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AB-1161 Electricity: eligible renewable energy and zero-carbon resources: state agencies: procurement.(2021-2022)

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Date Published: 04/13/2021 09:00 PM
AB1161:v97#DOCUMENT

Amended  IN  Assembly  April 13, 2021
Amended  IN  Assembly  March 22, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1161


Introduced by Assembly Member Eduardo Garcia

February 18, 2021


An act to add Division 27.5 (commencing with Section 80400) to the Water Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


AB 1161, as amended, Eduardo Garcia. Electricity: eligible renewable energy and zero-carbon resources: state agencies: procurement.
Existing law establishes as the policy of the state that eligible renewable energy resources and zero-carbon resources supply 100% of all 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 enact the Clean Economy and Clean Jobs Stimulus Act of 2021 and would require the Department of Water Resources to procure newly developed eligible renewable energy resources or zero-carbon resources, and energy storage associated with those resources, in an amount that satisfies 100 percent of the electricity procured to serve all state agencies by December 31, 2030, as provided. The bill would require the department, in conducting competitive solicitation for the procurement, to review confidential pricing information collected by the Public Utilities Commission or obtained from load-serving entities. The bill would require the commission to require all load-serving entities to provide to the department information necessary to carry out the purposes of the act, including market sensitive pricing information. The bill would provide that pricing information is not subject to public disclosure.
Under the Public Utilities Act, a violation of any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because a violation of an order or decision of the commission implementing requirements of this bill would be a crime, the bill would impose a state-mandated local program by creating a new crime.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

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 a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) The COVID-19 pandemic has caused enormous damage to the California economy. Untold numbers of jobs and businesses have been destroyed. The suffering and hardship will continue, and it will take time for the economy to recover.
(2) California is already transitioning to a carbon-free electric system by 2045.
(3) California’s stay-at-home public health policies implemented to slow the spread of COVID-19 had the additional effect of dramatically improving California’s air quality. It is well documented that poor air quality damages people’s lungs, which increases the risk of lung diseases such as COVID-19.
(4) The Department of Water Resources is uniquely positioned to quickly solicit and execute power purchase agreements for new, clean electric supply. The department has already executed agreements to supply its own electricity needs. With the assistance of the two largest electrical corporations that have experience competitively soliciting and executing hundreds of power purchase agreements, the department can quickly conduct competitive solicitations and execute competitive offers for new, clean electric supply. The department should immediately solicit those competitive offers and quickly execute contracts.
(5) To help ensure that the new, clean generation is constructed safely, on time, and with the high quality required to ensure a reliable electric supply, the Department of Water Resources should only purchase power from projects constructed using project labor agreements.
(6) The Department of Water Resources should procure enough renewable and carbon-free electricity to supply 100 percent of the expected 2030 load of all state agencies.
(7) If a central procurement entity is established through subsequent legislative action, that entity could accept an assignment of procurement obligations executed by the department.
(b) In enacting Division 27.5 (commencing with Section 80400) of the Water Code, it is the intent of the Legislature to do all of the following:
(1) To quickly create good family-supporting jobs, stimulate new economic activity in the state, and create new industries capable of providing long-term employment and tax revenues. This will help reduce the suffering of Californians, foster the recovery of businesses, and reduce the strain on the California state budget and the budgets of local governments.
(2) To speed California’s transition to a carbon-free electrical system, advancing the time when California will have a prosperous carbon-free economy.
(3) To preserve air quality improvements resulting from the COVID-19 stay-at-home policies by reducing emissions from the electric sector and making additional low-cost electricity available to reduce emissions from other sectors of the economy.

SEC. 2.

 Division 27.5 (commencing with Section 80400) is added to the Water Code, to read:

DIVISION 27.5. Clean Economy and Clean Jobs Stimulus Act of 2021

CHAPTER  1. General Provisions

80400.
 This division shall be known, and may be cited, as the Clean Economy and Clean Jobs Stimulus Act of 2021.

80401.
 For purposes of this division, the following definitions apply:
(a) “Commission” means the Public Utilities Commission.
(b) “Electrical corporation” has the same meaning as set forth in Section 218 of the Public Utilities Code.
(c) “Eligible energy resources” means eligible renewable energy resources or zero-carbon resources that are used for the generation of electricity.
(d) “Eligible renewable energy resources” has the same meaning as set forth in Section 399.12 of the Public Utilities Code.
(e) “Load-serving entity” has the same meaning as set forth in Section 380 of the Public Utilities Code.
(f) “Local publicly owned electric utility” has the same meaning as set forth in Section 224.3 of the Public Utilities Code.
(g) “Retail seller” has the same meaning as set forth in Section 399.12. 399.12 of the Public Utilities Code.

CHAPTER  2. Procurement of Eligible Energy Resources

80410.
 (a) The department shall procure newly developed eligible energy resources, and energy storage facilities associated with those resources, in an amount that satisfies 100 percent of the electricity procured to serve all state agencies by December 31, 2030.
(b) In determining the amount to be procured pursuant to subdivision (a), the department shall exclude any both of the following:
(1) Any amount of electricity generated by eligible energy resources that is procured by the department for its own use.
(2) Any amount of electricity generated by newly developed eligible energy resources procured by a load-serving entity under contracts of at least 10 years in duration to serve state agency customers.
(c) The department may increase the amount specified in subdivision (a), if the department determines that additional amounts are necessary to satisfy the subscriptions made by load-serving entities and local publicly owned electric utilities pursuant to Section 80414.

80411.
 Each eligible energy resource procured pursuant to Section 80410 shall meet all of the following:
(a) The eligible energy resource shall be newly developed as a result of contracting by the department and reach initial commercial operation after January 1, 2023.
(b) The eligible energy resource and any related energy storage shall satisfy the requirements of paragraph (1) of subdivision (b) of Section 399.16 of the Public Utilities Code.
(c) The eligible energy resource and any related energy storage facility shall be located in the state state, or have its first point of interconnection to the electrical grid within the state, and interconnected in front of the customer meter.

80412.
 In conducting the procurement required pursuant to Section 80410, the department shall do all of the following:
(a) Give preference to eligible energy resources that can begin construction before December 31, 2024.
(b) Give preference to procurement commitments expected to yield maximal, long-term employment, stimulate new economic activity, generate local and state tax revenues, and assist with the development of new industries.
(c) (1)Conduct competitive solicitations to ensure that contracted eligible energy resources are competitively priced.

(2)In implementing paragraph (1), the department shall review recent confidential pricing information collected by the commission or obtained from load-serving entities, and consult the two largest electrical corporations in the state.

(3)The department may subcontract with those two electrical corporations to conduct the competitive solicitations as agents of the department.

(4)The department shall not disclose any confidential information from the commission or the load-serving entities, and that information and any pricing information received as part of a bidding process is not subject to public disclosure pursuant to the Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code). A contract executed by the department pursuant to this division is subject to that act is shall be disclosed when the contract is executed.

(5)This subdivision does not prevent the department or an electrical corporation from consulting with nonmarket participants pursuant to a nondisclosure agreement.

(d) Consider attributes such as resource adequacy, flexibility and integration value, the ability to provide firm clean power, and local air quality benefits.
(e) Consider the results of integrated resource planning modeling conducted by the commission pursuant to section Section 454.52 of the Public Utilities Code.
(f) Include provisions in each contract that permit the assignment of the procurement obligation and any executed contracts to a central procurement entity, if a central procurement entity is established by law.

80413.
 The department shall consider doing all of the following to reduce the costs of procurement pursuant to this division:
(a) Coordinate with the California Infrastructure and Economic Development Bank and the federal government to make low-cost or zero-interest financing assistance available to new projects developed pursuant to procurement commitments under this division.
(b) Coordinate with other state and federal agencies to identify and obtain incentives from programs for new projects developed pursuant to procurement commitments under this division.
(c) If reasonably expected to provide incremental benefits, secure an ownership stake, or royalties, for any project or economic activity resulting from a contractual commitment.
(d) Coordinate with load-serving entities to determine the portion of state agency load excluded from the department’s total procurement quantities pursuant to paragraph (2) of subdivision (b) of Section 80410.

80414.
 The department shall invite load-serving entities and local publicly owned electric utilities to voluntarily subscribe to a portion of any procurement commitments made pursuant to this division. Any subscription shall be made available at the department’s cost.

80415.
 Except for quantities subject to the voluntary subscription described in Section 80414, all procurement pursuant to this division shall be used first to meet the department’s own needs. Additional quantities shall be used to meet the accelerated zero-carbon resource targets for other state agencies. Any renewable energy credits associated with meeting the need of a state agency shall be retired and may shall not be transferred or resold.

80416.
 The procurement conducted by the department pursuant to this division on behalf of state agencies shall not result in a state agency switching its retail service away from an existing load-serving entity or local publicly owned electric utility.

80417.
 A Except for quantities excluded from the procurement quantities of the department pursuant to paragraph (2) of subdivision (b) of Section 80410, a load-serving entity or local publicly owned electric utility shall exclude the retail sales of its state agency customers from any reporting under the Power Source Disclosure program pursuant to Section 398.4 of the Public Utilities Code.

80418.
 For purposes of calculating procurement requirements under 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), a retail seller or local publicly owned electric utility may exclude the retail sales of its state agency customers. customers, as modified by any quantities procured under long-term contracts and excluded from the procurement quantities of the department pursuant to paragraph (2) of subdivision (b) of Section 80410.

80419.
 The Independent System Operator, other California balancing authorities, and electrical corporations shall expedite all interconnection requests for projects providing energy procured pursuant to this division to the extent permissible under federal law.

80420.
 The department shall enter into an agreement pursuant to this division to procure eligible energy resources from a new energy generation facility only if the seller requires its contractors to use a multicraft project labor agreement, as that term is defined in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code, for construction of the facility. Those project labor agreements shall conform to the industry standard agreements recently used for other similar private projects, including side letters for high-voltage transmission and related work.

80421.

The commission shall require all load-serving entities to provide to the department any information the department requests to carry out this division. Any market sensitive pricing information provided is not subject to public disclosure pursuant to the Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code). This section does not prevent the department or any electrical corporation from consulting with nonmarket participants pursuant to a nondisclosure agreement.

CHAPTER  3. Fiscal Provisions

80430.
 The department shall recover the costs of any eligible energy resources it procures on behalf of state agencies pursuant to this division through the following:
(a) The resale of resource adequacy attributes of the eligible energy resources.
(b) The resale of energy into wholesale markets.
(c) Allocations from the Greenhouse Gas Reduction Fund upon appropriation by the Legislature.
(d) Any other sources identified by the department.

80431.
 Any costs for procured eligible energy resources not recovered from the sources identified in Section 80430 shall be recovered directly from the state agency consumers of the electricity, on a pro rata basis.

SEC. 3.

The Legislature finds and declares that Section 2 of this act, which adds Sections 80412 and 80421 to the Water Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

The benefits of protecting sensitive pricing information from public disclosure, which is necessary for a functioning competitive marketplace for electricity, outweigh the benefits of public disclosure of that information.

SEC. 4. SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only 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.