HomeMy WebLinkAboutAB 432 - Feed-in Tariff AB 432 Assembly Bill - AMENDED � age 1 of 6
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BILL NUMBER: AB 432 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 2, 2009 � CL� °' �
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INTRODUCED BY Assembly Member Nestande � FZ.. �
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FEBRUARY 24, 2009 ` ^
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An act to add Section 399.23 to the Public Utilities �d , U
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LEGISLATIVE COUNSEL'S DIGEST U C ; � ' � � w p
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AB 432, as amended, Nestande. ' ' ' � =• L '�' ,��• C � � [.-�.1 'i
cl-;�-s— Renewable energy resources: solar feed-inV Q � � Q z Q 4'" � C
tariff pilot program for City of Palm Desert.
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 W �
on the commission with respect to the purchase of electricity by a v
electrical corporations and requires the commission to review and � �
adopt a procurement plan and a renewable energy procurement plan for =' a
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each electrical corporation pursuant to the California Renewables �h +-'
Portfolio Standard Program. The program requires that a retail seller � o
of electricity, including electrical corporations, purchase a
specified minimum percentage of electricity generated by eligible a �
renewable energy resources, as defined, in any given year as a p �p
specified percentage of total kilowatthours sold to retail end-use .� �
customers each calendar year (renewables portfolio standard) . o
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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
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AB 432 Assembly Bill - AMENDED Page 2 of 6
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 establish a solar feed-in tariff, as defined,
pilot program that is applicable to the City of Palm Desert, which is
within the service territory of Southern California Edison Company.
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 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.
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Vote: majority. Appropriation: no. Fiscal committee: �re
yes . State-mandated local program: -,nv
yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 399.23 is added to the
Public Utilities Code , to read:
399.23. (a) For purposes of this section, the following terms
have the following meanings:
(1) "Capacity" of a solar energy system means the maximum
alternating current rated peak generation of the solar energy system,
using the system of ineasurement employed by the Energy Commission
pursuant to Chapter S. 8 (commencing with Section 25780) of the Public
Resources Code.
(2) "Commissioning" means the first time a solar energy system
commences to generate electricity following its operational readiness
and interconnection to the grid.
(3) "Environmental attributes" of electricity generated by a solar
energy system include the credits, benefits, emissions reductions,
environmental air quality credits, and emissions reduction credits,
offsets, and allowances, however entitled, resulting from the
avoidance of the emissions of any air contaminant, greenhouse gas,
chemical, or other substance attributable to an solar energy system.
(4) "kW" means kilowatts or 1,000 watts, as measured from the
alternating current side of the solar energy system inverter
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AB 432 Assembly Bill - AMENDED Page 3 of 6
consistent with Section 223 of Title 15 of the United States Code.
(5) "kWh" means kilowatthours, as measured by the number of
kilowatts generated in an hour.
(6) "MW" means megawatts or 1,000,000 watts.
(7) "Solar energy system" means a solar energy device that has the
primary purpose of providing for the collection and distribution of
solar energy for the generation of electricity, delivered to the
electrical distribution and transmission grid within the City of Palm
Desert, that produces at least one kW, and not more than one and
one-half MW of alternating current rated peak electricity and that is
a fixture upon or integrated into a building, parking structure, or
other improvement. A solar energy system includes the in verters,
access ways, measuring, administrative, and control facilities and
devices associated with the system, whether or not necessary for the
operation of the particular system, up through the point of
interconnection with the grid.
(8) "SCE" means the Southern California Edison Company, a
California electrical corporation.
(9) "Solar feed-in tariff" means a schedule detailing the rates,
rules, and terms of service that is filed by SCE and approved by the
commission that controls the electrical corporation 's purchase of
electricity delivered to the grid that is generated by a
tariff-eligible solar energy system within the City of Palm Desert.
(10) (A) "Standard-offer contract" means a standardized contract
that incorporates the terms of the solar feed-in tariff that is
approved by the commission and made available to all persons
proposing to construct and operate a solar energy system within the
City of Palm Desert.
(B) An "optional standard-offer contract" means a standardized
contract that is approved by the commission that includes pricing and
duration terms that differ from those of the standard-offer
contract, and that a tariff-eligible generator may affirmatively
elect to accept in lieu of the standard-offer contract.
(11) "Tariff-eligible generator" means the owner or operator of a
solar energy system that meets the eligibility requirements of this
section.
(b) SCE shall develop and, upon approval by the commission,
implement a solar feed-in tariff and standard-offer contract, that
requires payment for every kilowatthour of electricity generated and
delivered to the electrical distribution and transmission grid within
the City of Palm Desert by a solar energy system that meets the
requirements of this section. The solar feed-in tariff and
standard-offer contract shall require the tariff-eligible generator
to sell, and SCE to purchase, all electricity generated by the solar
energy system and delivered to the grid. The commission shall
establish the purchase price to be paid by SCE in a ratemaking
proceeding. The standard-offer contract shall be written in simple,
clear language and be transferrable with the real property on which
the solar energy system is located. The standard-offer contract may
be used as security for loans. The commission may approve one or more
optional standard-offer contracts.
(c) Applications for participation in the solar feed-in tariff
pilot program shall be simple and clear, require identification of
the owner of the solar energy system, require .identification of the
installer of the solar energy system, identify the precise location
of the solar energy system, and identify the type and size of the
solar energy system. The commission shall require SCE to process a11
applications within 30 days, except upon a showing of good cause made
to the commission by SCE with respect to particvlar applications
that cannot be processed within 30 days. The commission shall require
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AB 432 Assembly Bill - AMENDED Page 4 of 6
that commissioning of the solar energy system occur within one year
of the approval of the application. Any solar energy system that is
not commissioned within one year shall be required to submit a new
application to be eligible for the solar feed-in tariff or
standard-offer contract. The commission shall require that all solar
energy systems comply with electrical code and fire safety standards.
The commission may provide training for local building inspectors
responsible for inspecting solar energy systems.
(d) The price, or schedule of prices, paid by SCE pursuant to the
solar feed-in tariff shall be for a duration of 20 years following
the date of commissioning. The price, or schedule of prices, paid by
SCE pursuant to the standard-offer contract shall be for 20 years
duration. The commission may approve one or more optional
standard-offer contracts that includes pricing and duration terms
that differ from those of the standard-offer contract. The price paid
shall be that price, or schedules of prices, approved by the
commission that is in effect at the time the application is
submitted, with payments commencing with commissioning of the solar
energy system. The purchase price, or schedule of prices, shall be
established so as to provide the tariff-eligible generator just and
reasonable compensation for the value of the electricity generated by
the solar energy system and delivered to the grid, including the
environmental attributes of that electricity. The price, or schedule
of prices, shall be set forth in the standard-offer contract. The
price, or schedule of prices, shall reflect the expenses incurred by
SCE to read meters to determine the amount of electricity that is
delivered to the grid by the solar energy system.
(e) The feed-in tariff and standard-offer contract shall be
reviewed and, if needed, updated by the commission on a .biannual
(every two years) basis. The updated feed-in tariff and
standard-offer contract would be applicable to those solar energy
systems for which the application is submitted subsequent to the
operative date of the update. In its biannual review, the commission
shall consider the success of the solar feed-in tariff in encouraging
the installation of solar energy systems and any adjustments that
should be made to reflect actual average system costs and production
of each type and size and location of solar energy systems,
inflation, interest rates, a determination of what is a reasonable
and reliable return of in vestment, and the rates paid .by ratepayers
of the electrical corporation for electric service.
(f) Upon the expiration of the 20-year term of the standard-offer
contract, SCE sha11 continue to purchase all electricity delivered to
the grid by the solar energy system upon those terms and conditions
that the commission determines are just and reasonable.
(g) (1) The commission shall, in consultation with the Energy
Commission, electrical corporations, and the distril�uted generation
industry, develop and implement rules for interconnection of solar
energy systems to the distribution grid of the electrical
corporation.
(2) It is the intent of the Legislature that the commission
continue to apply Rule 21, as revised in Decisions 00-12-037 and
01-07-027, to interconnections by solar energy systems to the SCE
distribution system, without codifying that rule, in order that the
commission retain flexibility over interconnections resulting from
changing circumstances and technological advancements.
(3) This subdivision does not limit the ability of a
tariff-eligible generator to interconnect a solar energy system to
the transmission grid pursuant to the Small Generator Interconnection
Protocol of the Independent System Operator and approved by the
Federal Energy Regulatory Commission.
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AB 432 Assembly Bill - AMENDED Page 5 of 6
(h) (1) Every kilowatthour of electricity generated by a solar
energy system that is delivered to the grid shall be credited to SCE'
s renewables portfolio standard annual procurement targets for
purposes of this article.
(2) Every kilowatthour of electricity generated by a solar energy
system shall be credited toward any renewable energy procurement
requirement imposed upon SCE pursuant to the California Global
Warming Solutions Act of 2006 (Division 25. 5 (commencing with Section
38500) of the Health and Safety Code) .
(3) Ownership and use of the environmental attributes associated
with the electricity delivered to the grid .by the solar energy
system, including any renewable energy credits, shall belong to SCE.
(i) Net expenses incurred by SCE for implementation of the solar
feed-in tariff and standard-offer contract pursuant to this section
shall be fully recoverable by SCE in rates.
(j) The commission may request a tariff-eligible generator or SCE
to annually provide information necessary or useful to the commission
in its oversight of the solar feed-in tariff pilot program,
including information relative to project development costs,
equipment costs, electricity production costs, interconnection costs,
automatic rate adjustments, compliance costs, capacity installed,
and actual electricity generated and delivered to the grid. The
commission may prepare a standardized simple form for the annual
collection of information necessary or useful to its oversight of the
program.
(k) The commission shall report to the Governor and the
Legislature by January 31 of each even numbered year, all of the
followin g:
(I) The number of solar energy systems participating under the
solar feed-in tariff pilot program and the cumulative generating
capacity of those systems.
(2) Actual deliveries of electricity to the grid as a result of
the solar feed-in tariff pilot program.
(3) The actions undertaken by the commission to implement the
solar feed-in tariff pilot program and, when applicable, the results
of the biannual review.
(4) Any revisions to the solar feed-in tariff pilot program to
reflect inflation, changes in technology, and the increased or
decreased costs of solar photovoltaic generation of electricity.
(5) The impact of the solar feed-in tariff pilot program on rates
paid by the ratepayers of SCE.
(6) Any recommended changes to the solar feed-in tariff pilot
program.
(7) Recommendations for whether the solar feed-in tariff pilot
program should be expanded to areas outside the City of Palm Desert.
SEC. 2. 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 wi11 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.
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AB 432 Assembly Bill - AMENDED Page 6 of 6
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