BILL NUMBER: ABX2 26 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 28, 2001
AMENDED IN SENATE JUNE 19, 2001
INTRODUCED BY Assembly Member Calderon
MAY 17, 2001
An act to add Section and repeal 39925 to the Health and
Safety Code, and to add Section 743.2 to, and to amend Section 353.13
of, An act to amend Section 353.13 of the
Public Utilities Code, relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 26, as amended, Calderon. Electrical energy: air
pollution electrical corporations: tariffs .
(1) Existing law contains various provisions relative to air
pollution control.
This bill would require the State Air Resources Board, on or
before August 1, 2001, in consultation with the Independent System
Operator, air quality management districts, air pollution control
districts, and the owners and operators of fossil-fueled electrical
generating facilities in the state, to establish an environmental
dispatch procedure to minimize nitrogen oxide emissions from
generating facilities consistent with maintaining electric system
reliability. Under the provisions of the bill, the environmental
dispatch procedure will apply only to those units that have exhausted
the allowable emission credits or hours under a local air district
permit. The bill would authorize the Independent System Operator to
deviate from the environmental dispatch procedure where necessary to
preserve the reliability of the transmission grid. The bill would
require the State Air Resources Board and the Independent System
Operator to submit a report to the Legislature assessing the effect
of the environmental dispatch procedure on emissions and air quality,
electric system reliability, and electric prices in the state.
These requirements would be repealed January 1, 2004.
(2) Existing
Existing law requires the Public Utilities Commission to
require each electrical corporation to establish new tariffs on or
before January 1, 2003, for customers using distributed energy
resources.
This bill would require the commission, in establishing those
tariffs, to consider coincident peakload, and the reliability of the
onsite generation, as determined by the frequency and duration of
outages, so that customers with more reliable onsite generation and
those that reduce peak demand pay a lower cost-based rate.
(3) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations and other specified entities.
This bill would authorize an electrical corporation to recover the
reasonable cost of implementing programs, as described, intended to
reduce or manage electric demand and energy usage, provide
distributed generation, or allow customers to better manage their
energy usage through installation of real time metering. The bill
would authorize an electrical corporation to recover the costs by
charging those costs against amounts collected by the electrical
corporation on behalf of the Department of Water Resources for power
supplied by the department to the customers of the electrical
corporation. The bill would provide that the funding mechanisms
established for new programs under these provisions are not subject
to any prohibition against electricity post-rate freeze cost
recovery.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 39925 is added to the Health and Safety Code,
to read:
39925. (a) On or before August 1, 2001, the state board, in
consultation with the Independent System Operator, air quality
management districts, air pollution control districts, and the owners
and operators of fossil-fueled electrical generation facilities in
the state, shall establish standards and regulations to establish an
environmental dispatch procedure to minimize nitrogen oxide emissions
from generating facilities consistent with maintaining electric
system reliability. The environmental dispatch procedure shall apply
only to those units that have exhausted the allowable emission
credits or hours under a local air district permit. The Independent
System Operator may deviate from the environmental dispatch procedure
if necessary to preserve the reliability of the transmission grid.
(b) On or before August 1, 2003, the state board and the
Independent System Operator shall submit a report to the Legislature
assessing the effect of the standards and regulations developed
pursuant to this section on emissions and air quality, electric
system reliability, and electric prices in the state.
(c) This section shall remain in effect only until January 1,
2004, and as of that date is repealed, unless a later enacted
statute, which is enacted before January 1, 2004, deletes or extends
that date.
SEC. 2.
SECTION 1. Section 353.13 of the Public Utilities Code is
amended to read:
353.13. (a) The commission shall require each electrical
corporation to establish new tariffs on or before January 1, 2003,
for customers using distributed energy resources, including, but not
limited to, those that do not meet all of the criteria described in
Section 353.1. However, after January 1, 2003, distributed energy
resources that meet all of the criteria described in Section 353.1
shall continue to be subject only to those tariffs in existence
pursuant to Section 353.3, until June 1, 2011, except that
installations that do not operate in a combined heat and power
application will be subject to those tariffs in existence pursuant to
Section 353.3 only until June 1, 2006. Those tariffs required
pursuant to this section shall ensure that all net distribution costs
incurred to serve each customer class, taking into account the
actual costs and benefits of distributed energy resources,
proportional to each customer class, as determined by the commission,
are fully recovered only from that class. The commission shall
require each electrical corporation, in establishing those rates, to
ensure that customers with similar load profiles within a customer
class will, to the extent practicable, be subject to the same utility
rates, regardless of their use of distributed energy resources to
serve onsite loads or over-the-fence transactions allowed under
Sections 216 and 218. Customers with dedicated facilities shall
remain responsible for their obligations regarding payment for those
facilities.
(b) The commission shall prepare and submit to the Legislature, on
or before June 1, 2002, a report describing its proposed methodology
for determining the new rates and the process by which it will
establish those rates.
(c) In establishing the tariffs, the commission shall consider
coincident peakload, and the reliability of the onsite generation, as
determined by the frequency and duration of outages, so that
customers with more reliable onsite generation and those that reduce
peak demand pay a lower cost-based rate.
SEC. 3. Section 743.2 is added to the Public Utilities Code, to
read:
743.2. (a) The Legislature finds and declares that new and
existing programs intended to reduce or manage electric demand and
energy usage, provide distributed generation, or allow customers to
better manage their energy usage through installation of real time
metering, are preferable to the apparent alternative of increasingly
frequent and severe rotating outages and their consequent effect on
the state's economy, whether these programs are required by the
Legislature, the commission, or the Independent System Operator.
(b) An electrical corporation shall be permitted to recover
concurrently the reasonable costs of implementing the programs,
including customer incentive, marketing, administration, and
infrastructure costs for new programs and current programs, to the
extent funding for current programs is not already embedded in rates
or otherwise provided. An electrical corporation may charge these
costs against amounts collected by the electrical corporation on
behalf of the Department of Water Resources for power supplied by
that department to the customers of the electrical corporation
pursuant to Division 27 (commencing with Section 80000) of the Water
Code.
(c) Notwithstanding any law to the contrary, the funding
mechanisms established for new programs under this section may not be
subject to any prohibition against electricity post-rate freeze cost
recovery.