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SB-204 Electricity: demand response.(2021-2022)

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Date Published: 03/23/2021 09:00 PM
SB204:v97#DOCUMENT

Amended  IN  Senate  March 23, 2021
Amended  IN  Senate  March 03, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 204


Introduced by Senator Dodd
(Coauthor: Assembly Member Mayes)

January 11, 2021


An act to add Section 380.6 to the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


SB 204, as amended, Dodd. Electricity: demand response.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. Existing law requires each load-serving entity, defined as including electrical corporations, electric service providers, and community choice aggregators, to maintain physical generating capacity and electrical demand response adequate to meet its electrical demand requirements. Existing law requires the commission to establish rules for how and when backup generation may be used within a demand response program and to establish reporting and data collection requirements to verify compliance with those rules. Pursuant to existing law, the commission has authorized the state’s 3 largest electrical corporations to offer reliability-based demand response programs, including the base interruptible program, which is available to qualifying nonresidential customers of an electrical corporation.
This bill would require that the base interruptible program be available to qualifying commercial and industrial customers regardless of the load-serving entity that is that customer’s supplier of electricity. The bill would require that the minimum incentive levels for program participation for the 2023 calendar year be those applicable within the service territory of each electrical corporation during 2018, adjusted for inflation using a price index determined by the commission to be appropriate. The Beginning January 1, 2024, the bill would authorize the commission to approve increased or decreased incentive levels for program participation if the commission determines that those increased incentives are reasonably necessary to ensure continued participation by eligible customers, within the upper limits established by the commission, and are sufficient to ensure continued delivery of resource adequacy and adequacy, and to ensure expected ratepayer benefits. The bill would authorize the commission to approve decreased incentive levels if the commission determines that those decreased incentives are reasonably necessary to ensure continued expected ratepayer benefits, within lower limits established by the commission, and are sufficient to ensure continued participation by eligible customers. Because the bill would require actions by those load-serving entities that are community choice aggregators, the bill would impose a state-mandated local program.
The bill would require the commission, except as provided, to implement a pilot economic demand response program, to be administered by the large electrical corporations, in which base interruptible program participants may elect to participate, to operate for a 3-year period, as specified.
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.

 (a) The Legislature finds and declares all of the following:
(1) The rolling blackouts of August 2020 and the risk of rolling blackouts in September 2020 are unacceptable and unbefitting the State of California.
(2) The people of California should not endure rolling blackouts and the possibility of electricity outages must be minimized.
(3) The risk of prolonged heat waves, like those that contributed to the electrical grid’s reliability emergencies of August and September 2020, and other extreme weather events will continue due to climate change.
(4) California’s commitment to preferred resources such as energy efficiency, demand response, and clean energy and eligible renewable energy resources, as prioritized in the loading order established by the Public Utilities Commission and in Section 454.5 of the Public Utilities Code, remains unwavering and has been strengthened by the electrical grid’s reliability emergencies and risks of extreme weather events.
(5) The Public Utilities Commission is examining near-term measures to address reliability concerns in the summer of 2021, with a focus on demand-side resources, such as demand response.
(b) (1) It is the intent of the Legislature to protect, promote, and preserve demand response, and specifically the base interruptible program, which is a preferred resource with a long history of successfully preventing rolling blackouts, to enhance grid reliability.
(2) It is further the intent of the Legislature to exempt those large electrical corporations that had less than a five-megawatt load reduction from enrolled base interruptible program customers for the 2019 program year from the requirements of this act.

SEC. 2.

 Section 380.6 is added to the Public Utilities Code, to read:

380.6.
 (a) (1) For purposes of this section, the following terms have the following meanings:
(A) “Appropriate valuation” has the same meaning as that term is used in subdivision (j) of Section 380.
(B) “Base interruptible program” means the voluntary demand response program administered by the large electrical corporations that offers participating customers a monthly capacity bill credit for committing to reduce their electricity use to a minimum predetermined level within an hour after receiving notice during emergency situations.
(C) A “demand response resource” is a resource used to respond to conditions of elevated load, which can be either of the following:
(i) A supply resource that is integrated into the Independent System Operator energy markets that provides local, flexible, or system capacity that is triggered when needed, and where needed, in response to elevated load.
(ii) A load-modifying resource that reshapes or reduces the net load curve of an electrical corporation to manage load given the prevailing supply conditions.
(D) “Large electrical corporation” has the same meaning as defined in Section 3280.
(E) “Load-modifying demand response resource” means a demand response resource as defined in clause (ii) of subparagraph (C).
(F) “Load-serving entity” has the same meaning as defined in Section 380.
(G) “Supply resource demand response” means a demand response by a demand response resource as defined in clause (i) of subparagraph (C).
(b) (1) The commission’s authority pursuant to Section 380 to establish resource adequacy requirements and to ensure appropriate valuation of demand response resources while considering how the demand response resources further the reliability of the state’s electrical grid and the state’s goals for reducing emissions of greenhouse gases is determinative, and the Independent System Operator’s role pursuant to Section 380 is advisory only.
(2) This subdivision is declaratory of existing law.
(c) (1) The base interruptible program shall be administered by the large electrical corporations and available to qualifying commercial and industrial customers regardless of the load-serving entity that is that customer’s supplier of electricity.
(2) The minimum incentive levels pursuant to the base interruptible program for the 2023 calendar year shall be those applicable within the service territory of each large electrical corporation during 2018, adjusted for inflation using a price index determined by the commission to be appropriate. The Beginning January 1, 2024, the commission may approve increased or decreased incentive levels if the commission determines that those increased incentives are reasonably necessary to ensure continued participation by eligible customers, within the upper limits established by the commission, and are sufficient to ensure continued delivery of resource adequacy and adequacy, and to ensure expected ratepayer benefits. The commission may approve decreased incentive levels if the commission determines that those decreased incentives are reasonably necessary to ensure continued expected ratepayer benefits, within lower limits established by the commission, and are sufficient to ensure continued participation by eligible customers.
(3) (A) The commission shall ensure appropriate valuation of the base interruptible program through continued use of the load impact protocols or a similar, rigorous methodology that takes into consideration actual, historical performance.
(B) The commission shall consider revising the categorization of the base interruptible program from a supply resource demand response to a load-modifying demand response resource by September December 31, 2022. If the commission revises the categorization of the base interruptible program, the commission may adjust incentives and the incentive structure, if determined to be appropriate for a load-modifying resource.
(C) The commission shall address customer fatigue as it pertains to continued participation in the base interruptible program either with authorization of higher incentives for events called on three or more consecutive days, or reinstatement of the prohibition of more than three consecutive days with base interruptible program events by September 31, 2022, or other measures determined to be reasonable by the commission.
(d) The commission shall implement a pilot economic demand response program or optional rate design, to be administered by the large electrical corporations, in which base interruptible program participants may elect to participate. The pilot program shall be designed as part of an electrical corporation’s Phase II application for its general rate case or rate design window application, and made operational for a three-year period. The commission shall ensure that participation in the pilot program comports with reasonable dual participation rules to prevent double payments for the same demand response if events overlap. The pilot program shall be conducted in compliance with the requirements of Section 380.5.
(e) This section shall not apply to a large electrical corporation that had less than a five-megawatt load reduction from enrolled base interruptible program customers as reported by the electrical corporations in their program year 2019 ex-post load impact reports filed April 1, 2020.

SEC. 3.

 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.