for eligible energy resources.

(m)

(o) “Procure” means to acquire through ownership or contract.

(n)

(p) “Procurement entity” means any person or corporation authorized by the commission to enter into contracts to procure eligible renewable energy resources on behalf of customers of a retail seller pursuant to subdivision (f) of Section 399.13.
(q) “Retail load” means a retail seller’s or local publicly owned electric utility’s retail sales of electricity plus electricity consumed by one or more load-modifying energy storage resources to store energy for the benefit of the retail seller or local publicly owned electric utility minus electricity generated and delivered by one or more load-modifying energy storage resources for the benefit of the retail seller or local publicly owned electric utility.

(o)

(r) (1) “Renewable energy credit” means a certificate of proof associated with the generation of electricity from an eligible renewable energy resource, issued through the accounting system established by the Energy Commission pursuant to Section 399.25, that one unit of electricity was generated and delivered by an eligible renewable energy resource.
(2) “Renewable energy credit” includes all renewable and environmental attributes associated with the production of electricity from the eligible renewable energy resource, except for an emissions reduction credit issued pursuant to Section 40709 of the Health and Safety Code and any credits or payments associated with the reduction of solid waste and treatment benefits created by the utilization of biomass or biogas fuels.
(3) (A) Electricity generated by an eligible renewable energy resource attributable to the use of nonrenewable fuels, beyond a de minimis quantity used to generate electricity in the same process through which the facility converts renewable fuel to electricity, shall not result in the creation of a renewable energy credit. The Energy Commission shall set the de minimis quantity of nonrenewable fuels for each renewable energy technology at a level of no more than 2 percent of the total quantity of fuel used by the technology to generate electricity. The Energy Commission may adjust the de minimis quantity for an individual facility, up to a maximum of 5 percent, if it finds that all of the following conditions are met:
(i) The facility demonstrates that the higher quantity of nonrenewable fuel will lead to an increase in generation from the eligible renewable energy facility that is significantly greater than generation from the nonrenewable fuel alone.
(ii) The facility demonstrates that the higher quantity of nonrenewable fuels will reduce the variability of its electrical output in a manner that results in net environmental benefits to the state.
(iii) The higher quantity of nonrenewable fuel is limited to either natural gas or hydrogen derived by reformation of a fossil fuel.
(B) Electricity generated by a small hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of subparagraph (A) or (D) of paragraph (1) of subdivision (e).
(C) Electricity generated by a conduit hydroelectric generation facility shall not result in the creation of a renewable energy credit unless the facility meets the requirements of subparagraph (B) of paragraph (1) of subdivision (e).
(D) Electricity generated by a facility engaged in the combustion of municipal solid waste shall not result in the creation of a renewable energy credit. This subparagraph does not apply to renewable energy credits that were generated before January 1, 2017, by a facility engaged in the combustion of municipal solid waste located in Stanislaus County that was operational prior to September 26, 1996, and sold pursuant to contacts contracts entered into before January 1, 2017.

(p)

(s) “Renewables portfolio standard” means the specified percentage of electricity generated by eligible renewable energy resources that a retail seller or a local publicly owned electric utility is required to procure pursuant to this article.

(q)

(t) “Retail seller” means an entity engaged in the retail sale of electricity to end-use customers located within the state, including any of the following:
(1) An electrical corporation, as defined in Section 218.
(2) A community choice aggregator. A community choice aggregator shall participate in the renewables portfolio standard and clean energy standard programs subject to the same terms and conditions applicable to an electrical corporation.
(3) An electric service provider, as defined in Section 218.3. The electric service provider shall be subject to the same terms and conditions applicable to an electrical corporation pursuant to this article.
(4) “Retail seller” does not include any of the following:
(A) A corporation or person employing cogeneration technology or producing electricity consistent with subdivision (b) of Section 218.
(B) The Department of Water Resources acting in its capacity pursuant to Division 27 (commencing with Section 80000) of the Water Code.
(C) A local publicly owned electric utility.

(r)

(u) “WECC” means the Western Electricity Coordinating Council of the North American Electric Reliability Corporation, or a successor to the corporation.

SEC. 5.SEC. 7.

 Section 399.13 of the Public Utilities Code is amended to read:

399.13.
 (a) (1) The commission shall direct each electrical corporation to annually prepare an energy procurement plan that includes the elements specified in paragraph (6), to satisfy its obligations under the renewables portfolio standard and the clean energy standard. To the extent feasible, this procurement plan shall be proposed, reviewed, and adopted by the commission as part of, and pursuant to, a general procurement plan process. The commission shall require each electrical corporation to review and update its energy procurement plan as it determines to be necessary. The commission shall require all other retail sellers to prepare and submit energy procurement plans that address the requirements identified in paragraph (6).
(2) Every electrical corporation that owns electrical transmission facilities shall annually prepare, as part of the Federal Energy Regulatory Commission Order 890 process, and submit to the commission, a report identifying any electrical transmission facility, upgrade, or enhancement that is reasonably necessary to achieve the renewables portfolio standard and clean energy standard procurement requirements of this article. Each report shall look forward at least five years and, to ensure that adequate investments are made in a timely manner, shall include a preliminary schedule when an application for a certificate of public convenience and necessity will be made, pursuant to Chapter 5 (commencing with Section 1001), for any electrical transmission facility identified as being reasonably necessary to achieve the energy resources procurement requirements of this article. Each electrical corporation that owns electrical transmission facilities shall ensure that project-specific interconnection studies are completed in a timely manner.
(3) The commission shall direct each retail seller to prepare and submit an annual compliance report that includes all of the following:
(A) The current status and progress made during the prior year toward procurement of eligible renewable energy resources and eligible clean energy resources as required by Sections 399.15 and 399.15.1, including, if applicable, the status of any necessary siting and permitting approvals from federal, state, and local agencies for those eligible energy resources procured by the retail seller, and the current status of compliance with the portfolio content requirements of subdivision (c) of Section 399.16, including procurement of eligible energy resources located outside the state and within the WECC and unbundled renewable energy credits.
(B) If the retail seller is an electrical corporation, the current status and progress made during the prior year toward construction of, and upgrades to, transmission and distribution facilities and other electrical system components it owns to interconnect eligible energy resources and to supply the electricity generated by those resources to load, including the status of planning, siting, and permitting transmission facilities by federal, state, and local agencies.
(C) Recommendations to remove impediments to making progress toward achieving the energy resources procurement requirements established pursuant to this article.
(4) The commission shall review each annual compliance report filed by a retail seller. The commission shall notify a retail seller if the commission has determined, based upon its review, that the retail seller may be at risk of not satisfying the energy procurement requirements for the then-current or future compliance periods of the renewable portfolio standard or clean energy standard and shall provide recommendations in that circumstance regarding satisfying those requirements.
(5) The commission shall adopt, by rulemaking, all of the following:
(A) A process that provides criteria for the rank ordering and selection of least-cost and best-fit eligible renewable energy resources to comply with the California Renewables Portfolio Standard Program obligations on a total cost and best-fit basis. This process shall take into account all of the following:
(i) Estimates of indirect costs associated with needed transmission investments.
(ii) The cost impact of procuring the eligible renewable energy resources on the electrical corporation’s electricity portfolio.
(iii) The viability of the project to construct and reliably operate the eligible renewable energy resource, including the developer’s experience, the feasibility of the technology used to generate electricity, and the risk that the facility will not be built, or that construction will be delayed, with the result that electricity will not be supplied as required by the contract.
(iv) Workforce recruitment, training, and retention efforts, including the employment growth associated with the construction and operation of eligible renewable energy resources and goals for recruitment and training of women, minorities, and disabled veterans.
(v) (I) Estimates of electrical corporation expenses resulting from integrating and operating eligible renewable energy resources, including, but not limited to, any additional wholesale energy and capacity costs associated with integrating each eligible renewable resource.
(II) No later than December 31, 2015, the commission shall approve a methodology for determining the integration costs described in subclause (I).
(vi) Consideration of any statewide greenhouse gas emissions limit established pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code).
(vii) Consideration of capacity and system reliability of the eligible renewable energy resource to ensure grid reliability.
(B) Rules permitting retail sellers to accumulate, beginning January 1, 2011, excess procurement in one compliance period to be applied to any subsequent compliance period. The rules shall apply equally to all retail sellers. In determining the quantity of excess procurement for the applicable compliance period, the commission shall retain the rules adopted by the commission and in effect as of January 1, 2015, for the compliance period specified in subparagraphs (A) to (C), inclusive, of paragraph (1) of subdivision (b) of Section 399.15. For any subsequent compliance period, the rules shall allow the following:
(i) For electricity products meeting the portfolio content requirements of paragraph (1) of subdivision (b) of Section 399.16, contracts of any duration may count as excess procurement.
(ii) Electricity products meeting the portfolio content requirements of paragraph (2) or (3) of subdivision (b) of Section 399.16 shall not be counted as excess procurement. Contracts of any duration for electricity products meeting the portfolio content requirements of paragraph (2) or (3) of subdivision (b) of Section 399.16 that are credited towards a compliance period shall not be deducted from a retail seller’s procurement for purposes of calculating excess procurement.
(iii) If a retail seller notifies the commission that it will comply with the provisions of subdivision (b) for the compliance period beginning January 1, 2017, the provisions of clauses (i) and (ii) shall take effect for that retail seller for that compliance period.
(iv) For the purpose of excess procurement of eligible clean energy resources relative to the procurement requirements for a compliance period or subperiod, the following additional conditions apply:
(I) Procurement of quantities greater than actual retail sales in a specific hour the eligibility cap set forth in paragraph (8) of subdivision (c) of Section 399.15.1 shall not be counted as excess procurement.
(II) Excess procurement may be applied only to the corresponding compliance subperiod in the following calendar year that includes the same day of the year and hour of the day during which the excess procurement occurred. Excess procurement for one compliance subperiod shall not be used to meet the procurement requirements of a different subperiod within the same compliance period.
(C) Standard terms and conditions to be used by all electrical corporations in contracting for eligible energy resources, including performance requirements for generators. A contract for the purchase of electricity generated by an eligible energy resource, at a minimum, shall include the renewable energy credits and clean energy credits associated with all electricity generation specified under the contract. The standard terms and conditions shall include the requirement that, no later than six months after the commission’s approval of an electricity purchase agreement entered into pursuant to this article, the following information about the agreement shall be disclosed by the commission: party names, resource type, project location, and project capacity.
(D) An appropriate minimum margin of procurement above the minimum procurement level necessary to comply with the renewables portfolio standard and the clean energy standard to mitigate the risk that projects planned or under contract are delayed or canceled. This paragraph does not preclude an electrical corporation from voluntarily proposing a margin of procurement above the appropriate minimum margin established by the commission.
(6) Consistent with the goal of increasing California’s reliance on eligible energy resources, the energy procurement plan shall include all of the following:
(A) An assessment of annual or multiyear portfolio supplies and demand to determine the optimal mix of demand-side resources and eligible energy resources with deliverability characteristics that may include peaking, dispatchable, baseload, firm, and as-available capacity.
(B) Potential compliance delays related to the conditions described in paragraph (5) of subdivision (b) of Section 399.15.
(C) A bid solicitation setting forth the need for demand-side resources or for eligible energy resources of each deliverability characteristic, required online dates, and locational preferences, if any.
(D) A status update on the development schedule of all demand-side resources and eligible energy resources currently under contract.
(E) Consideration of mechanisms for price adjustments associated with the costs of key components for eligible energy resource projects with online dates more than 24 months after the date of contract execution.
(F) An assessment of the risk that an eligible energy resource will not be built, or that construction will be delayed, with the result that electricity will not be delivered as required by the contract.
(7) In soliciting and procuring eligible energy resources, each electrical corporation shall offer contracts of no less than 10 years duration, unless the commission approves of a contract of shorter duration.
(8) (A) In soliciting and procuring eligible energy resources for California-based projects, each electrical corporation shall give preference to energy projects that provide environmental and economic benefits to communities afflicted with poverty or high unemployment, or that suffer from high emission levels of toxic air contaminants, criteria air pollutants, and greenhouse gases.
(B) Subparagraph (A) applies to all procurement of eligible energy resources for California-based projects, whether the procurement occurs through all-source requests for offers, eligible renewable resources only requests for offers, or other procurement mechanisms. This subparagraph is declaratory of existing law.
(9) In soliciting and procuring eligible energy resources, each retail seller shall consider the best-fit attributes of resource types that ensure a balanced resource mix to maintain the reliability of the electrical grid.
(b) (1) A retail seller may enter into a combination of long- and short-term contracts for electricity and associated renewable energy credits and clean energy credits. Beginning January 1, 2021, at least 65 percent of the procurement a retail seller counts toward the renewables portfolio standard requirement of each compliance period shall be from its contracts of 10 years or more in duration or in its ownership or ownership agreements for eligible renewable energy resources. long-term energy contracts. Beginning January 1, 2024, at least 65 percent of the procurement a retail seller counts toward the clean energy standard requirement of each annual compliance period and subperiod shall be from its contracts of 10 years or more in duration or in its ownership or ownership agreements for eligible energy resources. long-term energy contracts. At least 25 percent by January 1, 2026, 45 percent by January 1, 2028, and 65 percent by January 1, 2030, of the procurement a retail seller counts toward the clean energy standard requirement of each net peak subperiod shall be from its long-term energy contracts.
(2) In demonstrating compliance with paragraph (1), a retail seller may rely on contracts of 10 years or more in duration or ownership agreements entered into directly by its direct access, as described in Section 365.1, end-use customer for eligible renewable energy resources located in front of the customer meter to satisfy the portion of the compliance requirement attributable to the retail sales to that end-use customer. A retail seller shall furnish to the commission documentation deemed necessary by the commission to verify compliance with this paragraph.
(c) The commission shall review and accept, modify, or reject each electrical corporation’s energy resource procurement plan prior to the commencement of energy procurement pursuant to this article by an electrical corporation. The commission shall assess adherence to the approved energy resource procurement plans in determining compliance with the obligations of this article.
(d) Unless previously preapproved by the commission, an electrical corporation shall submit a contract for the generation of an eligible energy resource to the commission for review and approval consistent with an approved energy resource procurement plan. If the commission determines that the bid prices are elevated due to a lack of effective competition among the bidders, the commission shall direct the electrical corporation to renegotiate the contracts or conduct a new solicitation.
(e) If an electrical corporation fails to comply with a commission order adopting an energy resource procurement plan, the commission shall exercise its authority to require compliance.
(f) (1) The commission may authorize a procurement entity to enter into contracts on behalf of customers of a retail seller for electricity products from eligible energy resources to satisfy the retail seller’s renewables portfolio standard or clean energy standard procurement requirements. The commission shall not require any person or corporation to act as a procurement entity or require any party to purchase eligible energy resources from a procurement entity.
(2) Subject to review and approval by the commission, the procurement entity shall be permitted to recover reasonable administrative and procurement costs through the retail rates of end-use customers that are served by the procurement entity and are directly benefiting from the procurement of eligible energy resources.
(g) Procurement and administrative costs associated with contracts entered into by an electrical corporation for eligible energy resources pursuant to this article and approved by the commission are reasonable and prudent and shall be recoverable in rates.

SEC. 6.SEC. 8.

 Section 399.15.1 is added to the Public Utilities Code, to read:

399.15.1.
 (a) The Energy Commission, in consultation with the commission, the Independent System Operator, and other California balancing authorities, shall establish compliance periods and subperiods that meet the following criteria:
(1) A compliance period shall consist of a single calendar year and shall contain one or more compliance subperiods.
(2) (A) The Energy Commission shall establish one initial compliance subperiod, referred to as the net peak compliance subperiod, consisting of a subset of hours covering peak demand adjusted to account for the contribution of variable eligible clean energy resources.
(B) The Energy Commission shall determine the specific hours of each day, which may vary by season, and the beginning and end dates for each season, that are included within the net peak compliance subperiod, and any other subperiod established, based on patterns of electricity demand during each subperiod to group together time periods with similar load and clean energy availability profiles. This determination may be different for utility service areas located in different regions of the state.
(C) After establishing the initial compliance subperiod, but no earlier than for the compliance period consisting of the year beginning January 1, 2028, the Energy Commission may change the number of compliance subperiods and the specific hours and days included within each subperiod as warranted by patterns of electricity demand and availability of eligible clean energy resources. All compliance subperiods shall be established for the purpose of identifying periods in which the supply of eligible clean energy resources as a share of total electrical load is projected to be significantly below the average for the full compliance period.
(D) When adding a compliance subperiod or changing the attributes of a subperiod pursuant to subparagraph (C), the Energy Commission shall provide a reasonable notice period of not less than three years before the new requirements take effect.
(3) The first compliance period and compliance subperiods as provided in paragraph (2) shall begin on January 1, 2024, and continue for each year thereafter.
(b) (1) The Energy Commission shall perform analysis to support the establishment of a current baseline for each retail seller and local publicly owned electric utility.
(2) The current baseline shall reflect the percentage of clean energy resources used as a percentage of each retail seller’s and local publicly owned electric utility’s total retail sales load and the aggregate percentage of clean energy resources across all retail sellers and local publicly owned electric utilities during the net peak compliance subperiod and during calendar year 2021, as if this section had been in effect at that time.
(3) The Energy Commission may include other relevant years in its development of the current baseline.
(4) In determining a retail seller’s or a local publicly owned electric utility’s baseline, the Energy Commission shall exclude any electricity from clean energy resources whose license to operate will expire before December 31, 2025. Those resources shall also be excluded from earning clean energy credits before their retirement.

(4)

(5) The commission shall establish for each retail seller, and the Energy Commission shall establish for each local publicly owned electric utility, its period and net peak subperiod current baseline.
(c) No later than April 1, 2023, the commission shall establish for each retail seller and the Energy Commission shall establish for each local publicly owned electric utility the clean energy standard procurement requirements for each compliance period and subperiod as follows:
(1) The current baseline established for each retail seller and local publicly owned electric utility pursuant to subdivision (b) shall be the clean energy standard procurement requirements for each compliance period and subperiod for the year beginning January 1, 2024, for that retail seller or local publicly owned electric utility.
(2) The clean energy standard procurement requirement for each retail seller and local publicly owned electric utility for the compliance period and subperiod for each year from 2025 through 2029 shall be established based on a straight-line increase from its 2024 procurement requirement to the 2030 clean energy standard procurement requirements in paragraph (3).
(3) For the compliance period consisting of the year beginning January 1, 2030, the clean energy standard procurement requirement shall be 85 percent of retail sales load for the annual period and 60 percent of retail sales load for the net peak subperiod.
(4) The clean energy standard procurement requirement for the compliance period and subperiod for each year from 2031 through 2034 shall be established based on a straight-line increase from the 2030 clean energy standard procurement requirements in paragraph (3) to the 2035 clean energy standard procurement requirements in paragraph (5).
(5) For the compliance period consisting of the year beginning January 1, 2035, the clean energy standard procurement requirement shall be 90 percent of retail sales load for the annual period and 75 percent of retail sales load for the net peak subperiod.

(6)For the compliance period consisting of the year 2045 and all subsequent compliance periods, the clean energy standard procurement requirement for every compliance period and subperiod shall be 100 percent of electrical load.

(7)

(6) For any new compliance subperiods established by the Energy Commission pursuant to subdivision (a), the commission may establish for each retail seller and the Energy Commission may establish for each local publicly owned electric utility the clean energy standard procurement requirements that require sufficient progress from the then-current levels of eligible clean energy resources during the compliance subperiods toward the requirement in paragraph (6). percentage required for the net peak subperiod in each corresponding year.

(8)

(7) Procurement in excess of an eligibility cap of 110 percent of the actual retail sales load for a retail seller or local publicly owned utility in any hour shall not be credited toward any compliance period or subperiod.
(d) No later than January 1, 2026, for compliance periods after 2035 and before from 2036 through 2045, the commission shall establish for each retail seller and the Energy Commission shall establish for each local publicly owned electric utility the clean energy standard procurement requirements for each compliance period and subperiod that require sufficient progress toward the requirement in paragraph (6) of subdivision (c). meeting the state’s goal of 100 percent clean energy as set forth in subdivision (a) of Section 454.53.
(e) Only for purposes of establishing the clean energy standard procurement requirements of this section, the commission shall include all electricity sold to retail customers by the Department of Water Resources pursuant to Division 27 (commencing with Section 80000) of the Water Code in the calculation of retail sales by load of an electrical corporation.
(f) Paragraphs (5) through to (9), inclusive, of subdivision (b) of Section 399.15 relating to compliance with the renewables portfolio standard program apply to compliance with the clean energy standard program.
(g) The commission shall establish a cost limitation for each electrical corporation and for other retail sellers, if requested by the retail seller, on the procurement expenditures for all eligible clean energy resources used to comply with the clean energy standard. The cost limitation shall be set at a level that prevents disproportionate rate impacts.
(h) If the cost limitation for a retail seller is insufficient to support the projected costs of meeting the clean energy standard procurement requirements, the retail seller may refrain from entering into new contracts or constructing facilities beyond the quantity that can be procured within the limitation, unless eligible energy resources can be procured without exceeding a de minimis further increase in rates.
(i) (1) The commission shall monitor the status of the cost limitation for each retail seller to ensure compliance with this article.
(2) If the commission determines that a retail seller may exceed its cost limitation before achieving the clean energy standard procurement requirements, the commission shall do both of the following within 60 days of making that determination:
(A) Investigate and identify the reasons why the retail seller may exceed its annual cost limitation.
(B) Notify the appropriate policy and fiscal committees of the Legislature that the retail seller may exceed its cost limitation, and include the reasons why the retail seller may exceed its cost limitation.

(g)

(j) The establishment of a clean energy standard shall not constitute implementation by the commission of the federal Public Utility Regulatory Policies Act of 1978 (Public Law 95-617).

SEC. 7.SEC. 9.

 Section 399.21 of the Public Utilities Code is amended to read:

399.21.
 (a) The commission, by rule, shall authorize the use of renewable energy credits to satisfy the renewables portfolio standard procurement requirements as provided in this article and the use of clean energy credits to satisfy the clean energy standard procurement requirements as provided in this article, subject to the following conditions:
(1) The commission and the Energy Commission shall ensure that the tracking system established pursuant to subdivision (c) of Section 399.25, is operational, is capable of independently verifying that electricity earning the credit is generated by an eligible energy resource, and can ensure that energy credits shall not be double counted by any seller of electricity within the service territory of the WECC.
(2) (A) Each renewable energy credit shall be counted only once for compliance with the renewables portfolio standard of this state or any other state, or for verifying retail product claims in this state or any other state.
(B) Each clean energy credit shall be counted only once for compliance with the clean energy standard of this state or any other state, or for verifying retail product claims in this state or any other state.
(C) Energy credits that qualify as both renewable energy credits and clean energy credits may be counted once in each program without violating subparagraphs (A) and (B).
(3) All revenues received by an electrical corporation for the sale of an energy credit shall be credited to the benefit of ratepayers.
(4) Energy credits shall not be created for electricity generated pursuant to any electricity purchase contract with a retail seller or a local publicly owned electric utility executed before January 1, 2005, unless the contract contains explicit terms and conditions specifying the ownership or disposition of those credits. Procurement under those contracts shall be tracked through the accounting system described in subdivision (b) of Section 399.25 and included in the quantity of eligible energy resources of the purchasing retail seller pursuant to Section 399.15.
(5) Energy credits shall not be created for electricity generated under any electricity purchase contract executed after January 1, 2005, pursuant to the federal Public Utility Regulatory Policies Act of 1978 (16 U.S.C. Sec. 2601 et seq.). Procurement under the electricity purchase contracts shall be tracked through the accounting system implemented by the Energy Commission pursuant to subdivision (b) of Section 399.25 and count toward the renewables portfolio standard or clean energy standard procurement requirements of the purchasing retail seller.
(6) Nothing in the amendments to this article made by the Clean Energy and Pollution Reduction Act of 2015 (Senate Bill 350 of the 2015–16 Regular Session) is intended to change commission Decision 11-12-052 regarding the classification of renewable energy credits from generation on the customer side of the meter.
(7) An energy credit shall not be eligible for compliance with a renewables portfolio standard or clean energy standard procurement requirement unless it is retired in the tracking system established pursuant to subdivision (c) of Section 399.25 by the retail seller or local publicly owned electric utility within 36 months from the initial date of generation of the associated electricity.
(8) Clean energy credits created by electricity exported from an eligible clean energy storage resource shall not be eligible for compliance with a clean energy standard procurement requirement unless the energy storage resource has retired clean energy credits and, if applicable, the corresponding renewable energy credits, for the electricity consumed in storing the energy used for that generation.
(b) The commission shall allow an electrical corporation to recover the reasonable costs of purchasing, selling, and administering energy credit contracts in rates.

SEC. 8.SEC. 10.

 Section 399.25 of the Public Utilities Code is amended to read:

399.25.
 The Energy Commission shall do all of the following:
(a) (1) Certify eligible renewable energy resources that it determines meet the criteria described in subdivision (k) of Section 399.12.
(2) Certify eligible clean energy resources that it determines meet the criteria described in subdivision (i) of Section 399.12.
(3) Periodically, as needed or requested, evaluate and qualify technologies and processes that can qualify as a zero-carbon process for generating electricity, considering the change in atmospheric carbon dioxide from the generation of electricity, the production of any feedstock or fuel used to generate the electricity, and any other processes or technologies used to prevent or mitigate potential emissions.
(b) Design and implement an accounting system to verify compliance with the renewables portfolio standard and clean energy standard by retail sellers and local publicly owned electric utilities, to ensure that electricity generated by an eligible energy resource is counted only once pursuant to paragraph (2) of subdivision (a) of Section 399.21 for the purpose of meeting the renewables portfolio standard and clean energy standards of this state or any other state, to certify energy credits produced by eligible energy resources, and to verify retail product claims in this state or any other state. In establishing the guidelines governing this accounting system, the Energy Commission shall collect data from electricity market participants that it deems necessary to verify compliance of retail sellers and local publicly owned electric utilities, in accordance with the requirements of this article and the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code). In seeking data from electrical corporations, the Energy Commission shall request data from the commission. The commission shall collect data from electrical corporations and remit the data to the Energy Commission within 90 days of the request.
(c) (1) Establish a system for tracking and verifying energy credits that, through the use of independently audited data, verifies the generation of electricity associated with each energy credit and protects against multiple counting of the same energy credit. The Energy Commission shall consult with other western states and with the WECC in the development of this system.
(2) Enhance the system for tracking and verifying energy credits, as necessary, so that the generation of energy associated with each eligible clean energy generation resource and export of energy associated with each eligible clean energy storage resource is recorded for each individual hour.
(d) Certify, for purposes of compliance with the renewables portfolio standard and clean energy standard requirements by a retail seller, the eligibility of energy credits associated with eligible energy resources procured by a local publicly owned electric utility, if the Energy Commission determines that all of the conditions of Section 399.31 have been met.

SEC. 9.SEC. 11.

 Section 399.26 of the Public Utilities Code is amended to read:

399.26.
 (a) In order for the state to meet the requirements of the California Renewables Portfolio Standard Program and the California 24/7 Clean Energy Standard Program, substantially increased amounts of electricity generated by eligible energy resources must be integrated with, and interconnected to, the transmission grid that is either owned by, or under the operational control of, the local publicly owned electric utilities and the transmission grid that is under the operational control of the Independent System Operator.
(b) The Independent System Operator and the balancing authority of each area in California shall do both of the following:
(1) Work cooperatively to integrate and interconnect eligible energy resources to the transmission grid by the most efficient means possible with the goal of minimizing the impact and cost of new transmission needed to meet both reliability needs and the renewables portfolio standard and clean energy standard procurement requirements.
(2) Accomplish the requirements of paragraph (1) in a manner that respects the ownership, business, and dispatch models for transmission facilities owned by electrical corporations, local publicly owned electric utilities, joint powers agencies, and independent transmission companies.
(c) The Independent System Operator shall seek any approvals from the Federal Energy Regulatory Commission that are necessary to accomplish the goals and requirements of this article.
(d) In order to maintain electric service reliability and to minimize the construction of fossil fuel electrical generation capacity to support the integration of intermittent renewable electrical generation into the electrical grid, by July 1, 2011, the commission shall determine the effective load carrying capacity of wind and solar energy resources on the California electrical grid. The commission shall use those effective load carrying capacity values in establishing the contribution of wind and solar energy resources toward meeting the resource adequacy requirements established pursuant to Section 380.

SEC. 10.SEC. 12.

 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 an energy resources procurement plan that requires the utility to do both of the following:
(A) 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).
(B) Procure a minimum quantity of electricity products from eligible clean energy resources, including clean energy credits, to meet its obligations under Section 399.15.1.
(2) Beginning January 1, 2019, a local publicly owned electric utility subject to Section 9621 shall incorporate the 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 eligible energy resource 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 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 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 energy resources that are located in reasonable proximity to program participants.
(d) (1) The governing board of a local publicly owned electric utility shall adopt procurement requirements consistent with subparagraph (B) of paragraph (5) of subdivision (a) of, and paragraph (1) of 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 for eligible renewable energy resource procurement consistent with subdivision (b) of Section 399.15.
(B) Cost limitations for eligible renewable energy resource 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 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 and clean 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 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 or clean 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 or the clean energy 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 or clean energy standard procurement requirements in subdivision (b) or Section 399.15.1 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 an existing 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).
(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 (a) 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 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 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. 11.SEC. 13.

 Section 399.31 of the Public Utilities Code is amended to read:

399.31.
 A retail seller may procure energy credits associated with deliveries of electricity by an eligible energy resource to a local publicly owned electric utility, for purposes of compliance with the renewables portfolio standard and clean energy standard requirements, if both of the following conditions are met:
(a) The local publicly owned electric utility has adopted and implemented a energy resources procurement plan adopted pursuant to Section 399.30 that complies with the renewables portfolio standard and clean energy standard.
(b) The local publicly owned electric utility is procuring sufficient eligible energy resources to satisfy the target standard, and will not fail to satisfy the target standard in the event that the energy credit is sold to the retail seller.

SEC. 12.SEC. 14.

 Section 399.33 of the Public Utilities Code is amended to read:

399.33.
 (a) This section shall only apply to a gas-fired powerplant that is located inside the state, is owned by and serves the electrical demands of a single local publicly owned electric utility, and meets all of the following conditions:
(1) The local publicly owned electric utility has outstanding public indebtedness associated with the powerplant, the powerplant was planned and built after January 1, 2000, and the debt was secured before January 1, 2017.
(2) Operating the powerplant below a 20-percent capacity factor on an annual average on a yearly basis may result in the loss of employment of a powerplant employee who receives a prevailing wage.
(3) The powerplant is subject to and meets the state’s greenhouse gases emission performance standard established by the Energy Commission pursuant to Section 8341.
(4) The powerplant is not located in a disadvantaged community. For purposes of this paragraph, “disadvantaged community” means a census tract that, pursuant to Section 39711 of the Health and Safety Code, has received a score on the California Communities Environmental Health Screening 3.0, also known as CalEnviroScreen 3.0, in the 81st to 100th percentile, inclusive.
(5) The local publicly owned electric utility can demonstrate with official documentation, such as an adopted city council resolution, to the satisfaction of the Energy Commission, that the powerplant was built in response to the energy crisis of 2000–01.
(6) The powerplant has not undergone repowering and is not serving as a peaker powerplant.
(b) If the procurement requirements of this article require more than 50 percent of retail sales of electricity to come from eligible renewable energy resources, then a local publicly owned electric utility that is the sole owner of a powerplant that both meets the requirements of subdivision (a) and is operating below 20 percent of its total capacity on an average annual basis during a given compliance period may, based on the utility’s operations, adjust its renewable energy procurement targets and its clean energy procurement targets by an amount equal to the difference between the actual generation from the powerplant and the amount of generation that the powerplant would have produced if it had operated at 20 percent of its total capacity, if all of the following conditions are met:
(1) The local publicly owned electric utility has procured eligible renewable energy resources as required by Section 399.30, as it existed on January 1, 2018.
(2) Additional procurement of eligible energy resources resulted in the powerplant operating at, or below, a 20-percent capacity factor on an annual average during a renewables portfolio standard compliance period.
(3) The local publicly owned electric utility has attempted to mitigate against the reduction of generation to below 20 percent of the powerplant’s total capacity by attempting to sell the powerplant or attempting to sell the generation from the powerplant to the extent it is practicable and does not result in resource shuffling.
(c) A local publicly owned electric utility shall notify the Energy Commission by April 1, 2019, of its intent to act pursuant to the authorization granted by this section.
(d) The Energy Commission shall review, and either approve or reject, a publicly owned electric utility’s adjustment of its procurement targets pursuant to this section.
(e) The Energy Commission may request relevant supporting documentation from a local publicly owned electric utility acting pursuant to this section.
(f) This section shall apply only until the end of the calendar year during which the powerplant’s original term of bonded indebtedness expires.

SEC. 13.SEC. 15.

 Section 454.52 of the Public Utilities Code is amended to read:

454.52.
 (a) (1) Beginning in 2017, and to be updated regularly thereafter, the commission shall adopt a process for each load-serving entity, as defined in Section 380, to file an integrated resource plan, and a schedule for periodic updates to the plan, and shall ensure that load-serving entities do the following:
(A) Meet the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each load-serving entity that reflect the electricity sector’s percentage in achieving the economywide greenhouse gas emissions reductions of 40 percent from 1990 levels by 2030.
(B) Procure at least 60 percent eligible renewable energy resources and 85 percent eligible clean energy resources by December 31, 2030, and at least 90 percent eligible clean energy resources by December 31, 2035, consistent with Article 16 (commencing with Section 399.11) of Chapter 2.3.
(C) Enable each electrical corporation to fulfill its obligation to serve its customers at just and reasonable rates.
(D) Minimize impacts on ratepayers’ bills.
(E) Ensure system and local reliability on both a near-term and long-term basis, including meeting the near-term and forecast long-term resource adequacy requirements of Section 380.
(F) Comply with paragraph (1) of subdivision (b) of Section 399.13.
(G) Strengthen the diversity, sustainability, and resilience of the bulk transmission and distribution systems, and local communities.
(H) Enhance distribution systems and demand-side energy management.
(I) Minimize localized air pollutants and other greenhouse gas emissions, with early priority on disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.
(J) Plan to meet all of the requirements of the California 24/7 Clean Energy Standard Program as provided in Article 16 (commencing with Section 399.11) of Chapter 2.3).
(2) (A) The commission may authorize all source procurement for electrical corporations that includes various resource types including demand-side resources, supply side resources, and resources that may be either demand-side resources or supply side resources, taking into account the differing electrical corporations’ geographic service areas, to ensure that each load-serving entity meets the goals set forth in paragraph (1).
(B) The commission may approve procurement of resource types that will reduce overall greenhouse gas emissions from the electricity sector and meet the other goals specified in paragraph (1), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.
(3) In furtherance of the requirements of paragraph (1), the commission shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, demand response, and distributed energy resources, including energy efficiency, in helping to ensure each load-serving entity meets energy needs and reliability needs in all hours and all seasons, while reducing the need for new electricity generation resources and new transmission resources in achieving the state’s energy goals at the least cost to ratepayers.
(b) (1) Each load-serving entity shall prepare and file an integrated resource plan consistent with subdivision (a) on a time schedule directed by the commission and subject to commission review.
(2) Each electrical corporation’s plan shall follow the provisions of Section 454.5.
(3) The plan of a community choice aggregator shall be submitted to its governing board for approval and provided to the commission for certification, consistent with paragraph (5) of subdivision (a) of Section 366.2, and shall achieve the following:
(A) Economic, reliability, environmental, security, and other benefits and performance characteristics that are consistent with the goals set forth in paragraph (1) of subdivision (a).
(B) A diversified procurement portfolio consisting of both short-term and long-term electricity and electricity-related and demand reduction products.
(C) The resource adequacy requirements established pursuant to Section 380.
(4) The plan of an electric service provider shall achieve the goals set forth in paragraph (1) of subdivision (a) through a diversified portfolio consisting of both short-term and long-term electricity, electricity-related, and demand reduction products.
(c) To the extent that additional procurement is authorized for the electrical corporation in the integrated resource plan or the procurement process authorized pursuant to Section 454.5, the commission shall ensure that the costs are allocated in a fair and equitable manner to all customers consistent with Section 454.51, that there is no cost shifting among customers of load-serving entities, and that community choice aggregators may self-provide renewable integration resources consistent with Section 454.51.
(d) To eliminate redundancy and increase efficiency, the process adopted pursuant to subdivision (a) shall incorporate, and not duplicate, any other planning processes of the commission.
(e) This section applies to an electrical cooperative, as defined in Section 2776, only if the electrical cooperative has an annual electrical demand exceeding 700 gigawatthours, as determined based on a three-year average commencing with January 1, 2013.

SEC. 14.SEC. 16.

 Section 454.53 of the Public Utilities Code is amended to read:

454.53.
 (a) It is the policy of the state that by December 31, 2045, eligible clean energy resources, as defined in Section 399.12, supply 100 percent of all electrical loads in California, including, but not limited to, retail sales of electricity to end-use customers, electricity procured to serve all state agencies, electricity uses used by electric utilities, electrical line losses during the transmission and distribution of electricity, and, excepted as provided in subdivision (e), electric loads met by end-user self-generation. Achieving this policy for California shall not increase carbon emissions elsewhere in the western grid and shall not allow resource shuffling. The commission and Energy Commission, in consultation with the State Air Resources Board, shall take steps to ensure that a transition to a clean electric system for the State of California does not cause or contribute to greenhouse gas emissions increases elsewhere in the western grid, and is undertaken in a manner consistent with clause 3 of Section 8 of Article I of the United States Constitution. The commission, the Energy Commission, the State Air Resources Board, and all other state agencies shall incorporate this policy into all relevant planning.
(b) The commission, Energy Commission, state board, and all other state agencies shall ensure that actions taken in furtherance of subdivision (a) do all of the following:
(1) Maintain and protect the safety, reliable operation, and balancing of the electric system.
(2) Prevent unreasonable impacts to electricity, gas, and water customer rates and bills resulting from implementation of this section, taking into full consideration the economic and environmental costs and benefits of clean energy resources.
(3) To the extent feasible and authorized under law, lead to the adoption of policies and taking of actions in other sectors to obtain greenhouse gas emission reductions that ensure equity between other sectors and the electricity sector.
(4) Not affect in any manner the rules and requirements for the oversight of, and enforcement against, retail sellers and local publicly owned utilities pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3) and Sections 454.51, 454.52, 9621, and 9622.
(c) Nothing in this section shall affect a retail seller’s obligation to comply with the federal Public Utility Regulatory Policies Act of 1978 (16 U.S.C. Sec. 2601 et seq.).
(d) The commission, Energy Commission, and state board shall do both of the following:
(1) Utilize programs authorized under existing statutes to achieve the policy described in subdivision (a).
(2) In consultation with all California balancing authorities, as defined in subdivision (d) of Section 399.12, as part of a public process, issue a joint report to the Legislature by January 1, 2021, and at least every four years thereafter. The joint report shall include all of the following:
(A) A review of the policy described in subdivision (a) focused on technologies, forecasts, then-existing transmission, and maintaining safety, environmental and public safety protection, affordability, and system and local reliability.
(B) An evaluation identifying the potential benefits and impacts on system and local reliability associated with achieving the policy described in subdivision (a).
(C) An evaluation identifying the nature of any anticipated financial costs and benefits to electric, gas, and water utilities, including customer rate impacts and benefits.
(D) The barriers to, and benefits of, achieving the policy described in subdivision (a).
(E) Alternative scenarios in which the policy described in subdivision (a) can be achieved and the estimated costs and benefits of each scenario.
(F) An evaluation of clean firm power capacity needed to achieve the policy described in subdivision (a) cost effectively, including the quantity of clean firm power needed, the performance requirements for clean firm resources, such as load-following capability and minimum duration once dispatched, and the technologies that could satisfy these requirements. requirements with a goal of providing as many options and as much flexibility as possible.
(e) Nothing in this section authorizes the commission to establish any requirements on a nonmobile self-cogeneration or cogeneration facility that served onsite load, or that served load pursuant to an over-the-fence arrangement if that arrangement existed on or before December 20, 1995.

SEC. 15.SEC. 17.

 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.