Bill Text: CA SB180 | 2015-2016 | Regular Session | Introduced

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

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Bill Title: Electricity: emissions of greenhouse gases.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2016-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB180 Detail]

Download: California-2015-SB180-Introduced.html

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BILL NUMBER: SB 180	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Jackson

                        FEBRUARY 9, 2015

   An act to add Section 25544 to the Public Resources Code, and to
amend the heading of Chapter 3 (commencing with Section 8340) of
Division 4.1 of, and to amend, repeal, and add Sections 8340 and 8341
of, the Public Utilities Code, relating to electricity.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 180, as introduced, Jackson. Electricity: emissions of
greenhouse gases.
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations
while local publicly owned electric utilities are under the direction
of their governing board. Existing law prohibits any load-serving
entity and any local publicly owned electric utility from entering
into a long-term financial commitment for baseload generation unless
that baseload generation complies with a greenhouse gases emission
performance standard. Existing law requires the Public Utilities
Commission, by February 1, 2007, through a rulemaking proceeding and
in consultation with the State Energy Resources Conservation and
Development Commission and the State Air Resources Board, to
establish a greenhouse gases emission performance standard for all
baseload generation of load-serving entities. Existing law requires
the State Energy Resources Conservation and Development Commission,
by June 30, 2007, at a duly noticed public hearing and in
consultation with the Public Utilities Commission and the State Air
Resources Board, to establish a greenhouse gases emission performance
standard for all baseload generation of local publicly owned
electric utilities.
   This bill would, on July 1, 2017, replace the greenhouse gases
performance emission standards for baseload generation with
greenhouse gases performance emission standards for primary
generation and secondary generation, as defined. The bill would
require the Public Utilities Commission, by June 30, 2017, through a
rulemaking proceeding and in consultation with the State Energy
Resources Conservation and Development Commission and the State Air
Resources Board, to establish a greenhouse gases emission performance
standard for all primary generation of load-serving entities, and a
separate standard for secondary generation. The bill would require
the State Energy Resources Conservation and Development Commission,
by June 30, 2017, at a duly noticed public hearing and in
consultation with the Public Utilities Commission and the State Air
Resources Board, to establish a greenhouse gases emission performance
standard for all primary generation of local publicly owned electric
utilities, and a separate standard for secondary generation. The
bill would require that the greenhouse gases emission performance
standard for primary generation and secondary generation be
established at the lowest level that the 2 commissions determine to
be technologically feasible without putting reliability of the
electrical grid and of electric service at risk. The bill would
require that the initial greenhouse gases emission performance
standard for primary generation establish a rate of emissions of
greenhouse gases that is 80% lower than the permissible rate of
emissions of greenhouse gases for baseload generation in effect as of
January 1, 2015. The bill would require that the commissions update
their respective greenhouse gases emission performance standards
every 5 years based on new technology.
   Existing law makes any public utility that fails to comply with
any part of any order, decision, rule, direction, demand, or
requirement of the commission guilty of a crime. Existing law
additionally makes every corporation or person other than a public
utility who fails to comply with any part of any order, decision,
rule, direction, demand, or requirement of the commission guilty of a
crime.
   Because this bill would require action by the Public Utilities
Commission to implement its requirements with respect to a
load-serving entity, and a violation of an order or decision of the
Public Utilities Commission would be a crime, the bill would impose a
state-mandated local program by expanding what is a crime.
   The Warren-Alquist State Energy Resources Conservation and
Development Act establishes the State Energy Resources Conservation
and Development Commission and requires it to certify sufficient
sites and related facilities that are required to provide a supply of
electricity sufficient to accommodate projected demand for power
statewide. The act grants the State Energy Resources Conservation and
Development Commission the exclusive authority to certify any
stationary or floating electrical generating facility using any
source of thermal energy, with a generating capacity of 50 megawatts
or more, and any facilities appurtenant thereto.
   The California Environmental Quality Act generally requires all
state and local governmental lead agencies to prepare, or cause to be
prepared by contract, and certify the completion of, an
environmental impact report on any discretionary project that they
propose to carry out or approve that may result in a significant
effect on the environment, that is, a substantial, or potentially
substantial, adverse change in the physical conditions that exist
within the area that will be affected by the project. The "lead
agency" for a project is the public agency that has the principal
responsibility for carrying out or approving the project that may
have a significant effect on the environment.
   This bill would designate the State Energy Resources Conservation
and Development Commission to be the lead agency with respect to any
carbon capture and storage project associated with an application for
certification.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


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

  SECTION 1.  Section 25544 is added to the Public Resources Code, to
read:
   25544.  The commission shall be the lead agency, as defined in
Section 21067, for any carbon capture and storage project associated
with an application for certification pursuant to this chapter. For
purposes of this section, "carbon capture and storage," also known as
carbon capture and sequestration, means the injection of carbon
dioxide or other greenhouse gases into geological formations so as to
prevent releases into the atmosphere.
  SEC. 2.  The heading of Chapter 3 (commencing with Section 8340) of
Division 4.1 of the Public Utilities Code is amended to read:
      CHAPTER 3.  GREENHOUSE GASES EMISSION PERFORMANCE STANDARD
 FOR BASELOAD ELECTRICAL GENERATING RESOURCES 


  SEC. 3.  Section 8340 of the Public Utilities Code is amended to
read:
   8340.  For purposes of this chapter, the following terms have the
following meanings:
   (a) "Baseload generation" means electricity generation from a
powerplant that is designed and intended to provide electricity at an
annualized plant capacity factor of at least 60 percent.
   (b) "Combined-cycle natural gas" with respect to a powerplant
means the powerplant employs a combination of one or more gas
turbines and steam turbines in which electricity is produced in the
steam turbine from otherwise lost waste heat exiting from one or more
of the gas turbines.
   (c) "Electric service provider" means an "electric service
provider" as defined in Section 218.3, but does not include
corporations or persons employing cogeneration technology or
producing electricity from other than a conventional power source
consistent with subdivision (b) of Section 218.
   (d) "Greenhouse gases" means those gases listed in Section 38505
of the Health and Safety Code.
   (e) "Load-serving entity" means every electrical corporation,
electric service provider, or community choice aggregator serving
end-use customers in the state.
   (f) "Long-term financial commitment" means either a new ownership
investment in baseload generation or a new or renewed contract with a
term of five or more years, which includes procurement of baseload
generation.
   (g) "Output-based methodology" means a greenhouse gases emission
performance standard that is expressed in pounds of greenhouse gases
emitted per megawatthour and factoring in the useful thermal energy
employed for purposes other than the generation of electricity.
   (h) "Plant capacity factor" means the ratio of the electricity
produced during a given time period, measured in kilowatthours, to
the electricity the unit could have produced if it had been operated
at its rated capacity during that period, expressed in kilowatthours.

   (i) "Powerplant" means a facility for the generation of
electricity, and includes one or more generating units at the same
location.
   (j) "Zero- or low-carbon generating resource" means an electrical
generating resource that will generate electricity while producing
emissions of greenhouse gases at a rate substantially below the
greenhouse gases emission performance standard, as determined by the
commission. 
   (k) This section shall become inoperative on July 1, 2017, and, as
of January 1, 2018, is repealed. 
  SEC. 4.  Section 8340 is added to the Public Utilities Code, to
read:
   8340.  For purposes of this chapter, the following terms have the
following meanings:
   (a) "Electric service provider" has the same meaning as defined in
Section 218.3, but does not include corporations or persons
employing cogeneration technology or producing electricity from other
than a conventional power source consistent with subdivision (b) of
Section 218.
   (b) "Exempt generation" means electricity generation from a
powerplant that is designed and intended to provide electricity at an
annualized plant capacity factor of less than 2 percent.
   (c) "Greenhouse gases" means those gases listed in Section 38505
of the Health and Safety Code.
   (d) "Greenhouse gases performance emissions standard" means the
permissible levels of emissions of greenhouse gases established
pursuant to Section 8341 for primary generation and secondary
generation.
   (e) "Load-serving entity" means every electrical corporation,
electric service provider, or community choice aggregator serving
end-use customers in the state.
   (f)  "Long-term financial commitment" means either a new ownership
investment in primary generation or secondary generation or a new or
renewed contract with a term of five or more years, which includes
procurement of primary generation or secondary generation.
   (g) "Output-based methodology" means a greenhouse gases emission
performance standard that is expressed in pounds of greenhouse gases
emitted per megawatthour and factoring in the useful thermal energy
employed for purposes other than the generation of electricity.
   (h) "Plant capacity factor" means the ratio of the electricity
produced during a given time period, measured in kilowatthours, to
the electricity the unit could have produced if it had been operated
at its rated capacity during that period, expressed in kilowatthours.

   (i) "Powerplant" means a facility for the generation of
electricity, and includes one or more generating units at the same
location.
   (j) "Primary generation" means electricity generation from a
powerplant that is designed and intended to provide electricity at an
annualized plant capacity factor of at least 15 percent.
   (k) "Secondary generation" means electricity generation from a
powerplant that is designed and intended to provide electricity at an
annualized plant capacity factor of less than 15 percent and at
least 2 percent.
   (l) "Zero- or low-carbon generating resource" means an electrical
generating resource that will generate electricity while producing
emissions of greenhouse gases at a rate substantially below the
greenhouse gases emission performance standard, as determined by the
commission.
   (m) This section shall become operative on January 1, 2017.
  SEC. 5.  Section 8341 of the Public Utilities Code is amended to
read:
   8341.  (a) No load-serving entity or local publicly owned electric
utility may enter into a long-term financial commitment unless any
baseload generation supplied under the long-term financial commitment
complies with the greenhouse gases emission performance standard
established by the commission, pursuant to subdivision (d), for a
load-serving entity, or by the Energy Commission, pursuant to
subdivision (e), for a local publicly owned electric utility.
   (b) (1) The commission shall not approve a long-term financial
commitment by an electrical corporation unless any baseload
generation supplied under the long-term financial commitment complies
with the greenhouse gases emission performance standard established
by the commission pursuant to subdivision (d).
   (2) The commission may, in order to enforce this section, review
any long-term financial commitment proposed to be entered into by an
electric service provider or a community choice aggregator.
   (3) The commission shall adopt rules to enforce the requirements
of this section, for load-serving entities. The commission shall
adopt procedures, for all load-serving entities, to verify the
emissions of greenhouse gases from any baseload generation supplied
under a contract subject to the greenhouse gases emission performance
standard to ensure compliance with the standard.
   (4) In determining whether a long-term financial commitment is for
baseload generation, the commission shall consider the design of the
powerplant and the intended use of the powerplant, as determined by
the commission based upon the electricity purchase contract, any
certification received from the Energy Commission, any other permit
or certificate necessary for the operation of the powerplant,
including a certificate of public convenience and necessity, any
procurement approval decision for the load-serving entity, and any
other matter the commission determines is relevant under the
circumstances.
   (5) Costs incurred by an electrical corporation to comply with
this section, including those costs incurred for electricity purchase
agreements that are approved by the commission that comply with the
greenhouse gases emission performance standard, are to be treated as
procurement costs incurred pursuant to an approved procurement plan
and the commission shall ensure timely cost recovery of those costs
pursuant to paragraph (3) of subdivision (d) of Section 454.5.
   (6) A long-term financial commitment entered into through a
contract approved by the commission, for electricity generated by a
zero- or low-carbon generating resource that is contracted for, on
behalf of consumers of this state on a cost-of-service basis, shall
be recoverable in rates, in a manner determined by the commission
consistent with Section 380. The commission may, after a hearing,
approve an increase from one-half to 1 percent in the return on
investment by the third party entering into the contract with an
electrical corporation with respect to investment in zero- or
low-carbon generation resources authorized pursuant to this
subdivision.
   (c) (1) The Energy Commission shall adopt regulations for the
enforcement of this chapter with respect to a local publicly owned
electric utility.
   (2) The Energy Commission may, in order to ensure compliance with
the greenhouse gases emission performance standard by local publicly
owned electric utilities, apply the procedures adopted by the
commission to verify the emissions of greenhouse gases from baseload
generation pursuant to subdivision (b).
   (3) In determining whether a long-term financial commitment is for
baseload generation, the Energy Commission shall consider the design
of the powerplant and the intended use of the powerplant, as
determined by the Energy Commission based upon the electricity
purchase contract, any certification received from the Energy
Commission, any other permit for the operation of the powerplant, any
procurement approval decision for the load-serving entity, and any
other matter the Energy Commission determines is relevant under the
circumstances.
   (d) (1) On or before February 1, 2007, the commission, through a
rulemaking proceeding, and in consultation with the Energy Commission
and the State Air Resources Board, shall establish a greenhouse
gases emission performance standard for all baseload generation of
load-serving entities, at a rate of emissions of greenhouse gases
that is no higher than the rate of emissions of greenhouse gases for
combined-cycle natural gas baseload generation. Enforcement of the
greenhouse gases emission performance standard shall begin
immediately upon the establishment of the standard. All
combined-cycle natural gas powerplants that are in operation, or that
have an Energy Commission final permit decision to operate as of
June 30, 2007, shall be deemed to be in compliance with the
greenhouse gases emission performance standard.
   (2) In determining the rate of emissions of greenhouse gases for
baseload generation, the commission shall include the net emissions
resulting from the production of electricity by the baseload
generation.
   (3) The commission shall establish an output-based methodology to
ensure that the calculation of emissions of greenhouse gases for
cogeneration recognizes the total usable energy output of the
process, and includes all greenhouse gases emitted by the facility in
the production of both electrical and thermal energy.
   (4) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the commission shall consider net emissions from the process of
growing, processing, and generating the electricity from the fuel
source.
   (5) Carbon dioxide that is injected in geological formations, so
as to prevent releases into the atmosphere, in compliance with
applicable laws and regulations shall not be counted as emissions of
the powerplant in determining compliance with the greenhouse gases
emissions performance standard.
   (6) In adopting and implementing the greenhouse gases emission
performance standard, the commission, in consultation with the
Independent System Operator shall consider the effects of the
standard on system reliability and overall costs to electricity
customers.
   (7) In developing and implementing the greenhouse gases emission
performance standard, the commission shall address long-term
purchases of electricity from unspecified sources in a manner
consistent with this chapter.
   (8) In developing and implementing the greenhouse gases emission
performance standard, the commission shall consider and act in a
manner consistent with any rules adopted pursuant to Section 824a-3
of Title 16 of the United States Code.
   (9) An electrical corporation that provides electric service to
75,000 or fewer retail end-use customers in California may file with
the commission a proposal for alternative compliance with this
section, which the commission may accept upon a showing by the
electrical corporation of both of the following:
   (A) A majority of the electrical corporation's retail end-use
customers for electric service are located outside of California.
   (B) The emissions of greenhouse gases to generate electricity for
the retail end-use customers of the electrical corporation are
subject to a review by the utility regulatory commission of at least
one other state in which the electrical corporation provides
regulated retail electric service.
   (e) (1) On or before June 30, 2007, the Energy Commission, at a
duly noticed public hearing and in consultation with the commission
and the State Air Resources Board, shall establish a greenhouse gases
emission performance standard for all baseload generation of local
publicly owned electric utilities at a rate of emissions of
greenhouse gases that is no higher than the rate of emissions of
greenhouse gases for combined-cycle natural gas baseload generation.
The greenhouse gases emission performance standard established by the
Energy Commission for local publicly owned electric utilities shall
be consistent with the standard adopted by the commission for
load-serving entities. Enforcement of the greenhouse gases emission
performance standard shall begin immediately upon the establishment
of the standard. All combined-cycle natural gas powerplants that are
in operation, or that have an Energy Commission final permit decision
to operate as of June 30, 2007, shall be deemed to be in compliance
with the greenhouse gases emission performance standard.
   (2) The greenhouse gases emission performance standard shall be
adopted by regulation pursuant to the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code).
   (3) In determining the rate of emissions of greenhouse gases for
baseload generation, the Energy Commission shall include the net
emissions resulting from the production of electricity by the
baseload generation.
   (4) The Energy Commission shall establish an output-based
methodology to ensure that the calculation of emissions of greenhouse
gases for cogeneration recognizes the total usable energy output of
the process, and includes all greenhouse gases emitted by the
facility in the production of both electrical and thermal energy.
   (5) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the Energy Commission shall consider net emissions from the process
of growing, processing, and generating the electricity from the fuel
source.
   (6) Carbon dioxide that is captured from the emissions of a
powerplant and that is permanently disposed of in geological
formations in compliance with applicable laws and regulations, shall
not be counted as emissions from the powerplant.
   (7) In adopting and implementing the greenhouse gases emission
performance standard, the Energy Commission, in consultation with the
Independent System Operator, shall consider the effects of the
standard on system reliability and overall costs to electricity
customers.
   (8) In developing and implementing the greenhouse gases emission
performance standard, the Energy Commission shall address long-term
purchases of electricity from unspecified sources in a manner
consistent with this chapter.
   (9) In developing and implementing the greenhouse gases emission
performance standard, the Energy Commission shall consider and act in
a manner consistent with any rules adopted pursuant to Section
824a-3 of Title 16 of the United States Code.
   (f) The Energy Commission, in a duly noticed public hearing and in
consultation with the commission and the State Air Resources Board,
shall reevaluate and continue, modify, or replace the greenhouse
gases emission performance standard when an enforceable greenhouse
gases emissions limit is established and in operation, that is
applicable to local publicly owned electric utilities.
   (g) The commission, through a rulemaking proceeding and in
consultation with the Energy Commission and the State Air Resources
Board, shall reevaluate and continue, modify, or replace the
greenhouse gases emission performance standard when an enforceable
greenhouse gases emissions limit is established and in operation,
that is applicable to load-serving entities. 
   (h) This section shall become inoperative on July 1, 2017, and, as
of January 1, 2018, is repealed. 
  SEC. 6.  Section 8341 is added to the Public Utilities Code, to
read:
   8341.  (a) (1) Beginning July 1, 2017, no load-serving entity or
local publicly owned electric utility may enter into a new long-term
financial commitment unless any primary generation supplied under the
long-term financial commitment complies with the greenhouse gases
emission performance standard established by the commission, pursuant
to subdivision (d), for a load-serving entity, or by the Energy
Commission, pursuant to subdivision (f), for a local publicly owned
electric utility.
   (2) Beginning July 1, 2017, no load-serving entity or local
publicly owned electric utility may enter into a new long-term
financial commitment unless any secondary generation supplied under
the long-term financial commitment complies with the greenhouse gases
emission performance standard established by the commission,
pursuant to subdivision (e), for a load-serving entity, or by the
Energy Commission, pursuant to subdivision (g), for a local publicly
owned electric utility.
   (3) Neither the commission or the Energy Commission shall
establish a greenhouse gases emission performance standard for exempt
generation.
   (b) (1) (A) The commission shall not approve a long-term financial
commitment by an electrical corporation unless the primary
generation supplied under the long-term financial commitment complies
with the greenhouse gases emission performance standard established
by the commission pursuant to subdivision (d).
   (B) The commission shall not approve a long-term financial
commitment by an electrical corporation unless the secondary
generation supplied under the long-term financial commitment complies
with the greenhouse gases emission performance standard established
by the commission pursuant to subdivision (e).
   (2) The commission may, in order to enforce this section, review
any long-term financial commitment proposed to be entered into by an
electric service provider or a community choice aggregator.
   (3) The commission shall adopt rules to enforce the requirements
of this section, for load-serving entities. The commission shall
adopt procedures, for all load-serving entities, to verify the
emissions of greenhouse gases from any primary generation or
secondary generation supplied under a contract subject to the
greenhouse gases emission performance standard to ensure compliance
with the standard.
   (4) In determining whether a long-term financial commitment is for
primary generation or secondary generation, the commission shall
consider the design of the powerplant and the intended use of the
powerplant, as determined by the commission based upon the
electricity purchase contract, any certification received from the
Energy Commission, any other permit or certificate necessary for the
operation of the powerplant, including a certificate of public
convenience and necessity, any procurement approval decision for the
load-serving entity, and any other matter the commission determines
is relevant under the circumstances.
   (5) Costs incurred by an electrical corporation to comply with
this section, including those costs incurred for electricity purchase
agreements that are approved by the commission that comply with the
respective greenhouse gases emission performance standards, are to be
treated as procurement costs incurred pursuant to an approved
procurement plan and the commission shall ensure timely cost recovery
of those costs pursuant to paragraph (3) of subdivision (d) of
Section 454.5.
   (6)  A long-term financial commitment entered into through a
contract approved by the commission, for electricity generated by a
zero- or low-carbon generating resource that is contracted for, on
behalf of consumers of this state on a cost-of-service basis, shall
be recoverable in rates, in a manner determined by the commission
consistent with Section 380. The commission may, after a hearing,
approve an increase from one-half to 1 percent in the return on
investment by the third party entering into the contract with an
electrical corporation with respect to investment in zero- or
low-carbon generation resources authorized pursuant to this
paragraph.
   (c) (1) The Energy Commission shall adopt regulations for the
enforcement of this chapter with respect to a local publicly owned
electric utility.
   (2) The Energy Commission may, in order to ensure compliance with
the greenhouse gases emission performance standard by local publicly
owned electric utilities, apply the procedures adopted by the
commission to verify the emissions of greenhouse gases from primary
generation and secondary generation pursuant to subdivision (b).
   (3) In determining whether a long-term financial commitment is for
primary generation or secondary generation, the Energy Commission
shall consider the design of the powerplant and the intended use of
the powerplant, as determined by the Energy Commission based upon the
electricity purchase contract, any certification received from the
Energy Commission, any other permit for the operation of the
powerplant, any procurement approval decision for the load-serving
entity, and any other matter the Energy Commission determines is
relevant under the circumstances.
   (d) (1) On or before June 30, 2017, the commission, through a
rulemaking proceeding, and in consultation with the Energy Commission
and the State Air Resources Board, shall establish a greenhouse
gases emission performance standard for all primary generation of
load-serving entities. The greenhouse gases emission performance
standard for primary generation shall be established at the lowest
level that the commission determines to be technologically feasible
without putting reliability of the electrical grid and of electric
service at risk. The initial greenhouse gases emission performance
standard for primary generation shall establish a rate of emissions
of greenhouse gases that is 80 percent lower than the permissible
rate of emissions of greenhouse gases for baseload generation in
effect as of January 1, 2015. The commission, in consultation with
the Energy Commission and the State Air Resources Board, shall update
the greenhouse gases emission performance standard for primary
generation every five years based on new technology. Enforcement of
the greenhouse gases emission performance standard for primary
generation shall begin on July 1, 2017.
   (2) In determining the rate of emissions of greenhouse gases for
primary generation, the commission shall include the net emissions
resulting from the production of electricity by the primary
generation.
   (3) The commission shall establish an output-based methodology to
ensure that the calculation of emissions of greenhouse gases for
cogeneration recognizes the total usable energy output of the
process, and includes all greenhouse gases emitted by the facility in
the production of both electricity and thermal energy.
   (4) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the commission shall consider net emissions from the process of
growing, processing, and generating the electricity from the fuel
source.
   (5) Greenhouse gases that are injected in geological formations,
so as to prevent releases into the atmosphere, commonly termed carbon
capture and storage or carbon capture and sequestration, in
compliance with applicable laws and regulations, shall not be counted
as emissions of the powerplant in determining compliance with the
greenhouse gases emissions performance standard for primary
generation.
   (6) In adopting and implementing the greenhouse gases emission
performance standard for primary generation, the commission, in
consultation with the Independent System Operator, shall consider the
effects of the standard on system reliability and overall costs to
electricity customers.
   (7) In developing and implementing the greenhouse gases emission
performance standard for primary generation, the commission shall
address long-term purchases of electricity from unspecified sources
in a manner consistent with this chapter.
   (8) In developing and implementing the greenhouse gases emission
performance standard for primary generation, the commission shall
consider and act in a manner consistent with any rules adopted
pursuant to Section 824a-3 of Title 16 of the United States Code.
   (9) An electrical corporation that provides electric service to
75,000 or fewer retail end-use customers in California may file with
the commission a proposal for alternative compliance with this
subdivision, which the commission may accept upon a showing by the
electrical corporation of both of the following:
   (A) A majority of the electrical corporation's retail end-use
customers for electric service are located outside of California.
   (B) The emissions of greenhouse gases to generate electricity for
the retail end-use customers of the electrical corporation are
subject to a review by the utility regulatory commission of at least
one other state in which the electrical corporation provides
regulated retail electric service.
                                                             (e) (1)
On or before June 30, 2017, the commission, through a rulemaking
proceeding, and in consultation with the Energy Commission and the
State Air Resources Board, shall establish a greenhouse gases
emission performance standard for all secondary generation of
load-serving entities. The greenhouse gases emission performance
standard for secondary generation shall be established at the lowest
level that the commission determines to be technologically feasible
without putting reliability of the electrical grid and of electric
service at risk. The commission, in consultation with the Energy
Commission and the State Air Resources Board, shall update the
greenhouse gases emission performance standard for secondary
generation every five years based on new technology. Enforcement of
the greenhouse gases emission performance standard for secondary
generation shall begin on July 1, 2017.
   (2) In determining the rate of emissions of greenhouse gases for
secondary generation, the commission shall include the net emissions
resulting from the production of electricity by the secondary
generation.
   (3) The commission shall establish an output-based methodology to
ensure that the calculation of emissions of greenhouse gases for
cogeneration recognizes the total usable energy output of the
process, and includes all greenhouse gases emitted by the facility in
the production of both electrical and thermal energy.
   (4) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the commission shall consider net emissions from the process of
growing, processing, and generating the electricity from the fuel
source.
   (5) Greenhouse gases that are injected in geological formations,
so as to prevent releases into the atmosphere, commonly termed carbon
capture and storage or carbon capture and sequestration, in
compliance with applicable laws and regulations, shall not be counted
as emissions of the powerplant in determining compliance with the
greenhouse gases emissions performance standard for secondary
generation.
   (6) In adopting and implementing the greenhouse gases emission
performance standard for secondary generation, the commission, in
consultation with the Independent System Operator, shall consider the
effects of the standard on system reliability and overall costs to
electricity customers.
   (7) In developing and implementing the greenhouse gases emission
performance standard for secondary generation, the commission shall
address long-term purchases of electricity from unspecified sources
in a manner consistent with this chapter.
   (8) In developing and implementing the greenhouse gases emission
performance standard for secondary generation, the commission shall
consider and act in a manner consistent with any rules adopted
pursuant to Section 824a-3 of Title 16 of the United States Code.
   (9) An electrical corporation that provides electric service to
75,000 or fewer retail end-use customers in California may file with
the commission a proposal for alternative compliance with this
subdivision, which the commission may accept upon a showing by the
electrical corporation of both of the following:
   (A) A majority of the electrical corporation's retail end-use
customers for electric service are located outside of California.
   (B) The emissions of greenhouse gases to generate electricity for
the retail end-use customers of the electrical corporation are
subject to a review by the utility regulatory commission of at least
one other state in which the electrical corporation provides
regulated retail electric service.
   (f) (1) On or before June 30, 2017, the Energy Commission, at a
duly noticed public hearing and in consultation with the commission
and the State Air Resources Board, shall establish a greenhouse gases
emission performance standard for all primary generation of local
publicly owned electric utilities. The greenhouse gases emission
performance standard for primary generation shall be established at
the lowest level that the Energy Commission determines to be
technologically feasible without putting reliability of the
electrical grid and of electric service at risk. The initial
greenhouse gases emission performance standard for primary generation
shall establish a rate of emissions of greenhouse gases that is 80
percent lower than the permissible rate of emissions of greenhouse
gases for baseload generation in effect as of January 1, 2015. The
Energy Commission, in consultation with the commission and the State
Air Resources Board, shall update the greenhouse gases emission
performance standard for primary generation every five years based on
new technology. The greenhouse gases emission performance standard
for primary generation established by the Energy Commission for local
publicly owned electric utilities shall be consistent with the
standard adopted by the commission for load-serving entities.
Enforcement of the greenhouse gases emission performance standard for
primary generation shall begin on July 1, 2017.
   (2) The greenhouse gases emission performance standard for primary
generation shall be adopted by regulation pursuant to the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
   (3) In determining the rate of emissions of greenhouse gases for
primary generation, the Energy Commission shall include the net
emissions resulting from the production of electricity by the primary
generation.
   (4) The Energy Commission shall establish an output-based
methodology to ensure that the calculation of emissions of greenhouse
gases for cogeneration recognizes the total usable energy output of
the process, and includes all greenhouse gases emitted by the
facility in the production of both electricity and thermal energy.
   (5) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the commission shall consider net emissions from the process of
growing, processing, and generating the electricity from the fuel
source.
   (6) Greenhouse gases that are injected in geological formations,
so as to prevent releases into the atmosphere, commonly termed carbon
capture and storage or carbon capture and sequestration, in
compliance with applicable laws and regulations, shall not be counted
as emissions of the powerplant in determining compliance with the
greenhouse gases emissions performance standard for primary
generation.
   (7) In adopting and implementing the greenhouse gases emission
performance standard for primary generation, the Energy Commission,
in consultation with the Independent System Operator, shall consider
the effects of the standard on system reliability and overall costs
to electricity customers.
   (8) In developing and implementing the greenhouse gases emission
performance standard for primary generation, the commission shall
address long-term purchases of electricity from unspecified sources
in a manner consistent with this chapter.
   (9) In developing and implementing the greenhouse gases emission
performance standard for primary generation, the Energy Commission
shall consider and act in a manner consistent with any rules adopted
pursuant to Section 824a-3 of Title 16 of the United States Code.
   (g) (1) On or before June 30, 2017, the Energy Commission, through
a rulemaking proceeding, and in consultation with the commission and
the State Air Resources Board, shall establish a greenhouse gases
emission performance standard for all secondary generation of
load-serving entities. The greenhouse gases emission performance
standard for secondary generation shall be established at the lowest
level that the Energy Commission determines to be technologically
feasible without putting reliability of the electrical grid and of
electric service at risk. The Energy Commission, in consultation with
the commission and the State Air Resources Board, shall update the
greenhouse gases emission performance standard for secondary
generation every five years based on new technology. The greenhouse
gases emission performance standard for secondary generation
established by the Energy Commission for local publicly owned
electric utilities shall be consistent with the standard adopted by
the commission for load-serving entities. Enforcement of the
greenhouse gases emission performance standard for secondary
generation shall begin on July 1, 2017.
   (2) The greenhouse gases emission performance standard for
secondary generation shall be adopted by regulation pursuant to the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
   (3) In determining the rate of emissions of greenhouse gases for
secondary generation, the Energy Commission shall include the net
emissions resulting from the production of electricity by the
secondary generation.
   (4) The Energy Commission shall establish an output-based
methodology to ensure that the calculation of emissions of greenhouse
gases for cogeneration recognizes the total usable energy output of
the process, and includes all greenhouse gases emitted by the
facility in the production of both electricity and thermal energy.
   (5) In calculating the emissions of greenhouse gases by facilities
generating electricity from biomass, biogas, or landfill gas energy,
the Energy Commission shall consider net emissions from the process
of growing, processing, and generating the electricity from the fuel
source.
   (6) Greenhouse gases that are injected in geological formations,
so as to prevent releases into the atmosphere, commonly termed carbon
capture and storage or carbon capture and sequestration, in
compliance with applicable laws and regulations, shall not be counted
as emissions of the powerplant in determining compliance with the
greenhouse gases emissions performance standard for secondary
generation.
   (7) In adopting and implementing the greenhouse gases emission
performance standard for secondary generation, the Energy Commission,
in consultation with the Independent System Operator, shall consider
the effects of the standard on system reliability and overall costs
to electricity customers.
   (8) In developing and implementing the greenhouse gases emission
performance standard for secondary generation, the Energy Commission
shall address long-term purchases of electricity from unspecified
sources in a manner consistent with this chapter.
   (9) In developing and implementing the greenhouse gases emission
performance standard for secondary generation, the Energy Commission
shall consider and act in a manner consistent with any rules adopted
pursuant to Section 824a-3 of Title 16 of the United States Code.
   (h) This section shall become operative on January 1, 2017.
  SEC. 7.  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.