Bill Text: CA SB523 | 2009-2010 | Regular Session | Amended
Bill Title: Solar Feed-in Tariff Pilot Program.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2010-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB523 Detail]
Download: California-2009-SB523-Amended.html
BILL NUMBER: SB 523 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 13, 2009
INTRODUCED BY Senator Pavley
(Coauthor: Assembly Member Brownley)
FEBRUARY 27, 2009
An act to add Sections 387.2 and 399.21
Section 399.24 to the Public Utilities Code, relating to
energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 523, as amended, Pavley. Renewable energy resources:
feed-in tariff. Solar Feed-in Tariff Pilot Program.
(1) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations. The Public Utilities Act imposes various
duties and responsibilities on the commission with respect to the
purchase of electricity by electrical corporations and requires the
commission to review and adopt a procurement plan and a renewable
energy procurement plan for each electrical corporation pursuant to
the California Renewables Portfolio Standard Program. The program
requires that a retail seller of electricity, including electrical
corporations, purchase a specified minimum percentage of electricity
generated by eligible renewable energy resources, as defined, in any
given year as a specified percentage of total kilowatthours sold to
retail end-use customers each calendar year (renewables portfolio
standard).
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 is owned and operated
by a retail customer of the electrical corporation. Existing law
requires that the electric generation facility: (1) have an effective
capacity of not more than 1.5 megawatts and be located on property
owned or under the control of the customer, (2) be interconnected and
operate in parallel with the electric transmission and distribution
grid, (3) be strategically located and interconnected to the electric
transmission system in a manner that optimizes the deliverability of
electricity generated at the facility to load centers, and (4) meet
the definition of an eligible renewable energy resource under the
California Renewables Portfolio Standard Program. Existing law
requires that the tariff provide for payment for every kilowatthour
of electricity generated by an electric generation facility at a
market price referent established by the commission pursuant to the
program. Existing law requires the electrical corporation to make
this tariff available to customers that own and operate an electric
generation facility within the service territory of the electrical
corporation, upon request, on a first-come-first-served basis, until
the combined statewide cumulative rated generating capacity of those
electric generation facilities equals 500 megawatts, or the
electrical corporation meets its proportionate share of the 500
megawatt limit based upon the ratio of its peak demand to total
statewide peak demand of all electrical corporations. Existing law
authorizes the commission to modify or adjust the above-described
requirements for any electrical corporation with less than 100,000
service connections, as individual circumstances merit. Existing law
provides that the electricity generated by an electric generation
facility counts toward the electrical corporation's renewables
portfolio standard and provides that the physical generating capacity
counts toward meeting the electrical corporation's resource adequacy
requirements.
This bill would require every electrical corporation with more
than 100,000 service connections to develop and, upon approval by the
commission, implement a standard-offer contract and feed-in tariff,
as defined, that requires the electrical corporation to purchase
every kilowatthour of electricity delivered to the grid that is
generated by a tariff-eligible generation facility. The bill would
require the commission to approve the standard-offer contract and
feed-in tariff at a rate and upon those terms that the commission
determines are reasonable on a market segment, as specified, and
technology specific basis in consideration of certain criteria. Each
electrical corporation would be required to obtain commission
approval of a standard-offer contract and feed-in tariff by June 1,
2010, and to implement the standard-offer contract and feed-in tariff
by July 1, 2010. The bill would authorize an electrical corporation
to offer optional alternative standard-offer contracts and feed-in
tariffs of differing duration upon approval by the commission. The
bill would require an electrical corporation to make the
standard-offer contract or feed-in tariff available to the owner or
operator of a tariff-eligible generation facility on a
first-come-first-served basis until the time that 2% of total retail
sales of electricity by the electrical corporation is generated by
tariff-eligible generation facilities. The bill would require that
after June 30, 2014, the commission review the effectiveness of the
implementation of standard-offer contracts and feed-in tariffs in
advancing specified purposes and would authorize the commission to
revise the program as it sees fit for additional tariff-eligible
generation facilities. The bill would authorize the commission to
modify the above-described requirements for an electrical corporation
with less than 100,000 service connections in the state based upon
the individual circumstances of that electrical corporation. The bill
would provide that every kilowatthour of electricity generated by a
tariff-eligible generation facility receiving service pursuant to the
standard-offer contract or feed-in tariff count toward meeting the
electrical corporation's requirements pursuant to the renewable
portfolio standard and the California Global Warming Solutions Act of
2006.
This bill would create the Solar Feed-in Tariff Pilot Program. The
bill would require Pacific Gas and Electric Company, Southern
California Edison, and San Diego Gas and Electric Company, to enter
into agreements to purchase all of the electricity generated by the
owner or operator of a solar energy generation facility located
within the territory served by that electrical corporation at
specified prices using a contract developed by the commission, as
provided. This program would be limited to the City of Santa Monica
and other pilot cities to be selected by the commission.
Under existing law, a violation of the Public Utilities Act or an
order or direction of the commission is a crime. Because this bill
would require an order or other action of the commission to implement
its provisions and a violation of that order or action would be a
crime, the bill would impose a state-mandated local program by
creating a new crime. The bill would also create a
state-mandated local program by imposing duties on the City of Santa
Monica.
(2) 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 with regard to certain mandates no
reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
(2) Under existing law the governing board of a local publicly
owned electric utility is responsible for implementing and enforcing
a renewables portfolio standard for the utility that recognizes the
intent of the Legislature to encourage renewable resources, while
taking into consideration the effect of the standard on rates,
reliability, and financial resources and the goal of environmental
improvement.
This bill would require the governing board of a local publicly
owned electric utility with more than 100,000 service connections to
develop and implement a feed-in tariff that provides for payment for
every kilowatthour of electricity generated by a tariff-eligible
generation facility that is delivered to the grid. The bill requires
that the tariff price to be paid by the utility be approved by the
governing board and be of a duration of not less than 20 years. The
bill would authorize the utility to offer optional alternative
feed-in tariffs of differing duration and to make the terms of a
feed-in tariff available to owners or operators of a tariff-eligible
generation facility in the form of a non-negotiable standard-offer
contract for a term of 20 years, and any other contract durations
determined to be necessary and reasonable by the utility's governing
board. The bill would provide that every kilowatthour of electricity
generated by a tariff-eligible generation facility receiving service
pursuant to the feed-in tariff or contract count toward meeting the
utility's renewable portfolio standard and the California Global
Warming Solutions Act of 2006. Because the bill would require actions
to be undertaken by local publicly owned electric utilities which
are entities of local government, the bill would impose a
state-mandated local program.
(3) 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 specified reasons.
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. The Legislature finds and declares all
of the following:
(a) It is the policy of the State of California to encourage the
rapid and sustainable development of electricity from renewable
sources, particularly from smaller, widely distributed solar
photovoltaic installations, by the adoption of the Solar Feed-in
Tariff Pilot Program created pursuant to this act.
(b) This act will create green jobs for the state. The German
solar energy industry created over 50,000 jobs in less than five
years, with the entire renewable energy industry creating as many as
200,000 jobs. Spain boasts 25,000 solar energy workers. Gainesville,
Florida, where a solar feed-in tariff program is currently being
tested, is experiencing a surge of capital investment in community
solar systems and local contractors are hiring.
(c) The pilot program created pursuant to this act will moderate
the near-term impact on ratepayers, while reducing volatility and
long-term rates relative to other sources of power.
(d) The pilot program created pursuant to this act will encourage
energy conservation by requiring a separate new meter to measure the
amount of solar electricity produced on site, while retaining the
meter that measures the total amount of electricity used on site.
(e) Distributed generation will enhance reliability while
maintaining utility profitability.
(f) Local power generation from renewable energy resources is a
clear pathway to energy independence and security for our future.
(g) Distributed solar installations bring the opportunity for
renewable power generation to the local level, avoiding the
environmental costs of large-scale, carbon-based, centralized power
generation, and reducing a wide range of air pollutants, particularly
greenhouse gases.
(h) This act presents a market mechanism to spur the solar
industry within our communities. It provides a simple and transparent
means for solar investments to earn reasonable and reliable returns,
allowing capital to flow into clean and renewable energy systems in
California communities. While initially more expensive, these
investments will, in the near future, result in sustainable green
power sources that will deliver electricity to public utilities at
lower energy costs than conventional generation.
SEC. 2. Section 399.24 is added to the
Public Utilities Code , to read:
399.24. (a) For the purposes of this section, the following terms
have the following meanings:
(1) "Commissioned" means the first time a solar energy generation
facility is put into operation following establishment of operational
readiness. Commissioning also includes the modernization of an
existing solar energy generation facility, if modernization costs are
at least 50 percent of the total estimated cost to build a
completely new electrical generation facility at that site, including
all building structures and installations required for its
operation, as determined by the commission.
(2) "Electrical corporation," as used in this section, only
includes Pacific Gas and Electric Company, Southern California
Edison, and San Diego Gas and Electric Company.
(3) "Pilot city" means the City of Santa Monica and any city
located in the state selected by the commission pursuant to a
competitive solicitation completed by March 1, 2010, and after notice
on the public record.
(4) "Program" means the Solar Feed-in Tariff Pilot Program created
pursuant to this section.
(5) "Solar energy generation facility" means a facility or device
that has the primary propose of collection and distribution of solar
energy for the generation of electricity, that meets all of the
following requirements:
(A) Has the capacity to produce at least one kilowatt and not more
than 1 megawatt of alternating current rated peak electricity.
(B) Is located in a pilot city.
(C) Does not receive payments pursuant to the California Solar
Initiative or any other net-metering program.
(D) Is not owned or operated by an electrical corporation.
(6) "Taxable entity" means an owner or operator of a solar energy
generation facility that is not a tax-exempt entity.
(7) "Tax-exempt entity" means an owner or operator of a solar
energy generation facility that is listed under Section 501(c) of
Title 26 of the United States Code.
(b) (1) An electrical corporation shall enter into agreements to
purchase all of the electricity generated by the owner or operator of
a solar energy generation facility located within the territory
served by that electrical corporation at the prices set forth in
subdivision (h) using the contract developed by the commission
pursuant to subdivision (c) on a first-come-first-served basis.
Contracts entered into pursuant to this subdivision shall be
transferable and may be used as security for loans.
(2) The owner or operator of a solar energy generation facility
shall provide the electrical corporation with whom it intends to
enter into an agreement pursuant to paragraph (1) with notice not
less than 60 days prior to the solar energy generation facility
becoming operational. Once operational, the owner or operator of the
facility shall request interconnection with the electrical
corporation's distribution system.
(3) (A) The electrical corporation shall connect a solar energy
generation facility to its distribution system upon the terms and
conditions set by the commission, but in no case more than 60 days
after the request for interconnection pursuant to paragraph (2). The
commission shall apply, in a nondiscriminatory manner, established
standards for the interconnection of solar energy generation
facilities that ensures the reliability of electrical service to all
customers, and ensures the safety of customers, grid operator
employees, and the general public.
(B) The electrical corporation shall prepare, publish, and apply
transparent, objective, and nondiscriminatory rules for connecting
solar energy generation facilities to its distribution system.
(C) If the electrical corporation does not provide interconnection
within the 60-day timeframe established pursuant to subparagraph
(A), the electrical corporation shall begin payments pursuant to
paragraph (1) on day 61 and thereafter. The payment amounts shall be
based on the nameplate capacity that the solar energy generation
facility could provide if connected to the distribution system.
(D) All costs associated with the interconnection of solar energy
generation facilities, including direct interconnection costs,
distribution system enhancements, and electrical corporation
compliance costs, shall be paid by the electrical corporation, and
included among the costs that the commission shall consider under
paragraph (3) of subdivision (c) for cost recovery from ratepayers.
(4) Ratepayers receiving assistance pursuant to the CARE program
established pursuant to Section 739.1 shall be exempt from any above
market rates, as determined by the commission.
(c) (1) The commission shall develop a standard contract of 20
years duration to be used for all payments made pursuant to
subdivision (b). The contract shall be written in simple, clear
language and shall specify both of the following:
(A) The price to be paid for each kilowatt-hour generated.
(B) That the owner or operator of the solar energy generation
facility must sell, and the electrical corporation must purchase, all
of the solar energy generated by the solar energy generation
facility.
(2) The commission may adjust the amounts set forth in subdivision
(h) no more than once every two years. The commission shall annually
review the amounts taking into consideration the ability of these
amounts to successfully encourage the installation of solar energy
generation facilities and taking into consideration any changes in
any of the following:
(A) Actual average system costs and the production of each type
and size of solar energy generation facility.
(B) Inflation and interest rates.
(C) The return achieved by the owners or operators of the solar
energy generation facilities and the electricity rates paid by
ratepayers.
(3) In all ratesetting proceedings, the commission shall consider
all of the costs incurred by an electrical corporation pursuant to
this section in the same manner that the commission considers all of
the electrical corporation's other costs. These costs shall be
reduced by the value of the renewable energy credits received by the
electrical corporation pursuant to subdivision (f).
(4) The commission shall ensure that no more than 100 megawatts of
alternating current rated peak electricity statewide is subject to
the requirements of this section.
(d) The commission shall assign administrative responsibilities
for the pilot program in the City of Santa Monica to the City of
Santa Monica's Solar Santa Monica Program, and for other pilot
programs to other qualified administrators nominated by the cities in
which the other pilot programs take place. The commission shall
require the electrical corporation to collaborate with the pilot city
to ensure that electricity is being distributed pursuant to this
program by July 1, 2010. A pilot program shall ensure all of the
following:
(1) A simple, clear application form for solar energy system
operators or owners requiring identification of the solar energy
generation facility owner and the installer, and the precise
location, type, and size of the facility.
(2) Applications are processed in less than 30 days.
(3) Solar energy generation facilities are commissioned within one
year after their application is approved.
(4) No system inspection is required beyond what is required by
existing law.
(5) The installation and use of a separate, dedicated meter to
measure the production of solar energy facilities operating pursuant
to this section, and requiring electrical corporations to read that
meter at no cost to the owner or operator of the solar energy
generation facility.
(e) (1) A program administrator and electrical corporation shall
provide the commission with any information that may be relevant to
the commission's performance of its duties under this section,
including, but not limited to, assessment of project development
costs, equipment costs, electricity production costs, interconnection
costs, automatic rate adjustments, compliance costs, capacity
installed, and the amount of electricity generated. The commission
shall create a simple form to collect this information.
(2) The program administrator and the electrical corporation
within that city shall jointly prepare an annual report describing
and summarizing the success the program in that city.
(3) The commission shall biennially submit a report to the
Legislature and the Governor on the implementation of this section
that shall include, but not be limited to, all of the following:
(A) The generation capacity of new solar energy generation
facilities installed in the City of Santa Monica and other pilot
cities and the environmental effects of the addition of those
facilities.
(B) The capability of the program in delivering the solar energy
generation required under the California Renewables Portfolio
Standard Program and other renewable energy objectives.
(C) Actions taken by the commission to implement this section.
(D) Revisions to the amounts set forth in subdivision (h).
(E) The impact of the implementation of this section on electrical
rates.
(F) Recommendations for changes to this section, if any, that may
be necessary or advisable, including whether the provisions of this
section should be expanded to other cities or adopted statewide.
(f) All electricity purchased pursuant to this section may be
counted toward the electrical corporation's renewable portfolio
procurement requirements and may earn emission reduction credits for
that electrical corporation.
(g) It is the intent of the Legislature that this section be
implemented in a manner that does not reduce, impede, or conflict
with the California Renewables Portfolio Standard Program or the
California Solar Initiative.
(h) The price of electricity under an agreement entered into
pursuant to this section shall be as follows:
Taxable Tax-exempt
Entity Entity
Pacific Gas and
Electric Company
Less than 10 kilowatts $0.374 $0.534
10 to 100 kilowatts $0.347 $0.495
Over 100 kilowatts $0.306 $0.437
San Diego Gas and
Electric Company
Less than 10 kilowatts $0.326 $0.466
10 to 100 kilowatts $0.312 $0.440
Over 100 kilowatts $0.292 $0.416
Southern California
Edison
Less than 10 kilowatts $0.320 $0.458
10 to 100 kilowatts $0.294 $0.420
Over 100 kilowatts $0.237 $0.339
SEC. 3. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution for certain costs that may be incurred by a local agency
or school district because, in that regard, 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.
However, if the Commission on State Mandates determines that this
act contains other costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division 4 of
Title 2 of the Government Code. All matter omitted in this
version of the bill appears in the bill as introduced in Senate,
February 27, 2009 (JR11)
