California Assembly Bill AB1295 Amended / Bill

 BILL NUMBER: AB 1295AMENDED BILL TEXT AMENDED IN ASSEMBLY MARCH 21, 2013 INTRODUCED BY Assembly Member Roger Hernndez FEBRUARY 22, 2013 An act to  amend Section 399.20 of   add and repeal Chapter 7.6 (commencing with Section 2831) of Part 2 of Division 1   of, and to repeal Sections 2832 and 3832.5 of,  the Public Utilities Code, relating to public utilities. LEGISLATIVE COUNSEL'S DIGEST AB 1295, as amended, Roger Hernndez. Public utilities: renewable  energy.  energy: community renewables option.   Under existing law, the Public Utilities Commission has regulatory jurisdiction over public utilities, including electrical corporations, as defined, while local publicly owned electric utilities, as defined, are under the direction of their governing boards. 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. Under existing law, the local government renewable energy self-generation program authorizes a local government, as defined, to receive a bill credit, as defined, to be applied to a designated benefiting account for electricity exported to the electrical grid by an eligible renewable generating facility, as defined, and requires the commission to adopt a rate tariff for the benefiting account.   The California Renewables Portfolio Standard Program, referred to as the RPS program, requires a retail seller of electricity, as defined, and local publicly owned electric utilities to purchase specified minimum quantities of electricity products from eligible renewable energy resources, as defined, for specified compliance periods, sufficient to ensure that the procurement of electricity products from eligible renewable energy resources achieves 20% of retail sales for the period January 1, 2011, to December 31, 2013, inclusive, 25% of retail sales by December 31, 2016, and 33% of retail sales by December 31, 2020, and in all subsequent years. The RPS program, consistent with the goals of procuring the least-cost and best-fit eligible renewable energy resources that meet project viability principles, requires that all retail sellers procure a balanced portfolio of electricity products from eligible renewable energy resources, as specified.   This bill would require an electrical corporation and a local publicly owned electric utility to include provisions in its tariff and addenda to a standard contract or allow an electrical generation facility, as defined, to participate in the community renewables option that would allow the facility to assign the payment by the electrical corporation or a local publicly owned electric utility due to that facility to a subscribing customer, as defined, in the form of a bill credit. The bill would, on and after January 1, 2016, require the commission and the governing board of the local publicly owned electric utility to evaluate the demand for the community renewables option. If the commission or the governing board of a local publicly owned electric utility finds that the community renewables option should be discontinued, the bill would make the provisions applicable to an electrical corporation or that local publicly owned electric utility, respective, be inoperative. This bill would repeal the provision of the community renewables option on January 1, 2020, unless the commission or the governing board of a local publicly owned electric utility finds that there is an adequate demand for the community renewables option, in which case, the provision of the community renewables option would remain in effect for the electrical corporation or that local publicly owned utility, respectively.   Existing law requires an electrical corporation to file with the Public Utilities Commission a standard tariff for electricity purchased from an electric generation facility and makes that tariff available to the owner or operator of an electric generation facility within the service territory of the electrical corporation.   This bill would make technical, nonsubstantive changes to the above provisions and would correct erroneous cross-references.  Vote: majority. Appropriation: no. Fiscal committee:  no   yes  . State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Chapter 7.6 (commencing with Section 2831) is added to Part 2 of Division 1 of the   Public Utilities Code   , to read:  CHAPTER 7.6. COMMUNITY RENEWABLES FACILITY 2831. As used in this article, the following terms mean the following: (a) "Community renewables facility" means an electric generation facility that has elected to participate in the community renewables option. (b) "Community renewables option" means the right of an electrical generation facility to assign the payment by the electrical corporation or a publicly owned electric utility due to that facility in accordance with this article to subscribing customers of the electrical corporation in the form of a bill credit. (c) "Electrical generation facility" means an electrical generation facility located within the service territory of, and developed to sell electricity to, an electrical corporation or a local publicly owned electric utility that meets all of the following criteria: (1) Has an effective capacity of not more than three megawatts. (2) Is interconnected and operates in parallel with the electrical transmission and distribution grid. (3) Is strategically located and interconnected to the electrical transmission and distribution grid in a manner that optimizes the deliverability of electricity generated at the facility to load centers. (4) Is an eligible renewable energy resource, as defined in Section 399.12. (d) "Subscribing customer" means a customer of an electrical corporation or publicly owned utility who has subscribed to the output of a community renewables facility. (e) "Subscription amount" means the percentage of kilowatthours delivered to an electrical corporation or a local publicly owned electric utility from a community renewables facility to which a subscribing customer has subscribed. 2831.5. A community renewables facility is not an electrical corporation, as defined in Section 218 or an electric service provider, as defined in Section 218.3. 2832. (a) An electrical corporation shall include provisions in its tariff and an addendum to a standard contract developed pursuant to Section 399.20 to provide for a community renewables option allowing a community renewables facility to assign the payment of electricity by the electrical corporation due to that facility to a subscribing customer in the form of a bill credit. (b) In approving the tariff, the commission shall ensure all of the following: (1) Customers that do not participate in the community renewables option are indifferent to whether other customers participate in the community renewables option, and no costs are shifted from subscribing customers to nonsubscribing customers. (2) An electric generation facility that has executed a standard contract with an electrical corporation and has begun deliveries pursuant to the contract may, in its sole discretion, elect to become a community renewables facility. (3) (A) The community renewables facility is solely responsible for any and all arrangements, agreements, or disputes with its subscribing customers concerning the community renewables option. The community renewables facility shall communicate, in writing, to the electrical corporation, in a timely manner, to be specified in the electrical corporation's tariff and contract addendum described in subdivision (c), but not less than once per year, information necessary for the electrical corporation to make payment under the standard contract and addendum to the standard contract that, include, but is not limited to, all of the following: (i) The name of each subscribing customer. (ii) The service address and service account number of each subscribing customer to which a bill credit should be applied. (iii) Each subscribing customer's subscription amount. (iv) The percentage of delivered kilowatthours of electricity that remains unsubscribed, if any, for which payment should be made directly to the community renewables facility. (B) The electrical corporation shall not be a party to an arrangement or agreement between the community renewables facility and the subscribing customer. (4) The electrical corporation shall continue to bill subscribing customers for all electricity consumed pursuant to each subscribing customer's otherwise applicable tariff. The payments made to a subscribing customer in the form of a bill credit shall be applied to the subscribing customer's monthly bill calculated pursuant to the customer's otherwise applicable tariff. (5) All electricity purchases by an electrical corporation pursuant this section shall be credited towards the electrical corporation's procurement requirements pursuant to Section 399.15 and shall count toward the electrical corporation's proportionate share of the statewide cap specified in Section 399.20. (c) The commission shall not authorize the community renewables option until it has adopted the tariff consistent with this section. (d) Notwithstanding paragraph (1) of subdivision (c) of Section 2831, the commission may allow other renewable programs adopted by the commission, including those programs adopted in commission decisions 10-12-048 and 09-06-049, as those decisions and programs may be modified from time to time, that meet the requirements of subdivisions (a) and (b) to include an equivalent community renewables option. (e) An electrical corporation shall recover from the community renewables facility any costs of implementing the community renewables option reasonably attributable to the community facility. Any implementation costs not reasonably attributable to the community renewables facility shall not be recovered from the ratepayers, as determined by the commission. (f) If a customer participates in direct transactions pursuant to paragraph (1) of subdivision (b) of Section 365 or Section 365.1, the electrical corporation that provides distribution service for the customer is not obligated to allow that customer to participate in a community renewables option. (g) On or before July 1, 2015, an energy service provider or community choice aggregator shall offer a comparable community renewables option in accordance with the procurement practices of that load serving entity. The commission shall review and approve the community renewables option proposed by the load serving entity to ensure that it is comparable to the requirements specified in subdivision (b). (h) (1) On and after January 1, 2016, the commission shall evaluate the demand for the community renewables option and consider whether to continue offering a community renewables option. (2) If the commission determines that the community renewables option should terminate, the commission shall issue an order to that effect and deliver a copy of the order to the Secretary of State. The section shall become inoperative on the effective date of the order. (i) (1) Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date. (2) Notwithstanding paragraph (1), if, before January 1, 2020, the commission finds that there is adequate demand to continue offering a community renewables option, this section shall remain in effect. The commission shall issue an order finding an adequate demand to continue offering a community renewables option and deliver a copy of the order to the Secretary of State. 2832.5. (a) A local publicly owned electric utility shall include provisions in its tariff and an addendum to a standard contract developed pursuant to Section 399.32 to provide for a community renewables option allowing a community renewables facility to assign the payment of electricity by the local publicly owned electric utility due to that facility to a subscribing customer in the form of a bill credit. (b) The governing board of the local publicly owned electric utility shall ensure all of the following: (1) Customers that do not participate in the community renewables option are indifferent to whether other customers participate in the community renewables option, and no costs are shifted from subscribing customers to nonsubscribing customers. (2) An electric generation facility that has executed a standard contract with a local publicly owned electric utility and has begun deliveries pursuant to the contract may, in its sole discretion, elect to become a community renewables facility. (3) (A) The community renewables facility is solely responsible for any and all arrangements, agreements, or disputes with its subscribing customers concerning the community renewables option. The community renewables facility shall communicate, in writing, to the local publicly owned electric utility, information necessary for the local publicly owned electric utility to make payment under the standard contract and addendum to the standard contact that, include, but is not limited to, all of the following: (i) The name of each subscribing customer. (ii) The service address and service account number of each subscribing customer to which a bill credit should be applied. (iii) Each subscribing customer's subscription amount. (iv) The percentage of delivered kilowatthours of electricity that remain unsubscribed, if any, for which payment should be made directly to the community renewables facility. (B) The local publicly owned electric utility shall not be a party to an arrangement or agreement between the community renewables facility and the subscribing customer. (4) The electrical corporation shall continue to bill subscribing customers for all electricity consumed pursuant to each subscribing customer's otherwise applicable tariff. The payments made to a subscribing customer in the form of a bill credit shall be applied to the subscribing customer's monthly bill calculated pursuant to the customer's otherwise applicable tariff. (5) All electricity purchases by a local publicly owned electric utility pursuant this section shall be credited towards the local publicly owned electric utility's procurement requirements pursuant to Section 399.30. (c) The local publicly owned electric utility may allow other renewable programs it has adopted that meet the requirements of subdivisions (a) and (b) to include an equivalent community renewables option. (d) (1) On and after January 1, 2016, the governing board of a local publicly owned electric utility shall evaluate the demand for the community renewables option and consider whether to continue offering a community renewables option. (2) If the governing board of a local publicly owned electric utility determines the offering of a community renewables option should terminate, the governing board shall adopt a resolution to that effect and deliver a copy of the resolution to the Secretary of State. This section shall not apply to that local publicly owned electric utility on the effective date of the resolution. (e) (1) Except as provided in paragraph (1), this section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date. (2) Notwithstanding paragraph (1), if, before January 1, 2020, the governing board of a local publicly owned electric utility finds that there is adequate demand to continue offering a community renewables option, this section shall remain in effect for that local publicly owned electric utility. The governing board shall adopt a resolution finding and adequate demand to continue offering a community renewables option and deliver a copy of the resolution to the Secretary of State. 2833. Except as provided in paragraph (2) of subdivision (i) of Section 2832 or paragraph (2) of subdivision (e) of Section 2832.5, this chapter shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date.   SECTION 1.   Section 399.20 of the Public Utilities Code is amended to read: 399.20. (a) It is the policy of this state and the intent of the Legislature to encourage electrical generation from eligible renewable energy resources. (b) As used in this section, "electric generation facility" means an electric generation facility located within the service territory of, and developed to sell electricity to, an electrical corporation that meets all of the following criteria: (1) Has an effective capacity of not more than three megawatts. (2) Is interconnected and operates in parallel with the electrical transmission and distribution grid. (3) Is strategically located and interconnected to the electrical transmission and distribution grid in a manner that optimizes the deliverability of electricity generated at the facility to load centers. (4) Is an eligible renewable energy resource. (c) An electrical corporation shall file with the commission a standard tariff for electricity purchased from an electric generation facility. The commission may modify or adjust the requirements of this section for an electrical corporation with less than 100,000 service connections, as individual circumstances merit. (d) (1) The tariff shall provide for payment for every kilowatthour of electricity purchased from an electric generation facility for a period of 10, 15, or 20 years, as authorized by the commission. The payment shall be the market price determined by the commission pursuant to paragraph (2) and shall include all current and anticipated environmental compliance costs, including, but not limited to, mitigation of emissions of greenhouse gases and air pollution offsets associated with the operation of new generating facilities in the local air pollution control or air quality management district where the electric generation facility is located. (2) The commission shall establish a methodology to determine the market price of electricity for terms corresponding to the length of contracts with an electric generation facility, in consideration of the following: (A) The long-term market price of electricity for fixed price contracts, determined pursuant to an electrical corporation's general procurement activities as authorized by the commission. (B) The long-term ownership, operating, and fixed-price fuel costs associated with fixed-price electricity from new generating facilities. (C) The value of different electricity products including baseload, peaking, and as-available electricity. (3) The commission may adjust the payment rate to reflect the value of every kilowatthour of electricity generated on a time-of-delivery basis. (4) The commission shall ensure, with respect to rates and charges, that ratepayers that do not receive service pursuant to the tariff are indifferent to whether a ratepayer with an electric generation facility receives service pursuant to the tariff. (e) An electrical corporation shall provide expedited interconnection procedures to an electric generation facility located on a distribution circuit that generates electricity at a time and in a manner so as to offset the peak demand on the distribution circuit, if the electrical corporation determines that the electric generation facility will not adversely affect the distribution grid. The commission shall consider and may establish a value for an electric generation facility located on a distribution circuit that generates electricity at a time and in a manner so as to offset the peak demand on the distribution circuit. (f) (1) An electrical corporation shall make the tariff available to the owner or operator of an electric generation facility within the service territory of the electrical corporation, upon request, on a first-come-first-served basis, until the electrical corporation meets its proportionate share of a statewide cap of 750 megawatts cumulative rated generation capacity served under this section and Section 399.32. The proportionate share shall be calculated based on the ratio of the electrical corporation's peak demand compared to the total statewide peak demand. (2) By June 1, 2013, the commission shall, in addition to the 750 megawatts identified in paragraph (1), direct the electrical corporations to collectively procure at least 250 megawatts of cumulative rated generating capacity from developers of bioenergy projects that commence operation on or after June 1, 2013. The commission shall, for each electrical corporation, allocate shares of the additional 250 megawatts based on the ratio of each electrical corporation's peak demand compared to the total statewide peak demand. In implementing this paragraph, the commission shall do all of the following: (A) Allocate the 250 megawatts identified in this paragraph among the electrical corporations based on the following categories: (i) For biogas from wastewater treatment, municipal organic waste diversion, food processing, and codigestion, 110 megawatts. (ii) For dairy and other agricultural bioenergy, 90 megawatts. (iii) For bioenergy using byproducts of sustainable forest management, 50 megawatts. Allocations under this category shall be determined based on the proportion of bioenergy that sustainable forest management providers derive from sustainable forest management in fire threat treatment areas, as designated by the Department of Forestry and Fire Protection. (B) Direct the electrical corporations to develop standard contract terms and conditions that reflect the operational characteristics of the projects, and to provide a streamlined contracting process. (C) Coordinate, to the maximum extent feasible, any incentive or subsidy programs for bioenergy with the agencies listed in subparagraph (A) of paragraph (3) in order to provide maximum benefits to ratepayers and to ensure that incentives are used to reduce contract prices. (D) The commission shall encourage gas and electrical corporations to develop and offer programs and services to facilitate development of in-state biogas for a broad range of purposes. (3) (A) The commission, in consultation with the State Energy Resources Conservation and Development Commission, the State Air Resources Board, the Department of Forestry and Fire Protection, the Department of Food and Agriculture, and the Department of Resources Recycling and Recovery, may review the allocations of the 250 additional megawatts identified in paragraph (2) to determine if those allocations are appropriate. (B) If the commission finds that the allocations of the 250 additional megawatts identified in paragraph (2) are not appropriate, the commission may reallocate the 250 megawatts among the categories established in subparagraph (A) of paragraph (2). (4) For the purposes of this subdivision, "bioenergy" means biogas and biomass. (g) The electrical corporation may make the terms of the tariff available to owners and operators of an electric generation facility in the form of a standard contract subject to commission approval. (h) Every kilowatthour of electricity purchased from an electric generation facility shall count toward meeting the electrical corporation's renewables portfolio standard annual procurement targets for purposes of paragraph (1) of subdivision (b) of Section 399.15. (i) The physical generating capacity of an electric generation facility shall count toward the electrical corporation's resource adequacy requirement for purposes of Section 380. (j) (1) The commission shall establish performance standards for any electric generation facility that has a capacity greater than one megawatt to ensure that those facilities are constructed, operated, and maintained to generate the expected annual net production of electricity and do not impact system reliability. (2) The commission may reduce the three megawatt capacity limitation of paragraph (1) of subdivision (b) if the commission finds that a reduced capacity limitation is necessary to maintain system reliability within that electrical corporation's service territory. (k) (1) An owner or operator of an electric generation facility that received ratepayer-funded incentives in accordance with Section 379.6 of this code, or with Section 25782 of the Public Resources Code, and participated in a net metering program pursuant to Sections 2827 and 2827.10 of, and former Section 2827.9 of, this code prior to January 1, 2010, shall be eligible for a tariff or standard contract filed by an electrical corporation pursuant to this section. (2) In establishing the tariffs or standard contracts pursuant to this section, the commission shall consider ratepayer-funded incentive payments previously received by the generation facility pursuant to Section 379.6 of this code or Section 25782 of the Public Resources Code. The commission shall require reimbursement of any funds received from these incentive programs to an electric generation facility, in order for that facility to be eligible for a tariff or standard contract filed by an electrical corporation pursuant to this section, unless the commission determines ratepayers have received sufficient value from the incentives provided to the facility based on how long the project has been in operation and the amount of renewable electricity previously generated by the facility. (3) A customer that receives service under a tariff or contract approved by the commission pursuant to this section is not eligible to participate in any net metering program. (l) An owner or operator of an electric generation facility electing to receive service under a tariff or contract approved by the commission shall continue to receive service under the tariff or contract until either of the following occurs: (1) The owner or operator of an electric generation facility no longer meets the eligibility requirements for receiving service pursuant to the tariff or contract. (2) The period of service established by the commission pursuant to subdivision (d) is completed. (m) Within 10 days of receipt of a request for a tariff pursuant to this section from an owner or operator of an electric generation facility, the electrical corporation that receives the request shall post a copy of the request on its Internet Web site. The information posted on the Internet Web site shall include the name of the city in which the facility is located, but information that is proprietary and confidential, including, but not limited to, address information beyond the name of the city in which the facility is located, shall be redacted. (n) An electrical corporation may deny a tariff request pursuant to this section if the electrical corporation makes any of the following findings: (1) The electric generation facility does not meet the requirements of this section. (2) The transmission or distribution grid that would serve as the point of interconnection is inadequate. (3) The electric generation facility does not meet all applicable state and local laws and building standards and utility interconnection requirements. (4) The aggregate of all electric generating facilities on a distribution circuit would adversely impact utility operation and load restoration efforts of the distribution system. (o) Upon receiving a notice of denial from an electrical corporation, the owner or operator of the electric generation facility denied a tariff pursuant to this section shall have the right to appeal that decision to the commission. (p) To ensure the safety and reliability of electric generation facilities, the owner of an electric generation facility receiving a tariff pursuant to this section shall provide an inspection and maintenance report to the electrical corporation at least once every other year. The inspection and maintenance report shall be prepared at the owner's or operator's expense by a California-licensed contractor who is not the owner or operator of the electric generation facility. A California-licensed electrician shall perform the inspection of the electrical portion of the generation facility. (q) The contract between the electric generation facility receiving the tariff and the electrical corporation shall contain provisions that ensure that construction of the electric generating facility complies with all applicable state and local laws and building standards, and utility interconnection requirements. (r) (1) All construction and installation of facilities of the electrical corporation, including at the point of the output meter or at the transmission or distribution grid, shall be performed only by that electrical corporation. (2) All interconnection facilities installed on the electrical corporation's side of the transfer point for electricity between the electrical corporation and the electrical conductors of the electric generation facility shall be owned, operated, and maintained only by the electrical corporation. The ownership, installation, operation, reading, and testing of revenue metering equipment for electric generating facilities shall only be performed by the electrical corporation.