BILL NUMBER: SB 1048 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Machado
FEBRUARY 22, 2005
An act to amend Sections 353.1, 353.2, and 353.13 of the Public
Utilities Code, relating to electrical restructuring.
LEGISLATIVE COUNSEL'S DIGEST
SB 1048, as introduced, Machado. Electrical restructuring:
distributed energy resources.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations.
Existing law pertaining to electrical restructuring requires the
commission to impose requirements upon electrical corporations to
facilitate customer generation of electricity from distributed energy
resources and ultraclean and low-emission distributed generation.
Existing law defines "distributed energy resources" to mean any
electric generation technology that meets certain criteria,
including: (1) having commenced initial operation between May 1,
2001, and June 1, 2003, except that gas-fired distributed energy
resources that are not operated in a combined heat and power
application must commence operation no later than September 1, 2002,
and (2) being 5 megawatts or smaller in aggregate capacity. Existing
law defines "ultraclean and low-emission distributed generation" as
an electric generation technology that produces zero emissions during
operation or that produces emissions that are equal to or less than
limits established by the State Air Resources Board, if the electric
generation technology commences operation between January 1, 2003,
and December 31, 2008. That definition requires that technologies
operating by combustion operate in a combined heat and power
application with a 60% system efficiency on a higher heating value.
This bill would change the criteria for distributed energy
resources to include electric generation technology that commences
initial operation between May 1, 2001, and December 31, 2010, and has
40 megawatts or smaller in aggregate capacity. The bill would modify
the definition of "ultraclean and low-emission distributed
generation" as an electric generation technology that produces zero
emissions during operation or that produces emissions that are equal
to or less than the limits established by the State Air Resources
Board, if the electric generation technology commences operation
between January 1, 2003, and December 31, 2010. The bill would make
other conforming changes.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 353.1 of the Public Utilities Code is amended
to read:
353.1. As used in this article, "distributed energy resources"
means any electric generation technology that meets all of the
following criteria:(a) Commences initial operation between May 1,
2001, and June 1, 2003, except that gas-fired distributed
energy resources that are not operated in a combined heat and power
application must commence operation no later than September 1, 2002
December 31, 2010 .
(b) Is located within a single facility.
(c) Is five 40 megawatts or smaller
in aggregate capacity.
(d) Serves onsite loads or over-the-fence transactions allowed
under Sections 216 and 218.
(e) Is powered by any fuel other than diesel.
(f) Complies with emission standards and guidance adopted by the
State Air Resources Board pursuant to Sections 41514.9 and 41514.10
of the Health and Safety Code. Prior to the adoption of those
standards and guidance, for the purpose of this article, distributed
energy resources shall meet emissions levels equivalent to nine parts
per million oxides of nitrogen, or the equivalent standard taking
into account efficiency as determined by the State Air Resources
Board, averaged over a three-hour period, or best available control
technology for the applicable air district, whichever is lower,
except for distributed generation units that displace and therefore
significantly reduce emissions from natural gas flares or reinjection
compressors, as determined by the State Air Resources Control Board.
These units shall comply with the applicable best available control
technology as determined by the air pollution control district or air
quality management district in which they are located.
SEC. 2. Section 353.2 of the Public Utilities Code is amended to
read:
353.2. (a) As used in this article, "ultra-clean and low-emission
distributed generation" means any electric generation technology
that meets both of the following criteria:(1) Commences initial
operation between January 1, 2003, and December 31, 2008
2010 .
(2) Produces zero emissions during its operation or produces
emissions during its operation that are equal to or less than the
2007 State Air Resources Board emission limits for distributed
generation, except that technologies operating by combustion must
operate in a combined heat and power application with a 60-percent
system efficiency on a higher heating value.
(b) In establishing rates and fees, the commission may consider
energy efficiency and emissions performance to encourage early
compliance with air quality standards established by the State Air
Resources Board for ultra-clean and low-emission distributed
generation.
SEC. 3. Section 353.13 of the Public Utilities Code is amended
to read:
353.13. (a) The commission shall require each electrical
corporation to establish new tariffs on or before January 1, 2003,
for customers using distributed energy resources, including, but not
limited to, those that do not meet all of the criteria described in
Section 353.1. However, after January 1, 2003, distributed energy
resources that meet all of the criteria described in Section 353.1
shall continue to be subject only to those tariffs in existence
pursuant to Section 353.3, until June 1, 2011 , except that
installations that do not operate in a combined heat and power
application will be subject to those tariffs in existence pursuant to
Section 353.3 only until June 1, 2006 . Those tariffs
required pursuant to this section shall ensure that all net
distribution costs incurred to serve each customer class, taking into
account the actual costs and benefits of distributed energy
resources, proportional to each customer class, as determined by the
commission, are fully recovered only from that class. The commission
shall require each electrical corporation, in establishing those
rates, to ensure that customers with similar load profiles within a
customer class will, to the extent practicable, be subject to the
same utility rates, regardless of their use of distributed energy
resources to serve onsite loads or over-the-fence transactions
allowed under Sections 216 and 218. Customers with dedicated
facilities shall remain responsible for their obligations regarding
payment for those facilities.(b) The commission shall prepare and
submit to the Legislature, on or before June 1, 2002, a report
describing its proposed methodology for determining the new rates and
the process by which it will establish those rates.
(c) In establishing the tariffs, the commission shall consider
coincident peakload, and the reliability of the onsite generation, as
determined by the frequency and duration of outages, so that
customers with more reliable onsite generation and those that reduce
peak demand pay a lower cost-based rate.