Amended  IN  Assembly  May 02, 2017
Amended  IN  Assembly  March 20, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1405

Introduced by Assembly Member Mullin

February 17, 2017

An act to add Chapter 8.5 (commencing with Section 2847) to Part 2 of Division 1 amend Sections 454.52 and 9621 of the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


AB 1405, as amended, Mullin. Electricity: Clean Peak Energy Standard. net-load peak.
Existing law requires the Public Utilities Commission to adopt a process for each load-serving entity to file an integrated resource plan and a schedule for periodic updates to the plan to ensure that the load-serving entity meets, among other things, the state’s greenhouse gas emissions reduction targets and the requirement to procure at least 50% of its electricity from eligible renewable resources by December 31, 2030. Existing law requires a local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours, on or before January 1, 2019, to adopt an integrated resource plan and a process for updating the plan at least once every 5 years to ensure that the utility satisfies, among other things, the state’s greenhouse gas emissions reduction targets and the requirement to procure at least 50% of its electricity from eligible renewable resources by December 31, 2030.
This bill would require the commission and the governing boards of local publicly owned electric utilities, as a part of the integrated resource plan process, to establish policies and procedures to ensure that each load-serving entity or local publicly owned electric utility, as applicable, meets net-load peak energy needs and reliability needs while reducing the need for new electricity generation in achieving the state’s energy goals at the least cost to ratepayers. Because this bill would impose additional duties on local publicly owned electric utilities, this bill would impose a state-mandated local program.
Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because a violation of an order or decision of the commission implementing the bill’s requirements would be a crime, this bill would impose a state-mandated local program by creating a new crime.
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.

The California Renewables Portfolio Standard Program requires the Public Utilities Commission to establish a renewables portfolio standard requiring all retail sellers, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources, as defined, so that the total kilowatthours of those products sold to their retail end-use customers achieves 25% of retail sales by December 31, 2016, 33% by December 31, 2020, 40% by December 31, 2024, 45% by December 31, 2027, and 50% by December 31, 2030. The program additionally requires each local publicly owned electric utility, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources to achieve the procurement requirements established by the program.

Existing law requires the commission to open a proceeding to determine appropriate targets, if any, for each load-serving entity to procure viable and cost-effective energy storage systems to be achieved by December 31, 2020. Existing law requires the commission to reevaluate the determination not less than once every 3 years. Existing law requires the governing board of a local publicly owned electric utility to initiate a process to determine appropriate targets, if any, for the utility to procure viable and cost-effective energy storage systems to be achieved by December 31, 2020.

This bill would require the commission to determine, by December 31, 2018, the actual percentage of kilowatthours delivered by each load-serving entity during a specified 4-hour period of heavy electricity demand, known in the bill as the peakload time period, that is derived from eligible renewable resources or energy storage systems, collectively referenced in the bill as clean peak resources. The bill would require the commission to ensure that each load-serving entity procure a minimum percentage of kilowatthours delivered during the peakload time period from clean peak resources on at least 15 days during each month in accordance with a specified schedule. Because a violation of an order or direction of the commission would be a crime, this bill would impose a state-mandated local program. The bill would require local publicly owned electric utilities to determine, by December 31, 2018, the actual percentage of kilowatthours delivered during the peakload time period from clean peak resources. The bill would require each local publicly owned electric utility to procure a minimum percentage of kilowatthours delivered during the peakload time period from clean peak resources on at least 15 days during each month in accordance to a specified schedule. Because the bill would impose additional duties on a local agency, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

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

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


SECTION 1.

 Section 454.52 of the Public Utilities Code is amended to read:

454.52.
 (a) For purposes of this section, “net-load peak” means the daily period of three or more consecutive hours in which the latest of the three hours is the hour of peak demand for electricity, excluding demand met by variable renewable generation directly connected to the grid operated by the Independent System Operator.
(b) (1) Commencing in 2017, and to be updated regularly thereafter, the commission shall adopt a process for each load-serving entity, as defined in Section 380, to file an integrated resource plan, and a schedule for periodic updates to the plan, to ensure that load-serving entities do the following:
(A) Meet the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each load-serving entity that reflect the electricity sector’s percentage in achieving the economywide greenhouse gas emissions reductions of 40 percent from 1990 levels by 2030.
(B) Procure at least 50 percent eligible renewable energy resources by December 31, 2030, consistent with Article 16 (commencing with Section 399.11) of Chapter 2.3.
(C) Enable each electrical corporation to fulfill its obligation to serve its customers at just and reasonable rates.
(D) Minimize impacts on ratepayers’ bills.
(E) Ensure system and local reliability.
(F) Strengthen the diversity, sustainability, and resilience of the bulk transmission and distribution systems, and local communities.
(G) Enhance distribution systems and demand-side energy management.
(H) Minimize localized air pollutants and other greenhouse gas emissions, with early priority on disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code.
(2) (A) The commission may authorize all source procurement for electrical corporations that includes various resource types including demand-side resources, supply side resources, and resources that may be either demand-side resources or supply side resources, taking into account the differing electrical corporations’ geographic service areas, to ensure that each load-serving entity meets the goals set forth in paragraph (1).
(B) The commission may approve procurement of resource types that will reduce overall greenhouse gas emissions from the electricity sector and meet the other goals specified in paragraph (1), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.
(3) In furtherance of the requirements of paragraph (1), the commission shall establish policies and procedures, including new targets or requirements for clean energy technology, demand response, and energy efficiency, to the extent those policies and procedures ensure each load-serving entity meets net-load peak energy needs and reliability needs while reducing the need for new electricity generation in achieving the state’s energy goals at the least cost to ratepayers.

(b)

(c) (1) Each load-serving entity shall prepare and file an integrated resource plan consistent with paragraph (2) of subdivision (a) on a time schedule directed by the commission and subject to commission review.
(2) Each electrical corporation’s plan shall follow the provisions of Section 454.5.
(3) The plan of a community choice aggregator shall be submitted to its governing board for approval and provided to the commission for certification, consistent with paragraph (5) of subdivision (a) of Section 366.2, and shall achieve the following:
(A) Economic, reliability, environmental, security, and other benefits and performance characteristics that are consistent with the goals set forth in paragraph (1) of subdivision (a).
(B) A diversified procurement portfolio consisting of both short-term and long-term electricity and electricity-related and demand reduction products.
(C) The resource adequacy requirements established pursuant to Section 380.
(4) The plan of an electric service provider shall achieve the goals set forth in paragraph (1) of subdivision (a) through a diversified portfolio consisting of both short-term and long-term electricity, electricity-related, and demand reduction products.

(c)

(d) To the extent that additional procurement is authorized for the electrical corporation in the integrated resource plan or the procurement process authorized pursuant to Section 454.5, the commission shall ensure that the costs are allocated in a fair and equitable manner to all customers consistent with 454.51, that there is no cost-shifting among customers of load-serving entities, and that community choice aggregators may self-provide renewable integration resources consistent with Section 454.51.

(d)

(e) In order to eliminate redundancy and increase efficiency, the process adopted pursuant to subdivision (a) shall incorporate, and not duplicate, any other planning processes of the commission.

SEC. 2.

 Section 9621 of the Public Utilities Code is amended to read:

9621.
 (a) For purposes of this section, “net-load peak” means the daily period of three or more consecutive hours in which the latest of the three hours is the hour of peak demand for electricity, excluding demand met by variable renewable generation directly connected to the grid operated by the Independent System Operator.
(b) This section shall apply to a local publicly owned electric utility with an annual electrical demand exceeding 700 gigawatthours, as determined on a three-year average commencing January 1, 2013.

(b)

(c) On or before January 1, 2019, the governing board of a local publicly owned electric utility shall adopt an integrated resource plan and a process for updating the plan at least once every five years to ensure the utility achieves all of the following:
(1) Meets the greenhouse gas emissions reduction targets established by the State Air Resources Board, in coordination with the commission and the Energy Commission, for the electricity sector and each local publicly-owned electric utility that reflect the electricity sector’s percentage in achieving the economywide greenhouse gas emissions reductions of 40 percent from 1990 levels by 2030.
(2) Ensures procurement of at least 50 percent eligible renewable energy resources by 2030 consistent with Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1.
(3) Meets the goals specified in subparagraphs (D) to (H), inclusive, of paragraph (1) of subdivision (a) of Section 454.52, and the goal specified in subparagraph (C) of paragraph (1) of subdivision (a) of Section 454.52, as that goal is applicable to each local publicly owned electric utility. A local publicly owned electric utility shall not, solely by reason of this paragraph, be subject to requirements otherwise imposed on electrical corporations.
(d) In furtherance of the requirements of subdivision (c), the governing board of a local publicly owned electric utility shall establish policies and procedures, including new targets or requirements for clean energy technology, demand response, and energy efficiency, to the extent that those policies and procedures ensure each utility meets net-load peak energy needs and reliability needs while reducing the need for new electricity generation in achieving the state’s energy goals at the least cost to ratepayers.

(c)

(e) (1) The integrated resource plan shall address procurement for the following:
(A) Energy efficiency and demand response resources pursuant to Section 9615.
(B) Energy storage requirements pursuant to Chapter 7.7 (commencing with Section 2835) of Part 2 of Division 1.
(C) Transportation electrification.
(D) A diversified procurement portfolio consisting of both short-term and long-term electricity, electricity-related, and demand response products.
(E) The resource adequacy requirements established pursuant to Section 9620.
(2) (A) The governing board of the local publicly owned electric utility may authorize all source procurement that includes various resource types, including demand-side resources, supply side resources, and resources that may be either demand-side resources or supply side resources, to ensure that the local publicly owned electric utility procures the optimum resource mix that meets the objectives of subdivision (b).
(B) The governing board may authorize procurement of resource types that will reduce overall greenhouse gas emissions from the electricity sector and meet the other goals specified in subdivision (b), but due to the nature of the technology or fuel source may not compete favorably in price against other resources over the time period of the integrated resource plan.

(d)

(f) A local publicly owned electric utility shall satisfy the notice and public disclosure requirements of subdivision (f) of Section 399.30 with respect to any integrated resource plan or plan update it considers.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because 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.
SECTION 1.Chapter 8.5 (commencing with Section 2847) is added to Part 2 of Division 1 of the Public Utilities Code, to read:
8.5.Clean Peak Energy Standard
2847.

For purposes of this chapter, the following definitions apply:

(a)“Clean peak resources” means eligible renewable energy resources or energy storage systems.

(b)“Eligible renewable energy resource” has the same meaning as set forth in Section 399.12.

(c)“Energy storage systems” has the same meaning as set forth in Section 2835.

(d)“Load-serving entity” has the same meaning as set forth in Section 380.

(e)“Peak demand hour” means the one hour of each day that exhibits the highest peak demand.

(f)“Peakload time period” means a four-hour time period comprising the one hour prior to and two hours following the peak demand hour.

2847.1.

(a)(1)The commission shall, by December 31, 2018, determine the actual percentage of kilowatthours delivered by each load-serving entity during the peakload time period to end-use customers in the state that is derived from clean peak resources.

(2)The commission shall ensure that each load-serving entity, in addition to the percentage determined pursuant to paragraph (1), procures a minimum percentage of kilowatthours delivered during the peakload time period from clean peak resources on at least 15 days every month in accordance with the following schedule:

(A)An additional 5 percent of electricity delivered during the peakload time period on the required number of days each month in the year 2020 shall be supplied by clean peak resources.

(B)An additional 6 percent of electricity delivered during the peakload time period on the required number of days each month shall be supplied by clean peak resources every third year thereafter until December 31, 2029, or until 40 percent of demand during the peakload time period is supplied by clean peak resources, whichever occurs earlier.

(3)Contributions toward the standard set pursuant to paragraph (2) from an energy storage system shall be prorated based on the share of renewable energy resources used to charge the energy storage system.

(4)Clean peak resources shall use Independent System Operator-approved performance measurement solutions.

(5)The commission shall ensure the clean peak resources provide benefits to the grid.

(6)The commission shall determine an appropriate mechanism for determining compliance with the clean peak standard, which may include the use of tradeable credits.

(7)The commission shall consider clean flexible capacity procurement targets to encourage deployment of clean peak resources to provide additional ancillary and ramping services.

(b)(1)Each local publicly owned electric utility shall, by December 31, 2018, determine the actual percentage of kilowatthours delivered during the peakload time period to its end-use customers that is derived from clean peak resources.

(2)Each local publicly owned electric utility, in addition to the percentage determined pursuant to paragraph (1), shall procure a minimum percentage of kilowatthours delivered during the peakload time period from clean peak resources on at least 15 days every month in accordance with the following schedule:

(A)An additional 5 percent of electricity delivered during the peakload time period on the required number of days each month in the year 2020 shall be supplied by clean peak resources.

(B)An additional 6 percent of electricity delivered during the peakload time period on the required number of days each month shall be supplied by clean peak resources every third year thereafter until December 31, 2029, or until 40 percent of demand during the peakload time period is supplied by clean peak resources, whichever occurs earlier.

(3)Each local publicly owned electric utility shall ensure the clean peak resources provide benefits to the grid.

SEC. 2.

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act or because 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.