BILL NUMBER: SB 107 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 5, 2003
AMENDED IN SENATE APRIL 9, 2003
INTRODUCED BY Senator Bowen
JANUARY 30, 2003
An act to amend Section 379.5 of, and to repeal Section 350 of,
the Public Utilities Code, relating to electric power, and declaring
the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 107, as amended, Bowen. Independent System Operator: report:
demand management : renewable, ultra-clean, low
emission distributed generation resources .
(1) The Public Utilities Act requires the Independent System
Operator, in consultation with the California Energy Resources
Conservation and Development Commission (Energy Commission), the
Public Utilities Commission, the Western Systems Coordinating
Council, and concerned regulatory agencies in other western states,
within 6 months after Federal Energy Regulatory Commission approval
of the Independent System Operator, to provide a report with certain
information to the Legislature and the Electricity Oversight Board.
This bill would repeal that provision.
(2) Existing law requires the Public Utilities Commission,
notwithstanding any other provision of law, on or before March 7,
2001, and in consultation with the Independent System Operator, to
take certain actions, including, in consultation with the Energy
Commission, adopting energy conservation demand-side management and
other initiatives in order to reduce demand for electricity and
reduce load during peak demand periods, including, but not limited
to, differential incentives for renewable or super clean distributed
generation resources. Pursuant to these provisions, the
commission has established the Self Generation Incentive Program
(Decision 01-03-073, March 27, 2001), which will expire at the end of
2004.
This bill would modify those provisions to require the Public
Utilities Commission , in consultation with the Independent
System Operator, to take those actions, including, in consultation
with the Energy Commission, adopting those energy conservation
demand-side management and other initiatives, including, but not
limited to, differential incentives for renewable or
to establish until January 1, 2007, an incentive program for
renewable and ultra-clean and low-emission distributed
generation resources , with a goal of achieving
commercialization of ultra-clean and low-emission distributed
generation resources by January 1, 2007. The commission would, in
establishing incentive levels, be required to consider the amount and
duration of existing incentives, including exemption from standby
tariffs, exemption from Department of Water Resources electricity
procurement obligations, state and federal tax credits, deductions,
and exemptions. The bill would require the Public Utilities
Commission to report to the Legislature, by January 1, 2006, on the
costs, benefits, environmental impacts, and efficiency impacts of the
incentive program .
(3) The bill would declare that it is to take effect immediately
as an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 350 of the Public Utilities Code is repealed.
SEC. 2. Section 379.5 of the Public Utilities Code is amended to
read:
379.5.
379.5. (a) The commission shall establish an incentive program,
to succeed the Self Generation Incentive Program, for renewable and
ultra-clean and low-emission distributed generation resources. A
goal of the incentive program is to achieve commercialization of
ultra-clean and low-emission distributed generation resources by
January 1, 2007. In establishing incentive levels, the commission
shall consider the amount and duration of existing incentives,
including exemption from standby tariffs, exemption from Department
of Water Resources electricity procurement obligations, state and
federal tax credits, deductions, and exemptions.
(b) The commission shall, by January 1, 2006, report to the
Legislature on the costs, benefits, environmental impacts, and
efficiency impacts of the incentive program.
(c) This section shall remain in effect only until January 1, 2007,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2007, deletes or extends that date.
The commission, in consultation with the Independent
System Operator, shall take all of the following actions, and shall
include the reasonable costs involved in taking those actions in the
distribution revenue requirements of utilities regulated by the
commission, as appropriate:
(a) (1) Identify and undertake those actions necessary to reduce
or remove constraints on the state's existing electrical transmission
and distribution system, including, but not limited to,
reconductoring of transmission lines, the addition of capacitors to
increase voltage, the reinforcement of existing transmission
capacity, and the installation of new transformer banks. The
commission shall, in consultation with the Independent System
Operator, give first priority to those geographical regions where
congestion reduces or impedes electrical transmission and supply.
(2) Consistent with the existing statutory authority of the
commission, afford electrical corporations a reasonable opportunity
to fully recover costs it determines are reasonable and prudent to
plan, finance, construct, operate, and maintain any facilities under
its jurisdiction required by this section.
(b) In consultation with the State Energy Resources Conservation
and Development Commission, adopt energy conservation demand-side
management and other initiatives in order to reduce demand for
electricity and reduce load during peak demand periods. Those
initiatives shall include, but not be limited to, all of the
following:
(1) Expansion and acceleration of residential and commercial
weatherization programs.
(2) Expansion and acceleration of programs to inspect and improve
the operating efficiency of heating, ventilation, and
air-conditioning equipment in new and existing buildings, to ensure
that these systems achieve the maximum feasible cost-effective energy
efficiency.
(3) Expansion and acceleration of programs to improve energy
efficiency in new buildings, in order to achieve the maximum feasible
reductions in uneconomic energy and peak electricity consumption.
(4) Incentives to equip commercial buildings with the capacity to
automatically shut down or dim nonessential lighting and
incrementally raise thermostats during a peak electricity demand
period.
(5) Evaluation of installing local infrastructure to link
temperature setback thermostats to real-time price signals.
(6) Incentives for load control and distributed generation to be
paid for enhancing reliability.
(7) Differential incentives for renewable or ultra-clean and
low-emission distributed generation resources.
(8) Reevaluation of all efficiency cost-effectiveness tests in
light of increases in wholesale electricity costs and of natural gas
costs to explicitly include the system value of reduced load on
reducing market clearing prices and volatility.
(c) In consultation with the Energy Resources Conservation and
Development Commission, adopt and implement a residential,
commercial, and industrial peak reduction program that encourages
electric customers to reduce electricity consumption during peak
power periods.
SEC. 3. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to encourage early compliance with air quality standards
established by the State Air Resources Board and ensure that the
cleanest, most environmentally sound distributed generation resources
are eligible for substantial ratepayer subsidies offered by the
Public Utilities Commission, including avoidance of energy crisis
cost obligations, it is necessary that this act take effect
immediately.