Amended IN Assembly April 21, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 1408Introduced by Assembly Member IrwinFebruary 21, 2025An act to amend Section 745 of amend Sections 345.5, 380, 454.52, and 9621 of, and to add Chapter 11 (commencing with Section 8420) to Division 4.1 of, the Public Utilities Code, relating to electricity. LEGISLATIVE COUNSEL'S DIGESTAB 1408, as amended, Irwin. Electricity: rates. interconnections.Existing law establishes the Independent System Operator (ISO) as a nonprofit, public benefit corporation and requires the ISO, among other duties, to ensure the efficient use and reliable operation of the transmission grid consistent with the achievement of planning and operating reserve criteria, as provided.This bill would require the ISO to integrate surplus interconnection considerations into its long-term transmission planning and enhance transparency around surplus interconnection opportunities.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. Existing law authorizes the commission to require or authorize an electrical corporation to employ default time-of-use rates to residential customers, subject to specified limitations and conditions. Existing law prohibits a residential customer from being subject to a default time-of-use rate schedule unless that residential customer has been provided with not less than one year of interval usage data from an advanced meter and associated customer education and, following the passage of this period, is provided with no less than one year of bill protection during which the total amount paid by the residential customer for electric service shall not exceed the amount that would have been payable by the residential customer under that customers previous rate schedule. corporations, while local publicly owned electric utilities are under the direction of their governing boards.This bill would require that the customer be provided with no less than 2 years, instead of one year, of bill protection during which the total amount paid by the residential customer for electric service is prohibited from exceeding the amount that would have been payable by the residential customer under that customers previous rate schedule.Existing law requires the commission, in consultation with the ISO, to establish resource adequacy requirements for all load-serving entities, as defined. Existing law requires each load-serving entity to, at a minimum, meet certain minimum planning reserve and reliability criteria, as specified.This bill would require each load-serving entity to prioritize available capacity for renewable energy development.Existing law requires the commission to adopt a process for each load-serving entity to file an integrated resource plan, adopt a schedule for periodic updates to the plan, and ensure each load-serving entity take specified actions, as specified. Existing law also requires the governing board of each local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours to adopt an integrated resource plan and a process for updating the plan at least once every 5 years to ensure the utility achieves certain goals, as specified.This bill would require each electrical corporation, and each local publicly owned utility with an annual electrical demand exceeding 700 gigawatthours, to require the evaluation of surplus interconnection options and to consider surplus interconnection options, for purposes of its integrated resource plan.This bill would also require each electrical corporation or local publicly owned electric utility to use available grid infrastructure through surplus interconnection to use any available interconnection capacity, as specified.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 certain provisions of this bill would be part of the act and a violation of a commission action implementing the bills requirements would be a crime, the bill would impose a state-mandated local program.Additionally, by imposing new duties on local publicly owned electric utilities, 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 specified reasons.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOYES Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 345.5 of the Public Utilities Code is amended to read:345.5. (a) The Independent System Operator, as a nonprofit, public benefit corporation, shall conduct its operations consistent with applicable state and federal laws and consistent with the interests of the people of the state.(b) To ensure the reliability of electric service and the health and safety of the public, the Independent System Operator shall manage the transmission grid and related energy markets in a manner that is consistent with all of the following:(1) Making the most efficient use of available energy resources. For purposes of this section, available energy resources include energy, capacity, ancillary services, and demand bid into markets administered by the Independent System Operator. Available energy resources do not include a schedule submitted to the Independent System Operator by an electrical corporation or a local publicly owned electric utility to meet its own customer load.(2) Reducing, to the extent possible, overall economic cost to the states consumers.(3) Applicable state law intended to protect the publics health and the environment.(4) Maximizing availability of existing electric generation resources necessary to meet the needs of the states electricity consumers.(5) Conducting internal operations in a manner that minimizes cost impact on ratepayers to the extent practicable and consistent with the provisions of this chapter.(6) Communicating with all balancing area authorities in California in a manner that supports electrical reliability.(c) The Independent System Operator shall do all of the following:(1) Consult and coordinate with appropriate state and local agencies to ensure that the Independent System Operator operates in furtherance of state law regarding consumer and environmental protection.(2) Ensure that the purposes and functions of the Independent System Operator are consistent with the purposes and functions of nonprofit, public benefit corporations in the state, including duties of care and conflict-of-interest standards for officers and directors of a corporation.(3) Maintain open meeting standards and meeting notice requirements consistent with the general policies of the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code) and affording the public the greatest possible access, consistent with other duties of the corporation. The Independent System Operators Open Meeting Policy, as adopted on April 23, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the Bagley-Keene Open Meeting Act than its policy in effect as of May 1, 2002.(4) Provide public access to corporate records consistent with the general policies of the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) and affording the public the greatest possible access, consistent with the other duties of the corporation. The Independent System Operators Information Availability Policy, as adopted on October 22, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the California Public Records Act than its policy in effect as of May 1, 2002.(5) Integrate surplus interconnection considerations into its long-term transmission planning and enhance transparency around surplus interconnection opportunities.SEC. 2. Section 380 of the Public Utilities Code is amended to read:380. (a) The commission, in consultation with the Independent System Operator, shall establish resource adequacy requirements for all load-serving entities.(b) In establishing resource adequacy requirements, the commission shall ensure the reliability of electrical service in California while advancing, to the extent possible, the states goals for clean energy, reducing air pollution, and reducing emissions of greenhouse gases. The resource adequacy program shall achieve all of the following objectives:(1) Facilitate the development of new generating, nongenerating, and hybrid capacity and the retention of existing generating, nongenerating, and hybrid capacity that is economical and needed for reliability and to achieve the state policy specified in Section 454.53.(2) Establish new, or maintain existing, demand response products and tariffs that facilitate the economical dispatch and use of demand response that can either meet or reduce an electrical corporations resource adequacy requirements, as determined by the commission.(3) Equitably allocate the cost of generating capacity and demand response in a manner that prevents the shifting of costs between customer classes.(4) Minimize enforcement requirements and costs.(5) Consideration of mitigation measures, if the commission determines they are needed, to reduce costs to ratepayers.(6) Maximize the ability of community choice aggregators to determine the generation resources used to serve their customers.(c) Each load-serving entity shall maintain physical generating capacity and electrical demand response adequate to meet its load requirements, including, but not limited to, peak demand and planning and operating reserves. The generating capacity or electrical demand response shall be deliverable to locations and at times as may be necessary to maintain electrical service system reliability, local area reliability, and flexibility.(d) (1) Each load-serving entity shall, at a minimum, meet the most recent minimum planning reserve and reliability criteria approved by the board of directors of the Western Systems Coordinating Council or the Western Electricity Coordinating Council.(2) Each load-serving entity shall prioritize available capacity for renewable energy development.(e) The commission shall implement and enforce the resource adequacy requirements established in accordance with this section in a nondiscriminatory manner. Each load-serving entity shall be subject to the same requirements for resource adequacy, the renewables portfolio standard program, and the integrated resource planning process pursuant to Section 454.52 that apply to electrical corporations pursuant to this section, or are otherwise required by law or by order or decision of the commission. The commission shall exercise its enforcement powers to ensure compliance by all load-serving entities.(f) (1) The commission shall require sufficient information, including, but not limited to, anticipated load, actual load, and measures undertaken by a load-serving entity to ensure resource adequacy, to be reported to enable the commission to determine compliance with the resource adequacy requirements established by the commission.(2) The commission shall calculate and publish annually on its internet website, in a new report or as part of another report, the percentage of each load-serving entitys local and system resource adequacy requirements from the previous calendar year that was met with capacity from eligible renewable energy resources pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11)), other zero-carbon resources, including large hydroelectric and nuclear resources, or energy storage resources. In determining the percentage of each load-serving entitys resource adequacy requirements, the commission shall include all directly owned or contracted resources and each load-serving entitys allocation of any centrally procured resources or allocation of resources pursuant to any other mechanism that involves an assignment or allocation of resources purchased or owned by a single buyer, and shall exclude any share of a load-serving entitys resources that were allocated to another load-serving entity.(g) An electrical corporations costs of meeting or reducing resource adequacy requirements, including, but not limited to, the costs associated with system reliability, local area reliability, or flexible resource adequacy, that are determined to be reasonable by the commission, or are otherwise recoverable under a procurement plan approved by the commission pursuant to Section 454.5, shall be fully recoverable from those customers on whose behalf the costs are incurred, as determined by the commission, at the time the commitment to incur the cost is made, on a fully nonbypassable basis, as determined by the commission. The commission shall exclude any amounts authorized to be recovered pursuant to Section 366.2 when authorizing the amount of costs to be recovered from customers of a community choice aggregator or from customers that purchase electricity through a direct transaction pursuant to this subdivision.(h) The commission shall determine and authorize the most efficient and equitable means for achieving all of the following:(1) Meeting the objectives of this section.(2) Ensuring that investment is made in new generating capacity.(3) Ensuring that existing generating capacity that is economical is retained to ensure reliability.(4) Ensuring that the resource adequacy program can reasonably maintain a standard measure of reliability, such as a one-day-in-10-year loss-of-load expectation or a similarly robust reliability metric adopted by the commission, and use it for planning purposes.(5) Ensuring that the cost of generating capacity and demand response is allocated equitably.(6) Ensuring that community choice aggregators can determine the generation resources used to serve their customers.(7) Ensuring that investments are made in new and existing demand response resources that are cost effective and help to achieve electrical grid reliability and the states goals for reducing emissions of greenhouse gases.(8) Minimizing the need for backstop procurement by the Independent System Operator.(i) In making the determination pursuant to subdivision (h), the commission may consider a centralized resource adequacy mechanism among other options.(j) The commission shall ensure appropriate valuation of both supply and load modifying demand response resources. The commission, in an existing or new proceeding, shall establish a mechanism to value load modifying demand response resources, including, but not limited to, the ability of demand response resources to help meet distribution needs and transmission system needs and to help reduce a load-serving entitys resource adequacy obligation pursuant to this section. In determining this value, the commission shall consider how these resources further the states electrical grid reliability and the states goals for reducing emissions of greenhouse gases. The commission, Energy Commission, and Independent System Operator shall coordinate to jointly ensure that changes in demand caused by load modifying demand response are expeditiously and comprehensively reflected in the Energy Commissions Integrated Energy Policy Report forecast and in planning proceedings and associated analyses, and shall encourage reflection of these changes in demand in the operation of the grid.(k) For purposes of this section, load-serving entity means an electrical corporation, electric service provider, or community choice aggregator. Load-serving entity does not include any of the following:(1) A local publicly owned electric utility.(2) The State Water Resources Development System commonly known as the State Water Project.(3) Customer generation located on the customers site or providing electric service through arrangements authorized by Section 218, if the customer generation, or the load it serves, meets one of the following criteria:(A) It takes standby service from the electrical corporation on a commission-approved rate schedule that provides for adequate backup planning and operating reserves for the standby customer class.(B) It is not physically interconnected to the electrical transmission or distribution grid, so that, if the customer generation fails, backup electricity is not supplied from the electrical grid.(C) There is physical assurance that the load served by the customer generation will be curtailed concurrently and commensurately with an outage of the customer generation.SEC. 3. Section 454.52 of the Public Utilities Code is amended to read:454.52. (a) (1) Beginning in 2017, and to be updated regularly thereafter, the commission shall adopt a process for each load-serving entity to file an integrated resource plan, and a schedule for periodic updates to the plan, and shall ensure that load-serving entities do all of the following:(A) Meet the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each load-serving entity that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions pursuant to Section 38566 of the Health and Safety Code.(B) Procure at least 60 percent eligible renewable energy resources by December 31, 2030, consistent with the state policy specified in Section 454.53 and Article 16 (commencing with Section 399.11) of Chapter 2.3.(C) Enable each electrical corporation to fulfill its obligation to serve its customers at just and reasonable rates.(D) Minimize impacts on ratepayers bills.(E) (i) Ensure system and local reliability on a short-term, midterm, and long-term basis, including meeting the short-term and forecast long-term resource adequacy requirements of Section 380, and require sufficient, predictable resource procurement and development to avoid unplanned energy supply shortfalls by taking into account impacts due to climate change, forecasted levels of building and transportation electrification, and other factors that can result in those shortfalls.(ii) In furtherance of avoiding unplanned energy supply shortfalls or expensive emergency procurement and ensuring a more accurate understanding of electrical grid operational needs, the commission shall aggregate reported short-term and midterm resource procurement from all load-serving entities conducted under Section 380 or this section and assess midterm resource sufficiency, and annually provide anonymized reports to the Independent System Operator. The commission shall report forward resource procurement using counting conventions that provide the data to the Independent System Operator to be used in its grid planning.(iii) To accomplish clause (i), the commission shall, as part of the integrated planning process, assess short-term, midterm, and long-term reliability by conducting probabilistic reliability modeling, including if there is sufficient capacity available for procurement in the short term and midterm by all load-serving entities to meet their procurement requirements. The commission shall review the results of that reliability modeling in a public proceeding at the same frequency as the forecast conducted in accordance with this section. When modeling short-term and midterm reliability, the commission shall model all procurement consistent with clause (ii) and may rely upon or incorporate probabilistic reliability modeling conducted by the Energy Commission into the commissions public process. The commission shall also report the modeling results in the joint Reliability Planning Assessments conducted under Section 25233 of the Public Resources Code.(F) Comply with paragraph (1) of subdivision (b) of Section 399.13.(G) Strengthen the diversity, sustainability, and resilience of the bulk transmission and distribution systems, and local communities.(H) Enhance distribution systems and demand-side energy management.(I) Minimize localized air pollutants and other greenhouse gas emissions, with early priority on disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.(J) Maintain a diverse portfolio of energy resources, which may include eligible energy resources procured by the Department of Water Resources.(2) (A) The commission may authorize all source procurement for load-serving entities that includes various resource types including demand-side resources, supply-side resources, and resources that may be either demand-side resources or supply-side resources, taking into account the differing load-serving entities geographic service areas, to ensure that each load-serving entity meets the goals set forth in paragraph (1).(B) The commission may approve procurement of resource types that will reduce the overall emissions of greenhouse gases from the electricity sector and meet the other goals specified in paragraph (1), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.(3) In furtherance of the requirements of paragraph (1), the commission shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each load-serving entity meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.(4) (A) On or before September 1, 2024, and consistent with the process and schedule adopted pursuant to paragraph (1), the commission, in consultation with the Energy Commission and the Independent System Operator, shall determine if there is a need for the procurement of eligible energy resources based on a review of the integrated resource plans submitted by load-serving entities in compliance with the requirements of this section and Section 454.53 and the progress towards meeting the portfolio of resources identified pursuant to subdivision (a) of Section 454.51.(B) If the commission determines that there is a need for the procurement of eligible energy resources, the commission shall specify the eligible energy resources that should be procured to meet that need.(C) Within six months of determining that there is a need for the procurement of eligible energy resources, the commission may request the Department of Water Resources to exercise its central procurement function to procure those eligible energy resources specified pursuant to subparagraph (B) that meet the portfolio of resources identified in subdivision (a) of Section 454.51.(D) (i) Upon receiving a request pursuant to subparagraph (C), the Department of Water Resources, before January 1, 2035, may exercise its central procurement function to conduct one or more competitive solicitations and enter into contracts to procure eligible energy resources in order to achieve the policy of the state specified in Section 454.53.(ii) Any contract entered into by the Department of Water Resources pursuant to clause (i) and approved by the commission pursuant to Section 80821 of the Water Code before January 1, 2035, shall remain in force for the duration of the contract.(E) The Department of Water Resources exercising of its central procurement function to procure eligible energy resources pursuant to this paragraph shall be conducted in accordance with Division 29.5 (commencing with Section 80800) of the Water Code.(b) (1) Each load-serving entity shall prepare and file an integrated resource plan consistent with paragraph (2) of subdivision (a) on a time schedule directed by the commission and subject to commission review.(2) (A) Each electrical corporations plan shall follow Section 454.5.(B) Each electrical corporation shall do both of the following for purposes of its integrated resource plan:(i) Require evaluation of surplus interconnection options.(ii) Consider surplus interconnection options.(3) The plan of a community choice aggregator shall be submitted to its governing board for approval and provided to the commission for certification, consistent with paragraph (5) of subdivision (a) of Section 366.2, and shall achieve all of the following:(A) Economic, reliability, environmental, security, and other benefits and performance characteristics that are consistent with the goals set forth in paragraph (1) of subdivision (a).(B) A diversified procurement portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.(C) The resource adequacy requirements established pursuant to Section 380.(4) The plan of an electric service provider shall achieve the goals set forth in paragraph (1) of subdivision (a) through a diversified portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.(c) To the extent that additional procurement is authorized for the electrical corporation in the integrated resource plan or the procurement process authorized pursuant to Section 454.5, the commission shall ensure that the costs are allocated in a fair and equitable manner to all customers consistent with Section 454.51, that there is no cost shifting among customers of load-serving entities, and that community choice aggregators may self-provide renewable integration resources consistent with Section 454.51. The commission may order the procurement of resources with specific attributes by load-serving entities as a result of the integrated resource planning process and shall enforce any resource procurement requirements on a nondiscriminatory basis. Enforcement may include the assessment of penalties for noncompliance.(d) To eliminate redundancy and increase efficiency, the process adopted pursuant to subdivision (a) shall incorporate, and not duplicate, any other planning processes of the commission.(e) This section applies to an electrical cooperative, as defined in Section 2776, only if the electrical cooperative has an annual electrical demand exceeding 700 gigawatthours, as determined based on a three-year average commencing with January 1, 2013.(f) (1) The commission shall not include the energy, capacity, or any attribute from Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025, in the adopted integrated resource plan portfolios, resource stacks, or preferred system plans.(2) The commission shall disallow a load-serving entity from including in their adopted integrated resource plan any energy, capacity, or any attribute from the Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025.(g) For a thermal powerplant that uses nuclear fission technology not constructed in the twenty-first century, all resource attributes shall be retired on January 1, 2031, and shall be reported as a separate, line item resource for purposes of complying with Section 398.4.(h) (1) Only a new energy resource that meets all of the following requirements is eligible to be procured by the Department of Water Resources pursuant to this section:(A) The resource directly supports attainment of the goals specified in Section 454.53 without increasing the states dependence on any fossil fuel-based resources.(B) The resource is determined by the commission to not be under contract at sufficient levels as shown in load-serving entities most recent individual integrated resource plans submitted to and reviewed by the commission pursuant to this section to achieve the goals specified in Section 454.53.(C) The resource has a construction and development lead time of at least five years.(D) The resource does not generate electricity using fossil fuels or fuels derived from fossil fuels.(E) The resource does not use combustion to generate electricity, unless that combustion use is ancillary and necessary to facilitate geothermal electricity generation.(2) Resources from a pump hydroelectric facility may be procured by the Department of Water Resources pursuant to this section if the pump hydroelectric facility does not exceed 500 megawatts and has been directly appropriated funding by the state before January 1, 2023.(i) For purposes of this section, the following definitions apply:(1) Load-serving entity has the same meaning as defined in Section 380.(2) Long term means a time period that includes five or more years in the future.(3) Midterm means a time period between two and five years in the future.(4) Short term means a time period between the present and two years in the future.SEC. 4. Chapter 11 (commencing with Section 8420) is added to Division 4.1 of the Public Utilities Code, to read: CHAPTER 11. Interconnection Capacity and Sharing8420. For purposes of this chapter, both of the following definitions apply:(a) Electrical corporation has the same meaning as defined in Section 218.(b) Local publicly owned electric utility has the same meaning as defined in Section 224.3.8421. Each electrical corporation or local publicly owned electric utility shall use available grid infrastructure through surplus interconnection, such as the addition of renewable energy resources or battery storage at or near fossil plants, to use any available interconnection capacity.SEC. 5. Section 9621 of the Public Utilities Code is amended to read:9621. (a) This section shall apply to a local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours, as determined on a three-year average commencing January 1, 2013.(b) On or before January 1, 2019, the governing board of a local publicly owned electric utility shall adopt an integrated resource plan and a process for updating the plan at least once every five years to ensure the utility achieves all of the following:(1) Meets the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each local publicly owned electric utility that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions of 40 percent from 1990 levels by 2030.(2) Ensures procurement of at least 50 percent eligible renewable energy resources by 2030 consistent with Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1.(3) Meets the goals specified in subparagraphs (D) to (H), inclusive, of paragraph (1) of subdivision (a) of Section 454.52, and the goal specified in subparagraph (C) of paragraph (1) of subdivision (a) of Section 454.52, as that goal is applicable to each local publicly owned electric utility. A local publicly owned electric utility shall not, solely by reason of this paragraph, be subject to requirements otherwise imposed on electrical corporations.(4) In furtherance of the carbon neutrality goals set forth in Executive Order B-55-18 To Achieve Carbon Neutrality (September 10, 2018), each updated integrated resource plan shall include, as applicable, details of the utilitys electrical service rate design that support transportation electrification, and existing or planned incentives to support transportation electrification, including rebates. The rate design shall include details for all applicable transportation sectors, including, but not limited to, on-road and off-road vehicles in the light-, medium-, and heavy-duty sectors. Each integrated resource plan shall also include information about the utilitys customer education and outreach efforts being implemented to inform utility customers of available incentives and decisionmaking tools, such as cost calculators or cost estimates that can assist customers in predicting the cost of paying for electricity for these vehicles.(c) In furtherance of the requirements of subdivision (b), the governing board of a local publicly owned electric utility shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each utility meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.(d) (1) The integrated resource plan shall address procurement for the following:(A) Energy efficiency and demand response resources pursuant to Section 9615.(B) Energy storage requirements pursuant to Chapter 7.7 (commencing with Section 2835) of Part 2 of Division 1.(C) Transportation electrification.(D) A diversified procurement portfolio consisting of both short-term and long-term electricity, electricity-related, and demand response products.(E) The resource adequacy requirements established pursuant to Section 9620.(2) (A) The governing board of the local publicly owned electric utility may authorize all source procurement that includes various resource types, including demand-side resources, supply side resources, and resources that may be either demand-side resources or supply side resources, to ensure that the local publicly owned electric utility procures the optimum resource mix that meets the objectives of subdivision (b).(B) The governing board may authorize procurement of resource types that will reduce overall greenhouse gas emissions from the electricity sector and meet the other goals specified in subdivision (b), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.(e) The governing board of a local publicly owned electric utility shall do both of the following for purposes of its integrated resource plan:(i) Require evaluation of surplus interconnection options.(ii) Consider surplus interconnection options.(e)(f) A local publicly owned electric utility shall satisfy the notice and public disclosure requirements of subdivision (f) of Section 399.30 with respect to any integrated resource plan or plan update it considers.SEC. 6. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because 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 XIIIB of the California Constitution.SECTION 1.Section 745 of the Public Utilities Code is amended to read:745.(a)For purposes of this section, time-variant pricing includes time-of-use rates, critical peak pricing, and real-time pricing, but does not include programs that provide customers with discounts from standard tariff rates as an incentive to reduce consumption at certain times, including peak time rebates.(b)The commission may authorize an electrical corporation to offer residential customers the option of receiving service pursuant to time-variant pricing and to participate in other demand response programs. The commission shall not establish a mandatory or default time-variant pricing tariff for any residential customer except as authorized in subdivision (c).(c)Beginning January 1, 2018, and subject to the commission making the findings required by subdivision (d), the commission may require or authorize an electrical corporation to employ default time-of-use rates for residential customers subject to all of the following:(1)Residential customers receiving a medical baseline allowance pursuant to subdivision (c) of Section 739, customers requesting third-party notification pursuant to subdivision (c) of Section 779.1, customers who the commission has ordered cannot be disconnected from service without an in-person visit from a utility representative (Decision 12-03-054 (March 22, 2012), Decision on Phase II Issues: Adoption of Practices to Reduce the Number of Gas and Electric Service Disconnections, Order 2 (b) at page 55), and other customers designated by the commission in its discretion shall not be subject to default time-of-use rates without their affirmative consent.(2)The commission shall ensure that any time-of-use rate schedule does not cause unreasonable hardship for senior citizens or economically vulnerable customers in hot climate zones.(3)The commission shall strive for time-of-use rate schedules that utilize time periods that are appropriate for at least the following five years.(4)A residential customer shall not be subject to a default time-of-use rate schedule unless that residential customer has been provided with not less than one year of interval usage data from an advanced meter and associated customer education and, following the passage of this period, is provided with no less than two years of bill protection during which the total amount paid by the residential customer for electric service shall not exceed the amount that would have been payable by the residential customer under that customers previous rate schedule.(5)Each electrical corporation shall provide each residential customer, not less than once per year, using a reasonable delivery method of the customers choosing, a summary of available tariff options with a calculation of expected annual bill impacts under each available tariff. The summary shall not be provided to customers who notify the utility that they choose not to receive the summary. The reasonable costs of providing this service shall be recovered in rates.(6)Residential customers have the option to not receive service pursuant to a time-of-use rate schedule and incur no additional charges as a result of the exercise of that option. Prohibited charges include, but are not limited to, administrative fees for switching away from time-of-use rates, hedging premiums that exceed any actual costs of hedging, and more than a proportional share of any discounts or other incentives paid to customers to increase participation in time-of-use rates. This prohibition on additional charges is not intended to ensure that a customer will necessarily experience a lower total bill as a result of the exercise of the option to not receive service pursuant to a time-of-use rate schedule.(d)The commission shall not require or authorize an electrical corporation to employ default time-of-use rates for residential customers unless it has first explicitly considered evidence addressing the extent to which hardship will be caused on either of the following:(1)Customers located in hot, inland areas, assuming no changes in overall usage by those customers during peak periods.(2)Residential customers living in areas with hot summer weather, as a result of seasonal bill volatility, assuming no change in summertime usage or in usage during peak periods.
Amended IN Assembly April 21, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 1408Introduced by Assembly Member IrwinFebruary 21, 2025An act to amend Section 745 of amend Sections 345.5, 380, 454.52, and 9621 of, and to add Chapter 11 (commencing with Section 8420) to Division 4.1 of, the Public Utilities Code, relating to electricity. LEGISLATIVE COUNSEL'S DIGESTAB 1408, as amended, Irwin. Electricity: rates. interconnections.Existing law establishes the Independent System Operator (ISO) as a nonprofit, public benefit corporation and requires the ISO, among other duties, to ensure the efficient use and reliable operation of the transmission grid consistent with the achievement of planning and operating reserve criteria, as provided.This bill would require the ISO to integrate surplus interconnection considerations into its long-term transmission planning and enhance transparency around surplus interconnection opportunities.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. Existing law authorizes the commission to require or authorize an electrical corporation to employ default time-of-use rates to residential customers, subject to specified limitations and conditions. Existing law prohibits a residential customer from being subject to a default time-of-use rate schedule unless that residential customer has been provided with not less than one year of interval usage data from an advanced meter and associated customer education and, following the passage of this period, is provided with no less than one year of bill protection during which the total amount paid by the residential customer for electric service shall not exceed the amount that would have been payable by the residential customer under that customers previous rate schedule. corporations, while local publicly owned electric utilities are under the direction of their governing boards.This bill would require that the customer be provided with no less than 2 years, instead of one year, of bill protection during which the total amount paid by the residential customer for electric service is prohibited from exceeding the amount that would have been payable by the residential customer under that customers previous rate schedule.Existing law requires the commission, in consultation with the ISO, to establish resource adequacy requirements for all load-serving entities, as defined. Existing law requires each load-serving entity to, at a minimum, meet certain minimum planning reserve and reliability criteria, as specified.This bill would require each load-serving entity to prioritize available capacity for renewable energy development.Existing law requires the commission to adopt a process for each load-serving entity to file an integrated resource plan, adopt a schedule for periodic updates to the plan, and ensure each load-serving entity take specified actions, as specified. Existing law also requires the governing board of each local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours to adopt an integrated resource plan and a process for updating the plan at least once every 5 years to ensure the utility achieves certain goals, as specified.This bill would require each electrical corporation, and each local publicly owned utility with an annual electrical demand exceeding 700 gigawatthours, to require the evaluation of surplus interconnection options and to consider surplus interconnection options, for purposes of its integrated resource plan.This bill would also require each electrical corporation or local publicly owned electric utility to use available grid infrastructure through surplus interconnection to use any available interconnection capacity, as specified.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 certain provisions of this bill would be part of the act and a violation of a commission action implementing the bills requirements would be a crime, the bill would impose a state-mandated local program.Additionally, by imposing new duties on local publicly owned electric utilities, 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 specified reasons.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOYES
Amended IN Assembly April 21, 2025
Amended IN Assembly April 21, 2025
CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION
Assembly Bill
No. 1408
Introduced by Assembly Member IrwinFebruary 21, 2025
Introduced by Assembly Member Irwin
February 21, 2025
An act to amend Section 745 of amend Sections 345.5, 380, 454.52, and 9621 of, and to add Chapter 11 (commencing with Section 8420) to Division 4.1 of, the Public Utilities Code, relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 1408, as amended, Irwin. Electricity: rates. interconnections.
Existing law establishes the Independent System Operator (ISO) as a nonprofit, public benefit corporation and requires the ISO, among other duties, to ensure the efficient use and reliable operation of the transmission grid consistent with the achievement of planning and operating reserve criteria, as provided.This bill would require the ISO to integrate surplus interconnection considerations into its long-term transmission planning and enhance transparency around surplus interconnection opportunities.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. Existing law authorizes the commission to require or authorize an electrical corporation to employ default time-of-use rates to residential customers, subject to specified limitations and conditions. Existing law prohibits a residential customer from being subject to a default time-of-use rate schedule unless that residential customer has been provided with not less than one year of interval usage data from an advanced meter and associated customer education and, following the passage of this period, is provided with no less than one year of bill protection during which the total amount paid by the residential customer for electric service shall not exceed the amount that would have been payable by the residential customer under that customers previous rate schedule. corporations, while local publicly owned electric utilities are under the direction of their governing boards.This bill would require that the customer be provided with no less than 2 years, instead of one year, of bill protection during which the total amount paid by the residential customer for electric service is prohibited from exceeding the amount that would have been payable by the residential customer under that customers previous rate schedule.Existing law requires the commission, in consultation with the ISO, to establish resource adequacy requirements for all load-serving entities, as defined. Existing law requires each load-serving entity to, at a minimum, meet certain minimum planning reserve and reliability criteria, as specified.This bill would require each load-serving entity to prioritize available capacity for renewable energy development.Existing law requires the commission to adopt a process for each load-serving entity to file an integrated resource plan, adopt a schedule for periodic updates to the plan, and ensure each load-serving entity take specified actions, as specified. Existing law also requires the governing board of each local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours to adopt an integrated resource plan and a process for updating the plan at least once every 5 years to ensure the utility achieves certain goals, as specified.This bill would require each electrical corporation, and each local publicly owned utility with an annual electrical demand exceeding 700 gigawatthours, to require the evaluation of surplus interconnection options and to consider surplus interconnection options, for purposes of its integrated resource plan.This bill would also require each electrical corporation or local publicly owned electric utility to use available grid infrastructure through surplus interconnection to use any available interconnection capacity, as specified.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 certain provisions of this bill would be part of the act and a violation of a commission action implementing the bills requirements would be a crime, the bill would impose a state-mandated local program.Additionally, by imposing new duties on local publicly owned electric utilities, 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 specified reasons.
Existing law establishes the Independent System Operator (ISO) as a nonprofit, public benefit corporation and requires the ISO, among other duties, to ensure the efficient use and reliable operation of the transmission grid consistent with the achievement of planning and operating reserve criteria, as provided.
This bill would require the ISO to integrate surplus interconnection considerations into its long-term transmission planning and enhance transparency around surplus interconnection opportunities.
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. Existing law authorizes the commission to require or authorize an electrical corporation to employ default time-of-use rates to residential customers, subject to specified limitations and conditions. Existing law prohibits a residential customer from being subject to a default time-of-use rate schedule unless that residential customer has been provided with not less than one year of interval usage data from an advanced meter and associated customer education and, following the passage of this period, is provided with no less than one year of bill protection during which the total amount paid by the residential customer for electric service shall not exceed the amount that would have been payable by the residential customer under that customers previous rate schedule. corporations, while local publicly owned electric utilities are under the direction of their governing boards.
This bill would require that the customer be provided with no less than 2 years, instead of one year, of bill protection during which the total amount paid by the residential customer for electric service is prohibited from exceeding the amount that would have been payable by the residential customer under that customers previous rate schedule.
Existing law requires the commission, in consultation with the ISO, to establish resource adequacy requirements for all load-serving entities, as defined. Existing law requires each load-serving entity to, at a minimum, meet certain minimum planning reserve and reliability criteria, as specified.
This bill would require each load-serving entity to prioritize available capacity for renewable energy development.
Existing law requires the commission to adopt a process for each load-serving entity to file an integrated resource plan, adopt a schedule for periodic updates to the plan, and ensure each load-serving entity take specified actions, as specified. Existing law also requires the governing board of each local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours to adopt an integrated resource plan and a process for updating the plan at least once every 5 years to ensure the utility achieves certain goals, as specified.
This bill would require each electrical corporation, and each local publicly owned utility with an annual electrical demand exceeding 700 gigawatthours, to require the evaluation of surplus interconnection options and to consider surplus interconnection options, for purposes of its integrated resource plan.
This bill would also require each electrical corporation or local publicly owned electric utility to use available grid infrastructure through surplus interconnection to use any available interconnection capacity, as specified.
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 certain provisions of this bill would be part of the act and a violation of a commission action implementing the bills requirements would be a crime, the bill would impose a state-mandated local program.
Additionally, by imposing new duties on local publicly owned electric utilities, 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 specified reasons.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Section 345.5 of the Public Utilities Code is amended to read:345.5. (a) The Independent System Operator, as a nonprofit, public benefit corporation, shall conduct its operations consistent with applicable state and federal laws and consistent with the interests of the people of the state.(b) To ensure the reliability of electric service and the health and safety of the public, the Independent System Operator shall manage the transmission grid and related energy markets in a manner that is consistent with all of the following:(1) Making the most efficient use of available energy resources. For purposes of this section, available energy resources include energy, capacity, ancillary services, and demand bid into markets administered by the Independent System Operator. Available energy resources do not include a schedule submitted to the Independent System Operator by an electrical corporation or a local publicly owned electric utility to meet its own customer load.(2) Reducing, to the extent possible, overall economic cost to the states consumers.(3) Applicable state law intended to protect the publics health and the environment.(4) Maximizing availability of existing electric generation resources necessary to meet the needs of the states electricity consumers.(5) Conducting internal operations in a manner that minimizes cost impact on ratepayers to the extent practicable and consistent with the provisions of this chapter.(6) Communicating with all balancing area authorities in California in a manner that supports electrical reliability.(c) The Independent System Operator shall do all of the following:(1) Consult and coordinate with appropriate state and local agencies to ensure that the Independent System Operator operates in furtherance of state law regarding consumer and environmental protection.(2) Ensure that the purposes and functions of the Independent System Operator are consistent with the purposes and functions of nonprofit, public benefit corporations in the state, including duties of care and conflict-of-interest standards for officers and directors of a corporation.(3) Maintain open meeting standards and meeting notice requirements consistent with the general policies of the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code) and affording the public the greatest possible access, consistent with other duties of the corporation. The Independent System Operators Open Meeting Policy, as adopted on April 23, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the Bagley-Keene Open Meeting Act than its policy in effect as of May 1, 2002.(4) Provide public access to corporate records consistent with the general policies of the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) and affording the public the greatest possible access, consistent with the other duties of the corporation. The Independent System Operators Information Availability Policy, as adopted on October 22, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the California Public Records Act than its policy in effect as of May 1, 2002.(5) Integrate surplus interconnection considerations into its long-term transmission planning and enhance transparency around surplus interconnection opportunities.SEC. 2. Section 380 of the Public Utilities Code is amended to read:380. (a) The commission, in consultation with the Independent System Operator, shall establish resource adequacy requirements for all load-serving entities.(b) In establishing resource adequacy requirements, the commission shall ensure the reliability of electrical service in California while advancing, to the extent possible, the states goals for clean energy, reducing air pollution, and reducing emissions of greenhouse gases. The resource adequacy program shall achieve all of the following objectives:(1) Facilitate the development of new generating, nongenerating, and hybrid capacity and the retention of existing generating, nongenerating, and hybrid capacity that is economical and needed for reliability and to achieve the state policy specified in Section 454.53.(2) Establish new, or maintain existing, demand response products and tariffs that facilitate the economical dispatch and use of demand response that can either meet or reduce an electrical corporations resource adequacy requirements, as determined by the commission.(3) Equitably allocate the cost of generating capacity and demand response in a manner that prevents the shifting of costs between customer classes.(4) Minimize enforcement requirements and costs.(5) Consideration of mitigation measures, if the commission determines they are needed, to reduce costs to ratepayers.(6) Maximize the ability of community choice aggregators to determine the generation resources used to serve their customers.(c) Each load-serving entity shall maintain physical generating capacity and electrical demand response adequate to meet its load requirements, including, but not limited to, peak demand and planning and operating reserves. The generating capacity or electrical demand response shall be deliverable to locations and at times as may be necessary to maintain electrical service system reliability, local area reliability, and flexibility.(d) (1) Each load-serving entity shall, at a minimum, meet the most recent minimum planning reserve and reliability criteria approved by the board of directors of the Western Systems Coordinating Council or the Western Electricity Coordinating Council.(2) Each load-serving entity shall prioritize available capacity for renewable energy development.(e) The commission shall implement and enforce the resource adequacy requirements established in accordance with this section in a nondiscriminatory manner. Each load-serving entity shall be subject to the same requirements for resource adequacy, the renewables portfolio standard program, and the integrated resource planning process pursuant to Section 454.52 that apply to electrical corporations pursuant to this section, or are otherwise required by law or by order or decision of the commission. The commission shall exercise its enforcement powers to ensure compliance by all load-serving entities.(f) (1) The commission shall require sufficient information, including, but not limited to, anticipated load, actual load, and measures undertaken by a load-serving entity to ensure resource adequacy, to be reported to enable the commission to determine compliance with the resource adequacy requirements established by the commission.(2) The commission shall calculate and publish annually on its internet website, in a new report or as part of another report, the percentage of each load-serving entitys local and system resource adequacy requirements from the previous calendar year that was met with capacity from eligible renewable energy resources pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11)), other zero-carbon resources, including large hydroelectric and nuclear resources, or energy storage resources. In determining the percentage of each load-serving entitys resource adequacy requirements, the commission shall include all directly owned or contracted resources and each load-serving entitys allocation of any centrally procured resources or allocation of resources pursuant to any other mechanism that involves an assignment or allocation of resources purchased or owned by a single buyer, and shall exclude any share of a load-serving entitys resources that were allocated to another load-serving entity.(g) An electrical corporations costs of meeting or reducing resource adequacy requirements, including, but not limited to, the costs associated with system reliability, local area reliability, or flexible resource adequacy, that are determined to be reasonable by the commission, or are otherwise recoverable under a procurement plan approved by the commission pursuant to Section 454.5, shall be fully recoverable from those customers on whose behalf the costs are incurred, as determined by the commission, at the time the commitment to incur the cost is made, on a fully nonbypassable basis, as determined by the commission. The commission shall exclude any amounts authorized to be recovered pursuant to Section 366.2 when authorizing the amount of costs to be recovered from customers of a community choice aggregator or from customers that purchase electricity through a direct transaction pursuant to this subdivision.(h) The commission shall determine and authorize the most efficient and equitable means for achieving all of the following:(1) Meeting the objectives of this section.(2) Ensuring that investment is made in new generating capacity.(3) Ensuring that existing generating capacity that is economical is retained to ensure reliability.(4) Ensuring that the resource adequacy program can reasonably maintain a standard measure of reliability, such as a one-day-in-10-year loss-of-load expectation or a similarly robust reliability metric adopted by the commission, and use it for planning purposes.(5) Ensuring that the cost of generating capacity and demand response is allocated equitably.(6) Ensuring that community choice aggregators can determine the generation resources used to serve their customers.(7) Ensuring that investments are made in new and existing demand response resources that are cost effective and help to achieve electrical grid reliability and the states goals for reducing emissions of greenhouse gases.(8) Minimizing the need for backstop procurement by the Independent System Operator.(i) In making the determination pursuant to subdivision (h), the commission may consider a centralized resource adequacy mechanism among other options.(j) The commission shall ensure appropriate valuation of both supply and load modifying demand response resources. The commission, in an existing or new proceeding, shall establish a mechanism to value load modifying demand response resources, including, but not limited to, the ability of demand response resources to help meet distribution needs and transmission system needs and to help reduce a load-serving entitys resource adequacy obligation pursuant to this section. In determining this value, the commission shall consider how these resources further the states electrical grid reliability and the states goals for reducing emissions of greenhouse gases. The commission, Energy Commission, and Independent System Operator shall coordinate to jointly ensure that changes in demand caused by load modifying demand response are expeditiously and comprehensively reflected in the Energy Commissions Integrated Energy Policy Report forecast and in planning proceedings and associated analyses, and shall encourage reflection of these changes in demand in the operation of the grid.(k) For purposes of this section, load-serving entity means an electrical corporation, electric service provider, or community choice aggregator. Load-serving entity does not include any of the following:(1) A local publicly owned electric utility.(2) The State Water Resources Development System commonly known as the State Water Project.(3) Customer generation located on the customers site or providing electric service through arrangements authorized by Section 218, if the customer generation, or the load it serves, meets one of the following criteria:(A) It takes standby service from the electrical corporation on a commission-approved rate schedule that provides for adequate backup planning and operating reserves for the standby customer class.(B) It is not physically interconnected to the electrical transmission or distribution grid, so that, if the customer generation fails, backup electricity is not supplied from the electrical grid.(C) There is physical assurance that the load served by the customer generation will be curtailed concurrently and commensurately with an outage of the customer generation.SEC. 3. Section 454.52 of the Public Utilities Code is amended to read:454.52. (a) (1) Beginning in 2017, and to be updated regularly thereafter, the commission shall adopt a process for each load-serving entity to file an integrated resource plan, and a schedule for periodic updates to the plan, and shall ensure that load-serving entities do all of the following:(A) Meet the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each load-serving entity that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions pursuant to Section 38566 of the Health and Safety Code.(B) Procure at least 60 percent eligible renewable energy resources by December 31, 2030, consistent with the state policy specified in Section 454.53 and Article 16 (commencing with Section 399.11) of Chapter 2.3.(C) Enable each electrical corporation to fulfill its obligation to serve its customers at just and reasonable rates.(D) Minimize impacts on ratepayers bills.(E) (i) Ensure system and local reliability on a short-term, midterm, and long-term basis, including meeting the short-term and forecast long-term resource adequacy requirements of Section 380, and require sufficient, predictable resource procurement and development to avoid unplanned energy supply shortfalls by taking into account impacts due to climate change, forecasted levels of building and transportation electrification, and other factors that can result in those shortfalls.(ii) In furtherance of avoiding unplanned energy supply shortfalls or expensive emergency procurement and ensuring a more accurate understanding of electrical grid operational needs, the commission shall aggregate reported short-term and midterm resource procurement from all load-serving entities conducted under Section 380 or this section and assess midterm resource sufficiency, and annually provide anonymized reports to the Independent System Operator. The commission shall report forward resource procurement using counting conventions that provide the data to the Independent System Operator to be used in its grid planning.(iii) To accomplish clause (i), the commission shall, as part of the integrated planning process, assess short-term, midterm, and long-term reliability by conducting probabilistic reliability modeling, including if there is sufficient capacity available for procurement in the short term and midterm by all load-serving entities to meet their procurement requirements. The commission shall review the results of that reliability modeling in a public proceeding at the same frequency as the forecast conducted in accordance with this section. When modeling short-term and midterm reliability, the commission shall model all procurement consistent with clause (ii) and may rely upon or incorporate probabilistic reliability modeling conducted by the Energy Commission into the commissions public process. The commission shall also report the modeling results in the joint Reliability Planning Assessments conducted under Section 25233 of the Public Resources Code.(F) Comply with paragraph (1) of subdivision (b) of Section 399.13.(G) Strengthen the diversity, sustainability, and resilience of the bulk transmission and distribution systems, and local communities.(H) Enhance distribution systems and demand-side energy management.(I) Minimize localized air pollutants and other greenhouse gas emissions, with early priority on disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.(J) Maintain a diverse portfolio of energy resources, which may include eligible energy resources procured by the Department of Water Resources.(2) (A) The commission may authorize all source procurement for load-serving entities that includes various resource types including demand-side resources, supply-side resources, and resources that may be either demand-side resources or supply-side resources, taking into account the differing load-serving entities geographic service areas, to ensure that each load-serving entity meets the goals set forth in paragraph (1).(B) The commission may approve procurement of resource types that will reduce the overall emissions of greenhouse gases from the electricity sector and meet the other goals specified in paragraph (1), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.(3) In furtherance of the requirements of paragraph (1), the commission shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each load-serving entity meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.(4) (A) On or before September 1, 2024, and consistent with the process and schedule adopted pursuant to paragraph (1), the commission, in consultation with the Energy Commission and the Independent System Operator, shall determine if there is a need for the procurement of eligible energy resources based on a review of the integrated resource plans submitted by load-serving entities in compliance with the requirements of this section and Section 454.53 and the progress towards meeting the portfolio of resources identified pursuant to subdivision (a) of Section 454.51.(B) If the commission determines that there is a need for the procurement of eligible energy resources, the commission shall specify the eligible energy resources that should be procured to meet that need.(C) Within six months of determining that there is a need for the procurement of eligible energy resources, the commission may request the Department of Water Resources to exercise its central procurement function to procure those eligible energy resources specified pursuant to subparagraph (B) that meet the portfolio of resources identified in subdivision (a) of Section 454.51.(D) (i) Upon receiving a request pursuant to subparagraph (C), the Department of Water Resources, before January 1, 2035, may exercise its central procurement function to conduct one or more competitive solicitations and enter into contracts to procure eligible energy resources in order to achieve the policy of the state specified in Section 454.53.(ii) Any contract entered into by the Department of Water Resources pursuant to clause (i) and approved by the commission pursuant to Section 80821 of the Water Code before January 1, 2035, shall remain in force for the duration of the contract.(E) The Department of Water Resources exercising of its central procurement function to procure eligible energy resources pursuant to this paragraph shall be conducted in accordance with Division 29.5 (commencing with Section 80800) of the Water Code.(b) (1) Each load-serving entity shall prepare and file an integrated resource plan consistent with paragraph (2) of subdivision (a) on a time schedule directed by the commission and subject to commission review.(2) (A) Each electrical corporations plan shall follow Section 454.5.(B) Each electrical corporation shall do both of the following for purposes of its integrated resource plan:(i) Require evaluation of surplus interconnection options.(ii) Consider surplus interconnection options.(3) The plan of a community choice aggregator shall be submitted to its governing board for approval and provided to the commission for certification, consistent with paragraph (5) of subdivision (a) of Section 366.2, and shall achieve all of the following:(A) Economic, reliability, environmental, security, and other benefits and performance characteristics that are consistent with the goals set forth in paragraph (1) of subdivision (a).(B) A diversified procurement portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.(C) The resource adequacy requirements established pursuant to Section 380.(4) The plan of an electric service provider shall achieve the goals set forth in paragraph (1) of subdivision (a) through a diversified portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.(c) To the extent that additional procurement is authorized for the electrical corporation in the integrated resource plan or the procurement process authorized pursuant to Section 454.5, the commission shall ensure that the costs are allocated in a fair and equitable manner to all customers consistent with Section 454.51, that there is no cost shifting among customers of load-serving entities, and that community choice aggregators may self-provide renewable integration resources consistent with Section 454.51. The commission may order the procurement of resources with specific attributes by load-serving entities as a result of the integrated resource planning process and shall enforce any resource procurement requirements on a nondiscriminatory basis. Enforcement may include the assessment of penalties for noncompliance.(d) To eliminate redundancy and increase efficiency, the process adopted pursuant to subdivision (a) shall incorporate, and not duplicate, any other planning processes of the commission.(e) This section applies to an electrical cooperative, as defined in Section 2776, only if the electrical cooperative has an annual electrical demand exceeding 700 gigawatthours, as determined based on a three-year average commencing with January 1, 2013.(f) (1) The commission shall not include the energy, capacity, or any attribute from Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025, in the adopted integrated resource plan portfolios, resource stacks, or preferred system plans.(2) The commission shall disallow a load-serving entity from including in their adopted integrated resource plan any energy, capacity, or any attribute from the Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025.(g) For a thermal powerplant that uses nuclear fission technology not constructed in the twenty-first century, all resource attributes shall be retired on January 1, 2031, and shall be reported as a separate, line item resource for purposes of complying with Section 398.4.(h) (1) Only a new energy resource that meets all of the following requirements is eligible to be procured by the Department of Water Resources pursuant to this section:(A) The resource directly supports attainment of the goals specified in Section 454.53 without increasing the states dependence on any fossil fuel-based resources.(B) The resource is determined by the commission to not be under contract at sufficient levels as shown in load-serving entities most recent individual integrated resource plans submitted to and reviewed by the commission pursuant to this section to achieve the goals specified in Section 454.53.(C) The resource has a construction and development lead time of at least five years.(D) The resource does not generate electricity using fossil fuels or fuels derived from fossil fuels.(E) The resource does not use combustion to generate electricity, unless that combustion use is ancillary and necessary to facilitate geothermal electricity generation.(2) Resources from a pump hydroelectric facility may be procured by the Department of Water Resources pursuant to this section if the pump hydroelectric facility does not exceed 500 megawatts and has been directly appropriated funding by the state before January 1, 2023.(i) For purposes of this section, the following definitions apply:(1) Load-serving entity has the same meaning as defined in Section 380.(2) Long term means a time period that includes five or more years in the future.(3) Midterm means a time period between two and five years in the future.(4) Short term means a time period between the present and two years in the future.SEC. 4. Chapter 11 (commencing with Section 8420) is added to Division 4.1 of the Public Utilities Code, to read: CHAPTER 11. Interconnection Capacity and Sharing8420. For purposes of this chapter, both of the following definitions apply:(a) Electrical corporation has the same meaning as defined in Section 218.(b) Local publicly owned electric utility has the same meaning as defined in Section 224.3.8421. Each electrical corporation or local publicly owned electric utility shall use available grid infrastructure through surplus interconnection, such as the addition of renewable energy resources or battery storage at or near fossil plants, to use any available interconnection capacity.SEC. 5. Section 9621 of the Public Utilities Code is amended to read:9621. (a) This section shall apply to a local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours, as determined on a three-year average commencing January 1, 2013.(b) On or before January 1, 2019, the governing board of a local publicly owned electric utility shall adopt an integrated resource plan and a process for updating the plan at least once every five years to ensure the utility achieves all of the following:(1) Meets the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each local publicly owned electric utility that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions of 40 percent from 1990 levels by 2030.(2) Ensures procurement of at least 50 percent eligible renewable energy resources by 2030 consistent with Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1.(3) Meets the goals specified in subparagraphs (D) to (H), inclusive, of paragraph (1) of subdivision (a) of Section 454.52, and the goal specified in subparagraph (C) of paragraph (1) of subdivision (a) of Section 454.52, as that goal is applicable to each local publicly owned electric utility. A local publicly owned electric utility shall not, solely by reason of this paragraph, be subject to requirements otherwise imposed on electrical corporations.(4) In furtherance of the carbon neutrality goals set forth in Executive Order B-55-18 To Achieve Carbon Neutrality (September 10, 2018), each updated integrated resource plan shall include, as applicable, details of the utilitys electrical service rate design that support transportation electrification, and existing or planned incentives to support transportation electrification, including rebates. The rate design shall include details for all applicable transportation sectors, including, but not limited to, on-road and off-road vehicles in the light-, medium-, and heavy-duty sectors. Each integrated resource plan shall also include information about the utilitys customer education and outreach efforts being implemented to inform utility customers of available incentives and decisionmaking tools, such as cost calculators or cost estimates that can assist customers in predicting the cost of paying for electricity for these vehicles.(c) In furtherance of the requirements of subdivision (b), the governing board of a local publicly owned electric utility shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each utility meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.(d) (1) The integrated resource plan shall address procurement for the following:(A) Energy efficiency and demand response resources pursuant to Section 9615.(B) Energy storage requirements pursuant to Chapter 7.7 (commencing with Section 2835) of Part 2 of Division 1.(C) Transportation electrification.(D) A diversified procurement portfolio consisting of both short-term and long-term electricity, electricity-related, and demand response products.(E) The resource adequacy requirements established pursuant to Section 9620.(2) (A) The governing board of the local publicly owned electric utility may authorize all source procurement that includes various resource types, including demand-side resources, supply side resources, and resources that may be either demand-side resources or supply side resources, to ensure that the local publicly owned electric utility procures the optimum resource mix that meets the objectives of subdivision (b).(B) The governing board may authorize procurement of resource types that will reduce overall greenhouse gas emissions from the electricity sector and meet the other goals specified in subdivision (b), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.(e) The governing board of a local publicly owned electric utility shall do both of the following for purposes of its integrated resource plan:(i) Require evaluation of surplus interconnection options.(ii) Consider surplus interconnection options.(e)(f) A local publicly owned electric utility shall satisfy the notice and public disclosure requirements of subdivision (f) of Section 399.30 with respect to any integrated resource plan or plan update it considers.SEC. 6. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because 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 XIIIB of the California Constitution.SECTION 1.Section 745 of the Public Utilities Code is amended to read:745.(a)For purposes of this section, time-variant pricing includes time-of-use rates, critical peak pricing, and real-time pricing, but does not include programs that provide customers with discounts from standard tariff rates as an incentive to reduce consumption at certain times, including peak time rebates.(b)The commission may authorize an electrical corporation to offer residential customers the option of receiving service pursuant to time-variant pricing and to participate in other demand response programs. The commission shall not establish a mandatory or default time-variant pricing tariff for any residential customer except as authorized in subdivision (c).(c)Beginning January 1, 2018, and subject to the commission making the findings required by subdivision (d), the commission may require or authorize an electrical corporation to employ default time-of-use rates for residential customers subject to all of the following:(1)Residential customers receiving a medical baseline allowance pursuant to subdivision (c) of Section 739, customers requesting third-party notification pursuant to subdivision (c) of Section 779.1, customers who the commission has ordered cannot be disconnected from service without an in-person visit from a utility representative (Decision 12-03-054 (March 22, 2012), Decision on Phase II Issues: Adoption of Practices to Reduce the Number of Gas and Electric Service Disconnections, Order 2 (b) at page 55), and other customers designated by the commission in its discretion shall not be subject to default time-of-use rates without their affirmative consent.(2)The commission shall ensure that any time-of-use rate schedule does not cause unreasonable hardship for senior citizens or economically vulnerable customers in hot climate zones.(3)The commission shall strive for time-of-use rate schedules that utilize time periods that are appropriate for at least the following five years.(4)A residential customer shall not be subject to a default time-of-use rate schedule unless that residential customer has been provided with not less than one year of interval usage data from an advanced meter and associated customer education and, following the passage of this period, is provided with no less than two years of bill protection during which the total amount paid by the residential customer for electric service shall not exceed the amount that would have been payable by the residential customer under that customers previous rate schedule.(5)Each electrical corporation shall provide each residential customer, not less than once per year, using a reasonable delivery method of the customers choosing, a summary of available tariff options with a calculation of expected annual bill impacts under each available tariff. The summary shall not be provided to customers who notify the utility that they choose not to receive the summary. The reasonable costs of providing this service shall be recovered in rates.(6)Residential customers have the option to not receive service pursuant to a time-of-use rate schedule and incur no additional charges as a result of the exercise of that option. Prohibited charges include, but are not limited to, administrative fees for switching away from time-of-use rates, hedging premiums that exceed any actual costs of hedging, and more than a proportional share of any discounts or other incentives paid to customers to increase participation in time-of-use rates. This prohibition on additional charges is not intended to ensure that a customer will necessarily experience a lower total bill as a result of the exercise of the option to not receive service pursuant to a time-of-use rate schedule.(d)The commission shall not require or authorize an electrical corporation to employ default time-of-use rates for residential customers unless it has first explicitly considered evidence addressing the extent to which hardship will be caused on either of the following:(1)Customers located in hot, inland areas, assuming no changes in overall usage by those customers during peak periods.(2)Residential customers living in areas with hot summer weather, as a result of seasonal bill volatility, assuming no change in summertime usage or in usage during peak periods.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Section 345.5 of the Public Utilities Code is amended to read:345.5. (a) The Independent System Operator, as a nonprofit, public benefit corporation, shall conduct its operations consistent with applicable state and federal laws and consistent with the interests of the people of the state.(b) To ensure the reliability of electric service and the health and safety of the public, the Independent System Operator shall manage the transmission grid and related energy markets in a manner that is consistent with all of the following:(1) Making the most efficient use of available energy resources. For purposes of this section, available energy resources include energy, capacity, ancillary services, and demand bid into markets administered by the Independent System Operator. Available energy resources do not include a schedule submitted to the Independent System Operator by an electrical corporation or a local publicly owned electric utility to meet its own customer load.(2) Reducing, to the extent possible, overall economic cost to the states consumers.(3) Applicable state law intended to protect the publics health and the environment.(4) Maximizing availability of existing electric generation resources necessary to meet the needs of the states electricity consumers.(5) Conducting internal operations in a manner that minimizes cost impact on ratepayers to the extent practicable and consistent with the provisions of this chapter.(6) Communicating with all balancing area authorities in California in a manner that supports electrical reliability.(c) The Independent System Operator shall do all of the following:(1) Consult and coordinate with appropriate state and local agencies to ensure that the Independent System Operator operates in furtherance of state law regarding consumer and environmental protection.(2) Ensure that the purposes and functions of the Independent System Operator are consistent with the purposes and functions of nonprofit, public benefit corporations in the state, including duties of care and conflict-of-interest standards for officers and directors of a corporation.(3) Maintain open meeting standards and meeting notice requirements consistent with the general policies of the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code) and affording the public the greatest possible access, consistent with other duties of the corporation. The Independent System Operators Open Meeting Policy, as adopted on April 23, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the Bagley-Keene Open Meeting Act than its policy in effect as of May 1, 2002.(4) Provide public access to corporate records consistent with the general policies of the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) and affording the public the greatest possible access, consistent with the other duties of the corporation. The Independent System Operators Information Availability Policy, as adopted on October 22, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the California Public Records Act than its policy in effect as of May 1, 2002.(5) Integrate surplus interconnection considerations into its long-term transmission planning and enhance transparency around surplus interconnection opportunities.
SECTION 1. Section 345.5 of the Public Utilities Code is amended to read:
### SECTION 1.
345.5. (a) The Independent System Operator, as a nonprofit, public benefit corporation, shall conduct its operations consistent with applicable state and federal laws and consistent with the interests of the people of the state.(b) To ensure the reliability of electric service and the health and safety of the public, the Independent System Operator shall manage the transmission grid and related energy markets in a manner that is consistent with all of the following:(1) Making the most efficient use of available energy resources. For purposes of this section, available energy resources include energy, capacity, ancillary services, and demand bid into markets administered by the Independent System Operator. Available energy resources do not include a schedule submitted to the Independent System Operator by an electrical corporation or a local publicly owned electric utility to meet its own customer load.(2) Reducing, to the extent possible, overall economic cost to the states consumers.(3) Applicable state law intended to protect the publics health and the environment.(4) Maximizing availability of existing electric generation resources necessary to meet the needs of the states electricity consumers.(5) Conducting internal operations in a manner that minimizes cost impact on ratepayers to the extent practicable and consistent with the provisions of this chapter.(6) Communicating with all balancing area authorities in California in a manner that supports electrical reliability.(c) The Independent System Operator shall do all of the following:(1) Consult and coordinate with appropriate state and local agencies to ensure that the Independent System Operator operates in furtherance of state law regarding consumer and environmental protection.(2) Ensure that the purposes and functions of the Independent System Operator are consistent with the purposes and functions of nonprofit, public benefit corporations in the state, including duties of care and conflict-of-interest standards for officers and directors of a corporation.(3) Maintain open meeting standards and meeting notice requirements consistent with the general policies of the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code) and affording the public the greatest possible access, consistent with other duties of the corporation. The Independent System Operators Open Meeting Policy, as adopted on April 23, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the Bagley-Keene Open Meeting Act than its policy in effect as of May 1, 2002.(4) Provide public access to corporate records consistent with the general policies of the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) and affording the public the greatest possible access, consistent with the other duties of the corporation. The Independent System Operators Information Availability Policy, as adopted on October 22, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the California Public Records Act than its policy in effect as of May 1, 2002.(5) Integrate surplus interconnection considerations into its long-term transmission planning and enhance transparency around surplus interconnection opportunities.
345.5. (a) The Independent System Operator, as a nonprofit, public benefit corporation, shall conduct its operations consistent with applicable state and federal laws and consistent with the interests of the people of the state.(b) To ensure the reliability of electric service and the health and safety of the public, the Independent System Operator shall manage the transmission grid and related energy markets in a manner that is consistent with all of the following:(1) Making the most efficient use of available energy resources. For purposes of this section, available energy resources include energy, capacity, ancillary services, and demand bid into markets administered by the Independent System Operator. Available energy resources do not include a schedule submitted to the Independent System Operator by an electrical corporation or a local publicly owned electric utility to meet its own customer load.(2) Reducing, to the extent possible, overall economic cost to the states consumers.(3) Applicable state law intended to protect the publics health and the environment.(4) Maximizing availability of existing electric generation resources necessary to meet the needs of the states electricity consumers.(5) Conducting internal operations in a manner that minimizes cost impact on ratepayers to the extent practicable and consistent with the provisions of this chapter.(6) Communicating with all balancing area authorities in California in a manner that supports electrical reliability.(c) The Independent System Operator shall do all of the following:(1) Consult and coordinate with appropriate state and local agencies to ensure that the Independent System Operator operates in furtherance of state law regarding consumer and environmental protection.(2) Ensure that the purposes and functions of the Independent System Operator are consistent with the purposes and functions of nonprofit, public benefit corporations in the state, including duties of care and conflict-of-interest standards for officers and directors of a corporation.(3) Maintain open meeting standards and meeting notice requirements consistent with the general policies of the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code) and affording the public the greatest possible access, consistent with other duties of the corporation. The Independent System Operators Open Meeting Policy, as adopted on April 23, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the Bagley-Keene Open Meeting Act than its policy in effect as of May 1, 2002.(4) Provide public access to corporate records consistent with the general policies of the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) and affording the public the greatest possible access, consistent with the other duties of the corporation. The Independent System Operators Information Availability Policy, as adopted on October 22, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the California Public Records Act than its policy in effect as of May 1, 2002.(5) Integrate surplus interconnection considerations into its long-term transmission planning and enhance transparency around surplus interconnection opportunities.
345.5. (a) The Independent System Operator, as a nonprofit, public benefit corporation, shall conduct its operations consistent with applicable state and federal laws and consistent with the interests of the people of the state.(b) To ensure the reliability of electric service and the health and safety of the public, the Independent System Operator shall manage the transmission grid and related energy markets in a manner that is consistent with all of the following:(1) Making the most efficient use of available energy resources. For purposes of this section, available energy resources include energy, capacity, ancillary services, and demand bid into markets administered by the Independent System Operator. Available energy resources do not include a schedule submitted to the Independent System Operator by an electrical corporation or a local publicly owned electric utility to meet its own customer load.(2) Reducing, to the extent possible, overall economic cost to the states consumers.(3) Applicable state law intended to protect the publics health and the environment.(4) Maximizing availability of existing electric generation resources necessary to meet the needs of the states electricity consumers.(5) Conducting internal operations in a manner that minimizes cost impact on ratepayers to the extent practicable and consistent with the provisions of this chapter.(6) Communicating with all balancing area authorities in California in a manner that supports electrical reliability.(c) The Independent System Operator shall do all of the following:(1) Consult and coordinate with appropriate state and local agencies to ensure that the Independent System Operator operates in furtherance of state law regarding consumer and environmental protection.(2) Ensure that the purposes and functions of the Independent System Operator are consistent with the purposes and functions of nonprofit, public benefit corporations in the state, including duties of care and conflict-of-interest standards for officers and directors of a corporation.(3) Maintain open meeting standards and meeting notice requirements consistent with the general policies of the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code) and affording the public the greatest possible access, consistent with other duties of the corporation. The Independent System Operators Open Meeting Policy, as adopted on April 23, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the Bagley-Keene Open Meeting Act than its policy in effect as of May 1, 2002.(4) Provide public access to corporate records consistent with the general policies of the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) and affording the public the greatest possible access, consistent with the other duties of the corporation. The Independent System Operators Information Availability Policy, as adopted on October 22, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the California Public Records Act than its policy in effect as of May 1, 2002.(5) Integrate surplus interconnection considerations into its long-term transmission planning and enhance transparency around surplus interconnection opportunities.
345.5. (a) The Independent System Operator, as a nonprofit, public benefit corporation, shall conduct its operations consistent with applicable state and federal laws and consistent with the interests of the people of the state.
###### 345.5.
(b) To ensure the reliability of electric service and the health and safety of the public, the Independent System Operator shall manage the transmission grid and related energy markets in a manner that is consistent with all of the following:
(1) Making the most efficient use of available energy resources. For purposes of this section, available energy resources include energy, capacity, ancillary services, and demand bid into markets administered by the Independent System Operator. Available energy resources do not include a schedule submitted to the Independent System Operator by an electrical corporation or a local publicly owned electric utility to meet its own customer load.
(2) Reducing, to the extent possible, overall economic cost to the states consumers.
(3) Applicable state law intended to protect the publics health and the environment.
(4) Maximizing availability of existing electric generation resources necessary to meet the needs of the states electricity consumers.
(5) Conducting internal operations in a manner that minimizes cost impact on ratepayers to the extent practicable and consistent with the provisions of this chapter.
(6) Communicating with all balancing area authorities in California in a manner that supports electrical reliability.
(c) The Independent System Operator shall do all of the following:
(1) Consult and coordinate with appropriate state and local agencies to ensure that the Independent System Operator operates in furtherance of state law regarding consumer and environmental protection.
(2) Ensure that the purposes and functions of the Independent System Operator are consistent with the purposes and functions of nonprofit, public benefit corporations in the state, including duties of care and conflict-of-interest standards for officers and directors of a corporation.
(3) Maintain open meeting standards and meeting notice requirements consistent with the general policies of the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code) and affording the public the greatest possible access, consistent with other duties of the corporation. The Independent System Operators Open Meeting Policy, as adopted on April 23, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the Bagley-Keene Open Meeting Act than its policy in effect as of May 1, 2002.
(4) Provide public access to corporate records consistent with the general policies of the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) and affording the public the greatest possible access, consistent with the other duties of the corporation. The Independent System Operators Information Availability Policy, as adopted on October 22, 1998, and in effect as of May 1, 2002, meets the requirements of this paragraph. The Independent System Operator shall maintain a policy that is no less consistent with the California Public Records Act than its policy in effect as of May 1, 2002.
(5) Integrate surplus interconnection considerations into its long-term transmission planning and enhance transparency around surplus interconnection opportunities.
SEC. 2. Section 380 of the Public Utilities Code is amended to read:380. (a) The commission, in consultation with the Independent System Operator, shall establish resource adequacy requirements for all load-serving entities.(b) In establishing resource adequacy requirements, the commission shall ensure the reliability of electrical service in California while advancing, to the extent possible, the states goals for clean energy, reducing air pollution, and reducing emissions of greenhouse gases. The resource adequacy program shall achieve all of the following objectives:(1) Facilitate the development of new generating, nongenerating, and hybrid capacity and the retention of existing generating, nongenerating, and hybrid capacity that is economical and needed for reliability and to achieve the state policy specified in Section 454.53.(2) Establish new, or maintain existing, demand response products and tariffs that facilitate the economical dispatch and use of demand response that can either meet or reduce an electrical corporations resource adequacy requirements, as determined by the commission.(3) Equitably allocate the cost of generating capacity and demand response in a manner that prevents the shifting of costs between customer classes.(4) Minimize enforcement requirements and costs.(5) Consideration of mitigation measures, if the commission determines they are needed, to reduce costs to ratepayers.(6) Maximize the ability of community choice aggregators to determine the generation resources used to serve their customers.(c) Each load-serving entity shall maintain physical generating capacity and electrical demand response adequate to meet its load requirements, including, but not limited to, peak demand and planning and operating reserves. The generating capacity or electrical demand response shall be deliverable to locations and at times as may be necessary to maintain electrical service system reliability, local area reliability, and flexibility.(d) (1) Each load-serving entity shall, at a minimum, meet the most recent minimum planning reserve and reliability criteria approved by the board of directors of the Western Systems Coordinating Council or the Western Electricity Coordinating Council.(2) Each load-serving entity shall prioritize available capacity for renewable energy development.(e) The commission shall implement and enforce the resource adequacy requirements established in accordance with this section in a nondiscriminatory manner. Each load-serving entity shall be subject to the same requirements for resource adequacy, the renewables portfolio standard program, and the integrated resource planning process pursuant to Section 454.52 that apply to electrical corporations pursuant to this section, or are otherwise required by law or by order or decision of the commission. The commission shall exercise its enforcement powers to ensure compliance by all load-serving entities.(f) (1) The commission shall require sufficient information, including, but not limited to, anticipated load, actual load, and measures undertaken by a load-serving entity to ensure resource adequacy, to be reported to enable the commission to determine compliance with the resource adequacy requirements established by the commission.(2) The commission shall calculate and publish annually on its internet website, in a new report or as part of another report, the percentage of each load-serving entitys local and system resource adequacy requirements from the previous calendar year that was met with capacity from eligible renewable energy resources pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11)), other zero-carbon resources, including large hydroelectric and nuclear resources, or energy storage resources. In determining the percentage of each load-serving entitys resource adequacy requirements, the commission shall include all directly owned or contracted resources and each load-serving entitys allocation of any centrally procured resources or allocation of resources pursuant to any other mechanism that involves an assignment or allocation of resources purchased or owned by a single buyer, and shall exclude any share of a load-serving entitys resources that were allocated to another load-serving entity.(g) An electrical corporations costs of meeting or reducing resource adequacy requirements, including, but not limited to, the costs associated with system reliability, local area reliability, or flexible resource adequacy, that are determined to be reasonable by the commission, or are otherwise recoverable under a procurement plan approved by the commission pursuant to Section 454.5, shall be fully recoverable from those customers on whose behalf the costs are incurred, as determined by the commission, at the time the commitment to incur the cost is made, on a fully nonbypassable basis, as determined by the commission. The commission shall exclude any amounts authorized to be recovered pursuant to Section 366.2 when authorizing the amount of costs to be recovered from customers of a community choice aggregator or from customers that purchase electricity through a direct transaction pursuant to this subdivision.(h) The commission shall determine and authorize the most efficient and equitable means for achieving all of the following:(1) Meeting the objectives of this section.(2) Ensuring that investment is made in new generating capacity.(3) Ensuring that existing generating capacity that is economical is retained to ensure reliability.(4) Ensuring that the resource adequacy program can reasonably maintain a standard measure of reliability, such as a one-day-in-10-year loss-of-load expectation or a similarly robust reliability metric adopted by the commission, and use it for planning purposes.(5) Ensuring that the cost of generating capacity and demand response is allocated equitably.(6) Ensuring that community choice aggregators can determine the generation resources used to serve their customers.(7) Ensuring that investments are made in new and existing demand response resources that are cost effective and help to achieve electrical grid reliability and the states goals for reducing emissions of greenhouse gases.(8) Minimizing the need for backstop procurement by the Independent System Operator.(i) In making the determination pursuant to subdivision (h), the commission may consider a centralized resource adequacy mechanism among other options.(j) The commission shall ensure appropriate valuation of both supply and load modifying demand response resources. The commission, in an existing or new proceeding, shall establish a mechanism to value load modifying demand response resources, including, but not limited to, the ability of demand response resources to help meet distribution needs and transmission system needs and to help reduce a load-serving entitys resource adequacy obligation pursuant to this section. In determining this value, the commission shall consider how these resources further the states electrical grid reliability and the states goals for reducing emissions of greenhouse gases. The commission, Energy Commission, and Independent System Operator shall coordinate to jointly ensure that changes in demand caused by load modifying demand response are expeditiously and comprehensively reflected in the Energy Commissions Integrated Energy Policy Report forecast and in planning proceedings and associated analyses, and shall encourage reflection of these changes in demand in the operation of the grid.(k) For purposes of this section, load-serving entity means an electrical corporation, electric service provider, or community choice aggregator. Load-serving entity does not include any of the following:(1) A local publicly owned electric utility.(2) The State Water Resources Development System commonly known as the State Water Project.(3) Customer generation located on the customers site or providing electric service through arrangements authorized by Section 218, if the customer generation, or the load it serves, meets one of the following criteria:(A) It takes standby service from the electrical corporation on a commission-approved rate schedule that provides for adequate backup planning and operating reserves for the standby customer class.(B) It is not physically interconnected to the electrical transmission or distribution grid, so that, if the customer generation fails, backup electricity is not supplied from the electrical grid.(C) There is physical assurance that the load served by the customer generation will be curtailed concurrently and commensurately with an outage of the customer generation.
SEC. 2. Section 380 of the Public Utilities Code is amended to read:
### SEC. 2.
380. (a) The commission, in consultation with the Independent System Operator, shall establish resource adequacy requirements for all load-serving entities.(b) In establishing resource adequacy requirements, the commission shall ensure the reliability of electrical service in California while advancing, to the extent possible, the states goals for clean energy, reducing air pollution, and reducing emissions of greenhouse gases. The resource adequacy program shall achieve all of the following objectives:(1) Facilitate the development of new generating, nongenerating, and hybrid capacity and the retention of existing generating, nongenerating, and hybrid capacity that is economical and needed for reliability and to achieve the state policy specified in Section 454.53.(2) Establish new, or maintain existing, demand response products and tariffs that facilitate the economical dispatch and use of demand response that can either meet or reduce an electrical corporations resource adequacy requirements, as determined by the commission.(3) Equitably allocate the cost of generating capacity and demand response in a manner that prevents the shifting of costs between customer classes.(4) Minimize enforcement requirements and costs.(5) Consideration of mitigation measures, if the commission determines they are needed, to reduce costs to ratepayers.(6) Maximize the ability of community choice aggregators to determine the generation resources used to serve their customers.(c) Each load-serving entity shall maintain physical generating capacity and electrical demand response adequate to meet its load requirements, including, but not limited to, peak demand and planning and operating reserves. The generating capacity or electrical demand response shall be deliverable to locations and at times as may be necessary to maintain electrical service system reliability, local area reliability, and flexibility.(d) (1) Each load-serving entity shall, at a minimum, meet the most recent minimum planning reserve and reliability criteria approved by the board of directors of the Western Systems Coordinating Council or the Western Electricity Coordinating Council.(2) Each load-serving entity shall prioritize available capacity for renewable energy development.(e) The commission shall implement and enforce the resource adequacy requirements established in accordance with this section in a nondiscriminatory manner. Each load-serving entity shall be subject to the same requirements for resource adequacy, the renewables portfolio standard program, and the integrated resource planning process pursuant to Section 454.52 that apply to electrical corporations pursuant to this section, or are otherwise required by law or by order or decision of the commission. The commission shall exercise its enforcement powers to ensure compliance by all load-serving entities.(f) (1) The commission shall require sufficient information, including, but not limited to, anticipated load, actual load, and measures undertaken by a load-serving entity to ensure resource adequacy, to be reported to enable the commission to determine compliance with the resource adequacy requirements established by the commission.(2) The commission shall calculate and publish annually on its internet website, in a new report or as part of another report, the percentage of each load-serving entitys local and system resource adequacy requirements from the previous calendar year that was met with capacity from eligible renewable energy resources pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11)), other zero-carbon resources, including large hydroelectric and nuclear resources, or energy storage resources. In determining the percentage of each load-serving entitys resource adequacy requirements, the commission shall include all directly owned or contracted resources and each load-serving entitys allocation of any centrally procured resources or allocation of resources pursuant to any other mechanism that involves an assignment or allocation of resources purchased or owned by a single buyer, and shall exclude any share of a load-serving entitys resources that were allocated to another load-serving entity.(g) An electrical corporations costs of meeting or reducing resource adequacy requirements, including, but not limited to, the costs associated with system reliability, local area reliability, or flexible resource adequacy, that are determined to be reasonable by the commission, or are otherwise recoverable under a procurement plan approved by the commission pursuant to Section 454.5, shall be fully recoverable from those customers on whose behalf the costs are incurred, as determined by the commission, at the time the commitment to incur the cost is made, on a fully nonbypassable basis, as determined by the commission. The commission shall exclude any amounts authorized to be recovered pursuant to Section 366.2 when authorizing the amount of costs to be recovered from customers of a community choice aggregator or from customers that purchase electricity through a direct transaction pursuant to this subdivision.(h) The commission shall determine and authorize the most efficient and equitable means for achieving all of the following:(1) Meeting the objectives of this section.(2) Ensuring that investment is made in new generating capacity.(3) Ensuring that existing generating capacity that is economical is retained to ensure reliability.(4) Ensuring that the resource adequacy program can reasonably maintain a standard measure of reliability, such as a one-day-in-10-year loss-of-load expectation or a similarly robust reliability metric adopted by the commission, and use it for planning purposes.(5) Ensuring that the cost of generating capacity and demand response is allocated equitably.(6) Ensuring that community choice aggregators can determine the generation resources used to serve their customers.(7) Ensuring that investments are made in new and existing demand response resources that are cost effective and help to achieve electrical grid reliability and the states goals for reducing emissions of greenhouse gases.(8) Minimizing the need for backstop procurement by the Independent System Operator.(i) In making the determination pursuant to subdivision (h), the commission may consider a centralized resource adequacy mechanism among other options.(j) The commission shall ensure appropriate valuation of both supply and load modifying demand response resources. The commission, in an existing or new proceeding, shall establish a mechanism to value load modifying demand response resources, including, but not limited to, the ability of demand response resources to help meet distribution needs and transmission system needs and to help reduce a load-serving entitys resource adequacy obligation pursuant to this section. In determining this value, the commission shall consider how these resources further the states electrical grid reliability and the states goals for reducing emissions of greenhouse gases. The commission, Energy Commission, and Independent System Operator shall coordinate to jointly ensure that changes in demand caused by load modifying demand response are expeditiously and comprehensively reflected in the Energy Commissions Integrated Energy Policy Report forecast and in planning proceedings and associated analyses, and shall encourage reflection of these changes in demand in the operation of the grid.(k) For purposes of this section, load-serving entity means an electrical corporation, electric service provider, or community choice aggregator. Load-serving entity does not include any of the following:(1) A local publicly owned electric utility.(2) The State Water Resources Development System commonly known as the State Water Project.(3) Customer generation located on the customers site or providing electric service through arrangements authorized by Section 218, if the customer generation, or the load it serves, meets one of the following criteria:(A) It takes standby service from the electrical corporation on a commission-approved rate schedule that provides for adequate backup planning and operating reserves for the standby customer class.(B) It is not physically interconnected to the electrical transmission or distribution grid, so that, if the customer generation fails, backup electricity is not supplied from the electrical grid.(C) There is physical assurance that the load served by the customer generation will be curtailed concurrently and commensurately with an outage of the customer generation.
380. (a) The commission, in consultation with the Independent System Operator, shall establish resource adequacy requirements for all load-serving entities.(b) In establishing resource adequacy requirements, the commission shall ensure the reliability of electrical service in California while advancing, to the extent possible, the states goals for clean energy, reducing air pollution, and reducing emissions of greenhouse gases. The resource adequacy program shall achieve all of the following objectives:(1) Facilitate the development of new generating, nongenerating, and hybrid capacity and the retention of existing generating, nongenerating, and hybrid capacity that is economical and needed for reliability and to achieve the state policy specified in Section 454.53.(2) Establish new, or maintain existing, demand response products and tariffs that facilitate the economical dispatch and use of demand response that can either meet or reduce an electrical corporations resource adequacy requirements, as determined by the commission.(3) Equitably allocate the cost of generating capacity and demand response in a manner that prevents the shifting of costs between customer classes.(4) Minimize enforcement requirements and costs.(5) Consideration of mitigation measures, if the commission determines they are needed, to reduce costs to ratepayers.(6) Maximize the ability of community choice aggregators to determine the generation resources used to serve their customers.(c) Each load-serving entity shall maintain physical generating capacity and electrical demand response adequate to meet its load requirements, including, but not limited to, peak demand and planning and operating reserves. The generating capacity or electrical demand response shall be deliverable to locations and at times as may be necessary to maintain electrical service system reliability, local area reliability, and flexibility.(d) (1) Each load-serving entity shall, at a minimum, meet the most recent minimum planning reserve and reliability criteria approved by the board of directors of the Western Systems Coordinating Council or the Western Electricity Coordinating Council.(2) Each load-serving entity shall prioritize available capacity for renewable energy development.(e) The commission shall implement and enforce the resource adequacy requirements established in accordance with this section in a nondiscriminatory manner. Each load-serving entity shall be subject to the same requirements for resource adequacy, the renewables portfolio standard program, and the integrated resource planning process pursuant to Section 454.52 that apply to electrical corporations pursuant to this section, or are otherwise required by law or by order or decision of the commission. The commission shall exercise its enforcement powers to ensure compliance by all load-serving entities.(f) (1) The commission shall require sufficient information, including, but not limited to, anticipated load, actual load, and measures undertaken by a load-serving entity to ensure resource adequacy, to be reported to enable the commission to determine compliance with the resource adequacy requirements established by the commission.(2) The commission shall calculate and publish annually on its internet website, in a new report or as part of another report, the percentage of each load-serving entitys local and system resource adequacy requirements from the previous calendar year that was met with capacity from eligible renewable energy resources pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11)), other zero-carbon resources, including large hydroelectric and nuclear resources, or energy storage resources. In determining the percentage of each load-serving entitys resource adequacy requirements, the commission shall include all directly owned or contracted resources and each load-serving entitys allocation of any centrally procured resources or allocation of resources pursuant to any other mechanism that involves an assignment or allocation of resources purchased or owned by a single buyer, and shall exclude any share of a load-serving entitys resources that were allocated to another load-serving entity.(g) An electrical corporations costs of meeting or reducing resource adequacy requirements, including, but not limited to, the costs associated with system reliability, local area reliability, or flexible resource adequacy, that are determined to be reasonable by the commission, or are otherwise recoverable under a procurement plan approved by the commission pursuant to Section 454.5, shall be fully recoverable from those customers on whose behalf the costs are incurred, as determined by the commission, at the time the commitment to incur the cost is made, on a fully nonbypassable basis, as determined by the commission. The commission shall exclude any amounts authorized to be recovered pursuant to Section 366.2 when authorizing the amount of costs to be recovered from customers of a community choice aggregator or from customers that purchase electricity through a direct transaction pursuant to this subdivision.(h) The commission shall determine and authorize the most efficient and equitable means for achieving all of the following:(1) Meeting the objectives of this section.(2) Ensuring that investment is made in new generating capacity.(3) Ensuring that existing generating capacity that is economical is retained to ensure reliability.(4) Ensuring that the resource adequacy program can reasonably maintain a standard measure of reliability, such as a one-day-in-10-year loss-of-load expectation or a similarly robust reliability metric adopted by the commission, and use it for planning purposes.(5) Ensuring that the cost of generating capacity and demand response is allocated equitably.(6) Ensuring that community choice aggregators can determine the generation resources used to serve their customers.(7) Ensuring that investments are made in new and existing demand response resources that are cost effective and help to achieve electrical grid reliability and the states goals for reducing emissions of greenhouse gases.(8) Minimizing the need for backstop procurement by the Independent System Operator.(i) In making the determination pursuant to subdivision (h), the commission may consider a centralized resource adequacy mechanism among other options.(j) The commission shall ensure appropriate valuation of both supply and load modifying demand response resources. The commission, in an existing or new proceeding, shall establish a mechanism to value load modifying demand response resources, including, but not limited to, the ability of demand response resources to help meet distribution needs and transmission system needs and to help reduce a load-serving entitys resource adequacy obligation pursuant to this section. In determining this value, the commission shall consider how these resources further the states electrical grid reliability and the states goals for reducing emissions of greenhouse gases. The commission, Energy Commission, and Independent System Operator shall coordinate to jointly ensure that changes in demand caused by load modifying demand response are expeditiously and comprehensively reflected in the Energy Commissions Integrated Energy Policy Report forecast and in planning proceedings and associated analyses, and shall encourage reflection of these changes in demand in the operation of the grid.(k) For purposes of this section, load-serving entity means an electrical corporation, electric service provider, or community choice aggregator. Load-serving entity does not include any of the following:(1) A local publicly owned electric utility.(2) The State Water Resources Development System commonly known as the State Water Project.(3) Customer generation located on the customers site or providing electric service through arrangements authorized by Section 218, if the customer generation, or the load it serves, meets one of the following criteria:(A) It takes standby service from the electrical corporation on a commission-approved rate schedule that provides for adequate backup planning and operating reserves for the standby customer class.(B) It is not physically interconnected to the electrical transmission or distribution grid, so that, if the customer generation fails, backup electricity is not supplied from the electrical grid.(C) There is physical assurance that the load served by the customer generation will be curtailed concurrently and commensurately with an outage of the customer generation.
380. (a) The commission, in consultation with the Independent System Operator, shall establish resource adequacy requirements for all load-serving entities.(b) In establishing resource adequacy requirements, the commission shall ensure the reliability of electrical service in California while advancing, to the extent possible, the states goals for clean energy, reducing air pollution, and reducing emissions of greenhouse gases. The resource adequacy program shall achieve all of the following objectives:(1) Facilitate the development of new generating, nongenerating, and hybrid capacity and the retention of existing generating, nongenerating, and hybrid capacity that is economical and needed for reliability and to achieve the state policy specified in Section 454.53.(2) Establish new, or maintain existing, demand response products and tariffs that facilitate the economical dispatch and use of demand response that can either meet or reduce an electrical corporations resource adequacy requirements, as determined by the commission.(3) Equitably allocate the cost of generating capacity and demand response in a manner that prevents the shifting of costs between customer classes.(4) Minimize enforcement requirements and costs.(5) Consideration of mitigation measures, if the commission determines they are needed, to reduce costs to ratepayers.(6) Maximize the ability of community choice aggregators to determine the generation resources used to serve their customers.(c) Each load-serving entity shall maintain physical generating capacity and electrical demand response adequate to meet its load requirements, including, but not limited to, peak demand and planning and operating reserves. The generating capacity or electrical demand response shall be deliverable to locations and at times as may be necessary to maintain electrical service system reliability, local area reliability, and flexibility.(d) (1) Each load-serving entity shall, at a minimum, meet the most recent minimum planning reserve and reliability criteria approved by the board of directors of the Western Systems Coordinating Council or the Western Electricity Coordinating Council.(2) Each load-serving entity shall prioritize available capacity for renewable energy development.(e) The commission shall implement and enforce the resource adequacy requirements established in accordance with this section in a nondiscriminatory manner. Each load-serving entity shall be subject to the same requirements for resource adequacy, the renewables portfolio standard program, and the integrated resource planning process pursuant to Section 454.52 that apply to electrical corporations pursuant to this section, or are otherwise required by law or by order or decision of the commission. The commission shall exercise its enforcement powers to ensure compliance by all load-serving entities.(f) (1) The commission shall require sufficient information, including, but not limited to, anticipated load, actual load, and measures undertaken by a load-serving entity to ensure resource adequacy, to be reported to enable the commission to determine compliance with the resource adequacy requirements established by the commission.(2) The commission shall calculate and publish annually on its internet website, in a new report or as part of another report, the percentage of each load-serving entitys local and system resource adequacy requirements from the previous calendar year that was met with capacity from eligible renewable energy resources pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11)), other zero-carbon resources, including large hydroelectric and nuclear resources, or energy storage resources. In determining the percentage of each load-serving entitys resource adequacy requirements, the commission shall include all directly owned or contracted resources and each load-serving entitys allocation of any centrally procured resources or allocation of resources pursuant to any other mechanism that involves an assignment or allocation of resources purchased or owned by a single buyer, and shall exclude any share of a load-serving entitys resources that were allocated to another load-serving entity.(g) An electrical corporations costs of meeting or reducing resource adequacy requirements, including, but not limited to, the costs associated with system reliability, local area reliability, or flexible resource adequacy, that are determined to be reasonable by the commission, or are otherwise recoverable under a procurement plan approved by the commission pursuant to Section 454.5, shall be fully recoverable from those customers on whose behalf the costs are incurred, as determined by the commission, at the time the commitment to incur the cost is made, on a fully nonbypassable basis, as determined by the commission. The commission shall exclude any amounts authorized to be recovered pursuant to Section 366.2 when authorizing the amount of costs to be recovered from customers of a community choice aggregator or from customers that purchase electricity through a direct transaction pursuant to this subdivision.(h) The commission shall determine and authorize the most efficient and equitable means for achieving all of the following:(1) Meeting the objectives of this section.(2) Ensuring that investment is made in new generating capacity.(3) Ensuring that existing generating capacity that is economical is retained to ensure reliability.(4) Ensuring that the resource adequacy program can reasonably maintain a standard measure of reliability, such as a one-day-in-10-year loss-of-load expectation or a similarly robust reliability metric adopted by the commission, and use it for planning purposes.(5) Ensuring that the cost of generating capacity and demand response is allocated equitably.(6) Ensuring that community choice aggregators can determine the generation resources used to serve their customers.(7) Ensuring that investments are made in new and existing demand response resources that are cost effective and help to achieve electrical grid reliability and the states goals for reducing emissions of greenhouse gases.(8) Minimizing the need for backstop procurement by the Independent System Operator.(i) In making the determination pursuant to subdivision (h), the commission may consider a centralized resource adequacy mechanism among other options.(j) The commission shall ensure appropriate valuation of both supply and load modifying demand response resources. The commission, in an existing or new proceeding, shall establish a mechanism to value load modifying demand response resources, including, but not limited to, the ability of demand response resources to help meet distribution needs and transmission system needs and to help reduce a load-serving entitys resource adequacy obligation pursuant to this section. In determining this value, the commission shall consider how these resources further the states electrical grid reliability and the states goals for reducing emissions of greenhouse gases. The commission, Energy Commission, and Independent System Operator shall coordinate to jointly ensure that changes in demand caused by load modifying demand response are expeditiously and comprehensively reflected in the Energy Commissions Integrated Energy Policy Report forecast and in planning proceedings and associated analyses, and shall encourage reflection of these changes in demand in the operation of the grid.(k) For purposes of this section, load-serving entity means an electrical corporation, electric service provider, or community choice aggregator. Load-serving entity does not include any of the following:(1) A local publicly owned electric utility.(2) The State Water Resources Development System commonly known as the State Water Project.(3) Customer generation located on the customers site or providing electric service through arrangements authorized by Section 218, if the customer generation, or the load it serves, meets one of the following criteria:(A) It takes standby service from the electrical corporation on a commission-approved rate schedule that provides for adequate backup planning and operating reserves for the standby customer class.(B) It is not physically interconnected to the electrical transmission or distribution grid, so that, if the customer generation fails, backup electricity is not supplied from the electrical grid.(C) There is physical assurance that the load served by the customer generation will be curtailed concurrently and commensurately with an outage of the customer generation.
380. (a) The commission, in consultation with the Independent System Operator, shall establish resource adequacy requirements for all load-serving entities.
###### 380.
(b) In establishing resource adequacy requirements, the commission shall ensure the reliability of electrical service in California while advancing, to the extent possible, the states goals for clean energy, reducing air pollution, and reducing emissions of greenhouse gases. The resource adequacy program shall achieve all of the following objectives:
(1) Facilitate the development of new generating, nongenerating, and hybrid capacity and the retention of existing generating, nongenerating, and hybrid capacity that is economical and needed for reliability and to achieve the state policy specified in Section 454.53.
(2) Establish new, or maintain existing, demand response products and tariffs that facilitate the economical dispatch and use of demand response that can either meet or reduce an electrical corporations resource adequacy requirements, as determined by the commission.
(3) Equitably allocate the cost of generating capacity and demand response in a manner that prevents the shifting of costs between customer classes.
(4) Minimize enforcement requirements and costs.
(5) Consideration of mitigation measures, if the commission determines they are needed, to reduce costs to ratepayers.
(6) Maximize the ability of community choice aggregators to determine the generation resources used to serve their customers.
(c) Each load-serving entity shall maintain physical generating capacity and electrical demand response adequate to meet its load requirements, including, but not limited to, peak demand and planning and operating reserves. The generating capacity or electrical demand response shall be deliverable to locations and at times as may be necessary to maintain electrical service system reliability, local area reliability, and flexibility.
(d) (1) Each load-serving entity shall, at a minimum, meet the most recent minimum planning reserve and reliability criteria approved by the board of directors of the Western Systems Coordinating Council or the Western Electricity Coordinating Council.
(2) Each load-serving entity shall prioritize available capacity for renewable energy development.
(e) The commission shall implement and enforce the resource adequacy requirements established in accordance with this section in a nondiscriminatory manner. Each load-serving entity shall be subject to the same requirements for resource adequacy, the renewables portfolio standard program, and the integrated resource planning process pursuant to Section 454.52 that apply to electrical corporations pursuant to this section, or are otherwise required by law or by order or decision of the commission. The commission shall exercise its enforcement powers to ensure compliance by all load-serving entities.
(f) (1) The commission shall require sufficient information, including, but not limited to, anticipated load, actual load, and measures undertaken by a load-serving entity to ensure resource adequacy, to be reported to enable the commission to determine compliance with the resource adequacy requirements established by the commission.
(2) The commission shall calculate and publish annually on its internet website, in a new report or as part of another report, the percentage of each load-serving entitys local and system resource adequacy requirements from the previous calendar year that was met with capacity from eligible renewable energy resources pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11)), other zero-carbon resources, including large hydroelectric and nuclear resources, or energy storage resources. In determining the percentage of each load-serving entitys resource adequacy requirements, the commission shall include all directly owned or contracted resources and each load-serving entitys allocation of any centrally procured resources or allocation of resources pursuant to any other mechanism that involves an assignment or allocation of resources purchased or owned by a single buyer, and shall exclude any share of a load-serving entitys resources that were allocated to another load-serving entity.
(g) An electrical corporations costs of meeting or reducing resource adequacy requirements, including, but not limited to, the costs associated with system reliability, local area reliability, or flexible resource adequacy, that are determined to be reasonable by the commission, or are otherwise recoverable under a procurement plan approved by the commission pursuant to Section 454.5, shall be fully recoverable from those customers on whose behalf the costs are incurred, as determined by the commission, at the time the commitment to incur the cost is made, on a fully nonbypassable basis, as determined by the commission. The commission shall exclude any amounts authorized to be recovered pursuant to Section 366.2 when authorizing the amount of costs to be recovered from customers of a community choice aggregator or from customers that purchase electricity through a direct transaction pursuant to this subdivision.
(h) The commission shall determine and authorize the most efficient and equitable means for achieving all of the following:
(1) Meeting the objectives of this section.
(2) Ensuring that investment is made in new generating capacity.
(3) Ensuring that existing generating capacity that is economical is retained to ensure reliability.
(4) Ensuring that the resource adequacy program can reasonably maintain a standard measure of reliability, such as a one-day-in-10-year loss-of-load expectation or a similarly robust reliability metric adopted by the commission, and use it for planning purposes.
(5) Ensuring that the cost of generating capacity and demand response is allocated equitably.
(6) Ensuring that community choice aggregators can determine the generation resources used to serve their customers.
(7) Ensuring that investments are made in new and existing demand response resources that are cost effective and help to achieve electrical grid reliability and the states goals for reducing emissions of greenhouse gases.
(8) Minimizing the need for backstop procurement by the Independent System Operator.
(i) In making the determination pursuant to subdivision (h), the commission may consider a centralized resource adequacy mechanism among other options.
(j) The commission shall ensure appropriate valuation of both supply and load modifying demand response resources. The commission, in an existing or new proceeding, shall establish a mechanism to value load modifying demand response resources, including, but not limited to, the ability of demand response resources to help meet distribution needs and transmission system needs and to help reduce a load-serving entitys resource adequacy obligation pursuant to this section. In determining this value, the commission shall consider how these resources further the states electrical grid reliability and the states goals for reducing emissions of greenhouse gases. The commission, Energy Commission, and Independent System Operator shall coordinate to jointly ensure that changes in demand caused by load modifying demand response are expeditiously and comprehensively reflected in the Energy Commissions Integrated Energy Policy Report forecast and in planning proceedings and associated analyses, and shall encourage reflection of these changes in demand in the operation of the grid.
(k) For purposes of this section, load-serving entity means an electrical corporation, electric service provider, or community choice aggregator. Load-serving entity does not include any of the following:
(1) A local publicly owned electric utility.
(2) The State Water Resources Development System commonly known as the State Water Project.
(3) Customer generation located on the customers site or providing electric service through arrangements authorized by Section 218, if the customer generation, or the load it serves, meets one of the following criteria:
(A) It takes standby service from the electrical corporation on a commission-approved rate schedule that provides for adequate backup planning and operating reserves for the standby customer class.
(B) It is not physically interconnected to the electrical transmission or distribution grid, so that, if the customer generation fails, backup electricity is not supplied from the electrical grid.
(C) There is physical assurance that the load served by the customer generation will be curtailed concurrently and commensurately with an outage of the customer generation.
SEC. 3. Section 454.52 of the Public Utilities Code is amended to read:454.52. (a) (1) Beginning in 2017, and to be updated regularly thereafter, the commission shall adopt a process for each load-serving entity to file an integrated resource plan, and a schedule for periodic updates to the plan, and shall ensure that load-serving entities do all of the following:(A) Meet the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each load-serving entity that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions pursuant to Section 38566 of the Health and Safety Code.(B) Procure at least 60 percent eligible renewable energy resources by December 31, 2030, consistent with the state policy specified in Section 454.53 and Article 16 (commencing with Section 399.11) of Chapter 2.3.(C) Enable each electrical corporation to fulfill its obligation to serve its customers at just and reasonable rates.(D) Minimize impacts on ratepayers bills.(E) (i) Ensure system and local reliability on a short-term, midterm, and long-term basis, including meeting the short-term and forecast long-term resource adequacy requirements of Section 380, and require sufficient, predictable resource procurement and development to avoid unplanned energy supply shortfalls by taking into account impacts due to climate change, forecasted levels of building and transportation electrification, and other factors that can result in those shortfalls.(ii) In furtherance of avoiding unplanned energy supply shortfalls or expensive emergency procurement and ensuring a more accurate understanding of electrical grid operational needs, the commission shall aggregate reported short-term and midterm resource procurement from all load-serving entities conducted under Section 380 or this section and assess midterm resource sufficiency, and annually provide anonymized reports to the Independent System Operator. The commission shall report forward resource procurement using counting conventions that provide the data to the Independent System Operator to be used in its grid planning.(iii) To accomplish clause (i), the commission shall, as part of the integrated planning process, assess short-term, midterm, and long-term reliability by conducting probabilistic reliability modeling, including if there is sufficient capacity available for procurement in the short term and midterm by all load-serving entities to meet their procurement requirements. The commission shall review the results of that reliability modeling in a public proceeding at the same frequency as the forecast conducted in accordance with this section. When modeling short-term and midterm reliability, the commission shall model all procurement consistent with clause (ii) and may rely upon or incorporate probabilistic reliability modeling conducted by the Energy Commission into the commissions public process. The commission shall also report the modeling results in the joint Reliability Planning Assessments conducted under Section 25233 of the Public Resources Code.(F) Comply with paragraph (1) of subdivision (b) of Section 399.13.(G) Strengthen the diversity, sustainability, and resilience of the bulk transmission and distribution systems, and local communities.(H) Enhance distribution systems and demand-side energy management.(I) Minimize localized air pollutants and other greenhouse gas emissions, with early priority on disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.(J) Maintain a diverse portfolio of energy resources, which may include eligible energy resources procured by the Department of Water Resources.(2) (A) The commission may authorize all source procurement for load-serving entities that includes various resource types including demand-side resources, supply-side resources, and resources that may be either demand-side resources or supply-side resources, taking into account the differing load-serving entities geographic service areas, to ensure that each load-serving entity meets the goals set forth in paragraph (1).(B) The commission may approve procurement of resource types that will reduce the overall emissions of greenhouse gases from the electricity sector and meet the other goals specified in paragraph (1), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.(3) In furtherance of the requirements of paragraph (1), the commission shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each load-serving entity meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.(4) (A) On or before September 1, 2024, and consistent with the process and schedule adopted pursuant to paragraph (1), the commission, in consultation with the Energy Commission and the Independent System Operator, shall determine if there is a need for the procurement of eligible energy resources based on a review of the integrated resource plans submitted by load-serving entities in compliance with the requirements of this section and Section 454.53 and the progress towards meeting the portfolio of resources identified pursuant to subdivision (a) of Section 454.51.(B) If the commission determines that there is a need for the procurement of eligible energy resources, the commission shall specify the eligible energy resources that should be procured to meet that need.(C) Within six months of determining that there is a need for the procurement of eligible energy resources, the commission may request the Department of Water Resources to exercise its central procurement function to procure those eligible energy resources specified pursuant to subparagraph (B) that meet the portfolio of resources identified in subdivision (a) of Section 454.51.(D) (i) Upon receiving a request pursuant to subparagraph (C), the Department of Water Resources, before January 1, 2035, may exercise its central procurement function to conduct one or more competitive solicitations and enter into contracts to procure eligible energy resources in order to achieve the policy of the state specified in Section 454.53.(ii) Any contract entered into by the Department of Water Resources pursuant to clause (i) and approved by the commission pursuant to Section 80821 of the Water Code before January 1, 2035, shall remain in force for the duration of the contract.(E) The Department of Water Resources exercising of its central procurement function to procure eligible energy resources pursuant to this paragraph shall be conducted in accordance with Division 29.5 (commencing with Section 80800) of the Water Code.(b) (1) Each load-serving entity shall prepare and file an integrated resource plan consistent with paragraph (2) of subdivision (a) on a time schedule directed by the commission and subject to commission review.(2) (A) Each electrical corporations plan shall follow Section 454.5.(B) Each electrical corporation shall do both of the following for purposes of its integrated resource plan:(i) Require evaluation of surplus interconnection options.(ii) Consider surplus interconnection options.(3) The plan of a community choice aggregator shall be submitted to its governing board for approval and provided to the commission for certification, consistent with paragraph (5) of subdivision (a) of Section 366.2, and shall achieve all of the following:(A) Economic, reliability, environmental, security, and other benefits and performance characteristics that are consistent with the goals set forth in paragraph (1) of subdivision (a).(B) A diversified procurement portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.(C) The resource adequacy requirements established pursuant to Section 380.(4) The plan of an electric service provider shall achieve the goals set forth in paragraph (1) of subdivision (a) through a diversified portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.(c) To the extent that additional procurement is authorized for the electrical corporation in the integrated resource plan or the procurement process authorized pursuant to Section 454.5, the commission shall ensure that the costs are allocated in a fair and equitable manner to all customers consistent with Section 454.51, that there is no cost shifting among customers of load-serving entities, and that community choice aggregators may self-provide renewable integration resources consistent with Section 454.51. The commission may order the procurement of resources with specific attributes by load-serving entities as a result of the integrated resource planning process and shall enforce any resource procurement requirements on a nondiscriminatory basis. Enforcement may include the assessment of penalties for noncompliance.(d) To eliminate redundancy and increase efficiency, the process adopted pursuant to subdivision (a) shall incorporate, and not duplicate, any other planning processes of the commission.(e) This section applies to an electrical cooperative, as defined in Section 2776, only if the electrical cooperative has an annual electrical demand exceeding 700 gigawatthours, as determined based on a three-year average commencing with January 1, 2013.(f) (1) The commission shall not include the energy, capacity, or any attribute from Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025, in the adopted integrated resource plan portfolios, resource stacks, or preferred system plans.(2) The commission shall disallow a load-serving entity from including in their adopted integrated resource plan any energy, capacity, or any attribute from the Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025.(g) For a thermal powerplant that uses nuclear fission technology not constructed in the twenty-first century, all resource attributes shall be retired on January 1, 2031, and shall be reported as a separate, line item resource for purposes of complying with Section 398.4.(h) (1) Only a new energy resource that meets all of the following requirements is eligible to be procured by the Department of Water Resources pursuant to this section:(A) The resource directly supports attainment of the goals specified in Section 454.53 without increasing the states dependence on any fossil fuel-based resources.(B) The resource is determined by the commission to not be under contract at sufficient levels as shown in load-serving entities most recent individual integrated resource plans submitted to and reviewed by the commission pursuant to this section to achieve the goals specified in Section 454.53.(C) The resource has a construction and development lead time of at least five years.(D) The resource does not generate electricity using fossil fuels or fuels derived from fossil fuels.(E) The resource does not use combustion to generate electricity, unless that combustion use is ancillary and necessary to facilitate geothermal electricity generation.(2) Resources from a pump hydroelectric facility may be procured by the Department of Water Resources pursuant to this section if the pump hydroelectric facility does not exceed 500 megawatts and has been directly appropriated funding by the state before January 1, 2023.(i) For purposes of this section, the following definitions apply:(1) Load-serving entity has the same meaning as defined in Section 380.(2) Long term means a time period that includes five or more years in the future.(3) Midterm means a time period between two and five years in the future.(4) Short term means a time period between the present and two years in the future.
SEC. 3. Section 454.52 of the Public Utilities Code is amended to read:
### SEC. 3.
454.52. (a) (1) Beginning in 2017, and to be updated regularly thereafter, the commission shall adopt a process for each load-serving entity to file an integrated resource plan, and a schedule for periodic updates to the plan, and shall ensure that load-serving entities do all of the following:(A) Meet the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each load-serving entity that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions pursuant to Section 38566 of the Health and Safety Code.(B) Procure at least 60 percent eligible renewable energy resources by December 31, 2030, consistent with the state policy specified in Section 454.53 and Article 16 (commencing with Section 399.11) of Chapter 2.3.(C) Enable each electrical corporation to fulfill its obligation to serve its customers at just and reasonable rates.(D) Minimize impacts on ratepayers bills.(E) (i) Ensure system and local reliability on a short-term, midterm, and long-term basis, including meeting the short-term and forecast long-term resource adequacy requirements of Section 380, and require sufficient, predictable resource procurement and development to avoid unplanned energy supply shortfalls by taking into account impacts due to climate change, forecasted levels of building and transportation electrification, and other factors that can result in those shortfalls.(ii) In furtherance of avoiding unplanned energy supply shortfalls or expensive emergency procurement and ensuring a more accurate understanding of electrical grid operational needs, the commission shall aggregate reported short-term and midterm resource procurement from all load-serving entities conducted under Section 380 or this section and assess midterm resource sufficiency, and annually provide anonymized reports to the Independent System Operator. The commission shall report forward resource procurement using counting conventions that provide the data to the Independent System Operator to be used in its grid planning.(iii) To accomplish clause (i), the commission shall, as part of the integrated planning process, assess short-term, midterm, and long-term reliability by conducting probabilistic reliability modeling, including if there is sufficient capacity available for procurement in the short term and midterm by all load-serving entities to meet their procurement requirements. The commission shall review the results of that reliability modeling in a public proceeding at the same frequency as the forecast conducted in accordance with this section. When modeling short-term and midterm reliability, the commission shall model all procurement consistent with clause (ii) and may rely upon or incorporate probabilistic reliability modeling conducted by the Energy Commission into the commissions public process. The commission shall also report the modeling results in the joint Reliability Planning Assessments conducted under Section 25233 of the Public Resources Code.(F) Comply with paragraph (1) of subdivision (b) of Section 399.13.(G) Strengthen the diversity, sustainability, and resilience of the bulk transmission and distribution systems, and local communities.(H) Enhance distribution systems and demand-side energy management.(I) Minimize localized air pollutants and other greenhouse gas emissions, with early priority on disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.(J) Maintain a diverse portfolio of energy resources, which may include eligible energy resources procured by the Department of Water Resources.(2) (A) The commission may authorize all source procurement for load-serving entities that includes various resource types including demand-side resources, supply-side resources, and resources that may be either demand-side resources or supply-side resources, taking into account the differing load-serving entities geographic service areas, to ensure that each load-serving entity meets the goals set forth in paragraph (1).(B) The commission may approve procurement of resource types that will reduce the overall emissions of greenhouse gases from the electricity sector and meet the other goals specified in paragraph (1), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.(3) In furtherance of the requirements of paragraph (1), the commission shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each load-serving entity meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.(4) (A) On or before September 1, 2024, and consistent with the process and schedule adopted pursuant to paragraph (1), the commission, in consultation with the Energy Commission and the Independent System Operator, shall determine if there is a need for the procurement of eligible energy resources based on a review of the integrated resource plans submitted by load-serving entities in compliance with the requirements of this section and Section 454.53 and the progress towards meeting the portfolio of resources identified pursuant to subdivision (a) of Section 454.51.(B) If the commission determines that there is a need for the procurement of eligible energy resources, the commission shall specify the eligible energy resources that should be procured to meet that need.(C) Within six months of determining that there is a need for the procurement of eligible energy resources, the commission may request the Department of Water Resources to exercise its central procurement function to procure those eligible energy resources specified pursuant to subparagraph (B) that meet the portfolio of resources identified in subdivision (a) of Section 454.51.(D) (i) Upon receiving a request pursuant to subparagraph (C), the Department of Water Resources, before January 1, 2035, may exercise its central procurement function to conduct one or more competitive solicitations and enter into contracts to procure eligible energy resources in order to achieve the policy of the state specified in Section 454.53.(ii) Any contract entered into by the Department of Water Resources pursuant to clause (i) and approved by the commission pursuant to Section 80821 of the Water Code before January 1, 2035, shall remain in force for the duration of the contract.(E) The Department of Water Resources exercising of its central procurement function to procure eligible energy resources pursuant to this paragraph shall be conducted in accordance with Division 29.5 (commencing with Section 80800) of the Water Code.(b) (1) Each load-serving entity shall prepare and file an integrated resource plan consistent with paragraph (2) of subdivision (a) on a time schedule directed by the commission and subject to commission review.(2) (A) Each electrical corporations plan shall follow Section 454.5.(B) Each electrical corporation shall do both of the following for purposes of its integrated resource plan:(i) Require evaluation of surplus interconnection options.(ii) Consider surplus interconnection options.(3) The plan of a community choice aggregator shall be submitted to its governing board for approval and provided to the commission for certification, consistent with paragraph (5) of subdivision (a) of Section 366.2, and shall achieve all of the following:(A) Economic, reliability, environmental, security, and other benefits and performance characteristics that are consistent with the goals set forth in paragraph (1) of subdivision (a).(B) A diversified procurement portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.(C) The resource adequacy requirements established pursuant to Section 380.(4) The plan of an electric service provider shall achieve the goals set forth in paragraph (1) of subdivision (a) through a diversified portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.(c) To the extent that additional procurement is authorized for the electrical corporation in the integrated resource plan or the procurement process authorized pursuant to Section 454.5, the commission shall ensure that the costs are allocated in a fair and equitable manner to all customers consistent with Section 454.51, that there is no cost shifting among customers of load-serving entities, and that community choice aggregators may self-provide renewable integration resources consistent with Section 454.51. The commission may order the procurement of resources with specific attributes by load-serving entities as a result of the integrated resource planning process and shall enforce any resource procurement requirements on a nondiscriminatory basis. Enforcement may include the assessment of penalties for noncompliance.(d) To eliminate redundancy and increase efficiency, the process adopted pursuant to subdivision (a) shall incorporate, and not duplicate, any other planning processes of the commission.(e) This section applies to an electrical cooperative, as defined in Section 2776, only if the electrical cooperative has an annual electrical demand exceeding 700 gigawatthours, as determined based on a three-year average commencing with January 1, 2013.(f) (1) The commission shall not include the energy, capacity, or any attribute from Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025, in the adopted integrated resource plan portfolios, resource stacks, or preferred system plans.(2) The commission shall disallow a load-serving entity from including in their adopted integrated resource plan any energy, capacity, or any attribute from the Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025.(g) For a thermal powerplant that uses nuclear fission technology not constructed in the twenty-first century, all resource attributes shall be retired on January 1, 2031, and shall be reported as a separate, line item resource for purposes of complying with Section 398.4.(h) (1) Only a new energy resource that meets all of the following requirements is eligible to be procured by the Department of Water Resources pursuant to this section:(A) The resource directly supports attainment of the goals specified in Section 454.53 without increasing the states dependence on any fossil fuel-based resources.(B) The resource is determined by the commission to not be under contract at sufficient levels as shown in load-serving entities most recent individual integrated resource plans submitted to and reviewed by the commission pursuant to this section to achieve the goals specified in Section 454.53.(C) The resource has a construction and development lead time of at least five years.(D) The resource does not generate electricity using fossil fuels or fuels derived from fossil fuels.(E) The resource does not use combustion to generate electricity, unless that combustion use is ancillary and necessary to facilitate geothermal electricity generation.(2) Resources from a pump hydroelectric facility may be procured by the Department of Water Resources pursuant to this section if the pump hydroelectric facility does not exceed 500 megawatts and has been directly appropriated funding by the state before January 1, 2023.(i) For purposes of this section, the following definitions apply:(1) Load-serving entity has the same meaning as defined in Section 380.(2) Long term means a time period that includes five or more years in the future.(3) Midterm means a time period between two and five years in the future.(4) Short term means a time period between the present and two years in the future.
454.52. (a) (1) Beginning in 2017, and to be updated regularly thereafter, the commission shall adopt a process for each load-serving entity to file an integrated resource plan, and a schedule for periodic updates to the plan, and shall ensure that load-serving entities do all of the following:(A) Meet the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each load-serving entity that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions pursuant to Section 38566 of the Health and Safety Code.(B) Procure at least 60 percent eligible renewable energy resources by December 31, 2030, consistent with the state policy specified in Section 454.53 and Article 16 (commencing with Section 399.11) of Chapter 2.3.(C) Enable each electrical corporation to fulfill its obligation to serve its customers at just and reasonable rates.(D) Minimize impacts on ratepayers bills.(E) (i) Ensure system and local reliability on a short-term, midterm, and long-term basis, including meeting the short-term and forecast long-term resource adequacy requirements of Section 380, and require sufficient, predictable resource procurement and development to avoid unplanned energy supply shortfalls by taking into account impacts due to climate change, forecasted levels of building and transportation electrification, and other factors that can result in those shortfalls.(ii) In furtherance of avoiding unplanned energy supply shortfalls or expensive emergency procurement and ensuring a more accurate understanding of electrical grid operational needs, the commission shall aggregate reported short-term and midterm resource procurement from all load-serving entities conducted under Section 380 or this section and assess midterm resource sufficiency, and annually provide anonymized reports to the Independent System Operator. The commission shall report forward resource procurement using counting conventions that provide the data to the Independent System Operator to be used in its grid planning.(iii) To accomplish clause (i), the commission shall, as part of the integrated planning process, assess short-term, midterm, and long-term reliability by conducting probabilistic reliability modeling, including if there is sufficient capacity available for procurement in the short term and midterm by all load-serving entities to meet their procurement requirements. The commission shall review the results of that reliability modeling in a public proceeding at the same frequency as the forecast conducted in accordance with this section. When modeling short-term and midterm reliability, the commission shall model all procurement consistent with clause (ii) and may rely upon or incorporate probabilistic reliability modeling conducted by the Energy Commission into the commissions public process. The commission shall also report the modeling results in the joint Reliability Planning Assessments conducted under Section 25233 of the Public Resources Code.(F) Comply with paragraph (1) of subdivision (b) of Section 399.13.(G) Strengthen the diversity, sustainability, and resilience of the bulk transmission and distribution systems, and local communities.(H) Enhance distribution systems and demand-side energy management.(I) Minimize localized air pollutants and other greenhouse gas emissions, with early priority on disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.(J) Maintain a diverse portfolio of energy resources, which may include eligible energy resources procured by the Department of Water Resources.(2) (A) The commission may authorize all source procurement for load-serving entities that includes various resource types including demand-side resources, supply-side resources, and resources that may be either demand-side resources or supply-side resources, taking into account the differing load-serving entities geographic service areas, to ensure that each load-serving entity meets the goals set forth in paragraph (1).(B) The commission may approve procurement of resource types that will reduce the overall emissions of greenhouse gases from the electricity sector and meet the other goals specified in paragraph (1), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.(3) In furtherance of the requirements of paragraph (1), the commission shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each load-serving entity meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.(4) (A) On or before September 1, 2024, and consistent with the process and schedule adopted pursuant to paragraph (1), the commission, in consultation with the Energy Commission and the Independent System Operator, shall determine if there is a need for the procurement of eligible energy resources based on a review of the integrated resource plans submitted by load-serving entities in compliance with the requirements of this section and Section 454.53 and the progress towards meeting the portfolio of resources identified pursuant to subdivision (a) of Section 454.51.(B) If the commission determines that there is a need for the procurement of eligible energy resources, the commission shall specify the eligible energy resources that should be procured to meet that need.(C) Within six months of determining that there is a need for the procurement of eligible energy resources, the commission may request the Department of Water Resources to exercise its central procurement function to procure those eligible energy resources specified pursuant to subparagraph (B) that meet the portfolio of resources identified in subdivision (a) of Section 454.51.(D) (i) Upon receiving a request pursuant to subparagraph (C), the Department of Water Resources, before January 1, 2035, may exercise its central procurement function to conduct one or more competitive solicitations and enter into contracts to procure eligible energy resources in order to achieve the policy of the state specified in Section 454.53.(ii) Any contract entered into by the Department of Water Resources pursuant to clause (i) and approved by the commission pursuant to Section 80821 of the Water Code before January 1, 2035, shall remain in force for the duration of the contract.(E) The Department of Water Resources exercising of its central procurement function to procure eligible energy resources pursuant to this paragraph shall be conducted in accordance with Division 29.5 (commencing with Section 80800) of the Water Code.(b) (1) Each load-serving entity shall prepare and file an integrated resource plan consistent with paragraph (2) of subdivision (a) on a time schedule directed by the commission and subject to commission review.(2) (A) Each electrical corporations plan shall follow Section 454.5.(B) Each electrical corporation shall do both of the following for purposes of its integrated resource plan:(i) Require evaluation of surplus interconnection options.(ii) Consider surplus interconnection options.(3) The plan of a community choice aggregator shall be submitted to its governing board for approval and provided to the commission for certification, consistent with paragraph (5) of subdivision (a) of Section 366.2, and shall achieve all of the following:(A) Economic, reliability, environmental, security, and other benefits and performance characteristics that are consistent with the goals set forth in paragraph (1) of subdivision (a).(B) A diversified procurement portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.(C) The resource adequacy requirements established pursuant to Section 380.(4) The plan of an electric service provider shall achieve the goals set forth in paragraph (1) of subdivision (a) through a diversified portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.(c) To the extent that additional procurement is authorized for the electrical corporation in the integrated resource plan or the procurement process authorized pursuant to Section 454.5, the commission shall ensure that the costs are allocated in a fair and equitable manner to all customers consistent with Section 454.51, that there is no cost shifting among customers of load-serving entities, and that community choice aggregators may self-provide renewable integration resources consistent with Section 454.51. The commission may order the procurement of resources with specific attributes by load-serving entities as a result of the integrated resource planning process and shall enforce any resource procurement requirements on a nondiscriminatory basis. Enforcement may include the assessment of penalties for noncompliance.(d) To eliminate redundancy and increase efficiency, the process adopted pursuant to subdivision (a) shall incorporate, and not duplicate, any other planning processes of the commission.(e) This section applies to an electrical cooperative, as defined in Section 2776, only if the electrical cooperative has an annual electrical demand exceeding 700 gigawatthours, as determined based on a three-year average commencing with January 1, 2013.(f) (1) The commission shall not include the energy, capacity, or any attribute from Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025, in the adopted integrated resource plan portfolios, resource stacks, or preferred system plans.(2) The commission shall disallow a load-serving entity from including in their adopted integrated resource plan any energy, capacity, or any attribute from the Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025.(g) For a thermal powerplant that uses nuclear fission technology not constructed in the twenty-first century, all resource attributes shall be retired on January 1, 2031, and shall be reported as a separate, line item resource for purposes of complying with Section 398.4.(h) (1) Only a new energy resource that meets all of the following requirements is eligible to be procured by the Department of Water Resources pursuant to this section:(A) The resource directly supports attainment of the goals specified in Section 454.53 without increasing the states dependence on any fossil fuel-based resources.(B) The resource is determined by the commission to not be under contract at sufficient levels as shown in load-serving entities most recent individual integrated resource plans submitted to and reviewed by the commission pursuant to this section to achieve the goals specified in Section 454.53.(C) The resource has a construction and development lead time of at least five years.(D) The resource does not generate electricity using fossil fuels or fuels derived from fossil fuels.(E) The resource does not use combustion to generate electricity, unless that combustion use is ancillary and necessary to facilitate geothermal electricity generation.(2) Resources from a pump hydroelectric facility may be procured by the Department of Water Resources pursuant to this section if the pump hydroelectric facility does not exceed 500 megawatts and has been directly appropriated funding by the state before January 1, 2023.(i) For purposes of this section, the following definitions apply:(1) Load-serving entity has the same meaning as defined in Section 380.(2) Long term means a time period that includes five or more years in the future.(3) Midterm means a time period between two and five years in the future.(4) Short term means a time period between the present and two years in the future.
454.52. (a) (1) Beginning in 2017, and to be updated regularly thereafter, the commission shall adopt a process for each load-serving entity to file an integrated resource plan, and a schedule for periodic updates to the plan, and shall ensure that load-serving entities do all of the following:(A) Meet the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each load-serving entity that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions pursuant to Section 38566 of the Health and Safety Code.(B) Procure at least 60 percent eligible renewable energy resources by December 31, 2030, consistent with the state policy specified in Section 454.53 and Article 16 (commencing with Section 399.11) of Chapter 2.3.(C) Enable each electrical corporation to fulfill its obligation to serve its customers at just and reasonable rates.(D) Minimize impacts on ratepayers bills.(E) (i) Ensure system and local reliability on a short-term, midterm, and long-term basis, including meeting the short-term and forecast long-term resource adequacy requirements of Section 380, and require sufficient, predictable resource procurement and development to avoid unplanned energy supply shortfalls by taking into account impacts due to climate change, forecasted levels of building and transportation electrification, and other factors that can result in those shortfalls.(ii) In furtherance of avoiding unplanned energy supply shortfalls or expensive emergency procurement and ensuring a more accurate understanding of electrical grid operational needs, the commission shall aggregate reported short-term and midterm resource procurement from all load-serving entities conducted under Section 380 or this section and assess midterm resource sufficiency, and annually provide anonymized reports to the Independent System Operator. The commission shall report forward resource procurement using counting conventions that provide the data to the Independent System Operator to be used in its grid planning.(iii) To accomplish clause (i), the commission shall, as part of the integrated planning process, assess short-term, midterm, and long-term reliability by conducting probabilistic reliability modeling, including if there is sufficient capacity available for procurement in the short term and midterm by all load-serving entities to meet their procurement requirements. The commission shall review the results of that reliability modeling in a public proceeding at the same frequency as the forecast conducted in accordance with this section. When modeling short-term and midterm reliability, the commission shall model all procurement consistent with clause (ii) and may rely upon or incorporate probabilistic reliability modeling conducted by the Energy Commission into the commissions public process. The commission shall also report the modeling results in the joint Reliability Planning Assessments conducted under Section 25233 of the Public Resources Code.(F) Comply with paragraph (1) of subdivision (b) of Section 399.13.(G) Strengthen the diversity, sustainability, and resilience of the bulk transmission and distribution systems, and local communities.(H) Enhance distribution systems and demand-side energy management.(I) Minimize localized air pollutants and other greenhouse gas emissions, with early priority on disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.(J) Maintain a diverse portfolio of energy resources, which may include eligible energy resources procured by the Department of Water Resources.(2) (A) The commission may authorize all source procurement for load-serving entities that includes various resource types including demand-side resources, supply-side resources, and resources that may be either demand-side resources or supply-side resources, taking into account the differing load-serving entities geographic service areas, to ensure that each load-serving entity meets the goals set forth in paragraph (1).(B) The commission may approve procurement of resource types that will reduce the overall emissions of greenhouse gases from the electricity sector and meet the other goals specified in paragraph (1), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.(3) In furtherance of the requirements of paragraph (1), the commission shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each load-serving entity meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.(4) (A) On or before September 1, 2024, and consistent with the process and schedule adopted pursuant to paragraph (1), the commission, in consultation with the Energy Commission and the Independent System Operator, shall determine if there is a need for the procurement of eligible energy resources based on a review of the integrated resource plans submitted by load-serving entities in compliance with the requirements of this section and Section 454.53 and the progress towards meeting the portfolio of resources identified pursuant to subdivision (a) of Section 454.51.(B) If the commission determines that there is a need for the procurement of eligible energy resources, the commission shall specify the eligible energy resources that should be procured to meet that need.(C) Within six months of determining that there is a need for the procurement of eligible energy resources, the commission may request the Department of Water Resources to exercise its central procurement function to procure those eligible energy resources specified pursuant to subparagraph (B) that meet the portfolio of resources identified in subdivision (a) of Section 454.51.(D) (i) Upon receiving a request pursuant to subparagraph (C), the Department of Water Resources, before January 1, 2035, may exercise its central procurement function to conduct one or more competitive solicitations and enter into contracts to procure eligible energy resources in order to achieve the policy of the state specified in Section 454.53.(ii) Any contract entered into by the Department of Water Resources pursuant to clause (i) and approved by the commission pursuant to Section 80821 of the Water Code before January 1, 2035, shall remain in force for the duration of the contract.(E) The Department of Water Resources exercising of its central procurement function to procure eligible energy resources pursuant to this paragraph shall be conducted in accordance with Division 29.5 (commencing with Section 80800) of the Water Code.(b) (1) Each load-serving entity shall prepare and file an integrated resource plan consistent with paragraph (2) of subdivision (a) on a time schedule directed by the commission and subject to commission review.(2) (A) Each electrical corporations plan shall follow Section 454.5.(B) Each electrical corporation shall do both of the following for purposes of its integrated resource plan:(i) Require evaluation of surplus interconnection options.(ii) Consider surplus interconnection options.(3) The plan of a community choice aggregator shall be submitted to its governing board for approval and provided to the commission for certification, consistent with paragraph (5) of subdivision (a) of Section 366.2, and shall achieve all of the following:(A) Economic, reliability, environmental, security, and other benefits and performance characteristics that are consistent with the goals set forth in paragraph (1) of subdivision (a).(B) A diversified procurement portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.(C) The resource adequacy requirements established pursuant to Section 380.(4) The plan of an electric service provider shall achieve the goals set forth in paragraph (1) of subdivision (a) through a diversified portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.(c) To the extent that additional procurement is authorized for the electrical corporation in the integrated resource plan or the procurement process authorized pursuant to Section 454.5, the commission shall ensure that the costs are allocated in a fair and equitable manner to all customers consistent with Section 454.51, that there is no cost shifting among customers of load-serving entities, and that community choice aggregators may self-provide renewable integration resources consistent with Section 454.51. The commission may order the procurement of resources with specific attributes by load-serving entities as a result of the integrated resource planning process and shall enforce any resource procurement requirements on a nondiscriminatory basis. Enforcement may include the assessment of penalties for noncompliance.(d) To eliminate redundancy and increase efficiency, the process adopted pursuant to subdivision (a) shall incorporate, and not duplicate, any other planning processes of the commission.(e) This section applies to an electrical cooperative, as defined in Section 2776, only if the electrical cooperative has an annual electrical demand exceeding 700 gigawatthours, as determined based on a three-year average commencing with January 1, 2013.(f) (1) The commission shall not include the energy, capacity, or any attribute from Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025, in the adopted integrated resource plan portfolios, resource stacks, or preferred system plans.(2) The commission shall disallow a load-serving entity from including in their adopted integrated resource plan any energy, capacity, or any attribute from the Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025.(g) For a thermal powerplant that uses nuclear fission technology not constructed in the twenty-first century, all resource attributes shall be retired on January 1, 2031, and shall be reported as a separate, line item resource for purposes of complying with Section 398.4.(h) (1) Only a new energy resource that meets all of the following requirements is eligible to be procured by the Department of Water Resources pursuant to this section:(A) The resource directly supports attainment of the goals specified in Section 454.53 without increasing the states dependence on any fossil fuel-based resources.(B) The resource is determined by the commission to not be under contract at sufficient levels as shown in load-serving entities most recent individual integrated resource plans submitted to and reviewed by the commission pursuant to this section to achieve the goals specified in Section 454.53.(C) The resource has a construction and development lead time of at least five years.(D) The resource does not generate electricity using fossil fuels or fuels derived from fossil fuels.(E) The resource does not use combustion to generate electricity, unless that combustion use is ancillary and necessary to facilitate geothermal electricity generation.(2) Resources from a pump hydroelectric facility may be procured by the Department of Water Resources pursuant to this section if the pump hydroelectric facility does not exceed 500 megawatts and has been directly appropriated funding by the state before January 1, 2023.(i) For purposes of this section, the following definitions apply:(1) Load-serving entity has the same meaning as defined in Section 380.(2) Long term means a time period that includes five or more years in the future.(3) Midterm means a time period between two and five years in the future.(4) Short term means a time period between the present and two years in the future.
454.52. (a) (1) Beginning in 2017, and to be updated regularly thereafter, the commission shall adopt a process for each load-serving entity to file an integrated resource plan, and a schedule for periodic updates to the plan, and shall ensure that load-serving entities do all of the following:
###### 454.52.
(A) Meet the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each load-serving entity that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions pursuant to Section 38566 of the Health and Safety Code.
(B) Procure at least 60 percent eligible renewable energy resources by December 31, 2030, consistent with the state policy specified in Section 454.53 and Article 16 (commencing with Section 399.11) of Chapter 2.3.
(C) Enable each electrical corporation to fulfill its obligation to serve its customers at just and reasonable rates.
(D) Minimize impacts on ratepayers bills.
(E) (i) Ensure system and local reliability on a short-term, midterm, and long-term basis, including meeting the short-term and forecast long-term resource adequacy requirements of Section 380, and require sufficient, predictable resource procurement and development to avoid unplanned energy supply shortfalls by taking into account impacts due to climate change, forecasted levels of building and transportation electrification, and other factors that can result in those shortfalls.
(ii) In furtherance of avoiding unplanned energy supply shortfalls or expensive emergency procurement and ensuring a more accurate understanding of electrical grid operational needs, the commission shall aggregate reported short-term and midterm resource procurement from all load-serving entities conducted under Section 380 or this section and assess midterm resource sufficiency, and annually provide anonymized reports to the Independent System Operator. The commission shall report forward resource procurement using counting conventions that provide the data to the Independent System Operator to be used in its grid planning.
(iii) To accomplish clause (i), the commission shall, as part of the integrated planning process, assess short-term, midterm, and long-term reliability by conducting probabilistic reliability modeling, including if there is sufficient capacity available for procurement in the short term and midterm by all load-serving entities to meet their procurement requirements. The commission shall review the results of that reliability modeling in a public proceeding at the same frequency as the forecast conducted in accordance with this section. When modeling short-term and midterm reliability, the commission shall model all procurement consistent with clause (ii) and may rely upon or incorporate probabilistic reliability modeling conducted by the Energy Commission into the commissions public process. The commission shall also report the modeling results in the joint Reliability Planning Assessments conducted under Section 25233 of the Public Resources Code.
(F) Comply with paragraph (1) of subdivision (b) of Section 399.13.
(G) Strengthen the diversity, sustainability, and resilience of the bulk transmission and distribution systems, and local communities.
(H) Enhance distribution systems and demand-side energy management.
(I) Minimize localized air pollutants and other greenhouse gas emissions, with early priority on disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.
(J) Maintain a diverse portfolio of energy resources, which may include eligible energy resources procured by the Department of Water Resources.
(2) (A) The commission may authorize all source procurement for load-serving entities that includes various resource types including demand-side resources, supply-side resources, and resources that may be either demand-side resources or supply-side resources, taking into account the differing load-serving entities geographic service areas, to ensure that each load-serving entity meets the goals set forth in paragraph (1).
(B) The commission may approve procurement of resource types that will reduce the overall emissions of greenhouse gases from the electricity sector and meet the other goals specified in paragraph (1), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.
(3) In furtherance of the requirements of paragraph (1), the commission shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each load-serving entity meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.
(4) (A) On or before September 1, 2024, and consistent with the process and schedule adopted pursuant to paragraph (1), the commission, in consultation with the Energy Commission and the Independent System Operator, shall determine if there is a need for the procurement of eligible energy resources based on a review of the integrated resource plans submitted by load-serving entities in compliance with the requirements of this section and Section 454.53 and the progress towards meeting the portfolio of resources identified pursuant to subdivision (a) of Section 454.51.
(B) If the commission determines that there is a need for the procurement of eligible energy resources, the commission shall specify the eligible energy resources that should be procured to meet that need.
(C) Within six months of determining that there is a need for the procurement of eligible energy resources, the commission may request the Department of Water Resources to exercise its central procurement function to procure those eligible energy resources specified pursuant to subparagraph (B) that meet the portfolio of resources identified in subdivision (a) of Section 454.51.
(D) (i) Upon receiving a request pursuant to subparagraph (C), the Department of Water Resources, before January 1, 2035, may exercise its central procurement function to conduct one or more competitive solicitations and enter into contracts to procure eligible energy resources in order to achieve the policy of the state specified in Section 454.53.
(ii) Any contract entered into by the Department of Water Resources pursuant to clause (i) and approved by the commission pursuant to Section 80821 of the Water Code before January 1, 2035, shall remain in force for the duration of the contract.
(E) The Department of Water Resources exercising of its central procurement function to procure eligible energy resources pursuant to this paragraph shall be conducted in accordance with Division 29.5 (commencing with Section 80800) of the Water Code.
(b) (1) Each load-serving entity shall prepare and file an integrated resource plan consistent with paragraph (2) of subdivision (a) on a time schedule directed by the commission and subject to commission review.
(2) (A) Each electrical corporations plan shall follow Section 454.5.
(B) Each electrical corporation shall do both of the following for purposes of its integrated resource plan:
(i) Require evaluation of surplus interconnection options.
(ii) Consider surplus interconnection options.
(3) The plan of a community choice aggregator shall be submitted to its governing board for approval and provided to the commission for certification, consistent with paragraph (5) of subdivision (a) of Section 366.2, and shall achieve all of the following:
(A) Economic, reliability, environmental, security, and other benefits and performance characteristics that are consistent with the goals set forth in paragraph (1) of subdivision (a).
(B) A diversified procurement portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.
(C) The resource adequacy requirements established pursuant to Section 380.
(4) The plan of an electric service provider shall achieve the goals set forth in paragraph (1) of subdivision (a) through a diversified portfolio consisting of short-term, midterm, and long-term electricity, electricity-related, and demand reduction products.
(c) To the extent that additional procurement is authorized for the electrical corporation in the integrated resource plan or the procurement process authorized pursuant to Section 454.5, the commission shall ensure that the costs are allocated in a fair and equitable manner to all customers consistent with Section 454.51, that there is no cost shifting among customers of load-serving entities, and that community choice aggregators may self-provide renewable integration resources consistent with Section 454.51. The commission may order the procurement of resources with specific attributes by load-serving entities as a result of the integrated resource planning process and shall enforce any resource procurement requirements on a nondiscriminatory basis. Enforcement may include the assessment of penalties for noncompliance.
(d) To eliminate redundancy and increase efficiency, the process adopted pursuant to subdivision (a) shall incorporate, and not duplicate, any other planning processes of the commission.
(e) This section applies to an electrical cooperative, as defined in Section 2776, only if the electrical cooperative has an annual electrical demand exceeding 700 gigawatthours, as determined based on a three-year average commencing with January 1, 2013.
(f) (1) The commission shall not include the energy, capacity, or any attribute from Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025, in the adopted integrated resource plan portfolios, resource stacks, or preferred system plans.
(2) The commission shall disallow a load-serving entity from including in their adopted integrated resource plan any energy, capacity, or any attribute from the Diablo Canyon Unit 1 beyond November 1, 2024, or Unit 2 beyond August 26, 2025.
(g) For a thermal powerplant that uses nuclear fission technology not constructed in the twenty-first century, all resource attributes shall be retired on January 1, 2031, and shall be reported as a separate, line item resource for purposes of complying with Section 398.4.
(h) (1) Only a new energy resource that meets all of the following requirements is eligible to be procured by the Department of Water Resources pursuant to this section:
(A) The resource directly supports attainment of the goals specified in Section 454.53 without increasing the states dependence on any fossil fuel-based resources.
(B) The resource is determined by the commission to not be under contract at sufficient levels as shown in load-serving entities most recent individual integrated resource plans submitted to and reviewed by the commission pursuant to this section to achieve the goals specified in Section 454.53.
(C) The resource has a construction and development lead time of at least five years.
(D) The resource does not generate electricity using fossil fuels or fuels derived from fossil fuels.
(E) The resource does not use combustion to generate electricity, unless that combustion use is ancillary and necessary to facilitate geothermal electricity generation.
(2) Resources from a pump hydroelectric facility may be procured by the Department of Water Resources pursuant to this section if the pump hydroelectric facility does not exceed 500 megawatts and has been directly appropriated funding by the state before January 1, 2023.
(i) For purposes of this section, the following definitions apply:
(1) Load-serving entity has the same meaning as defined in Section 380.
(2) Long term means a time period that includes five or more years in the future.
(3) Midterm means a time period between two and five years in the future.
(4) Short term means a time period between the present and two years in the future.
SEC. 4. Chapter 11 (commencing with Section 8420) is added to Division 4.1 of the Public Utilities Code, to read: CHAPTER 11. Interconnection Capacity and Sharing8420. For purposes of this chapter, both of the following definitions apply:(a) Electrical corporation has the same meaning as defined in Section 218.(b) Local publicly owned electric utility has the same meaning as defined in Section 224.3.8421. Each electrical corporation or local publicly owned electric utility shall use available grid infrastructure through surplus interconnection, such as the addition of renewable energy resources or battery storage at or near fossil plants, to use any available interconnection capacity.
SEC. 4. Chapter 11 (commencing with Section 8420) is added to Division 4.1 of the Public Utilities Code, to read:
### SEC. 4.
CHAPTER 11. Interconnection Capacity and Sharing8420. For purposes of this chapter, both of the following definitions apply:(a) Electrical corporation has the same meaning as defined in Section 218.(b) Local publicly owned electric utility has the same meaning as defined in Section 224.3.8421. Each electrical corporation or local publicly owned electric utility shall use available grid infrastructure through surplus interconnection, such as the addition of renewable energy resources or battery storage at or near fossil plants, to use any available interconnection capacity.
CHAPTER 11. Interconnection Capacity and Sharing8420. For purposes of this chapter, both of the following definitions apply:(a) Electrical corporation has the same meaning as defined in Section 218.(b) Local publicly owned electric utility has the same meaning as defined in Section 224.3.8421. Each electrical corporation or local publicly owned electric utility shall use available grid infrastructure through surplus interconnection, such as the addition of renewable energy resources or battery storage at or near fossil plants, to use any available interconnection capacity.
CHAPTER 11. Interconnection Capacity and Sharing
CHAPTER 11. Interconnection Capacity and Sharing
##### CHAPTER 11. Interconnection Capacity and Sharing
8420. For purposes of this chapter, both of the following definitions apply:(a) Electrical corporation has the same meaning as defined in Section 218.(b) Local publicly owned electric utility has the same meaning as defined in Section 224.3.
8420. For purposes of this chapter, both of the following definitions apply:
###### 8420.
(a) Electrical corporation has the same meaning as defined in Section 218.
(b) Local publicly owned electric utility has the same meaning as defined in Section 224.3.
8421. Each electrical corporation or local publicly owned electric utility shall use available grid infrastructure through surplus interconnection, such as the addition of renewable energy resources or battery storage at or near fossil plants, to use any available interconnection capacity.
8421. Each electrical corporation or local publicly owned electric utility shall use available grid infrastructure through surplus interconnection, such as the addition of renewable energy resources or battery storage at or near fossil plants, to use any available interconnection capacity.
###### 8421.
SEC. 5. Section 9621 of the Public Utilities Code is amended to read:9621. (a) This section shall apply to a local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours, as determined on a three-year average commencing January 1, 2013.(b) On or before January 1, 2019, the governing board of a local publicly owned electric utility shall adopt an integrated resource plan and a process for updating the plan at least once every five years to ensure the utility achieves all of the following:(1) Meets the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each local publicly owned electric utility that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions of 40 percent from 1990 levels by 2030.(2) Ensures procurement of at least 50 percent eligible renewable energy resources by 2030 consistent with Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1.(3) Meets the goals specified in subparagraphs (D) to (H), inclusive, of paragraph (1) of subdivision (a) of Section 454.52, and the goal specified in subparagraph (C) of paragraph (1) of subdivision (a) of Section 454.52, as that goal is applicable to each local publicly owned electric utility. A local publicly owned electric utility shall not, solely by reason of this paragraph, be subject to requirements otherwise imposed on electrical corporations.(4) In furtherance of the carbon neutrality goals set forth in Executive Order B-55-18 To Achieve Carbon Neutrality (September 10, 2018), each updated integrated resource plan shall include, as applicable, details of the utilitys electrical service rate design that support transportation electrification, and existing or planned incentives to support transportation electrification, including rebates. The rate design shall include details for all applicable transportation sectors, including, but not limited to, on-road and off-road vehicles in the light-, medium-, and heavy-duty sectors. Each integrated resource plan shall also include information about the utilitys customer education and outreach efforts being implemented to inform utility customers of available incentives and decisionmaking tools, such as cost calculators or cost estimates that can assist customers in predicting the cost of paying for electricity for these vehicles.(c) In furtherance of the requirements of subdivision (b), the governing board of a local publicly owned electric utility shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each utility meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.(d) (1) The integrated resource plan shall address procurement for the following:(A) Energy efficiency and demand response resources pursuant to Section 9615.(B) Energy storage requirements pursuant to Chapter 7.7 (commencing with Section 2835) of Part 2 of Division 1.(C) Transportation electrification.(D) A diversified procurement portfolio consisting of both short-term and long-term electricity, electricity-related, and demand response products.(E) The resource adequacy requirements established pursuant to Section 9620.(2) (A) The governing board of the local publicly owned electric utility may authorize all source procurement that includes various resource types, including demand-side resources, supply side resources, and resources that may be either demand-side resources or supply side resources, to ensure that the local publicly owned electric utility procures the optimum resource mix that meets the objectives of subdivision (b).(B) The governing board may authorize procurement of resource types that will reduce overall greenhouse gas emissions from the electricity sector and meet the other goals specified in subdivision (b), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.(e) The governing board of a local publicly owned electric utility shall do both of the following for purposes of its integrated resource plan:(i) Require evaluation of surplus interconnection options.(ii) Consider surplus interconnection options.(e)(f) A local publicly owned electric utility shall satisfy the notice and public disclosure requirements of subdivision (f) of Section 399.30 with respect to any integrated resource plan or plan update it considers.
SEC. 5. Section 9621 of the Public Utilities Code is amended to read:
### SEC. 5.
9621. (a) This section shall apply to a local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours, as determined on a three-year average commencing January 1, 2013.(b) On or before January 1, 2019, the governing board of a local publicly owned electric utility shall adopt an integrated resource plan and a process for updating the plan at least once every five years to ensure the utility achieves all of the following:(1) Meets the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each local publicly owned electric utility that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions of 40 percent from 1990 levels by 2030.(2) Ensures procurement of at least 50 percent eligible renewable energy resources by 2030 consistent with Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1.(3) Meets the goals specified in subparagraphs (D) to (H), inclusive, of paragraph (1) of subdivision (a) of Section 454.52, and the goal specified in subparagraph (C) of paragraph (1) of subdivision (a) of Section 454.52, as that goal is applicable to each local publicly owned electric utility. A local publicly owned electric utility shall not, solely by reason of this paragraph, be subject to requirements otherwise imposed on electrical corporations.(4) In furtherance of the carbon neutrality goals set forth in Executive Order B-55-18 To Achieve Carbon Neutrality (September 10, 2018), each updated integrated resource plan shall include, as applicable, details of the utilitys electrical service rate design that support transportation electrification, and existing or planned incentives to support transportation electrification, including rebates. The rate design shall include details for all applicable transportation sectors, including, but not limited to, on-road and off-road vehicles in the light-, medium-, and heavy-duty sectors. Each integrated resource plan shall also include information about the utilitys customer education and outreach efforts being implemented to inform utility customers of available incentives and decisionmaking tools, such as cost calculators or cost estimates that can assist customers in predicting the cost of paying for electricity for these vehicles.(c) In furtherance of the requirements of subdivision (b), the governing board of a local publicly owned electric utility shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each utility meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.(d) (1) The integrated resource plan shall address procurement for the following:(A) Energy efficiency and demand response resources pursuant to Section 9615.(B) Energy storage requirements pursuant to Chapter 7.7 (commencing with Section 2835) of Part 2 of Division 1.(C) Transportation electrification.(D) A diversified procurement portfolio consisting of both short-term and long-term electricity, electricity-related, and demand response products.(E) The resource adequacy requirements established pursuant to Section 9620.(2) (A) The governing board of the local publicly owned electric utility may authorize all source procurement that includes various resource types, including demand-side resources, supply side resources, and resources that may be either demand-side resources or supply side resources, to ensure that the local publicly owned electric utility procures the optimum resource mix that meets the objectives of subdivision (b).(B) The governing board may authorize procurement of resource types that will reduce overall greenhouse gas emissions from the electricity sector and meet the other goals specified in subdivision (b), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.(e) The governing board of a local publicly owned electric utility shall do both of the following for purposes of its integrated resource plan:(i) Require evaluation of surplus interconnection options.(ii) Consider surplus interconnection options.(e)(f) A local publicly owned electric utility shall satisfy the notice and public disclosure requirements of subdivision (f) of Section 399.30 with respect to any integrated resource plan or plan update it considers.
9621. (a) This section shall apply to a local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours, as determined on a three-year average commencing January 1, 2013.(b) On or before January 1, 2019, the governing board of a local publicly owned electric utility shall adopt an integrated resource plan and a process for updating the plan at least once every five years to ensure the utility achieves all of the following:(1) Meets the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each local publicly owned electric utility that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions of 40 percent from 1990 levels by 2030.(2) Ensures procurement of at least 50 percent eligible renewable energy resources by 2030 consistent with Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1.(3) Meets the goals specified in subparagraphs (D) to (H), inclusive, of paragraph (1) of subdivision (a) of Section 454.52, and the goal specified in subparagraph (C) of paragraph (1) of subdivision (a) of Section 454.52, as that goal is applicable to each local publicly owned electric utility. A local publicly owned electric utility shall not, solely by reason of this paragraph, be subject to requirements otherwise imposed on electrical corporations.(4) In furtherance of the carbon neutrality goals set forth in Executive Order B-55-18 To Achieve Carbon Neutrality (September 10, 2018), each updated integrated resource plan shall include, as applicable, details of the utilitys electrical service rate design that support transportation electrification, and existing or planned incentives to support transportation electrification, including rebates. The rate design shall include details for all applicable transportation sectors, including, but not limited to, on-road and off-road vehicles in the light-, medium-, and heavy-duty sectors. Each integrated resource plan shall also include information about the utilitys customer education and outreach efforts being implemented to inform utility customers of available incentives and decisionmaking tools, such as cost calculators or cost estimates that can assist customers in predicting the cost of paying for electricity for these vehicles.(c) In furtherance of the requirements of subdivision (b), the governing board of a local publicly owned electric utility shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each utility meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.(d) (1) The integrated resource plan shall address procurement for the following:(A) Energy efficiency and demand response resources pursuant to Section 9615.(B) Energy storage requirements pursuant to Chapter 7.7 (commencing with Section 2835) of Part 2 of Division 1.(C) Transportation electrification.(D) A diversified procurement portfolio consisting of both short-term and long-term electricity, electricity-related, and demand response products.(E) The resource adequacy requirements established pursuant to Section 9620.(2) (A) The governing board of the local publicly owned electric utility may authorize all source procurement that includes various resource types, including demand-side resources, supply side resources, and resources that may be either demand-side resources or supply side resources, to ensure that the local publicly owned electric utility procures the optimum resource mix that meets the objectives of subdivision (b).(B) The governing board may authorize procurement of resource types that will reduce overall greenhouse gas emissions from the electricity sector and meet the other goals specified in subdivision (b), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.(e) The governing board of a local publicly owned electric utility shall do both of the following for purposes of its integrated resource plan:(i) Require evaluation of surplus interconnection options.(ii) Consider surplus interconnection options.(e)(f) A local publicly owned electric utility shall satisfy the notice and public disclosure requirements of subdivision (f) of Section 399.30 with respect to any integrated resource plan or plan update it considers.
9621. (a) This section shall apply to a local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours, as determined on a three-year average commencing January 1, 2013.(b) On or before January 1, 2019, the governing board of a local publicly owned electric utility shall adopt an integrated resource plan and a process for updating the plan at least once every five years to ensure the utility achieves all of the following:(1) Meets the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each local publicly owned electric utility that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions of 40 percent from 1990 levels by 2030.(2) Ensures procurement of at least 50 percent eligible renewable energy resources by 2030 consistent with Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1.(3) Meets the goals specified in subparagraphs (D) to (H), inclusive, of paragraph (1) of subdivision (a) of Section 454.52, and the goal specified in subparagraph (C) of paragraph (1) of subdivision (a) of Section 454.52, as that goal is applicable to each local publicly owned electric utility. A local publicly owned electric utility shall not, solely by reason of this paragraph, be subject to requirements otherwise imposed on electrical corporations.(4) In furtherance of the carbon neutrality goals set forth in Executive Order B-55-18 To Achieve Carbon Neutrality (September 10, 2018), each updated integrated resource plan shall include, as applicable, details of the utilitys electrical service rate design that support transportation electrification, and existing or planned incentives to support transportation electrification, including rebates. The rate design shall include details for all applicable transportation sectors, including, but not limited to, on-road and off-road vehicles in the light-, medium-, and heavy-duty sectors. Each integrated resource plan shall also include information about the utilitys customer education and outreach efforts being implemented to inform utility customers of available incentives and decisionmaking tools, such as cost calculators or cost estimates that can assist customers in predicting the cost of paying for electricity for these vehicles.(c) In furtherance of the requirements of subdivision (b), the governing board of a local publicly owned electric utility shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each utility meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.(d) (1) The integrated resource plan shall address procurement for the following:(A) Energy efficiency and demand response resources pursuant to Section 9615.(B) Energy storage requirements pursuant to Chapter 7.7 (commencing with Section 2835) of Part 2 of Division 1.(C) Transportation electrification.(D) A diversified procurement portfolio consisting of both short-term and long-term electricity, electricity-related, and demand response products.(E) The resource adequacy requirements established pursuant to Section 9620.(2) (A) The governing board of the local publicly owned electric utility may authorize all source procurement that includes various resource types, including demand-side resources, supply side resources, and resources that may be either demand-side resources or supply side resources, to ensure that the local publicly owned electric utility procures the optimum resource mix that meets the objectives of subdivision (b).(B) The governing board may authorize procurement of resource types that will reduce overall greenhouse gas emissions from the electricity sector and meet the other goals specified in subdivision (b), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.(e) The governing board of a local publicly owned electric utility shall do both of the following for purposes of its integrated resource plan:(i) Require evaluation of surplus interconnection options.(ii) Consider surplus interconnection options.(e)(f) A local publicly owned electric utility shall satisfy the notice and public disclosure requirements of subdivision (f) of Section 399.30 with respect to any integrated resource plan or plan update it considers.
9621. (a) This section shall apply to a local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours, as determined on a three-year average commencing January 1, 2013.
###### 9621.
(b) On or before January 1, 2019, the governing board of a local publicly owned electric utility shall adopt an integrated resource plan and a process for updating the plan at least once every five years to ensure the utility achieves all of the following:
(1) Meets the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each local publicly owned electric utility that reflect the electricity sectors percentage in achieving the economywide greenhouse gas emissions reductions of 40 percent from 1990 levels by 2030.
(2) Ensures procurement of at least 50 percent eligible renewable energy resources by 2030 consistent with Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1.
(3) Meets the goals specified in subparagraphs (D) to (H), inclusive, of paragraph (1) of subdivision (a) of Section 454.52, and the goal specified in subparagraph (C) of paragraph (1) of subdivision (a) of Section 454.52, as that goal is applicable to each local publicly owned electric utility. A local publicly owned electric utility shall not, solely by reason of this paragraph, be subject to requirements otherwise imposed on electrical corporations.
(4) In furtherance of the carbon neutrality goals set forth in Executive Order B-55-18 To Achieve Carbon Neutrality (September 10, 2018), each updated integrated resource plan shall include, as applicable, details of the utilitys electrical service rate design that support transportation electrification, and existing or planned incentives to support transportation electrification, including rebates. The rate design shall include details for all applicable transportation sectors, including, but not limited to, on-road and off-road vehicles in the light-, medium-, and heavy-duty sectors. Each integrated resource plan shall also include information about the utilitys customer education and outreach efforts being implemented to inform utility customers of available incentives and decisionmaking tools, such as cost calculators or cost estimates that can assist customers in predicting the cost of paying for electricity for these vehicles.
(c) In furtherance of the requirements of subdivision (b), the governing board of a local publicly owned electric utility shall consider the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency, in helping to ensure each utility meets energy needs and reliability needs in hours to encompass the hour of peak demand of electricity, excluding demand met by variable renewable generation directly connected to a California balancing authority, as defined in Section 399.12, while reducing the need for new electricity generation resources and new transmission resources in achieving the states energy goals at the least cost to ratepayers.
(d) (1) The integrated resource plan shall address procurement for the following:
(A) Energy efficiency and demand response resources pursuant to Section 9615.
(B) Energy storage requirements pursuant to Chapter 7.7 (commencing with Section 2835) of Part 2 of Division 1.
(C) Transportation electrification.
(D) A diversified procurement portfolio consisting of both short-term and long-term electricity, electricity-related, and demand response products.
(E) The resource adequacy requirements established pursuant to Section 9620.
(2) (A) The governing board of the local publicly owned electric utility may authorize all source procurement that includes various resource types, including demand-side resources, supply side resources, and resources that may be either demand-side resources or supply side resources, to ensure that the local publicly owned electric utility procures the optimum resource mix that meets the objectives of subdivision (b).
(B) The governing board may authorize procurement of resource types that will reduce overall greenhouse gas emissions from the electricity sector and meet the other goals specified in subdivision (b), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.
(e) The governing board of a local publicly owned electric utility shall do both of the following for purposes of its integrated resource plan:
(i) Require evaluation of surplus interconnection options.
(ii) Consider surplus interconnection options.
(e)
(f) A local publicly owned electric utility shall satisfy the notice and public disclosure requirements of subdivision (f) of Section 399.30 with respect to any integrated resource plan or plan update it considers.
SEC. 6. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because 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 XIIIB of the California Constitution.
SEC. 6. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because 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 XIIIB of the California Constitution.
SEC. 6. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because 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 XIIIB of the California Constitution.
### SEC. 6.
(a)For purposes of this section, time-variant pricing includes time-of-use rates, critical peak pricing, and real-time pricing, but does not include programs that provide customers with discounts from standard tariff rates as an incentive to reduce consumption at certain times, including peak time rebates.
(b)The commission may authorize an electrical corporation to offer residential customers the option of receiving service pursuant to time-variant pricing and to participate in other demand response programs. The commission shall not establish a mandatory or default time-variant pricing tariff for any residential customer except as authorized in subdivision (c).
(c)Beginning January 1, 2018, and subject to the commission making the findings required by subdivision (d), the commission may require or authorize an electrical corporation to employ default time-of-use rates for residential customers subject to all of the following:
(1)Residential customers receiving a medical baseline allowance pursuant to subdivision (c) of Section 739, customers requesting third-party notification pursuant to subdivision (c) of Section 779.1, customers who the commission has ordered cannot be disconnected from service without an in-person visit from a utility representative (Decision 12-03-054 (March 22, 2012), Decision on Phase II Issues: Adoption of Practices to Reduce the Number of Gas and Electric Service Disconnections, Order 2 (b) at page 55), and other customers designated by the commission in its discretion shall not be subject to default time-of-use rates without their affirmative consent.
(2)The commission shall ensure that any time-of-use rate schedule does not cause unreasonable hardship for senior citizens or economically vulnerable customers in hot climate zones.
(3)The commission shall strive for time-of-use rate schedules that utilize time periods that are appropriate for at least the following five years.
(4)A residential customer shall not be subject to a default time-of-use rate schedule unless that residential customer has been provided with not less than one year of interval usage data from an advanced meter and associated customer education and, following the passage of this period, is provided with no less than two years of bill protection during which the total amount paid by the residential customer for electric service shall not exceed the amount that would have been payable by the residential customer under that customers previous rate schedule.
(5)Each electrical corporation shall provide each residential customer, not less than once per year, using a reasonable delivery method of the customers choosing, a summary of available tariff options with a calculation of expected annual bill impacts under each available tariff. The summary shall not be provided to customers who notify the utility that they choose not to receive the summary. The reasonable costs of providing this service shall be recovered in rates.
(6)Residential customers have the option to not receive service pursuant to a time-of-use rate schedule and incur no additional charges as a result of the exercise of that option. Prohibited charges include, but are not limited to, administrative fees for switching away from time-of-use rates, hedging premiums that exceed any actual costs of hedging, and more than a proportional share of any discounts or other incentives paid to customers to increase participation in time-of-use rates. This prohibition on additional charges is not intended to ensure that a customer will necessarily experience a lower total bill as a result of the exercise of the option to not receive service pursuant to a time-of-use rate schedule.
(d)The commission shall not require or authorize an electrical corporation to employ default time-of-use rates for residential customers unless it has first explicitly considered evidence addressing the extent to which hardship will be caused on either of the following:
(1)Customers located in hot, inland areas, assuming no changes in overall usage by those customers during peak periods.
(2)Residential customers living in areas with hot summer weather, as a result of seasonal bill volatility, assuming no change in summertime usage or in usage during peak periods.