BILL NUMBER: SB 107 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 7, 2006
AMENDED IN ASSEMBLY AUGUST 30, 2005
AMENDED IN ASSEMBLY JULY 13, 2005
AMENDED IN ASSEMBLY JUNE 21, 2005
AMENDED IN SENATE MAY 4, 2005
AMENDED IN SENATE APRIL 19, 2005
INTRODUCED BY Senators Simitian and Perata
(Principal coauthor: Assembly Member Levine)
(Coauthor: Assembly Member Blakeslee)
JANUARY 20, 2005
An act to amend Sections 25740, 25741, 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, and 399.15 of,
to add Article 9 (commencing with Section 635) to Chapter 3 of Part
1 of Division 1 of, and to repeal and add Section 399.16
of, the Public Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 107, as amended, 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 eligible 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 California 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 develop tracking,
accounting, verification, and enforcement mechanisms for renewable
energy credits, as defined. The bill would specify that facilities
located out of state shall not be eligible for supplemental energy
payments unless certain requirements are met. The bill would require
that deliveries of electricity from an eligible renewable energy
resource under any electricity purchase contract
agreement with a retail seller executed before January 1,
2002, be tracked and included in the baseline quantity of eligible
renewable energy resources of the purchasing retail seller. The bill
would require that electricity generated pursuant to a prescribed
federal act and pursuant to a purchase contract executed on or after
January 1, 2002, count towards the renewables portfolio standard
requirements of the retail seller. The bill would provide for the
tracking of deliveries under these purchase contracts through a
prescribed accounting system. The bill would make other technical and
conforming changes.
Existing law provides that if supplemental energy payments from
the Energy Commission, in combination with the market prices approved
by the CPUC, are insufficient to cover any above-market costs of
eligible renewable energy resources, the CPUC is required to allow 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.
This bill would require that the CPUC
allow a retail seller to adopt flexible rules allowing
a retail seller to limit its annual procurement
obligation to the quantity of eligible renewable energy resources
that can be delivered by existing transmission if the CPUC
determines that existing transmission is insufficient to ensure
deliverability of the electricity generated by eligible renewable
energy resources finds that the retail
seller has undertaken all reasonable efforts to utilize
flexible delivery points and has undertaken all reasonable efforts to
ensure the availability of any needed transmission capacity .
(4) Existing law The Public Utilities Act
permits the Energy Commission to consider an electric
generating facility that is located outside the state to be an
eligible renewable energy resource if it meets specific criteria.
This bill would delete that provision within the act and
would amend the definition of an "in-state renewable electricity
generation facility" within related provisions prescribing
duties of the Energy Commission to encompass certain
facilities located outside the state .
(5) 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.
(6) 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 California 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 supplying electricity
to retail sellers, as defined, to the extent the retail seller is
servicing load that is within the distribution area of an electrical
corporation and subject to the renewable energy public goods charge,
to receive supplemental energy payments under certain circumstances.
The bill would prohibit the Energy Commission from awarding
supplemental energy payments for the sale or purchase of renewable
energy credits or to service load that is not subject to the
renewable energy public goods charge. The bill would revise
existing criteria for Energy Commission consideration of an
out-of-state electrical generation facility as an eligible renewable
energy resource. incorporate the modified definition
of an "in-state renewable electricity generation facility."
(7) 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.
(8) Existing law requires that 10% of the money collected under
the renewable energy public goods charge be used for 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.
(9) 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.
(10) 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.
(11) This bill would delete certain obsolete and duplicative
provisions and make technical and conforming changes.
(12) Existing law makes a violation of the Public Utilities Act or
a violation of an order of the CPUC a crime.
Certain of the provisions of this bill are a part of the act and
an order of the CPUC would be required to implement these provisions.
Because a violation of the provisions of the bill that are part of
the act 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.
(13) 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: majority. Appropriation: no. 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 electricity generated from
eligible renewable energy resources per year, so that it equals at
least 20 percent of total retail sales of electricity in California
per year by December 31, 2010.
SEC. 2. Section 25741 of the Public Resources Code is amended to
read:
25741. As used in this chapter, the following terms have the
following meaning:
(a) "Delivered" and "delivery" mean the electricity output of an
in-state renewable electric generation facility that is used to serve
end-use retail customers located within the state. Subject to
verification by the accounting system established by the commission
pursuant to subdivision (b) of Section 399.13 of the Public Utilities
Code, electricity shall be deemed delivered if it is either provided
at a location within the state, or the electricity is scheduled and
settled for delivery within the state. Subject to criteria adopted by
the commission, electricity generated by an eligible renewable
energy resource that generates electricity on an intermittent basis
may be considered "delivered" even if the scheduling and settlement
occurs at a time subsequent to generation.
(a)
(b) "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 satisfies one of the following requirements:
(A) The facility is located in the state or near the border of the
state with the first point of connection to the transmission network
within this state and electricity produced by the facility is
delivered to an in-state location.
(B) The facility has its first point of interconnection to the
transmission network outside the state and satisfies all of the
following requirements:
(i) It is connected to the transmission network within the Western
Electricity Coordinating Council (WECC) service territory.
(ii) It commences initial commercial operation after January 1,
2005.
(iii) Electricity produced by the facility is delivered to an
in-state location.
(iv) It will not cause or contribute to any violation of a
California environmental quality standard or requirement.
(v) 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.
(vi) It participates in the accounting system to verify compliance
with the renewables portfolio standard by retail sellers, once
established by the Energy Commission pursuant to subdivision (b) of
Section 399.13 of the Public Utilities Code.
(C) The facility meets the requirements of clauses (i), (iii),
(iv), (v), and (vi) in subparagraph (B), but does not meet the
requirements of clause (ii) because it commences initial operation
prior to January 1, 2005, if the facility satisfies either of the
following requirements:
(i) The electricity is from incremental generation resulting from
expansion or repowering of the facility.
(ii) The facility has been part of the existing baseline of
eligible renewable energy resources of a retail seller established
pursuant to subdivision (a) paragraph (2) of
subdivision (b) of Section 399.15 of the Public Utilities Code.
(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 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.
(c) "Procurement entity" means any person or corporation
authorized by the Public Utilities Commission to enter into
agreements on behalf of customers of a retail seller for deliveries
of eligible renewable energy resources pursuant to subdivision (e) of
Section 399.14 of the Public Utilities Code.
(b)
(d) "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)
(e) "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.
(d)
(f) "Retail seller" means a "retail seller"
as defined in Section 399.12 of the Public Utilities Code.
(e) "Delivered" and "delivery" mean the electricity output of an
in-state renewable electric generation facility that is used to serve
end-use retail customers located within the state. Subject to
verification by the accounting system established by the commission
pursuant to subdivision (b) of Section 399.13 of the Public Utilities
Code, electricity shall be deemed delivered if it is either provided
at a location within the state, or, if provided at a location
adjacent to the state, the electricity is subsequently metered and
settled at a location within the state.
SEC. 3. 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 Division 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 renewable energy public goods charge.
(B) Supplemental energy payments shall be awarded only to
facilities that are eligible for funding under this section.
(C) Supplemental energy payments awarded to facilities selected by
an electrical corporation a retail seller or
procurement entity 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 no longer than 10 years, but shall,
subject to 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
retail seller or procurement entity .
(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 selected by an electrical corporation may receive
supplemental energy payments only if it results from 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 the project
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 or procurement entity may receive
supplemental energy payments only if the retail seller
demonstrates to the Public Utilities Commission
determines 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 to service load
that is not subject to the renewable energy public goods charge.
(G) Supplemental energy payments shall not be awarded for any
purchases of renewable energy credits, or for electricity purchase
agreements, of less than 10 years in duration. The ineligibility of
agreements of less than 10 years duration for supplemental energy
payments does not constitute an insufficiency in supplemental energy
payments pursuant to paragraph (4) or (5) of subdivision (b) of
Section 399.15.
(2) A facility that is located outside of California shall not be
eligible for funding under this section unless it meets all
of the following requirements:
(A) It is located near the border of the state with its first
point of interconnection to the Western Electricity Coordinating
Council (WECC) transmission system located within the state.
(B) It is developed with guaranteed contracts to sell its
generation to end-use customers subject to the funding requirements
of Sections 381, 399.7, and 399.8, or to marketers that provide this
guarantee for resale of the generation, for a period of time at least
equal to the amount of time it receives incentive payments under
this subdivision.
(C) It will not cause or contribute to any violation of a state
environmental quality standard or requirement.
(D) 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) It meets any
other condition established by the commission.
satisfies the requirements of this subdivision and the criteria of
subparagraph (B) of paragraph (2) of subdivision (b) of Section
25741.
(3) 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 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 competition transition charge payments, or is otherwise
excluded from competition transition charge payments.
(C) 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 , or any other
provision authorizing an appropriation of water .
(D) Is a solid waste conversion facility, unless the facility
meets the criteria established in paragraph (3) of subdivision
(a) (b) 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 electricity generated by the
renewable electricity generation facility to customers subject to 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 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 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. 4. 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 is in place for a period of
not less than five years, and is structured 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 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
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 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 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. 5. Section 25745 of the Public Resources Code is repealed.
SEC. 6. Section 25749 of the Public Resources Code is repealed.
SEC. 7. 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 eligible 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 that are eligible renewable energy
resources as defined in Section 399.12 , except that the
electricity is delivered to the local publicly owned electric utility
and not a retail seller. Electricity shall be reported as having
been delivered to the local publicly owned electric utility from an
eligible renewable energy resource when the electricity
would qualify for compliance with the renewables portfolio standard
if it were delivered to a retail seller .
(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.
(c) The requirements of this section may be satisfied by
electricity generated by an eligible renewable energy resource that
the local publicly owned electric utility owns or for which it has
entered into an electricity purchase contract. Nothing in this
section is intended to imply that the purchase of electricity from
third parties in a wholesale transaction is the preferred method of
fulfilling the responsibility of a local publicly owned electric
utility to implement and enforce a renewables portfolio standard.
SEC. 8. 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 eligible renewable
energy 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 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 eligible 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 eligible 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 consumption.
(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 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.
SEC. 9. 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) "Delivered" and "delivery" have the same meaning as provided
in subdivision (e) (a) of Section 25741
of the Public Resources Code.
(b) "Eligible renewable energy resource" means an electric
generating facility that meets the definition of "in-state renewable
electricity generation facility" in Section 25741 of the Public
Resources Code, subject to the following limitations:
(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 electricity certified as
incremental geothermal production by the Energy Commission, provided
that the incremental 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.
(2) (A) An existing small hydroelectric generation facility of 30
megawatts or less shall be eligible only if a retail seller owned or
procured the electricity from the facility as of December 31, 2005,
and that electricity shall be eligible only for purposes of adjusting
the retail seller's baseline quantity of eligible renewable energy
resources. 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 , or any other provision
authorizing an appropriation of water .
(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 adjusting 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 , or any other
provision authorizing an appropriation of water .
(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. 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. This paragraph shall become
inoperative on January 1, 2010, unless a later enacted statute
deletes or extends that date.
(c) "Energy Commission" means the State Energy Resources
Conservation and Development Commission.
(d) "Local publicly owned electric utility" as used in this
division means a municipality or municipal corporation operating as a
"public utility" furnishing electric service as provided in Section
10001, a municipal utility district furnishing electric service
formed pursuant to Division 6 (commencing with Section 11501), a
public utility district furnishing electric services formed pursuant
to the Public Utility District Act set forth in Division 7
(commencing with Section 15501), an irrigation district furnishing
electric services formed pursuant to the Irrigation District Law set
forth in Division 11 (commencing with Section 20500) of the Water
Code, or a joint powers authority that includes one or more of these
agencies and that owns generation or transmission facilities, or
furnishes electric services over its own or its member's electric
distribution system.
(d)
(e) "Procure" means that a retail seller
receives delivered electricity generated by an eligible renewable
energy resource that it owns or for which it has entered into an
electricity purchase contract agreement
. 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.
(e) "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
program 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 in 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 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 electric utility as defined in Section
9604.
(f) "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 this article.
(g) (1) "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 and delivered by an eligible renewable
energy resource.
(2) "Renewable energy credit" includes all renewable and
environmental attributes associated with the production of
electricity from the eligible renewable energy resource, except for
an emissions reduction credit issued pursuant to Section 40709 of the
Health and Safety Code and any credits or payments associated with
the reduction of solid waste and treatment benefits created by the
utilization of biomass or biogas fuels.
(3) No 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
result in the creation of a renewable energy credit.
(h) "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
program 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
January 1, 2006, or the date on which a contract between an electric
service provider and a retail customer expires, whichever is earlier.
Nothing in 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 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 electric utility.
(4) A renewable energy credit shall not be eligible to satisfy
annual procurement targets established pursuant to this article, but
may be used for accounting purposes, provided that any credit
procured by a retail seller is bundled with delivered electricity.
SEC. 10. 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 (b) 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 resource
is counted only once for the purpose of meeting the renewables
portfolio standard of this state or any other state, 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 that, through the use of independently audited data,
verifies the generation and delivery of electricity associated with
each renewable energy credit and protects against multiple counting
of the same renewable energy credit. The Energy Commission shall
consult with other western states and with the Western Electricity
Coordinating Council in the development of this system.
(d) Certify, for purposes of compliance with the renewable
portfolio standard requirements 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 that is procuring
the electricity is in compliance with the requirements of Section
387.
(2) The local publicly owned electric utility has established an
annual renewables portfolio standard target 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.
(d)
(e) Allocate and award supplemental energy
payments pursuant to 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 selected by an electrical corporation may receive
supplemental energy payments only if it results from a competitive
solicitation that is found by the commission to comply with the
California Renewables Portfolio Standard Program under this article
and the project 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 only 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.
(e)
(f) Deliveries of electricity from an
eligible renewable energy resource under an electricity purchase
contract agreement with a retail seller
executed before January 1, 2002, 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.
(f)
(g) Deliveries of electricity from an
eligible renewable energy resource under an electricity purchase
contract agreement with a retail seller
executed after January 1, 2002, pursuant to the federal Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. Sec. 2601 et
seq.), 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. 11. Section 399.14 of the Public Utilities Code is amended to
read:
399.14. (a) (1) The commission shall direct each electrical
corporation to prepare a renewable energy procurement plan as
described in paragraph (3) (4) 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.
(2) The commission shall adopt, by rulemaking 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 rules permitting
electrical corporations retail sellers
to apply excess procurement in one year to subsequent years or
inadequate procurement in one year to no more than the following
three years. The flexible rules for compliance shall apply to
all years, including years before and after a retail seller procures
at least 20 percent of total retail sales of electricity from
eligible renewable energy resources. The flexible rules for
compliance shall address situations where, as a result of
transmission constraints, a retail seller is unable to procure
eligible renewable energy resources sufficient to satisfy the
requirements of this article. Any rules addressing transmission
constraints shall require a finding by the commission that the retail
seller has undertaken all reasonable efforts to utilize flexible
delivery points and has undertaken all reasonable efforts to ensure
the availability of any needed transmission capacity.
(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, at a minimum, 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: party 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
all of the following:
(A) An assessment of annual or multiyear portfolio supplies and
demand to determine the optimal mix of eligible renewable energy
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 eligible
renewable energy resources 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 may authorize a retail seller to enter into a
contract of less than 10 years duration with an eligible renewable
energy resource, subject to the following conditions:
(1) No supplemental energy payments shall be awarded for a
contract of less than 10 years duration. The ineligibility of
contracts of less than 10 years duration for supplemental energy
payments pursuant to this paragraph does not constitute an
insufficiency in supplemental energy payments pursuant to paragraph
(4) or (5) of subdivision (b) of Section 399.15.
(2) The commission has established minimum quantities of eligible
renewable energy resources to be procured by the retail seller
through contracts of at least 10 years duration.
(b)
(c) The commission shall review and accept,
modify, or reject each electrical corporation's renewable energy
procurement plan prior to the commencement of renewable procurement
pursuant to this article by an electrical corporation.
(c)
(d) The commission shall review the results
of an eligible 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 the contracts
or conduct a new solicitation.
(d)
(e) 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 meet annual procurement targets established pursuant to Section
399.15.
(e) Upon application by a retail seller, the
(f) The commission may authorize
a procurement entity to enter into contracts on behalf of customers
of the a 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 a retail
seller. If the rates of the procurement entity are regulated by the
commission, the commission shall allow the procurement entity to
recover reasonable costs through retail rates subject to review and
approval. . Subject to review and approval by the
commission, the procurement entity shall be permitted to recover
reasonable administrative and procurement costs through the retail
rates of end-use customers directly benefiting from the procurement
of eligible renewable energy resources. A project selected for a
long-t erm electricity purchase contract of more than 10
years duration by a procurement entity through a competitive
solicitation, and approved by the commission, may receive
supplemental energy payments from the Energy Commission if the
transaction satisfies the requirements of subdivision (b) of Section
25743 of the Public Resources Code.
(f)
(g) 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)
(h) Construction, alteration, demolition,
installation, and repair work on an eligible renewable energy
resource that receives production incentives or supplemental energy
payments pursuant to Sections 25742 and 25743 of the Public Resources
Code, including 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. 12. 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 electricity generated by eligible renewable energy resources 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
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 renewable energy resources.
(b) The commission shall implement annual procurement targets for
each retail seller as follows:
(1) Beginning on January 1, 2003, each 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, 2010. A retail seller with 20 percent of
retail sales procured from eligible renewable energy resources in any
year shall not be required to increase its procurement of renewable
energy resources in the following year.
(2) For purposes of setting annual procurement targets, the
commission shall establish an initial baseline for each retail seller
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.
(3) Only for purposes of establishing these targets, the
commission shall include all 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.
(4) In the event that 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 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 Section 399.6 and Chapter 8.6
(commencing with Section 25740) of Division 15 of the Public
Resources Code, to cover any above-market costs of eligible renewable
energy resources.
(5) If supplemental energy payments from the Energy Commission, in
combination with the market prices approved by the commission, are
insufficient to cover any above-market costs of eligible
renewable energy resources electricity procured from
eligible renewable energy resources through an electricity purchase
agreement of at least 10 years duration , the commission shall
allow 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). If
the commission determines that existing transmission is insufficient
to ensure deliverability of the electricity generated by eligible
renewable energy resources, the commission shall allow a retail
seller to limit its annual procurement obligation to the quantity of
eligible renewable energy resources that is deliverable by existing
transmission.
(c) The commission shall establish a methodology to determine the
market price of electricity for terms corresponding to the length of
contracts with eligible renewable energy resources, in consideration
of the following:
(1) The long-term market price of electricity for fixed price
contracts, determined pursuant to an 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 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
any 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. The Energy Commission
shall not award supplemental energy payments to service load that is
not subject to the renewable energy public goods charge.
(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).
(f) The commission shall consult with the Energy Commission in
calculating market prices under subdivision (c) and establishing
other renewables portfolio standard policies.
SEC. 13. Section 399.16 of the Public Utilities Code is repealed.
SEC. 14. Section 399.16 is added to the
Public Utilities Code , to read:
399.16. The commission, by rule, may authorize the use of
renewable energy credits to satisfy annual procurement targets
established pursuant to this article, subject to the following
conditions:
(a) Prior to authorizing any renewable energy credit to be used
toward satisfying annual procurement targets, the commission and the
Energy Commission shall conclude that the tracking system established
pursuant to subdivision (c) of Section 399.13, is operational, is
capable of independently verifying the electricity generated by an
eligible renewable energy resource and delivered to the retail
seller, and can ensure that renewable energy credits shall not be
double counted by any seller of electricity within the service
territory of the Western Electricity Coordinating Council (WECC).
(b) A renewable energy credit shall be counted only once 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.
(c) The electricity is delivered to a retail seller, the
Independent System Operator, or a local publicly owned electric
utility.
(d) All revenues received by an electrical corporation for the
sale of a renewable energy credit shall be credited to the benefit of
ratepayers.
(e) The commission may limit the quantity of renewable energy
credits that may be procured unbundled from electricity generation by
any retail seller, to meet the annual procurement targets.
(f) 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, of more than 10 years
duration, with eligible renewable energy resources.
(g) Any additional condition that the commission determines is
reasonable.
SEC. 14. SEC. 15. 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.
SEC. 15 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.
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