Bill Text: CA AB64 | 2009-2010 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Energy: renewable energy resources: generation and
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Vetoed) 2010-01-14 - Consideration of Governor's veto stricken from file. [AB64 Detail]
Download: California-2009-AB64-Amended.html
Bill Title: Energy: renewable energy resources: generation and
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Vetoed) 2010-01-14 - Consideration of Governor's veto stricken from file. [AB64 Detail]
Download: California-2009-AB64-Amended.html
BILL NUMBER: AB 64 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 15, 2009
AMENDED IN ASSEMBLY MARCH 24, 2009
AMENDED IN ASSEMBLY MARCH 18, 2009
INTRODUCED BY Assembly Members Krekorian and Bass
DECEMBER 9, 2008
An act to amend Sections 25500, 25740, 25740.5, 25741, and 25742
of, and to repeal Chapter 4.3 (commencing with Section 25330) of
Division 15 of, the Public Resources Code, and to amend Section 454.5
of, to amend and repeal Section 387 of, to add Section 399.23 to, to
add Chapter 4.5 (commencing with Section 950) to Part 1 of Division
1 of, and to repeal Article 16 (commencing with Section 399.11) of
Chapter 2.3 of Part 1 of Division 1 of, the Public Utilities Code,
relating to energy, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 64, as amended, Krekorian. Energy: renewable energy resources:
generation and transmission.
(1) The Public Utilities Act imposes various duties and
responsibilities on the Public Utilities Commission (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. 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 the PUC to implement annual
procurement targets for each retail seller 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, 2010. Existing law requires the State Energy
Resources Conservation and Development Commission (Energy Commission)
to certify eligible renewable energy resources and to design and
implement an accounting system to verify compliance with the
renewables portfolio standard by retail sellers. 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 recast the renewables portfolio standard program,
to be operative on January 1, 2011, to require that a retail seller
and a local publicly owned electric utility: (1) procure at least 20%
of the electricity delivered to its retail customers from eligible
renewable energy resources by December 31, 2010, (2) procure at least
25% of the electricity delivered to its retail customers from
eligible renewable energy resources by December 31, 2015, and (3)
procure at least 33% of the electricity delivered to its retail
customers from eligible renewable energy resources by December 31,
2020. The PUC would be responsible for implementing these
requirements for retail sellers, while the governing board would be
responsible for implementing these requirements for a local publicly
owned electric utility. The bill would require the PUC to establish
annual procurement targets for retail sellers that
are sufficient to reach the above-stated requirements. The bill
would require that an electrical corporation's renewable energy
procurement plan include a process that provides criteria for the
rank ordering and selection of eligible renewable energy resources to
comply with the above-stated procurement requirements so that each
corporation's total renewables portfolio benefits ratepayers. The
bill would require the PUC to annually establish and adopt a
benchmark price for electricity generated by an eligible renewable
energy resource, for terms corresponding to the length of contracts,
in consideration of specified matter, and for each electrical
corporation, to establish a limitation on the total costs expended
above the benchmark prices for procurement of electricity pursuant to
the renewables portfolio standard and would prohibit the
limitation from exceeding 5% of the electrical
corporation's revenue requirements . The bill would require the
PUC to allow an electrical corporation or other retail seller to
limit its procurement to the quantity of eligible renewable energy
resources that can be purchased at or below the cost limitation if
insufficient to support the total costs expended above the benchmark
price. The bill would revise existing law with respect to the use of
renewable energy credits to meet the renewables portfolio standard
procurement requirements and would allow retail sellers and
local publicly owned electric utilities to meet up to 10% of its
renewables portfolio standard procurement requirements from
nondeliverable renewable energy resources, as defined .
(2) 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. Existing law establishes the
Renewable Resource Trust Fund 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 it equals at least 20% of total retail sales of
electricity in California per year by December 31, 2010, 25% of total
retail sales of electricity in California per year by December 31,
2015, and 33% of total retail sales of electricity in California per
year by December 31, 2020. The bill would revise the definitions
applicable to the Renewable Energy Resources Program to incorporate
the definition of an eligible renewable energy resource from the
renewables portfolio standard program, would define what is a "new"
and "existing" eligible renewable energy resource, would delete
certain unneeded defined terms, and would make other conforming
changes.
(3) Existing law requires every electrical corporation to file
with the PUC a standard tariff for electricity generated by an
electric generation facility, as defined, that is owned and operated
by a retail customer of the electrical corporation. Existing law
requires that the electric generation facility: (1) have an effective
capacity of not more than 1.5 megawatts and be located on property
owned or under the control of the customer, (2) be interconnected and
operate in parallel with the electric transmission and distribution
grid, (3) be strategically located and interconnected to the electric
transmission system in a manner that optimizes the deliverability of
electricity generated at the facility to load centers, and (4) meet
the definition of an eligible renewable energy resource under the
California Renewables Portfolio Standard Program. Existing law
requires that the tariff provide for payment for every kilowatthour
of electricity generated by an electric generation facility at a
market price referent established by the PUC pursuant to the program.
Existing law requires the electrical corporation to make this tariff
available to customers that own and operate an electric generation
facility within the service territory of the electrical corporation,
upon request, on a first-come-first-served basis, until the combined
statewide cumulative rated generating capacity of those electric
generation facilities equals 500 megawatts, or the electrical
corporation meets its proportionate share of the 500 megawatt limit
based upon the ratio of its peak demand to total statewide peak
demand of all electrical corporations. Existing law authorizes the
PUC to modify or adjust the above-described requirements for any
electrical corporation with less than 100,000 service connections, as
individual circumstances merit. Existing law provides that the
electricity generated by an electric generation facility counts
toward the electrical corporation's renewables portfolio standard and
provides that the physical generating capacity counts toward meeting
the electrical corporation's resource adequacy requirements.
This bill would instead require an electrical corporation to file
with the PUC a standard tariff for the electricity purchased from a
small-scale renewable distributed generation facility, as defined,
that is owned, leased, or rented by a retail customer of the
electrical corporation. The bill would revise the first requirement,
discussed above, to instead require that the small-scale renewable
distributed generation facility have an effective capacity of not
more than 5 megawatts, subject to the authority of the PUC to reduce
this megawatt limitation, discussed below. The bill would require
that the tariff provide for a base payment rate for every
kilowatthour of electricity purchased from a small-scale renewable
distributed generation facility at the benchmark price established by
the PUC pursuant to the California Renewables Portfolio Standard
Program, for a period of 10, 15, or 20 years, as authorized by the
PUC. The bill would authorize the PUC to adjust the payment rate to
reflect the value of the electricity on a time-of-delivery basis and
any other attributes of renewable generation and require, with
respect to rates and charges, that ratepayers that do not receive
service pursuant to the tariff are indifferent, with respect to rates
and charges, to whether other ratepayers receive service pursuant to
the tariff. The bill would require the electrical corporation to
make the tariff available to any customer that owns, leases, or rents
a small-scale renewable distributed generation facility within the
service territory of the electrical corporation, upon request, on a
first-come-first-served basis, until the combined statewide
cumulative rated generating capacity of those facilities subject to
tariffs with electrical corporations reaches 500 megawatts, or its
proportionate share of that limit. The bill would provide that the
electricity purchased from a small-scale renewable distributed
generation facility count toward meeting the electrical corporation's
renewables portfolio standard and that electricity generated by the
small-scale renewable distributed generation facility count toward
meeting the electrical corporation's resource adequacy requirements.
The bill would require the PUC, in consultation with the ISO, to
monitor and examine the impact on the transmission and distribution
grid and any effects upon ratepayers resulting from small-scale
renewable distributed generation facilities operating pursuant to the
bill's provisions, would require the PUC to establish performance
standards for any small-scale renewable distributed generation
facility that has a capacity greater than one megawatt to ensure that
those facilities are constructed, operated, and maintained to
generate the expected annual net production of electricity and do not
impact system reliability, and would authorize the PUC to reduce the
5 megawatt capacity limitation if the PUC finds that a reduced
capacity limitation is necessary to maintain system reliability
within that electrical corporation's service territory. The bill
would recast the existing authority of the PUC to modify or adjust
the above-described requirements for any electrical corporation with
less than 100,000 service connections, as individual circumstances
merit.
This bill would require a local publicly owned electric utility
that sells electricity at retail to 75,000 or more customers to adopt
and implement a tariff for electricity purchased from a small-scale
renewable distributed generation facility meeting certain size,
deliverability, and interconnection requirements and to consider
certain factors. The bill would require the local publicly owned
electric utility to make the tariff available to customers that own
and operate a small-scale renewable distributed generation facility
within the service territory of the utility, upon request, on a
first-come-first-served basis, until the combined statewide
cumulative rated generating capacity of those small-scale renewable
distributed generation facilities, subject to tariffs with local
publicly owned electric utilities, reaches 250 megawatts. The bill
would provide that the electricity purchased from a small-scale
renewable distributed generation facility count toward meeting the
local publicly owned electric utility's renewables portfolio standard
annual procurement targets.
(4)
(3) Existing law creates the California Consumer Power
and Conservation Financing Authority, with powers and
responsibilities as prescribed, including the issuance of revenue
bonds, for the purposes of augmenting electric generating facilities
and to ensure a sufficient and reliable supply of electricity,
financing incentives for investment in cost-effective
energy-efficient appliances and energy demand reduction, achieving a
specified energy capacity reserve level, providing financing for the
retrofit of inefficient electric powerplants, and renewable energy
and conservation. Existing law creates in the State Treasury the
California Consumer Power and Conservation Financing Authority Fund,
and continuously appropriates all money in the fund, except as
specified, for the support of the authority. Existing law prohibits
the authority from approving any new program, enterprise, or project,
on or after January 1, 2007, unless authority to approve such an
activity is granted by statute enacted on or before January 1, 2007.
This bill would establish the Renewables Infrastructure Authority,
with powers and responsibilities as prescribed, including the
issuance of revenue bonds of up to $6,400,000,000, for the purposes
of financing projects and programs, as defined, to build eligible
renewable energy resources and electric transmission lines, as
defined, to deliver the electricity generated to retail customers.
The authority would have a 9-member governing board, as prescribed.
The bill would establish the Renewables Infrastructure Authority Fund
and continuously appropriate moneys in the fund, except as
specified, for the authority's purposes.
The bill would authorize the authority to designate an area as a
renewable energy designation zone, as defined. Each city or county
would be required to consider the designated zone when making a
determination regarding a land use change within or adjacent to the
zone that could affect its continuing viability to accommodate energy
generation facilities, related transmission lines, transmission
corridor zones, or other facilities appurtenant to the designated
zone. Notwithstanding provisions of law that give the Energy
Commission authority to certify certain thermal powerplants and
related facilities, the authority would have the authority to certify
all sites and related facilities in a designated renewable energy
designation zone, including new sites and related facilities and
changes or additions to an existing facility.
The bill would authorize the authority to certify all electric
transmission lines, remote resource interconnection lines, electric
transmission facilities and facilities appurtenant thereto, and
related facilities in the state, except any electric transmission
lines or facilities appurtenant thereto for which the PUC has issued
a certificate of public convenience and necessity, or which any
municipal utility has approved, before January 1, 2010, and electric
transmission lines that connect generation facilities to the
high-voltage transmission grid that are under the certification
authority of the Energy Commission.
(5)
(4) Existing law authorizes the Energy Commission to
designate a transmission corridor zone on its own motion or by
application of a person who plans to construct a high-voltage
electric transmission line within the state. Existing law provides
that the designation of a transmission corridor shall serve to
identify a feasible corridor where a future transmission line can be
built that is consistent with the state's needs and objectives as set
forth in the strategic plan adopted by the PUC. Existing law
prescribes procedures for the designation of a transmission corridor
zone, including publication of the request for designation and
request for comments, coordination with federal agencies and
California Native American tribes, informational hearings, and
requirements for a proposed decision.
This bill would repeal these provisions of law, and would give to
the Renewables Infrastructure Authority the authority to designate
transmission corridor zones.
(6)
(5) Under existing law, a violation of the Public
Utilities Act or an order or direction of the PUC is a crime. Because
some of the provisions of this bill would require an order or other
action of the PUC to implement its provisions, and a violation of
that order or action would be a crime, the bill would impose a
state-mandated local program by creating a new crime. By placing
additional requirements upon local publicly owned electric utilities,
which are entities of local government, and new requirements upon
city and county governments, the bill would impose a state-mandated
local program.
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.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 4.3 (commencing with Section 25330) of Division
15 of the Public Resources Code is repealed.
SEC. 2. Section 25500 of the Public Resources Code is amended to
read:
25500. (a) In accordance with the provisions of this division,
and except as otherwise provided in Article 7 (commencing with
Section 990) of Chapter 4.5 of Part 1 of Division 1 of the Public
Utilities Code, the commission shall have the exclusive power to
certify all sites and related facilities in the state, whether a new
site and related facility or a change or addition to an existing
facility. The issuance of a certificate by the commission shall be in
lieu of any permit, certificate, or similar document required by any
state, local or regional agency, or federal agency to the extent
permitted by federal law, for such use of the site and related
facilities, and shall supersede any applicable statute, ordinance, or
regulation of any state, local, or regional agency, or federal
agency to the extent permitted by federal law.
(b) After the effective date of this division, no construction of
any facility or modification of any existing facility shall be
commenced without first obtaining certification for any such site and
related facility by the commission, as prescribed in this division.
SEC. 3. 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, 25 percent of total retail sales of
electricity in California per year by December 31, 2015, and 33
percent of total retail sales of electricity in California per year
by December 31, 2020.
SEC. 4. Section 25740.5 of the Public Resources Code is amended to
read:
25740.5. (a) The commission shall optimize public investment and
ensure that the most cost-effective and efficient investments in
renewable energy resources are vigorously pursued.
(b) The commission's long-term goal shall be a fully competitive
and self-sustaining supply of electricity generated from renewable
sources.
(c) The program objective shall be to increase, in the near term,
the quantity of California's electricity generated by eligible
renewable energy resources, while protecting system reliability,
fostering resource diversity, and obtaining the greatest
environmental benefits for California residents.
(d) An additional objective of the program shall be to identify
and support emerging renewable technologies in distributed generation
applications that have the greatest near-term commercial promise and
that merit targeted assistance.
(e) The Legislature recommends allocations among all of the
following:
(1) Rebates, buydowns, or equivalent incentives for emerging
renewable technologies.
(2) Customer education.
(3) Production incentives for reducing fuel costs, that are
confirmed to the satisfaction of the commission, at solid fuel
biomass energy facilities in order to provide demonstrable
environmental and public benefits, including improved air quality.
(4) Solar thermal generating resources that enhance the
environmental value or reliability of the electrical system and that
require financial assistance to remain economically viable, as
determined by the commission. The commission may require financial
disclosure from applicants for purposes of this paragraph.
(5) Specified fuel cell technologies, if the commission makes all
of the following findings:
(A) The specified technologies have similar or better air
pollutant characteristics than renewable technologies in the report
made pursuant to Section 25748.
(B) The specified technologies require financial assistance to
become commercially viable by reference to wholesale generation
prices.
(C) The specified technologies could contribute significantly to
the infrastructure development or other innovation required to meet
the long-term objective of a self-sustaining, competitive supply of
electricity generated from renewable sources.
(6) Existing wind-generating resources, if the commission finds
that the existing wind-generating resources are a cost-effective
source of reliable energy and environmental benefits compared with
other eligible renewable energy resources, and that the existing
wind-generating resources require financial assistance to remain
economically viable. The commission may require financial disclosure
from applicants for the purposes of this paragraph.
(f) Notwithstanding any other provision of law, moneys collected
for renewable energy pursuant to Article 15 (commencing with Section
399) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities
Code shall be transferred to the Renewable Resource Trust Fund.
Moneys collected between January 1, 2007, and January 1, 2012, shall
be used for the purposes specified in this chapter.
SEC. 5. 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) "Eligible renewable energy resource" means an eligible
renewable energy resource as defined in Section 399.12 of the Public
Utilities Code.
(b) "Existing" in reference to an eligible renewable energy
resource means a facility that had obtained any necessary permits to
operate and was able to generate electricity prior to January 1,
2005.
(c) "New" in reference to an eligible renewable energy resource
means a facility that either had not obtained all of the necessary
permits to operate or was not able to generate electricity prior to
January 1, 2005.
(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).
(e) "Retail seller" means a "retail seller" as defined in Section
399.12 of the Public Utilities Code.
SEC. 6. Section 25742 of the Public Resources Code is amended to
read:
25742. (a) Twenty percent of the funds collected pursuant to the
renewable energy public goods charge shall be used for programs that
are designed to achieve fully competitive and self-sustaining
existing eligible renewable energy resources, and to secure for the
state the environmental, economic, and reliability benefits that
continued operation of those facilities will provide during the
2007-2011 investment cycle. Eligibility for production incentives
under this section shall be limited to those technologies found
eligible for funds by the commission pursuant to paragraphs (3), (4),
and (6) of subdivision (e) of Section 25740.5.
(b) Any funds used to support eligible renewable energy resources
pursuant to this section shall be expended in accordance with the
provisions of this chapter.
(c) 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 shall not receive
payments for any electricity produced that has any of the following
characteristics:
(1) Is sold at monthly average rates equal to, or greater than,
the applicable target price, as determined by the commission.
(2) Is used onsite.
(d) (1) Existing facilities generating electricity from biomass
energy shall be eligible for funding and otherwise considered an
eligible renewable energy resource only if they report to the
commission the types and quantities of biomass fuels used.
(2) The commission shall report the types and quantities of
biomass fuels used by each facility to the Legislature in the reports
prepared pursuant to Section 25748.
(e) Each existing facility seeking an award pursuant to this
section shall be evaluated by the commission to determine the amount
of the funds being sought, the cumulative amount of funds the
facility has received previously from the commission and other state
sources, the value of any past and current federal or state tax
credits, the facility's contract price for energy and capacity, the
prices received by similar facilities, the market value of the
facility, and the likelihood that the award will make the facility
competitive and self-sustaining within the 2007-2011 investment
cycle. The commission shall use this evaluation to determine the
value of an award to the public relative to other renewable energy
investment alternatives. The commission shall compile its findings
and report them to the Legislature in the reports prepared pursuant
to Section 25748.
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 shall be responsible for implementing and enforcing a
renewables portfolio standard that accomplishes all of the following:
(1) Procures at least 20 percent of the electricity delivered to
its retail customers from eligible renewable energy resources, as
defined in Section 952, by December 31, 2010.
(2) Procures at least 25 percent of the electricity delivered to
its retail customers from eligible renewable energy resources, as
defined in Section 952, by December 31, 2015.
(3) Procures at least 33 percent of the electricity delivered to
its retail customers from eligible renewable energy resources, as
defined in Section 952, by December 31, 2020.
(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, all of 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 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) This section shall remain in effect only until January 1,
2011, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2011, deletes or extends
that date.
SEC. 8. Section 399.23 is added to the Public Utilities Code, to
read:
399.23. This article shall remain in effect only until January 1,
2011, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2011, deletes or extends
that date.
SEC. 9. Section 454.5 of the Public Utilities Code is amended to
read:
454.5. (a) The commission shall specify the allocation of
electricity, including quantity, characteristics, and duration of
electricity delivery, that the Department of Water Resources shall
provide under its power purchase agreements to the customers of each
electrical corporation, which shall be reflected in the electrical
corporation's proposed procurement plan. Each electrical corporation
shall file a proposed procurement plan with the commission not later
than 60 days after the commission specifies the allocation of
electricity. The proposed procurement plan shall specify the date
that the electrical corporation intends to resume procurement of
electricity for its retail customers, consistent with its obligation
to serve. After the commission's adoption of a procurement plan, the
commission shall allow not less than 60 days before the electrical
corporation resumes procurement pursuant to this section.
(b) An electrical corporation's proposed procurement plan shall
include, but not be limited to, all of the following:
(1) An assessment of the price risk associated with the electrical
corporation's portfolio, including any utility-retained generation,
existing power purchase and exchange contracts, and proposed
contracts or purchases under which an electrical corporation will
procure electricity, electricity demand reductions, and
electricity-related products and the remaining open position to be
served by spot market transactions.
(2) A definition of each electricity product, electricity-related
product, and procurement related financial product, including support
and justification for the product type and amount to be procured
under the plan.
(3) The duration of the plan.
(4) The duration, timing, and range of quantities of each product
to be procured.
(5) A competitive procurement process under which the electrical
corporation may request bids for procurement-related services,
including the format and criteria of that procurement process.
(6) An incentive mechanism, if any incentive mechanism is
proposed, including the type of transactions to be covered by that
mechanism, their respective procurement benchmarks, and other
parameters needed to determine the sharing of risks and benefits.
(7) The upfront standards and criteria by which the acceptability
and eligibility for rate recovery of a proposed procurement
transaction will be known by the electrical corporation prior to
execution of the transaction. This shall include an expedited
approval process for the commission's review of proposed contracts
and subsequent approval or rejection thereof. The electrical
corporation shall propose alternative procurement choices in the
event a contract is rejected.
(8) Procedures for updating the procurement plan.
(9) A showing that the procurement plan will achieve the
following:
(A) 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 and goals pursuant to the renewables portfolio standard.
(B) The electrical corporation will create or maintain a
diversified procurement portfolio consisting of both short-term and
long-term electricity and electricity-related and demand reduction
products.
(C) The electrical corporation will first meet its unmet resource
needs through all available energy efficiency and demand reduction
resources that are cost effective, reliable, and feasible.
(10) The electrical corporation's risk management policy,
strategy, and practices, including specific measures of price
stability.
(11) A plan to achieve appropriate increases in diversity of
ownership and diversity of fuel supply of nonutility electrical
generation.
(12) A mechanism for recovery of reasonable administrative costs
related to procurement in the generation component of rates.
(c) The commission shall review and accept, modify, or reject each
electrical corporation's procurement plan. The commission's review
shall consider each electrical corporation's individual procurement
situation, and shall give strong consideration to that situation in
determining which one or more of the features set forth in this
subdivision shall apply to that electrical corporation. A procurement
plan approved by the commission shall contain one or more of the
following features, provided that the commission may not approve a
feature or mechanism for an electrical corporation if it finds that
the feature or mechanism would impair the restoration of an
electrical corporation's creditworthiness or would lead to a
deterioration of an electrical corporation's creditworthiness:
(1) A competitive procurement process under which the electrical
corporation may request bids for procurement-related services. The
commission shall specify the format of that procurement process, as
well as criteria to ensure that the auction process is open and
adequately subscribed. Any purchases made in compliance with the
commission-authorized process shall be recovered in the generation
component of rates.
(2) An incentive mechanism that establishes a procurement
benchmark or benchmarks and authorizes the electrical corporation to
procure from the market, subject to comparing the electrical
corporation's performance to the commission-authorized benchmark or
benchmarks. The incentive mechanism shall be clear, achievable, and
contain quantifiable objectives and standards. The incentive
mechanism shall contain balanced risk and reward incentives that
limit the risk and reward of an electrical corporation.
(3) Upfront achievable standards and criteria by which the
acceptability and eligibility for rate recovery of a proposed
procurement transaction will be known by the electrical corporation
prior to the execution of the bilateral contract for the transaction.
The commission shall provide for expedited review and either approve
or reject the individual contracts submitted by the electrical
corporation to ensure compliance with its procurement plan. To the
extent the commission rejects a proposed contract pursuant to this
criteria, the commission shall designate alternative procurement
choices obtained in the procurement plan that will be recoverable for
ratemaking purposes.
(d) A procurement plan approved by the commission shall accomplish
each of the following objectives:
(1) Enable the electrical corporation to fulfill its obligation to
serve its customers at just and reasonable rates.
(2) Eliminate the need for after-the-fact reasonableness reviews
of an electrical corporation's actions in compliance with an approved
procurement plan, including resulting electricity procurement
contracts, practices, and related expenses. However, the commission
may establish a regulatory process to verify and assure that each
contract was administered in accordance with the terms of the
contract, and contract disputes which may arise are reasonably
resolved.
(3) Ensure timely recovery of prospective procurement costs
incurred pursuant to an approved procurement plan. The commission
shall establish rates based on forecasts of procurement costs adopted
by the commission, actual procurement costs incurred, or combination
thereof, as determined by the commission. The commission shall
establish power procurement balancing accounts to track the
differences between recorded revenues and costs incurred pursuant to
an approved procurement plan. The commission shall review the power
procurement balancing accounts, not less than semiannually, and shall
adjust rates or order refunds, as necessary, to promptly amortize a
balancing account, according to a schedule determined by the
commission. Until January 1, 2006, the commission shall ensure that
any overcollection or undercollection in the power procurement
balancing account does not exceed 5 percent of the electrical
corporation's actual recorded generation revenues for the prior
calendar year excluding revenues collected for the Department of
Water Resources. The commission shall determine the schedule for
amortizing the overcollection or undercollection in the balancing
account to ensure that the 5 percent threshold is not exceeded. After
January 1, 2006, this adjustment shall occur when deemed appropriate
by the commission consistent with the objectives of this section.
(4) Moderate the price risk associated with serving its retail
customers, including the price risk embedded in its long-term supply
contracts, by authorizing an electrical corporation to enter into
financial and other electricity-related product contracts.
(5) Provide for just and reasonable rates, with an appropriate
balancing of price stability and price level in the electrical
corporation's procurement plan.
(e) The commission shall provide for the periodic review and
prospective modification of an electrical corporation's procurement
plan.
(f) The commission may engage an independent consultant or
advisory service to evaluate risk management and strategy. The
reasonable costs of any consultant or advisory service is a
reimbursable expense and eligible for funding pursuant to Section
631.
(g) The commission shall adopt appropriate procedures to ensure
the confidentiality of any market sensitive information submitted in
an electrical corporation's proposed procurement plan or resulting
from or related to its approved procurement plan, including, but not
limited to, proposed or executed power purchase agreements, data
request responses, or consultant reports, or any combination,
provided that the Division of Ratepayer Advocates and other consumer
groups that are nonmarket participants shall be provided access to
this information under confidentiality procedures authorized by the
commission.
(h) Nothing in this section alters, modifies, or amends the
commission's oversight of affiliate transactions under its rules and
decisions or the commission's existing authority to investigate and
penalize an electrical corporation's alleged fraudulent activities,
or to disallow costs incurred as a result of gross incompetence,
fraud, abuse, or similar grounds. Nothing in this section expands,
modifies, or limits the State Energy Resources Conservation and
Development Commission's existing authority and responsibilities as
set forth in Sections 25216, 25216.5, and 25323 of the Public
Resources Code.
(i) An electrical corporation that serves less than 500,000
electric retail customers within the state may file with the
commission a request for exemption from this section, which the
commission shall grant upon a showing of good cause.
(j) (1) Prior to its approval pursuant to Section 851 of any
divestiture of generation assets owned by an electrical corporation
on or after September 24, 2002, the commission shall determine the
impact of the proposed divestiture on the electrical corporation's
procurement rates and shall approve a divestiture only to the extent
it finds, taking into account the effect of the divestiture on
procurement rates, that the divestiture is in the public interest and
will result in net ratepayer benefits.
(2) Any electrical corporation's procurement necessitated as a
result of the divestiture of generation assets on or after September
24, 2002, shall be subject to the mechanisms and procedures set forth
in this section only if its actual cost is less than the recent
historical cost of the divested generation assets.
(3) Notwithstanding paragraph (2), the commission may deem
proposed procurement eligible to use the procedures in this section
upon its approval of asset divestiture pursuant to Section 851.
SEC. 10. Chapter 4.5 (commencing with Section 950) is added to
Part 1 of Division 1 of the Public Utilities Code, to read:
CHAPTER 4.5. CALIFORNIA RENEWABLES PORTFOLIO STANDARD PROGRAM
Article 1. General Provisions and Definitions
950. The Legislature finds and declares all of the following:
(a) California has plentiful and robust natural resources that it
has yet to utilize and from which it can derive a sustainable way of
life. At the same time, California faces challenges unlike those that
it has ever faced. At present, pollution in California's cities
threatens human health and despoils the natural beauty of the state.
Recent environmental trends portend a future of dramatic change to
the state's landscape, with effects on the state's species, habitats,
and population centers that are not yet fully understood.
(b) The California Renewables Portfolio Standard Program is
established to address those challenges and, with the instruments of
policy set forth in this chapter, seeks to accomplish the following
statewide policy objectives:
(1) Reducing emissions of greenhouse gases and California's
contribution to global warming.
(2) Reducing in-state consumption of nonrenewable fuels in order
to improve the public health and air quality throughout the state.
(3) Stimulating sustainable economic development, encouraging
innovation in energy technologies, and creating new employment
opportunities.
(4) Decreasing California's reliance on imported sources of
energy.
(5) Increasing fuel diversity and promoting greater stability and
predictability in electricity prices for consumers.
(c) In order to achieve the ambitious targets set forth in this
chapter, it will be necessary to facilitate investments in California'
s electrical transmission infrastructure to ensure system
reliability, relieve transmission congestion, and meet future growth
in load with eligible renewable energy resources.
(d) California must meet its renewable energy goals while
simultaneously ensuring that no interruptions in electrical service
occur because of intermittent renewable energy procurement and that
future growth in load can be met by procuring renewables long after
the goals of this renewables portfolio standard are met.
(e) It is the policy of this state and the intent of the
Legislature that the California Renewables Portfolio Standard Program
not adversely impact the ability of an electrical corporation to
pursue other measures recognized by the State Air Resources Board as
necessary to achieve the greenhouse gases emissions reduction targets
established by the California Global Warming Solutions Act of 2006.
952. For purposes of this chapter, the following terms have the
following meanings:
(a) "Conduit hydroelectric facility" means a facility for the
generation of electricity that uses only the hydroelectric potential
of an existing pipe, ditch, flume, siphon, tunnel, canal, or other
manmade conduit that is operated to distribute water for a beneficial
use and that meets the eligibility requirements of Section 953
and subdivision (c) of Section 954 .
(b) "Delivered" and "delivery," in reference to the electricity
generated by an eligible renewable energy resource, mean that the
electricity is used to serve end-use retail customers located within
the state or is simultaneously scheduled to meet anticipated in-state
load.
(c) "Eligible renewable energy resource" means an electric
generating facility that uses biomass, solar energy, 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, and that meets the general eligibility requirements of
Section 953 and, when applicable, the requirements for specific
renewable energy sources of Section 954.
(d) "Nondeliverable renewable energy resource" means an electric
generating facility that uses biomass, solar energy, wind,
geothermal, fuel cells using renewable fuels, small hydroelectric
generation of 30 megawatts or less, digester gas, landfill gas, ocean
wave, ocean thermal, or tidal current, and any additions or
enhancements to the facility using that technology, and that meets
the eligibility requirements of paragraphs (1), (3), (4), (5), and
(6) of, but does not meet the deliverability requirement of paragraph
(2) of, subdivision (b) of Section 953 and, when applicable, meets
the requirements for specific renewable energy sources of Section
954.
(e)
(d) "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 agreement. Nothing in this chapter 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 chapter.
(f)
(e) (1) "Renewable energy credit" means a certificate
of proof, issued through the accounting system established by the
Energy Commission pursuant to Section 975, that either one unit of
electricity was generated and delivered by an eligible renewable
energy resource or, subject to the limits established in
Section 980, one unit of electricity was generated by a
nondeliverable 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 or
nondeliverable 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.
(g)
(f) "Renewable generator" means the owner or operator
of an eligible renewable energy resource with the authority to
contract for the electricity generated by the facility.
(h)
(g) "Renewables portfolio standard" means the specified
percentage of electricity generated by eligible renewable energy
resources that a retail seller or local publicly owned electric
utility is required to procure pursuant to this chapter.
(i)
(h) (1) "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:
(A) An electrical corporation.
(B) 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.
(C) An electric service provider, as defined in Section 218.3. The
commission shall 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 chapter. 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.
(2) "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.
(j)
(i) "WECC" means the Western Electricity Coordinating
Council of the North American Electric Reliability Council
Corporation , or a successor entity to either
council corporation .
953. To be eligible for meeting the renewables portfolio
standard, an eligible renewable energy resource shall satisfy one of
the following requirements:
(a) The facility is located in the state, or near the border of
the state with its 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:
(1) It is connected to the transmission network within the WECC
service territory.
(2) Electricity produced by the facility is delivered to an
in-state location.
(3) It will not cause or contribute to any violation of a
California environmental quality standard or requirement.
(4) 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.
(5) 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 (a) of
Section 975.
(6) It commences initial commercial operation after January 1,
2005.
(c) The facility meets the requirements of paragraphs (1), (2),
(3), (4), and (5) in subdivision (b), but does not meet the
requirements of paragraph (6) because it commences initial operation
prior to January 1, 2005, if the facility satisfies either of the
following requirements:
(1) The electricity is from incremental generation resulting from
expansion or repowering of the facility.
(2) The facility has been part of the existing baseline of
eligible renewable energy resources of the retail seller or local
publicly owned electric utility.
954. (a) (1) Except as provided in paragraph (2), a hydroelectric
generation facility that is larger than 30 megawatts is not an
eligible renewable energy resource.
(2) The incremental increase in the amount of electricity
generated from a hydroelectric generation facility as a result of
efficiency improvements at the facility, is electricity from an
eligible renewable energy resource, without regard to the electrical
output of the facility, if all of the following conditions are met:
(A) The incremental increase is the result of efficiency
improvements from a retrofit that do not result in an adverse impact
on instream beneficial uses or cause a change in the volume or timing
of streamflow.
(B) The hydroelectric generation facility has, within the
immediately preceding 15 years, received certification from the State
Water Resources Control Board pursuant to Section 401 of the Clean
Water Act (33 U.S.C. Sec. 1341), or has received certification from a
regional board to which the state board has delegated authority to
issue certification, unless the facility is exempt from certification
because there is no potential for discharge into waters of the
United States.
(C) The hydroelectric generation facility was operational prior to
January 1, 2007, the efficiency improvements are initiated on or
after January 1, 2008, the efficiency improvements are not the result
of routine maintenance activities, as determined by the Energy
Commission, and the efficiency improvements were not included in any
resource plan sponsored by the facility owner prior to January 1,
2008.
(D) All of the incremental increase in electricity resulting from
the efficiency improvements are demonstrated to result from a
long-term financial commitment by the retail seller or local publicly
owned electric utility. For purposes of this paragraph, "long-term
financial commitment" means either new ownership investment in the
facility by the retail seller or local publicly owned electric
utility, or a new or renewed contract with a term of 10 or more
years, which includes procurement of the incremental generation.
(b) (1) Except for a conduit hydroelectric generation facility
operating pursuant to subdivision (c), a hydroelectric generation
facility of 30 megawatts or less that was in operation prior to
January 1, 2006, shall be eligible only if a retail seller or local
publicly owned electric utility procured the electricity from the
facility as of December 31, 2005.
(2) A hydroelectric generation facility of 30 megawatts or less
that becomes operational on or after January 1, 2006, is not eligible
if it will cause an adverse impact on instream beneficial uses or
cause a change in the volume or timing of streamflow.
(3) A small hydroelectric generation facility that satisfies the
criteria for an eligible renewable energy resource pursuant to this
subdivision shall not lose its eligibility if efficiency improvements
undertaken after January 1, 2008, cause the generating capacity of
the facility to exceed 30 megawatts, and the efficiency improvements
do not result in an adverse impact on instream beneficial uses or
cause a change in the volume or timing of streamflow. The entire
generating capacity of the facility shall be eligible.
(c) (1) A conduit hydroelectric facility of 30 megawatts or less
that commenced operation before January 1, 2006, is an eligible
renewable energy resource.
(2) A conduit hydroelectric generation facility of 30 megawatts or
less that becomes operational on or after January 1, 2006, is an
eligible renewable energy resource unless it will cause an adverse
impact on instream beneficial uses or cause a change in the volume or
timing of streamflow.
(d) A facility engaged in the combustion
conversion of municipal solid waste using a noncombustion
thermal process to convert solid waste to a clean-burning fuel for
the purpose of generating electricity is an eligible renewable energy
resource if either it is located in Stanislaus County and was
operational prior to September 26, 1996, or it meets all of the
following conditions:
(1) The technology does not use air or oxygen in the conversion
process, except ambient air to maintain temperature control.
(2) 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.
(3) The technology produces no discharges to surface or
groundwaters of the state.
(4) The technology produces no hazardous wastes.
(5) The technology removes all recyclable materials and marketable
green waste compostable materials from the solid waste stream prior
to the conversion process, to the maximum extent feasible, and the
owner or operator of the facility certifies that those materials will
be recycled or composted.
(6) The facility is in compliance with all applicable laws,
regulations, and ordinances.
(7) The technology meets any other conditions established by the
commission.
(8) 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.
955. This chapter shall become operative on January 1, 2011.
Article 2. Implementation of the Renewables Portfolio Standard
for Retail Sellers
960. In order to fulfill unmet long-term resource needs, the
commission shall establish a renewables portfolio standard requiring
each retail seller to increase its procurement of eligible renewable
energy resources to accomplish all of the following:
(a) Procure at least 20 percent of the electricity delivered to
its retail customers from eligible renewable energy resources.
(b) Procure at least 25 percent of the electricity delivered to
its retail customers from eligible renewable energy resources by
December 31, 2015.
(c) Procure at least 33 percent of the electricity delivered to
its retail customers from eligible renewable energy resources by
December 31, 2020.
962. (a) The commission shall direct each electrical corporation
to prepare a renewable energy procurement plan to satisfy its
procurement requirements under the renewables portfolio standard. The
renewable energy procurement plan shall, to the extent feasible, be
proposed, reviewed, and adopted by the commission as part of, and
pursuant to, a general procurement plan process pursuant to Section
454.5. The commission shall require each electrical corporation to
review and update its renewable energy procurement plan as it
determines to be necessary.
(b) (1) The renewable energy procurement plan shall include a
process that provides criteria for the rank ordering and selection of
eligible renewable energy resources to comply with the renewables
portfolio standard procurement requirement so that each electrical
corporation's total renewables portfolio benefits ratepayers. 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. This process shall also consider the viability of the
eligible renewable energy resource, including the developer's
experience, the feasibility of the technology used to generate
electricity, and the risk that the facility will not be built, or
construction will be delayed, with the result that electricity will
not be delivered as required by the contract.
(2) 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.
(D) An analysis of the risk that the eligible renewable energy
resource will not be built, or that construction will be delayed,
with the result that electricity will not be delivered as required by
the contract.
(c) As part of its procurement plan bid solicitation, each
electrical corporation shall offer standard terms and conditions to
be used in contracting with renewable generators 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 of the contract 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 chapter,
the following information about the agreement shall be disclosed by
the commission: the names of the contracting parties, the renewable
energy resource type, the project location, and the generating
capacity of the project.
(d) (1) In soliciting and procuring eligible renewable energy
resources, each electrical corporation shall offer contracts of no
less than 10 years' duration, unless the commission approves of a
contract of shorter duration.
(2) The commission may authorize a retail seller to enter into a
contract of less than 10 years' duration with a renewable generator
for the electricity generated by an eligible renewable energy
resource, if the commission has established, for each retail seller,
minimum quantities of eligible renewable energy resources to be
procured either through contracts of at least 10 years' duration or
from new facilities commencing commercial operations on or after
January 1, 2005.
(e) 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 chapter by
an electrical corporation.
(f) The commission shall review the results of a solicitation for
eligible renewable energy resources submitted for approval by an
electrical corporation and accept or reject proposed contracts with
the renewable generator 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
among the bidders, the commission shall direct the electrical
corporation to renegotiate the contracts or conduct a new
solicitation.
(g) (1) The commission shall provide preference to contracts for
renewable energy resources that are from a California supplier.
(2) For purposes of this paragraph, "California supplier" means
any sole proprietorship, partnership, joint venture, corporation, or
other business entity that manufactures eligible renewable energy
resources in California that are supplied to the renewable generator
and that meets either of the following criteria:
(A) The owners or policymaking officers are domiciled in
California and the permanent principal office, or place of business
from which the supplier's trade is directed or managed, is located in
California.
(B) A business or corporation, including those owned by, or under
common control of, a corporation, that meets all of the following
criteria continuously during the five years prior to providing
eligible renewable energy resources to a renewable generator:
(i) Owns and operates a manufacturing facility located in
California that builds or manufactures eligible renewable energy
resources.
(ii) Is licensed by the state to conduct business within the
state.
(iii) Employs California residents for work within the state.
(3) For purposes of qualifying as a California supplier, a
distribution or sales management office or facility does not qualify
as a manufacturing facility.
(h) Procurement and administrative costs associated with long-term
contracts entered into by an electrical corporation for eligible
renewable energy resources pursuant to this chapter and approved by
the commission shall be deemed reasonable per se by the commission,
and shall be recoverable in rates.
(i) (1) 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 retail seller that is not an electrical corporation that
fails to meet renewables procurement requirements pursuant to Section
960.
(2) Notwithstanding paragraph (1), if the commission determines
that a retail seller has made a commercially reasonable effort to
procure eligible renewable energy resources in an amount sufficient
to meet its renewables portfolio standard procurement requirements,
the commission may waive penalties for the retail seller's failure to
procure at least 20 percent of the electricity delivered to its
retail customers from eligible renewable energy resources by December
31, 2010.
963. (a) (1) The commission shall, by January 1, 2011, and
annually thereafter, establish and adopt a benchmark price for
electricity generated by an eligible renewable energy resource, for
terms corresponding to the length of contracts with renewable
generators, in consideration of the following:
(A) The long-term market price of electricity for all fixed-price
contracts determined pursuant to an electrical corporation's general
procurement activities as authorized by the commission.
(B) The value of different deliverability characteristics for
electricity, including baseload, peaking, dispatchable, firm, and
as-available electricity.
(C) The value of the carbon reductions from the eligible renewable
energy resources and the value of any other emissions reductions
that are not already accounted for pursuant to Section 40709 of the
Health and Safety Code.
(2) The benchmark price shall not include any indirect expenses,
including imbalance energy charges, sale of excess energy, decreased
generation from existing resources, or transmission upgrades.
(b) The commission shall, by January 1, 2011, for each electrical
corporation, establish a limitation on the total costs expended above
the benchmark prices determined in subdivision (a) for the
procurement of eligible renewable energy resources to achieve the
annual procurement targets established pursuant to
this article. The cost limitation shall not exceed ____
5 percent of the electrical corporation's
revenue requirement.
(c) If the cost limitation established by the commission for an
electrical corporation pursuant to subdivision (b) is insufficient to
support the total costs expended above the benchmark prices
determined pursuant to subdivision (a) for the procurement of
eligible renewable energy resources, the commission shall allow the
electrical corporation and other retail sellers to limit
their to limit its procurement to the quantity
of eligible renewable energy resources that can be procured at or
below the benchmark prices.
(d) An electrical corporation may voluntarily propose to procure
eligible renewable energy resources at above the benchmark price that
are not counted toward the cost limitation. Any voluntary
procurement above the benchmark price shall be subject to commission
approval prior to the expense being recovered in rates.
964. (a) The commission may authorize a procurement entity to
enter into contracts on behalf of customers of a retail seller for
electricity generated by eligible renewable energy resources to meet
the retail seller's renewables portfolio standard procurement
requirements. The commission may not require any person or
corporation to act as a procurement entity or require any party to
purchase electricity generated by eligible renewable energy resources
from a procurement entity.
(b) The procurement entity shall, subject to review and approval
by the commission, recover reasonable administrative and procurement
costs through the retail rates of end-use customers that are served
by the procurement entity and are directly benefiting from the
procurement of electricity generated by eligible renewable energy
resources.
965. Construction, alteration, demolition, installation, and
repair work on an eligible renewable energy resource that receives
production incentives pursuant to Section 25742 of the Public
Resources Code, including work performed to qualify, receive, or
maintain production incentives is "public works" for the purposes of
Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of
the Labor Code.
Article 3. Implementation of the Renewables Portfolio Standard
for Local Publicly Owned Electric Utilities
970. (a) In order to fulfill unmet long-term resource needs, each
governing body of a local publicly owned electric utility shall be
responsible for implementing and enforcing a renewables portfolio
standard that accomplishes all of the following:
(1) Procures at least 20 percent of the electricity delivered to
its retail customers from eligible renewable energy resources.
(2) Procures at least 25 percent of the electricity delivered to
its retail customers from eligible renewable energy resources by
December 31, 2015.
(3) Procures at least 33 percent of the electricity delivered to
its retail customers from eligible renewable energy resources by
December 31, 2020.
(b) The governing board of the local publicly owned electric
utility shall adopt a program for the enforcement of this article on
or before January 1, 2011. The program shall be adopted at a publicly
noticed meeting offering all interested parties an opportunity to
comment. Not less than 30 days' notice shall be given to the public
of any meeting held for purposes of adopting the program. Not less
than 10 days' notice shall be given to the public before any meeting
is held to make a substantive change to the program.
(c) A local publicly owned electric utility shall retain
discretion over the manner employed by the utility to meet the
renewables portfolio standard established pursuant to this section.
The discretionary authority of a local publicly owned electric
utility includes, but is not limited to, all of the following:
(1) The mix of eligible renewable energy resources procured or
owned by the utility and those additional generation resources
procured or owned by the utility for purposes of ensuring resource
adequacy and reliability.
(2) The prices paid by the utility for electricity generated by
eligible renewable energy resources.
(3) The reasonable costs incurred by the utility for renewable
energy resources owned by the utility.
(d) (1) Each local publicly owned electric utility shall annually
post notice, in accordance with Chapter 9 (commencing with Section
54950) of Part 1 of Division 2 of Title 5 of the Government Code,
whenever its governing body will deliberate in public on its
renewable energy resources procurement plan.
(2) Contemporaneous with the posting of the notice of a public
meeting to consider the renewable energy resources procurement plan,
the local publicly owned electric utility shall notify the Energy
Commission of the date, time, and location of the meeting in order to
enable the Energy Commission to post the information on its Internet
Web site. This requirement is satisfied if the local publicly owned
electric utility provides the uniform resource locator (URL) that
links to this information.
(3) Upon distribution to its governing body of information related
to its renewable energy resources procurement status and future
plans, for its consideration at a noticed public meeting, the local
publicly owned electric utility shall make that information available
to the public and shall provide the Energy Commission with an
electronic copy of the
documents for posting on the Energy Commission's Internet Web site.
This requirement is satisfied if the local publicly owned electric
utility provides the uniform resource locator (URL) that links to the
documents or information regarding other manners of access to the
documents.
(e) Within 30 business days after a local publicly owned electric
utility executes a renewable energy resources procurement contract,
the local publicly owned electric utility shall submit, to the Energy
Commission, documentation that includes all of the following:
(1) A description of the eligible renewable energy resource,
including the duration of the contract or electricity purchase
agreement.
(2) A description and identification of the electric generating
facility providing the eligible renewable energy resource under the
contract.
(3) An estimate of the percentage increase in the utility's total
retail sales of electricity from eligible renewable energy resources
that will result from the contract.
(f) A local publicly owned electric utility may use renewable
energy credits to meet its renewables portfolio standard procurement
requirements to the same extent and under the same circumstances as a
retail seller is authorized to use renewable energy credits to meet
the retail seller's renewables portfolio standard procurement
requirements.
(g) Each local publicly owned electric utility shall report, on an
annual basis, to its customers and to the Energy 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 energy source.
(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.
(h) Upon a determination by the Energy Commission that a local
publicly owned electric utility has failed to comply with this
article, the State Air Resources Board may impose penalties pursuant
to Part 6 (commencing with Section 38580) of Division 25.5 of the
Health and Safety Code.
Article 4. Duties of the Energy Commission in Implementing the
Renewables Portfolio Standard
975. (a) The Energy Commission shall do all of the following:
(1) Design and implement an accounting system to verify compliance
with the renewables portfolio standard by retail sellers and
local publicly owned electric utilities , to ensure that
electricity generated by an eligible renewable energy resource is
counted only once for the purpose of compliance with regulatory or
legal requirements of this state or any other state, for verifying
retail product claims in this state or any other state or to certify
renewable energy credits. 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.
(2) Certify eligible renewable energy resources that it determines
meet the criteria described in subdivision (c) of Section 952, the
requirements of Section 953, and when applicable, the requirements of
Section 954.
(3) 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 WECC in the
development of this system. 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.
(b) The Energy Commission may, as part of the integrated energy
policy report adopted pursuant to Chapter 4 (commencing with Section
25300) of Division 15 of the Public Resources Code, recommend
additional technologies and resources to be included in the
definition of an eligible renewable energy resource for purposes of
this chapter.
Article 5. Renewable Energy Credits
980. (a) Subject to the conditions of this article, a retail
seller or local publicly owned electric utility may use renewable
energy credits from eligible renewable energy resources or
nondeliverable renewable energy resources, that are
certified by the Energy Commission pursuant to Article 4, to comply
with the renewables portfolio standard procurement requirements.
(b) A retail seller or local publicly owned electric utility may
meet up to 10 percent of its renewables portfolio standard
procurement requirements with renewable energy credits from
nondeliverable renewable energy resources that are certified by the
Energy Commission pursuant to Article 4.
(c)
(b) No retail seller or local publicly owned electric
utility shall use renewable energy credits to comply with the
renewables portfolio standard procurement requirements pursuant to
subdivision (a) or (b) until the commission and the Energy Commission
find that the tracking system established pursuant to paragraph (3)
of subdivision (a) of Section 975, is operational, is capable of
independently verifying the electricity generated by an eligible
renewable energy resource, and can ensure that renewable energy
credits shall not be double counted for the purposes of compliance
with regulatory or legal requirements of this state or any other
state, or for verifying retail product claims in this state or any
other state.
(d)
(c) A renewable energy credit shall be counted only
once for the purposes of compliance with regulatory or legal
requirements of this state or any other state, or for verifying
retail product claims in this state or any other state, except that a
renewable energy credit may be used by a retail seller or local
publicly owned electric utility for both compliance with any federal
renewable energy portfolio requirement and for compliance with the
renewables portfolio standard pursuant to this chapter.
(e)
(d) A renewable energy credit shall either be used for
purposes of compliance with regulatory or legal requirements of this
state or any other state, or shall expire within 18 months of the
date of purchase by the retail seller or local publicly owned
utility.
(f)
(e) No renewable energy credits shall be created for
electricity generated pursuant to any electricity purchase contract
with a retail seller or a local publicly owned electric utility
executed before January 1, 2005, unless the contract contains
explicit terms and conditions specifying the ownership or disposition
of those credits. Deliveries under those contracts shall be tracked
through the accounting system described in paragraph (3) of
subdivision (a) of Section 975 and included in the baseline quantity
of eligible renewable energy resources of a purchasing retail seller
pursuant to Article 2, or a local publicly owned electric utility
pursuant to Article 3.
(g)
(f) No renewable energy credits shall be created for
electricity generated under any electricity purchase contract with a
qualifying facility executed after January 1, 2005, pursuant to the
federal Public Utility Regulatory Policies Act of 1978 (Public Law
95-617). Deliveries under the electricity purchase contracts shall be
tracked through the accounting system described in paragraph (3) of
subdivision (a) of Section 975 and count toward the renewables
portfolio standard procurement requirements of the purchasing retail
seller or local publicly owned electric utility.
(h)
(g) The commission shall allow an electrical
corporation to recover in rates the reasonable costs of purchasing
renewable energy credits to meet its renewables portfolio standard
procurement requirements.
(i)
(h) All revenues received by an electrical corporation
for the sale of a renewable energy credit shall be credited to the
benefit of ratepayers.
Article 6. Small-Scale Renewable Distributed Generation
Facilities
985. The Legislature finds and declares all of the following:
(a) The state should encourage the reduction of electricity demand
at customer sites and increase generating capacity in order to meet
the demand for electricity.
(b) Some tariff structures and regulatory structures are
presenting a barrier to meeting the requirements and goals of this
chapter.
(c) Small projects of less than five megawatts that are otherwise
eligible renewable energy resources may face difficulties in
participating in competitive solicitations under the California
Renewables Portfolio Standard Program (Chapter 8.6 (commencing with
Section 25740) of Division 15 of the Public Resources Code).
(d) A tariff that allows customers of electrical corporations and
local publicly owned electric utilities to sell electricity generated
by renewable technologies would address these barriers and could
assist in the achievement of the renewables portfolio standard and
the state's goals for reducing emissions of greenhouse gases pursuant
to the California Global Warming Solutions Act of 2006 (Division
25.5 (commencing with Section 38500) of the Health and Safety Code).
(e) A tariff for electricity generated by renewable technologies
should recognize the environmental attributes of the renewable
technology, the characteristics that contribute to peak electricity
demand reduction, reduced transmission congestion, avoided
transmission and distribution improvements, and in a manner that
accelerates the deployment of renewable energy resources.
(f) It is the policy of this state and the intent of the
Legislature to encourage the distributed generation of electricity
from small-scale eligible renewable energy resources at the sites
where the electricity will be utilized.
986. As used in this article, "small-scale renewable distributed
generation facility" means an electric generation facility, owned,
leased, or rented by a retail customer of a retail seller or local
publicly owned electric utility, that meets all of the following
criteria:
(a) Has an effective capacity of not more than five megawatts and
is located on property owned or under the control of the customer.
Premises that are leased by the customer are under the control of the
customer for purposes of this requirement. It is not required that
the customer own the electric generation facility.
(b) Is interconnected and operates in parallel with the electric
transmission and distribution grid.
(c) Is strategically located and interconnected to the electric
transmission system in a manner that optimizes the deliverability of
electricity generated at the facility to load centers.
(d) Is an eligible renewable energy resource.
987. (a) Every electrical corporation shall file with the
commission a standard tariff for electricity purchased from an
electric generation facility.
(b) The tariff shall provide for a base payment rate for every
kilowatthour of electricity purchased from a small-scale renewable
distributed generation facility at the benchmark price as determined
by the commission pursuant to Section 963 for a period of 10, 15, or
20 years, as authorized by the commission. The commission may adjust
the payment rate to reflect the value of every kilowatthour of
electricity generated on a time-of-delivery basis and any other
attributes of renewable generation. The commission shall ensure that
ratepayers that do not receive service pursuant to the tariff are
indifferent, with respect to rates and charges, to whether a
ratepayer with a small-scale renewable distributed generation
facility receives service pursuant to the tariff.
(c) Every electrical corporation shall make this tariff available
to customers that own, lease, or rent a small-scale renewable
distributed generation facility within the service territory of the
electrical corporation, upon request, on a first-come-first-served
basis, until the combined statewide cumulative rated generating
capacity of those facilities reaches 500 megawatts. An electrical
corporation may make the terms of the tariff available to customers
in the form of a standard contract subject to commission approval.
Each electrical corporation shall only be required to offer service
or contracts under this section until that electrical corporation
meets its proportionate share of the 500 megawatts based on the ratio
of its peak demand to the total statewide peak demand.
(d) Every kilowatthour of electricity purchased from the electric
generation facility shall count toward the electrical corporation's
renewables portfolio standard annual procurement targets for purposes
of this chapter.
(e) The electricity generated by a small-scale renewable
distributed generation facility, consistent with Section 380, shall
count toward the electrical corporation's resource adequacy
requirement.
(f) (1) The commission, in consultation with the Independent
System Operator, shall monitor and examine the impact on the
transmission and distribution grid and any effects upon ratepayers
resulting from small-scale renewable distributed generation
facilities operating pursuant to a tariff or contract approved by the
commission pursuant to this section.
(2) The commission shall establish performance standards for any
small-scale renewable distributed generation facility that has a
capacity greater than one megawatt to ensure that those facilities
are constructed, operated, and maintained to generate the expected
annual net production of electricity and do not impact system
reliability.
(g) (1) The commission may modify or adjust the requirements of
this section for any electrical corporation with less than 100,000
service connections, as individual circumstances merit.
(2) The commission may reduce the five megawatt capacity
limitation of subdivision (a) of Section 986, if the commission finds
that a reduced capacity limitation is necessary to maintain system
reliability within that electrical corporation's service territory.
(h) (1) A customer electing to receive service under a tariff or
contract approved by the commission shall continue to receive service
under the tariff or contract until either of the following occurs:
(A) The customer no longer meets the eligibility requirements for
receiving service pursuant to the tariff or contract.
(B) The period of service established by the commission pursuant
to subdivision (b) is completed.
(2) Upon completion of the period of service established by the
commission pursuant to subdivision (b), the customer may elect to
renew receiving service pursuant to the tariff or contract approved
by the commission for the period of time then established by the
commission, or may elect to receive service under another then
applicable tariff.
988. (a) A local publicly owned electric utility that sells
electricity at retail to 75,000 or more customers shall adopt a
standard tariff for electricity purchased from a small-scale
renewable distributed generation facility.
(b) The governing board of the local publicly owned electric
utility shall ensure that the tariff adopted pursuant to subdivision
(b) reflects the value of every kilowatthour of electricity generated
on a time-of-delivery basis. The governing board may adjust this
value based on the other attributes of renewable generation. The
governing board shall ensure that ratepayers that do not receive
service pursuant to the tariff are indifferent, with respect to rates
and charges, to whether a ratepayer with a small-scale renewable
distributed generation facility receives service pursuant to the
tariff.
(c) A local publicly owned electric utility that sells electricity
at retail to 75,000 or more customers shall make the tariff
available to customers that own, lease, or rent a small-scale
renewable distributed generation facility within the service
territory of the utility, upon request, on a first-come-first-served
basis, until the combined statewide cumulative rated generating
capacity of those facilities reaches 250 megawatts. A local publicly
owned electric utility may make the terms of the tariff available to
customers in the form of a standard contract. A local publicly owned
electric utility is only required to offer service or contracts under
this section until the utility meets its proportionate share of the
250 megawatts based on the ratio of its peak demand to the total
statewide peak demand.
(d) Every kilowatthour of electricity purchased from a small-scale
renewable distributed generation facility shall count toward the
local publicly owned electric utility's renewables portfolio standard
procurement requirements for purposes of this chapter.
(e) A local publicly owned electric utility may establish
performance standards for any small-scale renewable distributed
generation facility that has a capacity greater than one megawatt to
ensure that those facilities are constructed, operated, and
maintained to generate the expected annual net production of
electricity and do not impact system reliability.
(f) A local publicly owned electric utility may reduce the five
megawatt capacity limitation of subdivision (a) of Section 986, if
the utility finds that a reduced capacity limitation is necessary.
Article 7. 6. Renewables
Infrastructure Authority
990. (a) The Legislature finds and declares that in order to
furnish the citizens of California with a reliable and affordable
supply of electricity that integrates electricity generated from
eligible renewable energy resources consistent with the renewables
portfolio standard, and to protect the public health, welfare, and
safety, the state needs to finance, purchase, lease, own, operate,
acquire, or otherwise provide financial assistance for public and
private facilities for the generation and transmission of electricity
generated from eligible renewable energy resources.
(b) As used in this article, the following terms have the
following meanings:
(1) "Authority" means the Renewables Infrastructure Authority
established pursuant to Section 991 and any board, commission,
department, or officer succeeding to the functions thereof, or to
whom the powers conferred upon the authority by this article shall be
given by law.
(2) "Board" means the Board of Directors of the Renewables
Infrastructure Authority.
(3) "Bond purchase agreement" means a contractual agreement
executed between the authority and an underwriter or underwriters
and, where appropriate, a participating party, whereby the authority
agrees to sell bonds issued pursuant to this article.
(4) "Bonds" means bonds, including structured, senior, and
subordinated bonds or other securities; loans; notes, including bond
revenue or grant anticipation notes; certificates of indebtedness;
commercial paper; floating rate and variable maturity securities; and
any other evidences of indebtedness or ownership, including
certificates of participation or beneficial interest, asset backed
certificates, or lease-purchase or installment purchase agreements,
whether taxable or excludable from gross income for state and federal
income taxation purposes.
(5) "Cost," as applied to a program, project, or portion thereof
financed under this article, means all or any part of the cost of
construction, improvement, repair, reconstruction, renovation, and
acquisition of all lands, structures, improved or unimproved real or
personal property, rights, rights-of-way, franchises, licenses,
easements, and interests acquired or used for a project; the cost of
demolishing or removing or relocating any buildings or structures on
land so acquired, including the cost of acquiring any lands to which
the buildings or structures may be moved; the cost of all machinery
and equipment; financing charges; the costs of any environmental
mitigation; the costs of issuance of bonds or other indebtedness;
interest prior to, during, and for a period after, completion of the
project, as determined by the authority; provisions for working
capital; reserves for principal and interest; reserves for reduction
of costs for loans or other financial assistance; reserves for
maintenance, extension, enlargements, additions, replacements,
renovations, and improvements; and the cost of architectural,
engineering, financial, appraisal, and legal services, plans,
specifications, estimates, administrative expenses, and other
expenses necessary or incidental to determining the feasibility of
any project, enterprise, or program or incidental to the completion
or financing of any project or program.
(6) "Electric transmission line" means any electrical powerline
carrying electricity from a powerplant or renewable energy
designation zone located within the state to a point of junction with
any interconnected transmission system. Electric transmission line
may include any high-voltage electric transmission line pursuant to
Section 25330 of the Public Resources Code, and any replacement on
the site of existing electrical powerlines with electrical powerlines
equivalent to those existing electrical powerlines or the placement
of new or additional conductors, insulators, or accessories related
to those electrical powerlines on supporting structures in existence
on January 1, 2010, or certified pursuant to this article. Electric
transmission line may also include a remote resource interconnection
line to accommodate proposed location-constrained generation in a
designated renewable energy designation zone.
(7) "Enterprise" means a revenue-producing improvement, building,
system, plant, works, facilities, or undertaking used for or useful
for the generation or production of electricity for lighting,
heating, and power for public or private uses. Enterprise includes,
but is not limited to, all parts of the enterprise, all appurtenances
to it, lands, easements, rights in land, water rights, contract
rights, franchises, buildings, structures, improvements, equipment,
and facilities appurtenant or relating to the enterprise.
(8) "Feasible" means capable of being accomplished in a successful
manner within a reasonable period of time, taking into account
economic, environmental, social, and technological factors.
(9) "Financial assistance" in connection with a project,
enterprise or program, includes, but is not limited to, any
combination of grants, loans, the proceeds of bonds issued by the
authority, insurance, guarantees or other credit enhancements or
liquidity facilities, and contributions of money, property, labor, or
other things of value, as may be approved by resolution of the
board; the purchase or retention of authority bonds, the bonds of a
participating party for their retention or for sale by the authority,
or the issuance of authority bonds or the bonds of a special purpose
trust used to fund the cost of a project or program for which a
participating party is directly or indirectly liable, including, but
not limited to, bonds, the security for which is provided in whole or
in part pursuant to the powers granted by this division; bonds for
which the authority has provided a guarantee or enhancement; or any
other type of assistance determined to be appropriate by the
authority.
(10) "Fund" means the Renewables Infrastructure Authority Fund
created pursuant to Section 995.
(11) "Loan agreement" means a contractual agreement executed
between the authority and a participating party that provides that
the authority will loan funds to the participating party and that the
participating party will repay the principal and pay the interest
and redemption premium, if any, on the loan.
(12) "Participating party" means either of the following:
(A) Any person, company, corporation, partnership, firm, federally
recognized California Indian tribe, or other entity or group of
entities, whether organized for profit or not for profit, engaged in
business or operations within the state and that applies for
financial assistance from the authority for the purpose of
implementing a project or program in a manner prescribed by the
authority.
(B) Any subdivision of the state or local government, including,
but not limited to, departments, agencies, commissions, cities,
counties, nonprofit corporations, special districts, assessment
districts, and joint powers authorities within the state or any
combination of these subdivisions, that has, or proposes to acquire,
an interest in a project, or that operates or proposes to operate a
program and that makes application to the authority for financial
assistance in a manner prescribed by the authority.
(13) "Program" means a loan
program that provides financial assistance to a participating party
to use for the purchase or lease of eligible renewable energy
resources.
(14) "Project" means plants, facilities, equipment, appliances,
structures, expansions, and improvements within the state that serve
the purposes of this article as approved by the authority, and all
activities and expenses necessary to initiate and complete those
projects.
(15) "Renewable energy designation zone" means the geographic area
necessary to accommodate the construction and operation of one or
more powerplants or other form of generation that operate using an
"eligible renewable energy resource" as defined in Section 952 and
where the backup fuel, such as oil and natural gas, does not, in the
aggregate, exceed 10 percent of the total energy output of the
facility during any calendar year period. A renewable energy
designation zone shall accommodate existing land uses and land uses
identified in local, general, or specific plans, and avoid
environmental constraints or mitigate potential environmental
impacts.
(16) "Revenues" means all receipts, purchase payments, loan
repayments, lease payments, rents, fees and charges, and all other
income or receipts derived by the authority from an enterprise, or by
the authority or a participating party from any other financing
arrangement undertaken by the authority or a participating party,
including, but not limited to, all receipts from a bond purchase
agreement, and any income or revenue derived from the investment of
any money in any fund or account of the authority or a participating
party.
(17) "State" means the State of California.
(18) "Transmission corridor zone" means the geographic area
necessary to accommodate the construction and operation of one or
more high-voltage electric transmission lines. A transmission
corridor zone shall not be more than 1,500 feet in width unless
required to accommodate existing land uses and land uses identified
in local, general, or specific plans, or to avoid environmental
constraints or mitigate potential environmental impacts.
(c) Any action taken pursuant to this division is exempt from the
Administrative Procedure Act, as defined in Section 11370 of the
Government Code.
991. (a) There is hereby created in the state government the
Renewables Infrastructure Authority, which shall be responsible for
administering this article. The authority shall implement the
purposes of this chapter and to that end, finance projects and
programs in pursuant to this article, all to the mutual benefit of
the people of the state and to protect their health, welfare, and
safety.
(b) The authority shall be governed by a nine-member board of
directors that shall consist of the following persons:
(1) The Secretary for Resources.
(2) Secretary for Environmental Protection.
(3) Chair of the Energy Commission.
(4) President of the commission.
(5) A member of the public appointed by the Governor and subject
to confirmation by the Senate. This member shall have considerable
experience in power generation, natural gas transportation or
storage, energy conservation, financing, or ratepayer advocacy.
(6) The State Treasurer.
(7) The president of the Independent System Operator governing
board.
(8) A designee of the Senate Pro Tem, who shall be a nonvoting
member.
(9) A designee of the Speaker of the Assembly, who shall be a
nonvoting member.
(c) A quorum is necessary for any action to be taken by the board.
Five of the members shall constitute a quorum, and the affirmative
vote of four board members shall be necessary for any action to be
taken by the board.
(d) (1) The chairperson of the board shall be appointed by the
Governor.
(2) Except as provided in this subdivision, the members of the
board shall serve without compensation, but shall be reimbursed for
actual and necessary expenses incurred in the performance of their
duties to the extent that reimbursement for these expenses is not
otherwise provided or payable by another public agency, and shall
receive one hundred dollars ($100) for each full day of attending
meetings of the authority.
991.1. (a) The authority is authorized and empowered to do any of
the following:
(1) Adopt an official seal.
(2) Sue and be sued in its own name.
(3) Employ or contract with officers and employees to administer
the authority. The authority may contract for the services of a chief
executive officer, who shall serve at the pleasure of the board. If
the chief executive officer contracts for the services of any other
officer or employee, the contract shall be subject to the approval of
the board.
(4) Exercise the power of eminent domain.
(5) Adopt rules and regulations for the regulation of its affairs
and the conduct of its business.
(6) Do all things generally necessary or convenient to carry out
its powers and purposes under this article.
(b) The chief executive officer shall manage and conduct the
business and affairs of the authority and the fund subject to the
direction of the board. Except as otherwise provided in this section,
the board may assign to the executive director, by resolution, those
duties generally necessary or convenient to carry out its powers and
purposes under this article. The chief executive office may
designate a liaison to the federal government to facilitate, when
necessary, the implementation of its powers and duties. Any action
involving final approval of any bonds, notes, loans, or other
financial assistance shall require the approval of a majority of the
members of the board.
991.2. (a) The authority's operating budget shall be subject to
review and appropriation in the annual Budget Act. For purposes of
this section, the authority's operating budget shall include the
costs of personnel, administration, and overhead.
(b) The authority shall, on or before January 1 of each year,
prepare and submit to the Governor, the Chairperson of the Joint
Legislative Budget Committee, and the chairperson of the committee in
each house that considers appropriations, a report regarding its
activities and expenditures pursuant to this article.
(c) The Bureau of State Audits shall perform an evaluation of the
effectiveness of the authority's efforts in achieving its purposes as
described in Section 991.3. The evaluation shall include
recommendations as to whether there is a continued need for the
authority beyond January 1, 2016. The evaluation shall be submitted
to the Governor and the Legislature on or before January 1, 2014.
991.3. The authority may only exercise its powers pursuant to
this article for the following purposes:
(a) Establish, finance, purchase, lease, own, operate, acquire, or
construct generating facilities that are eligible renewable energy
resources and other projects and enterprises to facilitate the state'
s renewable energy goals, on its own or through agreements with
public and private third parties or joint ventures with public or
private entities, or provide financial assistance for projects or
programs by participating parties, to supplement private and public
sector supplies of electricity, taking into account generation
facilities in operation or under development as of the effective date
of this section, and to ensure a sufficient and reliable supply of
electricity for California's consumers at just and reasonable rates.
(b) Finance programs, administered by the Energy Commission, the
commission, and other approved participating parties for consumers
and businesses to invest in cost-effective energy efficient
appliances, eligible renewable energy resources, and other programs
that will reduce the demand for energy in California or meet that
demand through generation from eligible renewable energy resources.
(c) Achieve an adequate energy reserve capacity in California.
(d) Provide financing for owners of aged, inefficient, eligible
renewable energy resources to perform necessary retrofits to improve
the efficiency and environmental performance of those resources.
991.4. The authority may enter into any agreement or contract,
execute any instrument, and perform any act or thing necessary or
convenient to, directly or indirectly, secure the authority's bonds
or a participating party's obligations to the authority, including,
but not limited to, bonds of a participating party purchased by the
authority for retention or sale, with funds or moneys that are
legally available and that are due or payable to the participating
party by reason of any grant, allocation, apportionment, or
appropriation of the state or agencies thereof, to the extent that
the Controller shall be the custodian at any time of these funds or
moneys, or with funds or moneys that are or will be legally available
to the participating party, the authority, or the state or any
agencies thereof by reason of any grant, allocation, apportionment,
or appropriation of the federal government or agencies thereof; and
in the event of written notice that the participating party has not
paid or is in default on its obligations to the authority, direct the
Controller to withhold payment of those funds or moneys from the
participating party over which it is or will be custodian and to pay
the same to the authority or its assignee, or direct the state or any
agencies thereof to which any grant, allocation, apportionment, or
appropriation of the federal government or agencies thereof is or
will be legally available to pay the same upon receipt to the
authority or its assignee, until the default has been cured and the
amounts then due and unpaid have been paid to the authority or its
assignee, or until arrangements satisfactory to the authority have
been made to cure the default.
991.5. (a) The fiscal powers granted to the authority by this
article may be exercised without regard or reference to any other
department, division, or agency of the state, except the Legislature
or as otherwise stated in this article. This article shall be deemed
to provide an alternative method of doing the things authorized by
this article, and shall be regarded as supplemental and additional to
powers conferred by other laws.
(b) No member of the board or any person executing bonds of the
authority pursuant to this article shall be personally liable on the
bonds or subject to any personal liability or accountability by
reason of the issuance thereof.
(c) All expenses incurred in connection with any enterprise or
project in carrying out this article shall be payable solely from
funds provided under the authority of this article and no liability
or obligation shall be imposed upon the State of California and, none
shall be incurred by the authority beyond the extent to which moneys
shall have been provided under this article. Under no circumstances
shall the authority create any debt, liability, or obligation on the
part of the State of California in connection with any enterprise or
project payable from any source whatsoever other than the moneys
provided under this article.
991.6. In connection with an enterprise, the authority may do any
or all of the following:
(a) Acquire any enterprise by gift, purchase, or eminent domain as
necessary to achieve the purposes of the authority pursuant to
Sections 991.3 and 992.1.
(b) Construct or improve any enterprise. By gift, lease, purchase,
eminent domain, or otherwise, it may acquire any real or personal
property, for an enterprise, except that no property of a state
public body may be acquired without its consent. The authority may
sell, lease, exchange, transfer, assign, or otherwise dispose of any
real or personal property or any interest in such property. It may
lay out, open, extend, widen, straighten, establish, or change the
grade of any real property or public rights-of-way necessary or
convenient for any enterprise.
(c) Operate, maintain, repair, or manage all or any part of any
enterprise, including the leasing for commercial purposes of surplus
space or other space that is not economic to use for such enterprise.
(d) Adopt reasonable rules or regulations for the conduct of the
enterprise.
(e) Prescribe, revise, and collect charges for the services,
facilities, or energy furnished by the enterprise. The charges shall
be established and adjusted so as to provide funds sufficient with
other revenues and moneys available therefor, if any, to (1) pay the
principal of, and interest on, outstanding bonds of the authority
financing such enterprise as the same shall become due and payable,
(2) create and maintain reserves, including, without limitation,
operating and maintenance reserves and reserves required or provided
for in any resolution authorizing, or trust agreement securing such
bonds, and (3) pay operating and administrative costs of the
authority.
(f) Execute all instruments, perform all acts, and do all things
necessary or convenient in the exercise of the powers granted by this
article.
991.7. In connection with a project, the authority may do any or
all of the following:
(a) Determine the location and character of any project to be
financed under this article.
(b) Acquire, construct, enlarge, remodel, renovate, alter,
improve, furnish, equip, own, maintain, manage, repair, operate,
lease as lessee or lessor, or regulate any project to be financed
under this article.
(c) Contract with any participating party for the construction of
a project by such participating party.
(d) Enter into leases and agreements, as lessor or lessee, with
any participating party relating to the acquisition, construction,
and installation of any project, including real property, buildings,
equipment, and facilities of any kind or character.
(e) Establish, revise, charge and collect rates, rents, fees, and
charges for a project. The rates, rents, fees, and charges shall be
established and adjusted in respect to the aggregate rates, rents,
fees, and charges from all projects so as to provide funds sufficient
with other revenues and moneys available therefor, if any, to (1)
pay the principal of and interest on outstanding bonds of the
authority financing the project as the same shall become due and
payable, (2) create and maintain reserves, including, without
limitation, operating and maintenance reserves and reserves required
or provided for in any resolution authorizing, or trust agreement
securing the bonds, and (3) pay operating and administrative costs of
the authority.
(f) Enter into contracts of sale with any participating party
covering any project financed by the authority.
(g) As an alternative to leasing or selling a project to a
participating party, finance the acquisition, construction, or
installation of a project by means of a loan to the participating
party.
(h) Execute all instruments, perform all acts, and do all things
necessary or convenient in the exercise of the powers granted by this
article.
991.8. In connection with the purposes of this article, the
authority may charge and equitably apportion among participating
parties or other public or private entities the authority's
administrative costs and expenses, including operating and
financing-related costs incurred in connection with an enterprise or
a project. The authority shall recover those costs that are related
to one of the authority's own enterprises or projects, in which case
costs shall be included in the cost of generating and transmitting
that electricity.
992. (a) All generation-related projects and enterprises financed
pursuant to this article shall provide electricity to the consumers
of this state at the cost of generating that electricity, including
the costs of financing those projects or enterprises. To the extent
that electricity is not needed in the state, or that it is
financially advantageous to California consumers, the electricity may
be sold outside the state at just and reasonable rates.
(b) If a participating party is an electrical corporation, the
commission shall determine the cost of generating electricity and to
which entities the electricity is sold.
(c) If a participating party is a local publicly owned electric
utility seeking to provide electricity to consumers in its service
territory, the governing board of that utility shall determine the
cost of generating electricity and to which entities the electricity
is sold.
(d) If neither subdivision (b) nor subdivision (c) applies, the
authority shall determine the cost of generating electricity and to
which entities the electricity is sold, consistent with subdivision
(a).
992.1. In addition to the other powers provided in this article,
the activities of the authority under this article are intended to
supplement private and public sector supplies of electricity
generated from eligible renewable energy resources, taking into
account generation facilities in operation or under development as of
January 1, 2010, consistent with achieving reasonable energy
capacity reserves.
992.2. The authority shall have the authority to receive and act
on applications for financial assistance from renewable generators
who commit to undertake capacity expansion through facility
retrofits, new construction, or both, that will improve the
efficiency and environmental performance of generation facilities
that are eligible renewable energy resources.
992.4. (a) The authority may not invest in any nuclear facilities
or develop additional hydroelectric facilities without first
receiving specific statutory authorization to do so on a
project-by-project basis.
(b) All generation facilities constructed or improved pursuant to
this article shall comply with Chapter 1 (commencing with Section
1720) of Part 7 of Division 2 of the Labor Code.
992.5. (a) If the authority determines that additional electric
generation supply is required to meet the purposes of this chapter,
the authority may undertake the following activities to ensure that
the authority, or any participating party, is able to build, own, and
operate generation facilities as part of a least cost electric
supply policy:
(1) (A) Identify suitable sites or renewable energy designation
zones for the construction of generation facilities, taking into
account fuel supply, interconnection, community, feasibility, and
environmental factors.
(B) The authority may designate a renewable energy designation
zone on its own motion, by a motion by the Energy Commission, or by
an application of a person who plans to construct an eligible
renewable energy resource within the state. The designation of a
renewable energy designation zone shall serve to identify a feasible
region where one or more generation facilities that are eligible
renewable energy resources may be built that are consistent with the
state's needs and objectives as set forth in the Renewables
Investment Plan adopted pursuant to Section 994.
(C) In addition to designating zones, the authority may rank
renewable energy designation zones based on the following criteria:
(i) Total capacity of generation projects that are in the
Independent System Operator generation queue for each of the
renewable energy designation zones.
(ii) Fuel diversity.
(iii) Distance to the nearest possible Independent System Operator
transmission bulk facility.
(iv) Potential viable transmission route.
(v) Order of magnitude of transmission cost per megawatt for the
designated renewable energy designation zone to deliver electricity
from renewable generators to the load centers.
(vi) Realistic commercial operating dates for location-constrained
projects and the transmission interconnection facilities.
(vii) Potential impact on the transmission access charge.
(viii) Potential operational, congestion, and reliability benefits
of the facility.
(ix) Stranded cost risk and potential impact.
(x) Alternative means of transmission access from the renewable
energy designation zone to the Independent System Operator grid.
(D) The authority shall arrange for the publication of a summary
of any application made for designation in a newspaper of general
circulation in each county where the proposed renewable energy
designation zone would be located, and shall notify all property
owners within, or adjacent to, the renewable energy designation zone.
The authority shall transmit a copy of the application for
designation to all cities, counties, and state and federal agencies
having an interest in the proposed renewable energy designation zone.
The authority shall publish the application for designation on its
Internet Web site, and notify members of the public that the
application is available on the authority's Internet Web site.
(E) As soon as practicable after the authority designates a
renewable energy designation zone, it shall do both of the following:
(i) Post a copy of its decision on its Internet Web site and cause
a summary of the notice to be published in a newspaper of general
circulation in each county in which the renewable energy designation
zone and related facilities, or any part thereof, designated in the
notice are proposed to be located.
(ii) Send a copy of its decision, including a description of the
renewable energy designation zone to each affected city, county,
state agency, and federal agency, and notify property owners within
or adjacent to the renewable energy designation zone of the
availability of the decision on the authority's Internet Web site.
(F) After receiving notice from the authority regarding the
designation or revision of a renewable energy designation zone within
its jurisdiction, each city or county shall consider the designated
zone when making a determination regarding a land use change within
or adjacent to the zone that could affect its continuing viability to
accommodate generation facilities, related transmission lines,
transmission corridor zones, or other facilities appurtenant to the
designated zone. Upon receiving the authority's notification of a
proposed renewable energy designation zone, a city or county may
request a fee from the authority to cover the actual added costs of
this review and the authority shall pay this amount to the city or
county.
(G) After the authority designates a renewable energy designation
zone, it shall identify that zone in its subsequent Renewables
Investment Plans adopted pursuant to Section 994. The Energy
Commission shall display the renewable energy designation zone in the
strategic plans adopted pursuant to Section 25324 of the Public
Resources Code.
(H) If, upon regular review or at any other time, the authority
finds that a renewable energy designation zone designation is no
longer needed, the authority shall revise or repeal the designation
and, as soon as practicable, notify the affected cities, counties,
state and federal agencies, and property owners within, or adjacent
to, the renewable energy designation zone.
(2) (A) Notwithstanding Chapter 6 (commencing with Section 25500)
of Division 15 of the Public Resources Code, certify all sites and
related facilities for all generation facilities that are eligible
renewable energy resources, and facilities appurtenant thereto, that
are within the state that have a minimum generating capacity of 5
megawatts, including, but not limited to, all generation facilities
in a designated renewable energy designation zone, including new
sites and related facilities and changes or additions to an existing
facility.
(B) The issuance of a certificate by the authority shall be in
lieu of any permit, certificate, or similar document required by any
state, local, or regional agency or federal agency to the extent
permitted by federal law, for use of the site and related facilities,
and shall supersede any applicable statute, ordinance, or regulation
of any state, local, or regional agency, or federal agency to the
extent permitted by federal law.
(C) The authority shall determine within 30 days of the
application to construct a generation facility within a designated
renewable energy designation zone whether the application is
complete.
(D) If the notice or application is determined to be complete, the
authority shall conduct all applicable public and community
involvement processes. After the conclusion of hearings, and no later
than 180 days after the date of determination of whether the
application is complete, the authority shall issue a proposed
decision that contains its findings and conclusions regarding all of
the following matters:
(i) Conformity of the proposed generation facility and related
facilities with the Renewables Investment Plan adopted pursuant to
Section 994.
(ii) Suitability of the proposed generation facility and related
facilities with respect to environmental, public health and safety,
land use, economic, and transmission-system impacts.
(iii) Mitigation measures and alternatives as may be needed to
protect environmental quality, public health and safety, the state's
electrical transmission grid, or any other relevant matter.
(iv) Other factors that the authority considers relevant.
(E) The authority shall issue its final decision on certification
within six months of the date the authority determined that the
application was complete.
(3) Secure rights to the sites or renewable energy designation
zones identified, including, but not limited to, fee simple
acquisition, leaseholds, or options.
(4) Conduct any studies that may be necessary to construct and
operate generation facilities at the site that are eligible renewable
energy resources, including, but not limited to, environmental,
engineering, or feasibility studies. The designation of a renewable
energy designation zone is subject to the California Environmental
Quality Act (Division 13 (commencing with Section 21000) of the
Public Resources Code). The authority shall be the lead agency for
all generation projects proposed in the designated zone. When deemed
feasible, the authority shall prepare a master environmental impact
report for a designated zone.
(5) Conduct, in coordination with the Energy Commission, all
applicable public and community involvement processes.
(6) Apply for permits, licenses, or other local, state, or federal
approvals, including, but not limited to, compliance with the
applicable procedures of the Energy Commission.
(b) The authority may request proposals from qualified
participating parties to purchase, lease, or otherwise acquire sites
for the purpose of developing generation facilities that are eligible
renewable energy resources and that will provide the lowest cost
electricity to consumers over the life of the facilities, consistent
with Section 992. If after 45 days
following a request for proposals, or 45 days after
notification pursuant to subparagraph (E) of paragraph (1) of
subdivision (a), if the authority determines it is necessary and
feasible, the authority shall exercise its authority to build, own,
and operate generation facilities as part of a least cost electrical
supply policy.
(c) The authority shall comply with all applicable air quality
laws and all environmental regulations.
993. (a) In accordance with the provisions of this article and
notwithstanding any other provision of law, the authority shall,
except as provided in subdivision (e), have the exclusive power to
certify all electric transmission lines, remote resource
interconnection lines, electric transmission facilities and
facilities appurtenant thereto, and related facilities in the state,
including new electric transmission lines or transmission corridor
zones and related facilities or changes or additions to existing
electric transmission lines.
(b) The issuance of a certificate by the authority shall be in
lieu of any permit, certificate, or similar document required by any
state, local or regional agency, or federal agency to the extent
permitted by federal law, for such use of the site and related
facilities, and shall supersede any applicable statute, ordinance, or
regulation of any state, local, or regional agency, or federal
agency to the extent permitted by federal law.
(c) On or after January 1, 2011, no facility or line described in
subdivision (a) shall commence without first obtaining certification
for that site and related facility by the authority.
(d) The authority shall certify sufficient sites and related
facilities which are required for the transmission of electricity
sufficient to accommodate the generation projected in the most recent
designation of a renewable energy designation zone, adopted pursuant
to Section 992.5.
(e) (1) This section does not apply to any electric transmission
lines or facilities appurtenant thereto for which the commission has
issued a certificate of public convenience and necessity, or which
any local publicly owned electric utility has approved, before
January 1, 2011.
(2) This section does not apply to electric transmission lines
that connect generation facilities to the high-voltage transmission
grid that are under the siting authority of the Energy Commission,
pursuant to Section 25500 of the Public Resources Code.
993.4. (a) The authority may not invest in any electric
transmission lines without first receiving specific statutory
authorization to do so on a project-by-project basis.
(b) All electric transmission lines constructed or improved
pursuant to this division shall comply with Chapter 1 (commencing
with Section 1720) of Part 7 of Division 2 of the Labor Code.
993.5. (a) If the authority determines that an additional
electric transmission line is required to meet the purposes of this
chapter, the authority may undertake the following activities to
ensure that the authority, or any participating party, is able to
build, own, and operate transmission lines as part of a least cost
electric supply policy:
(1) Identify suitable sites for the construction of electric
transmission lines, taking into account the designation of a
renewable energy designation zone, interconnection, community,
feasibility, and environmental factors.
(2) Identify the site for an electric transmission line or a
transmission corridor zone on its own motion, by a motion by the
Energy Commission, or by application of a person who plans to
construct an electric transmission line within the state. The
designation of a site for an electric transmission line or a
transmission corridor zone shall serve to identify a feasible
corridor where one or more future electric transmission lines can be
built that are consistent with the state's needs and objectives as
set forth in the Renewables Investment Plan adopted pursuant to
Section 994.
(3) Require an application to site the electric transmission line
be submitted to the authority. The application shall be in the form
prescribed by the authority, shall be supported by any information
that the authority may require, and shall require a showing that the
site being applied for is consistent with the Renewables Investment
Plan adopted pursuant to Section 994.
(4) Secure rights to the sites identified, including, but not
limited to, fee simple acquisition, leaseholds, or options.
(5) Conduct any studies that may be necessary to construct and
operate electric transmission lines and transmission corridor zones,
including, but not limited to, environmental, engineering, or
feasibility studies. The designation of the site for an electric
transmission line and facilities appurtenant thereto or transmission
corridor zones is subject to the California Environmental Quality Act
(Division 13 (commencing with Section 21000) of the Public Resources
Code). The authority shall be the lead agency for all electric
transmission lines and facilities appurtenant thereto and
transmission corridor zones pursuant to this chapter. The authority
shall conduct a programmatic environmental impact report, for each
designated electric transmission line.
(6) Conduct, in coordination with the Energy Commission, all
applicable public and community involvement processes.
(7) Apply for permits, licenses, or other local, state, or federal
approvals, including, but not limited to, compliance with the
applicable procedures of the Energy Commission.
(8) (A) Utilize the bond authority provided in this division,
under terms and conditions approved by the authority, to acquire,
construct, enlarge, remodel, renovate, alter, improve, furnish,
equip, own, maintain, manage, repair, operate, lease as lessee or
lessor, or regulate electric transmission lines.
(B) The rates, rents, fees, and charges associated with the
investment in electric transmission lines shall be established and
adjusted to ensure compliance with subdivision (e) of Section 991.7.
(9) Request proposals from qualified participating parties to
purchase, lease, or otherwise acquire sites for the purpose of
developing electric transmission facilities that will provide the
lowest cost power to consumers over the life of the facilities,
consistent with Section 992.
(b) When considering whether to designate a site for an electric
transmission line and facilities appurtenant thereto or transmission
corridor zones pursuant to this section, the authority shall confer
with cities and counties, federal agencies, and California Native
American tribes to identify appropriate areas within their
jurisdictions that may be suitable for designation. The authority
shall, to the extent feasible, coordinate efforts to identify
long-term transmission needs of the state with the land use plans of
cities, counties, federal agencies, and California Native American
tribes. The authority shall not propose any facility within the
jurisdiction of a California Native American tribe without the
approval of the California Native American tribe.
994. (a) By January 1, 2011, and annually thereafter, the
authority shall, in consultation with the Energy Commission and the
Independent System Operator, develop a Renewables Investment Plan and
submit that plan to the Governor and the Joint Legislative Budget
Committee and the chairs of the policy committees with jurisdiction
over energy policy in the State of California.
(b) The Renewables Investment Plan shall take into account
California's anticipated needs, over the next decade, for electricity
generated by eligible renewable energy resources and the need for
transmission to deliver the electricity generated to retail
customers. The plan shall address issues regarding adequacy of
supply, storage, reliability of service, grid congestion, and
environmental quality. In developing the investment plan, the
authority shall compare the costs of various energy resources,
including a comparison of the costs and benefits of demand reduction
strategies with the costs and benefits of additional generation
supply. The plan shall acknowledge the potential volatility of fossil
fuel prices and the value of resources that avoid that price risk.
(c) The plan shall outline a strategy for cost-effective
investments, using the financing powers provided to the authority by
this article. The plan may recommend changes to the specific
expenditure authority granted in this article in order to carry out
the investment strategy contained in the plan.
(d) The plan shall be developed with input from interested parties
at scheduled public hearings of the authority. The authority shall
adopt the plan by majority vote of the board at a public meeting. The
authority shall update the plan on a regular basis as determined by
the authority.
(e) All investments made by the authority under this article shall
be consistent with the strategy outlined in the Renewables
Investment Plan. Nothing in this section shall preclude the authority
from exercising its powers prior to the adoption of the initial
Renewables Investment Plan.
(f) The authority shall be the agency responsible for ensuring
that the investment strategy outlined in the Renewables Investment
Plan is implemented. To that end, the authority may, on its own or
through a partnership with a participating party, make those
investments necessary to ensure that the plan is implemented.
994.5. Nothing in this article shall be construed to obviate the
need to review the roles, functions, and duties of other state energy
oversight agencies and, where appropriate, change or consolidate
those roles, functions, and duties. To achieve that efficiency, the
Governor may propose to the Legislature a Governmental Reorganization
Plan, pursuant to Section 8523 of the Government Code and Section 6
of Article V of the Constitution.
995. (a) There is hereby created in the State Treasury the
Renewables Infrastructure Authority Fund for expenditure by the
authority for the purpose of implementing the objectives and
provisions of this article. For the purposes of subdivision (e), or
as necessary or convenient to the accomplishment of any other purpose
of the authority, the authority may establish within the fund
additional and separate accounts and subaccounts.
(b) Except as provided in subdivision (a) of Section 991.2, all
moneys in the fund that are not General Fund moneys are continuously
appropriated to the authority and may be used for any reasonable
costs that may be incurred by the authority in the exercise of its
powers under this article.
(c) The fund, on behalf of the authority, may borrow or receive
moneys from the authority, or from any federal, state, or local
agency or private entity, to create reserves in the fund as provided
in this article and as authorized by the board.
(d) The authority may pledge any or all of the moneys in the fund
(including in any account or subaccount) as security for payment of
the principal of, and interest on, any particular issuance of bonds
issued pursuant to this article.
(e) The authority, may, from time to time, direct the Treasurer to
invest moneys in the fund that are not required for the authority's
current needs, including proceeds from the sale of any bonds, in any
securities permitted by law as the authority shall designate. The
authority also may direct the Treasurer to deposit moneys in
interest-bearing accounts in state or national banks or other
financial institutions having principal offices in this state. The
authority may alternatively require the transfer of moneys in the
fund to the Surplus Money Investment Fund for investment pursuant to
Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of
Division 4 of the Government Code. All interest or other increment
resulting from an investment or deposit shall be deposited in the
fund, notwithstanding Section 16305.7 of the Government Code. Moneys
in the fund shall not be subject to transfer to any other fund
pursuant to any provision of Part 2 (commencing with Section 16300)
of Division 4 of the Government Code, excepting the Surplus Money
Investment Fund.
996. For the purposes provided in this division, the authority is
authorized to incur indebtedness and to issue securities of any kind
or class, at public or private sale by the Treasurer, and to renew
the same, provided that all such indebtedness, howsoever evidenced,
shall be payable solely from revenues. The authority may issue bonds
for the purposes of this division in an amount not to exceed six
billion, four hundred million dollars ($6,400,000,000), exclusive of
any refundings.
996.1. In addition to the powers otherwise provided in this
article, the authority may, in connection with the issuance of bonds,
do all of the following:
(a) Issue, from time to time, bonds payable from and secured by a
pledge of all or any part of the revenues in order to finance the
activities authorized by this article, including, without limitation,
an enterprise or multiple enterprises, a single project for a single
participating party, a series of projects for a single participating
party, a single project for several participating parties, or
several projects for several participating parties, and to sell those
bonds at public or private sale by the Treasurer, in the form and on
those terms and conditions as the Treasurer, as agent for sale,
shall approve.
(b) Pledge all or any part of the revenues to secure bonds and any
repayment or reimbursement obligations of the authority to any
provider of insurance or a guarantee of liquidity or credit facility
entered into to provide for the payment or debt service on any bond.
(c) Employ and compensate bond counsel, financial consultants,
underwriters, and other advisers determined necessary and appointed
by the Treasurer in connection with the issuance and sale of any
bond.
(d) Issue bonds to refund or purchase or otherwise acquire bonds
on terms and conditions as the Treasurer, as agent for sale, shall
approve.
(e) Perform all acts that relate to the function and purpose of
the authority under this article, whether or not specifically
designated.
996.2. Bonds issued under this article shall not be deemed to
constitute a debt or liability of the state or of any political
subdivision thereof, other than the authority, or a pledge of the
faith and credit of the state or of any political subdivision, other
than the authority, but shall be payable solely from the funds herein
provided therefor. All bonds issued under this division shall
contain on the face thereof a statement to the following effect:
"Neither the faith and credit nor the taxing power of the State of
California or any local agency is pledged to the payment of the
principal of or interest on this bond." The issuance of bonds under
this article shall not directly or indirectly or contingently
obligate the state or any political subdivision thereof to levy or to
pledge any form of taxation whatever therefor or to make any
appropriation for their payment. Nothing in this section shall
prevent nor be construed to prevent the authority from pledging its
full faith and credit to the payment of bonds or issue of bonds
authorized pursuant to this article.
996.5. The authority is authorized to obtain loans from the
Pooled Money Investment Account pursuant to Sections 16312 and 16313
of the Government Code. These loans shall be subject to the terms
negotiated with the Pooled Money Investment Board, including, but not
limited to, a pledge of authority bond proceeds or revenues.
997. The authority may not finance or approve any new program,
enterprise, or project on or after December 31, 2020, unless
authority to approve such an activity is granted by statute enacted
on or before January 1, 2021.
SEC. 11. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
certain 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.
With respect to certain other costs, no reimbursement is required
by this act pursuant to Section 6 of Article XIII B of the California
Constitution because a local agency or school district has the
authority to levy service charges, fees, or assessments sufficient to
pay for the program or level of service mandated by this act, within
the meaning of Section 17556 of the Government Code.
