354.
(a) As used in this section, “clean distributed energy resource” means a facility that is located on the customer’s premises and generates electricity, or electricity and useful heat, where the electricity generated is used for a purpose described in paragraph (1) or (2) of subdivision (b) of Section 218, and that meets, as determined for each year of eligibility based on the then current criteria, either of the following requirements: (1) It meets all of the following criteria:
(A) Has emissions of greenhouse gases that do not exceed 379 kilograms of carbon dioxide, or its equivalent, per megawatthour, which is equal to the emissions rate eligibility threshold for the self-generation incentive program in effect on January 1, 2016.
(B) Complies with the emissions standards adopted by the State Air Resources Board pursuant to the distributed generation certification program requirements (17 Cal. Code Regs. 94203).
(C) Has a nameplate rated generation capacity of 15 megawatts or less.
(D) Is sized to meet the electrical demand of, or use the available waste heat of, the customer that will be served by the facility.
(2) It meets all of the following criteria:
(A) Is an eligible renewable energy resource, pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11)).
(B) Has a nameplate rated generation capacity of 15 megawatts or less.
(C) Is sized to meet the electrical demand of the customer that will be served by the facility.
(D) Will not otherwise be addressed in the commission’s implementation of Section 769 or 2827.1.
(b) To the extent authorized by federal law, by July 1, 2017, the commission shall require the state’s three largest electrical corporations to do the following for customers served by clean distributed energy resources installed after January 1, 2016:
(1) Collect all applicable nonbypassable charges fixed, implemented, administered, or imposed by the commission based only on the actual metered consumption of electricity delivered to the customer through the electrical corporation’s transmission or distribution system. All charges shall be at the same rate per kilowatthour as paid by other customers that do not employ a clean distributed energy resource under the electrical corporation’s applicable rate schedule.
(2) Identify the total amount of nonbypassable charges that would be collected each year from customers served by clean distributed energy resources installed after January 1, 2016, based on gross consumption without any adjustment for the generation of the clean distributed energy resources. This total amount shall be fully recovered from customers in the same customer class as those customers served by clean distributed energy resources installed after January 1, 2016, and no amount may be shifted to any other customer class.
(3) (A) Calculate a reserve capacity for standby service, if applicable, based on the capacity needed by an electrical corporation to serve a customer’s electrical demand during an outage of the clean distributed energy resource providing electric service for that customer.
(B) Initial reserve capacity shall be established by the customer for a minimum of 12 months based on the clean distributed energy resource generation technology’s historical operation, the number, size, and outage diversity of the clean distributed energy resource, and the annual average reduction of customer load that could occur during an outage.
(C) If after the initial 12-month period, the electrical corporation reasonably determines that the reserve capacity does not reflect the customer’s actual standby demand, averaged over the previous 12 months, the electrical corporation shall modify the reserve capacity once every 12 months to reflect the customer’s actual average annual reserve capacity based on the same criteria used to establish the initial reserve capacity. Calculation of actual average annual reserve capacity shall exclude the customer’s electrical demand served by the electrical corporation within 24 hours following an outage of the clean distributed energy resource resulting from any event on the electrical corporation’s transmission or distribution grid that is outside of the customer’s control that requires the customer to reduce onsite generation.
(c) A customer served by a clean distributed energy resource shall provide relevant data to the commission and the State Air Resources Board annually. The facility shall be subject to onsite inspection to verify equipment operation and performance, including capacity, thermal output, and usage, to verify applicable criteria for air pollutant and greenhouse gases emissions performance. Requests for relevant data shall occur no more than once per year.
(d) (1) The Energy Commission, in consultation with the commission, shall report on the impacts of this section in the integrated energy policy report to be filed on or before November 1, 2017, and November 1, 2019.
(2) The report to be submitted pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code.
(3) The requirement for submitting a report pursuant to this subdivision is inoperative on November 1, 2021, pursuant to Section 10231.5 of the Government Code.
(e) The commission shall suspend the eligibility of new customers to receive service pursuant to the rate program established pursuant to subdivision (b) on December 31, 2020. Customers that installed clean distributed energy resources after January 1, 2016, that became operational prior to suspension of eligibility pursuant to this subdivision and continue to generate electricity from their clean distributed energy resources after suspension shall continue to participate in the rate program established pursuant to subdivision (b) for the entire useful life of their clean distributed energy resource.