Bill Text: CA AB365 | 2013-2014 | Regular Session | Amended
Bill Title: Electricity: distributed generation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2014-07-01 - Withdrawn from committee. Re-referred to Com. on RLS. [AB365 Detail]
Download: California-2013-AB365-Amended.html
BILL NUMBER: AB 365 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 30, 2014
AMENDED IN SENATE JUNE 12, 2014
AMENDED IN ASSEMBLY APRIL 3, 2013
INTRODUCED BY Assembly Member Mullin
FEBRUARY 14, 2013
An act to add Section 354 to the Public Utilities Code,
relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
AB 365, as amended, Mullin. Electricity: distributed generation.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations,
as defined. Existing law authorizes the commission to fix the rates
and charges for every public utility, and requires that those rates
and charges be just and reasonable. Existing law requires the
commission to require each electrical corporation under the
operational control of the Independent System Operator as of January
1, 2001, to modify tariffs so that all customers that install new
distributed energy resources, as defined, in accordance with
specified criteria are served under rates, rules, and requirements
identical to those of a customer within the same rate schedule that
does not use distributed energy resources, and to withdraw any
provisions in otherwise applicable tariffs that activate other
tariffs, rates, or rules if a customer uses distributed energy
resources. Existing law provides, notwithstanding these requirements,
that a customer that installs new distributed energy resources not
be exempted from (1) reasonable interconnection charges, (2) charges
imposed pursuant to the Reliable Electric Service Investment Act, and
(3) charges imposed to repay the Department of Water Resources for
electricity procurement expenses incurred in response to the
electricity crisis of 2000-01. Existing law requires the commission,
in establishing the rates applicable to customers that install new
distributed energy resources, to create a firewall that segregates
distribution cost recovery so that any net costs, taking into account
the actual costs and benefits of distributed energy resources,
proportional to each customer class, as determined by the commission,
resulting from the tariff modifications granted to members of each
customer class may be recovered only from that class.
This bill would, to the extent authorized by federal law, require
the commission, by July 1, 2015, to do both of the following for
those electrical corporation customers that have operational clean
distributed energy resources, as defined: (1) require each electrical
corporation to collect all applicable nonbypassable charges fixed or
imposed by the commission based only on the actual metered
consumption of electricity delivered to the customer through the
electrical corporation's transmission or distribution system, and (2)
calculate a reservation capacity for standby service, if applicable,
based on the capacity needed by an electrical corporation to serve a
customer's electrical demand during an outage of the clean
distributed energy resource providing electric service for that
customer.
Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the
commission is a crime.
Because the provisions of this bill would be a part of the act and
because a violation of an order or decision of the commission
implementing its requirements would be a crime, the bill would impose
a state-mandated local program by creating a new crime.
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.
This bill would make legislative findings and declarations as to
clean onsite electricity generation and nonbypassable charges.
Vote: majority. Appropriation: no. Fiscal committee: yes
no . State-mandated local program: yes
no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Clean onsite generation of electricity yields multiple
benefits, including increased electrical reliability, reduced
emissions of greenhouse gases and oxides of nitrogen (NOx), and
electrical grid resiliency.
(b) Increased deployment of clean onsite electricity generation
reduces the need for generation that emits higher levels of
greenhouse gases that contribute to climate change and higher levels
of NOx that contribute to smog formation.
(c) Several types of clean onsite electrical generation
technologies currently exist and others are being developed, with
many being manufactured and developed in California.
(d) Nonbypassable charges applied by electrical corporations to
electricity produced and consumed onsite are a major impediment to
broader deployment of clean onsite generation technologies.
Residential, commercial, and industrial customers are willing to
invest their own capital to install clean onsite generation
technologies. However, nonbypassable charges applied to electricity
produced and consumed onsite create an economic barrier to these
investments.
(e) California is the only state that allows electrical
corporations to apply nonbypassable charges to electricity produced
and consumed onsite among those states with similarly high energy
prices and environmental goals, including New York, New Jersey,
Maryland, Vermont, Connecticut, and Hawaii.
(f)
(d) A recent study shows that all ratepayers would see a
net cost savings from increased deployment of onsite electricity
generation at customer sites that pay nonbypassable charges only on
their electricity purchases from the grid. This ratepayer savings
arises because onsite electricity generation reduces demand on the
electrical grid, which reduces market electricity prices, and avoids
transmission and distribution costs and energy losses. On average,
all ratepayers in electrical corporation service areas would see an
energy rate savings of between seventeen cents ($0.17) and
thirty-seven cents ($0.37) per megawatt hour, which translates to an
average household savings of between nine cents ($0.09) and eighteen
cents ($0.18) per month.
(g) Other cost-saving benefits to all ratepayers from clean onsite
electrical generation include reductions in future generating
capacity requirements, reductions in electrical grid congestion
prices, reductions in emissions of greenhouse gases and criteria air
pollutants, and increases in electrical grid resiliency and security.
(h) Nonbypassable charges create an economic barrier to the
installation of clean onsite electrical generation and, as a result,
prevent cost savings for all ratepayers and environmental benefits
for all Californians.
SEC. 2. Section 354 is added to the Public
Utilities Code, to read:
354. (a) As used in this section, "clean distributed energy
resource" means a facility that is located on the customer's premises
and generates electricity, or electricity and useful heat, where the
electricity generated is used for a purpose described in paragraph
(1) or (2) of subdivision (b) of Section 218, and that meets either
of the following requirements:
(1) It meets all of the following criteria:
(A) Produces emissions of greenhouse gases at a rate per
megawatthour, accounting for waste heat recovery, where applicable,
and savings on transmission and distribution losses, that is less
than or equal to an emissions rate determined by the Energy
Commission by January 30, 2015, that represents the emissions of
greenhouse gases from the marginal generating unit dispatched to meet
the demand on the electrical grid that is avoided by the electricity
generated by the clean distributed energy resource.
(B) Has an oxide of nitrogen (NOx) emissions rate, including
credit for waste heat recovery, when applicable, that is less than or
equal to 0.07 pounds per megawatthour, or a lower NOx emissions rate
that the State Air Resources Board determines reflects the best
performance achieved in practice by existing electrical generation
technologies pursuant to Section 41514.9 of the Health and Safety
Code.
(C) Has a nameplate rated generation capacity of 20 megawatts or
less.
(2) It is an "eligible renewable energy resource" pursuant to the
California Renewables Portfolio Standard Program (Article 16
(commencing with Section 399.11)) that has a nameplate rated
generation capacity of 20 megawatts or less.
(b) To the extent authorized by federal law, by July 1, 2015, the
commission shall do both of the following for those electrical
corporation customers served by clean distributed energy resources:
(1) Require each electrical corporation to collect all applicable
nonbypassable charges fixed or imposed by the commission based only
on the actual metered consumption of electricity delivered to the
customer through the electrical corporation's transmission or
distribution system. All charges shall be at the same rate per
kilowatthour as paid by other customers that do not employ a clean
distributed energy resource under the electrical corporation's
applicable rate schedule.
(2) (A) Calculate a reservation capacity for standby service, if
applicable, based on the capacity needed by an electrical corporation
to serve a customer's electrical demand during an outage of the
clean distributed energy resource providing electric service for that
customer.
(B) Initial reservation capacity shall be established by the
customer for a minimum of 12 months based on the clean distributed
energy resource generation technology's historical operation, the
number, size, and outage diversity of the clean distributed energy
resource, and the annual average reduction of customer load that
could occur during an outage.
(C) If after the initial 12-month period, the electrical
corporation reasonably determines that the reservation capacity does
not reflect the customer's actual standby demand, averaged over the
previous 12 months, the electrical corporation shall modify the
reservation capacity once every 12 months to reflect the customer's
actual average annual reservation capacity based on the same criteria
used to establish the initial reservation capacity. Calculation of
actual average annual reservation capacity shall exclude the customer'
s electrical demand served by the electrical corporation within 24
hours following an outage of the clean distributed energy resource
resulting from any event on the electrical corporation's transmission
or distribution grid that is outside of the customer's control that
requires the customer to reduce onsite generation.
SEC. 3. No reimbursement is required by this
act pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because 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.
