BILL NUMBER: SBX1 9 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 20, 2001
AMENDED IN SENATE MARCH 12, 2001
INTRODUCED BY Senator Morrow
JANUARY 22, 2001
An act to add Article 3.5 (commencing with Section 353.1) to
Chapter 2.3 of Part 1 of Division 1 of , and to repeal
Sections 353.1, 353.3, 353.5, 353.7, and 353.9 of, the
Public Utilities Code, relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 9, as amended, Morrow. Public Utilities Commission:
distributed energy resources.
(1) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations and other specified entities.
This bill would require the commission to require each electrical
corporation to modify tariffs so that all customers
installing that install new distributed energy
resources, as defined, in accordance with specified criteria,
are served under rates, rules, and requirements identical to
those of a customer within the same rate schedule that does not use
distributed energy resources, and to withdraw any provisions in
otherwise applicable tariffs that activate other tariffs, rates, or
rules if a customer uses distributed energy resources. The bill
would require the commission to require each electrical corporation,
as part of its distribution planning process, to include nonutility
owned distributed energy resources as a possible alternative to
investments in its distribution system in order to ensure reliable
electric service at the lowest possible cost. The bill would require
the commission to require each electrical corporation to adopt
standard contract terms, conditions, penalties, and enforcement
mechanisms for distributed energy resources units providing
distribution reliability services. The bill would require the
commission, in establishing the rates under the provisions of the
bill, to create a firewall that segregates distribution cost
recovery, as described. The
The bill would require a local publicly owned electric
utility, as defined, or a local publicly owned utility otherwise
providing electrical service, to undertake a review of its rates,
tariffs, and rules, as prescribed, and to hold at least one noticed
public meeting to solicit public comment on the review and any
recommended changes. The bill would repeal the
above-described provisions as of January 1, 2005.
The bill would require the commission to require each electrical
corporation to establish new tariffs on or before January 1,
2005 2003, for customers using distributed
energy resources installed on or after June 1, 2005.
Tariffs modified under the bill would continue to apply to
distributed energy resources installed before June 1, 2005, for 10
years after the date of installation, as specified .
The bill would continue to subject certain distributed energy
resources, after January 1, 2003, to preexisting tariffs under the
bill, until June 1, 2011 . The bill would require the
commission to prepare and submit to the Legislature, on or before
March June 1, 2004
2002 , a report describing its proposed methodology for
determining the new rates and the process by which it will establish
those rates.
Because a violation of a requirement of the commission is a crime,
this bill would impose a state-mandated local program by creating a
new crime.
(2) 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 a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Article 3.5 (commencing with Section 353.1) is added to
Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code, to
read:
Article 3.5. Distributed Energy Resources
353.1. As used in this article, "distributed energy resources"
means any electric generation technology installed and
operational on or after May 1, 2001, located within a single facility
five megawatts or smaller in aggregate capacity that primarily
serves nearby electric load, is powered by any fuel other than
diesel, and meets the State Air Resources Board emission standards
and guidelines for distributed generation, as defined in Sections
41514.9 and 41514.10 of the Health and Safety Code. Until standards
and guidelines have been adopted by the State Air Resources Board,
for the purpose of this article, distributed energy resources shall
meet emissions levels equivalent to ____. that meets
all of the following criteria:
(a) Commences initial operation between May 1, 2001, and June 1,
2003, except that gas-fired distributed energy resources that are not
operated in a combined heat and power application must commence
operation no later than July 1, 2001.
(b) Is located within a single facility.
(c) Is five megawatts or smaller in aggregate capacity.
(d) Serves onsite loads or over-the-fence transactions allowed
under Sections 216 and 218.
(e) Is powered by any fuel other than diesel.
(f) Complies with emission standards and guidance adopted by the
State Air Resources Board pursuant to Sections 41514.9 and 41514.10
of the Health and Safety Code. Prior to the adoption of those
standards and guidance, for the purpose of this article, distributed
energy resources shall meet emissions levels equivalent to nine parts
per million oxides of nitrogen, averaged over a three-hour period,
or best available control technology for the applicable air district,
whichever is lower.
353.3. (a) The commission shall require each
electrical corporation to modify tariffs so that all customers
installing new distributed energy resources in accordance with
the criteria described in Section 353.1 are served under rates,
rules, and requirements identical to those of a customer within the
same rate schedule that does not use distributed energy resources,
and to withdraw any provisions in otherwise applicable tariffs that
activate other tariffs, rates, or rules if a customer uses
distributed energy resources. Except
(b) To qualify for the tariffs described in subdivision (a), each
customer shall participate in a real-time metering and pricing
program, in which rates for any energy purchased from the electrical
corporation reflect the actual cost to the electrical corporation of
energy at the time it is consumed.
(c) Except as specified in Section 353.7, customers may not
be subject to the application of additional rates or tariffs solely
because of their use of distributed energy resources to serve onsite
loads or over-the-fence transactions allowed under Sections 216 and
218.
353.5. The commission shall require each electrical corporation,
as part of its distribution planning process, to include nonutility
owned distributed energy resources as a possible alternative to
investments in its distribution system in order to ensure reliable
electric service at the lowest possible cost. The commission shall
require each electrical corporation to adopt standard contract terms,
conditions, penalties, and enforcement mechanisms for distributed
energy resources units providing distribution reliability services.
The commission shall review for the purpose of compliance with this
section, on an annual basis, the progress of each corporation in
incorporating these changes into their planning processes.
353.7. Nothing Notwithstanding Section
353.3, nothing in this article may result in any exemption from
reasonable interconnection charges, lead to any reduction in
contributions by each customer class to public purpose programs
funded under Section 399.8, or relieve any customer of any obligation
determined by the commission to result from participation in the
purchase of power through the Department of Water Resources pursuant
to Division 27 (commencing with Section 80000) of the Water Code.
353.9. In establishing the rates required under this article, the
commission shall create a firewall that segregates distribution cost
recovery so that any net costs, taking into account the actual costs
and benefits of distributed energy resources, proportional to each
customer class, as determined by the commission, resulting from the
tariff modifications granted to members of each customer class may be
recovered only from that class.
353.11. A local publicly owned electric utility, as defined in
subdivision (d) of Section 9604, or a local publicly owned utility
otherwise providing electrical service, shall review at the earliest
practicable date its rates, tariffs, and rules to identify barriers
to and determine the appropriate balance of costs and benefits of,
distributed energy resources in order to facilitate the installation
of these resources in the interests of their customer-owners and the
state, and shall hold at least one noticed public meeting to solicit
public comment on the review and any recommended changes. However,
notwithstanding any other provision of this article, such an entity
has the sole authority to undertake such a review and to make
modifications to its rates, tariffs, and rules as the governing body
of that utility determines to be necessary.
353.13. Sections 353.1, 353.3, 353.5, 353.7, and 353.9 shall
remain in effect only until January 1, 2005, and as of that date are
repealed, unless a later enacted statute, that is enacted before
January 1, 2005, deletes or extends that date.
353.14.
353.13. (a) The commission shall require each electrical
corporation to establish new tariffs on or before January 1,
2005 2003 , for customers using distributed
energy resources installed on or after June 1, 2005.
Distributed energy resources installed before June 1, 2005, shall be
subject to those tariffs in existence pursuant to this article as of
December 31, 2004, for a period of 10 years from the date of
installation , including, but not limited to, those
which 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 . 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 March 1, 2004 June 1, 2002 ,
a report describing its proposed methodology for determining the new
rates and the process by which it will establish those rates.
It is the intent of this Legislature that the Legislature
will review the report and provide direction to the commission on how
to proceed within 90 days after the date of receiving the report.
SEC. 2. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only 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.