BILL NUMBER: SB 183 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 27, 2003
AMENDED IN SENATE MAY 7, 2003
AMENDED IN SENATE MARCH 27, 2003
INTRODUCED BY Senator Sher
FEBRUARY 12, 2003
An act to amend Section 25401.6 of, and to add Chapter 8.6
(commencing with Section 25740) to Division 15 of , the
Public Resources Code, and to amend Sections 383.6, 394.25, 399.6,
and 399.8 399.8, and 399.12 of, and to
repeal Sections 383.5, 383.7, 399.6, 399.8, and 445 of, the Public
Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 183, as amended, Sher. Energy: renewable technologies.
Under the Public Utilities Act, the Public Utilities Commission
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
State Energy Resources Conservation and Development Commission
(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 requires that 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, after deducting
certain administrative costs, be used for a multiyear, consumer-based
program to foster the development of emerging renewable technologies
in distributed generation applications by providing monetary
rebates, buydowns, or equivalent incentives. The Emerging Renewable
Resources Account is established within the Renewable Resource Trust
Fund, to accomplish these purposes.
This bill would recast those provisions in the Public Resources
Code, except for certain provisions authorizing the Energy Commission
to determine that a renewable electricity generation technology
facility located outside the state is eligible for funding. The bill
would require the Energy Commission, at least once annually, to
publish and make available to the public the balance of funds
available for emerging renewable energy resources for rebates,
buydowns, and other incentives for the purchase of these resources.
The bill would make other conforming changes.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 25401.6 of the Public Resources Code is amended
to read:
25401.6. (a) In its administration of Section 25744, the
commission shall establish a separate rebate for eligible distributed
emerging technologies for affordable housing projects including, but
not limited to, projects undertaken pursuant to Section 50052.5,
50053, or 50199.4 of the Health and Safety Code. In establishing the
rebate, where the commission determines that the occupants of the
housing shall have individual meters, the commission may adjust the
amount of the rebate based on the capacity of the system, provided
that a system may receive a rebate only up to 75 percent of the total
installed costs. The commission may establish a reasonable limit on
the total amount of funds dedicated for purposes of this section.
(b) It is the intent of the Legislature that this section fulfills
the purpose of paragraph (5) of subdivision (b) of Section 25744.
SEC. 2. Chapter 8.6 (commencing with Section 25740) is added to
Division 15 of the Public Resources Code, to read:
CHAPTER 8.6. RENEWABLE ENERGY RESOURCES PROGRAM
25740. 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.
25741. As used in this chapter, the following terms have the
following meaning:
(a) "In-state renewable electricity generation facility" means a
facility that meets all of the following criteria:
(1) 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.
(2) 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.
(3) 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:
(A) The technology does not use air or oxygen in the conversion
process, except ambient air to maintain temperature control.
(B) The technology produces no discharges of air contaminants or
emissions, including greenhouse gases as defined in Section 42801.1
of the Health and Safety Code.
(C) The technology produces no discharges to surface or
groundwaters of the state.
(D) The technology produces no hazardous wastes.
(E) 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 those materials will
be recycled or composted.
(F) The facility at which the technology is used is in compliance
with all applicable laws, regulations, and ordinances.
(G) The technology meets any other conditions established by the
commission.
(H) The facility certifies that any local agency sending solid
waste to the facility is in compliance with Division 30
(commencing with Section 40000), 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. diverted at least 30
percent of all solid waste it collects through solid waste reduction,
recycling, and composting. For purposes of this paragraph "local
agency" means any city, county, or special district, or subdivision
thereof, which is authorized to provide solid waste handling
services.
(b) "Renewable energy public goods charge" means that portion of
the nonbypassable system benefits charge authorized to be collected
and to be transferred to the Renewable Resource Trust Fund pursuant
to the Reliable Electric Service Investments Act (Article 15
(commencing with Section 399) of Chapter 2.3 of Part 1 of Division 1
of the Public Utilities Code).
(c) "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
commission.
25742. (a) Twenty percent of the funds collected pursuant to the
renewable energy public goods charge 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. Eligibility
for incentives under this section shall be limited to those
technologies found eligible for funds by the commission pursuant to
paragraphs (5), (6), and (8) of subdivision (c) of Section 399.6 of
the Public Utilities Code.
(b) Any funds used to support in-state renewable electricity
generation facilities pursuant to this section shall be expended in
accordance with the provisions of the report, subject to all of the
following requirements:
(1) Of the funding for existing renewable electricity generation
facilities available pursuant to this section, 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.
(2) The commission shall reexamine the tier structure as proposed
in the report and adjust the structure to reflect market and
contractual conditions. The commission shall also consider inflation
when adjusting the structure.
(3) The 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 price paid 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 price paid for electricity or the payment caps, production
incentives shall be based on the amount determined by dividing
available funds by eligible generation. The price paid for
electricity shall be determined by the commission based on the energy
prices paid to nonutility power generators as authorized by the
Public Utilities Commission, or on otherwise available measures of
price. For the first tier technologies, the 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.
(4) Facilities that are eligible to receive funding pursuant to
this section shall be registered in accordance with criteria
developed by the commission and those facilities may not receive
payments for any electricity produced that has any of the following
characteristics:
(A) Is sold at monthly average rates equal to or greater than the
applicable target price, as determined by the commission.
(B) 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 section.
(C) 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.
25743. (a) Fifty-one and one-half percent of the money collected
pursuant to the renewable energy public goods charge, 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.
(b) Any funds used for new in-state renewable electricity
generation facilities pursuant to this section shall be expended in
accordance with the report, subject to all of the following
requirements:
(1) In order to cover the above market costs of renewable
resources as approved by the Public Utilities Commission and selected
by retail sellers to fulfill their obligations under Article 16
(commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division
1 of the Public Utilities Code, the commission shall award funds in
the form of supplemental energy payments, subject to the following
criteria:
(A) The 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) of Chapter 2.3 of Part 1 of the Public Utilities
Code. The commission may waive application of the caps to
accommodate a facility, if it is demonstrated to the satisfaction of
the 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 of the
Public Utilities Code the renewable energy public
goods charge .
(B) Supplemental energy payments shall be awarded only to
facilities that are eligible for funding under this subdivision.
(C) Supplemental energy payments awarded to facilities selected by
an electrical corporation pursuant to Article 16 (commencing with
Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public
Utilities Code shall be paid for the lesser of 10 years, or the
duration of the contract with the electrical corporation.
(D) The 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.
(E) 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) of Chapter 2.3 of Part 1 of Division 1 of the
Public Utilities Code.
(2) Facilities that are eligible to receive funding pursuant to
this subdivision shall be registered in accordance with criteria
developed by the commission and those facilities may not receive
payments for any electricity produced that has any of the following
characteristics:
(A) 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
subparagraph (C) of paragraph (1) of subdivision (c) of Section 399.6
of the Public Utilities Code.
(B) 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.
(C) 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 of the Public Utilities Code.
(D) 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) Is a solid waste conversion facility, unless the facility
meets the criteria established in paragraph (3) of subdivision (a) of
Section 25741 and the facility certifies that any local agency
sending solid waste to the facility is in compliance with Division 30
(commencing with Section 40000), 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.
(4)
(3) 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 of the Public Utilities Code
the renewable energy public goods charge .
(5)
(4) The 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.
(6)
(5) In awarding funding, the commission may provide
preference to projects that provide tangible demonstrable benefits to
communities with a plurality of minority or low-income populations.
(c) 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.
(d) Facilities engaging in the direct combustion of
municipal solid waste or tires are not eligible for funding under
this subdivision.
(e) 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 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 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.
(f) Facilities generating electricity from biomass energy shall be
considered an in-state renewable electricity generation technology
facility to the extent that they report to the commission the types
and quantities of biomass fuels used and certify to the satisfaction
of the commission that fuel utilization is limited to the following:
(1) Agricultural crops and agricultural wastes and residues.
(2) 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.
(3) Wood and wood wastes that meet all of the following
requirements:
(A) 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 Sec. 4511) of Part 2 of
Division 4).
(B) Have been harvested for the purpose of forest fire fuel
reduction or forest stand improvement.
(C) 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.
25744. (a) Seventeen and one-half percent of the money collected
pursuant to the renewable energy public goods charge shall be used
for a multiyear, consumer-based program to foster the development of
emerging renewable technologies in distributed generation
applications.
(b) Any funds used for emerging technologies pursuant to this
section shall be expended in accordance with the report, subject to
all of the following requirements:
(1) 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.
(2) 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 generating 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 commission.
(3) 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 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 of the Public Utilities Code the renewable
energy public goods charge and contributing funds to support
programs under this chapter. 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
generation 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 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
Public Utilities Commission shall be eligible for funding.
(4) The 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.
(5) In awarding funding, the commission may provide preference to
systems that provide tangible demonstrable benefits to communities
with a plurality of minority or low-income populations.
(6) In awarding funding, the 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, insulation levels,
and installation orientation.
(7) At least once annually, the commission shall publish and make
available to the public the balance of funds available for emerging
renewable energy resources for rebates, buydowns, and other
incentives for the purchase of these resources.
25745. (a) Ten percent of the money collected pursuant to the
renewable energy public goods charge 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.
(b) Any funds used for customer credits pursuant to this section
shall be expended, as provided in the report, subject to all of the
following requirements:
(1) Customer credits shall be awarded to California retail
customers located in the service territory of an electrical
corporation that is subject to Section 381 of the Public
Utilities Code the renewable energy public goods
charge that is contributing funds to support programs under
this chapter, 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.
(2) 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 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.
(3) The 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.
(4) Customer credits may not be awarded for the purchase of
electricity that is used to meet the obligations of a renewable
portfolio standard.
(5) The Public Utilities Commission shall notify the 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 of the Public Utilities Code.
(6) By March 31, 2003, the 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.
25746. One percent of the money collected pursuant to the
renewable energy public goods charge shall be used in accordance with
the report to promote renewable energy and 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.
25747. (a) The commission shall adopt guidelines governing the
funding programs authorized under this chapter, 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 subdivision may not be less than 30 days.
Notwithstanding any other provision of law, any guidelines adopted
pursuant to this chapter 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 subdivision 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.
(b) Funds to further the purposes of this chapter may be committed
for multiple years.
(c) Awards made pursuant to this chapter are grants, subject to
appeal to the commission upon a showing that factors other than those
described in the guidelines adopted by the 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 commission, shall not constitute the rendering of
goods, services, or a direct benefit to the commission.
25748. The 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 chapter. Reports prepared pursuant to this section 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 report shall identify the
types and quantities of biomass fuels used by facilities receiving
funds pursuant to Section 25743 and their impacts on improving air
quality. The reports shall discuss the progress being made toward
achieving the 17-percent target provided in Section 25740 by each
funding category authorized pursuant to this chapter. The reports
shall also address the allocation of funds from interest on the
accounts described in this chapter, and money in the accounts
described in subdivision (e) (b) of
Section 381 of the Public Utilities Code
25751 . 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 section, except that
reallocations may not reduce the allocation established in Section
25743 nor increase the allocation established in Section 25742.
25749. The 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 commission shall consult with the Public
Utilities Commission, electrical corporations, and the Independent
System Operator, in the development and preparation of the plan.
25750. The commission shall participate in proceedings at the
Public Utilities 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.
25751. (a) The Renewable Resource Trust Fund is hereby created in
the State Treasury.
(b) The following accounts are hereby established 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 Section 399.8 of the Public
Utilities Code, shall be transmitted to the commission at least
quarterly for deposit in the Renewable Resource Trust Fund pursuant
to Section 399.6 of the Public Utilities Code. 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 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 commission without regard to fiscal
year for the purposes enumerated in this chapter.
(e) Upon notification by the commission, the Controller shall pay
all awards of the money in the accounts created pursuant to
subdivision (b) for purposes enumerated in this chapter. The
eligibility of each award shall be determined solely by the
commission based on the procedures it adopts under this chapter.
Based on the eligibility of each award, the 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 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 this chapter; and an
accounting of future costs associated with any award or group of
awards known to the commission to represent a portion of a multiyear
funding commitment.
(f) The 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. The commission shall examine the cashflow 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.
(g) The 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 30 days
after the close of each quarter and shall include information
describing the awards submitted to the 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 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 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. 3. Section 383.5 of the Public Utilities Code is repealed.
SEC. 4. Section 383.6 of the Public Utilities Code is amended to
read:
383.6. The commission shall, by December 1, 2003, prepare and
submit to the Legislature, a comprehensive transmission plan for
renewable electricity generation facilities, to provide for the
rational, orderly, cost-effective expansion of transmission
facilities that may be necessary to facilitate the development of
renewable electricity generation facilities identified in the
renewable electricity generation resource plan prepared pursuant to
Section 25749 of the Public Resources Code. The commission shall
consult with the State Energy Resources Conservation and Development
Commission, the Independent System Operator, and electrical
corporations in the development of and preparation of the plan.
SEC. 5. Section 383.7 of the Public Utilities Code is repealed.
SEC. 6. 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 subdivision (a)
of Section 25744 of the Public Resources Code . 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
Chapter 8.6 (commencing with Section 25740) of Division 15 of the
Public Resources Code. This subdivision may not be construed to
apply retroactively.
(e) If a customer of an electric service provider or a community
choice aggregator is involuntarily returned to service provided by an
electrical corporation, any reentry fee imposed on that customer
that the commission deems is necessary to avoid imposing costs on
other customers of the electric corporation shall be the obligation
of the electric service provider or a community choice aggregator,
except in the case of a customer returned due to default in payment
or other contractual obligations or because the customer's contract
has expired. As a condition of its registration, an electric service
provider or a community choice aggregator shall post a bond or
demonstrate insurance sufficient to cover those reentry fees. In the
event that an electric service provider becomes insolvent and is
unable to discharge its obligation to pay reentry fees, the fees
shall be allocated to the returning customers.
SEC. 7. Section 399.6 of the Public Utilities Code, as added by
Section 4 of Chapter 1050 of the Statutes of 2000, is repealed.
SEC. 8. Section 399.6 of the Public Utilities Code, as amended by
Section 192 of Chapter 664 of the Statutes of 2002, is amended to
read:
399.6. (a) In order to optimize public investment and ensure that
the most cost-effective and efficient investments in renewable
resources are vigorously pursued, the Energy Commission shall create
an investment plan as set forth in paragraphs (1) to (3), inclusive,
to govern the allocation of funds provided pursuant to this article.
The Energy Commission's long-term goal shall be a fully competitive
and self-sustaining California renewable energy supply. The
investment plan shall be in accordance with all of the following:
(1) The investment plan's objective shall be to increase, in the
near term, the quantity of California's electricity generated by
in-state renewable energy resources, while protecting system
reliability, fostering resource diversity, and obtaining the greatest
environmental benefits for California residents.
(2) An additional objective of the plan shall be to identify and
support emerging renewable energy technologies that have the greatest
near-term commercial promise and that merit targeted assistance.
(3) The investment plan shall contain specific numerical targets,
reflecting the projected impact of the plan, for both of the
following:
(A) Increased quantity of California electrical generation
produced from emerging technologies and from overall renewable
resources.
(B) Increased supply of renewable generation available from
facilities other than those selling to investor-owned utilities under
contracts entered into prior to 1996 under the federal Public
Utilities Regulatory Policies Act of 1978 (P.L. 95-617).
(b) The Energy Commission shall, on an annual basis, evaluate
progress on meeting the targets set forth in subparagraphs (A) and
(B) of paragraph (3) of subdivision (a), or any substitute provisions
adopted by the Legislature upon review of the investment plan, and
assess the impact of the investment plan on reducing the cost to
Californians of renewable energy generation.
(c) In preparing these investment plans, the Energy Commission
shall recommend allocations among all of the following:
(1) (A) Except as provided in subparagraph (B), production
incentives for new renewable energy, including repowered or
refurbished renewable energy.
(B) Allocations may not be made for renewable energy that is
generated by a project that remains under a power purchase contract
with an electrical corporation originally entered into prior to
September 24, 1996, whether amended or restated thereafter.
(C) Notwithstanding subparagraph (B), production incentives for
incremental new, repowered, or refurbished renewable energy from
existing projects under a power purchase contract with an electrical
corporation originally entered into prior to September 24, 1996,
whether amended or restated thereafter, may be allowed in any month,
if all of the following occur:
(i) The project's power purchase contract provides that all energy
delivered and sold under the contract is paid at a price that does
not exceed commission-approved short-run avoided cost of energy.
(ii) Either of the following:
(I) The power purchase contract is amended to provide that the
kilowatthours used to determine the capacity payment in any
time-of-delivery period in any month under the contract shall be
equal to the actual kilowatthour production, but no greater than the
five-year average of the kilowatthours delivered for the
corresponding time-of-delivery period and month, in the years 1994 to
1998, inclusive.
(II) If a project's installed capacity as of December 31, 1998, is
less than 75 percent of the nameplate capacity as stated in the
power purchase contract, the power purchase contract is amended to
provide that the kilowatthours used to determine the capacity payment
in any time-of-delivery period in any month under the contract shall
be equal to the actual kilowatthour production, but no greater than
the product of the five-year average of the kilowatthours delivered
for the corresponding time-of-delivery period and month, in the years
1994 to 1998, inclusive, and the ratio of installed capacity as of
December 31 of the previous year, but not to exceed contract
nameplate capacity, to the installed capacity as of December 31,
1998.
(iii) The production incentive is payable only with respect to the
kilowatthours delivered in a particular month that exceeds the
corresponding five-year average calculated pursuant to clause (ii).
(2) Rebates, buydowns, or equivalent incentives for emerging
renewable technologies.
(3) Customer credits for renewables not under contract with a
utility.
(4) Customer education.
(5) Incentives for reducing fuel costs that are confirmed to the
satisfaction of the Energy Commission at solid fuel biomass energy
facilities in order to provide demonstrable environmental and public
benefits, including, but not limited to, air quality.
(6) Solar thermal generating resources that enhance the
environmental value or reliability of the electrical system and that
require financial assistance to remain economically viable, as
determined by the Energy Commission. The Energy Commission may
require financial disclosure from applicants for purposes of this
paragraph.
(7) Specified fuel cell technologies, if the Energy Commission
makes all of the following findings:
(A) The specified technologies have similar or better air
pollutant characteristics than renewable technologies in the
investment plan.
(B) The specified technologies require financial assistance to
become commercially viable by reference to wholesale generation
prices.
(C) The specified technologies could contribute significantly to
the infrastructure development or other innovation required to meet
the long-term objective of a self-sustaining, competitive supply of
renewable energy.
(8) Existing wind-generating resources, if the Energy Commission
finds that the existing wind-generating resources are a
cost-effective source of reliable and environmental benefits compared
with other eligible sources, and that the existing wind-generating
resources require financial assistance to remain economically viable,
as determined by the Energy Commission. The Energy Commission may
require financial disclosure from applicants for the purposes of this
paragraph.
(d) The commission shall establish a cap on the aggregate amount
of funds that may be awarded to public entities from the program that
provides customer credits for renewables. The intent of the cap is
to assure adequate funding of credits for residential and small
commercial customers.
(e) Notwithstanding any other provision of law, moneys collected
for renewable energy pursuant to this article shall be transferred to
the Renewable Resource Trust Fund of the Energy Commission. The
Energy Commission shall prepare and submit to the Legislature, on or
before March 31, 2001, an initial investment plan for these moneys,
addressing the application of moneys collected between January 1,
2002, and January 1, 2007. The initial investment plan shall also
include an evaluation of and report to the Legislature regarding the
appropriateness and structure of a mandatory state purchase of
renewable energy. On or before March 31, 2006, the Energy Commission
shall prepare an investment plan proposing the application of moneys
collected between January 1, 2007, and January 1, 2012.
SEC. 9. Section 399.8 of the Public Utilities Code, as amended by
Section 1 of Chapter 770 of the Statutes of 2001, is repealed.
SEC. 10. Section 399.8 of the Public Utilities Code, as amended by
Section 2 of Chapter 770 of the Statutes of 2001, is amended to
read:
399.8. (a) In order to ensure that the citizens of this state
continue to receive safe, reliable, affordable, and environmentally
sustainable electric service, it is the policy of this state and the
intent of the Legislature that prudent investments in energy
efficiency, renewable energy, and research, development and
demonstration shall continue to be made.
(b) (1) Every customer of an electrical corporation, shall pay a
nonbypassable system benefits charge authorized pursuant to this
article. The system benefits charge shall fund energy efficiency,
renewable energy, and research, development and demonstration.
(2) Local publicly owned electric utilities shall continue to
collect and administer system benefits charges pursuant to Section
385.
(c) (1) The commission shall require each electrical corporation
to identify a separate rate component to collect revenues to fund
energy efficiency, renewable energy, and research, development and
demonstration programs authorized pursuant to this section beginning
January 1, 2002, through January 1, 2012. The rate component shall
be a nonbypassable element of the local distribution service and
collected on the basis of usage.
(2) This rate component may not exceed, for any tariff schedule,
the level of the rate component that was used to recover funds
authorized pursuant to Section 381 on January 1, 2000. If the
amounts specified in paragraph (1) of subdivision (d) are not
recovered fully in any year, the commission shall reset the rate
component to restore the unrecovered balance, provided that the rate
component may not exceed, for any tariff schedule, the level of the
rate component that was used to recover funds authorized pursuant to
Section 381 on January 1, 2000. Pending restoration, any annual
shortfalls shall be allocated pro rata among the three funding
categories in the proportions established in paragraph (1) of
subdivision (d).
(d) The commission shall order San Diego Gas and Electric Company,
Southern California Edison Company, and Pacific Gas and Electric
Company to collect these funds commencing on January 1, 2002, as
follows:
(1) Two hundred twenty-eight million dollars ($228,000,000) per
year in total for energy efficiency and conservation activities, one
hundred thirty-five million dollars ($135,000,000) in total per year
for renewable energy, and sixty-two million five hundred thousand
dollars ($62,500,000) in total per year for research, development and
demonstration. The funds for energy efficiency and conservation
activities shall continue to be allocated in proportions established
for the year 2000 as set forth in paragraph (1) of subdivision (c) of
Section 381.
(2) The amounts shall be adjusted annually at a rate equal to the
lesser of the annual growth in electric commodity sales or inflation,
as defined by the gross domestic product deflator.
(e) The commission and the Energy Commission shall retain and
continue their oversight responsibilities as set forth in Sections
381 and 383, and Chapter 7.1 (commencing with Section 25620) and
Chapter 8.6 (commencing with Section 25740) of Division 15 of the
Public Resources Code.
(f) (1) On or before January 1, 2004, the Governor shall appoint
an independent review panel including, but not limited to, members
with expertise on the energy service needs of large and small
electricity consumers, system reliability issues, and energy-related
public policy. On or before January 1, 2005, the panel shall prepare
and submit to the Legislature and the Energy Commission a report
evaluating the energy efficiency, renewable energy, and research,
development and demonstration programs funded under this section.
Reasonable costs associated with the review in each of the three
program categories, including technical assistance, may be charged to
the relevant program category under procedures to be developed by
the commission for energy efficiency and by the Energy Commission for
renewable energy and research development and demonstration.
(2) The report shall also assess all of the following:
(A) Whether ongoing programs are consistent with the statutory
goals.
(B) Whether potential synergies among the program categories
described in paragraph (1) that could provide enhanced public value
have been identified and incorporated in the programs.
(C) If established targets for increased renewable generation are
likely to be achieved.
(D) What changes should be made to result in a more efficient use
of public resources.
(3) The report shall also compare the Energy Commission's programs
with efforts undertaken by other states and assess, as an
alternative, the relative costs and benefits of adopting a tradable
minimum renewable energy requirement in California. The evaluation
shall include recommendations intended to optimize renewable resource
development at the least cost.
(4) For energy efficiency programs, the report shall include an
evaluation of all of the following:
(A) The net benefits secured for residential customers, taking
into account both public and private costs, including improvements in
that customer group's ability to avoid or reduce consumption of
relatively costly peak electricity.
(B) Whether the programs provide a balance of benefits to all
sectors that contribute to the funding.
(C) The extent to which competition in energy markets including,
but not limited to, load participation in ancillary services markets,
and improvements in technology affect the continuing need for such
programs.
(D) The status and growth of the private, competitive energy
services industry that provides energy efficiency services and other
energy products to customers.
(E) The commercial availability of any new technologies that
reduce electricity demands during high-priced periods.
(F) Customers' willingness and ability to reduce consumption or
adopt energy efficiency measures without program support.
(G) The extent to which the programs have delivered cost-effective
energy efficiency not adequately provided by markets and as a result
have reduced energy demand and consumption.
(H) The relative cost-effectiveness of program expenditures
compared to other current or potential expenditures to enhance system
reliability.
(5) The report shall include specific recommendations aimed at
assisting the Legislature in determining whether to change or
eliminate the collection of the system benefits charge on or after
January 1, 2007.
(6) The panel may update and revise the report as needed.
(g) Promptly after receiving the panel's report, the commission
shall convene a proceeding to address implementation of the panel's
energy efficiency recommendations.
(h) An applicant for the Large Nonresidential Standard Performance
Contract Program funded pursuant to paragraph (1) of subdivision (b)
and an electrical corporation shall promptly attempt to resolve
disputes that arise related to the program's guidelines and
parameters prior to entering into a program agreement. The applicant
shall provide the electrical corporation with written notice of any
dispute. Within 10 business days after receipt of the notice, the
parties shall meet to resolve the dispute. If the dispute is not
resolved within 10 business days after the date of the
meeting, the electrical corporation
shall notify the applicant of his or her right to file a complaint
with the commission, which complaint shall describe the grounds for
the complaint, injury, and relief sought. The commission shall issue
its findings in response to a filed complaint within 30 business
days of the date of receipt of the complaint. Prior to issuance of
its findings, the commission shall provide a copy of the complaint to
the electrical corporation, which shall provide a response to the
complaint to the commission within five business days of the date of
receipt. During the dispute period, the amount of estimated
financial incentives shall be held in reserve until the dispute is
resolved.
SEC. 16.
SEC. 11. Section 399.12 of the Public Utilities Code is amended to
read:
399.12. For purposes of this article, the following terms have
the following meanings:
(a) (1) "Eligible renewable energy resource" means an electric
generating facility that is one of the following:
(1) The facility meets the definition of "in-state
renewable electricity generation technology
facility " in Section 383.5. 25741 of
the Public Resources Code, with the following exceptions:
(2)
(A) A geothermal generation facility originally commencing
operation prior to September 26, 1996, shall be eligible for purposes
of adjusting a retail seller's baseline quantity of eligible
renewable energy resources except for output certified as incremental
geothermal production by the Energy Commission, provided that the
incremental output was not sold to an electrical corporation under
contract entered into prior to September 26, 1996. For each facility
seeking certification, the Energy Commission shall determine
historical production trends and establish criteria for measuring
incremental geothermal production that recognizes the declining
output of existing steamfields and the contribution of capital
investments in the facility or wellfield.
(3)
(B) The output of a small hydroelectric generation facility
of 30 megawatts or less procured or owned by an electrical
corporation as of the date of enactment of this article shall be
eligible only for purposes of establishing the baseline of an
electrical corporation pursuant to paragraph (3) of subdivision (a)
of Section 399.15. A new hydroelectric facility is not an eligible
renewable energy resource if it will require a new or increased
appropriation or diversion of water under Part 2 (commencing with
Section 1200) of Division 2 of the Water Code.
(4)
(C) A facility engaged in the direct combustion
of municipal solid waste shall not be considered an eligible
renewable resource unless it is located in Stanislaus County and was
operational prior to September 26, 1996. Output from such facilities
shall be eligible only for the purpose of adjusting a retail seller'
s baseline quantity of eligible renewable energy resources.
(2) A facility that does not meet the definition of "in-state
renewable electricity generation facility" in Section 25741 of the
Public Resources Code, solely because it is located out of state, is
still an "Eligible renewable energy resource" under this subdivision
if it meets both of the following requirements:
(A) It is located so that it is or will be connected to the
Western Electricity Coordinating Council (WECC) transmission system.
(B) It participates in a renewable energy certificate based
tracking system to be developed by the Energy Commission pursuant to
this subdivision.
(b) "Retail seller" means an entity engaged in the retail sale of
electricity to end-use customers, including any of the following:
(1) An electrical corporation, as defined in Section 218.
(2) A community choice aggregator. The commission shall institute
a rulemaking to determine the manner in which a community choice
aggregator will participate in the renewables portfolio standard
subject to the same terms and conditions applicable to an electrical
corporation.
(3) An electric service provider, as defined in Section 218.3
subject to the following conditions:
(A) An electric service provider shall be considered a retail
seller under this article for sales to any customer acquiring service
after January 1, 2003.
(B) An electric service provider shall be considered a retail
seller under this article for sales to all its customers beginning on
the earlier of January 1, 2006, or the date on which a contract
between an electric service provider and a retail customer expires.
Nothing on this subdivision may require an electric service provider
to disclose the terms of the contract to the commission.
(C) The commission shall institute a rulemaking to determine the
manner in which electric service providers will participate in the
renewables portfolio standard. The electric service provider shall
be subject to the same terms and conditions applicable to an
electrical corporation pursuant to this article. Nothing in this
paragraph shall impair a contract entered into between an electric
service provider and a retail customer prior to the suspension of
direct access by the commission pursuant to Section 80110 of the
Water Code.
(4) "Retail seller" does not include any of the following:
(A) A corporation or person employing cogeneration technology or
producing power consistent with subdivision (b) of Section 218.
(B) The Department of Water Resources acting in its capacity
pursuant to Division 27 (commencing with Section 80000) of the Water
Code.
(C) A local publicly owned electrical utility as defined in
subdivision (d) of Section 9604.
(c) "Renewables portfolio standard" means the specified percentage
of electricity generated by eligible renewable energy resources that
a retail seller is required to procure pursuant to Sections 399.13
and 399.15.
SEC. 12. Section 445 of the Public Utilities Code is
repealed.