BILL NUMBER: AB 2718 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 5, 2002
AMENDED IN SENATE JUNE 19, 2002
AMENDED IN ASSEMBLY APRIL 18, 2002
AMENDED IN ASSEMBLY APRIL 2, 2002
INTRODUCED BY Assembly Member Oropeza
(Coauthors: Assembly Members Calderon and Pescetti)
FEBRUARY 22, 2002
An act to amend Section 379.5 of the Public Utilities Code,
relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 2718, as amended, Oropeza. Oil producers.
Existing law requires the Public Utilities Commission, in
consultation with the Independent System Operator and the State
Energy Resources Conservation and Development Commission, to adopt
initiatives, on or before March 7, 2001, to reduce demand for
electricity and reduce load during peak demand periods, including
differential incentives for renewable or super clean distributed
generation resources.
This bill would delete the March 7, 2001, deadline and would
provide that differential incentives for renewable or super clean
distributed generation resources include fuel cells and microturbines
operating on renewable energy.
The bill would also provide that fuel cells and microturbines
operating on flared or otherwise wasted gas, as
defined, are also eligible for incentives under the level 3 incentive
category established by the commission in an amount equal
to totaling $2.50 per watt and must
upon demonstration that operation of the system will
produce a net air quality benefit. The bill would require the
commission to require a customer receiving the incentive to
secure an interconnection agreement to operate solely on the
waste gas stream wasted gas .
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 379.5 of the Public Utilities Code is amended
to read:
379.5. Notwithstanding any other provision of law, the
commission, in consultation with the Independent System Operator,
shall take all of the following actions, and shall include the
reasonable costs involved in taking those actions in the distribution
revenue requirements of utilities regulated by the commission, as
appropriate:
(a) (1) Identify and undertake those actions necessary to reduce
or remove constraints on the state's existing electrical transmission
and distribution system, including, but not limited to,
reconductoring of transmission lines, the addition of capacitors to
increase voltage, the reinforcement of existing transmission
capacity, and the installation of new transformer banks. The
commission shall, in consultation with the Independent System
Operator, give first priority to those geographical regions where
congestion reduces or impedes electrical transmission and supply.
(2) Consistent with the existing statutory authority of the
commission, afford electrical corporations a reasonable opportunity
to fully recover costs it determines are reasonable and prudent to
plan, finance, construct, operate, and maintain any facilities under
its jurisdiction required by this section.
(b) In consultation with the State Energy Resources Conservation
and Development Commission, adopt energy conservation demand-side
management and other initiatives in order to reduce demand for
electricity and reduce load during peak demand periods. Those
initiatives shall include, but not be limited to, all of the
following:
(1) Expansion and acceleration of residential and commercial
weatherization programs.
(2) Expansion and acceleration of programs to inspect and improve
the operating efficiency of heating, ventilation, and
air-conditioning equipment in new and existing buildings, to ensure
that these systems achieve the maximum feasible cost-effective energy
efficiency.
(3) Expansion and acceleration of programs to improve energy
efficiency in new buildings, in order to achieve the maximum feasible
reductions in uneconomic energy and peak electricity consumption.
(4) Incentives to equip commercial buildings with the capacity to
automatically shut down or dim nonessential lighting and
incrementally raise thermostats during a peak electricity demand
period.
(5) Evaluation of installing local infrastructure to link
temperature setback thermostats to real-time price signals.
(6) Incentives for load control and distributed generation to be
paid for enhancing reliability.
(7) Differential incentives for renewable or super clean
distributed generation resources. "Super clean distributed
generation resources" includes, but is not limited to, fuel cells and
microturbines operating on renewable energy. Fuel cells
and microturbines operating on flared or otherwise wasted gas shall
also be eligible for incentives under the level 3 incentive category
as established by the commission in Decision 01-03-073, dated March
27, 2001, in an amount equal to two dollars and fifty cents ($2.50)
per watt. Fuel cells and microturbines eligible for incentives under
this paragraph shall be exempt from the requirements of Section
218.5. "Wasted gas" energy. Fuel cells and
microturbines operating on wasted gas shall also be eligible for
incentives under the level 3 incentive category as established by the
commission in Decision 01-03-073, dated March 27, 2001. All of the
existing level 3 criteria shall apply to a fuel cell or microturbine
that will operate on wasted gas, except that the system need not
utilize waste heat recovery, and shall be eligible for an incentive
totaling two dollars and fifty cents ($2.50) per watt upon
demonstration that operation of the system will produce a net air
quality benefit. "Wasted gas" includes gases generated as a
byproduct of petroleum production operations that would otherwise be
stranded or not utilized due to the unavailability of an acceptable
disposal method, or gas not utilized due to other constraints.
Fuel cells and microturbines utilizing flared or wasted gas
shall secure an interconnection agreement that specifies that the
fuel cells and microturbines shall be operated solely on the waste
gas stream and not on gas that would otherwise be eligible for
delivery to the utility pipeline system. The
commission shall require a customer that receives an incentive for a
fuel cell or a microturbine that will operate on wasted gas to secure
an interconnection agreement that specifies that the fuel cell or
microturbine shall be operated solely on wasted gas and not on gas
that would otherwise be eligible for delivery to the utility pipeline
system. An incentive awarded for a system that is eligible because
it will operate on wasted gas shall be subject to refund and shall be
refunded by the recipient to the extent the system does not operate
on wasted gas. A gas corporation or other gas supplier shall report
to the commission any deliveries of gas for a system that has been
awarded an incentive because it will operate on wasted gas.
(8) Reevaluation of all efficiency cost-effectiveness tests in
light of increases in wholesale electricity costs and of natural gas
costs to explicitly include the system value of reduced load on
reducing market-clearing prices and volatility.
(c) In consultation with the State Energy Resources
Conservation and Development Commission, adopt and implement a
residential, commercial, and industrial peak reduction program that
encourages electric customers to reduce electricity consumption
during peak power periods.