BILL NUMBER: SB 107 INTRODUCED
BILL TEXT
INTRODUCED BY Senators Simitian and Perata
JANUARY 20, 2005
An act to amend Sections 25740, 25743, and 25744 of, and to repeal
Sections 25745 and 25749 of, the Public Resources Code, and to amend
Sections 387, 399.11, 399.12, 399.13, 399.14, 399.15, and 399.16 of,
to add Section 399.17 to, and to add Article 9 (commencing with
Section 635) to Chapter 3 of Part 1 of Division 1 of, the Public
Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 107, as introduced, Simitian. Renewable energy.
(1) Existing law expresses the intent of the Legislature, in
establishing the Renewable Energy Resources Program, to increase the
amount of renewable electricity generated per year, so that it equals
at least 17% of the total electricity generated for consumption in
California per year by 2006.
This bill would revise and recast that intent language so that the
amount of electricity generated per year from renewable energy
resources is increased to an amount that equals at least 20% of the
total electricity sold to retail customers in California per year by
December 31, 2010. The bill would make conforming changes related to
this provision.
(2) The Public Utilities Act imposes various duties and
responsibilities on the Public Utilities Commission (CPUC) with
respect to the purchase of electricity and requires the CPUC to
review and adopt a procurement plan and a renewable energy
procurement plan for each electrical corporation pursuant to the
California Renewables Portfolio Standard Program. The program
requires that a retail seller of electricity, including electrical
corporations, community choice aggregators, and electric service
providers, but not including local publicly owned electric utilities,
purchase a specified minimum percentage of electricity generated by
eligible renewable energy resources, as defined, in any given year as
a specified percentage of total kilowatthours sold to retail end-use
customers each calendar year (renewables portfolio standard). The
renewables portfolio standard requires each electrical corporation to
increase its total procurement of eligible renewable energy
resources by at least an additional 1% of retail sales per year so
that 20% of its retail sales are procured from eligible renewable
energy resources no later than December 31, 2017.
This bill would instead require that each retail seller, as
defined, increase its total procurement of eligible renewable energy
resources by at least an additional 1% of retail sales per year so
that 20% of its retail sales are procured from eligible renewable
energy resources no later than December 31, 2010.
(3) Existing law requires the State Energy Resources Conservation
and Development Commission (Energy Commission) to certify eligible
renewable energy resources, to design and implement an accounting
system to verify compliance with the renewables portfolio standard by
retail sellers, and to allocate and award supplemental energy
payments to cover above-market costs of renewable energy.
This bill would require the Energy Commission to establish a
renewable energy credit, as defined, trading program and to develop
tracking, accounting, verification, and enforcement mechanisms for
the program. The bill would prohibit the Energy Commission from
certifying or awarding tradeable renewable energy credits for
electricity generated pursuant to any electricity purchase contract
with a retail seller executed before January 1, 2005, that does not
contain explicit terms and conditions specifying the ownership or
disposition of those credits. The bill would prohibit the Energy
Commission from certifying or awarding tradeable renewable energy
credits for electricity generated pursuant to any purchase contract
executed after January 1, 2005, pursuant to a prescribed federal act.
The bill would provide for the tracking of deliveries under these
purchase contracts through a prescribed accounting system. The bill
would additionally require the Energy Commission to require any
retail seller of electricity that does not meet the requirements of
the renewables portfolio standard by directly owning or purchasing
electricity generated from eligible renewable energy resources, to
purchase renewable energy credits for a quantity of electricity
produced from eligible renewable energy resources, that is sufficient
to make up the shortfall. The bill would require the CPUC to
establish rules authorizing electrical corporations to meet the
renewables portfolio standard requirements using renewable energy
credits. The bill would require the rules to prohibit an electrical
corporation from selling renewable energy credits associated with
eligible renewable energy resources included in the corporation's
baseline quantity on January 1, 2004. The bill would require the
Energy Commission to certify, and would specify criteria for, the
eligibility of renewable energy credits associated with electricity
delivered to a local publicly owned electric utility by an eligible
renewable energy resource, for purposes of compliance with the
renewables portfolio standard by a retail seller. The bill would make
other technical and conforming changes.
(4) Under existing law, the governing board of a local publicly
owned electric utility is responsible for implementing and enforcing
a renewables portfolio standard that recognizes the intent of the
Legislature to encourage renewable energy resources, while taking
into consideration the effect of the standard on rates, reliability,
and financial resources and the goal of environmental improvement.
Existing law requires the governing board of a local publicly owned
electric utility to annually report certain information relative to
renewable energy resources to its customers.
This bill would additionally require that the governing board of a
local publicly owned electric utility annually report the utility's
status in implementing a renewables portfolio standard and progress
toward attaining the standard to its customers and to report to the
Energy Commission the information that the governing board is
required to annually report to their customers. These additional
reporting requirements would thereby impose a state-mandated local
program. The bill would require the Energy Commission to report to
the Governor and Legislature no later than January 1, 2007, with
recommendations for how to incentivize each local publicly owned
electric utility to implement and enforce a renewables portfolio
standard program consistent with the renewables portfolio standard
program requirements applicable to a retail seller of electricity.
(5) Under the Public Utilities Act, the CPUC requires electrical
corporations to identify a separate rate component to fund programs
that enhance system reliability and provide in-state benefits. This
rate component is a nonbypassable element of local distribution and
collected on the basis of usage. The funds are collected to support
cost-effective energy efficiency and conservation activities, public
interest research and development not adequately provided by
competitive and regulated markets, and renewable energy resources
(renewable energy public goods charge). Under existing law, 51.5% of
the money collected as part of the renewable energy public goods
charge is required to 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. Existing law also provides that any of those funds used for
new in-state renewable electricity generation facilities are required
to be expended in accordance with a specified report of the Energy
Commission to the Legislature, subject to certain requirements,
including the awarding of supplemental energy payments.
This bill would require that these funds be awarded only to a
project that is selected by an electrical corporation pursuant to a
competitive solicitation procedure found by the CPUC to comply with
the Renewables Portfolio Standard Program and that the project
participant has entered into an electricity purchase agreement
resulting from that solicitation that is approved by the CPUC. The
bill would authorize certain projects to receive supplemental energy
payments under certain circumstances. The bill would revise existing
criteria for Energy Commission consideration of an out-of-state
electrical generation facility as an eligible renewable energy
resource.
(6) Existing law requires that 17.5% of the money collected under
the renewable energy public goods charge be used for a multiyear,
consumer-based program to foster the development of emerging
renewable technologies in distributed generation applications, and
that certain funds be expended in accordance with the above-described
report, subject to, among other things, the requirement that funding
for emerging technologies be provided through a competitive,
market-based process.
This bill would make technical and nonsubstantive changes to these
provisions.
(7) Existing law requires that 10% of the money collected under
the renewable energy public goods charge be used for 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.
This bill would delete this provision.
(8) Existing law requires the use of standard terms and conditions
by all electrical corporations in contracting for eligible renewable
energy resources.
This bill would require that those terms and conditions include
the requirement that, no later than 6 months after the CPUC's
approval of an electricity purchase agreement, the following
information about the agreement be disclosed by the CPUC: party
names, resource type, project location, and project capacity.
(9) This bill would require an electrical corporation or local
publicly owned electric utility to adopt certain strategies in a
long-term plan or a procurement plan, as applicable, to achieve
efficiency in the use of fossil fuels and to address carbon
emissions, as specified.
(10) This bill would delete certain obsolete and duplicative
provisions and make technical and conforming changes.
(11) Existing law makes a violation of the Public Utilities Act or
a violation of an order of the CPUC a crime.
Because a violation of the provisions of the bill or of any CPUC
order implementing these provisions would be a crime, this bill would
impose a state-mandated local program by creating new crimes.
(12) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that with regard to certain mandates no
reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 25740 of the Public Resources Code is amended
to read:
25740. It is the intent of the Legislature in establishing this
program, to increase the amount of renewable
electricity generated from renewable energy resources per
year, so that it equals at least 17 20
percent of the total electricity generated for consumption
total retail sales of electricity in California
per year by 2006 December 31, 2010 .
SEC. 2. Section 25743 of the Public Resources Code is amended to
read:
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 eligible
renewable energy 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
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
no longer than 10 years, but shall, subject
the payment caps in subparagraph (A), be equal to the
cumulative above-market costs relative to the applicable market price
referent at the time of initial contracting, over 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.
(F) A project may receive funds pursuant to this section only if
it is selected by an electrical corporation pursuant to a
competitive solicitation that is found by the Public Utilities
Commission to comply with the California Renewables Portfolio
Standard Program under Article 16 (commencing with Section 399.11) of
Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code,
and that has entered into an electricity purchase agreement resulting
from that solicitation, that is approved by the Public Utilities
Commission. A project selected for an electricity purchase agreement
by another retail seller may receive supplemental energy payments if
the retail seller demonstrates to the Public Utilities Commission
that the selection of the project is consistent with the results of a
least-cost and best-fit process, and the supplemental energy
payments are reasonable in comparison to those paid under similar
contracts with other retail sellers. The commission may not award
supplemental energy payments for the sale or purchase of renewable
energy credits.
(2) The commission may determine as part of a solicitation, that a
facility that does not meet the definition of an "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 all 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 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
commences initial commercial operation after January
1, 200 5 .
(C) It has a contract with a retail seller or another entity to
supply electricity to end-use customers subject to the renewable
energy public goods charge for a period of time at least equal to the
duration of incentive payments provided pursuant to this
subdivision.
(D) It demonstrates delivery of the electricity under contract to
the retail seller serving end-use customers subject to the renewable
energy public goods charge.
(C)
(E ) It will not cause or
contribute to any violation of a California environmental quality
standard or requirement.
(D)
(F) If the facility is outside of the United
States, it is developed and operated in a manner that is as
protective of the environment as a similar facility located in the
state.
(E)
(G) It meets any other condition established
by the commission.
(3) 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) 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 the renewable energy public goods charge.
(5) 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) 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.
Section 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.
SEC. 3. Section 25744 of the Public Resources Code is amended to
read:
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
is in place for a period of not less than five years, and
shall be is 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)
paragraph (3) , 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
kilowatt hours. 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 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.
(c) Notwithstanding Section 399.6 of the Public Utilities Code,
the commission may expend, until December 31, 2008, up to sixty
million dollars ($60,000,000) of the funding allocated to the
Renewable Resources Trust Fund for the program established in this
section, subject to the repayment requirements of subdivision (f) of
Section 25751.
SEC. 4. Section 25745 of the Public Resources Code is repealed.
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 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.
SEC. 5. Section 25749 of the Public Resources Code is repealed.
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.
SEC. 6. Section 387 of the Public Utilities Code is amended to
read:
387. (a) Each governing body of a local publicly owned electric
utility, as defined in Section 9604, shall be responsible for
implementing and enforcing a renewables portfolio standard that
recognizes the intent of the Legislature to encourage renewable
resources, while taking into consideration the effect of the standard
on rates, reliability, and financial resources and the goal of
environmental improvement.(b) Each local publicly owned electric
utility shall report, on an annual basis, to its customers and to
the State Energy Resources Conservation and Development Commission
, the following:
(1) Expenditures of public goods funds collected pursuant to
Section 385 for renewable energy resource development. Reports shall
contain a description of programs, expenditures, and expected or
actual results.
(2) The resource mix used to serve its customers by fuel type.
Reports shall contain the contribution of each type of renewable
energy resource with separate categories for those fuels considered
eligible renewable energy resources as defined by Section 399.12.
(3) The utility's status in implementing a renewables portfolio
standard pursuant to subdivision (a) and the utility's progress
toward attaining the standard following implementation.
SEC. 7. Section 399.11 of the Public Utilities Code is amended
to read:
399.11. The Legislature finds and declares all of the following:
(a) In order to attain a target of generating 20 percent
of total retail sales of electricity in California from
renewable energy for the State of California
resources by December 31, 2010, and for the purposes of
increasing the diversity, reliability, public health and
environmental benefits of the energy mix, it is the intent of the
Legislature that the California Public Utilities Commission and the
State Energy Resources Conservation and Development Commission
implement the California Renewables Portfolio Standard Program
described in this article.
(b) Increasing California's reliance on renewable energy resources
may promote stable electricity prices, protect public health,
improve environmental quality, stimulate sustainable economic
development, create new employment opportunities, and reduce reliance
on imported fuels.
(c) The development of renewable energy resources and the
delivery of the electricity generated by those resources to customers
in California may ameliorate air quality problems throughout
the state and improve public health by reducing the burning of fossil
fuels and the associated environmental impacts and by reducing
in-state fossil fuel extraction .
(d) The California Renewables Portfolio Standard Program is
intended to complement the Renewable Energy Resources
Program administered by the State Energy Resources Conservation and
Development Commission and established pursuant to Sections
383.5 and 445 Chapter 8.6 (commencing with Section
25740) of Division 15 of the Public Resources Code .
(e) New and modified electric transmission facilities may be
necessary to facilitate the state achieving its renewables portfolio
standard targets. In order to attain a target of generating 20
percent of total retail sales of electricity in California from
renewable energy resources by December 31, 2010, the state must
expedite regulatory proceedings related to the addition or
modification of electric transmission by fast-tracking the processing
of transmission permit requests needed to facilitate the development
or delivery of renewable generation. It is the intent of the
Legislature that the commission report to the Legislature annually,
consistent with its reporting obligations under Section 1701.6, the
actions it has taken to fast-track completion of proceedings related
to the addition or modification of electric transmission needed to
access renewable energy resources, and the results of those actions.
SEC. 8. 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 meets
the definition of " in-state
renewable electricity generation facility " in
Section 25741 of the Public Resources Code, subject to the following
limitations :
(1) The facility meets the definition of "in-state renewable
electricity generation technology" in Section 383.5.
(2)
(1 ) 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 electricity certified as
incremental geothermal production by the Energy Commission, provided
that the incremental output electricity
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 geothermal
output of existing steamfields and the contribution of capital
investments in the facility or wellfield. This paragraph shall
remain operative only until January 1, 2010.
(3)
(2) (A) An existing
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 if a retail seller owned or procured the electricity from the
facility as of December 31, 2003, and that electricity 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.
(B) Notwithstanding subparagraph (A), an existing conduit
hydroelectric facility, as defined by Section 823a of Title 16 of the
United States Code, of 30 megawatts or less, shall be eligible for
the purposes of
satisfying a retail seller's baseline quantity of eligible renewable
energy resources. A new conduit hydroelectric facility, as defined by
Section 823a of Title 16 of the United States Code, of 30 megawatts
or less, shall be an eligible renewable energy resource so long as it
does not 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)
(3) A facility engaged in the 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 Electricity generated by a facility meeting
these requirements shall be eligible only for the purpose of
adjusting a retail seller's baseline quantity of eligible renewable
energy resources.
(4) Notwithstanding paragraph (1), any geothermal electricity
included in the baseline of a retail seller from a facility under a
long-term contract executed before January 1, 2004, shall be eligible
to satisfy the annual procurement targets of any retail seller upon
the expiration of that contract.
(b) "Energy Commission" means the State Energy Resources
Conservation and Development Commission.
(b)
(c) "Retail seller" means an entity engaged
in the retail sale of electricity to end-use customers located
within the state , 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 program . 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 electricity 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
electric utility as defined in subdivision (d) of Section 9604.
(c)
(d) "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.
(e) "Renewable energy credit" means a certificate of proof, issued
through the accounting system established by the Energy Commission
pursuant to Section 399.13, that one unit of electricity was
generated by an eligible renewable energy resource and delivered to a
retail seller, the Independent System Operator, or a local publicly
owned electric utility subject to the requirements of subdivision (e)
of Section 399.13. The Energy Commission shall ensure that the
renewable energy credit includes all renewable and environmental
attributes associated with the production of electricity from the
eligible renewable energy resource, and shall rely on the definition
of "renewable energy credit" adopted as a standard term by the
commission. Any electricity generated by an eligible renewable energy
resource attributable to the use of nonrenewable fuels, beyond a de
minimus quantity, as determined by the Energy Commission, shall not
result in the creation of any renewable energy credits.
SEC. 9. Section 399.13 of the Public Utilities Code is amended
to read:
399.13. The Energy Commission shall do all of the following:(a)
Certify eligible renewable energy resources that it determines meet
the criteria described in subdivision (a) of Section 399.12.
(b) Design and implement an accounting system to verify compliance
with the renewables portfolio standard by retail sellers, to ensure
that electricity generated by an eligible renewable energy
output resource is counted only once
for the purpose of meeting the renewables portfolio standard of this
state or any other state, and for verifying
to certify renewable energy credits produced by eligible renewable
energy resources, and to verify retail product claims in this
state or any other state. In establishing the guidelines governing
this accounting system, the Energy Commission shall
collect data from electricity market participants that it deems
necessary to verify compliance of retail sellers, in accordance with
the requirements of this article and the California Public Records
Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of
Title 1 of the Government Code). In seeking data from electrical
corporations, the Energy Commission shall request data from the
commission. The commission shall collect data from electrical
corporations and remit the data to the Energy Commission within 90
days of the request.
(c) Establish a system for tracking and verifying renewable
energy credits. The Energy Commission shall consult with other states
in the Western Electricity Coordinating Council transmission system
to develop consistent mechanisms and protocols for verifying
renewable energy credits and to prevent double counting of the
electricity generated from any eligible renewable energy resource.
(d) Allocate and award supplemental energy payments
pursuant to Section 383.5 Chapter 8.6
(commencing with Section 25740) of Division 15 of the Public
Resources Code, to eligible renewable energy resources to cover
above-market costs of renewable energy. A project may receive
supplemental energy payments only if it is selected by an electrical
corporation pursuant to a competitive solicitation that is found by
the commission to comply with the California Renewables Portfolio
Standard Program under this article and that has entered
into an electricity purchase agreement resulting from that
solicitation that is approved by the commission. A project selected
for an electricity purchase agreement by another retail seller may
receive supplemental energy payments if the retail seller
demonstrates to the commission that the selection of the project is
consistent with the results of a least-cost and best-fit process, and
that the supplemental energy payments are
reasonable in comparison to those paid under similar contracts with
other retail sellers. The Energy Commission shall not award
supplemental energy payments for the sale or purchase of renewable
energy credits.
(e) Certify, for purposes of compliance with the renewables
portfolio standard by a retail seller, the eligibility of renewable
energy credits associated with deliveries of electricity by an
eligible renewable energy resource to a local publicly owned electric
utility if the Energy Commission determines that the following
conditions have been satisfied:
(1) The local publicly owned electric utility procuring the
electricity complies with the requirements of this article.
(2) The local publicly owned electric utility has established
annual procurement targets comparable to those applicable to an
electrical corporation, is procuring sufficient eligible renewable
energy resources to satisfy the targets, and will not fail to satisfy
the targets in the event that the renewable energy credit is sold to
another retail seller.
(f) The Energy Commission shall not certify or award tradeable
renewable energy credits for electricity generated pursuant to any
electricity purchase contract with a retail seller executed before
January 1, 2005, unless the contract contains explicit terms and
conditions specifying the ownership or disposition of those credits.
Deliveries under those contracts shall be tracked through the
accounting system described in subdivision (b) and included in the
baseline quantity of eligible renewable energy resources of the
purchasing retail seller pursuant to Section 399.15.
(g) The Energy Commission shall not certify or award tradeable
renewable energy credits for electricity generated under any
electricity purchase contract executed after January 1, 2005,
pursuant to the federal Public Utility Regulatory Policies Act of
1978 (16 U.S.C. Sec. 2601 et seq.). Deliveries under the electricity
purchase contracts shall be tracked through the accounting system
described in subdivision (b) and count towards the renewables
portfolio standard obligations of the purchasing retail seller.
SEC. 10. Section 399.14 of the Public Utilities Code is amended
to read:
399.14. (a) The commission shall direct each electrical
corporation to prepare a renewable energy procurement
plans plan as described in paragraph
(3) to satisfy its obligations under the renewables portfolio
standard. To the extent feasible, this procurement plan shall be
proposed, reviewed, and adopted by the commission as part of, and
pursuant to, a general procurement plan process. The commission shall
require each electrical corporation to review and update its
renewable energy procurement plan as it determines to be necessary.
(1) (A) The commission shall not require an electrical corporation to
conduct procurement to fulfill the renewables portfolio standard
until the commission determines either of the following:
(i) The electrical corporation has attained an investment grade
credit rating as determined by at least two major rating agencies.
(ii) The electrical corporation is able to procure eligible
renewable energy resources on reasonable terms, those resources can
be financed if necessary, and the procurement will not impair the
restoration of an electrical corporation's creditworthiness. This
provision shall not apply before April 1, 2004, for any electrical
corporation that on June 30, 2003, is in federal court under Chapter
11 of the federal bankruptcy law Bankruptcy
Code (11 U.S.C. Sec. 1101 et seq.) .
(B) Within 90 days of the commission's determination as provided
in subparagraph (A), an electrical corporation shall conduct
solicitations to implement a renewable energy procurement plan. The
determination required by this paragraph shall apply only to the
requirements established pursuant to this article. The requirements
established for an electrical corporation pursuant to Section 454.5
shall be governed by that section.
(2) Not later than six months after the effective date of
this section, the The commission shall adopt,
by rule, for all electrical corporations, all of the following:
(A) A process for determining market prices pursuant to
subdivision (c) of Section 399.15. The commission shall make specific
determinations of market prices after the closing date of a
competitive solicitation conducted by an electrical corporation for
eligible renewable energy resources. In order to ensure that the
market price established by the commission pursuant to subdivision
(c) of Section 399.15 does not influence the amount of a bid
submitted through the competitive solicitation in a manner that would
increase the amount ratepayers are obligated to pay for
electricity generated by eligible renewable energy
resources , and in order to ensure that the bid price does not
influence the establishment of the market price, the electrical
corporation shall not transmit or share the results of any
competitive solicitation for eligible renewable energy resources
until the commission has established market prices pursuant to
subdivision (c) of Section 399.15.
(B) A process that provides criteria for the rank ordering and
selection of least-cost and best-fit eligible renewable
energy resources to comply with the annual California
Renewables Portfolio Standard Program obligations on a total cost
basis. This process shall consider estimates of indirect costs
associated with needed transmission investments and ongoing utility
expenses resulting from integrating and operating eligible renewable
energy resources.
(C) Flexible rules for compliance , including
, but not limited to, both of the following:
(i) Rules permitting electrical
corporations to apply excess procurement in one year to subsequent
years or inadequate procurement in one year to no more than the
following three years.
(ii) Rules permitting electrical corporations to purchase
renewable energy credits from an eligible renewable energy resource
pursuant to a contract of at least 10 years duration, under the
condition that the electricity generated by the eligible renewable
energy resource is sold into the California electricity market and no
feasible or cost-effective transmission facilities exist to deliver
the electricity to the electrical corporation's service territory.
(D) Standard terms and conditions to be used by all electrical
corporations in contracting for eligible renewable energy resources,
including performance requirements for renewable generators. A
contract for the purchase of electricity generated by an eligible
renewable energy resource shall include the renewable energy credits
associated with all electricity generation specified under the
contract. The standard terms and conditions shall include the
requirement that, no later than six months after the
commission's approval of an electricity purchase agreement entered
into pursuant to this article, the following information about the
agreement shall be disclosed by the commission: p arty
names, resource type, project location, and project capacity.
(3) Consistent with the goal of procuring the least-cost and
best-fit eligible renewable energy resources, the renewable energy
procurement plan submitted by an electrical corporation shall include
, but is not limited to, all of the following:
(A) An assessment of annual or multiyear portfolio supplies and
demand to determine the optimal mix of renewable generation resources
with deliverability characteristics that may include peaking,
dispatchable, baseload, firm, and as-available capacity.
(B) Provisions for employing available compliance flexibility
mechanisms established by the commission.
(C) A bid solicitation setting forth the need for renewable
generation of each deliverability characteristic, required online
dates, and locational preferences, if any.
(4) In soliciting and procuring eligible renewable energy
resources, each electrical corporation shall offer contracts of no
less than 10 years in duration, unless the commission approves of a
contract of shorter duration. Any bid solicitation or contract
of less than 10 years in duration shall be considered nonconforming.
(5) In soliciting and procuring eligible renewable energy
resources, each electrical corporation may give preference to
projects that provide tangible demonstrable benefits to communities
with a plurality of minority or low-income populations.
(b) The commission shall review and accept, modify, or reject each
electrical corporation's renewable energy procurement
plan 90 days prior to the commencement of
renewable procurement pursuant to this article by the electrical
corporation.
(c) The commission shall review the results of a renewable energy
resources solicitation submitted for approval by an electrical
corporation and accept or reject proposed contracts with eligible
renewable energy resources based on consistency with the approved
renewable energy procurement plan. If the commission
determines that the bid prices are elevated due to a lack of
effective competition amongst the bidders, the commission shall
direct the electrical corporation to renegotiate such
the contracts or conduct a new solicitation.
(d) If an electrical corporation fails to comply with a commission
order adopting a renewable energy procurement plan, the
commission shall exercise its authority pursuant to Section 2113 to
require compliance. The commission shall enforce comparable
penalties on any other retail seller that fails to me e t
annual procurement targets established pursuant to Section 399.15.
(e) Upon application by an electrical corporation
a retail seller , the commission may authorize
another a procurement entity to enter
into contracts on behalf of customers of the electrical
corporation retail seller for deliveries of
eligible renewable energy resources to satisfy the annual
renewables portfolio standard obligations, subject to similar
terms and conditions applicable to an electrical
corporation a retail seller . The commission
shall allow the procurement entity to recover reasonable costs
through retail rates subject to review and approval.
(f) Procurement and administrative costs associated with long-term
contracts entered into by an electrical corporation for eligible
renewable energy resources pursuant to this article, at or below the
market price determined by the commission pursuant to subdivision (c)
of Section 399.15, shall be deemed reasonable per se, and shall be
recoverable in rates.
(g) For purposes of this article, "procure" means that a
utility retail seller may acquire the
renewable output of electric generation facilities
electricity generated by an eligible renew able energy
resource that it owns or for which it has contracted. Nothing
in this article is intended to imply that the purchase of electricity
from third parties in a wholesale transaction is the preferred
method of fulfilling a retail seller's obligation to comply with this
article.
(h) Construction, alteration, demolition, installation, and repair
work on an eligible renewable energy resource that receives
production incentives or supplemental energy payments pursuant to
Section 383.5 25742 or 25743 of the Public
Resources Code , including , but not limited to,
work performed to qualify, receive, or maintain production
incentives or supplemental energy payments is "public works" for the
purposes of Chapter 1 (commencing with Section 1720) of Part 7 of
Division 2 of the Labor Code.
SEC. 11. Section 399.15 of the Public Utilities Code is amended
to read:
399.15. (a) In order to fulfill unmet long-term resource needs,
the commission shall establish a renewables portfolio standard
requiring all electrical corporations to procure a minimum quantity
of output from electricity generated by
eligible renewable energy resources , or an equivalent
quantity of renewable energy credits, as a specified percentage
of total kilowatthours sold to their retail end-use customers each
calendar year, if sufficient funds are made available pursuant to
paragraph (2), and Sections 399.6 and 383.5
Section 399.6 and Chapter 8.6 (commencing with Section 25740) of
Division 15 of the Public Resources Code, to cover the
above-market costs of eligible renewables , and subject to
all of the following: . (1) An electric
corporation shall not be required to enter into long-term contracts
with eligible renewable energy resources that exceed the market
prices established pursuant to subdivision (c) of this section.
(2) The Energy Commission shall provide supplemental energy
payments from funds in the New Renewable Resources Account in the
Renewable Resource Trust Fund to eligible renewable energy resources
pursuant to Section 383.5,, consistent with this article, for
above-market costs. Indirect costs associated with the purchase of
eligible renewable energy resources, such as imbalance energy
charges, sale of excess energy, decreased generation from existing
resources, or transmission upgrades shall not be eligible for
supplemental energy payments, but shall be recoverable by an
electrical corporation in rates, as authorized by the commission.
(3) For purposes of setting annual procurement targets, the
commission shall establish an initial baseline for each electrical
corporation based on the actual percentage of retail sales procured
from eligible renewable energy resources in 2001, and, to the extent
applicable, adjusted going forward pursuant to subdivision (a) of
Section 399.12.
(b) The commission shall implement annual procurement targets for
each electrical corporation retail seller
as follows:
(1) Beginning on January 1, 2003, each electrical
corporation retail seller shall, pursuant to
subdivision (a), increase its total procurement of eligible renewable
energy resources by at least an additional 1 percent of retail sales
per year so that 20 percent of its retail sales are procured from
eligible renewable energy resources no later than December 31,
2017. An electrical corporation with 20 percent of retail
sales procured from eligible renewable energy resources in any year
shall not be required to increase its procurement of such resources
in the following year 2010 .
(2) For purposes of setting annual procurement targets, the
commission shall establish an initial baseline for each electrical
corporation based on the actual percentage of retail sales procured
from eligible renewable energy resources in 2001, and, to the extent
applicable, adjusted going forward pursuant to subdivision (a) of
Section 399.12. The Commission shall establish baselines and set
annual procurement targets for other retail sellers that
ensure that the departure of customer loads from bundled service by
an electrical corporation do not cause any reduction in the quantity
of eligible renewable energy resources that would have otherwise been
procured by the electrical corporation to serve those customers.
(3) Only for purposes of establishing these targets,
the commission shall include all power
electricity sold to retail customers by the Department of Water
Resources pursuant to Section 80100 of the Water Code in the
calculation of retail sales by an electrical corporation.
(3)
(4) In the event that an
electrical corporation a retail seller fails to
procure sufficient eligible renewable energy resources in a given
year to meet any annual target established pursuant to this
subdivision, the electrical corporation
retail seller shall procure additional eligible renewable
energy resources in subsequent years to compensate for the shortfall
if sufficient funds are made available pursuant to paragraph (2)
, and Sections 399.6 and 383.5 of subdivision
(a), Section 399.6, and Chapter 8.6 (commencing with Section 25740)
of Division 15 of the Public Resources Code, to cover the
above-market costs of eligible renewables
renewable energy resources .
(4)
(5) If supplemental energy payments from the
Energy Commission, in combination with the market prices approved by
the commission, are insufficient to cover the above-market costs of
eligible renewable energy resources, the commission shall allow
an electrical corporation a retail seller
to limit its annual procurement obligation to the quantity of
eligible renewable energy resources that can be procured with
available supplemental energy payments. A retail seller shall
not be required to enter into long-term contracts with
operators of eligible renewable energy resources that
exceed the market prices established pursuant to subdivision (c).
(c) The commission shall establish a methodology to determine the
market price of electricity for terms corresponding to the length of
contracts with renewable generators, in consideration of the
following:
(1) The long-term market price of electricity for fixed price
contracts, determined pursuant to the electrical corporation's
general procurement activities as authorized by the commission.
(2) The long-term ownership, operating, and fixed-price fuel costs
associated with fixed-price electricity from new generating
facilities.
(3) The value of different products including baseload, peaking,
and as-available output electricity .
(d) The Energy Commission shall provide supplemental energy
payments from funds in the New Renewable Resources Account of the
Renewable Resource Trust Fund to eligible renewable energy resources
pursuant to Chapter 8.6 (commencing with Section 25740) of Division
15 of the Public
Resources Code, consistent with this article, for above-market costs.
Indirect costs associated with the purchase of eligible
renewable energy resources by an electrical corporation, including
imbalance energy charges, sale of excess energy, decreased generation
from existing resources, or transmission upgrades, shall not be
eligible for supplemental energy payments, but are recoverable in
rates, as authorized by the commission.
(e) The establishment of a renewables portfolio
standard shall not constitute implementation by the commission of the
federal Public Utility Regulatory Policies Act of 1978 (Public Law
95-617).
(e)
(f) The commission shall consult with the
Energy Commission in calculating market prices under subdivision (c)
and establishing other renewables portfolio standard policies.
(g) The commission shall establish rules that authorize the use of
renewable energy credits to satisfy annual procurement targets. At a
minimum, the rules shall do all of the following:
(1) Prohibit a renewable energy credit from being counted more
than once by any retail seller for compliance with the renewables
portfolio standard of this state or any other state, or for verifying
retail product claims in this state or any other state.
(2) Ensure that any revenues received by an electrical corporation
for the sale of renewable energy credits are credited to ratepayers.
(3) Limit the quantity of renewable energy credits that can be
procured unbundled from electricity generation to meet the annual
procurement targets of a retail seller.
(4) Require every retail seller to demonstrate that all purchased
renewable energy credits are certified by the Energy Commission and
comply with the requirements of this article.
(5) Ensure that no retail seller shall be obligated to procure
renewable energy credits to satisfy annual procurement targets in the
event that supplemental energy payments, in combination with the
market prices approved by the commission, are insufficient to cover
the above-market costs of long-term contracts with eligible renewable
energy resources.
(6) Prohibit an electrical corporation from selling renewable
energy credits associated with eligible renewable energy resources
included in that electrical corporation's baseline quantity on
January 1, 2004.
(7) Prohibit sales of renewable energy credits by an electrical
corporation during any year in which the electrical corporation
utilizes flexible compliance rules to permit inadequate procurement
pursuant to subparagraph (C) of paragraph (2) of subdivision (a) of
Section 399.14.
SEC. 12. Section 399.16 of the Public Utilities Code is amended
to read:
399.16. The commission Energy Commission
may consider an electric generating facility that is located
outside the state to be an eligible renewable energy resource if
it the facility meets the criteria
described in Section 399.12 and all 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 is developed with guaranteed contracts to sell
its generation commences initial commercial operation
after January 1, 2006, supplies electricity under a guaranteed
contract with a retail seller , and demonstrates delivery of
energy, to a the contracted amount of
electricity to that retail seller or the Independent
System Operator .
(c) It participates in the accounting system to verify compliance
with the renewables portfolio standard by retail sellers, once
established by the State Energy
Resources Conservation and Development Commission pursuant
to subdivision (b) of Section 399.13.
SEC. 13. Section 399.17 is added to the Public Utilities Code ,
to read:
399.17. (a) Subject to the provisions of this section, the
requirements of this article apply to an electrical corporation with
60,000 or fewer customer accounts in California that serves retail
end-use customers outside California.
(b) For an electrical corporation with 60,000 or fewer customer
accounts in California that serves retail end-use customers outside
California, an eligible renewable energy resource includes a facility
that is located outside California, if the facility is connected to
the Western Electricity Coordinating Council (WECC) transmission
system, provided all of the following conditions are met:
(1) The electricity generated by the facility is procured by the
electrical corporation on behalf of its California customers, and is
not used to fulfill renewable energy procurement requirements in
other states.
(2) The electrical corporation participates in, and complies with,
the accounting system administered by the Energy Commission pursuant
to subdivision (b) of Section 399.13.
(3) The Energy Commission verifies that the electricity generated
by the facility is eligible to meet the annual procurement targets of
this article.
(c) The commission shall determine the annual procurement targets
for an electrical corporation with 60,000 or fewer customer accounts
in California that serves retail end-use customers outside
California, as a specified percentage of total kilowatthours sold by
the electrical corporation to its retail end-use customers in
California in a calendar year.
(d) An electrical corporation with 60,000 or fewer customer
accounts in California that serves retail end-use customers outside
California, may use an integrated resource plan prepared in
compliance with the requirements of another state utility regulatory
commission, to fulfill the requirement to prepare a renewable energy
procurement plan pursuant to this article, provided the plan meets
the requirements of Sections 399.11, 399.12, 399.13, and 399.14, as
modified by this section.
(e) Procurement and administrative costs associated with long-term
contracts entered into by an electrical corporation with 60,000 or
fewer customer accounts in California that serves retail end-use
customers outside California, for eligible renewable energy resources
pursuant to this article, at or below the market price determined by
the commission pursuant to subdivision (c) of Section 399.15, shall
be deemed reasonable per se, and shall be recoverable in rates of the
electrical corporation's California customers, provided the costs
are not recoverable in rates in other states served by the electrical
corporation.
SEC. 14. Article 9 (commencing with Section 635) is added to
Chapter 3 of Part 1 of Division 1 of the Public Utilities Code , to
read:
Article 9. Long-Term Plans and Procurement Plans
635. In a long-term plan adopted by an electrical corporation or
in a procurement plan implemented by a local publicly owned electric
utility, the electrical corporation or local publicly owned electric
utility shall adopt a strategy applicable both to newly constructed
or repowered generation owned and procured by the electrical
corporation or local publicly owned electric utility to achieve
efficiency in the use of fossil fuels and to address carbon emissions
consistent with the loading order approved by the commission, or for
a local publicly owned electric utility, a functionally equivalent
order by its governing body, the State Energy Resources Conservation
and Development Commission, and the California Consumer Power and
Conservation Financing Authority.
SEC. 15. The State Energy Resources Conservation and Development
Commission shall, on or before January 1, 2007, report to the
Governor and the Legislature with recommendations for how to
incentivize each local publicly owned electric utility, as defined in
Section 9604 of the Public Utilities Code, to implement and enforce
a renewables portfolio standard program meeting the requirements of
Section 399.15 of the Public Utilities Code, utilizing eligible
renewable energy resources, as defined in Section 399.12. The
commission may include the report as a component of the 2005
Integrated Energy Policy or the next renewable energy report required
pursuant to Section 25758 of the Public Resources Code. The
commission shall use existing resources to comply with this section.
SEC. 16.
No reimbursement is required by this act pursuant to Section 6 of
Article XIII B of the California Constitution for certain costs that
may be incurred by a local agency or school district because, in that
regard, this act creates a new crime or infraction, eliminates a
crime or infraction, or changes the penalty for a crime or
infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIII B of the California Constitution. However,
if the Commission on State Mandates determines that this act contains
other costs mandated by the state, reimbursement to local agencies
and school districts for those costs shall be made pursuant to Part 7
(commencing with Section 17500) of Division 4 of Title 2 of the
Government Code.