Bill Text: CA SB1122 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Energy: renewable bioenergy projects.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2012-09-27 - Chaptered by Secretary of State. Chapter 612, Statutes of 2012. [SB1122 Detail]

Download: California-2011-SB1122-Amended.html

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BILL NUMBER: SB 1122	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 28, 2012
	AMENDED IN ASSEMBLY  JUNE 18, 2012
	AMENDED IN SENATE  MAY 29, 2012
	AMENDED IN SENATE  APRIL 16, 2012

INTRODUCED BY   Senator Rubio

                        FEBRUARY 17, 2012

   An act to  amend Section   399.20 of, and to 
add  Chapter 7.6 (commencing with Section 2833) to Part 2 of
Division 1 of   Section 399.24 to,  the Public
Utilities Code, relating to energy.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1122, as amended, Rubio. Energy: renewable biomass and biogas
projects.
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities.  Existing law, adopted
prior to the enactment of the California Renewables Portfolio
Standard Program, provides that until the commission completes an
electric generation procurement methodology that values the
environmental and diversity costs and benefits associated with
various generation technologies, the commission shall direct that a
specific portion of future electrical generating capacity needed for
California be reserved or set aside for renewable resources.
    Existing law requires every electrical
corporation   to file with the commission a standard tariff
for electricity generated by an electric generation facility, as
defined, that qualifies for the tariff, is owned and operated by a
retail customer of the electrical corporation, and is located within
the service territory of, and developed to sell electricity to, the
electrical corporation. Existing law requires an electrical
corporation to make the tariff available to the owner or operator of
an electric generation facility within the service territory of the
electrical corporation, as specified, until the electrical
corporation meets its proportionate share of a sta   tewide
cap of 750 megawatts, as specified. 
   This bill would  make certain legislative findings and
declarations regarding new and emerging small- and community-scale
distributed renewable generation technologies. The bill would
 require the commission, by June 1, 2013, to direct
electrical corporations, as defined, to collectively procure at least
250 megawatts of electrical generating capacity from  small
and community-scale   startup developers of 
biomass and biogas projects, as defined.  The bill would
authorize the commission to increase the 750 megawatt statewide cap
in order to allocate 250 megawatts to startup developers of biomass
and biogas projects fueled by specified sources of bioenergy. 
The bill would, among other things, require the commission, in
implementing  that   the 250 megawatt 
procurement requirement, to direct each electrical corporation to
develop standard contract terms and conditions, as specified, and to
provide a streamlined contracting process for  the above
  that  procurement requirement. The bill would
also require the commission, at least once a year, to solicit
electricity from  small- and community-scale  
startup developers of  biomass or biogas projects through a
competitive solicitation process for specified project application
categories.  The bill would authorize the commission to
monitor that solicitation process, and if the commission determines
the prices of a bid are not reasonable, suspend the bidding within
that project application category.  
   Existing law authorizes the furnishing of utility services by
publicly owned public utilities, which are subject to the control of
their governing bodies.  
   This bill would specify that before June 1, 2013, each local
publicly owned utility that sells electricity at retail to 75,000 or
more customers is strongly encouraged to consider and adopt, if
appropriate, a procurement target for small- and community-scale
biomass and biogas projects.  
   The bill would also require the commission to encourage gas and
electrical corporations to develop and offer, by December 31, 2013,
programs and services to facilitate the development of in-state
biogas and to facilitate the conditioning and upgrading of biogas in
order to enable biogas to be used for a broad range of purposes, as
specified. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 399.20 of the   Public
Utilities Code   is amended to read: 
   399.20.  (a) It is the policy of this state and the intent of the
Legislature to encourage electrical generation from eligible
renewable energy resources.
   (b) As used in this section, "electric generation facility" means
an electric generation facility located within the service territory
of, and developed to sell electricity to, an electrical corporation
that meets all of the following criteria:
   (1) Has an effective capacity of not more than three megawatts.
   (2) Is interconnected and operates in parallel with the electrical
transmission and distribution grid.
   (3) Is strategically located and interconnected to the electrical
transmission and distribution grid in a manner that optimizes the
deliverability of electricity generated at the facility to load
centers.
   (4) Is an eligible renewable energy resource.
   (c) Every electrical corporation shall file with the commission a
standard tariff for electricity purchased from an electric generation
facility. 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.
   (d) (1) The tariff shall provide for payment for every
kilowatthour of electricity purchased from an electric generation
facility for a period of 10, 15, or 20 years, as authorized by the
commission. The payment shall be the market price determined by the
commission pursuant to paragraph (2) and shall include all current
and anticipated environmental compliance costs, including, but not
limited to, mitigation of emissions of greenhouse gases and air
pollution offsets associated with the operation of new generating
facilities in the local air pollution control or air quality
management district where the electric generation facility is
located.
   (2) The commission shall establish a methodology to determine the
market price of electricity for terms corresponding to the length of
contracts with an electric generation facility, in consideration of
the following:
   (A) The long-term market price of electricity for fixed price
contracts, determined pursuant to an electrical corporation's general
procurement activities as authorized by the commission.
   (B) The long-term ownership, operating, and fixed-price fuel costs
associated with fixed-price electricity from new generating
facilities.
   (C) The value of different electricity products including
baseload, peaking, and as-available electricity.
   (3) The commission may adjust the payment rate to reflect the
value of every kilowatthour of electricity generated on a
time-of-delivery basis.
   (4) The commission shall ensure, with respect to rates and
charges, that ratepayers that do not receive service pursuant to the
tariff are indifferent to whether a ratepayer with an electric
generation facility receives service pursuant to the tariff.
   (e) An electrical corporation shall provide expedited
interconnection procedures to an electric generation facility located
on a distribution circuit that generates electricity at a time and
in a manner so as to offset the peak demand on the distribution
circuit, if the electrical corporation determines that the electric
generation facility will not adversely affect the distribution grid.
The commission shall consider and may establish a value for an
electric generation facility located on a distribution circuit that
generates electricity at a time and in a manner so as to offset the
peak demand on the distribution circuit.
   (f)  (1)    An electrical corporation shall make
the tariff available to the owner or operator of an electric
generation facility within the service territory of the electrical
corporation, upon request, on a first-come-first-served basis, until
the electrical corporation meets its proportionate share of a
statewide cap of 750 megawatts cumulative rated generation capacity
served under this section and Section 387.6. The proportionate share
shall be calculated based on the ratio of the electrical corporation'
s peak demand compared to the total statewide peak demand. 
   (2) By June 1, 2013, the commission shall direct the electrical
corporations to collectively procure at least 250 megawatts of
electrical generating capacity from startup developers of biomass and
biogas projects. The commission may increase the 750 megawatt
statewide cap identified in paragraph (1) in order to allocate 250
megawatts to electric generation facilities fueled by the sources of
bioenergy specified in subparagraph (B). The proportionate share
shall be calculated based on the ratio of the electrical corporation'
s peak demand compared to the total statewide peak demand. In
implementing this paragraph, the commission shall do all of the
following:  
   (A) Allocate the 250 megawatts identified in this paragraph among
the electrical corporations.  
   (B) Direct each electrical corporation to, at least once a year,
solicit electricity from startup developers of biomass or biogas
projects through a competitive solicitation process for each of the
following project application categories:  
   (i) For dairy digester gas, 85 megawatts.  
   (ii) For biogas from wastewater treatment, 50 megawatts. 

   (iii) For agricultural biomass and biogas, 50 megawatts. 

   (iv) For biomass using byproducts of sustainable forest
management, 30 megawatts.  
   (v) For landfill gas and organic waste diversion, 35 megawatts.
 
   (C) Direct the electrical corporations to develop standard
contract terms and conditions that reflect the operational
characteristics of the projects, and to provide a streamlined
contracting process.  
   (D) Select the offers that represent the least-cost, best-fit
resources for the electrical corporation.  
   (E) Coordinate, to the maximum extent feasible, any incentive or
subsidy programs for biogas and biomass with the solicitation
requirement in subparagraph (B) in order to provide maximum benefits
to ratepayers and to ensure that incentives are used to reduce
contract prices.  
   (F) Ensure that electrical corporations give priority to resources
that result in the most greenhouse gas reductions as part of their
contract. As part of the solicitation process, the commission shall
require the electrical corporations to evaluate the value of
greenhouse gas reductions.  
   (G) Allocate a proportional share of costs to the electric service
provider and community choice aggregator customers through
nonbypassable charges. 
   (g) The electrical corporation may make the terms of the tariff
available to owners and operators of an electric generation facility
in the form of a standard contract subject to commission approval.
   (h) Every kilowatthour of electricity purchased from an electric
generation facility shall count toward meeting the electrical
corporation's renewables portfolio standard annual procurement
targets for purposes of paragraph (1) of subdivision (b) of Section
399.15.
   (i) The physical generating capacity of an electric generation
facility shall count toward the electrical corporation's resource
adequacy requirement for purposes of Section 380.
   (j) (1) The commission shall establish performance standards for
any electric 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.
   (2) The commission may reduce the three megawatt capacity
limitation of paragraph (1) of subdivision (b) if the commission
finds that a reduced capacity limitation is necessary to maintain
system reliability within that electrical corporation's service
territory.
   (k) (1) Any owner or operator of an electric generation facility
that received ratepayer-funded incentives in accordance with Section
379.6 of this code, or with Section 25782 of the Public Resources
Code, and participated in a net metering program pursuant to Sections
2827, 2827.9, and 2827.10 of this code prior to January 1, 2010,
shall be eligible for a tariff or standard contract filed by an
electrical corporation pursuant to this section.
   (2) In establishing the tariffs or standard contracts pursuant to
this section, the commission shall consider ratepayer-funded
incentive payments previously received by the generation facility
pursuant to Section 379.6 of this code or Section 25782 of the Public
Resources Code. The commission shall require reimbursement of any
funds received from these incentive programs to an electric
generation facility, in order for that facility to be eligible for a
tariff or standard contract filed by an electrical corporation
pursuant to this section, unless the commission determines ratepayers
have received sufficient value from the incentives provided to the
facility based on how long the project has been in operation and the
amount of renewable electricity previously generated by the facility.

   (3) A customer that receives service under a tariff or contract
approved by the commission pursuant to this section is not eligible
to participate in any net metering program.
   (l) An owner or operator of an electric generation facility
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:
   (1) The owner or operator of an electric generation facility no
longer meets the eligibility requirements for receiving service
pursuant to the tariff or contract.
   (2) The period of service established by the commission pursuant
to subdivision (d) is completed.
   (m) Within 10 days of receipt of a request for a tariff pursuant
to this section from an owner or operator of an electric generation
facility, the electrical corporation that receives the request shall
post a copy of the request on its Internet Web site. The information
posted on the Internet Web site shall include the name of the city in
which the facility is located, but information that is proprietary
and confidential, including, but not limited to, address information
beyond the name of the city in which the facility is located, shall
be redacted.
   (n) An electrical corporation may deny a tariff request pursuant
to this section if the electrical corporation makes any of the
following findings:
   (1) The electric generation facility does not meet the
requirements of this section.
   (2) The transmission or distribution grid that would serve as the
point of interconnection is inadequate.
   (3) The electric generation facility does not meet all applicable
state and local laws and building standards and utility
interconnection requirements.
   (4) The aggregate of all electric generating facilities on a
distribution circuit would adversely impact utility operation and
load restoration efforts of the distribution system.
   (o) Upon receiving a notice of denial from an electrical
corporation, the owner or operator of the electric generation
facility denied a tariff pursuant to this section shall have the
right to appeal that decision to the commission.
   (p) In order to ensure the safety and reliability of electric
generation facilities, the owner of an electric generation facility
receiving a tariff pursuant to this section shall provide an
inspection and maintenance report to the electrical corporation at
least once every other year. The inspection and maintenance report
shall be prepared at the owner's or operator's expense by a
California-licensed contractor who is not the owner or operator of
the electric generation facility. A California-licensed electrician
shall perform the inspection of the electrical portion of the
generation facility.
   (q) The contract between the electric generation facility
receiving the tariff and the electrical corporation shall contain
provisions that ensure that construction of the electric generating
facility complies with all applicable state and local laws and
building standards, and utility interconnection requirements.
   (r) (1) All construction and installation of facilities of the
electrical corporation, including at the point of the output meter or
at the transmission or distribution grid, shall be performed only by
that electrical corporation.
   (2) All interconnection facilities installed on the electrical
corporation's side of the transfer point for electricity between the
electrical corporation and the electrical conductors of the electric
generation facility shall be owned, operated, and maintained only by
the electrical corporation. The ownership, installation, operation,
reading, and testing of revenue metering equipment for electric
generating facilities shall only be performed by the electrical
corporation.
   SEC. 2.    Section 399.24 is added to the  
Public Utilities Code  , to read:  
   399.24.  The commission shall encourage gas and electrical
corporations to develop and offer, by December 31, 2013, programs and
services to facilitate the development of in-state biogas and to
facilitate the conditioning and upgrading of biogas in order to
enable biogas to be used for a broad range of purposes, including
injection into natural gas pipelines, use for onsite power
generation, and use at compressed natural gas filling stations for
alternative fuel vehicles.  
  SECTION 1.    Chapter 7.6 (commencing with Section
2833) is added to Part 2 of Division 1 of the Public Utilities Code,
to read:
      CHAPTER 7.6.  RENEWABLE BIOMASS AND BIOGAS PROJECTS


   2833.  (a) The Legislature finds and declares the following:
   (1) New and emerging small- and community-scale distributed
renewable generation technologies can greatly reduce greenhouse gas
pollution in California, while providing quantifiable benefits to
California ratepayers and the environment, contributing to the state'
s renewable energy, air quality, and climate goals, and providing
increased electric system reliability.
   (2) Current commission procurement programs do not fully account
for the benefits of methane and other emissions reductions that
result from the utilization of low-emission biomass and biogas
technologies from landfills and organic waste diversion, wastewater
treatment plants, food and agricultural processing, animal husbandry
facilities, byproducts of sustainable forest management and wildfire
prevention, and farms.
   (3) Resource diversity benefits California ratepayers in the long
term by reducing both the price of electricity and the risks to the
reliability of the electric system.
   (b) 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, that furnishes electricity to more than
100,000 customers.
   (2) "Small- and community-scale biogas or biomass projects" means
electrical generation projects that are no larger than five
megawatts, that were not operative before January 1, 2013, and that
comply with the regulations of the air quality management or air
pollution control district and all other applicable environmental
compliance standards.
   (c) By June 1, 2013, the commission shall direct the electrical
corporations to collectively procure at least 250 megawatts of
electrical generating capacity from small- and community-scale
biomass and biogas projects.
   (d) In implementing this section, the commission shall do all of
the following:
   (1) Allocate the 250 megawatts identified in subdivision (c) among
the electrical corporations.
   (2) Direct each electrical corporation to, at least once a year,
solicit electricity from small- and community-scale biomass or biogas
projects through a competitive solicitation process for each of the
following project application categories:
   (A) For dairy digester gas, 85 megawatts.
   (B) For biogas from wastewater treatment, 50 megawatts.
   (C) For agricultural biomass and biogas, 50 megawatts.
   (D) For biomass using byproducts of sustainable forest management,
30 megawatts.
   (E) For landfill gas and organic waste diversion, 35 megawatts.
   (3) Direct the electrical corporations to develop standard
contract terms and conditions that reflect the operational
characteristics of the projects, and to provide a streamlined
contracting process.
   (4) Select the offers that represent the least-cost, best-fit
resources for the electrical corporation.
   (5) Coordinate, to the maximum extent feasible, any incentive or
subsidy programs for biogas and biomass with the solicitation
requirement in paragraph (2) in order to provide maximum benefits to
ratepayers and to ensure that incentives are used to reduce contract
prices.
   (6) Ensure that electrical corporations give priority to resources
that result in the most greenhouse gas reductions as part of their
contract. As part of the solicitation process, the commission shall
require the electrical corporations to evaluate the value of
greenhouse gas reductions.
   (7) Allocate a proportional share of costs to the electric service
provider and community choice aggregator customers through
nonbypassable charges.
   (e) During the bidding process in a solicitation pursuant to
subdivision (d), the commission may monitor the bidding process in
the solicitation, and, if the commission determines the prices of a
bid are not reasonable, suspend the bidding within that project
application category.
   2834.  (a) The Legislature finds and declares all of the
following:
   (1) New and emerging community-scale distributed renewable
generation technologies can greatly reduce greenhouse gas pollution
in California, while providing quantifiable benefits to California
ratepayers and the environment, contributing to the state's renewable
energy, air quality, and climate goals, and providing increased
electric system reliability.
   (2) The Energy Commission has acknowledged in its 2011 Integrated
Energy Policy Report that "i]ncreased bioenergy production could
provide the state with several economic, environmental, and
reliability benefits."
   (3) Significant potential exists for the utilization of
low-emission biomass and biogas technologies from landfills and
organic waste diversion, wastewater treatment plants, food and
agricultural processing, animal husbandry facilities, byproducts of
sustainable forest management and wildfire prevention, and farms.
   (4) Resource diversity benefits California ratepayers in the long
term by reducing both the price of electricity and the risks to the
reliability of the electric system.
   (b) Before June 1, 2013, each local publicly owned utility that
sells electricity at retail to 75,000 or more customers is strongly
encouraged to consider and adopt, if appropriate, a procurement
target for small- and community-scale biomass and biogas projects. To
achieve that target, each local publicly owned utility shall set an
interim deadline of December 31, 2016, and a final deadline of
December 31, 2020.