LEGISLATIVE COUNSEL'S DIGEST


SB 14, as amended, Simitian. Utilities: renewable energy
resources.
(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. The program states the intent of the Legislature
to increase the amount of electricity generated from eligible
renewable energy resources per year so that amount equals at least
20% of total retail sales of electricity in California per year by
December 31, 2010.
This bill would revise the Renewable Energy Resources Program to
state the intent of the Legislature to increase the amount of
electricity generated from eligible renewable energy resources per
year, so that amount equals at least 33% of total retail sales of
electricity in California per year by December 31, 2020. The bill
would revise certain terms used in the program and revise
certain eligibility criteria for an instate renewable
electricity a renewable electrical generation
facility , as defined, pursuant to the program. The
bill would require the Energy Commission, by May 31, 2010,
to report to the Legislature whether out-of-state, run-of-river
hydroelectric generating facilities should be considered renewable
electric generating facilities, as defined.
(2) Existing law expresses the intent of the Legislature, in
establishing the California Renewables Portfolio Standard Program
(RPS program), to increase the amount of electricity generated per
year from eligible renewable energy resources, as defined, to an
amount that equals at least 20% of the total electricity sold to
retail customers in California per year by December 31, 2010.
This bill would express the intent that the amount of electricity
generated per year from eligible renewable energy resources
is be increased to an amount that equals at
least 20% of the total electricity sold to retail customers in
California per year by December 31, 2012 2013
, and 33% by December 31, 2020.
(3) 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, as defined, pursuant to the 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 instead require the PUC to require that a retail
seller procure the following percentages of electricity from eligible
renewable energy resources by the following dates: (A) 20%
by December 31, 2012; (B) 23% by December 31, 2014; (C) 26% by
December 31, 2016; (D) 30% by December 31, 2018; and (E)
Until December 31, 2012, the same percentage as actually
achieved by the retail seller during 2009; (B) 20% by December 31,
2013; (C) 25% by December 31, 2016; and (D) 33% by December 31,
2020. The bill would authorize the PUC to permit a retail seller to
delay compliance with (A), (B), (C), and (D)
(B) or (C) procurement levels when specified circumstances are
present, but would not authorize the PUC to permit a retail seller to
delay compliance with the (E) (D)
procurement level. The bill would delete the existing market price
referent provisions and instead require the PUC to 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, and reflecting, certain
matters. The bill would require the PUC to establish a limitation on
the annual expenditures made above the market price, by an electrical
corporation, in order to achieve the procurement levels established
by the PUC. The bill would require the PUC to permit an electrical
corporation to limit its procurement of electricity from eligible
renewable energy resources to that quantity that can be procured at
or below the market prices established by the PUC, up to the
limitation. The bill would delete an existing requirement that the
PUC adopt flexible rules for compliance for retail sellers
and would instead require the PUC to adopt rules permitting retail
sellers to apply excess procurement in one year to subsequent years
.
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 the 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.
(4) Under existing law, the governing board of a local publicly
owned electric utility is responsible for implementing and enforcing
a renewables portfolio standard for the utility 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.
This bill would repeal this provision and instead make certain of
the requirements of the RPS program, as discussed below, applicable
to local publicly owned electric utilities. By placing additional
requirements upon local publicly owned electric utilities, the bill
would impose a state-mandated local program.
(5) Existing law requires the Energy Commission to certify
eligible renewable energy resources, to design and implement an
accounting system to verify compliance with the RPS requirements by
retail sellers, and to develop tracking, accounting, verification,
and enforcement mechanisms for renewable energy credits, as defined.
This bill would require the Energy Commission to design and
implement an accounting system to verify compliance with the RPS
requirements by retail sellers and local publicly owned electric
utilities. The bill would require the Energy Commission, among other
things, to adopt regulations specifying procedures for enforcement of
the RPS requirements that include a public process under which the
Energy Commission is authorized to issue a notice of violation and
correction with respect to a local publicly owned electric utility
and for referral to the State Air Resources Board for penalties
imposed pursuant to the California Global Warming Solutions Act of
2006. The bill would require that the RPS established for a local
publicly owned electric utility require it to procure the following
percentages of electricity from eligible renewable energy resources
by the following dates: (A) 20% by December 31, 2012; (B)
23% by December 31, 2014; (C) 26% by December 31, 2016; (D) 30% by
December 31, 2018; and (E) Until December 31, 2012,
the same percentage as actually achieved by the utility during 2009;
(B) 20% by December 31, 2013; (C) 25% by December 31, 2016;
and (D) 33% by December 31, 2020. The bill would provide
that the local publicly owned electric utility retains discretion
with respect to certain matters in complying with the RPS, would
require that certain notices be given by the utility when adopting
and periodically revising its procurement plan, and would require the
utility to report certain information relative to RPS compliance to
the Energy Commission and its customers.
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 Energy Commission
to use those values in establishing the contribution of those
resources toward meeting specified resource adequacy requirements.

(6) Existing law requires that an electrical corporation's
proposed procurement plan include certain elements, including a
showing that the electrical corporation will, in order to fulfill its
unmet resource needs, until a 20% renewable resources portfolio is
achieved, procure renewable energy resources with the goal of
ensuring that at least an additional 1% per year of the electricity
sold by the electrical corporation is generated from eligible
renewable energy resources, provided sufficient funds are made
available to cover the above-market costs for new renewable energy
resources pursuant to certain provisions of the Renewable Energy
Resources Program.
This 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 requirements pursuant to the RPS program.

(7)
(6) Existing law requires the PUC to prepare and submit
to the Governor and the Legislature a written report annually before
February 1 of each year on the costs of programs and activities
conducted by an electrical corporation or gas corporation that have
more than a specified number of customers in California.
The bill would require the PUC to prepare and submit to the policy
and fiscal committees of the Legislature, annually before February 1
of each year, a report on (A) all electrical corporation revenue
requirement increases associated with meeting the renewables
portfolio standard, (B) all cost savings experienced, or costs
avoided, by electrical corporations as a result of meeting the
renewables portfolio standard, (C) all costs incurred by electrical
corporations for incentives for distributed and renewable generation,
(D) all cost savings experienced, or costs avoided, by electrical
corporations as a result of incentives for distributed generation and
renewable generation, (E) specified costs for which an electrical
corporation is seeking recovery in rates that are pending
determination or approval by the PUC, (F) the decision number of each
PUC decision in the prior year authorizing an electrical corporation
to recover costs incurred in rates, and (G) any changes in the prior
year in load serviced by an electrical corporation.
(8) 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.
(9) 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.

(10) 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.
(11) Existing law grants the Energy Commission the exclusive
authority to certify any stationary or floating electrical generating
facility using any source of thermal energy, with a generating
capacity of 50 megawatts or more, and any facilities appurtenant
thereto. Existing law prohibits the construction of any thermal
powerplant or facilities appurtenant thereto or modification of any
existing thermal powerplant and appurtenant facility without first
obtaining certification from the Energy Commission. Each person
proposing to construct a thermal powerplant or electric transmission
line on a site is required to submit an application to the Energy
Commission. The Energy Commission is required to prescribe the form
and content of applications for facilities and to formally act to
approve or disapprove applications, including specifying conditions
under which approval and continuing operation of any facility is
permitted.
This bill would require the Energy Commission to develop a
concurrent application review process with the Department of Fish and
Game for eligible renewable energy resources with the goal of
reducing the time required to complete certification and compliance
with the California Environmental Quality Act for eligible renewable
energy resources that are within a competitive renewable energy zone.

(12)
(7) This bill would appropriate $322,000 from the
Public Utilities Commission Utilities Reimbursement Account to the
PUC for additional staffing to identify, review, and approve
transmission lines reasonably necessary or appropriate to facilitate
achievement of the renewables portfolio standard.
(13)
(8) 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 specified reasons.

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