Code Section Group

Public Utilities Code - PUC

DIVISION 1. REGULATION OF PUBLIC UTILITIES [201 - 3260]

  ( Division 1 enacted by Stats. 1951, Ch. 764. )

PART 1. PUBLIC UTILITIES ACT [201 - 2120]

  ( Part 1 enacted by Stats. 1951, Ch. 764. )

CHAPTER 2.3. Electrical Restructuring [330 - 400]

  ( Chapter 2.3 added by Stats. 1996, Ch. 854, Sec. 10. )

ARTICLE 15. Reliable Electric Service Investments Act [399 - 399.9]
  ( Article 15 added by Stats. 2000, Ch. 1050, Sec. 4. )

399.
  

(a) This article shall be known, and may be cited, as the Reliable Electric Service Investments Act.

(b) The Legislature finds and declares that safe, reliable electric service is of utmost importance to the citizens of this state, and its economy.

(c) The Legislature further finds and declares that in order to ensure that the citizens of this state continue to receive safe, reliable, affordable, and environmentally sustainable electric service, it is essential that prudent investments continue to be made in all of the following areas:

(1) To protect the integrity of the electric distribution grid.

(2) To ensure an adequately sized and trained utility workforce.

(3) To ensure cost-effective energy efficiency improvements.

(4) To achieve a sustainable supply of renewable energy.

(5) To advance public interest research, development and demonstration programs not adequately provided by competitive and regulated markets.

(d) It is the intent of the Legislature to reaffirm, without requiring revision, California’s doctrine, as reflected in regulatory and judicial decisions, regarding electrical corporations’ reasonable opportunity to recover costs and investments associated with their electric distribution grid and the reasonable opportunity to attract capital for investment on reasonable terms.

(e) The Legislature further finds and declares all of the following:

(1) Acting under applicable constitutional and statutory authorities, the Public Utilities Commission and the boards of local publicly owned electric utilities have included in regulated electricity prices, investments that are essential to maintaining system reliability, reducing California electricity users’ bills, and mitigating environmental costs of California users’ electricity consumption.

(2) Among the most important of these “system benefits” investments categories are energy efficiency, renewable energy, and public interest research, development and demonstration (RD&D).

(3) Energy efficiency investments funded from California’s usage-based charges on electricity distribution help improve systemwide reliability by reducing demand in times and areas of system congestion, and at the same time reduce all California electricity users’ costs. These investments also significantly reduce environmental costs associated with California’s electricity consumption, including, but not limited to, degradation of the state’s air, water, and land resources.

(4) California’s in-state renewable energy resources help alleviate supply deficits that could threaten electric system reliability, reduce environmental costs associated with California’s electricity consumption, and increase the diversity of the electricity system’s fuel mix, reducing electricity users’ exposure to fossil-fuel price volatility.

(5) California’s public interest RD&D investments enhance private and regulated sector investment in electricity system technologies, and are designed specifically to help ensure sustained improvement in the economic and environmental performance of the distribution, transmission, and generation and end-use systems that serve California electricity users.

(6) California has established a long tradition of recovering system benefits investments through usage-based electricity charges, which is reflected in at least two decades of electricity price regulation by the commission, the boards of local publicly owned electric utilities, and the mandate of the Legislature in Chapter 854 of the Statutes of 1996 (Assembly Bill 1890 of the 1995–96 Regular Session of the Legislature) and Chapter 905 of the Statutes of 1997 (Senate Bill 90 of the 1997–98 Regular Session of the Legislature).

(7) Unless the Legislature acts to extend the mandate of this article for minimum levels of usage based system benefits charges, California electricity users are at substantial risk of higher economic and environmental costs and degraded reliability.

(Amended (as added by Stats. 2000, Ch. 1050) by Stats. 2006, Ch. 512, Sec. 23. Effective September 27, 2006.)

399.2.
  

(a) (1) It is the policy of this state, and the intent of the Legislature, to reaffirm that each electrical corporation shall continue to operate its electric distribution grid in its service territory and shall do so in a safe, reliable, efficient, and cost-effective manner.

(2) In furtherance of this policy, it is the intent of the Legislature that each electrical corporation shall continue to be responsible for operating its own electric distribution grid including, but not limited to, owning, controlling, operating, managing, maintaining, planning, engineering, designing, and constructing its own electric distribution grid, emergency response and restoration, service connections, service turnons and turnoffs, and service inquiries relating to the operation of its electric distribution grid, subject to the commission’s authority.

(b) In order to ensure the continued efficient use, and cost-effective, safe, and reliable operation of the electric distribution grid, each electrical corporation shall continue to operate its electric distribution grid in its service territory consistent with Section 330.

(c) In carrying out the purposes of this section, each electrical corporation shall continue to make reasonable investments in its electric distribution grid. Each electrical corporation shall continue to have a reasonable opportunity to fully recover from all customers of the electrical corporation, in a manner determined by the commission pursuant to this code, all of the following:

(1) Reasonable investments in its electric distribution grid.

(2) A reasonable return on the investments in its electric distribution grid.

(3) Reasonable costs to operate its electric distribution grid.

(d) For purposes of this section, the term “electric distribution grid” means those facilities owned or operated by an electrical corporation that are not under the control of the Independent System Operator and that are used to transmit, deliver, or furnish electricity for light, heat, or power.

(e) Nothing in this section shall be construed to alter or to affect any of the following:

(1) Section 216, 218, or 2827.

(2) The authority of the commission to establish and enforce standards and tariff conditions for the interconnection of customer-owned facilities to the electric distribution grid.

(3) The ratemaking authority of the commission under this code.

(4) The authority of the commission to establish rules governing the extension of service to new customers.

(f) Nothing in this section shall be construed to alter or affect any authority or lack of authority of the commission regarding the ownership and operation of new electric generation used in whole, or in part, for the purpose of maintaining or enhancing the reliability of the electric distribution grid.

(g) Nothing in this section diminishes or expands any existing authority of a local governmental entity.

(h) The commission shall require every electrical corporation operating an electric distribution grid to inform all customers who request residential service connections via telephone of the availability of the California Alternative Rates for Energy (CARE) program and how they may qualify for and obtain these services and shall accept applications for the CARE program according to procedures specified by the commission. Electrical corporations shall recover the reasonable costs of implementing this subdivision.

(Added by Stats. 2000, Ch. 1050, Sec. 4. Effective January 1, 2001.)

399.2.5.
  

(a) Notwithstanding Sections 1001 to 1013, inclusive, an application of an electrical corporation for a certificate authorizing the construction of new transmission facilities is necessary to the provision of electric service if the commission finds that the new facility is necessary to facilitate achievement of the renewables portfolio standard established in Article 16 (commencing with Section 399.11).

(b) With respect to a transmission facility described in subdivision (a), the commission shall take all feasible actions to ensure that the transmission rates established by the Federal Energy Regulatory Commission are fully reflected in any retail rates established by the commission. These actions shall include all of the following:

(1) Making findings, where supported by an evidentiary record, that those transmission facilities provide benefit to the transmission network and are necessary to facilitate the achievement of the renewables portfolio standard established in Article 16 (commencing with Section 399.11).

(2) Directing the utility to which the generator will be interconnected, where the direction is not preempted by federal law, to seek the recovery through general transmission rates of the costs associated with the transmission facilities.

(3) Asserting the positions described in paragraphs (1) and (2) to the Federal Energy Regulatory Commission in appropriate proceedings.

(4) Allowing recovery in retail rates of any increase in transmission costs incurred by an electrical corporation resulting from the construction of the transmission facilities that are not approved for recovery in transmission rates by the Federal Energy Regulatory Commission after the commission determines that the costs were prudently incurred.

(c) (1) The commission, prior to making a finding pursuant to subdivision (a), may approve an advice letter from an electrical corporation seeking, for a specific transmission project, a finding of eligibility for cost recovery pursuant to paragraph (4) of subdivision (b), if the electrical corporation certifies in the advice letter, in a form prescribed by the commission, that it expects that the facility will be necessary to facilitate achievement of the renewables portfolio standard established pursuant to Article 16 (commencing with Section 399.11). The electrical corporation’s ultimate recovery of construction costs shall be contingent upon the commission finding, pursuant to subdivision (a), that the facility is necessary to facilitate achievement of the renewables portfolio standard and that the costs were prudently incurred.

(2) Prior to making a finding pursuant to subdivision (a), the commission may approve an advice letter from an electrical corporation requesting retail rate cost recovery for costs incurred prior to permitting or certification for potential transmission facilities if the electrical corporation certifies in the advice letter, in a form prescribed by the commission, that it expects that the facility will be necessary to facilitate achievement of the renewables portfolio standard established pursuant to Article 16 (commencing with Section 399.11). The electrical corporation’s ultimate recovery of costs incurred prior to permitting or certification shall be contingent upon the commission finding that the electrical corporation administered the approved costs reasonably and prudently.

(3) Any commission determination pursuant to this subdivision is not binding upon the commission when determining the need for the transmission facilities pursuant to Chapter 5 (commencing with Section 1001) or Article 16 (commencing with Section 399.11).

(d) Any cost recovery pursuant to subdivision (b) or (c) shall be limited to costs that are not approved for recovery in transmission rates by the Federal Energy Regulatory Commission.

(Amended by Stats. 2010, Ch. 460, Sec. 1. (AB 1954) Effective January 1, 2011.)

399.3.
  

Nothing in Section 399.2 shall be construed to preclude any of California’s local publicly owned electric utilities from exercising authority to operate their electric distribution grid as provided under law.

(Added by Stats. 2000, Ch. 1050, Sec. 4. Effective January 1, 2001.)

399.4.
  

(a) (1) In order to ensure that prudent investments in energy efficiency continue to be made that produce cost-effective energy savings, reduce customer demand, and contribute to the safe and reliable operation of the electrical distribution grid, it is the policy of this state and the intent of the Legislature that the commission shall supervise the administration of cost-effective energy efficiency programs authorized pursuant to its statutory authority, including Sections 381, 381.1, 381.2, 381.5, 382, 384.5, 400, 454.5, 454.55, 454.56, 589, 701.1, 749, and 769, Article 10 (commencing with Section 890) of Chapter 4, and Chapter 6 (commencing with Section 2781) of Part 2.

(2) As used in this section, the term “energy efficiency” includes, but is not limited to, cost-effective activities to achieve peak load reduction that improve end-use efficiency, lower customers’ bills, and reduce system needs.

(b) (1) If a customer or contractor is the recipient of a rebate or incentive offered by a public utility for an energy efficiency improvement or installation of energy efficient components, equipment, or appliances in a building, the public utility shall provide the rebate or incentive only if the customer or contractor certifies that the improvement or installation has complied with any applicable permitting requirements, including any applicable specifications or requirements set forth in the California Building Standards Code (Title 24 of the California Code of Regulations), and, if a contractor performed the installation or improvement, that the contractor holds the appropriate license for the work performed.

(2) In addition to the requirements of paragraph (1), if a customer or contractor is the recipient of a rebate or incentive offered by a public utility for the purchase or installation of central air conditioning or a heat pump, and their related fans, the public utility shall provide the rebate or incentive only if the customer or contractor provides proof of permit closure. The public utility is not responsible for verifying the proof of permit closure documentation provided by the customer or contractor.

(3) This subdivision does not imply or create authority or responsibility, or expand existing authority or responsibility, of a public utility for the enforcement of the building energy and water efficiency standards adopted pursuant to subdivision (a) or (b) of Section 25402 of the Public Resources Code, or appliance efficiency standards and certification requirements adopted pursuant to subdivision (c) of Section 25402 of the Public Resources Code.

(4) This subdivision does not limit the authority of the commission to impose any additional requirements on a recipient of any rebate or incentive.

(c) The commission, in evaluating energy efficiency investments under its statutory authority, shall also ensure that local and regional interests, multifamily dwellings, and energy service industry capabilities are incorporated into program portfolio design and that local governments, community-based organizations, and energy efficiency service providers are encouraged to participate in program implementation where appropriate.

(d) The commission, in a new or existing proceeding, shall review and update its policies governing energy efficiency programs funded by utility customers to facilitate achieving the targets established pursuant to subdivision (c) of Section 25310 of the Public Resources Code. In updating its policies, the commission shall, at a minimum, do all of the following:

(1) Authorize market transformation programs with appropriate levels of funding to achieve deeper energy efficiency savings.

(2) Authorize pay for performance programs that link incentives directly to measured energy savings. As part of pay for performance programs authorized by the commission, customers should be reasonably compensated for developing and implementing an energy efficiency plan, with a portion of their incentive reserved pending post project measurement results.

(3) Authorize programs to achieve deeper savings through operational, behavioral, and retrocommissioning activities.

(4) Ensure that customers have certainty in the values and methodology used to determine energy efficiency incentives by basing the amount of any incentives provided by gas and electrical corporations on the values and methodology contained in the executed customer agreement. Incentive payments shall be based on measured results.

(Amended by Stats. 2017, Ch. 561, Sec. 210. (AB 1516) Effective January 1, 2018.)

399.8.
  

(a) In order to ensure that the citizens of this state continue to receive safe, reliable, affordable, and environmentally sustainable electric service, it is the policy of this state and the intent of the Legislature that prudent investments in energy efficiency, renewable energy, and research, development and demonstration shall continue to be made.

(b) (1) Every customer of an electrical corporation shall pay a nonbypassable system benefits charge authorized pursuant to this article. The system benefits charge shall fund energy efficiency, renewable energy, and research, development and demonstration.

(2) Local publicly owned electric utilities shall continue to collect and administer system benefits charges pursuant to Section 385.

(c) (1) The commission shall require each electrical corporation to identify a separate rate component to collect revenues to fund energy efficiency, renewable energy, and research, development and demonstration programs authorized pursuant to this section beginning January 1, 2002, and ending January 1, 2012. The rate component shall be a nonbypassable element of the local distribution service and collected on the basis of usage.

(2) This rate component may not exceed, for any tariff schedule, the level of the rate component that was used to recover funds authorized pursuant to Section 381 on January 1, 2000. If the amounts specified in paragraph (1) of subdivision (d) are not recovered fully in any year, the commission shall reset the rate component to restore the unrecovered balance, provided that the rate component may not exceed, for any tariff schedule, the level of the rate component that was used to recover funds authorized pursuant to Section 381 on January 1, 2000. Pending restoration, any annual shortfalls shall be allocated pro rata among the three funding categories in the proportions established in paragraph (1) of subdivision (d).

(d) The commission shall order San Diego Gas and Electric Company, Southern California Edison Company, and Pacific Gas and Electric Company to collect these funds commencing on January 1, 2002, as follows:

(1) Two hundred twenty-eight million dollars ($228,000,000) per year in total for energy efficiency and conservation activities, sixty-five million five hundred thousand dollars ($65,500,000) in total per year for renewable energy, and sixty-two million five hundred thousand dollars ($62,500,000) in total per year for research, development and demonstration. The funds for energy efficiency and conservation activities shall continue to be allocated in proportions established for the year 2000 as set forth in paragraph (1) of subdivision (c) of Section 381.

(2) The amounts shall be adjusted annually at a rate equal to the lesser of the annual growth in electric commodity sales or inflation, as defined by the gross domestic product deflator.

(e) The commission shall ensure that each electrical corporation allocates funds transferred by the Energy Commission pursuant to subdivision (b) of Section 25743 in a manner that maximizes the economic benefit to all customer classes that funded the New Renewable Resources Account.

(f) The commission and the Energy Commission shall retain and continue their oversight responsibilities as set forth in Sections 381 and 383, and Chapter 7.1 (commencing with Section 25620) and Chapter 8.6 (commencing with Section 25740) of Division 15 of the Public Resources Code.

(g) An applicant for the Large Nonresidential Standard Performance Contract Program funded pursuant to paragraph (1) of subdivision (b) and an electrical corporation shall promptly attempt to resolve disputes that arise related to the program’s guidelines and parameters prior to entering into a program agreement. The applicant shall provide the electrical corporation with written notice of any dispute. Within 10 business days after receipt of the notice, the parties shall meet to resolve the dispute. If the dispute is not resolved within 10 business days after the date of the meeting, the electrical corporation shall notify the applicant of his or her right to file a complaint with the commission, which complaint shall describe the grounds for the complaint, injury, and relief sought. The commission shall issue its findings in response to a filed complaint within 30 business days of the date of receipt of the complaint. Prior to issuance of its findings, the commission shall provide a copy of the complaint to the electrical corporation, which shall provide a response to the complaint to the commission within five business days of the date of receipt. During the dispute period, the amount of estimated financial incentives shall be held in reserve until the dispute is resolved.

(Amended by Stats. 2007, Ch. 685, Sec. 10. Effective January 1, 2008.)

399.9.
  

(a) No part of this article shall be construed to alter or affect the low-income funding provisions set forth in Section 382. Programs provided to low-income electricity customers, including but not limited to, targeted energy efficiency services and the California Alternative Rates for Energy Program shall continue to be funded as set forth in Section 382.

(b) Nothing in this article shall be construed to affect the jurisdiction of the commission over electric distribution service.

(Added by Stats. 2000, Ch. 1050, Sec. 4. Effective January 1, 2001.)

PUCPublic Utilities Code - PUC