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SB-993 Clean energy development incentive rate tariff.(2023-2024)

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Date Published: 05/06/2024 09:00 PM
SB993:v97#DOCUMENT

Amended  IN  Senate  May 06, 2024
Amended  IN  Senate  April 22, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill
No. 993

Introduced by Senator Becker

January 31, 2024

An act to add Section 740.23 to the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


SB 993, as amended, Becker. Clean energy development incentive rate tariff.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable.
This bill would require the commission, on or before July 1, 2026, in a new or existing proceeding, to evaluate and, if just and reasonable, establish a clean energy development incentive rate time-of-use tariff to encourage the development of new commercial or industrial electrical loads that contribute to the state’s efforts to reduce the emissions of greenhouse gases. The bill would require the tariff to offer lower rates for customers and to meet specified requirements, including, among other things, that the program only be open to new electrical customers that did not establish service before January 1, 2025, or to existing electrical customers that are expected to increase their total annual electrical demand by more than 50% after beginning service under the tariff. The bill would require that the tariff only be open to customers producing hydrogen using an electrolysis of water or using electricity to provide industrial process heat. The bill would require the tariff to be available to bundled customers of electrical corporations until the tariff meets a statewide limitation of 5,000 megawatts of customer participation.
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 a commission action implementing the bill’s requirements would be a crime, the bill would impose a state-mandated local program.
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.

 Section 740.23 is added to the Public Utilities Code, to read:

740.23.
 (a) On or before July 1, 2026, the commission shall, in a new or existing proceeding, evaluate and, if just and reasonable, establish a clean energy development incentive rate time-of-use tariff to encourage the development of new large commercial or industrial electrical loads for facilities that contribute to the state’s efforts to reduce the emissions of greenhouse gases. The tariff shall offer lower electricity rates for customers and shall have the following requirements:
(1) The tariff shall only be open to new electrical customers that did not establish service before January 1, 2025, or to existing electrical customers that increase their total annual electrical demand by more than 50 percent after beginning service under the tariff.
(2) The tariff is only open to customers with loads that can operate flexibly to improve grid resilience by aligning their demand with times and locations of plentiful renewable or zero-carbon electricity, while curtailing demand during other times.
(3) The hourly tariff rates are as low as feasible, while still sufficient to cover the marginal cost of service in that hour, all applicable nonbypassable charges, and a portion of nonmarginal costs.
(4) The tariff provides significantly higher rates in other hours that are sufficient to encourage a reduction in demand or full curtailment of demand when that would help reduce total costs for the electrical system, such as during periods of peak grid demand or periods of local or regional transmission congestion.
(5) The tariff requires the customers to be interruptible during times of peak grid usage. The commission shall consider tariffed customer’s interruptible load when determining a load-serving entity’s resource adequacy requirements.
(b) The tariff shall not result in a cost-shift between customer classes.
(c) The tariff shall only be open to customers with the following uses:
(1) Producing hydrogen using an electrolysis of water.
(2) Using electricity to provide industrial process heat, including through the use of a thermal energy storage system.
(d) The commission may consider adopting a mechanism that would enable an electrical corporation to offer customers producing hydrogen an option to receive renewable or zero-carbon electricity that would meet the requirements of the federal Clean Hydrogen Production Tax Credit (26 U.S.C. Section 45V) as long as any additional costs associated with that mechanism are paid for solely by the tariffed customers and not by other nonparticipating ratepayers.

(d)

(e) The tariff shall be available to bundled customers of electrical corporations until the tariff meets a statewide limitation of 5,000 megawatts of customer participation.

SEC. 2.

 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.