BILL NUMBER: SB 168 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY SEPTEMBER 2, 2003
AMENDED IN ASSEMBLY JUNE 19, 2003
AMENDED IN ASSEMBLY JUNE 12, 2003
AMENDED IN SENATE APRIL 28, 2003
INTRODUCED BY Committee on Energy, Utilities and Communications
(Senators Bowen (Chair), Battin, Dunn, Morrow, and Sher)
FEBRUARY 12, 2003
An act to amend Sections 25401.2, 25523, 25525, and 25620.5 of,
and to amend and renumber Section 25620.10 of, the Public Resources
Code, to amend Sections 383.5 and 445 of, and to repeal Division 4.7
(commencing with Section 9201) of, the Public Utilities Code, and to
amend Section 2 of Chapter 850 of the Statutes of 2002, relating to
energy and telecommunications , and making an appropriation
therefor .
LEGISLATIVE COUNSEL'S DIGEST
SB 168, as amended, Committee on Energy, Utilities and
Communications. Renewable Resource Trust Fund :
Telecommunications: California High-Cost Fund-B Administrative
Committee Fund and Universal Lifeline Telephone Service Trust
Administrative Committee Fund .
(1) The Warren-Alquist State Energy Resources Conservation and
Development Act requires the State Energy Resources Conservation and
Development Commission (Energy Commission) to certify a sufficient
number of sites and related facilities to provide a supply of
electric power sufficient to accommodate projected demand for power
statewide. The act requires the Energy Commission to not certify any
facility contained in an application when it finds that the facility
does not conform with any applicable state, local, or regional
standards, ordinances, or laws, unless the Energy Commission
determines that the facility is required for public convenience and
necessity and that there are not more prudent and feasible means of
achieving the public convenience and necessity.
This bill would instead authorize the Energy Commission to not
certify a facility contained in an application when it finds that the
facility does not conform with any applicable state, local, or
regional standards, ordinances, or laws, unless the Energy Commission
determines that the facility is required for public convenience and
necessity and that there are not more prudent and feasible means of
achieving the public convenience and necessity.
(2) 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. Existing law permits the cost to the state to be
reasonable.
This bill would require the cost to the state to be reasonable.
(3) Existing law requires the Energy Commission to regularly
convene an advisory board that is required to make recommendations to
guide the Energy Commission's selection of specified programs and
projects to be funded. Existing law specifies the members of the
advisory board.
This bill would instead require the board membership to include,
as appropriate, but not be limited to, those specified
representatives.
(4) Under the Public Utilities Act, the Public Utilities
Commission (PUC) requires electrical corporations to identify a
separate rate component to fund in- state operation and development
of existing and new and emerging renewable resources technologies.
This rate component is a nonbypassable element of local distribution
and collected on the basis of usage. Existing law requires specified
electrical corporations to collect specific amounts to support
in-state operation and development of existing and new and emerging
renewable resources technologies. Existing law also requires the
Energy Commission to transfer funds collected for in-state operation
and development of existing and new and emerging renewable resources
technologies into the Renewable Resource Trust Fund. Existing law
establishes certain accounts in the Renewable Resource Trust Fund.
Existing law requires, upon notification by the Energy Commission,
the Controller to pay all awards of the money in the accounts for
certain renewable energy purposes. Existing law requires the Energy
Commission to report to the Legislature on the implementation of
these provisions on a quarterly basis and to report on the mechanisms
funded by May 31, 2000, and every two years thereafter.
This bill instead would require the Energy Commission to report to
the Legislature on the implementation of the Renewable Resource
Trust Fund, and the mechanisms funded, on an annual basis.
(5) Existing law requires the Energy Commission, commencing on or
before March 1, 1985, to participate in a meeting on an annual basis
that includes specified representatives, the purpose of which is to
work towards achieving specified goals related to energy research,
development, and demonstration projects.
This bill would repeal those provisions.
(6) Existing law requires the Energy Commission, in consultation
with the PUC, to report to the Legislature and the Governor, by March
31, 2003, regarding the feasibility of implementing real-time,
critical peak, and other dynamic pricing tariffs for electricity in
California, as strategies which can either reduce peak demand or
shift peak demand load to off-peak periods.
This bill, instead, would require the report, as revised, to be
given to the Legislature and the Governor by September 30, 2003.
(7) Existing law, requires the PUC to develop, implement,
and maintain a suitable program to establish a fair and equitable
local rate structure aided by transfer payments to small independent
telephone corporations serving high cost rural and small metropolitan
areas, in order to promote the goals of universal telephone service
and to reduce any disparity in rates charged by small independent
telephone corporations serving high cost rural and small metropolitan
areas. Moneys collected for this program are deposited into the
California High-Cost Fund-B Administrative Committee Fund. Moneys in
the fund may be expended, upon appropriation in the annual Budget
Act.
The Moore Universal Telephone Service Act requires the PUC to
establish a class of lifeline service necessary to meet minimum
residential communications needs and establish rates and charges for
that service. Moneys collected by telephone corporations to fund
this program are deposited into the Universal Lifeline Telephone
Service Trust Administrative Committee Fund. Moneys in the fund may
be expended, upon appropriation in the annual Budget Act.
This bill would appropriate $40,000,000 from the California
High-Cost Fund-B Administrative Committee Fund for the purpose of
transfer payments to telephone corporations providing services in
high cost areas in fiscal year 2001-02 and authorized to receive the
funds. The bill would appropriate $6,000,000 from the Universal
Lifeline Telephone Service Trust Administrative Committee Fund for
the purpose of transfer payments to telephone corporations providing
lifeline service in fiscal year 2001-02 and authorized to receive the
funds. The bill would prohibit the commission from increasing any
fee, charge, rate, or assessment, or imposing any surcharge, as a
result of these appropriations.
(8) This bill would make other related and conforming
changes.
Vote: 2/3 majority .
Appropriation: yes no . Fiscal
committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 25401.2 of the Public Resources Code is amended
to read:
25401.2. (a) As part of the report required by Section 25302, the
commission shall develop and update an inventory of current and
potential cost-effective opportunities in each utility's service
territory, to improve efficiencies and to help utilities manage loads
in all sectors of natural gas and electricity use. The report shall
include estimates of the overall magnitude of these resources, load
shapes, and the projected costs associated with delivering the
various types of energy savings that are identified in the inventory.
The report shall also estimate the amount and incremental cost per
unit of potential energy efficiency and load management activities.
Where applicable, the inventory shall include data on variations in
savings and costs associated with particular measures. The report
shall take into consideration environmental benefits as developed in
related commission and public utilities commission proceedings.
(b) The commission shall develop and maintain the inventory in
consultation with electric and gas utilities, the Public Utilities
Commission, academic institutions, and other interested parties.
(c) The commission shall convene a technical advisory group to
develop an analytic framework for the inventory, to discuss the level
of detail at which the inventory would operate, and to ensure that
the inventory is consistent with other demand-side databases.
Privately owned electric and gas utilities shall provide financial
support, gather data, and provide analysis for activities that the
technical advisory group recommends. The technical advisory group
shall terminate on January 1, 1993.
SEC. 2. Section 25523 of the Public Resources Code is amended to
read:
25523. The commission shall prepare a written decision after the
public hearing on an application, which includes all of the
following:
(a) Specific provisions relating to the manner in which the
proposed facility is to be designed, sited, and operated in order to
protect environmental quality and assure public health and safety.
(b) In the case of a site to be located in the coastal zone,
specific provisions to meet the objectives of Division 20 (commencing
with Section 30000) as may be specified in the report submitted by
the California Coastal Commission pursuant to subdivision (d) of
Section 30413, unless the commission specifically finds that the
adoption of the provisions specified in the report would result in
greater adverse effect on the environment or that the provisions
proposed in the report would not be feasible.
(c) In the case of a site to be located in the Suisun Marsh or in
the jurisdiction of the San Francisco Bay Conservation and
Development Commission, specific provisions to meet the requirements
of Division 19 (commencing with Section 29000) of this code or Title
7.2 (commencing with Section 66600) of the Government Code as may be
specified in the report submitted by the San Francisco Bay
Conservation and Development Commission pursuant to subdivision (d)
of Section 66645 of the Government Code, unless the commission
specifically finds that the adoption of the provisions specified in
the report would result in greater adverse effect on the environment
or the provisions proposed in the report would not be feasible.
(d) (1) Findings regarding the conformity of the proposed site and
related facilities with standards adopted by the commission pursuant
to Section 25216.3 and subdivision (d) of Section 25402, with public
safety standards and the applicable air and water quality standards,
and with other applicable local, regional, state, and federal
standards, ordinances, or laws. If the commission finds that there
is noncompliance with a state, local, or regional ordinance or
regulation in the application, it shall consult and meet with the
state, local, or regional governmental agency concerned to attempt to
correct or eliminate the noncompliance. If the noncompliance cannot
be corrected or eliminated, the commission shall inform the state,
local, or regional governmental agency if it makes the findings
required by Section 25525.
(2) The commission may not find that the proposed facility
conforms with applicable air quality standards pursuant to paragraph
(1) unless the applicable air pollution control district or air
quality management district certifies, prior to the licensing of the
project by the commission, that complete emissions offsets for the
proposed facility have been identified and will be obtained by the
applicant within the time required by the district's rules or unless
the applicable air pollution control district or air quality
management district certifies that the applicant requires emissions
offsets to be obtained prior to the commencement of operation
consistent with Section 42314.3 of the Health and Safety Code and
prior to commencement of the operation of the proposed facility. The
commission shall require as a condition of certification that the
applicant obtain any required emission offsets within the time
required by the applicable district rules, consistent with any
applicable federal and state laws and regulations, and prior to the
commencement of the operation of the proposed facility.
(e) Provision for restoring the site as necessary to protect the
environment, if the commission denies approval of the application.
(f) In the case of a site and related facility using resource
recovery (waste-to-energy) technology, specific conditions requiring
that the facility be monitored to ensure compliance with paragraphs
(1), (2), (3), and (6) of subdivision (a) of Section 42315 of the
Health and Safety Code.
(g) In the case of a facility, other than a resource recovery
facility subject to subdivision (f), specific conditions requiring
the facility to be monitored to ensure compliance with toxic air
contaminant control measures adopted by an air pollution control
district or air quality management district pursuant to subdivision
(d) of Section 39666 or Section 41700 of the Health and Safety Code,
whether the measures were adopted before or after issuance of a
determination of compliance by the district.
(h) A discussion of any public benefits from the project
including, but not limited to, economic benefits, environmental
benefits, and electricity reliability benefits.
SEC. 3. Section 25525 of the Public Resources Code is amended to
read:
25525. The commission may not certify a facility contained in the
application when it finds, pursuant to subdivision (d) of Section
25523, that the facility does not conform with any applicable state,
local, or regional standards, ordinances, or laws, unless the
commission determines that the facility is required for public
convenience and necessity and that there are not more prudent and
feasible means of achieving public convenience and necessity. In
making the determination, the commission shall consider the entire
record of the proceeding, including, but not limited to, the impacts
of the facility on the environment, consumer benefits, and electric
system reliability. The commission may not make a finding in
conflict with applicable federal law or regulation. The basis for
these findings shall be reduced to writing and submitted as part of
the record pursuant to Section 25523.
SEC. 4. 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,
commission-issued intradepartmental master agreement, the methods for
selection of professional services firms set forth in Chapter 10
(commencing with Section 4525) of Division 5 of Title 1 of the
Government Code, 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 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 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 results to the state.
(6) Whenever the price of the award is not the determining factor.
(d) The commission may establish interagency agreements.
(e) The commission may provide awards on a single source basis by
choosing from among two or more parties or by soliciting multiple
applications from parties capable of supplying or providing similar
goods or services. The cost to the state shall be reasonable and the
commission may only enter into a single source agreement with a
particular party if the commission determines that it is in the state'
s best interests.
(f) The commission, in accordance with subdivision (g) and in
consultation with the Department of General Services, may provide
awards on a sole source basis when the cost to the state is
reasonable and the commission makes any of the following
determinations:
(1) The proposal was unsolicited and meets the evaluation criteria
of this chapter.
(2) The expertise, service, or product is unique.
(3) A competitive solicitation would frustrate obtaining necessary
information, goods, or services in a timely manner.
(4) The award 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 may not use a sole source basis for an award
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 provisions of this section are severable. If any
provision of this section or its application is held to be invalid,
that invalidity does not affect other provisions or applications that
can be given effect without the invalid provision or application.
SEC. 5. Section 25620.10 of the Public Resources Code, as added by
Section 9 of Chapter 515 of the Statutes of 2002, is amended and
renumbered to read:
25620.11. The commission shall regularly convene an advisory
board that shall make recommendations to guide the commission's
selection of programs and projects to be funded under this chapter.
The advisory board shall include as appropriate, but not be limited
to, representatives from the Public Utilities Commission, consumer
organizations, environmental organizations, and electrical
corporations subject to the funding requirements of Section 381 of
the Public Utilities Code.
SEC. 6. Section 383.5 of the Public Utilities Code is amended to
read:
383.5. (a) 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.
(b) As used in this section, the following terms have the
following meaning:
(1) "In-state renewable electricity generation technology" means a
facility that meets all of the following criteria:
(A) The facility uses biomass, solar thermal, photovoltaic, wind,
geothermal, fuel cells using renewable fuels, small hydroelectric
generation of 30 megawatts or less, digester gas, municipal solid
waste conversion, landfill gas, ocean wave, ocean thermal, or tidal
current, and any additions or enhancements to the facility using that
technology.
(B) The facility is located in the state or near the border of the
state with the first point of connection to the Western Electricity
Coordinating Council (WECC) transmission system located within this
state.
(C) For the purposes of this subdivision, "solid waste conversion"
means a technology that uses a noncombustion thermal process to
convert solid waste to a clean burning fuel for the purpose of
generating electricity, and that meets all of the following criteria:
(i) The technology does not use air or oxygen in the conversion
process, except ambient air to maintain temperature control.
(ii) The technology produces no discharges of air contaminants or
emissions, including greenhouse gases as defined in Section 42801 of
the Health and Safety Code.
(iii) The technology produces no discharges to surface or
groundwaters of the state.
(iv) The technology produces no hazardous wastes.
(v) To the maximum extent feasible, the technology removes all
recyclable materials and marketable green waste compostable materials
from the solid waste stream prior to the conversion process and the
owner or operator of the facility certifies that the those materials
will be recycled or composted.
(vi) The facility at which the technology is used is in compliance
with all applicable laws, regulations, and ordinances.
(vii) The technology meets any other conditions established by the
State Energy Resources Conservation and Development Commission.
(viii) The facility certifies that any local agency sending solid
waste to the facility is in compliance with Division 30 (commencing
with Section 40000) of the Public Resources Code, has reduced,
recycled, or composted solid waste to the maximum extent feasible,
and shall have been found by the California Integrated Waste
Management Board to have diverted at least 30 percent of all solid
waste through source reduction, recycling and composting.
(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.
(3) "Energy Commission" means 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 technology facilities, and
to secure for the state the environmental, economic, and reliability
benefits that continued operation of those facilities will provide.
Eligibility for incentives under this subdivision shall be limited
to those technologies found eligible for funds by the Energy
Commission pursuant to paragraphs (5), (6), and (8) of subdivision
(c) of Section 399.6.
(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) Of the funding for existing renewable electricity generation
technology facilities available pursuant to this subdivision, 75
percent shall be used to fund first tier technologies, including
biomass and solar electric technologies and 25 percent shall be used
to fund second tier wind technologies.
(B) The Energy Commission shall reexamine the tier structure as
proposed in the report and adjust the structure to reflect market and
contractual conditions. The Energy Commission shall also consider
inflation when adjusting the structure.
(C) The Energy Commission shall establish a cents per kilowatthour
production incentive, not to exceed the payment caps per
kilowatthour established in the report, as those payment caps are
revised in guidelines adopted by the commission, 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 clearing price or the payment caps,
production incentives shall be based on the amount determined by
dividing available funds by eligible generation. The market clearing
price for electricity shall be determined by the Energy Commission
based on the energy prices paid to nonutility power generators as
authorized by the commission, or on otherwise available measures of
market price. For the first tier biomass technologies, the Energy
Commission shall establish a time-differentiated incentive structure
that encourages plants to run the maximum feasible amount of time and
that provides a higher incentive when the plants are receiving the
lowest price. The Energy Commission may establish a different
incentive rate within the same technology tier to account for
discounted contracts.
(D) Facilities that are eligible to receive funding pursuant to
this subdivision shall be registered in accordance with criteria
developed by the Energy 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 Energy 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
excludes competitive transition charge payments, or is otherwise
excluded from competitive transition charge payments.
(d) (1) Fifty-one and one-half percent of the funds 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 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 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) In order to cover the above market costs of renewable
resources as approved by the commission and selected by retail
sellers to fulfill their obligations under Article 16 (commencing
with Section 399.11), the Energy Commission shall award funds in the
form of supplemental energy payments, subject to the following
criteria:
(i) The Energy Commission may establish caps on supplemental
energy payments. The caps shall be designed to provide for a viable
energy market capable of achieving the goals of Article 16
(commencing with Section 399.11). The Energy Commission may waive
application of the caps to accommodate a facility, if it is
demonstrated to the satisfaction of the Energy Commission, that
operation of the facility would provide substantial economic and
environmental benefits to end use customers subject to the funding
requirements of Section 381.
(ii) Supplemental energy payments shall be awarded only to
facilities that are eligible for funding under this subdivision.
(iii) Supplemental energy payments awarded to facilities selected
by an electrical corporation pursuant to Article 16 (commencing with
Section 399.11) shall be paid for the lesser of 10 years, or the
duration of the contract with the electrical corporation.
(iv) The Energy Commission shall reduce or terminate supplemental
energy payments for projects that fail either to commence and
maintain operations consistent with the contractual obligations to an
electrical corporation, or that fail to meet eligibility
requirements.
(v) Funds shall be managed in an equitable manner in order for
retail sellers to meet their obligation under Article 16 (commencing
with Section 399.11).
(B) The Energy Commission may determine as part of a solicitation,
that a facility that does not meet the definition of "in-state
renewable electricity generation technology" facility solely because
it is located outside the state, is eligible for funding under this
subdivision if it meets both of the following requirements:
(i) It is located so that it is or will be connected to the
Western Electricity Coordinating Council (WECC) transmission system.
(ii) It is developed with guaranteed contracts to sell its
generation to end use customers subject to the funding requirements
of Section 381, or to marketers that provide this guarantee for
resale of the generation, for a period of time at least equal to the
amount of time it receives incentive payments under this subdivision.
(C) Facilities that are eligible to receive funding pursuant to
this subdivision shall be registered in accordance with criteria
developed by the Energy 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
excludes competitive transition charge payments, or is otherwise
excluded from competitive transition charge payments.
(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.
(D) Eligibility to compete for funds or to receive funds shall be
contingent upon having to sell the output of the renewable
electricity generation facility to customers subject to the funding
requirements of Section 381.
(E) The Energy 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.
(F) In awarding funding, the Energy 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.
(5) Production incentives awarded under this subdivision prior to
January 1, 2002, shall commence on the date that a project begins
electricity production, provided that the project was operational
prior to January 1, 2002, unless the Energy 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 a
finding that the project will not be operational due to circumstances
beyond the control of the developer, the Energy 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.
(6) Facilities generating electricity from biomass energy shall be
considered an in-state renewable electricity generation technology
facility to the extent that they certify to the satisfaction of the
Energy Commission that fuel utilization is limited to the following:
(A) Agricultural crops and agricultural wastes and residues.
(B) Solid waste materials such as waste pallets, crates, dunnage,
manufacturing, and construction wood wastes, landscape or
right-of-way tree trimmings, mill residues that are directly the
result of the milling of lumber, and rangeland maintenance residues.
(C) Wood and wood wastes that meet all of the following
requirements:
(i) Have been harvested pursuant to an approved timber harvest
plan prepared in accordance with the Z'berg-Nejedly Forest Practice
Act of 1973 (Chapter 8 (commencing with Section 4511), Part 2,
Division 4, Public Resource Code).
(ii) Have been harvested for the purpose of forest fire fuel
reduction or forest stand improvement.
(iii) Do not transport or cause the transportation of species
known to harbor insect or disease nests outside zones of infestation
or current quarantine zones, as identified by the Department of Food
and Agriculture or the Department of Forestry and Fire Protection,
unless approved by the Department of Food and Agriculture and the
Department of Forestry and Fire Protection.
(e) (1) Seventeen and one-half percent of the funds 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.
(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 in the
amount of electricity production of the system, measured in
kilowatthours, determined by the Energy 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 generating capacity per customer site, and other
distributed renewable emerging technologies that meet the emerging
technology eligibility criteria established by the Energy Commission.
Eligible electricity generating systems are intended primarily to
offset part or all of the consumer's own electricity demand, and
shall not be owned by 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, and 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 generation output. Systems and their
fuel resource 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 Energy Commission may require
eligible electricity generating systems to have meters in place to
monitor and measure a system's performance and generation. Only
systems that will be operated in compliance with applicable law and
the rules of the commission shall be eligible for funding.
(D) The Energy Commission shall 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 Energy Commission may provide
preference to systems that provide tangible demonstrable benefits to
communities with a plurality of minority or low-income populations.
(F) In awarding funding, the Energy Commission shall develop and
implement eligibility criteria and a system that provides preference
to systems based upon system performance, taking into account
factors, including, but not limited to, shading, insolation levels,
and installation orientation.
(f) (1) Ten percent of the funds collected pursuant to paragraph
(6) of subdivision (c) of Section 381 shall be used to provide
customer credits to customers that entered into a direct transaction
on or before September 20, 2001, for purchases of electricity
produced by registered in-state renewable electricity generating
facilities.
(2) Any funds used for customer credits pursuant to this
subdivision shall be expended, as provided in the report, subject to
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 that is contributing funds
to support programs under this section, and that is purchasing
qualifying electricity from renewable electricity generating
facilities, through transactions traceable to specific generation
sources by any auditable contract trail or equivalent that provides
commercial verification that the electricity from the claimed
renewable electricity generating facilities has been sold once and
only once to a retail customer.
(B) Credits awarded pursuant to this paragraph may be paid
directly to electric service providers, energy marketers,
aggregators, or generators if those persons or entities account for
the credits on the recipient customer's utility 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 20 percent 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 Energy Commission shall develop criteria and procedures
for the identification of energy purchasers and providers that 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 Energy 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.
(E) By March 31, 2003, the Energy Commission shall report to the
Governor and the Legislature on how to most effectively utilize the
funds for customer credits, including whether, and under what
conditions, the program should be continued. The report shall
include an examination of trends in markets for renewable energy,
including the trading of nonenergy attributes, and the role of
customer credits in these markets. The report will recommend an
appropriate funding allocation for the customer credits and how
implementation of the customer credits should be structured, if
appropriate.
(F) Customer credits may not be awarded for the purchase of
electricity that is used to meet the obligations of a renewable
portfolio standard.
(g) One percent of the funds 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 Energy Commission shall adopt guidelines governing the
funding programs authorized under this section and Section 399.13,
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 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 Energy Commission upon a showing that factors other
than those described in the guidelines adopted by the Energy
Commission were applied in making the awards and payments. Any
actions taken by an applicant to apply for, or become or remain
eligible and registered to receive, payments or awards, including
satisfying conditions specified by the Energy Commission, shall not
constitute the rendering of goods, services, or a direct benefit to
the Energy Commission.
(i) The Energy Commission shall report to the Legislature on or
before March 31, 2004, and annually thereafter, regarding the results
of the mechanisms funded pursuant to this section. The report shall
contain the following elements:
(A) 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.
(B) The status of account transfers and repayments.
(C) A description of the cumulative commitment of claims by
account, the relative demand for funds by account, and a forecast of
future awards.
(D) A discussion of the progress being made toward achieving the
17-percent target provided in subdivision (a) by each funding
category authorized pursuant to subdivisions (c), (d), (e), (f), and
(g) of this section.
(E) The description of 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.
(F) An itemized list, including project descriptions, award
amounts, and outcomes for projects awarded funding in the prior year.
(G) Other matters the Energy Commission determines may be of
importance to the Legislature.
(2) Notwithstanding subdivisions (c), (d), (e), (f), and (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 and
with the latest report provided to the Legislature pursuant to this
subdivision, except that reallocations may not reduce the allocation
established in subdivision (d) nor increase the allocation
established in subdivision (c).
(j) The Energy Commission shall, by December 1, 2003, prepare and
submit to the Legislature a comprehensive renewable electricity
generation resource plan that describes the renewable resource
potential available in California, and recommendations for a plan for
development to achieve the target of increasing the amount of
electricity generated from renewable sources per year, so that it
equals 17 percent of the total electricity generated for consumption
in California by 2006. The Energy Commission shall consult with the
commission, electrical corporations, and the Independent System
Operator, in the development and preparation of the plan.
(k) The Energy Commission shall participate in proceedings at the
commission that relate to or affect efforts to stimulate the
development of electricity generated from renewable sources, in order
to obtain coordination of the state's efforts to achieve the target
of increasing the amount of electricity generated from renewable
sources per year, so that it equals 17 percent of the total
electricity generated for consumption in California by 2006.
SEC. 7. 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-Credit Renewable Resource Purchases 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 paragraphs (3) and (6) of
subdivision (c) of Section 381, shall be transmitted to the State
Energy Resources Conservation and Development Commission (hereafter
the Energy 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 Energy 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 Energy Commission without regard to fiscal year
for the purposes enumerated in Section 383.5.
(e) Upon notification by the Energy Commission, the Controller
shall pay all awards of the money in the accounts created pursuant to
subdivision (b) for purposes enumerated in Section 383.5. The
eligibility of each award shall be determined solely by the Energy
Commission based on the procedures it adopts under subdivision (h) of
Section 383.5. Based on the eligibility of each award, the Energy
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 Energy 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
enumerated in Section 383.5; and an accounting of future costs
associated with any award or group of awards known to the Energy
Commission to represent a portion of a multiyear funding commitment.
(f) The Energy Commission may transfer funds between accounts for
cashflow purposes, provided that the balance due each account is
restored and the transfer does not adversely affect any of the
accounts.
(g) 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 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.
SEC. 8. Division 4.7 (commencing with Section 9201) of the Public
Utilities Code is repealed.
SEC. 9. Section 2 of Chapter 850 of the Statutes of 2002 is
amended to read:
Sec. 2. (a) On or before September 30, 2003, the State Energy
Resources Conservation and Development Commission, in consultation
with the Public Utilities Commission, shall report to the Legislature
and the Governor regarding the feasibility of implementing real-time
pricing, critical peak pricing, and other dynamic pricing tariffs
for electricity in California, as strategies which can either reduce
peak demand or shift peak demand load to off-peak periods.
(b) The report shall consider all of the following:
(1) How wholesale real-time prices would be calculated and made
available to customers.
(2) Options for day-ahead and hour-ahead retail prices.
(3) Options for incorporating demand responsiveness into the
wholesale competitive market and operations of the California
Independent System Operator.
(4) Options for ensuring customer protection under a real-time,
critical peak, and other dynamic pricing scenarios, including
identifying potentially disadvantaged groups who may be
disproportionately vulnerable to the impact of volatile prices and
suggestions for effective safeguards for those customers.
(5) A summary of current cooperative activities to further
implementation of price responsive demand among appropriate state
agencies.
(6) A listing of existing statutes and other regulatory barriers
that could constrain the implementation of price responsive demand,
or are redundant with price responsive demand.
(7) Identification of means to ensure consumer protection.
SEC. 10. (a) There is hereby appropriated from the California
High-Cost Fund-B Administrative Committee Fund to the Public
Utilities Commission, forty million dollars ($40,000,000) for the
purpose of transfer payments to telephone corporations providing
services in high cost rural and small metropolitan areas in fiscal
year 2001-02 and authorized to receive these funds pursuant to
Chapter 1.5 (commencing with Section 270) of Part 1 of Division 1 and
Section 739.5 of the Public Utilities Code.
(b) There is hereby appropriated from the Universal Lifeline
Telephone Service Trust Administrative Committee Fund to the Public
Utilities Commission, six million dollars ($6,000,000) for the
purpose of transfer payments to telephone corporations providing
discounted residential telephone services to eligible customers in
fiscal year 2001-02 and authorized to receive these funds pursuant to
Chapter 1.5 (commencing with Section 270) and Article 8 (commencing
with Section 871) of Chapter 3, of Part 1 of Division 1 of, the
Public Utilities Code.
(c) No fee, charge, rate, or assessment may be increased, nor any
surcharge imposed, by the commission as a result of this section.
SEC. 11.
SEC. 10. It is the intent of the Legislature that the report
required by subdivision (i) of Section 383.5 of the Public Utilities
Code, is the annual report required by Item 3360-001-0381 of the
Supplemental Budget Report of the 1999 Budget Act.