LEGISLATIVE COUNSEL'S DIGEST
AB 64, as amended, Krekorian. Energy: renewable energy resources:
generation and transmission.
(1) Under existing law, the Public Utilities Commission (PUC) has
regulatory authority over public utilities, including electrical
corporations, as defined. Existing law requires the PUC to require
the state's 3 largest electrical corporations, Pacific Gas and
Electric Company, San Diego Gas and Electric, and Southern California
Edison, to identify a separate electrical 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. Existing PUC
resolutions refer to the nonbypassable rate component as a "public
goods charge." The public goods charge moneys 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.
The existing Warren-Alquist State Energy Resources Conservation
and Development Act establishes the State Energy Resources
Conservation and Development Commission (Energy Commission). Existing
law establishes the Renewable Resource Trust Fund as a fund that is
continuously appropriated, with certain exceptions for administrative
expenses, in the State Treasury and requires that certain moneys
collected to support renewable energy resources through the public
goods charge are deposited into the fund and authorizes the Energy
Commission to expend the moneys pursuant to the Renewable Energy
Resources Program.
This bill would make conforming changes to terms used in the
Renewable Energy Resources Program statutes that would be made by SB
14 of the 2009-10 Regular Session.
(2) The Public Utilities Act imposes various duties and
responsibilities on the PUC with respect to the purchase of
electricity and requires the PUC 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 (RPS program). The RPS 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 in any given year as a specified percentage of total
kilowatthours sold to retail end-use customers each calendar year.
The RPS program requires the PUC to implement annual procurement
targets for each retail seller to increase its total procurement of
electricity generated by eligible renewable energy resources by at
least an additional 1% of retail sales per year so that 20% of its
retail sales of electricity are procured from eligible renewable
energy resources no later than December 31, 2010. Existing law
requires the PUC to make a determination of the existing market cost
for electricity, which PUC decisions call the market price referent,
and to limit an electrical corporation's obligation to procure
electricity from eligible renewable energy resources, that exceeds
the market price referent, to an amount collected through the
renewable energy public goods charge.
This bill would delete an existing requirement that the PUC adopt
flexible rules for compliance for retail sellers. The bill would
require the PUC to direct each electrical corporation to prepare a
renewable energy procurement plan that includes certain matter and to
review and update the plan. The bill would, to the extent feasible,
require that the renewable energy procurement plan be proposed,
reviewed, and adopted by the PUC pursuant to the general procurement
plan process. The bill would require that an electrical corporation's
proposed procurement plan include a showing that the electrical
corporation will, in order to fulfill its unmet resource needs,
procure resources from eligible renewable energy resources in an
amount sufficient to meet its procurement targets pursuant to the RPS
program. The bill would authorize an electrical corporation to apply
to the PUC for approval to construct, own, and operate an eligible
renewable energy resource and require the PUC to approve the
application if certain conditions are met, until corporation owned
and operated resources provide 8.5% of the corporation's anticipated
retail sales.
Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the PUC
is a crime.
Because certain provisions of this bill are within the act and
require action by the PUC to implement its requirements, a violation
of these provisions would impose a state-mandated local program by
expanding the definition of a crime.
(3) The Public Utilities Act prohibits any electrical corporation
from beginning the construction of, among other things, a line,
plant, or system, or of any extension thereof, without having first
obtained from the PUC a certificate that the present or future public
convenience and necessity require or will require that construction,
termed a certificate of public convenience and necessity. Existing
law requires the PUC, in acting upon an application by an electrical
corporation for a certificate of public convenience and necessity, to
deem new transmission facilities necessary to the provision of
electric service if the PUC finds that new transmission facilities
are necessary to facilitate achievement of the renewable power goals
established under the RPS program. Existing law requires the PUC,
upon finding that new transmission facilities are necessary to
facilitate achievement of the renewable power goals established under
the RPS, to take all feasible actions to ensure that the
transmission rates established by the Federal Energy Regulatory
Commission (FERC) are fully reflected in any retail rates established
by the PUC.
This bill would require the PUC to issue a decision on an
application for a certificate of public convenience and necessity
within 18 months of the filing of a completed application under
specified circumstances. The bill would require the PUC, in acting
upon an application by an electrical corporation for a certificate of
public convenience and necessity, to deem new transmission
facilities necessary to the provision of electric service if the PUC
finds that new transmission facilities are reasonably necessary or
appropriate to facilitate achievement of the renewables portfolio
standard. The bill would require the PUC to provide assurance of the
eligibility for recovery in retail rates of any increase in
transmission costs incurred by an electrical corporation resulting
from the construction of transmission facilities in certain
circumstances and to allow recovery in retail rates of any increase
in transmission costs if not approved by the Federal Energy
Regulatory Commission if the PUC determines the costs were prudently
incurred pursuant to a specified law.
(4) Existing law establishes the Department of Fish and Game in
the Natural Resources Agency, and generally charges the department
with the administration and enforcement of the Fish and Game Code.
This bill would require the department to establish an internal
division with the primary purpose of performing comprehensive
planning and environmental compliance services with priority given to
projects involving the building of eligible renewable energy
resources.
(5) The existing restructuring of the electrical industry within
the Public Utilities Act provides for the establishment of an
Independent System Operator (ISO). Existing law requires the ISO to
ensure efficient use and reliable operation of the transmission grid
consistent with achieving planning and operating reserve criteria no
less stringent than those established by the Western Electricity
Coordinating Council and the American Electric Reliability Council.
Pursuant to existing law, the ISO's tariffs are required to be
approved by the FERC.
This bill would require the ISO and other California balancing
authorities to work cooperatively to integrate and interconnect
eligible renewable energy resources to the transmission grid by the
most efficient means possible with the goal of minimizing the impact
and cost of new transmission facilities needed to meet both
reliability needs and the renewables portfolio standard procurement
requirements, and to accomplish this in a manner that respects the
ownership, business, and dispatch models for transmission facilities
owned by electrical corporations, local publicly owned electric
utilities, joint power agencies, and merchant transmission companies.
(6) The bill would require the Energy Commission, by July 1, 2010,
to update previously conducted studies relating to determining the
effective load carrying capacity of wind and solar energy resources
on the electrical grid. The bill would require the PUC to use those
values in establishing the contribution of those resources toward
meeting specified resource adequacy requirements.
(7) 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 no reimbursement is required by this
act for a specified reason.
(8) The provisions of the bill would only become operative if the
bill and SB 14 of the 2009-10 Regular Session are both enacted and
become effective on or before January 1, 2010.
Comments/questions on AB 64 (Bass and Fuentes and Krekorian): Energy: renewable energy resources: generation and transmission.
