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AB-1538 Clean Energy Reliability Program.(2023-2024)



Current Version: 04/17/23 - Amended Assembly

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AB1538:v97#DOCUMENT

Amended  IN  Assembly  April 17, 2023
Amended  IN  Assembly  March 30, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 1538

Introduced by Assembly Member Muratsuchi

February 17, 2023

An act to add Section 380.7 380.8 to the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


AB 1538, as amended, Muratsuchi. Clean Energy Reliability Program.
Existing law vests the Public Utilities Commission with regulatory authority over load-serving entities, which include electrical corporations, electric service providers, and community choice aggregators. Existing law requires the commission, in consultation with the Independent System Operator, to establish resource adequacy requirements for all load-serving entities. Existing law requires the commission, in establishing those resource adequacy requirements, to ensure the reliability of electrical service in California while advancing, to the extent possible, the state’s goals for clean energy, reducing air pollution, and reducing emissions of greenhouse gases.
This bill would establish the Clean Energy Reliability Program, to be administered by the commission, upon appropriation, to provide incentive payments to qualifying load-serving entities that use eligible resources, as defined, to exceed their clean energy capacity requirements or targets, within or at the end of a given compliance period, as those requirements and compliance periods are determined through a specified commission rulemaking or its successor. exceed procurement targets for eligible resources established by the commission, as specified. The bill would require a load-serving entity to remit incentive payments to its customers as a bill credit or use the payment in a manner determined by the commission to reduce ratepayer costs arising from the additional procurement of eligible resources. The bill would require a load-serving entity to meet specified conditions to be eligible for an incentive payment.
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 its provisions would be part of the act and a violation of a commission action implementing its requirements would therefore 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.

 This act shall be known, and may be cited, as the Clean Energy Reliability Program.
SEC. 2.Section 380.7 is added to the Public Utilities Code, to read:
380.7.

(a)For purposes of this section, the following definitions apply:

(1)(A)“Eligible resources” include all of the following:

(i)Eligible renewable energy resources, as defined in Section 399.12.

(ii)Energy storage resources.

(iii)Green hydrogen.

(iv)Zero-emission hybrid battery storage technologies.

(v)Zero-emission demand-side resources.

SEC. 2.

 Section 380.8 is added to the Public Utilities Code, to read:

380.8.
 (a) (1) On or before July 1, 2024, the commission shall determine a definition of eligible resources for purposes of the Clean Energy Reliability Program established pursuant to this section.

(B)

(2) “Eligible resources” do shall not include fossil fuel resources, even if emissions of greenhouse gases arising from the use of the resource are offset by carbon capture or storage technologies.

(2)“Load-serving entity” has the same meaning as defined in Section 380.

(3)“Program” means the Clean Energy Reliability Program.

(b) (1) The Clean Energy Reliability Program is hereby established, to be administered by the commission, upon appropriation by the Legislature, to provide incentive payments to qualifying load-serving entities that use eligible resources to exceed their clean energy capacity requirements or targets, within or at the end of a given compliance period, as those requirements and compliance periods are determined through Rulemaking 20-05-003 or its successor. exceed procurement targets for eligible resources established by the commission in Rulemaking 20-05-003 or its successor.
(2) Funds for incentive payments made to load-serving entities pursuant to paragraph (1) shall be available only upon an appropriation by the Legislature for this purpose. Ratepayer funds shall not be used to provide incentives pursuant to this section.
(3) An incentive payment received by a load-serving entity shall be remitted to the customers of the load-serving entity as a bill credit or used in a manner determined by the commission to reduce ratepayer costs arising from the additional procurement of eligible resources.
(c) For purposes of the program, the commission shall do both of the following:
(1) Count eligible resources using applicable commission counting rules.

(2)Calculate incentive payments using the resource adequacy market price benchmark for the year of the payment for each megawatt of electricity generated from an eligible resource in excess of the load-serving entity’s clean energy capacity requirements or targets.

(2) Calculate an appropriate value for the incentive payments on or before July 1, 2024, that shall be adjusted annually based on the market value of energy capacity.
(d) In order to receive an incentive payment pursuant to the program, a load-serving entity’s eligible resources shall be entity shall do all of the following:
(1) Demonstrate that its eligible resources are online and participating in the Independent System Operator’s market.
(2) Disclose all contract information for the eligible resource to the commission, subject to confidential treatment as allowed by commission rules and applicable laws.

(e)(1)In order to receive an incentive payment pursuant to the program, a load-serving entity shall include

(3) Include a project labor agreement if both of the following conditions are satisfied:
(A) The load-serving entity enters into a contract for the eligible resource on or after January 1, 2024, and the eligible resource comes online on or after January 1, 2024.
(B) The eligible resource has a capacity of 5 megawatts or more.

(2)In order to receive an incentive payment pursuant to the program, a load-serving entity shall include

(4) Include a prevailing wage requirement if both of the following conditions are satisfied:
(A) The load-serving entity enters into a contract for the eligible resource on or after January 1, 2024, and the eligible resource comes online on or after January 1, 2024.
(B) The eligible resource has a capacity of less than 5 megawatts.

(f)

(e) If a load-serving entity receives an incentive payment during a multiyear compliance period, but does not exceed its clean energy capacity requirements or targets in a subsequent year of the compliance period, the commission shall not provide incentive payments to the load-serving entity for any year that it failed to exceed its clean energy capacity requirements or targets.
(f) In administering the Clean Energy Reliability Program pursuant to this section, the commission shall evaluate how the incentive payments and potential additional procurement made by some load-serving entities pursuant to this section should be appropriately balanced with rules regarding fines for noncompliance with procurement orders and associated backstop procurement obligations on the large electrical corporations for deficient procurement by other load-serving entities. The commission may adjust program rules to encourage resource development in the market, while ensuring state funding for purposes of this section does not inadvertently support load-serving entities that are deficient in the procurement required by the commission through Rulemaking 20-05-003 or its successor. In conducting the evaluation, the commission shall consider the Legislature’s intent to ensure reliability and new resource development while minimizing ratepayer costs.

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.