BILL NUMBER: SB 703 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 2, 2003
AMENDED IN SENATE JUNE 3, 2003
AMENDED IN SENATE APRIL 30, 2003
INTRODUCED BY Senators Florez, Denham, and Poochigian
(Coauthor: Assembly Member Cogdill)
FEBRUARY 21, 2003
An act to add Section 745 Sections 745 and
746 to the Public Utilities Code, relating to public
utilities, and declaring the urgency thereof, to take effect
immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 703, as amended, Florez. Electricity rates: agricultural
irrigation pumps.
The
(1) The California Constitution authorizes the Public
Utilities Commission to set rates for all public utilities subject to
its jurisdiction.
This bill would require the commission to establish incentive
rates for agricultural and water pumping customers meeting
certain criteria, that are competitive with the cost of
owning and operating diesel-driven irrigation pumps and other
diesel-driven agricultural equipment and in .
In establishing those incentives, the commission would
be required to take into consideration the significant air
quality and public health benefits of retiring existing diesel-driven
irrigation pumps and other diesel-driven agricultural operations, to
prevent future conversions to diesel equipment, and to
accomplish certain results to request that local air
pollution control districts or air quality management districts
quantify the net reduction in air emissions, coordinate and avoid
duplication with other state and federal incentives for conversion of
diesel-driven agricultural equipment, and coordinate with other
agricultural efficiency incentives and programs. The bill would
require the commission to report to the Legislature by January 1,
2005, on implementation of the program established by the bill.
(2) Existing law requires the commission, in consultation with the
Independent System Operator and the State Energy Resources
Conservation and Development Commission (Energy Commission), to adopt
initiatives, on or before March 7, 2001, to reduce demand for
electricity and reduce load during peak demand periods, including
differential incentives for renewable or super clean distributed
generation resources. Pursuant to this requirement, the commission
has developed a Self Generation Incentive Program to encourage
customers of electrical corporations to install distributed
generation that operates on renewable fuel or contributes to system
reliability.
Under the Public Utilities Act, the 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 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, and makes moneys in the fund continuously
appropriated. Existing law establishes certain accounts in the
Renewable Resource Trust Fund, including the Emerging Renewable
Resources Account.
This bill would make systems utilizing ultra-clean and
low-emission technologies for the generation of electricity, eligible
for financial incentives pursuant to the Self Generation Incentive
Program and the Emerging Renewable Resources Account, if the system
is installed for use in agricultural operations. To the extent the
bill would expand the uses for which moneys in a continuously
appropriated fund may be expended, the bill would make an
appropriation .
This
(3) This bill would declare that it is to take effect
immediately as an urgency statute.
Vote: 2/3. Appropriation: no yes
. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature hereby finds and declares all the
following:
(a) Over the past 15 years, a significant number of agricultural
irrigation pumps, wind machines, and other agricultural equipment,
have been converted from electrical motors to diesel-driven engines,
due to rising electricity rates.
(b) Diesel-driven irrigation pumps and other diesel-driven
agricultural equipment represent a source of oxides of nitrogen (NOx)
and particulate matter that exacerbates the existing air quality
and public health problems facing many areas of the state.
(c) The reduction or elimination of emissions from diesel-driven
irrigation pumps and other diesel-driven agricultural equipment
, through conversion to electricity and ultra-clean and low-emission
technologies, is in the public interest.
(d) It is the policy of the State of California and the California
Public Utilities Commission to encourage alternatives to
diesel-driven irrigation pumps and other diesel-driven agricultural
equipment, including electric motors, through the development of
long-term rate structures that are competitive with diesel engines.
(e) It is the intent of the Legislature, in enacting this statute,
to establish cost-effective agricultural and water
pumping electricity rate schedules that are competitive with diesel
rates to prevent additional conversions of agricultural irrigation
pumps, and to provide an incentive to convert diesel-driven
irrigation pumps back to electrical motors. It is the further
intent of the Legislature that any discounts are financed by the
beneficiaries of the air quality improvements, to avoid shifting
costs to nonbeneficiaries.
SEC. 2. Section 745 is added to the Public Utilities Code, to
read:
745. (a) The commission shall establish cost-effective
incentive rates for agricultural and water pumping customers that
are competitive with the cost of owning and operating
diesel-driven irrigation pumps and other diesel-driven agricultural
equipment. The rates established shall be sufficient to support
conversion to electric equipment and shall be available to the
customer for a period of 10 years. In order to be eligible for the
incentive rates, a customer must do each of the following:
(1) Voluntarily convert diesel-powered agricultural load to
electric power.
(2) Provide proof that diesel equipment being replaced has been
surrendered to the local air pollution control district or air
quality management district and permanently retired or reallocated at
the discretion of the district, to achieve a net reduction in
emissions.
(b) In establishing the incentive rates for agricultural
and water pumping customers, the commission shall take into
consideration , the commission shall do each of the
following:
(1) Consider the significant air quality and public health
benefits of retiring existing diesel-driven irrigation pumps and
other diesel-driven agricultural operations and preventing future
conversions to diesel equipment.
(c) In establishing incentive rates to reduce or eliminate
diesel-driven irrigation pumps or other diesel-driven agricultural
equipment, the commission shall provide for all of the following:
(1) A process, when appropriate, to certify that Tier I
diesel-driven irrigation pumps or other diesel-driven agricultural
equipment existing as of January 1, 2003, is permanently retired, and
Tier II equipment is appropriately retired or reallocated for net
emissions reduction.
(2) A process to quantify the net reduction of air emissions
associated with retirement or conversion prevention, with any surplus
emission credits, as determined by the regional air district, to be
credited to ratepayers.
(3) Consideration of the costs for electrical distribution line
extensions and hookups necessary to furnish electricity service.
(4) Consideration of, and coordination with,
(2) Request the local air pollution control district or air
quality management district, to quantify the net reduction in air
emissions associated with retirement or conversion prevention and to
report those net reductions to the commission. In federal
nonattainment areas, these emission reductions shall be permanently
retired. In federal attainment districts, any surplus emission
credits, as determined by the local air pollution control district or
air quality management district, shall be credited to ratepayers.
(3) Coordinate and avoid duplication with other state and
federal incentives for the conversion of diesel-driven irrigation
pumps and other diesel-driven agricultural equipment.
(5) Coordination
(4) Coordinate with other agricultural energy efficiency
incentives and programs.
(c) In determining the cost-effectiveness of the incentive rates
authorized pursuant to this section, the commission shall consider
distribution costs, including electrical line extensions and metering
necessary to furnish electricity service.
(d) In implementing this section, the commission is authorized to
include costs of necessary and appropriate incentives in rates,
to be allocated equitably among customer classes,
those customers benefiting from the resulting
improvements in air quality. The net cost of the program shall
not exceed fifty million dollars ($50,000,000) annually. In
authorizing such rates, the commission shall find it in the ratepayer
interest.
(e) The commission shall establish the rates under this section as
part of ongoing comprehensive utility rate proceedings.
(f) The commission shall report to the Legislature on or before
January 1, 2005, on the implementation of the program established by
this section. The report shall provide an accounting of the overall
cost to ratepayers and an assessment of the benefits to air quality,
including a cost-benefit analysis with other renewable resource
programs.
SEC. 3. Section 746 is added to the Public Utilities Code, to
read:
746. Notwithstanding any other provision of law, systems
utilizing ultraclean and low emission technologies for the generation
of electricity, including solar powered systems, whether or not
connected to the electrical grid, shall be eligible for financial
incentives from the Emerging Renewable Resources Account established
pursuant to Section 445, and the Self Generation Incentive Program,
administered by the commission and established pursuant to Section
379.5 (Decision 01-03-073, March 27, 2001), if the system is
installed for use in agricultural operations.
SEC. 3.
SEC. 4. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to ensure that critical air quality and public health
benefits are achieved in an expedited manner, it is necessary that
this act take effect immediately.