BILL NUMBER: AB 1724 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Pavley
MARCH 19, 2001
An act to amend Section 399.6 of the Public Utilities Code,
relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 1724, as introduced, Pavley. Public utilities: Reliable
Electric Service Investments Act.
Under the Reliable Electric Service Investments Act, the State
Energy Resources Conservation and Development Commission (Energy
Commission) is required to create an investment plan, in accordance
with specified objectives, to govern the allocation of funds in order
to be a fully competitive and self-sustaining California renewable
energy supply. Existing law requires the Energy Commission, in
preparing these investment plans, to recommend specified allocations
including customer credits for renewable energy not under contract
with a utility. Existing law specifies that commencing on January 1,
2002, public entities are not eligible to receive customer credits
for renewables.
This bill would delete the provision that prohibits, commencing
January 1, 2002, public entities from receiving customer credits for
renewables.
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 399.6 of the Public Utilities Code is amended
to read:
399.6. (a) In order to optimize public investment and ensure that
the most cost-effective and efficient investments in renewable
resources are vigorously pursued, the Energy Commission shall create
an investment plan as set forth in paragraphs (1) to (3), inclusive,
to govern the allocation of funds provided pursuant to this article.
The Energy Commission's long-term goal shall be a fully competitive
and self-sustaining California renewable energy supply. The
investment plan shall be in accordance with all of the following:
(1) The investment plan's objective shall be to increase, in the
near term, the quantity of California's electricity generated by
in-state renewable energy resources, while protecting system
reliability, fostering resource diversity, and obtaining the greatest
environmental benefits for California residents.
(2) An additional objective of the plan shall be to identify and
support emerging renewable energy technologies that have the greatest
near-term commercial promise and that merit targeted assistance.
(3) The investment plan shall contain specific numerical targets,
reflecting the projected impact of the plan, for both of the
following:
(A) Increased quantity of California electrical generation
produced from emerging technologies and from overall renewable
resources.
(B) Increased supply of renewable generation available from
facilities other than those selling to investor-owned utilities under
contracts entered into prior to 1996 under the federal Public
Utilities Regulatory Policies Act of 1978 (P.L. 95-617).
(b) The Energy Commission shall, on an annual basis, evaluate
progress on meeting the targets set forth in subparagraphs (A) and
(B) of paragraph (3) of subdivision (a), or any substitute provisions
adopted by the Legislature upon review of the investment plan, and
assess the impact of the investment plan on reducing the cost to
Californians of renewable energy generation.
(c) In preparing these investment plans, the Energy Commission
shall recommend allocations among all of the following:
(1) (A) Except as provided in subparagraph (B), production
incentives for new renewable energy, including repowered or
refurbished renewable energy.
(B) Allocations may not be made for renewable energy that is
generated by a project that remains under a power purchase contract
with an electrical corporation originally entered into prior to
September 24, 1996, whether amended or restated thereafter.
(C) Notwithstanding subparagraph (B), production incentives for
incremental new, repowered, or refurbished renewable energy from
existing projects under a power purchase contract with an electrical
corporation originally entered into prior to September 24, 1996,
whether amended or restated thereafter, may be allowed in any month,
if all of the following occur:
(i) The project's power purchase contract provides that all energy
delivered and sold under the contract is paid at a price that does
not exceed commission approved short-run avoided cost of energy.
(ii) Either of the following:
(I) The power purchase contract is amended to provide that the
kilowatthours used to determine the capacity payment in any
time-of-delivery period in any month under the contract shall be
equal to the actual kilowatthour production, but no greater than the
five-year average of the kilowatthours delivered for the
corresponding time-of-delivery period and month, in the years 1994 to
1998, inclusive.
(II) If a project's installed capacity as of December 31, 1998, is
less than 75 percent of the nameplate capacity as stated in the
power purchase contract, the power purchase contract is amended to
provide that the kilowatthours used to determine the capacity payment
in any time-of-delivery period in any month under the contract shall
be equal to the actual kilowatthour production, but no greater than
the product of the five-year average of the kilowatthours delivered
for the corresponding time-of-delivery period and month, in the years
1994 to 1998, inclusive, and the ratio of installed capacity as of
December 31 of the previous year, but not to exceed contract
nameplate capacity, to the installed capacity as of December 31,
1998.
(iii) The production incentive is payable only with respect to the
kilowatthours delivered in a particular month that exceeds the
corresponding five-year average calculated pursuant to clause (ii).
(2) Rebates, buydowns, or equivalent incentives for emerging
renewable technologies.
(3) Customer credits for renewables not under contract with a
utility.
(4) Customer education.
(5) Incentives for reducing fuel costs that are confirmed to the
satisfaction of the Energy Commission at solid fuel biomass energy
facilities in order to provide demonstrable environmental and public
benefits, including but not limited to, air quality.
(6) Solar thermal generating resources that enhance the
environmental value or reliability of the electricity system and that
require financial assistance to remain economically viable, as
determined by the Energy Commission. The Energy Commission may
require financial disclosure from applicants for purposes of this
paragraph.
(7) Specified fuel cell technologies, if the Energy Commission
makes all of the following findings:
(A) The specified technologies have similar or better air
pollutant characteristics than renewable technologies in the
investment plan.
(B) The specified technologies require financial assistance to
become commercially viable by reference to wholesale generation
prices.
(C) The specified technologies could contribute significantly to
the infrastructure development or other innovation required to meet
the long-term objective of a self-sustaining, competitive supply of
renewable energy.
(8) Existing wind-generating resources, if the Energy Commission
finds that the existing wind-generating resources are a
cost-effective source of reliability and environmental benefits
compared with other eligible sources, and that the existing
wind-generating resources require financial assistance to remain
economically viable, as determined by the Energy Commission. The
Energy Commission may require financial disclosure from applicants
for the purposes of this paragraph.
(d) Commencing on January 1, 2002, public entities are
not eligible to receive customer credits for renewables.
(e) Notwithstanding any other provision of law, moneys
collected for renewable energy pursuant to this article shall be
transferred to the Renewable Resource Trust Fund of the Energy
Commission, to be held until further action by the Legislature. The
Energy Commission shall prepare and submit to the Legislature, on or
before March 31, 2001, an initial investment plan for these moneys,
addressing the application of moneys collected between January 1,
2002, and January 1, 2007. The initial investment plan shall also
include an evaluation of and report to the Legislature regarding the
appropriateness and structure of a mandatory state purchase of
renewable energy. On or before March 31, 2006, the Energy Commission
shall prepare an investment plan proposing the application of moneys
collected between January 1, 2007, and January 1, 2012. No moneys
may be expended in the years covered by these plans without further
legislative action.