BILL NUMBER: SB 1524 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 18, 2002
INTRODUCED BY Senator Sher
FEBRUARY 20, 2002
An act to repeal Article 2 (commencing with Section 334)
of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code,
relating to public utilities. An act to amend
Sections 25620, 25620.1, 25620.2, 25620.3, 25620.5, 25620.7, 25648,
25648.4, and 25684 of, and to add and repeal Section 25620.9 of, the
Public Resources Code, and to amend Sections 381, 383.5, 394.25, and
445 of the Public Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 1524, as amended, Sher. Electricity Oversight Board
Renewable energy .
(1) Existing law requires the State Energy Resources Conservation
and Development Commission (Energy Commission) to develop, implement,
and administer the Public Interest Research, Development, and
Demonstration Program. Existing law requires the program to consist
of a balanced portfolio that addresses California's energy and
environmental needs, technology opportunities, and system
reliability. Existing law, until January 1, 2000, required the
Energy Commission to adopt regulations to ensure the success of
electricity industry restructuring in the transition to a new market
structure and to implement the program. Existing law authorizes the
Energy Commission to solicit applications for awards, using a sealed
competitive bid, competitive negotiation process, multiparty
agreement, single source, or sole source method.
This bill would require the Energy Commission, not later than 6
months after the enactment of this bill to designate a panel of
independent experts with special expertise in public interest
research, development, and demonstration programs to conduct an
evaluation of the program and to submit a preliminary report to the
Governor and the Legislature not later than 18 months after the
enactment of this bill, and a final report not later than 30 months
after the enactment of this bill.
Existing law authorizes the Energy Commission to solicit
applications for awards and specifies criteria for funding projects
under the program.
The bill would authorize the Energy Commission to adopt
regulations governing the administration of the program, in
accordance with specified procedures, until January 1, 2007.
The bill would make technical and conforming changes.
(2) Existing law requires the Public Utilities Commission
(commission) to order specified electrical corporations to collect
and spend certain funds for cost-effective energy efficiency and
conservation activities, public interest research and development,
and development of renewable resources technology. Existing law
provides that the commission's authority to collect funds for
in-state operation and development of existing and new and emerging
renewable resource technologies becomes inoperative on March 31,
2002.
This bill would require the San Diego Gas and Electric Company to
spend no less than $13,900,000 per year, the Southern California
Edison Company to spend no less than $65,300,000 per year, and the
Pacific Gas and Electric Company to spend no less than $55,800,000
per year, for the years 2002 to 2011, inclusive, to accomplish the
funding of in-state operation and development of existing and new and
emerging renewable resources technologies. The bill would delete the
provision making the commission's authority to collect funds for
these purposes inoperative on March 31, 2002. The bill would make
additional technical, nonsubstantive changes.
(3) Existing law defines "in-state renewable electricity
generation technology" for the purposes of these provisions.
Existing law defines, for the purposes of these provisions, "report"
as the Policy Report on AB 1890 Renewables Funding (March 1997,
Publication Number P500-97-002) submitted to the Legislature by the
Energy Commission.
This bill would define "in-state renewable electricity generation
facility" instead of "in-state renewable electricity generation
technology" and would modify the existing definition to no longer
only include facilities that were placed in operation after September
26, 1996. The bill would include within the definition of "in-state
renewable electricity generation facility" a facility using ocean
thermal, tidal current, and wave energy generation technologies,
located within the state's territorial boundaries. The bill would
provide that on and after January 1, 2002, "report," for the purposes
of these provisions, means the report entitled "Investing in
Renewable Electricity Generation in California" (June 2001,
Publication Number P500-00-022) submitted to the Governor and the
Legislature by the Energy Commission.
(4) Existing law requires 45% of the money collected for in-state
operation and development of existing and new and emerging renewable
resources technologies, up to $243,000,000, to be used for programs
that are designed to improve the competitiveness of existing in-state
renewable electricity generation technology facilities. Existing
law requires 30% of the money collected for in-state operation and
development of existing and new and emerging renewable resources
technologies, up to $162,000,000, to be used for programs that are
designed to foster the development of new in-state renewable
electricity generation technology facilities. Existing law requires
10% of the money collected for in-state operation and development of
existing and new and emerging renewable resources technologies, up to
$54,000,000, to be used for a multiyear, consumer-based program to
foster the development of emerging renewable technologies in
distributed generation applications. Existing law requires 15% of
the money collected for in-state operation and development of
existing and new and emerging renewable resources technologies, up to
$81,000,000, to be used for programs designed to provide customer
credits for purchases of renewable energy produced by certified
energy providers, to disseminate information regarding renewable
energy technologies, to promote purchases of renewable energy, to
help develop a consumer market for renewable energy, and to help
develop a consumer market for renewable energy technologies.
This bill would instead require 20% of the funds collected to
accomplish the funding of in-state operation and development of
existing and new and emerging renewable resources technologies, to be
spent by the San Diego Gas and Electric Company, the Southern
California Edison Company, and the Pacific Gas and Electric Company,
to be used for programs that are designed to improve the
competitiveness of existing in-state renewable electricity generation
facilities. The bill would instead require 50% of the funds
collected to accomplish the funding of in-state operation and
development of existing and new and emerging renewable resources
technologies, to be spent by the San Diego Gas and Electric Company,
the Southern California Edison Company, and the Pacific Gas and
Electric Company, to be used for programs that are designed to foster
the development of new in-state renewable electricity generation
facilities. The bill would instead require 17.5% of the funds
collected to accomplish the funding of in-state operation and
development of existing and new and emerging renewable resources
technologies, to be spent by the San Diego Gas and Electric Company,
the Southern California Edison Company, and the Pacific Gas and
Electric Company, to be used for a multiyear, consumer-based program
to foster the development of emerging renewable technologies in
distributed generation applications. The bill would instead require
10% of the funds collected to accomplish the funding of in-state
operation and development of existing and new and emerging renewable
resources technologies, to be spent by the San Diego Gas and Electric
Company, the Southern California Edison Company, and the Pacific Gas
and Electric Company, to be used to provide customer credits for
purchases of renewable energy produced by certified generating
facilities. The bill would require 2.5% of the funds collected to
accomplish the funding of in-state operation and development of
existing and new and emerging renewable resources technologies, to be
spent by the San Diego Gas and Electric Company and the Pacific Gas
and Electric Company, to be used to promote renewable energy and to
disseminate information on renewable energy technologies, and to help
develop a consumer market for renewable energy and for small-scale
emerging renewable energy technologies.
(5) Existing law provides for the Renewable Resource Trust Fund in
the State Treasury and establishes certain accounts in the Renewable
Resource Trust Fund, including the Customer-Side Renewable Resource
Purchases Account. Existing law provides that the money in the fund
and the accounts are continuously appropriated to the Energy
Commission. Existing law provides that unallocated funds in any
account shall remain in the respective account until December 31,
2001.
This bill would instead establish the Customer-Credit Renewable
Resources Account and the Renewable Resources Consumer Education
Account. The bill would require that unallocated funds in any
account remain in the respective account until the Energy Commission
submits a specified report.
Existing law establishes the Electricity Oversight Board to
oversee the Independent System Operator and the Power Exchange, serve
as an appeal board for decisions of the Independent System Operator,
and investigate any matter related to the wholesale market for
electricity to ensure that the interests of the people of the state
are served.
This bill would repeal these provisions and would declare the
intent of the Legislature to enact subsequent legislation to require
the Public Utilities Commission to perform these duties instead of
the Electricity Oversight Board.
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. Article 2 (commencing with Section 334) of
SECTION 1. Section 25620 of the Public Resources Code is amended
to read:
25620. The Legislature hereby finds and declares all of the
following:
(a) It is in the best interests of the people of this state that
the quality of life of its citizens be improved by providing
environmentally sound, safe, reliable, and affordable energy services
and products.
(b) To improve the quality of life of this state's citizens, it is
proper and appropriate for the state to undertake public interest
energy research, development, and demonstration projects that are not
adequately provided for by competitive and regulated energy markets.
(c) Public interest energy research, demonstration, and
development projects should advance energy science or technologies of
value to California citizens and should be consistent with the
policies of Chapter 854 of the Statutes of 1996
Section 399.7 of the Public Utilities Code .
(d) The commission should use its adopted "Strategic Plan
for Implementing the Research, Demonstration, and Development
Provisions of AB 1890" "Five-Year Investment Plan, 2002
Through 2006 for the Public Interest Energy Research (PIER) Program
(Volume 1)" (P600-01-004a, March 1, 2001) to ensure compliance
with the policies and provisions of Chapter 854
of the Statutes of 1996 Section 399.7 of the Public
Utilities Code in the administration of public interest energy
research, demonstration, and development programs.
SEC. 2. Section 25620.1 of the Public Resources Code is amended to
read:
25620.1. (a) The commission shall develop, implement, and
administer the Public Interest Research, Development, and
Demonstration Program, which is hereby created. The program shall
include a full range of research, development, and demonstration
activities that, as determined by the commission, are not adequately
provided for by competitive and regulated markets.
(b) The program shall consist of a balanced portfolio
that addresses California's energy and environmental needs,
technology opportunities, and system reliability. To achieve
balance, the commission shall actively solicit applications for the
underrepresented subject areas of end-use energy efficiency,
renewable technologies, and environmental enhancements. The
portfolio shall include the relevant core subject areas of
environmental enhancements, end-use efficiency,
environmentally-preferred advanced generation technologies, renewable
technologies, and other strategic energy research, including public
interest system reliability research, demonstration, and development
not adequately addressed by the Public Utilities Commission. The
portfolio shall be reviewed annually by the commission through a
public process. That annual review process shall consider technology
status, development barriers, and expected benefits.
goal of the program is to provide California and its citizens with a
clean, affordable, reliable, and resilient supply of energy, where
customers have energy choices that can meet their individual needs,
California's industries can grow and prosper, and California is
established as the world leader in energy efficiency and clean,
advanced energy technologies and systems. To meet this goal, the
commission shall adopt a portfolio approach for the program to
effectively balance the risks, benefits, and time horizons for
various activities and investments that will provide tangible
benefits for California electricity ratepayers. The portfolio shall
emphasize innovative energy supply and end-use technologies, focusing
on their reliability, affordability, and environmental attributes.
The portfolio may also include projects that have the potential to
enhance the reliability, peaking power, and storage capabilities of
renewable energy. The priorities for funding projects under the
program shall be based upon at least one of the following:
(1) The potential for exploiting emerging opportunities.
(2) The potential for mitigating important energy system problems.
(3) The potential for expanding upon the benefits derived from
prior projects funded by the program.
(c) The commission shall review the portfolio adopted pursuant to
subdivision (b) in accordance with the "Five-Year Investment Plan,
2002 Through 2006 for the Public Interest Energy Research (PIER)
Program (Volume 1)" (P600-01-004a, March 1, 2001).
(c)
(d) The term "award," as used in this chapter, may include,
but is not limited to, contracts, grants, interagency
agreements, loans, purchase orders, and other
financial agreements designed to fund public interest research,
demonstration, and development projects or programs.
SEC. 3. Section 25620.2 of the Public Resources Code is amended to
read:
25620.2. (a) The commission shall administer the program in a
manner that is consistent with the purposes of Chapter 854
of the Statutes of 1996 Section 399.7 of the Public
Utilities Code , and shall ensure that the program meets all of
the following criteria:
(1) Demonstrates a balance of benefits to all sectors that
contribute to the funding under Section 381 of the Public Utilities
Code.
(2) Addresses key technical and scientific barriers.
(3) Demonstrates a balance between short-term, mid-term, and
long-term potential.
(4) Ensures that research currently, previously, or about to be
undertaken by research organizations is not unnecessarily duplicated.
(b) To ensure the efficient implementation and administration of
the program, the commission shall do both of the following:
(1) Develop procedures for the solicitation of award applications
for project or program funding, and to ensure efficient program
management.
(2) Evaluate and select programs and projects, based on merit,
that will be funded under the program.
(c) To ensure the success of electric industry
restructuring in the transition to a new market structure and to
implement the program, the commission shall adopt regulations, as
defined in Section 11342.600 of the Government Code,
The commission may adopt regulations in accordance with the
following procedures:
(1) Prepare a preliminary text of the proposed regulation and
provide a copy of the preliminary text to any person requesting a
copy.
(2) Provide public notice of the proposed regulation to any person
who has requested notice of the regulations prepared by the
commission. The notice shall contain all of the following:
(A) A clear overview explaining the proposed regulation.
(B) Instructions on how to obtain a copy of the proposed
regulations.
(C) A statement that if a public hearing is not scheduled for the
purpose of reviewing a proposed regulation, any person may request,
not later than 15 days prior to the close of the written comment
period, a public hearing conducted in accordance with the
commission procedures set forth in
Section 11346.8 of the Government Code.
(D) A deadline for the submission of written comments .
(3) Accept written public comments for 30 calendar days after
providing the notice required in paragraph (2).
(4) Certify that all written comments were read and considered by
the commission.
(5) Place all written comments in a record that includes copies of
any written factual support used in developing the proposed
regulation, including written reports and copies of any transcripts
or minutes in connection with any public hearings on the adoption of
the regulation. The record shall be open to public inspection and
available to the courts.
(6) Provide public notice of any substantial revision of the
proposed regulation at least 15 days prior to the expiration of the
deadline for public comments and comment period using the procedures
provided in paragraph (2).
(7) Conduct public hearings, if a hearing is requested by an
interested party, that shall be conducted in accordance with
the procedures set forth in Section 11346.8 of the Government Code
commission procedures .
(8) Adopt any proposed regulation at a regularly scheduled and
noticed meeting of the commission. The regulation shall become
effective immediately unless otherwise provided by the commission.
(9) Publish any adopted regulation in a manner that makes copies
of the regulation easily available to the public. Any adopted
regulation shall also be made available on the Internet. The
commission shall transmit a copy of an adopted regulation to the
Office of Administrative Law for publication, or, if the commission
determines that printing the regulation is impractical, an
appropriate reference as to where a copy of the regulation may be
obtained.
(10) Notwithstanding any other provision of law, this subdivision
provides an interim exception from the requirements of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code for regulations required to implement Sections
25621 and 25622 25620.1 and 25620.2
that are adopted under the procedures specified in this subdivision.
(11) This subdivision shall become inoperative on January 1,
2000 2007 , unless a later enacted
statute deletes or extends that date. However, after January 1,
2000 2007 , the commission
shall is not be required to
repeat any procedural step in adopting a regulation that has been
completed before January 1, 2000 2007 ,
using the procedures specified in this subdivision.
SEC. 4. Section 25620.3 of the Public Resources Code is amended to
read:
25620.3. (a) The commission may, consistent with the
requirements of Section 25620.2, provide awards to any individual or
entity proposing a public interest research, demonstration,
and development project or program. to participate in
any or all of the planning, developing, executing, implementing,
administering, evaluating, and supporting the program. The
commission may solicit that expertise using, among other approaches,
the methods set forth in Chapter 10 (commencing with Section 4525) of
Division 5 of Title 1 of the Government Code. The commission may
also solicit for multiple awardees for similar work using, among
other approaches, a commission-issued intradepartmental master
services agreement. Regardless of the method of making the award, in
the event that awards have been made to multiple entities and their
subcontractors for similar purposes, the commission may select from
among the awardees the particular expertise needed for a specified
type of work. Selection of the particular expertise may be based
solely on a review of qualifications, including the specific
expertise required, availability of the expertise, or access to a
resource of special relevance to the work, including, but not limited
to, a database, model, technical facility, or a collaborative or
institutional affiliation that would expedite the quality and
performance of the work.
(b) If the committee of the commission with oversight of the
program determines that it is necessary, in order to ensure that
research may commence in a timely manner to assist the development of
a product that has significant commercial potential and that could
help mitigate potential energy supply shortfalls, it may exempt
awards made pursuant to this chapter from any or all of the
following:
(1) Article 4 (commencing with Section 10335) of Chapter 2 of Part
2 of Division 2 of the Public Contract Code.
(2) Chapter 10 (commencing with Section 4525) of Division 5 of
Title 1 of the Government Code, and Sections 6106 and 6106.5 of the
Public Contract Code.
(3) Section 10295 of the Public Contract Code.
(4) Chapter 6 (commencing with Section 14825) of Part 5.5 of
Division 3 of Title 2 of the Government Code.
(5) Subdivisions (f) and (g) of Section 25620.5.
(c) The commission may provide an award to a project or program
that includes a group of related projects, or to a party who
aggregates projects that directly benefit from the award.
(d) The commission may establish multiparty agreements. In a
multiparty agreement, the commission may be a signatory to a common
agreement among two or more parties. These agreements include, but
are not limited to, cofunding, leveraged research, collaborations,
and membership arrangements. If the commission enters into these
agreements, it shall be a party to these agreements and may share in
the roles, responsibilities, risks, investments, and results.
(e) The commission may issue awards that include the ability to
make advance payments to federal agencies, national laboratories, or
other state agencies when those entities are subcontractors to a
binding and enforceable prime contract with the commission that
provides for specific performance milestones and the ability to
assign tasks on a work authorization basis.
(f) The commission may delegate approval of awards up to one
million dollars ($1,000,000) to the executive director, to the
committee with oversight of the program, or to their designee.
(g) The commission may delegate to a public entity, in any award,
its authority for a portion of the program, and any or all of the
planning, developing, executing, implementing, administering,
evaluation, and supporting functions. This delegation of authority
includes the authority to conduct a solicitation using reasonable
competitive bidding methods, reasonable sole and single source
methods, or the sole and single source authorities of the program for
subcontracts or agreements and the execution of those agreements.
SEC. 5. Section 25620.5 of the Public Resources Code is amended to
read:
25620.5. (a) The commission may solicit applications for awards,
using a sealed competitive bid, competitive negotiation process,
multiparty interagency agreement,
single source, or sole source method. When scoring teams are
convened to review and score proposals, the scoring teams may include
persons not employed by the commission, as long as employees of the
state constitute no less than 50 percent of the membership of the
scoring team. A person participating on a scoring team may not have
any conflict of interest with respect to the proposal before the
scoring team.
(b) A sealed bid method may be used when goods and services to be
acquired can be described with sufficient specificity so that bids
can be evaluated against specifications and criteria set forth in the
solicitation for bids.
(c) The commission may use a competitive negotiation process in
any of the following circumstances:
(1) Whenever the desired contract award
is not for a fixed price.
(2) Whenever project specifications cannot be drafted in
sufficient detail so as to be applicable to a sealed competitive bid.
(3) Whenever there is a need to compare the different price,
quality, and contractual structural
factors of the bids submitted.
(4) Whenever there is a need to afford bidders an opportunity to
revise their proposals.
(5) Whenever oral or written discussions with bidders concerning
the technical and price aspects of their proposals will provide
better projects results to the state.
(6) Whenever the price of the contract
award is not the determining factor.
(d) The commission may establish multiparty and
interagency agreements with other entities to advance a
defined research, development, and demonstration project purposes.
The commission shall be a party to those agreements and shall share
in the roles, responsibilities, risks, investments, and results of
the agreement agreements .
(e) The commission may choose provide
awards on a single source basis by choosing from among two or
more business entities parties or by
soliciting multiple applications from parties capable of
supplying or providing goods or services that meet a
specified need of the commission similar goods or
services . The cost to the state shall be reasonable and the
commission shall may only enter into a
single source contract agreement with a
particular entity if the commission determines that it is in the
state's best interests.
(f) The commission, in accordance with subdivision (g), may
select projects provide awards on a
sole source basis when the cost to the state is reasonable
and when, in consultation with the Department of General
Services, the commission makes any of the following determinations
concerning sole source contracts :
(1) The proposal was unsolicited and meets the evaluation criteria
of this chapter.
(2) The expertise, service, or product is unique.
(3) The urgency of the need for the information or deliverable is
such that a competitive solicitation would frustrate timely
performance.
(4) The contract funds the next phase of a multiphased proposal
and the existing agreement is being satisfactorily performed.
(5) When it is determined by the commission to be in the best
interests of the state.
(g) The commission shall may not
utilize use a sole source basis for a
project contract pursuant to
subdivision (f), unless both of the following conditions are met:
(1) The commission, at least 30 days prior to taking an action
pursuant to subdivision (f), notifies the Joint Legislative Budget
Committee, in writing, of its intent to take the proposed action.
(2) The Joint Legislative Budget Committee either approves or does
not disapprove the proposed action within 30 days from the date of
notification required by paragraph (1).
(h) The commission shall submit semiannual reports to the
Legislative Analyst and to the appropriate fiscal and policy
committees of the Legislature that review bills relating to energy
and public utilities. The reports shall contain an evaluation of the
progress and status of the implementation of this section. In
addition, the reports shall identify each instance in which an
exemption authorized by subdivision (b) of Section 25620.3 was
utilized.
(i) The provisions of this section are severable. If any
provision of this section or its application is held to be invalid,
that invalidity shall not affect other provisions or applications
that can be given effect without the invalid provision or
application.
SEC. 6. Section 25620.7 of the Public Resources Code is amended to
read:
25620.7. The commission may contract for, or through interagency
agreement obtain, technical , scientific, or
administrative services support to reduce the overhead and
administrative costs of implementing from one or more
entities, to support the program. Funding for this purpose
shall be made from money in the Public Interest Research,
Development, and Demonstration Fund.
SEC. 7. Section 25620.9 is added to the Public Resources Code, to
read:
25620.9. (a) Not later than six months after the enactment of
this section, the commission shall designate a panel of independent
experts with special expertise in public interest research,
development, and demonstration programs. The panel shall conduct a
comprehensive evaluation of the program established pursuant to this
chapter. The evaluation shall include a review of the public value
of programs established pursuant to this chapter, including, but not
limited to, the monetary and nonmonetary benefits to public health
and the environment, and the benefit of providing funds for
technology development that would otherwise not be funded.
(b) Not later than 18 months after the enactment of this section,
the panel designated pursuant to subdivision (a) shall submit a
preliminary report to the Governor and to the Legislature on its
findings and recommendations on the implementation of the program
established pursuant to this chapter. The panel, not later than 30
months after the enactment of this section, shall submit a final
report to the Governor and to the Legislature, including any
additional findings and recommendations regarding implementation of
the program.
(c) This section shall remain in effect only until July 1, 2006,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2007, deletes or extends that date.
SEC. 8. Section 25648 of the Public Resources Code is amended to
read:
25648. (a) The commission shall make loans, and research contract
and grant awards, for purposes of making existing energy
technologies more efficient, cost-effective, and environmentally
acceptable, and to research, develop, demonstrate, and commercialize
new, cost-effective alternative sources of energy, technologies
which that displace conventional fuels,
and energy efficiency and conservation devices.
(b) In selecting projects, the commission shall consider, but is
not limited to, the list of opportunity technologies developed in the
most current energy development report produced pursuant to Section
25604, or a subset of those opportunity technologies.
(c) The commission shall select the projects through competitive
bid procedures, such as invitations for bids, requests for proposals,
program opportunity notices, and multistep bids using
preapplications, by demonstrating the need for sole source awards, or
by evaluating small business grant and loan applications.
(d) The criteria for the selection of projects shall include, but
not be limited to, all of the following factors:
(1) The potential of the project to reduce energy consumption or
provide an alternative source of energy.
(2) The financial, technical, and management strength of the
project applicant.
(3) The near-term and long-term feasibility of the project.
(4) The ability of the project technology to be used throughout
California.
(5) The potential of the project for promoting diverse, secure,
and resilient energy supplies.
(6) The potential of the project to displace petroleum.
(7) The potential of the project for reducing adverse
environmental impacts.
(8) The potential of the project to stimulate economic
development, employment, and tax revenues for California.
(9) The potential of the project for reducing short-term and
long-term energy costs for the ratepayers of California.
(10) The need of the project for state financing.
(11) The ability of the project to attract private and other
public investment.
(12) The investment payback period for the project.
(13) The probability of success in overcoming the risk of the
project.
(14) The potential for stimulating small business competition in
the field of alternative energy development.
(15) The ability of the project to generate needed community
economic development for participating local jurisdictions.
(16) The extent of the applicant's financial participation.
(17) The degree of innovation of the project.
(18) Whether the project is, in general, consistent with the
energy policies of California regarding the energy technologies and
priorities as set forth in the biennial report of the commission.
(19) The cost of the project.
(e) The commission shall apply the criteria specified in
subdivision (d) consistently within each competitive bid
solicitation.
(f) Loans, research contracts, and grants entered into
Awards provided pursuant to this
section chapter are not subject to Article 4
(commencing with Section 10335) or Article 5 (commencing
with Section 10355) of Chapter 2 of Part 2 of Division 2 of
the Public Contract Code.
SEC. 9. Section 25648.4 of the Public Resources Code is amended to
read:
25648.4. The commission shall apply this chapter to research,
development, demonstration, and commercialization projects that are
not subject to Chapter 6 (commencing with Section 3800) of Division 3
and Chapter 7.1 (commencing with Section 25620), and Chapter
7.8 (commencing with Section 25680) of this division
25680) .
SEC. 10. Section 25684 of the Public Resources Code is amended to
read:
25684. (a) The commission shall make loans and
repayable research contracts, and may provide primary research
contracts funding from the account for the purposes of making energy
technologies more efficient and cost-effective, and to develop new
cost-effective alternative sources of energy. The commission shall
select recipients through a procedure using an invitation for bids or
a request for proposals. Each invitation for bids and request for
proposals shall specify the criteria to be used in selecting projects
for financing. The criteria shall include, but not be limited to,
all of the following factors:
(a)
(1) The potential of the project to reduce consumption and
increase the efficiency of nonrenewable energy sources and systems.
(b)
(2) The financial, technical, and management strength of the
project applicant.
(c)
(3) The near-term and long-term feasibility of the project.
(d)
(4) The ability of the project technology to be used on
other applications throughout California.
(e)
(5) The potential of the project for promoting diverse,
secure, and resilient energy supplies.
(f)
(6) The potential of the project for reducing adverse
environmental impacts.
(g)
(7) The potential of the project to stimulate economic
development, employment, and tax revenues for California.
(h)
(8) The potential of the project for reducing short-term and
long-term energy costs for the ratepayers of California.
(i)
(9) The need of the project for state financing.
(j)
(10) The ability of the project to garner private
investment.
(k)
(11) The investment payback period for the project.
(l)
(12) The probability of success in overcoming the risk of
the project.
(m)
(13) The potential for stimulating small business
competition in the field of alternative energy development.
(n)
(14) The ability of the project to generate needed community
economic development for participating local jurisdictions.
(o)
(15) The extent of the applicant's financial participation.
(p)
(16) The degree of innovation of the project.
(q)
(17) Whether the project is in general agreement with the
energy policies of California regarding the energy technologies and
priorities as set forth in the biennial report of the commission.
Contracts entered into
(b) Awards provided pursuant to this section
chapter are not subject to Article 4 (commencing
with Section 10335) or Article 5 (commencing with Section
10355) of Chapter 2 of Part 2 of Division 2 of the Public
Contract Code.
SEC. 11. Section 381 of the Public Utilities Code is amended to
read:
381. (a) To ensure that the funding for the programs described in
subdivision (b) and Section 382 are not commingled with other
revenues, the commission shall require each electrical corporation to
identify a separate rate component to collect the revenues used to
fund these programs. The rate component shall be a nonbypassable
element of the local distribution service and collected on the basis
of usage. This rate component shall fall within the rate levels
identified in subdivision (a) of Section 368.
(b) The commission shall allocate funds collected pursuant to
subdivision (a), and any interest earned on collected funds, to
programs which that enhance system
reliability and provide in-state benefits as follows:
(1) Cost-effective energy efficiency and conservation activities.
(2) Public interest research and development not adequately
provided by competitive and regulated markets.
(3) In-state operation and development of existing and new and
emerging renewable resource technologies defined as electricity
produced from other than a conventional power source within the
meaning of Section 2805, provided that a power source utilizing more
than 25 percent fossil fuel may not be included.
(c) The Public Utilities Commission shall order the respective
electrical corporations to collect and spend these funds, as follows:
(1) Cost-effective energy efficiency and conservation activities
shall be funded at not less than the following levels commencing
January 1, 1998, through December 31, 2001: for San Diego Gas and
Electric Company a level of thirty-two million dollars ($32,000,000)
per year; for Southern California Edison Company a level of ninety
million dollars ($90,000,000) for each of the years l998, 1999, and
2000; fifty million dollars ($50,000,000) for the year 2001; and for
Pacific Gas and Electric Company a level of one hundred six million
dollars ($106,000,000) per year.
(2) Research, development, and demonstration programs to advance
science or technology that are not adequately provided by competitive
and regulated markets shall be funded at not less than the following
levels commencing January 1, 1998 through December 31, 2001
2011 : for San Diego Gas and Electric Company
a level of four million dollars ($4,000,000) per year; for Southern
California Edison Company a level of twenty-eight million five
hundred thousand dollars ($28,500,000) per year; and for Pacific Gas
and Electric Company a level of thirty million dollars ($30,000,000)
per year.
(3) In-state operation and development of existing and new and
emerging renewable resource technologies shall be funded at not less
than the following levels on a statewide basis: one hundred nine
million five hundred thousand dollars ($109,500,000) per year for
each of the years 1998, 1999, and 2000, and one hundred thirty-six
million five hundred thousand dollars ($136,500,000) for the year
2001. To accomplish these funding levels over the period described
herein the San Diego Gas and Electric Company shall spend twelve
million dollars ($12,000,000) per year, the Southern California
Edison Company shall expend no less than forty-nine million five
hundred thousand dollars ($49,500,000) for the years 1998, 1999, and
2000, and no less than seventy-six million five hundred thousand
dollars ($76,500,000) for the year 2001, and the Pacific Gas and
Electric Company shall expend no less than forty-eight million
dollars ($48,000,000) per year through the year 2001. Additional
funding not to exceed seventy-five million dollars ($75,000,000)
shall be allocated from moneys collected pursuant to subdivision (d)
in order to provide a level of funding totaling five hundred forty
million dollars ($540,000,000).
(4) Up to fifty million dollars ($50,000,000) of the amount
collected pursuant to subdivision (d) may be used to resolve
outstanding issues related to implementation of subdivision (a) of
Section 374. Moneys remaining after fully funding the provisions of
this paragraph shall be reallocated for purposes of paragraph (3).
(5) Up to ninety million dollars ($90,000,000) of the amount
collected pursuant to subdivision (d) may be used to resolve
outstanding issues related to contractual arrangements in the
Southern California Edison service territory stemming from the
Biennial Resource Planning Update auction. Moneys remaining after
fully funding the provisions of this paragraph shall be reallocated
for purposes of paragraph (3).
(6) To accomplish the funding of in-state operation and
development of existing and new and emerging renewable resources
technologies in accordance with the intent of Section 399, the San
Diego Gas and Electric Company shall spend no less than thirteen
million nine hundred thousand dollars ($13,900,000) per year from
January 1, 2002, to December 31, 2011, inclusive, the Southern
California Edison Company shall spend no less than sixty-five million
three hundred thousand dollars ($65,300,000) per year from January
1, 2002, to December 31, 2011, inclusive, and the Pacific Gas and
Electric Company shall spend no less than fifty-five million eight
hundred thousand dollars ($55,800,000) per year from January 1, 2002,
to December 31, 2011, inclusive.
(d) Notwithstanding any other provisions of this chapter, the
commission may allow entities subject to the
its jurisdiction of the Public
Utilities Commission shall to extend the period
for competition transition charge collection up to three months
beyond its otherwise applicable termination of December 31, 2001,
or to allow these entities to impose an alternative
nonbypassable system benefits charge, so as to ensure that the
aggregate portion of the research, environmental, and low-income
funds allocated to renewable resources shall equal five hundred forty
million dollars ($540,000,000) and that the costs specified in
paragraphs (3), (4), and (5) of subdivision (c) are collected.
(e) Each electrical corporation shall allow customers to make
voluntary contributions through their utility bill payments as either
a fixed amount or a variable amount to support programs established
pursuant to paragraph (3) of subdivision (b). Funds collected by
electrical corporations for these purposes shall be forwarded in a
timely manner to the appropriate fund as specified by the commission.
(f) The commission's authority to collect funds pursuant
to this section for purposes of paragraph (3) of subdivision (b)
shall become inoperative on March 31, 2002.
(g) For purposes of this article, "emerging renewable
technology" means a new renewable technology, including, but not
limited to, fuel cells using renewable fuels and
photovoltaic technology, that is determined by the
California State Energy Resources Conservation
and Development Commission to be emerging from research and
development and that has significant commercial potential.
SEC. 12. Section 383.5 of the Public Utilities Code is amended to
read:
383.5. (a) As used in this section, the following terms
have the following meaning:
(1) "In-state renewable electricity generation technology" means
biomass, solar thermal, photovoltaic, wind, geothermal, small
hydropower of 30 megawatts or less, waste tire, digester gas,
landfill gas, and municipal solid waste generation technologies, as
described in the report, defined in paragraph (2), including any
additions or enhancements thereto, that are produced in facilities
located in this state and placed in operation after September 26,
1996, or that were operational prior to that date, and that are also
certified under Section 292.2904 of Title 18 of the Code of Federal
Regulations as a qualifying small power production facility either
located in California, or that began selling electricity to a
California electrical corporation prior to September 26, 1996, under
a Standard Offer Power Purchase Agreement authorized by the
commission.
(2) "Report" means the Policy Report on AB 1890 Renewables Funding
(March 1997, Publication Number P500-97-002) submitted to the
Legislature by the State Energy Resources Conservation and
Development Commission.
(b) (1) Forty-five percent of the money collected pursuant to
paragraph (3) of subdivision (c) of Section 381, up to two hundred
forty-three million dollars ($243,000,000), shall be used for
programs that are designed to improve the competitiveness of existing
in-state renewable electricity generation technology facilities, and
to secure for the state the environmental, economic, and reliability
benefits that continued operation of those facilities will provide.
(2) Any funds used to support in-state renewable electricity
generation technology facilities pursuant to this subdivision shall
be expended in accordance with the provisions of the report, subject
to all of the following requirements:
(A) Funding for existing renewable electricity generation
technologies shall be grouped into three technology tiers, as
follows:
(i) Twenty-five percent of the money, up to one hundred
thirty-five million dollars ($135,000,000), shall be used to fund
first tier technologies, including biomass, solar thermal, and whole
waste tire technologies.
(ii) Thirteen percent of the money, up to seventy million two
hundred thousand dollars ($70,200,000), shall be used to fund second
tier wind technologies.
(iii) Seven percent of the money, up to thirty-seven million eight
hundred thousand dollars ($37,800,000), shall be used to fund third
tier technologies, including geothermal, small hydropower, digester
gas, landfill gas, and municipal solid waste technologies
It is the intent of the Legislature in establishing this
program, to increase the amount of renewable electricity generated
per year, so that it equals at least 17 percent of the total
electricity generated for consumption in California per year by 2006.
(b) As used in this section, the following terms have the
following meaning:
(1) "In-state renewable electricity generation facility" means a
facility using biomass, solar thermal, photovoltaic, wind,
geothermal, fuel cells using renewable fuels, small hydroelectric
generation facility of 30 megawatts or less, waste tire, digester
gas, landfill gas, and municipal solid waste generation technologies,
as described in the report, defined in paragraph (2), including any
additions or enhancements thereto, that are located in this state or
located near the boarder of this state and with the first point of
connection to the Western States Coordinating Council (WSCC)
transmission system located within this state. "In-state renewable
electricity generation facility" also includes a facility using ocean
thermal, tidal current, and wave energy generation technologies,
located within the state's territorial boundaries.
(2) "Report" means the report entitled "Investing in Renewable
Electricity Generation in California" (June 2001, Publication Number
P500-00-022) submitted to the Governor and the Legislature by the
State Energy Resources Conservation and Development Commission.
(c) (1) Twenty percent of the funds collected pursuant to
paragraph (6) of subdivision (c) of Section 381 shall be used for
programs that are designed to improve the competitiveness of existing
in-state renewable electricity generation facilities, and to secure
for the state the environmental, economic, and reliability benefits
that continued operation of those facilities will provide.
(2) Any funds used to support in-state renewable electricity
generation facilities pursuant to this subdivision shall be expended
in accordance with the provisions of the report, subject to all of
the following requirements:
(A) Funding for existing renewable electricity generation
facilities shall be grouped into two technology tiers, as follows:
(i) Fifteen percent of the money shall be used to fund first tier
technologies, including biomass and solar thermal electric
technologies.
(ii) Five percent of the money shall be used to fund second tier
wind technologies.
(iii) The state Energy Resources Conservation and Development
Commission shall reexamine the tier structure as proposed in the
report and adjust the structure to reflect market conditions. The
State Energy Resources Conservation and Development Commission may
also consider inflatin when adjusting the structure .
(B) The State Energy Resources Conservation and Development
Commission shall establish a cents per kilowatthour production
incentive, not to exceed the payment caps per kilowatthour
established in the report representing the difference between target
prices and the market clearing price for electricity, if sufficient
funds are available. If there are insufficient funds in any payment
period to pay either the difference between the target and market
price or the payment caps, production incentives shall be based on
the amount determined by dividing available funds by eligible
generation. The target price for Tier 1 technologies shall
not be based on less than four cents ($0.04) per kilowatthour. The
market clearing price for electricity shall be the energy prices paid
to nonutility power generators as provided in Section 390.
(C) Funding for each type of existing in-state renewable
electricity generation technology shall be reduced each year during
the period from January 1, 1998, to January 1, 2002, to encourage the
development of increasingly competitive technologies.
(D) Facilities that are eligible to receive funding pursuant to
this section shall be certified in accordance with the requirements
set forth in the report and may not receive payments for any
electricity produced that has any of the following characteristics:
(i) Is sold under a fixed energy price payment under a long-term
contract with an existing in-state electrical corporation.
(ii) Derives from a utility-owned facility that is receiving, or
is eligible to receive, recovery of above-market facility costs
through a competitive transition charge.
(iii) Is used onsite, sold to customers in a manner that excludes
competitive transition charge payments, or is otherwise excluded from
competitive transition charge payments.
(c) (1) Thirty percent of the money, up to one hundred sixty-two
million dollars ($162,000,000), collected pursuant to paragraph (3)
of subdivision (c) of Section 381, shall be used for programs
designed to foster the development of new in-state renewable
electricity generation technology facilities, and to secure for the
state the environmental, economic, and reliability benefits that
continued operation of those facilities will provide. Funds to
further the purposes of this subdivision may be committed for
multiple years.
(2) Any funds used for new in-state renewable electricity
generation technology facilities pursuant to this subdivision shall
be expended in accordance with the report, subject to all of the
following requirements:
(A) Funds shall be allocated for proposed projects based on a
competitive solicitation process whereby production incentives, not
to exceed one and one-half cents ($0.015) per kilowatthour, are
awarded to the lowest bidders, provided that not more than 25 percent
of the funds allocated pursuant to paragraph (1) may be awarded to a
single project.
(B) Funds expended for production incentives shall be paid over a
five-year period commencing on the date that a project begins
electricity production, provided that the project shall be
operational prior to January 1, 2002, unless the State Energy
Resources Conservation and Development Commission finds that the
project will not be operational prior to January 1, 2002, due to
circumstances beyond the control of the developer. Upon making this
finding, the State Energy Resources Conservation and Development
Commission shall pay production incentives over a five-year period,
commencing on the date of operation, provided that the date that a
project begins electricity production may not extend beyond January
1, 2007.
(C) The amount of funds expended shall be increased for each
successive year during the period from January 1, 1998, to January 1,
2002, as fewer projects are expected to be funded during the first
few years after funding becomes available.
(D) Facilities that are eligible to receive payments from the New
Renewable Resources Account created pursuant to paragraph (2) of
subdivision (a) of Section 445 shall be certified as specified in the
report and may not receive payments for any electricity produced
that has any of the following characteristics:
(i) Is sold under an existing long-term contract with an existing
in-state electrical corporation if the contract includes fixed energy
or capacity payments.
(ii) Is used onsite and is sold to customers in a manner that
excludes competitive transition charge payments, or is otherwise
excluded from competitive transition charge payments.
(iii) Is produced by a facility that is owned by customer-owned
electricity generating systems market price for
electricity shall be determined by the State Energy Resources
Conservation and Development Commission based on the energy prices
paid to nonutility power generators as provided in Section 390, or on
otherwise available measures of market price .
(C) Facilities that are eligible to receive funding pursuant to
this subdivision shall be registered in accordance with criteria
developed by the State Energy Resources Conservation and Development
Commission and those facilities may not receive payments for any
electricity produced that has any of the following characteristics:
(i) Is sold at monthly average rates equal to or greater than the
applicable target price, as determined by the State Energy Resources
Conservation and Development Commission.
(ii) Is that portion of electricity generation attributable to the
use of qualified agricultural biomass fuel, for a facility that is
receiving fuel-based incentives through the Agricultural
Biomass-to-Energy Incentive Grant Program established pursuant to
Part 3 (commencing with Section 1101) of Division 1 of the Food and
Agricultural Code. Notwithstanding subdivision (f) of Section 1104
of the Food and Agricultural Code, facilities that receive funding
from the Agricultural Biomass-to-Energy Incentive Grant Program are
eligible to receive funding pursuant to this subdivision.
(iii) Is used onsite or is sold to customers in a manner that does
not include independent metering of the electricity generated, upon
which production incentives may be based.
(d) (1) Fifty percent of the money collected pursuant to paragraph
(6) of subdivision (c) of Section 381 shall be used for programs
designed to foster the development of new in-state renewable
electricity generation facilities, and to secure for the state the
environmental, economic, and reliability benefits that operation of
those facilities will provide.
(2) Any funds used for new in-state renewable electricity
generation facilities pursuant to this subdivision shall be expended
in accordance with the report, subject to all of the following
requirements:
(A) Funds shall be allocated for proposed projects based on a
competitive solicitation process whereby production incentives, not
to exceed a maximum amount, as specified by the State Energy
Resources Conservation and Development Commission, are awarded to the
lowest bidders, provided that not more than 25 percent of the funds
allocated in any competitive solicitation pursuant to paragraph (1)
may be awarded to a single project.
(B) Funds expended for production incentives shall be paid over a
five-year period commencing on or after the date that a project
begins electricity production, provided that the project shall be
operational within four years after the date of the competitive
solicitation in which the project was allocated funding. A project
that becomes operational later than four years after the date of the
competitive solicitation in which the project was allocated funding
may not receive payments except upon the extension and reapproval of
its award by the State Energy Resources Conservation and Development
Commission, and may not receive any payments for energy generated
beyond the date nine years after the date of the competitive
solicitation. The State Energy Resources Conservation and Development
Commission may extend and reapprove a project award if it finds that
the project will not be operational within the expected four-year
period, due to circumstances specific to the project and beyond the
control of the project developer. Upon making this finding, the
State Energy Resources Conservation and Development Commission shall
pay production incentives over a five-year period, commencing on the
date of operation, provided that the date that a project begins
electricity production may not extend beyond six years after the date
of the applicable competitive solicitation or January 1, 2007,
whichever is later.
(C) The State Energy Resources Conservation and Development
Commission may determine as part of a solicitation that a facility
that does not meet the definition of "in-state renewable generation
facility" solely because it is located outside the state is eligible
for funding from this subdivision if it satisfies both of the
following requirements:
(i) It is located so that it is or will be connected to the WSCC
grid.
(ii) It is developed with guaranteed contracts to sell its
generation to end-use customers within California, or to marketers
that provide this guarantee for resale of the generation, for a
period at least equal to the amount of time it receives incentive
payments pursuant to this subdivision.
(D) Facilities that are eligible to receive funding pursuant to
this subdivision shall be registered in accordance with criteria
developed by the State Energy Resources Conservation and Development
Commission and those facilities may not receive payments for any
electricity produced that has any of the following characteristics:
(i) Is sold under an existing long-term contract with an existing
in-state electrical corporation if the contract includes fixed energy
or capacity payments, except for that electricity that satisfies the
provisions of subparagraph (C) of paragraph (1) of subdivision (c)
of Section 399.6.
(ii) Is used onsite or is sold to customers in a manner that does
not include independent metering of the electricity generated, upon
which production incentives may be based.
(iii) Is produced by a facility that is owned by an electrical
corporation or a local publicly owned electric utility as defined in
subdivision (d) of Section 9604.
(iv) Is a hydroelectric generation project that will require a new
or increased appropriation of water under Part 2 (commencing with
Section 1200) of Division 2 of the Water Code.
(E) Eligibility to compete for funds or to receive funds shall not
be contingent upon the location or nature of the power purchaser.
(3) Repowered wind projects shall be eligible for funding under
this subdivision if the new investment is at least 80 percent of the
value of the repowered facility.
(d) (1) Ten percent of the money collected pursuant to paragraph
(3) of subdivision (c) of Section 381, up to fifty-four million
dollars ($54,000,000), shall be used for a multiyear, consumer-based
program to foster the development of emerging renewable technologies
in distributed generation applications. Funds to further the
purposes of this subdivision may be committed for multiple years.
(2) Any funds used for emerging technologies pursuant to this
subdivision shall be expended in accordance with all of the following
requirements:
(A) Funding for emerging technologies shall be provided through a
competitive, market-based process that shall be in place for a period
of not less than four years, and shall be structured so as to allow
eligible emerging technology manufacturers and suppliers to
anticipate and plan for increased sale and installation volumes over
the life of the program.
(B) The program shall provide monetary rebates, buydowns, or
equivalent incentives, subject to subparagraph (C) of paragraph (2)
of subdivision (d), to purchasers, lessees, lessors, or sellers of
eligible electricity generating systems. Incentives shall benefit
the end-use consumer of renewable generation by directly and
exclusively reducing the cost of the eligible system, or the cost of
electricity produced by the eligible system. Incentives shall be
issued on the basis of the rated electrical capacity of the system
measured in watts. The amount of the per-watt incentive shall
decline over the term of the program, with a corresponding increase
in the amount of total electrical capacity eligible for the
incentive, thereby encouraging the manufacturers and suppliers of
eligible systems to reduce system costs. Incentives shall be limited
to a maximum percentage of the system price, as defined by the State
Energy Resources Conservation and Development Commission, and the
maximum incentive percentage shall decline over the term of the
program, as shall the per-watt incentive, in amounts to be determined
by the State Energy Resources Conservation and Development
Commission.
(C) Eligible distributed emerging technologies are photovoltaic,
solar thermal electric, fuel cell technologies that utilize renewable
fuels, and wind turbines of not more than ten kilowatts rated
electrical capacity per customer site, provided that the technologies
meet the emerging technology eligibility criteria contained in the
report prepared by State Energy Resources Conservation and
Development Commission. Eligible electricity generating systems are
intended primarily to offset part or all of the consumer's own
electrical energy demand, and shall not be owned by electrical
corporations or publicly owned utilities, be located at a customer
site that is not receiving distribution service from existing
in-state electrical corporations. Not less than 60 percent of the
available incentive funds shall be reserved for systems of 10
kilowatts rated electrical capacity or smaller, and not less than 15
percent of the funds shall be reserved for systems of 100 kilowatts
rated electrical capacity or smaller. All eligible electricity
generating system components shall be new and unused, and shall not
have been previously placed in service in any other location or for
any other application. Systems and their fuel resource shall be
located on the premises of the end-use consumer of the electricity
produced, and all eligible electricity generating systems shall be
connected to the utility grid in California.
(D) The State Energy Resources Conservation and Development
Commission shall also determine, in collaboration with industry and
consumer interests, if a program provision limiting the amount of
funds available for any single project is warranted, and determine
how federal, state, or other funds or incentives not related to this
section that are already available, or that may become available for
eligible electricity generating systems, may impact the availability
of funds allocated under this section, if at all. The emerging
renewable technologies program shall be implemented not later than
March 31, 1998, and incentives shall be available for eligible
electricity generating systems that are placed in service after
January 1, 1998, in accordance with the program provisions developed
by the State Energy Resources Conservation and Development
Commission. However, projects placed in service after January 1,
1998, and prior to September 1, 1998, shall not be subject to limits,
if any, that may be determined by the commission, pursuant to this
subparagraph.
(e) Fifteen percent of the money collected pursuant to paragraph
(3) of subdivision (c) of Section 381, up to eighty-one million
dollars ($81,000,000), shall be used for programs designed to provide
customer credits for purchases of renewable energy produced by
certified energy providers, to disseminate information regarding
renewable energy technologies, to promote purchases of renewable
energy, to help develop a consumer market for renewable energy, and
to help develop a consumer market for renewable energy technologies,
as provided in the report, subject to the following requirements:
(1) (A) Fourteen percent of the money, up to seventy-five million
six hundred thousand dollars ($75,600,000), shall be expended to
provide customer credits for purchases of renewable energy produced
by certified energy providers. Customer credits shall be awarded to
California retail customers located in the service territory of an
investor-owned utility that is subject to Section 381 who purchase
qualifying renewable electric power through transactions traceable to
specific generation sources by any auditable contract trail or
equivalent that provides commercial verification that the electricity
source claimed has been sold not more than
(F) The State Energy Resources Conservation and Development
Commission may require applicants competing for funding to post a
forfeitable bid bond or other financial guaranty as an assurance of
the applicant's intent to move forward expeditiously with the project
proposed. The amount of any bid bond or financial guaranty may not
exceed 10 percent of the total amount of the funding requested by the
applicant.
(G) In awarding funding, the State Energy Resources Conservation
and Development Commission may provide preference to projects that
provide tangible demonstrable benefits to communities with a
plurality of minority or low-income populations.
(3) Repowered existing facilities shall be eligible for funding
under this subdivision if the capital investment to repower the
existing facility equals at least 80 percent of the value of the
repowered facility.
(4) Facilities engaging in the combustion of municipal solid waste
or tires are not eligible for funding under this subdivision.
(e) (1) Seventeen and one-half percent of the money collected
pursuant to paragraph (6) of subdivision (c) of Section 381 shall be
used for a multiyear, consumer-based program to foster the
development of emerging renewable technologies in distributed
generation applications.
(2) Any funds used for emerging technologies pursuant to this
subdivision shall be expended in accordance with the report, subject
to all of the following requirements:
(A) Funding for emerging technologies shall be provided through a
competitive, market-based process that shall be in place for a period
of not less than five years, and shall be structured so as to allow
eligible emerging technology manufacturers and suppliers to
anticipate and plan for increased sale and installation volumes over
the life of the program. Notwithstanding subparagraphs (B), (C), and
(D), up to 15 percent of the funds allocated by this subdivision may
be used by the State Energy Resources Conservation and Development
Commission to establish programs with alternative program structures,
as long as the programs have goals consistent with this
subparagraph. These programs may include incentives for in-state
manufacturing of renewable energy systems eligible for funding under
this subdivision provided that these programs yield tangible benefits
to California ratepayers that contribute to the Renewable Resources
Trust Fund.
(B) The program shall provide monetary rebates, buydowns, or
equivalent incentives, subject to subparagraph (C), to purchasers,
lessees, lessors, or sellers of eligible electricity generating
systems. Incentives shall benefit the end-use consumer of renewable
generation by directly and exclusively reducing the purchase or lease
cost of the eligible system, or the cost of electricity produced by
the eligible system. Incentives shall be issued on the basis of the
rated electrical capacity of the system measured in watts, or the
amount of electricity production of the system, measured in
kilowatthours. Incentives shall be limited to a maximum percentage
of the system price, as determined by the State Energy Resources
Conservation and Development Commission.
(C) Eligible distributed emerging technologies are photovoltaic,
solar thermal electric, fuel cell technologies that utilize renewable
fuels, and wind turbines of not more than 50 kilowatts rated
electrical capacity per customer site, and other distributed
renewable emerging technologies that meet the emerging technology
eligibility criteria established by the State Energy Resources
Conservation and Development Commission. Eligible electricity
generating systems are intended primarily to offset part or all of
the consumer's own electrical energy demand, and shall not be owned
by electrical corporations or local publicly owned electric
utilities, nor be located at a customer site that is not receiving
distribution service from an electrical corporation that is subject
to Section 381 and contributing funds to support programs under this
section. All eligible electricity generating system components shall
be new and unused, shall not have been previously placed in service
in any other location or for any other application, and shall have a
warranty of not less than five years to protect against defects and
undue degradation of electrical output. Systems and their fuel
resources shall be located on the same premises of the end-use
consumer where the consumer's own electricity demand is located, and
all eligible electricity generating systems shall be connected to the
utility grid in California. The State Energy Resources Conservation
and Development Commission may require eligible electricity
generating systems to have meters in place to monitor and measure a
system's performance and generation.
(D) The State Energy Resources Conservation and Development
Commission may limit the amount of funds available for any system or
project of multiple systems and reduce the level of funding for any
system or project of multiple systems that has received, or may be
eligible to receive, any government or utility funds, incentives, or
credit.
(E) In awarding funding, the State Energy Resources Conservation
and Development Commission may provide preference to systems that
provide tangible demonstrable benefits to communities with a
plurality of minority or low-income populations.
(f) (1) Ten percent of the money collected pursuant to paragraph
(6) of subdivision (c) of Section 381 shall be used to provide
customer credits for purchases of the renewable attributes of
renewable energy produced by registered generating facilities.
(2) Any funds used for customer credits pursuant to this
subdivision shall be expended, as provided in the report, subject to
all of the following requirements:
(A) Customer credits shall be awarded to California retail
customers located in the service territory of an electrical
corporation that is subject to Section 381 and contributing funds to
support programs under this section, and who are purchasing
qualifying renewable aspects of renewable electric power through
transactions traceable to specific generation sources by any
auditable contract trail or equivalent that provides commercial
verification that the renewable aspect of the electricity source
claimed has been sold once and only once to a retail customer.
Credits may be given without regard to whether the power supplier is
also receiving funds under any other subdivision of this section.
(B) Credits awarded pursuant to this paragraph may be paid
directly to energy marketers, aggregators, or generators if
those persons or entities account for the credits on the recipient
customer's utility bills. Credits shall not exceed one and one-half
cents ($0.015) per kilowatthour. Credits awarded to members of the
combined class of customers, other than residential and small
commercial customers, shall not exceed one thousand dollars ($1,000)
per customer in 1998 and 1999. Thereafter, the State Energy
Resources Conservation and Development Commission shall determine by
January 10 of each year the average customer incentive rebate level
paid over the preceding calendar year. In the event that the
payments have remained at the one and one-half cents ($0.015) per
kilowatthour cap over the preceding calendar year, the one thousand
dollars ($1,000) per customer cap shall be removed for that calendar
year, except that in no event shall more than fifteen million dollars
($15,000,000) of the total customer incentive funds be awarded to
members of the combined class of customers other than residential and
small commercial customers.
(C) Funding for credits pursuant to this paragraph shall be
increased for each successive year during the period from January 1,
1998, to January 1, 2002, to encourage the increasing use of those
credits.
(D) The State Energy Resources Conservation and Development
Commission shall develop interim criteria and procedures for the
certification of energy providers and for the identification of
energy purchasers who are eligible to receive funds pursuant to this
paragraph through a process consistent with this paragraph. The
criteria and procedures shall apply only to funding eligibility and
shall not extend to other renewable marketing claims.
(E) The commission shall notify the State Energy Resources
Conservation and Development Commission in writing within 10 days of
revoking or suspending the registration of any electric service
provider pursuant to paragraph (4) of subdivision (b) of Section
394.25.
(2) One percent of the money, up to five million four hundred
thousand dollars ($5,400,000), shall be expended to promote renewable
energy and to disseminate information on renewable energy
technologies, including emerging renewable technologies, and to help
develop a consumer market for renewable energy and for small-scale
emerging renewable energy technologies.
(f) (1) The State Energy Resources Conservation and Development
Commission shall adopt guidelines governing the funding programs
authorized under this section, at a publicly noticed meeting offering
all interested parties an opportunity to comment. Substantive
changes to the guidelines shall not be adopted without at least 10
days' written notice to the public. The public notice of meetings
required by this paragraph shall not be less than 30 days.
Notwithstanding any other provision of law, any guidelines adopted
pursuant to this section shall be deemed to satisfy the requirements
of Chapter 3.5 (commencing with Section 11340) of Division 3 of Title
2 of the Government Code.
(2) The State Energy Resources Conservation and Development
Commission shall, in collaboration with eligible emerging technology
industry stakeholders and consumer interests, complete the emerging
technology program design, as outlined in subdivision (d), and
implement its provisions. electric service providers,
energy marketers, aggregators, or generators if those persons or
entities account for the credits on the recipient customer's bills.
Credits may not exceed one and one-half cents ($0.015) per
kilowatthour. Credits awarded to members of the combined class of
customers, other than residential and small commercial customers, may
not exceed one thousand dollars ($1,000) per customer per calendar
year. In no event may more than thirteen million five hundred
thousand dollars ($13,500,000) of the total customer incentive funds
be awarded to members of the combined class of customers other than
residential and small commercial customers.
(C) The State Energy Resources Conservation and Development
Commission shall develop criteria and procedures for the registration
of energy providers and for the identification of energy purchasers
who are eligible to receive funds pursuant to this paragraph through
a process consistent with this paragraph. These criteria and
procedures shall apply only to funding eligibility and may not extend
to other renewable marketing claims.
(D) The commission shall notify the State Energy Resources
Conservation and Development Commission in writing within 10 days of
revoking or suspending the registration of any electric service
provider pursuant to paragraph (4) of subdivision (b) of Section
394.25.
(g) Two and one-half percent of the money collected pursuant to
paragraph (6) of subdivision (c) of Section 381 shall be used in
accordance with the report to promote renewable energy and to
disseminate information on renewable energy technologies, including
emerging renewable technologies, and to help develop a consumer
market for renewable energy and for small-scale emerging renewable
energy technologies.
(h) (1) The State Energy Resources Conservation and Development
Commission shall adopt guidelines governing the funding programs
authorized under this section, at a publicly noticed meeting offering
all interested parties an opportunity to comment. Substantive
changes to the guidelines may not be adopted without at least 10 days'
written notice to the public. The public notice of meetings
required by this paragraph may not be less than 30 days.
Notwithstanding any other provision of law, any guidelines adopted
pursuant to this section shall be exempt from the requirements of
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code. The Legislature declares that the
changes made to this paragraph by the act amending this section
during the 2002 portion of the 2001-02 Regular Session are
declaratory of, and not a change in existing law.
(2) Funds to further the purposes of this section may be committed
for multiple years.
(3) Awards made pursuant to this section are grants, subject to
appeal to the State Energy Resources Conservation and Development
Commission upon a showing that factors other than those described in
the guidelines adopted by the State Energy Resources Conservation and
Development Commission were applied in making the awards and
payments. Any actions taken by an applicant to apply for, or become
or remain eligible and certified registered
to receive, payments or awards, including satisfying conditions
specified by the State Energy Resources Conservation and Development
Commission, shall not constitute the rendering of goods, services,
or a direct benefit to the State Energy Resources Conservation and
Development Commission.
(g)
(i) The State Energy Resources Conservation and Development
Commission shall report to the Legislature on or before May 31, 2000,
and on or before May 31 of every second year thereafter, regarding
the results of the mechanisms funded pursuant to this section.
Reports prepared pursuant to this section
subdivision shall include a description of the allocation of
funds among existing, new and emerging technologies; the allocation
of funds among programs, including consumer-side incentives; and the
need for the reallocation of money among those technologies. The
reports shall also address the allocation of funds from interest on
the accounts described in this section, and money in the
accounts described in subdivision (e) of Section 381, and
money included in the accounts pursuant to Section 385.
381. Notwithstanding paragraph (4) of subdivision
(b) of Section 383 or subdivisions (b),
(c), (d), (e), (f), and (e) (g)
of this section, money may be reallocated without further
legislative action among existing, new, and emerging technologies and
consumer-side programs in a manner consistent with the
report. report and with the latest report provided to
the Legislature pursuant to this subdivision.
(j) The State Energy Resources Conservation and Development
Commission may expend money collected pursuant to paragraph (6) of
subdivision (c) of Section 381 for statutory costs related to the
State Energy Resources Conservation and Development Commission's
implementation of a renewables portfolio standard program if that
program is enacted during the 2002 portion of the 2001-02 Regular
Session.
SEC. 13. Section 394.25 of the Public Utilities Code is amended to
read:
394.25. (a) The commission may enforce the provisions of Sections
2102, 2103, 2104, 2105, 2107, 2108, and 2114 against electric
service providers as if those electric service providers were public
utilities as defined in these code sections. Notwithstanding the
above, nothing in this section grants the commission jurisdiction to
regulate electric service providers other than as specifically set
forth in this part. Electric service providers shall continue to be
subject to the provisions of Sections 2111 and 2112. Upon a finding
by the commission's executive director that there is evidence to
support a finding that the electric service provider has committed an
act constituting grounds for suspension or revocation of
registration as set forth in subdivision (b) of Section 394.25, the
commission shall notify the electric service provider in writing and
notice an expedited hearing on the suspension or revocation of the
electric service provider's registration to be held within 30 days of
the notification to the electric service provider of the executive
director's finding of evidence to support suspension or revocation of
registration. The commission shall, within 45 days after holding
the hearing, issue a decision on the suspension or revocation of
registration, which shall be based on findings of fact and
conclusions of law based on the evidence presented at the hearing.
The decision shall include the findings of fact and the conclusions
of law relied upon.
(b) An electric service provider may have its registration
suspended or revoked, immediately or prospectively, in whole or in
part, for any of the following acts:
(1) Making material misrepresentations in the course of soliciting
customers, entering into service agreements with those customers, or
administering those service agreements.
(2) Dishonesty, fraud, or deceit with the intent to substantially
benefit the electric service provider or its employees, agents, or
representatives, or to disadvantage retail electric customers.
(3) Where the commission finds that there is evidence that the
electric service provider is not financially or operationally capable
of providing the offered electric service.
(4) The misrepresentation of a
material fact by an applicant in obtaining a registration pursuant to
Section 394.
(c) Pursuant to its authority to revoke or suspend registration,
the commission may suspend a registration for a specified period or
revoke the registration, or in lieu of suspension or revocation,
impose a moratorium on adding or soliciting additional customers.
Any suspension or revocation of a registration shall require the
electric service provider to cease serving customers within the
boundaries of investor-owned electric corporations, and the affected
customers shall be served by the electrical corporation until the
time when they may select service from another service provider.
Customers shall not be liable for the payment of any early
termination fees or other penalties to any electric service provider
under the service agreement if the serving electric service provider'
s registration is suspended or revoked.
(d) The commission shall require any electric service provider
whose registration is revoked pursuant to paragraph (4) of
subdivision (b) to refund all of the customer credit funds that the
electric service provider received from the State Energy Resources
Conservation and Development Commission pursuant to paragraph (1) of
subdivision (e) (f) of Section 383.5.
The repayment of these funds shall be in addition to all other
penalties and fines appropriately assessed the electric service
provider for committing those acts under other provisions of law.
All customer credit funds refunded under this subdivision shall be
deposited in the Renewable Resource Trust Fund for redistribution by
the State Energy Resources Conservation and Development Commission
pursuant to Section 383.5. This subdivision may not be construed to
apply retroactively.
SEC. 14. Section 445 of the Public Utilities Code is amended to
read:
445. (a) The Renewable Resource Trust Fund is hereby created in
the State Treasury.
(b) The following accounts are hereby created within the Renewable
Resource Trust Fund:
(1) The Existing Renewable Resources Account.
(2) New Renewable Resources Account.
(3) Emerging Renewable Resources Account.
(4) Customer-Side Renewable Resource Purchases
(4) Customer-Credit Renewable Resources Account.
(5) Renewable Resources Consumer Education Account.
(c) The money in the fund may be expended for the state's
administration of this article only upon appropriation by the
Legislature in the annual Budget Act.
(d) Notwithstanding Section 383, that portion of revenues
collected by electrical corporations for the benefit of in-state
operation and development of existing and new and emerging renewable
resource technologies, pursuant to paragraph (3)
paragraphs (3) and (6) of subdivision (c) of Section 381,
shall be transmitted to the State Energy Resources Conservation and
Development Commission at least quarterly for deposit in the
Renewable Resource Trust Fund. After setting aside in the fund money
that may be needed for expenditures authorized by the annual Budget
Act in accordance with subdivision (c), the Treasurer shall
immediately deposit money received pursuant to this section into the
accounts created pursuant to subdivision (b) in proportions
designated by the State Energy Resources Conservation and Development
Commission for the current calendar year. Notwithstanding Section
13340 of the Government Code, the money in the fund and the accounts
within the fund are hereby continuously appropriated to the State
Energy Resources Conservation and Development Commission without
regard to fiscal year for the purposes enumerated in Section 383.5.
(e) Upon notification by the State Energy Resources Conservation
and Development Commission, the Controller shall pay all awards of
the money in the accounts created pursuant to subdivision
(c) (b) for purposes of furthering the
purposes of subdivision (c) of enumerated in
Section 383.5. The eligibility of each award shall be determined
solely by the State Energy Resources Conservation and Development
Commission based on the procedures it adopts under subdivision
(f) (h) of Section 383.5. Based on the
eligibility of each award, the State Energy Resources Conservation
and Development Commission shall also establish the need for a
multiyear commitment to any particular award and so advise the
Department of Finance. Eligible awards submitted by the State Energy
Resources Conservation and Development Commission to the Controller
shall be accompanied by information specifying the account from which
payment should be made and the amount of each payment; a summary
description of how payment of the award furthers the purposes
of subdivision (c) of enumerated in
Section 383.5; and an accounting of future costs associated with any
award or group of awards known to the State Energy Resources
Conservation and Development Commission to represent a portion of a
multiyear funding commitment.
(f) The State Energy Resources Conservation and Development
Commission may transfer funds between accounts for cash-flow
purposes, provided that the balance due each account is restored and
the transfer does not adversely affect any of the accounts. The
State Energy Resources Conservation and Development Commission shall
examine the cash-flow in the respective accounts on an annual basis,
and shall annually prepare and submit to the Legislature a report
that describes the status of account transfers and
repayments. Any other unallocated funds in any account shall remain
in the respective account, and be available for the purposes of this
section until December 31, 2001. After that date, money may be
reallocated without further legislative action among existing, new,
and emerging technologies and consumer-side programs in a manner
consistent with the report described in subdivision (a) of Section
383.5. repayments.
(g) The State Energy Resources Conservation and Development
Commission shall, on a quarterly basis, report to the Legislature on
the implementation of this article. Those quarterly reports shall be
submitted to the Legislature not more than 15
30 days after the close of each quarter and shall include
information describing the awards submitted to the Treasurer
Controller for payment pursuant to this
article, the cumulative commitment of claims by account, the relative
demand for funds by account, a forecast of future awards, and other
matters the commission State Energy Resources
Conservation and Development Commission determines may be of
importance to the Legislature.
(h) The Department of Finance, commencing March 1, 1999, shall
conduct an independent audit of the Renewable Resource Trust Fund and
its related accounts annually, and provide an audit report to the
Legislature not later than March 1 31
of each year for which this article is operative. The Department of
Finance's report shall include information regarding revenues,
payment of awards, reserves held for future commitments, unencumbered
cash balances, and other matters that the Director of Finance
determines may be of importance to the Legislature.
Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is
repealed.
SEC. 2. It is the intent of the Legislature to enact subsequent
legislation to require the Public Utilities Commission to perform
those activities formerly performed by the Electricity Oversight
Board.