Bill Text: CA AB982 | 2023-2024 | Regular Session | Amended

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Bill Title: Public Utilities Public Purpose Programs Fund.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2024-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB982 Detail]

Download: California-2023-AB982-Amended.html

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Amended  IN  Assembly  March 27, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 982

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Introduced by Assembly Member Villapudua

February 15, 2023

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An act to amend Section 25711 of the Public Resources Code, and to amend Sections 327, 379.6, 381, 381.1, 384.5, 399.4, 399.8, 399.20.3, 589, 718, 739.1, 739.3, 739.4, 739.9, 2788, and 2851 of, and to add Section 318 to, the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL'S DIGEST

AB 982, as amended, Villapudua. Public Utilities Public Purpose Programs Fund.

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Under existing law, the commission administers, or otherwise oversees, various public purpose programs, including energy efficiency and conservation programs, cost-effective energy efficiency programs, the Family Electric Rate Assistance program, the California Alternate Rates for Energy (CARE) program, rate assistance programs for eligible food banks, and home insulation financial assistance programs. Under existing law, those programs are generally funded through a charge on electrical service, which is collected through customer rates.

This bill would establish the Public Utilities Public Purpose Programs Fund, and would, upon appropriation, require the commission to allocate the moneys in the fund for purposes of funding the Family Electric Rate Assistance program, programs funded through an electrical corporation’s public purpose program rate component as of December 31, 2023, including the CARE program, and other programs determined by the commission to provide public benefits, except the Family Electric Rate Assistance program and the CARE program, as specified.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because certain of the above provisions would be part of the act and a violation of a commission action implementing this bill’s requirements would be a crime, 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.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 (a) The Legislature finds and declares all of the following:

(1) Customers of electrical corporations pay for public purpose programs through their electricity rates. These costs would more appropriately be funded by all taxpayers because the benefits accrue to society at large, not only to electrical customers or the electrical system.

(2) Electricity rates are increasing in part due to the increasing costs of state climate change mitigation policies and programs administered by electrical corporations or third parties, funded by electrical customers, and mandated by statute or by the commission to reduce consumption of electricity or to provide environmental, health, and other benefits that accrue to all taxpayers.

(3) Public purpose programs’ costs, such as low-income customer bill support and low-income weatherization assistance, represent a significant portion of these electricity rates and contribute to the increases in electricity rates.

(b) (1) In order to provide some electricity rate relief and to more equitably allocate the costs of programs that benefit all taxpayers, not just utility customers, it is the intent of the Legislature to appropriate General Fund moneys sufficient to pay for all certain electrical corporation public purpose programs and public purpose programs administered by third parties that are funded through electricity rates.

(2) It is the intent of the Legislature that on and after January 1, 2024, all certain current and future costs for public purpose programs funded by electrical customers, whether the program is required pursuant to the Public Utilities Code, pursuant to other statutes, or by order or decision of the Public Utilities Commission, be authorized for recovery through the General Fund.

SEC. 2.

 Section 25711 of the Public Resources Code is amended to read:

25711.

 For purposes of implementing this chapter, the Electric Program Investment Charge Fund is hereby created in the State Treasury.

(a) The commission shall administer the fund.

(b) The Controller shall, as directed by the commission, disburse moneys in the fund for purposes of this chapter.

(c) The commission may use moneys in the fund for the administration of this chapter, as authorized by the Public Utilities Commission and appropriated by the Legislature in the annual Budget Act.

SEC. 3.

 Section 318 is added to the Public Utilities Code, to read:

318.

 (a) (1) For purposes of this section, “public purpose programs” means all of the following programs: programs, except as specified in paragraph (2):

(1)The Family Electric Rate Assistance program described in Section 739.12.

(2)

(A) The programs funded through an electrical corporation’s public purpose program rate component as of December 31, 2023, including, but not limited to, the California Alternative Rates for Energy (CARE) program established pursuant to Section 739.1. 2023.

(3)

(B) Other programs determined by the commission, based on a record developed in an open proceeding before the commission through which electrical corporations and other parties have an opportunity to participate, to provide public benefits.

(2) “Public purpose programs” does not include the Family Electric Rate Assistance program described in Section 739.12 or the California Alternate Rates for Energy (CARE) program established pursuant to Section 739.1.

(b) In order to ensure that the residents of this state continue to receive safe, reliable, affordable, and environmentally sustainable electrical service, it is the policy of this state and the intent of the Legislature that low-income bill support continue to be provided and that prudent investments in energy efficiency, renewable energy, research, development, and demonstration continue to be made.

(c) The Public Utilities Public Purpose Programs Fund is hereby established in the State Treasury.

(d) Upon appropriation, the moneys in the Public Utilities Public Purpose Programs Fund shall be allocated by the commission for purposes of the public purpose programs.

(e) In implementing this section, the commission shall consider the continuity of the public purpose programs and minimizing customer disruptions.

(f) Upon appropriation, all programs administered by electrical regional energy networks shall be funded through the Public Utilities Public Purpose Programs Fund.

SEC. 4.Section 327 of the Public Utilities Code is amended to read:

327.

(a)The electrical corporations and gas corporations that participate in the California Alternate Rates for Energy (CARE) program, as established pursuant to Section 739.1, shall administer low-income energy efficiency and rate assistance programs described in Sections 382, 739.1, 739.2, and 2790, subject to commission oversight. In administering the programs described in Section 2790, the electrical corporations and gas corporations, to the extent practicable, shall do all of the following:

(1)Continue to leverage CARE program funds with funds available from other state and federal sources.

(2)Work with state and local agencies, community-based organizations, and other entities to ensure efficient and effective delivery of programs.

(3)Encourage local employment and job skill development.

(4)Maximize the participation of eligible participants.

(5)Work to reduce consumers electric and gas consumption, and bills.

(6)For electrical corporations, target energy efficiency and solar programs to upper-tier and multifamily customers in a manner that will result in long-term permanent reductions in electricity usage at the dwelling units, and develop programs that specifically target nonprofit affordable housing providers, including programs that promote weatherization of existing dwelling units and replacement of inefficient appliances.

(7)For gas corporations, allocate the costs of the CARE program on an equal cents per kilowatt hour or equal cents per therm basis to all classes of customers that were subject to the surcharge that funded the program on January 1, 2008.

(b)If the commission requires low-income energy efficiency programs to be subject to competitive bidding, the electrical and gas corporations described in subdivision (a), as part of their bid evaluation criteria, shall consider both cost-of-service criteria and quality-of-service criteria. The bidding criteria, at a minimum, shall recognize all of the following factors:

(1)The bidder’s experience in delivering programs and services, including, but not limited to, weatherization, appliance repair and maintenance, energy education, outreach and enrollment services, and bill payment assistance programs to targeted communities.

(2)The bidder’s knowledge of the targeted communities.

(3)The bidder’s ability to reach targeted communities.

(4)The bidder’s ability to use and employ people from the local area.

(5)The bidder’s general contractor’s license and evidence of good standing with the Contractors’ State License Board.

(6)The bidder’s performance quality as verified by the funding source.

(7)The bidder’s financial stability.

(8)The bidder’s ability to provide local job training.

(9)Other attributes that benefit local communities.

(c)Notwithstanding subdivision (b), the commission may modify the bid criteria based upon public input from a variety of sources, including representatives from low-income communities and the program administrators identified in subdivision (b), in order to ensure the effective and efficient delivery of high quality low-income energy efficiency programs.

SEC. 5.SEC. 4.

 Section 379.6 of the Public Utilities Code is amended to read:

379.6.

 (a) (1) It is the intent of the Legislature that the self-generation incentive program increase deployment of distributed generation and energy storage systems to facilitate the integration of those resources into the electrical grid, improve efficiency and reliability of the distribution and transmission system, and reduce emissions of greenhouse gases, peak demand, and ratepayer costs. It is the further intent of the Legislature that the commission, in future proceedings, provide for an equitable distribution of the costs and benefits of the program.

(2) For gas corporations, the commission, in consultation with the Energy Commission, may authorize the annual collection of not more than double the amount authorized for the self-generation incentive program in the 2008 calendar year, through December 31, 2024.

(3) (A) For electrical corporations, the commission, in consultation with the Energy Commission, may authorize the annual allocation from the Public Utilities Public Purpose Programs Fund of not more than double the amount authorized for the self-generation incentive program in the 2008 calendar year, through December 31, 2024.

(B) The commission shall require the administration of the program for distributed energy resources originally established pursuant to Chapter 329 of the Statutes of 2000 until January 1, 2026.

(C) On January 1, 2026, the commission shall provide repayment of all unallocated funds collected pursuant to this section to reduce ratepayer costs, unless those unallocated funds originated from the Public Utilities Public Purpose Programs Fund in which case those unallocated funds shall be credited to the Public Utilities Public Purpose Programs Fund.

(b) (1) Eligibility for incentives under the self-generation incentive program that are funded through paragraphs paragraph (2) or (3) of subdivision (a) shall be limited to distributed energy resources that the commission, in consultation with the State Air Resources Board, determines will achieve reductions in 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).

(2) On or before July 1, 2015, the commission shall update the factor for avoided greenhouse gas emissions based on both the most recent data available to the State Air Resources Board for greenhouse gas emissions from electricity sales in the self-generation incentive program administrators’ service areas and current estimates of greenhouse gas emissions over the useful life of the distributed energy resource, including consideration of the effects of the California Renewables Portfolio Standard.

(3) The commission shall adopt requirements for energy storage systems to ensure that eligible energy storage systems reduce the emissions of greenhouse gases.

(c) Eligibility for the funding of any combustion-operated distributed generation projects using fossil fuel is subject to all of the following conditions:

(1) An oxides of nitrogen (NOx) emissions rate standard of 0.07 pounds per megawatthour and a minimum efficiency of 60 percent, or any other NOx emissions rate and minimum efficiency standard adopted by the State Air Resources Board. A minimum efficiency of 60 percent shall be measured as useful energy output divided by fuel input. The efficiency determination shall be based on 100-percent load.

(2) Combined heat and power units that meet the 60-percent efficiency standard may take a credit to meet the applicable NOx emissions standard of 0.07 pounds per megawatthour. Credit shall be at the rate of one megawatthour for each 3,400,000 British thermal units (Btus) of heat recovered.

(3) The customer receiving incentives shall adequately maintain and service the combined heat and power units so that during operation the system continues to meet or exceed the efficiency and emissions standards established pursuant to paragraphs (1) and (2).

(4) Notwithstanding paragraph (1), a project that does not meet the applicable NOx emissions standard is eligible if it meets both of the following requirements:

(A) The project operates solely on waste gas. The commission shall require a customer that applies for an incentive pursuant to this paragraph to provide an affidavit or other form of proof that specifies that the project shall be operated solely on waste gas. Incentives awarded pursuant to this paragraph shall be subject to refund and shall be refunded by the recipient to the extent the project does not operate on waste gas. As used in this paragraph, “waste gas” means natural gas that is generated as a byproduct of petroleum production operations and is not eligible for delivery to the utility pipeline system.

(B) The air quality management district or air pollution control district, in issuing a permit to operate the project, determines that operation of the project will produce an onsite net air emissions benefit compared to permitted onsite emissions if the project does not operate. The commission shall require the customer to secure the permit before receiving incentives.

(d) In determining the eligibility for the self-generation incentive program, minimum system efficiency shall be determined either by calculating electrical and process heat efficiency as set forth in Section 216.6, or by calculating overall electrical efficiency.

(e) Eligibility for incentives under the self-generation incentive program shall be limited to distributed energy resource technologies that the commission determines meet all of the following requirements:

(1) The distributed energy resource technology shifts onsite energy use to off-peak time periods or reduces demand from the grid by offsetting some or all of the customer’s onsite energy load, including, but not limited to, net peak electric load.

(2) The distributed energy resource technology is commercially available.

(3) The distributed energy resource technology safely uses the existing transmission and distribution system.

(4) The distributed energy resource technology improves air quality by reducing criteria air pollutants.

(f) Recipients of the self-generation incentive program funds shall provide relevant data to the commission and the State Air Resources Board, upon request, and shall be subject to onsite inspection to verify equipment operation and performance, including capacity, thermal output, and usage to verify criteria air pollutant and greenhouse gas emissions performance.

(g) In administering the self-generation incentive program, the commission shall determine a capacity factor for each distributed generation system energy resource technology in the program.

(h) (1) In administering the self-generation incentive program, the commission may adjust the amount of incentives and evaluate other public policy interests, including, but not limited to, ratepayers, energy efficiency, peak load reduction, load management, and environmental interests.

(2) The commission shall consider the relative amount and the cost of greenhouse gas emissions reductions, peak demand reductions, system reliability benefits, and other measurable factors when allocating program funds between eligible technologies.

(i) The commission shall ensure that distributed generation resources are made available in the self-generation incentive program for all ratepayers.

(j) In administering the self-generation incentive program, the commission shall provide an additional incentive of 20 percent from existing program funds for the installation of eligible distributed generation resources manufactured in California.

(k) The costs of the self-generation incentive program shall not be recovered from customers participating in the California Alternate Rates for Energy (CARE) program.

(l) The commission shall evaluate the overall success and impact of the self-generation incentive program based on the following performance measures:

(1) The amount of reductions of emissions of greenhouse gases.

(2) The amount of reductions of emissions of criteria air pollutants measured in terms of avoided emissions and reductions of criteria air pollutants represented by emissions credits secured for project approval.

(3) The amount of energy reductions measured in energy value.

(4) The amount of reductions of customer peak demand.

(5) The ratio of the electricity generated by distributed energy resource generation projects receiving incentives from the self-generation incentive program to the electricity capable of being produced by those projects, commonly known as a capacity factor.

(6) The value to the electrical transmission and distribution system measured in avoided costs of transmission and distribution upgrades and replacement.

(7) The ability to improve onsite electricity reliability as compared to onsite electricity reliability before the self-generation incentive program technology was placed in service.

(m) On and after January 1, 2020, generation technologies using nonrenewable fuels shall not be eligible for incentives under the self-generation incentive program.

SEC. 6.SEC. 5.

 Section 381 of the Public Utilities Code is amended to read:

381.

 (a) To ensure that the funding for the programs described in subdivision (b) and Section 382 are not commingled with other revenues, the commission shall require each electrical corporation to establish a two-way balancing an account for moneys allocated from the Public Utilities Public Purpose Programs Fund.

(b) The commission shall allocate moneys from the Public Utilities Public Purpose Programs Fund to programs that enhance electrical system reliability and provide in-state benefits as follows:

(1) Energy efficiency and conservation activities.

(2) Public interest research and development not adequately provided by competitive and regulated markets.

(3) In-state operation and development of existing and new and emerging eligible renewable energy resources, as defined in Section 399.12.

SEC. 7.SEC. 6.

 Section 381.1 of the Public Utilities Code is amended to read:

381.1.

 (a) No later than July 15, 2003, the commission shall establish policies and procedures by which any party, including, but not limited to, a local entity that establishes a community choice aggregation program, may apply to become administrators for cost-effective electrical efficiency and conservation programs established pursuant to Section 381 and funded by moneys allocated from the Public Utilities Public Purpose Programs Fund. In determining whether to approve an application to become administrators and subject to an aggregator’s right to elect to become an administrator pursuant to subdivision (f), the commission shall consider the value of program continuity and planning certainty and the value of allowing competitive opportunities for potentially new administrators. The commission shall weigh the benefits of the party’s proposed program to ensure that the program meets the following objectives:

(1) Is consistent with the goals of the existing programs established pursuant to Section 381.

(2) Advances the public interest in maximizing cost-effective electricity savings and related benefits.

(3) Accommodates the need for broader statewide or regional programs.

(b) All audit and reporting requirements established by the commission pursuant to Section 381 and other statutes shall apply to the parties chosen as administrators under this section.

(c) If a community choice aggregator is not the administrator of energy efficiency and conservation programs for which its customers are eligible, the commission shall require the administrator of cost-effective energy efficiency and conservation programs to direct a proportional share of its approved energy efficiency program activities for which the community choice aggregator’s customers are eligible, to the community choice aggregator’s territory without regard to customer class. To the extent that energy efficiency and conservation programs are targeted to specific locations to avoid or defer transmission or distribution system upgrades, the targeted expenditures shall continue irrespective of whether the loads in those locations are served by an aggregator or by an electrical corporation. The commission shall also direct the administrator to work with the community choice aggregator, to provide advance information where appropriate about the likely impacts of energy efficiency programs and to accommodate any unique community program needs by placing more, or less, emphasis on particular approved programs to the extent that these special shifts in emphasis in no way diminish the effectiveness of broader statewide or regional programs. If the community choice aggregator proposes energy efficiency programs other than programs already approved for implementation in its territory, it shall do so under established commission policies and procedures. The commission may order an adjustment to the share of energy efficiency program activities directed to a community choice aggregator’s territory if necessary to ensure an equitable and cost-effective allocation of energy efficiency program activities.

(d) The commission shall establish an impartial process for making the determination of whether a third party, including a community choice aggregator, may become administrators for cost-effective energy efficiency and conservation programs pursuant to subdivision (a), and shall not delegate or otherwise transfer the commission’s authority to make this determination for a community choice aggregator to an electrical corporation.

(e) The impartial process established by the commission shall allow a registered community choice aggregator to elect to become the administrator of moneys allocated from the Public Utilities Public Purpose Programs Fund for cost-effective electrical efficiency and conservation programs.

(f) A community choice aggregator electing to become an administrator shall submit a plan, approved by its governing board, to the commission for the administration of cost-effective energy efficiency and conservation programs for the aggregator’s electrical service customers that includes funding requirements, a program description, a cost-effectiveness analysis, and the duration of the program. The commission shall certify that the plan submitted does all of the following:

(1) Is consistent with the goals of the programs established pursuant to this section and Section 399.4.

(2) Advances the public interest in maximizing cost-effective electricity savings and related benefits.

(3) Accommodates the need for broader statewide or regional programs.

(4) Includes audit and reporting requirements consistent with the audit and reporting requirements established by the commission pursuant to this section.

(5) Includes evaluation, measurement, and verification protocols established by the community choice aggregator.

(6) Includes performance metrics regarding the community choice aggregator’s achievement of the objectives listed in paragraphs (1) to (5), inclusive, and in any previous plan.

(g) If the commission does not certify the plan for the administration of cost-effective energy efficiency and conservation programs submitted by a community choice aggregator pursuant to subdivision (f), the community choice aggregator electing to administer these programs may submit an amended plan to the commission for certification. Moneys shall not be released to a community choice aggregator unless the commission certifies the plan pursuant to subdivision (f).

SEC. 8.SEC. 7.

 Section 384.5 of the Public Utilities Code is amended to read:

384.5.

 (a) On or before March 1, 2014, the commission shall order electrical corporations to submit, on or before July 1, 2015, a tariff to be used, at the discretion of local governments, to fund energy efficiency improvements in street light poles owned by the electrical corporations to ensure reduced energy consumption for local governments who are streetlight street light customers covered by these tariffs.

(b) The tariff shall be designed to allow local governments to remit the cost of the improvement through the tariff over time, resulting in reduced energy consumption, without shifting costs to nonparticipating ratepayers. The cost of the improvement shall be identified separately rather than included within the charge for electrical service.

(c) Notwithstanding subdivision (b), the improvement performed pursuant to the tariff submitted under subdivision (a) shall be eligible for any rebate or incentives available through programs intended to increase energy efficiency that are funded by the Public Utilities Public Purpose Programs Fund.

(d) The electrical corporation that owns the street light poles shall install or otherwise make the energy efficiency improvements selected by the local government with an appropriately trained workforce in accordance with all applicable safety orders of the commission.

(e) For the purposes of this section, the following terms have the following meanings:

(1) “Electrical corporation” means an electrical corporation, as defined in Section 218, with at least 100,000 service connections in California.

(2) “Street light pole” means a pole, arm, or fixture used primarily for street, pedestrian, or security lighting.

SEC. 9.SEC. 8.

 Section 399.4 of the Public Utilities Code is amended to read:

399.4.

 (a) (1) In order to ensure that prudent investments in energy efficiency continue to be made that produce cost-effective energy savings, reduce customer demand, and contribute to the safe and reliable operation of the electrical distribution grid, it is the policy of this state and the intent of the Legislature that the commission shall supervise the administration of cost-effective energy efficiency programs authorized pursuant to its statutory authority, including Sections 381, 381.1, 381.2, 381.5, 382, 384.5, 400, 454.5, 454.55, 454.56, 589, 701.1, 749, and 769, Article 10 (commencing with Section 890) of Chapter 4, and Chapter 6 (commencing with Section 2781) of Part 2.

(2) As used in this section, the term “energy efficiency” includes, but is not limited to, cost-effective activities to achieve peak load reduction that improve end-use efficiency, lower customers’ bills, and reduce system needs.

(b) (1) If a customer or contractor is the recipient of a rebate or incentive offered by a public utility for an energy efficiency improvement or installation of energy efficient components, equipment, or appliances in a building, the public utility shall provide the rebate or incentive only if the customer or contractor certifies that the improvement or installation has complied with any applicable permitting requirements, including any applicable specifications or requirements set forth in the California Building Standards Code (Title 24 of the California Code of Regulations), and, if a contractor performed the installation or improvement, that the contractor holds the appropriate license for the work performed.

(2) In addition to the requirements of paragraph (1), if a customer or contractor is the recipient of a rebate or incentive offered by a public utility for the purchase or installation of central air conditioning or a heat pump, and their related fans, the public utility shall provide the rebate or incentive only if the customer or contractor provides proof of permit closure. The public utility is not responsible for verifying the proof of permit closure documentation provided by the customer or contractor.

(3) This subdivision does not imply or create authority or responsibility, or expand existing authority or responsibility, of a public utility for the enforcement of the building energy and water efficiency standards adopted pursuant to subdivision (a) or (b) of Section 25402 of the Public Resources Code, or appliance efficiency standards and certification requirements adopted pursuant to subdivision (c) of Section 25402 of the Public Resources Code.

(4) This subdivision does not limit the authority of the commission to impose any additional requirements on a recipient of any rebate or incentive.

(c) The commission, in evaluating energy efficiency investments under its statutory authority, shall also ensure that local and regional interests, multifamily dwellings, and energy service industry capabilities are incorporated into program portfolio design and that local governments, community-based organizations, and energy efficiency service providers are encouraged to participate in program implementation where appropriate.

(d) The commission, in a new or existing proceeding, shall review and update its policies governing energy efficiency programs to facilitate achieving the targets established pursuant to subdivision (c) of Section 25310 of the Public Resources Code. In updating its policies, the commission shall, at a minimum, do all of the following:

(1) Authorize market transformation programs with appropriate levels of funding to achieve deeper energy efficiency savings.

(2) Authorize pay for performance pay-for-performance programs that link incentives directly to measured energy savings. As part of pay for performance pay-for-performance programs authorized by the commission, customers should be reasonably compensated for developing and implementing an energy efficiency plan, with a portion of their incentive reserved pending post project measurement results.

(3) Authorize programs to achieve deeper savings through operational, behavioral, and retrocommissioning activities.

(4) Ensure that customers have certainty in the values and methodology used to determine energy efficiency incentives by basing the amount of any incentives provided by gas and electrical corporations on the values and methodology contained in the executed customer agreement. Incentive payments shall be based on measured results.

SEC. 10.SEC. 9.

 Section 399.8 of the Public Utilities Code is amended to read:

399.8.

 (a) In order to ensure that the citizens of this state continue to receive safe, reliable, affordable, and environmentally sustainable electric service, it is the policy of this state and the intent of the Legislature that prudent investments in energy efficiency, renewable energy, and research, development development, and demonstration shall continue to be made.

(b) (1) Moneys allocated from the Public Utilities Public Purpose Programs Fund shall be used to fund electrical efficiency, renewable energy, and research, development development, and demonstration.

(2) Local publicly owned electric utilities shall continue to collect and administer system benefits charges pursuant to Section 385.

(c) The commission and the Energy Commission shall retain and continue their oversight responsibilities as set forth in Section 381 of this code and Chapter 7.1 (commencing with Section 25620) and Chapter 8.6 (commencing with Section 25740) of Division 15 of the Public Resources Code.

(d) An applicant for the Large Nonresidential Standard Performance Contract Program funded pursuant to paragraph (1) of subdivision (b) and an electrical corporation shall promptly attempt to resolve disputes that arise related to the program’s guidelines and parameters before entering into a program agreement. The applicant shall provide the electrical corporation with written notice of any dispute. Within 10 business days after receipt of the notice, the parties shall meet to resolve the dispute. If the dispute is not resolved within 10 business days after the date of the meeting, the electrical corporation shall notify the applicant of their right to file a complaint with the commission, which complaint shall describe the grounds for the complaint, injury, and relief sought. The commission shall issue its findings in response to a filed complaint within 30 business days of the date of receipt of the complaint. Before issuance of its findings, the commission shall provide a copy of the complaint to the electrical corporation, which shall provide a response to the complaint to the commission within five business days of the date of receipt. During the dispute period, the amount of estimated financial incentives shall be held in reserve until the dispute is resolved.

SEC. 11.SEC. 10.

 Section 399.20.3 of the Public Utilities Code is amended to read:

399.20.3.

 (a) For purposes of this section, the following definitions apply:

(1) “Bioenergy” has the same meaning as set forth in paragraph (6) of subdivision (f) of Section 399.20.

(2) “Tier 1 high hazard zone” includes areas where wildlife and falling trees threaten electrical transmission and distribution lines, roads, and other evacuation corridors, critical community infrastructure, or other existing structures, as designated by the Department of Forestry and Fire Protection pursuant to the Proclamation of a State of Emergency on Tree Mortality declared by the Governor on October 30, 2015.

(3) “Tier 2 high hazard zone” includes watersheds that have significant tree mortality combined with community and natural resource assets, as designated by the Department of Forestry and Fire Protection pursuant to the Proclamation of a State of Emergency on Tree Mortality declared by the Governor on October 30, 2015.

(b) (1) In addition to the requirements of subdivision (f) of Section 399.20, by December 1, 2023, electrical corporations shall collectively procure, through financial commitments of 5 to 15 years, inclusive, their proportionate share of 125 megawatts of cumulative rated generating capacity from existing bioenergy projects that commenced operations before June 1, 2013. At least 80 percent of the feedstock of an eligible facility, on an annual basis, shall be a byproduct of sustainable forestry management, which includes removal of dead and dying trees from Tier 1 and Tier 2 high hazard zones and is not that from lands that have been clear cut. At least 60 percent of this feedstock shall be from Tier 1 and Tier 2 high hazard zones.

(2) Paragraph (1) shall not apply to a utility subject to subdivision (g) if both of the following apply:

(A) The utility, either directly or through a joint powers authority, entered into five-year financial commitments for its proportionate share of 125 megawatts of cumulative rated generating capacity from existing bioenergy projects pursuant to this section as it was enacted by Chapter 368 of the Statutes of 2016.

(B) The utility’s financial commitments referenced in subparagraph (A) include, (1) include: (i) a contract with a facility operator that was, on June 1, 2022, in a bankruptcy or other insolvency proceeding, proceeding; or (2) (ii) a contract for a project that does not deliver energy to the utility.

(c) For the purpose of contracts entered into pursuant to subdivision (b), commission Resolution E-4770 (March 17, 2016), and commission Resolution E-4805 (October 13, 2016), Tier 1 and Tier 2 high hazard zone fuel or feedstock shall also include biomass fuels removed from fuel reduction operations exempt from timber harvesting plan requirements pursuant to subdivisions (a), (f), (j), and (k) of Section 4584 of the Public Resources Code.

(d) The commission shall require an electrical corporation that has entered into a contract pursuant to subdivision (b), commission Resolution E-4770 (March 17, 2016), or commission Resolution E-4805 (October 13, 2016) to allow fuel or feedstock reporting requirements to be based on a monthly or annual basis, and a bioenergy facility providing generation pursuant to that contract shall have the right to opt out of the mandated fuel or feedstock usage levels in any particular month upon providing written notice to the electrical corporation in the month of operation. For months in which a bioenergy facility opts out of the mandated fuel or feedstock usage levels or misses the mandated fuel or feedstock targets, that facility shall be paid the alternate price adopted by the commission in commission Resolution E-4770 for all megawatthours generated during that month. Contracts shall continue in force through the end of the contracted term without creating an event of default for missing mandated fuel or feedstock usage levels and without giving rise to a termination right in favor of the electrical corporation.

(e) (1) For each electrical corporation, the commission shall allocate its proportionate share of the 125 megawatts based on the ratio of the electrical corporation’s peak demand to the total statewide peak demand.

(2) Procurement by an electrical corporation of generation capacity pursuant to a contract under the commission’s Resolution E-4770 (March 17, 2016) that is in excess of the requirement of that electrical corporation under that resolution shall count towards meeting the electrical corporation’s proportionate share allocated pursuant to paragraph (1).

(f) The commission may direct each electrical corporation to develop standard contract terms and conditions that reflect the operational characteristics of the bioenergy projects and to provide a streamlined contracting process or may require the electrical corporations to use the mechanism established pursuant to the commission’s Resolution E-4770 (March 17, 2016) to meet the requirements of subdivision (e). The procurement pursuant to the developed standard contract shall occur on an expedited basis due to the Proclamation of a State of Emergency on Tree Mortality declared by the Governor on October 30, 2015.

(g) A local publicly owned electric utility serving more than 100,000 customers shall procure its proportionate share, based on the ratio of the utility’s peak demand to the total statewide peak demand, of 125 megawatts of cumulative rated capacity from existing bioenergy projects described in subdivision (b) subject to terms of at least five years.

(h) The Procurement Review Group within the commission shall advise the commission on the cost of the generation procured pursuant to this section.

(i) For purposes of this section, any incremental procurement of electricity products from bioenergy resources by a new contract or contract extension of five years or longer in duration shall be from a resource that meets emission limits equivalent to, or more stringent than, the applicable best available retrofit control technology, as determined by the local air pollution control district or air quality management district. The determination shall be made before the start of the operating period under the new contract or contract extension.

SEC. 12.SEC. 11.

 Section 589 of the Public Utilities Code is amended to read:

589.

 (a) In an existing or new proceeding, the commission shall require electrical and gas corporations to cooperate in establishing a single internet website available to the public that provides up-to-date information, updated no less frequently than once every 30 days, regarding energy efficiency assistance programs that are funded through the Public Utilities Public Purpose Programs Fund for purposes of electrical corporations, and that are funded through ratepayers for purposes of gas corporations, to the extent the information is available, in an aggregate format that would not provide identifying information about individual customers of the electrical and gas corporations, include all of the following:

(1) The types of energy efficiency measures installed.

(2) The ZIP Code location of each customer receiving energy efficiency assistance pursuant to this section.

(3) The amount of funds expended at each ZIP Code location.

(4) The expected annual energy savings and reduced energy usage expected in kilowatthours or therms.

(b) (1) The commission shall order the electrical and gas corporations to establish, based on data, energy efficiency assistance program reports on program totals, geographical and monthly statistics, cost distribution, and progress toward program goals pursuant to this section.

(2) The electrical and gas corporations shall make the reports available on the internet website established pursuant to subdivision (a).

(c) The commission shall require the electrical and gas corporations to publish data, including the amount expended, on the energy efficiency assistance programs that are not direct retrofits, including, but not limited to, research on building and appliance standards and marketing and outreach, on the internet website established pursuant to subdivision (a).

(d) The commission shall take steps necessary to ensure the internet website established pursuant to subdivision (a) is available to the public on or before June 1, 2014.

(e) The commission shall have a link to the internet website established pursuant to subdivision (a) on the commission’s internet website and require the electrical and gas corporations to have a link to the internet website established pursuant to subdivision (a) on the appropriate page of the internet website of each electrical and gas corporation.

SEC. 13.SEC. 12.

 Section 718 of the Public Utilities Code is amended to read:

718.

 (a) (1)  The commission shall develop policies, rules, or regulations with a goal of reducing, by January 1, 2024, the statewide level of gas and electric service disconnections for nonpayment by residential customers, including policies, rules, or regulations specific to the four gas and electrical corporations that have the greatest number of customers. The commission shall convene stakeholders, including, but not limited to, public health officials, consumer advocates, and organizations representing low-income communities, to assist with the development of the policies, rules, or regulations.

(2) Costs of the Arrearage Management Program established pursuant to commission Decision 20-06-003 (June 11, 2020), Phase 1 Decision Adopting Rules and Policy Changes to Reduce Residential Customer Disconnections for the Larger California-Jurisdictional Energy Utilities, shall be allocated from the Public Utilities Public Purpose Programs Fund established in Section 318.

(3) Costs of a Percentage of Income Payment Plan pilot program established pursuant to commission Decision 21-10-012 (October 7, 2021), Decision Authorizing Percentage of Income Payment Plan Pilot Programs, shall be allocated from the Public Utilities Public Purpose Programs Fund established in Section 318.

(b) (1) In each gas and electrical corporation general rate case, the commission shall do both of the following:

(A) Designate the impact of any proposed increase in rates on disconnections for nonpayment as an issue in the scope of the proceeding.

(B) Conduct an assessment of and properly identify the impact of any proposed increase in rates on disconnections for nonpayment, which shall be included in the record of the proceeding.

(2) The commission shall adopt residential utility disconnections for nonpayment as a metric and incorporate the metric into each gas and electrical corporation general rate case.

SEC. 14.Section 739.1 of the Public Utilities Code is amended to read:

739.1.

(a)The commission shall continue a program of assistance to low-income electricity and gas customers with annual household incomes that are no greater than 200 percent of the federal poverty guideline levels, the cost of which shall not be borne solely by any single class of customer. For one-person households, program eligibility shall be based on two-person household guideline levels. The program shall be referred to as the California Alternate Rates for Energy or CARE program. The commission shall ensure that the level of discount for low-income electricity and gas customers correctly reflects the level of need.

(b)The portion of the CARE program applicable to electricity customers shall be funded by moneys allocated from the Public Utilities Public Purpose Programs Fund.

(c)The commission shall establish rates for CARE program participants, subject to both of the following:

(1)That the commission ensure that low-income ratepayers are not jeopardized or overburdened by monthly energy expenditures, pursuant to subdivision (b) of Section 382.

(2)That the level of the discount for low-income electricity and gas ratepayers correctly reflects the level of need as determined by the needs assessment conducted pursuant to subdivision (d) of Section 382.

(d)In establishing CARE discounts for an electrical corporation with 100,000 or more customer accounts in California, the commission shall ensure all of the following:

(1)The average effective CARE discount shall not be less than 30 percent or more than 35 percent of the revenues that would have been produced for the same billed usage by non-CARE customers. The average effective discount determined by the commission shall not reflect any charges for which CARE customers are exempted, discounts to fixed charges or other rates paid by non-CARE customers, or bill savings resulting from participation in other programs, including the medical baseline allowance pursuant to subdivision (c) of Section 739. The average effective CARE discount shall be calculated as a weighted average of the CARE discounts provided to individual customers.

(2)If an electrical corporation provides an average effective CARE discount in excess of the maximum percentage specified in paragraph (1), the electrical corporation shall not reduce, on an annual basis, the average effective CARE discount by more than a reasonable percentage decrease below the discount in effect on January 1, 2013, or that the electrical corporation had been authorized to place in effect by that date.

(3)The entire discount shall be provided in the form of a reduction in the overall bill for the eligible CARE customer.

(e)The commission shall work with electrical and gas corporations to establish penetration goals. For gas corporations, the commission shall authorize recovery of all administrative costs associated with the implementation of the CARE program that the commission determines to be reasonable, through a balancing account mechanism. For electrical corporations, the commission shall authorize recovery, from moneys allocated from the Public Utilities Public Purpose Programs Fund, of all administrative costs associated with the implementation of the CARE program that the commission determines to be reasonable, through a balancing account mechanism. Administrative costs shall include, but are not limited to, outreach, marketing, regulatory compliance, certification and verification, billing, measurement and evaluation, and capital improvements and upgrades to communications and processing equipment.

(f)The commission shall examine methods to improve CARE enrollment and participation. This examination shall include, but need not be limited to, comparing information from CARE and the Universal Lifeline Telephone Service (ULTS) to determine the most effective means of using that information to increase CARE enrollment, automatic enrollment of ULTS customers who are eligible for the CARE program, customer privacy issues, and alternative mechanisms for outreach to potential enrollees. The commission shall ensure that a customer consents before enrollment. The commission shall consult with interested parties, including ULTS providers, to develop the best methods of informing ULTS customers about other available low-income programs and the best mechanism for telephone providers to recover reasonable costs incurred pursuant to this section.

(g)(1)The commission shall improve the CARE application process by cooperating with other entities and representatives of California government, including the California Health and Human Services Agency and the Secretary of California Health and Human Services, to ensure that all gas and electric customers eligible for public assistance programs in California that reside within the service territory of an electrical corporation or gas corporation, are enrolled in the CARE program. The commission may determine that gas and electric customers are categorically eligible for CARE assistance if they are enrolled in other public assistance programs with substantially the same income eligibility requirements as the CARE program. To the extent practicable, the commission shall develop a CARE application process using the existing ULTS application process as a model. The commission shall work with electrical and gas corporations and the Low-Income Oversight Board established in Section 382.1 to meet the low-income objectives in this section.

(2)The commission shall ensure that an electrical corporation or gas corporation with a commission-approved program to provide discounts based upon economic need in addition to the CARE program, including a Family Electric Rate Assistance program, uses a single application form, to enable an applicant to alternatively apply for any assistance program for which the applicant may be eligible. It is the intent of the Legislature to allow applicants under one program, that may not be eligible under that program, but that may be eligible under an alternative assistance program based upon economic need, to complete a single application for any commission-approved assistance program offered by the public utility.

(h)It is the intent of the Legislature that the commission ensure CARE program participants receive affordable electrical and gas service that does not impose an unfair economic burden on those participants.

(i)The commission’s program of assistance to low-income electricity and gas customers shall, as soon as practicable, include nonprofit group living facilities specified by the commission, if the commission finds that the residents in these facilities substantially meet the commission’s low-income eligibility requirements and there is a feasible process for certifying that the assistance shall be used for the direct benefit, such as improved quality of care or improved food service, of the low-income residents in the facilities. The commission shall authorize utilities to offer discounts to eligible facilities licensed or permitted by appropriate state or local agencies, and to facilities, including women’s shelters, hospices, and homeless shelters, that may not have a license or permit but provide other proof satisfactory to the utility that they are eligible to participate in the program.

(j)(1)In addition to existing assessments of eligibility, an electrical corporation may require proof of income eligibility for those CARE program participants whose electricity usage, in any monthly or other billing period, exceeds 400 percent of baseline usage. The authority of an electrical corporation to require proof of income eligibility is not limited by the means by which the CARE program participant enrolled in the program, including if the participant was automatically enrolled in the CARE program because of participation in a governmental assistance program. If a CARE program participant’s electricity usage exceeds 400 percent of baseline usage, the electrical corporation may require the CARE program participant to participate in the Energy Savings Assistance Program (ESAP), which includes a residential energy assessment, in order to provide the CARE program participant with information and assistance in reducing the CARE program participant’s energy usage. Continued participation in the CARE program may be conditioned upon the CARE program participant agreeing to participate in ESAP within 45 days of notice being given by the electrical corporation pursuant to this paragraph. The electrical corporation may require the CARE program participant to notify the utility of whether the residence is rented, and, if so, a means by which to contact the landlord, and the electrical corporation may share any evaluation and recommendation relative to the residential structure that is made as part of an energy assessment, with the landlord of the CARE program participant. Requirements imposed pursuant to this paragraph shall be consistent with procedures adopted by the commission.

(2)If a CARE program participant’s electricity usage exceeds 600 percent of baseline usage, the electrical corporation shall require the CARE program participant to participate in ESAP, which includes a residential energy assessment, in order to provide the CARE program participant with information and assistance in reducing the CARE program participant’s energy usage. Continued participation in the CARE program shall be conditioned upon the CARE program participant agreeing to participate in ESAP within 45 days of a notice made by the electrical corporation pursuant to this paragraph. The electrical corporation may require the CARE program participant to notify the utility of whether the residence is rented, and, if so, a means by which to contact the landlord, and the electrical corporation may share any evaluation and recommendation relative to the residential structure that is made as part of an energy assessment, with the landlord of the CARE program participant. Following the completion of the energy assessment, if the CARE program participant’s electricity usage continues to exceed 600 percent of baseline usage, the electrical corporation may remove the CARE program participant from the program if the removal is consistent with procedures adopted by the commission. This paragraph does not prevent a CARE program participant with electricity usage exceeding 600 percent of baseline usage from participating in an appeals process with the electrical corporation to determine whether the participant’s usage levels are legitimate.

(3)A CARE program participant in a rental residence shall not be removed from the program in situations where the landlord is nonresponsive when contacted by the electrical corporation or does not provide for ESAP participation.

SEC. 15.SEC. 13.

 Section 739.3 of the Public Utilities Code is amended to read:

739.3.

 (a) Subject to direction and supervision by the commission, each electrical corporation and gas corporation shall develop and implement a program of rate assistance to eligible food banks at a fixed percentage to be determined by the commission. The commission may adjust the fixed percentage as appropriate. The funding source for the gas rate assistance program is the surcharge on all natural gas imposed pursuant to Section 890, and the amount of that funding shall be subject to the approval of the commission. Funding for the electric rate assistance program is through the Public Utilities Public Purpose Programs Fund.

(b) The Legislature encourages the governing board of each local publicly owned electric utility to develop and implement a program of rate assistance to eligible food banks at a fixed percentage, to be determined by the governing board, but consistent with that fixed by the commission for electrical corporations.

(c) For purposes of this section, the following terms have the following meanings:

(1) “Eligible food bank” means a qualified eligible recipient agency that has executed an agreement with the State Department of Social Services in order to participate in The Emergency Food Assistance Program administered by the Food and Nutrition Service of the United States Department of Agriculture.

(2) “Eligible recipient agency” has the same meaning as defined in Section 251.3(d) of Title 7 of the Code of Federal Regulations.

(3) “Agreement” means an agreement executed in compliance with Section 251.2 of Title 7 of the Code of Federal Regulations.

SEC. 16.Section 739.4 of the Public Utilities Code is amended to read:

739.4.

(a)A natural gas customer who enrolls in the CARE program after May 22, 2001, but before October 1, 2001, shall receive the same one-time bill credit based on the amount of each gas corporation’s average CARE customer discount applied for each month in October 2000 to March 2001, inclusive. The credit does not apply to a customer who initiates service with a gas corporation after May 22, 2001, and who has no prior history of service with the gas corporation. CARE program funds shall be used for the purpose of providing these credits. The commission shall adjust CARE program income requirements annually to reflect the increased cost-of-living due to inflation.

(b)The commission shall require all electrical and gas utilities through which CARE program rates are available to do all of the following, in multilingual formats to the extent printed and recorded information is provided, to facilitate better penetration rates for the CARE program and to protect low-income and senior households from unwarranted disconnection of necessary electric and gas services:

(1)Provide an outgoing message on all calls, where the customer is seeking to establish service or is put on hold, to customer service lines that briefly describes the CARE program in standard language approved by the commission, and that provides a toll-free phone number for customers to call to subscribe to the program or for further information.

(2)Provide information to customers about the CARE program and facilitate subscription to CARE, on all calls in which customers are making payment arrangements, on all collections calls, and on all calls for reconnection of service.

(3)(A)Provide information about the CARE program and other assistance programs, and attempt to qualify customers for CARE, and provide information about individual payment arrangements that allow customers to pay the amounts due over a reasonable period of time, not to exceed 12 months, and attempt to enroll customers in a payment arrangement program, before effecting any disconnection of service for nonpayment or inability to pay energy bills in full.

(B)(i)Offer individual payment arrangements to customers so that the customer is able to pay amounts due over a reasonable period of time, not to exceed 12 months.

(ii)Prohibit the disconnection of customers that have made, and are in compliance with, payment arrangements offered by an electric or gas utility pursuant to this subparagraph.

(C)Prohibit the disconnection of a delinquent residential customer for amounts due in which the electric or gas utility receives a commitment pledge, letter of intent, purchase order, or other notification that a provider of energy assistance is forwarding payment sufficient to prevent disconnection.

(D)(i)Advise residential customers facing disconnection or who contact the utility to make payment arrangements of the levelizing payment program that allows them to pay a monthly average bill based on 12 months usage.

(ii)Advise residential customers about enrollment in the levelizing payment program in conjunction with completion of payment arrangements, payment under terms of subparagraph (B), or at the customer’s request absent those arrangements.

(E)This paragraph is not intended to reduce the revenues of any utility extending payment arrangements subject to the terms of the paragraph.

(4)Provide information on customer bills, presented in a conspicuous manner on a front facing page, that indicates that a customer may be eligible for the CARE program. This notice shall be provided quarterly on customer bills.

(c)The commission shall conduct targeted outreach about the program using census block data to effectively target low-income and senior households throughout the state.

(d)CARE program funds shall be used for the purposes of paragraph (3) of subdivision (b) and outreach pursuant to subdivision (c). The commission’s costs for outreach pursuant to subdivision (c) may not exceed five hundred thousand dollars ($500,000) above the amount that the commission currently expends on similar activities related to the CARE program. Gas corporations may recover all reasonable costs of implementing this section from CARE program funds. The commission shall reimburse, using moneys allocated from the Public Utilities Public Purpose Programs Fund, electrical corporations for their reasonable costs of implementing this section.

SEC. 17.Section 739.9 of the Public Utilities Code is amended to read:

739.9.

(a)“Fixed charge” means any fixed customer charge, basic service fee, demand differentiated basic service fee, demand charge, or other charge not based on the volume of electricity consumed.

(b)Increases to electrical rates and charges in rate design proceedings, including any reduction in the California Alternate Rates for Energy (CARE) discount, shall be reasonable and subject to a reasonable phase-in schedule relative to the rates and charges in effect before January 1, 2014.

(c)Consistent with the requirements of Section 739, the commission may modify the seasonal definitions and applicable percentage of average consumption for one or more climatic zones.

(d)The commission may adopt new, or expand existing, fixed charges for the purpose of collecting a reasonable portion of the fixed costs of providing electrical service to residential customers. The commission shall ensure that any approved charges do all of the following:

(1)Reasonably reflect an appropriate portion of the different costs of serving small and large customers.

(2)Not unreasonably impair incentives for conservation, energy efficiency, and beneficial electrification and greenhouse gas emissions reduction.

(3)Are set at levels that do not overburden low-income customers.

(e)(1)For purposes of this section, the commission may authorize fixed charges for any rate schedule applicable to a residential customer account. The fixed charge shall be established on an income-graduated basis with no fewer than three income thresholds so that a low-income ratepayer in each baseline territory would realize a lower average monthly bill without making any changes in usage. The commission shall, no later than July 1, 2024, authorize a fixed charge for default residential rates.

(2)For purposes of this subdivision, “income-graduated” means that low-income customers pay a smaller fixed charge than high-income customers.

(f)Notwithstanding the requirements of subdivision (d) of Section 739 and Section 739.7, the commission shall not apply the composite tier method to the treatment of any revenues resulting from any fixed charge adopted pursuant to this section.

SEC. 18.SEC. 14.

 Section 2788 of the Public Utilities Code is amended to read:

2788.

 (a) The commission shall allow for purposes of setting the rates of a gas corporation participating in a home insulation assistance and financing program all expenses that the commission finds are reasonably related to the implementation and administration of the program, including commercial advertising. The commission may disapprove advertising or promotional expenses that the commission finds are not reasonably designed to promote the success of the home insulation financial assistance program.

(b) Using moneys allocated from the Public Utilities Public Purposes Program Fund, the commission shall reimburse an electrical corporation participating in a home insulation assistance and financing program for all expenses that the commission finds are reasonably related to the implementation and administration of the program, including commercial advertising. The commission may disapprove advertising or promotional expenses that the commission finds are not reasonably designed to promote the success of the home insulation financial assistance program.

SEC. 19.SEC. 15.

 Section 2851 of the Public Utilities Code is amended to read:

2851.

 (a) In implementing the California Solar Initiative, the commission shall do all of the following:

(1) (A) The commission shall authorize the award of monetary incentives for up to the first megawatt of alternating current generated by solar energy systems that meet the eligibility criteria established by the Energy Commission pursuant to Chapter 8.8 (commencing with Section 25780) of Division 15 of the Public Resources Code. The commission shall determine the eligibility of a solar energy system, as defined in Section 25781 of the Public Resources Code, to receive monetary incentives until the time the Energy Commission establishes eligibility criteria pursuant to Section 25782. Monetary incentives shall not be awarded for solar energy systems that do not meet the eligibility criteria. The incentive level authorized by the commission shall decline each year following implementation of the California Solar Initiative, at a rate of no less than an average of 7 percent per year, and, except as provided in subparagraph (B), shall be zero as of December 31, 2016. The commission shall adopt and publish a schedule of declining incentive levels no less than 30 days in advance of the first decline in incentive levels. The commission may develop incentives based upon the output of electricity from the system, provided those incentives are consistent with the declining incentive levels of this paragraph and the incentives apply to only the first megawatt of electricity generated by the system.

(B) The incentive level for the installation of a solar energy system pursuant to Section 2852 shall be zero as of December 31, 2021.

(2) The commission shall adopt a performance-based incentive program so that by January 1, 2008, 100 percent of incentives for solar energy systems of 100 kilowatts or greater and at least 50 percent of incentives for solar energy systems of 30 kilowatts or greater are earned based on the actual electrical output of the solar energy systems. The commission shall encourage, and may require, performance-based incentives for solar energy systems of less than 30 kilowatts. Performance-based incentives shall decline at a rate of no less than an average of 7 percent per year. In developing the performance-based incentives, the commission may:

(A) Apply performance-based incentives only to customer classes designated by the commission.

(B) Design the performance-based incentives so that customers may receive a higher level of incentives than under incentives based on installed electrical capacity.

(C) Develop financing options that help offset the installation costs of the solar energy system, provided that this financing is ultimately repaid in full by the consumer or through the application of the performance-based rebates.

(3) By January 1, 2008, the commission, in consultation with the Energy Commission, shall require reasonable and cost-effective energy efficiency improvements in existing buildings as a condition of providing incentives for eligible solar energy systems, with appropriate exemptions or limitations to accommodate the limited financial resources of low-income residential housing.

(4) Notwithstanding subdivision (g) of Section 2827, the commission may develop a time-variant tariff that creates the maximum incentive for ratepayers to install solar energy systems so that the system’s peak electricity production coincides with California’s peak electricity demands and that ensures that ratepayers receive due value for their contribution to the purchase of solar energy systems and customers with solar energy systems continue to have an incentive to use electricity efficiently. In developing the time-variant tariff, the commission may exclude customers participating in the tariff from the rate cap for residential customers for existing baseline quantities or usage by those customers of up to 130 percent of existing baseline quantities, as required by Section 739.9. This paragraph does not authorize the commission to require time-variant pricing for ratepayers without a solar energy system.

(b) Notwithstanding subdivision (a), in implementing the California Solar Initiative, the commission may authorize the award of monetary incentives for solar thermal and solar water heating devices, in a total amount up to one hundred million eight hundred thousand dollars ($100,800,000).

(c) (1) In implementing the California Solar Initiative, the commission shall not allocate more than fifty million dollars ($50,000,000) to research, development, and demonstration that explores solar technologies and other distributed generation technologies that employ or could employ solar energy for generation or storage of electricity or to offset natural gas usage. Any program that allocates additional moneys to research, development, and demonstration shall be developed in collaboration with the Energy Commission to ensure there is no duplication of efforts, and adopted by the commission through a rulemaking or other appropriate public proceeding. Any grant awarded by the commission for research, development, and demonstration shall be approved by the full commission at a public meeting. This subdivision does not prohibit the commission from continuing to allocate moneys to research, development, and demonstration pursuant to the self-generation incentive program for distributed generation resources originally established pursuant to Chapter 329 of the Statutes of 2000, as modified pursuant to Section 379.6.

(2) The Legislature finds and declares that a program that provides a stable source of monetary incentives for eligible solar energy systems will encourage private investment sufficient to make solar technologies cost effective.

(d) (1) The commission shall not impose any charge on the consumption of natural gas, or on natural gas ratepayers, to fund the California Solar Initiative.

(2) Notwithstanding any other law, any charge imposed to fund the program adopted and implemented pursuant to this section shall be imposed upon all customers not participating in the California Alternate Rates for Energy (CARE) or family electric rate assistance (FERA) programs, including those residential customers subject to the rate limitation specified in Section 739.9 for existing baseline quantities or usage up to 130 percent of existing baseline quantities of electricity.

(3) The costs of the program adopted and implemented pursuant to this section shall not be recovered from customers participating in the California Alternate Rates for Energy or CARE program. program established pursuant to Section 739.1.

(e) Except as provided in subdivision (f), in implementing the California Solar Initiative, the commission shall ensure that the total cost over the duration of the program does not exceed three billion five hundred fifty million eight hundred thousand dollars ($3,550,800,000). Except as provided in subdivision (f), financial components of the California Solar Initiative shall consist of the following:

(1) Programs under the supervision of the commission and administered by the San Diego Gas and Electric Company, Southern California Edison Company, or Pacific Gas and Electric Company. Except as provided in subdivision (f), the total cost over the duration of these programs shall not exceed two billion three hundred sixty-six million eight hundred thousand dollars ($2,366,800,000) and includes moneys in a tracking account for support of the California Solar Initiative.

(2) Programs adopted, implemented, and financed in the amount of seven hundred eighty-four million dollars ($784,000,000), by charges collected by local publicly owned electric utilities pursuant to Section 2854. This subdivision shall not give the commission power and jurisdiction with respect to a local publicly owned electric utility or its customers.

(3) (A) Programs for the installation of solar energy systems on new construction (New Solar Homes Partnership Program), administered by the Energy Commission, and funded by charges in the amount of four hundred million dollars ($400,000,000), collected from customers of San Diego Gas and Electric Company, Southern California Edison Company, and Pacific Gas and Electric Company. If the commission is notified by the Energy Commission that funding available pursuant to Section 25751 of the Public Resources Code for the New Solar Homes Partnership Program and any other funding for the purposes of this paragraph have been exhausted, the commission may require an electrical corporation to continue administration of the program pursuant to the guidelines established for the program by the Energy Commission, until the funding limit authorized by this paragraph has been reached. The commission may determine whether a third party, including the Energy Commission, should administer the utility’s continuation of the New Solar Homes Partnership Program. The commission, in consultation with the Energy Commission, shall supervise the administration of the continuation of the New Solar Homes Partnership Program by an electrical corporation or third-party administrator. After the exhaustion of funds, the Energy Commission shall notify the Joint Legislative Budget Committee 30 days before the continuation of the program. This subparagraph shall become inoperative on June 1, 2018.

(B) If the commission requires a continuation of the program pursuant to subparagraph (A), any funding made available pursuant to the continuation of the program shall be encumbered through the issuance of rebate reservations by no later than June 1, 2018, and disbursed by no later than December 31, 2021.

(4) The changes made to this subdivision by Chapter 39 of the Statutes of 2012 do not authorize the levy of a charge or any increase in the amount collected pursuant to any existing charge, nor do the changes add to, or detract from, the commission’s existing authority to levy or increase charges.

(f) Upon the expenditure or reservation in any electrical corporation’s service territory of the amount specified in paragraph (1) of subdivision (e) for low-income residential housing programs pursuant to subdivision (c) of Section 2852, the commission shall authorize the continued collection of the charge for the purposes of Section 2852. The commission shall ensure that the total amount collected pursuant to this subdivision does not exceed one hundred eight million dollars ($108,000,000). Upon approval by the commission, an electrical corporation may use amounts collected pursuant to subdivision (e) for purposes of funding the general market portion of the California Solar Initiative, that remain unspent and unencumbered after December 31, 2016, to reduce the electrical corporation’s portion of the total amount collected pursuant to this subdivision.

SEC. 20.SEC. 16.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.