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AB-1239 Electricity: demand response resources and programs.(2021-2022)



Current Version: 03/29/21 - Amended Assembly Compare Versions information image


AB1239:v98#DOCUMENT

Amended  IN  Assembly  March 29, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1239


Introduced by Assembly Member Ting

February 19, 2021


An act to repeal Section 32208 of the Financial Code, to amend Sections 39730.7 and 39730.8 of the Health and Safety Code, to amend the heading of Chapter 3 (commencing with Section 25200) of Division 15 of, and to amend Sections 25104, 25112, 25200, 26205.5, and 26225 of, the Public Resources Code, and to amend Section 20 of the Public Utilities Code, relating to the State Energy Resources Conservation and Development Commission. add Section 380.4 to the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


AB 1239, as amended, Ting. State Energy Resources Conservation and Development Commission. Electricity: demand response resources and programs.
Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations. Existing law requires each load-serving entity, including an electrical corporation, to maintain physical generating capacity and electrical demand response adequate to meet its electrical demand requirements. Existing law requires the PUC, in establishing a demand response program, to take certain actions, including ensuring that the program approved for resource adequacy requirements delivers the expected results and provides ratepayer benefits.
This bill would require the PUC, by January 31, 2022, to open an investigation into the root causes of demand response market failures and why demand response has not reached its potential and make recommendations for policy changes aimed at ensuring those market failures are not repeated. The bill would require that the investigation include public participation and be concluded by September 30, 2022. The bill would require that the investigation assess the market failures that have led to the underutilization of demand response resources during the 5-year period beginning January 1, 2016, and include detailed and specific recommendations to the PUC for suggested revisions to existing PUC policies governing the use of demand response resources. The bill would require that the PUC, the State Energy Resources Conservation and Development Commission (Energy Commission), and the Independent System Operator (ISO) identify and develop initiatives to achieve all cost-effective demand response by 2030, with expanded demand response programs that improve reliability of the electrical grid, avoid increasing emissions of greenhouse gases, and include optional participation by residential customers. The bill would require that the PUC, the Energy Commission, and the ISO identify barriers that limit the ISO’s ability to plan for and utilize demand response.

Existing law establishes the State Energy Resources Conservation and Development Commission and sets forth its powers and duties.

This bill would rename the commission as the Energy Commission, and would make related changes. The bill would prohibit existing supplies, forms, insignias, signs, logos, uniforms, or emblems from being destroyed or changed as a result of changing the name of the commission, and would require their continued use until exhausted or unserviceable.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 380.4 is added to the Public Utilities Code, to read:

380.4.
 (a) The Legislature finds and declares all of the following:
(1) Demand response solutions achieved significant energy savings during the August 2020 electrical supply crisis, however those savings were diminished and discounted after the application of outmoded regulatory policies.
(2) The flexible capacity these demand response resources bring to utility grid integration and blackout avoidance have been artificially limited by regulatory approaches and policies that apply counterproductive counting methods and impossible requirements of parity to supply side resources, leading to significant limitations on their adoption.
(3) These policies have minimized demand response market potential and its potential to help during critical times of need, to address grid needs, and to contribute to the state’s goals for reducing emissions of greenhouse gases.
(b) By January 31, 2022, the commission shall open an investigation into the root causes of demand response market failures and why demand response has not reached its potential, and make recommendations for policy changes aimed at ensuring those market failures are not repeated. The investigation shall do all the following:
(1) Include public participation.
(2) Assess the market failures that have led to the underutilization of demand response resources during the five-year period beginning January 1, 2016.
(3) Include detailed and specific recommendations to the commission for suggested revisions to existing commission policies governing the use of demand response resources.
(4) Be completed by no later than September 30, 2022.
(c) The commission, the Energy Commission, and the Independent System Operator shall identify and develop initiatives to achieve all cost-effective demand response by 2030. The expansion of demand response programs shall do all the following:
(1) Improve reliability of the electrical grid.
(2) Avoid increasing emissions of greenhouse gases.
(3) Include optional participation by residential customers, including customers participating in the California Alternate Rates for Energy program or other low-income ratepayer support programs, who could choose to lower their electrical service bills by participating in demand response programs.
(d) The commission, the Energy Commission, and the Independent System Operator shall identify barriers that limit the Independent System Operator’s ability to plan for and utilize demand response.

SECTION 1.Section 32208 of the Financial Code is repealed.
SEC. 2.Section 39730.7 of the Health and Safety Code is amended to read:
39730.7.

(a)For purposes of this section, the following terms have the following meanings:

(1)“Department” means the Department of Food and Agriculture.

(2)“Commission” means the Public Utilities Commission.

(3)“Strategy” means the strategy to reduce short-lived climate pollutants developed pursuant to Section 39730.

(b)(1)The state board, in consultation with the department, shall adopt regulations to reduce methane emissions from livestock manure management operations and dairy manure management operations, consistent with this section and the strategy, by up to 40 percent below the dairy sector’s and livestock sector’s 2013 levels by 2030.

(2)Before adopting regulations pursuant to paragraph (1), the state board shall do all of the following:

(A)Work with stakeholders to identify and address technical, market, regulatory, and other challenges and barriers to the development of dairy methane emissions reduction projects. The group of stakeholders shall include a broad range of stakeholders involved in the development of dairy methane reduction projects, including, but not limited to, project developers, dairy and livestock industry representatives, state and local permitting agencies, energy agency representatives, compost producers with experience composting dairy manure, environmental and conservation stakeholders, public health experts, and others with demonstrated expertise relevant to the success of dairy methane emissions reduction efforts.

(B)Provide a forum for public engagement by holding at least three public meetings in geographically diverse locations throughout the state where dairy operations and livestock operations are present.

(C)In consultation with the department, do both of the following:

(i)Conduct or consider livestock and dairy operation research on dairy methane emissions reduction projects, including, but not limited to, scrape manure management systems, solids separation systems, and enteric fermentation.

(ii)Consider developing and adopting methane emissions reduction protocols.

(3)The state board shall make available to the public by posting on its internet website a report on the progress made in implementing paragraph (2). Pursuant to Section 9795 of the Government Code, the state board shall notify the Legislature of the report.

(4)Notwithstanding the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), the regulations adopted pursuant to paragraph (1) shall be implemented on or after January 1, 2024, if the state board, in consultation with the department, determines all of the following:

(A)The regulations are technologically feasible.

(B)The regulations are economically feasible considering milk and live cattle prices and the commitment of state, federal, and private funding, among other things, and that markets exist for the products generated by dairy manure management and livestock manure management methane emissions reduction projects, including composting, biomethane, and other products. The analysis shall include consideration of both of the following:

(i)Electrical interconnection of onsite electrical generation facilities using biomethane.

(ii)Access to common carrier pipelines available for the injection of digester biomethane.

(C)The regulations are cost effective.

(D)The regulations include provisions to minimize and mitigate potential leakage to other states or countries, as appropriate.

(E)The regulations include an evaluation of the achievements made by incentive-based programs.

(c)No later than July 1, 2020, the state board, in consultation with the department, shall analyze the progress the dairy and livestock sectors have made in achieving the goals identified in the strategy and specified in paragraph (1) of subdivision (b). The analysis shall determine if sufficient progress has been made to overcome technical and market barriers, as identified in the strategy. If the analysis determines that progress has not been made in meeting the targets due to insufficient funding or technical or market barriers, the state board, in consultation with the department and upon consultation with stakeholders, may reduce the goal in the strategy for the dairy and livestock sectors, as identified pursuant to paragraph (1) of subdivision (b).

(d)(1)(A)No later than January 1, 2018, the state board, in consultation with the commission and the Energy Commission, shall establish energy infrastructure development and procurement policies needed to encourage dairy biomethane projects to meet the goal identified pursuant to paragraph (1) of subdivision (b).

(B)The state board shall develop a pilot financial mechanism to reduce the economic uncertainty associated with the value of environmental credits, including credits pursuant to the Low-Carbon Fuel Standard regulations (Subarticle 7 (commencing with Section 95480) of Title 17 of the California Code of Regulations) from dairy-related projects producing low-carbon transportation fuels. The state board shall make recommendations to the Legislature for expanding this mechanism to other sources of biogas.

(2)No later than January 1, 2018, the commission, in consultation with the state board and the department, shall direct gas corporations to implement not less than five dairy biomethane pilot projects to demonstrate interconnection to the common carrier pipeline system. For the purposes of these pilot projects, gas corporations may recover in rates the reasonable cost of pipeline infrastructure developed pursuant to the pilot projects.

(e)No later than January 1, 2018, the state board shall provide guidance on credits generated pursuant to the Low-Carbon Fuel Standard regulations (Subarticle 7 (commencing with Section 95480) of Title 17 of the California Code of Regulations) and the market-based compliance mechanism developed pursuant to Part 5 (commencing with Section 38570) of Division 25.5 from the methane reduction protocols described in the strategy and shall ensure that projects developed before the implementation of regulations adopted pursuant to subdivision (b) receive credit for at least 10 years. Projects shall be eligible for an extension of credits after the first 10 years to the extent allowed by regulations adopted pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500)).

(f)Enteric emissions reductions shall be achieved only through incentive-based mechanisms until the state board, in consultation with the department, determines that a cost-effective, considering the impact on animal productivity, and scientifically proven method of reducing enteric emissions is available and that adoption of the enteric emissions reduction method would not damage animal health, public health, or consumer acceptance. Voluntary enteric emissions reductions may be used toward satisfying the goals of this chapter.

(g)Except as provided in this section, the state board shall not adopt methane emissions reduction regulations controlling the emissions of methane from dairy operations or livestock operations to achieve the 2020 and 2030 greenhouse gas emissions reduction goals established pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500)).

(h)This section does not limit the authority of the state board to acquire planning and baseline information, including requiring the monitoring and reporting of emissions.

(i)This section does not in any way affect the state board’s or districts’ authority to regulate emissions of criteria pollutants, toxic air contaminants, or other pollutants pursuant to other provisions of this division.

SEC. 3.Section 39730.8 of the Health and Safety Code is amended to read:
39730.8.

(a)For purposes of this section, the following terms have the following meanings:

(1)“Commission” means the Public Utilities Commission.

(2)“Strategy” means the strategy to reduce short-lived climate pollutants developed pursuant to Section 39730.

(b)The Energy Commission, in consultation with the state board and the commission, shall develop recommendations for the development and use of renewable gas, including biomethane and biogas, as a part of its 2017 Integrated Energy Policy Report prepared pursuant to Section 25302 of the Public Resources Code. In developing the recommendations, the Energy Commission, shall identify cost-effective strategies that are consistent with existing state policies and climate change goals by considering priority end uses of renewable gas, including biomethane and biogas, and their interactions with state policies, including biomethane and all of the following:

(1)The 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).

(2)The Low-Carbon Fuel Standard regulations (Subarticle 7 (commencing with Section 95480) of Title 17 of the California Code of Regulations).

(3)Waste diversion goals established pursuant to Division 30 (commencing with Section 40000) of the Public Resources Code.

(4)The market-based compliance mechanism developed pursuant to Part 5 (commencing with Section 38570) of Division 25.5.

(5)The strategy.

(c)Based on the recommendations developed pursuant to subdivision (b), and to meet the state’s climate change, renewable energy, low-carbon fuel, and short-lived climate pollutants goals, including black carbon, landfill diversion, and dairy methane targets identified in the strategy, state agencies shall consider and, as appropriate, adopt policies and incentives to significantly increase the sustainable production and use of renewable gas, including biomethane and biogas.

(d)Based on the recommendations developed pursuant to subdivision (b), the commission, in consultation with the Energy Commission and the state board, shall consider additional policies to support the development and use in the state of renewable gas, including biomethane and biogas, that reduce short-lived climate pollutants in the state.

(e)In implementing this section, priority shall be given to fuels with the greatest greenhouse gas emissions benefits, including the consideration of carbon intensity and reduction in short-lived climate pollutants, as appropriate.

SEC. 4.Section 25104 of the Public Resources Code is amended to read:
25104.

“Commission” means the Energy Commission.

SEC. 5.Section 25112 of the Public Resources Code is amended to read:
25112.

“Member” or “member of the commission” means a member of the Energy Commission appointed pursuant to Section 25200.

SEC. 6.The heading of Chapter 3 (commencing with Section 25200) of Division 15 of the Public Resources Code is amended to read:
3.Energy Commission
SEC. 7.Section 25200 of the Public Resources Code is amended to read:
25200.

(a)There is in the Natural Resources Agency the Energy Commission, consisting of five members appointed by the Governor subject to Section 25204.

(b)The Energy Commission shall succeed to, and is vested with, all the duties, powers, purposes, responsibilities, property, and jurisdiction previously vested in the State Energy Resources Conservation and Development Commission.

(c)Whenever the term “State Energy Resources Conservation and Development Commission” appears in a law, the term means the “Energy Commission.”

(d)No existing supplies, forms, insignias, signs, logos, uniforms, or emblems shall be destroyed or changed as a result of changing the name of the State Energy Resources Conservation and Development Commission to the Energy Commission, and those materials shall continue to be used until exhausted or unserviceable.

SEC. 8.Section 26205.5 of the Public Resources Code is amended to read:
26205.5.

(a)Of the moneys provided to the Job Creation Fund for purposes of paragraph (1) of subdivision (a) of Section 26205, the available remaining funds, which are the funds allocated to a local educational agency that has not submitted an energy expenditure plan, as determined by the Energy Commission as of March 1, 2018, shall be appropriated as follows:

(1)The first seventy-five million dollars ($75,000,000) shall be provided to school districts, county offices of education, and joint power authorities currently operating home-to-school transportation programs on behalf of local educational agencies for grants or loans for schoolbus retrofit or replacement through a program administered by the Energy Commission, in consultation with the State Air Resources Board.

(A)Priority shall be given to school districts, county offices of education, and joint power authorities currently operating home-to-school transportation programs on behalf of local educational agencies operating the oldest schoolbuses or schoolbuses operating in disadvantaged communities, as identified pursuant to Section 39711 of the Health and Safety Code, as determined by the State Air Resources Board, and to school districts, county offices of education, or joint power authorities currently operating home-to-school transportation programs on behalf of local educational agencies with a majority of pupils eligible for free or reduced-price meals in the prior year.

(B)Any schoolbuses that have been replaced pursuant to this paragraph shall be scrapped.

(C)A local air district may administer funding provided pursuant to this paragraph, if authorized by the Energy Commission.

(2)The next one hundred million dollars ($100,000,000) shall be deposited into the Education Subaccount, created pursuant to Section 26227, for the purpose of low-interest and no-interest revolving loans and loan loss reserves for eligible projects and technical assistance on a competitive basis. Priority shall be given to local educational agencies based on the percentage of pupils eligible for free or reduced-price meals in the prior year, energy savings, geographic diversity, and diversity in the size of the local educational agencies’ pupil populations. If a local educational agency has a project eligible for a loan under this paragraph, the maximum loan amount for the project shall be the project cost reduced by both of the following, as applicable:

(A)The amount of any grant awarded for the project pursuant to paragraph (3).

(B)Any state, federal, or local incentives that have been provided for the project.

(3)(A)(i)The remaining moneys, if any, shall be provided to local educational agencies in accordance with subdivision (b) of Section 26227.2, as implemented by the Energy Commission, in consultation with the State Department of Education, as follows:

(I)Ten percent shall be for local educational agencies with an average daily attendance of not more than 1,000.

(II)Ten percent shall be for local educational agencies with an average daily attendance of more than 1,000 and not more than 2,000.

(III)Eighty percent shall be for local educational agencies with an average daily attendance of more than 2,000.

(ii)The Energy Commission may adjust the funding allocations specified in clause (i) and may add additional categories based on average daily attendance to further the purposes of Section 26227.2.

(B)The Energy Commission shall facilitate local educational agency pursuit of funding under this paragraph and from the State Energy Conservation Assistance Account through coordinated information, documentation, and review processes regarding the project.

(C)For purposes of this paragraph, average daily attendance shall be those numbers as reported in the prior year, as determined by the State Department of Education.

(b)A local educational agency that receives moneys pursuant to this section shall encumber those moneys within nine months of allocation.

(c)For purposes of this section,“local educational agency” means a school district, county office of education, charter school, or state special school.

SEC. 9.Section 26225 of the Public Resources Code is amended to read:
26225.

For the purposes of this chapter, the following terms have the following meanings:

(a)“Chancellor” means the Chancellor of the California Community Colleges.

(b)“Local education agency,” “local educational agency,” or “LEA” means a school district, county office of education, charter school, or state special school.

(c)“Job Creation Fund” means the Clean Energy Job Creation Fund established in Section 26205.

SEC. 10.Section 20 of the Public Utilities Code is amended to read:
20.

“Commission” means the Public Utilities Commission created by Section 1 of Article XII of the California Constitution, and “commissioner” means a member of the commission.