AB 2700: Electrical corporation: California Renewables Portfolio Standard Program: procurement plans.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2016-05-11
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. The California Renewables Portfolio Standard Program requires the commission to establish a renewables portfolio standard requiring all retail sellers, defined as including an electrical corporation, to procure a minimum quantity of electricity products from eligible renewable energy resources, as defined, at specified percentages of the total kilowatthours sold to their retail end-use customers during specified compliance periods. The program requires the commission to direct each electrical corporation to annually prepare a renewable energy procurement plan to satisfy its procurement requirements pursuant to the program. As part of the renewable energy procurement plan process, the commission is required to adopt rules establishing a process that provides criteria for the rank ordering and selection of least-cost and best-fit eligible renewable energy resources to comply with the programs procurement obligations and requires that the criteria take specified matters into account, including workforce recruitment, training, and retention efforts, as specified.
This bill would require that the criteria take into account jobs retained associated with contracting for existing eligible renewable energy resources. The bill would require the commission to update the criteria by July 1, 2017, to identify the value of maintaining existing baseload resources to achieve the goal of a balanced portfolio of eligible renewable energy resources.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. The Public Utilities Act requires the commission to review and accept, modify, or reject a procurement plan for each electrical corporation in accordance with specified elements, incentive mechanisms, and objectives. The act requires the commission to (1) identify a diverse and balanced portfolio of resources needed to ensure a reliable electricity supply that provides optimal integration of renewable energy resources in a cost-effective manner, (2) direct each electrical corporation to include, as part of its proposed procurement plan, a strategy for procuring best-fit and least-cost resources to satisfy the portfolio needs identified by the commission, (3) ensure that the net costs of any incremental renewable energy integration resources procured by an electrical corporation to satisfy the need identified by the commission are allocated on a fully nonbypassable basis, and (4) permit community choice aggregators to submit proposals for satisfying their portion of the renewable energy resource integration needs identified by the commission. The California Renewables Portfolio Standard Program requires the commission to establish a renewables portfolio standard requiring all retail sellers, defined as including an electrical corporation, to procure a minimum quantity of electricity products from eligible renewable energy resources, as defined, at specified percentages of the total kilowatthours sold to their retail end-use customers during specified compliance periods. The program requires the commission to direct each electrical corporation to annually prepare a renewable energy procurement plan to satisfy its procurement requirements pursuant to the program. As part of the renewable energy procurement plan process, the commission is required to adopt rules establishing a process that provides criteria for the rank ordering and selection of least-cost and best-fit eligible renewable energy resources to comply with the programs procurement obligations and requires that the criteria take specified matters into account, including workforce recruitment, training, and retention efforts, as specified.
This bill would make nonsubstantive revisions to the above-described requirements of the commission relative to integration of renewable energy resources to ensure a reliable electricity supply through the procurement plan process.
This bill would require that the criteria take into account jobs retained associated with contracting for existing eligible renewable energy resources. The bill would require the commission to update the criteria by July 1, 2017, to identify the value of maintaining existing baseload resources to achieve the goal of a balanced portfolio of eligible renewable energy resources.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. The Public Utilities Act requires the commission to review and accept, modify, or reject a procurement plan for each electrical corporation in accordance with specified elements, incentive mechanisms, and objectives. The act requires the commission to (1) identify a diverse and balanced portfolio of resources needed to ensure a reliable electricity supply that provides optimal integration of renewable energy resources in a cost-effective manner, (2) direct each electrical corporation to include, as part of its proposed procurement plan, a strategy for procuring best-fit and least-cost resources to satisfy the portfolio needs identified by the commission, (3) ensure that the net costs of any incremental renewable energy integration resources procured by an electrical corporation to satisfy the need identified by the commission are allocated on a fully nonbypassable basis, and (4) permit community choice aggregators to submit proposals for satisfying their portion of the renewable energy resource integration needs identified by the commission.
This bill would make nonsubstantive revisions to the above-described requirements of the commission relative to integration of renewable energy resources to ensure a reliable electricity supply through the procurement plan process.
(a)(1)The commission shall direct each electrical corporation to annually prepare a renewable energy procurement plan that includes the matter in paragraph (5), to satisfy its obligations under the renewables portfolio standard. To the extent feasible, this procurement plan shall be proposed, reviewed, and adopted by the commission as part of, and pursuant to, a general procurement plan process. The commission shall require each electrical corporation to review and update its renewable energy procurement plan as it determines to be necessary. The commission shall require all other retail sellers to prepare and submit renewable energy procurement plans that address the requirements identified in paragraph (5).
(2)Every electrical corporation that owns electrical transmission facilities shall annually prepare, as part of the Federal Energy Regulatory Commission Order 890 process, and submit to the commission, a report identifying any electrical transmission facility, upgrade, or enhancement that is reasonably necessary to achieve the renewables portfolio standard procurement requirements of this article. Each report shall look forward at least five years and, to ensure that adequate investments are made in a timely manner, shall include a preliminary schedule when an application for a certificate of public convenience and necessity will be made, pursuant to Chapter 5 (commencing with Section 1001), for any electrical transmission facility identified as being reasonably necessary to achieve the renewable energy resources procurement requirements of this article. Each electrical corporation that owns electrical transmission facilities shall ensure that project-specific interconnection studies are completed in a timely manner.
(3)The commission shall direct each retail seller to prepare and submit an annual compliance report that includes all of the following:
(A)The current status and progress made during the prior year toward procurement of eligible renewable energy resources as a percentage of retail sales, including, if applicable, the status of any necessary siting and permitting approvals from federal, state, and local agencies for those eligible renewable energy resources procured by the retail seller, and the current status of compliance with the portfolio content requirements of subdivision (c) of Section 399.16, including procurement of eligible renewable energy resources located outside the state and within the WECC and unbundled renewable energy credits.
(B)If the retail seller is an electrical corporation, the current status and progress made during the prior year toward construction of, and upgrades to, transmission and distribution facilities and other electrical system components it owns to interconnect eligible renewable energy resources and to supply the electricity generated by those resources to load, including the status of planning, siting, and permitting transmission facilities by federal, state, and local agencies.
(C)Recommendations to remove impediments to making progress toward achieving the renewable energy resources procurement requirements established pursuant to this article.
(4)The commission shall adopt, by rulemaking, all of the following:
(A)A process that provides criteria for the rank ordering and selection of least-cost and best-fit eligible renewable energy resources to comply with the California Renewables Portfolio Standard Program obligations on a total cost and best-fit basis. This process shall take into account all of the following:
(i)Estimates of indirect costs associated with needed transmission investments.
(ii)The cost impact of procuring the eligible renewable energy resources on the electrical corporations electricity portfolio.
(iii)The viability of the project to construct and reliably operate the eligible renewable energy resource, including the developers experience, the feasibility of the technology used to generate electricity, and the risk that the facility will not be built, or that construction will be delayed, with the result that electricity will not be supplied as required by the contract.
(iv)Workforce recruitment, training, and retention efforts, including jobs retained associated with contracting for existing eligible renewable energy resources, the employment growth associated with the construction and operation of eligible renewable energy resources, and goals for recruitment and training of women, minorities, and disabled veterans.
(v)(I)Estimates of electrical corporation expenses resulting from integrating and operating eligible renewable energy resources, including, but not limited to, any additional wholesale energy and capacity costs associated with integrating each eligible renewable resource.
(II)No later than December 31, 2015, the commission shall approve a methodology for determining the integration costs described in subclause (I).
(vi)Consideration of any statewide greenhouse gas emissions limit established pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code).
(vii)Consideration of capacity and system reliability of the eligible renewable energy resource to ensure grid reliability.
(B)Rules permitting retail sellers to accumulate, beginning January 1, 2011, excess procurement in one compliance period to be applied to any subsequent compliance period. The rules shall apply equally to all retail sellers. In determining the quantity of excess procurement for the applicable compliance period, the commission shall retain the rules adopted by the commission and in effect as of January 1, 2015, for the compliance period specified in subparagraphs (A) to (C), inclusive, of paragraph (1) of subdivision (b) of Section 399.15. For any subsequent compliance period, the rules shall allow the following:
(i)For electricity products meeting the portfolio content requirements of paragraph (1) of subdivision (b) of Section 399.16, contracts of any duration may count as excess procurement.
(ii)Electricity products meeting the portfolio content requirements of paragraph (2) or (3) of subdivision (b) of Section 399.16 shall not be counted as excess procurement. Contracts of any duration for electricity products meeting the portfolio content requirements of paragraph (2) or (3) of subdivision (b) of Section 399.16 that are credited towards a compliance period shall not be deducted from a retail sellers procurement for purposes of calculating excess procurement.
(iii)If a retail seller notifies the commission that it will comply with the provisions of subdivision (b) for the compliance period beginning January 1, 2017, the provisions of clauses (i) and (ii) shall take effect for that retail seller for that compliance period.
(C)Standard terms and conditions to be used by all electrical corporations in contracting for eligible renewable energy resources, including performance requirements for renewable generators. A contract for the purchase of electricity generated by an eligible renewable energy resource, at a minimum, shall include the renewable energy credits associated with all electricity generation specified under the contract. The standard terms and conditions shall include the requirement that, no later than six months after the commissions approval of an electricity purchase agreement entered into pursuant to this article, the following information about the agreement shall be disclosed by the commission: party names, resource type, project location, and project capacity.
(D)An appropriate minimum margin of procurement above the minimum procurement level necessary to comply with the renewables portfolio standard to mitigate the risk that renewable projects planned or under contract are delayed or canceled. This paragraph does not preclude an electrical corporation from voluntarily proposing a margin of procurement above the appropriate minimum margin established by the commission.
(5)Consistent with the goal of increasing Californias reliance on eligible renewable energy resources, the renewable energy procurement plan shall include all of the following:
(A)An assessment of annual or multiyear portfolio supplies and demand to determine the optimal mix of eligible renewable energy resources with deliverability characteristics that may include peaking, dispatchable, baseload, firm, and as-available capacity.
(B)Potential compliance delays related to the conditions described in paragraph (5) of subdivision (b) of Section 399.15.
(C)A bid solicitation setting forth the need for eligible renewable energy resources of each deliverability characteristic, required online dates, and locational preferences, if any.
(D)A status update on the development schedule of all eligible renewable energy resources currently under contract.
(E)Consideration of mechanisms for price adjustments associated with the costs of key components for eligible renewable energy resource projects with online dates more than 24 months after the date of contract execution.
(F)An assessment of the risk that an eligible renewable energy resource will not be built, or that construction will be delayed, with the result that electricity will not be delivered as required by the contract.
(6)In soliciting and procuring eligible renewable energy resources, each electrical corporation shall offer contracts of no less than 10 years duration, unless the commission approves of a contract of shorter duration.
(7)In soliciting and procuring eligible renewable energy resources for California-based projects, each electrical corporation shall give preference to renewable energy projects that provide environmental and economic benefits to communities afflicted with poverty or high unemployment, or that suffer from high emission levels of toxic air contaminants, criteria air pollutants, and greenhouse gases.
(8)In soliciting and procuring eligible renewable energy resources, each retail seller shall consider the best-fit attributes of resource types that ensure a balanced resource mix to maintain the reliability of the electrical grid.
(b)A retail seller may enter into a combination of long- and short-term contracts for electricity and associated renewable energy credits. Beginning January 1, 2021, at least 65 percent of the procurement a retail seller counts toward the renewables portfolio standard requirement of each compliance period shall be from its contracts of 10 years or more in duration or in its ownership or ownership agreements for eligible renewable energy resources.
(c)The commission shall review and accept, modify, or reject each electrical corporations renewable energy resource procurement plan prior to the commencement of renewable energy procurement pursuant to this article by an electrical corporation. The commission shall assess adherence to the approved renewable energy resource procurement plans in determining compliance with the obligations of this article.
(d)Unless previously preapproved by the commission, an electrical corporation shall submit a contract for the generation of an eligible renewable energy resource to the commission for review and approval consistent with an approved renewable energy resource procurement plan. If the commission determines that the bid prices are elevated due to a lack of effective competition among the bidders, the commission shall direct the electrical corporation to renegotiate the contracts or conduct a new solicitation.
(e)If an electrical corporation fails to comply with a commission order adopting a renewable energy resource procurement plan, the commission shall exercise its authority to require compliance.
(f)(1)The commission may authorize a procurement entity to enter into contracts on behalf of customers of a retail seller for electricity products from eligible renewable energy resources to satisfy the retail sellers renewables portfolio standard procurement requirements. The commission shall not require any person or corporation to act as a procurement entity or require any party to purchase eligible renewable energy resources from a procurement entity.
(2)Subject to review and approval by the commission, the procurement entity shall be permitted to recover reasonable administrative and procurement costs through the retail rates of end-use customers that are served by the procurement entity and are directly benefiting from the procurement of eligible renewable energy resources.
(g)Procurement and administrative costs associated with contracts entered into by an electrical corporation for eligible renewable energy resources pursuant to this article and approved by the commission are reasonable and prudent and shall be recoverable in rates.
(h)Construction, alteration, demolition, installation, and repair work on an eligible renewable energy resource that receives production incentives pursuant to Section 25742 of the Public Resources Code, including work performed to qualify, receive, or maintain production incentives, are public works for the purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.
SEC. 2.By July 1, 2017, the commission shall update the criteria for the rank ordering and selection of least-cost and best-fit eligible renewable energy resources adopted pursuant to subparagraph (A) of paragraph (4) of subdivision (a) of Section 399.13 to identify the value of maintaining existing baseload resources to achieve the goal of a balanced portfolio of eligible renewable energy resources.
(a)(1)The commission shall direct each electrical corporation to annually prepare a renewable energy procurement plan that includes the matter in paragraph (5), to satisfy its obligations under the renewables portfolio standard. To the extent feasible, this procurement plan shall be proposed, reviewed, and adopted by the commission as part of, and pursuant to, a general procurement plan process. The commission shall require each electrical corporation to review and update its renewable energy procurement plan as it determines to be necessary. The commission shall require all other retail sellers to prepare and submit renewable energy procurement plans that address the requirements identified in paragraph (5).
(2)Every electrical corporation that owns electrical transmission facilities shall annually prepare, as part of the Federal Energy Regulatory Commission Order 890 process, and submit to the commission, a report identifying any electrical transmission facility, upgrade, or enhancement that is reasonably necessary to achieve the renewables portfolio standard procurement requirements of this article. Each report shall look forward at least five years and, to ensure that adequate investments are made in a timely manner, shall include a preliminary schedule when an application for a certificate of public convenience and necessity will be made, pursuant to Chapter 5 (commencing with Section 1001), for any electrical transmission facility identified as being reasonably necessary to achieve the renewable energy resources procurement requirements of this article. Each electrical corporation that owns electrical transmission facilities shall ensure that project-specific interconnection studies are completed in a timely manner.
(3)The commission shall direct each retail seller to prepare and submit an annual compliance report that includes all of the following:
(A)The current status and progress made during the prior year toward procurement of eligible renewable energy resources as a percentage of retail sales, including, if applicable, the status of any necessary siting and permitting approvals from federal, state, and local agencies for those eligible renewable energy resources procured by the retail seller, and the current status of compliance with the portfolio content requirements of subdivision (c) of Section 399.16, including procurement of eligible renewable energy resources located outside the state and within the WECC and unbundled renewable energy credits.
(B)If the retail seller is an electrical corporation, the current status and progress made during the prior year toward construction of, and upgrades to, transmission and distribution facilities and other electrical system components it owns to interconnect eligible renewable energy resources and to supply the electricity generated by those resources to load, including the status of planning, siting, and permitting transmission facilities by federal, state, and local agencies.
(C)Recommendations to remove impediments to making progress toward achieving the renewable energy resources procurement requirements established pursuant to this article.
(4)The commission shall adopt, by rulemaking, all of the following:
(A)A process that provides criteria for the rank ordering and selection of least-cost and best-fit eligible renewable energy resources to comply with the California Renewables Portfolio Standard Program obligations on a total cost and best-fit basis. This process shall take into account all of the following:
(i)Estimates of indirect costs associated with needed transmission investments.
(ii)The cost impact of procuring the eligible renewable energy resources on the electrical corporations electricity portfolio.
(iii)The viability of the project to construct and reliably operate the eligible renewable energy resource, including the developers experience, the feasibility of the technology used to generate electricity, and the risk that the facility will not be built, or that construction will be delayed, with the result that electricity will not be supplied as required by the contract.
(iv)Workforce recruitment, training, and retention efforts, including jobs retained associated with contracting for existing eligible renewable energy resources, the employment growth associated with the construction and operation of eligible renewable energy resources resources, and goals for recruitment and training of women, minorities, and disabled veterans.
(v)(I)Estimates of electrical corporation expenses resulting from integrating and operating eligible renewable energy resources, including, but not limited to, any additional wholesale energy and capacity costs associated with integrating each eligible renewable resource.
(II)No later than December 31, 2015, the commission shall approve a methodology for determining the integration costs described in subclause (I).
(vi)Consideration of any statewide greenhouse gas emissions limit established pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code).
(vii)Consideration of capacity and system reliability of the eligible renewable energy resource to ensure grid reliability.
(B)Rules permitting retail sellers to accumulate, beginning January 1, 2011, excess procurement in one compliance period to be applied to any subsequent compliance period. The rules shall apply equally to all retail sellers. In determining the quantity of excess procurement for the applicable compliance period, the commission shall retain the rules adopted by the commission and in effect as of January 1, 2015, for the compliance period specified in subparagraphs (A) to (C), inclusive, of paragraph (1) of subdivision (b) of Section 399.15. For any subsequent compliance period, the rules shall allow the following:
(i)For electricity products meeting the portfolio content requirements of paragraph (1) of subdivision (b) of Section 399.16, contracts of any duration may count as excess procurement.
(ii)Electricity products meeting the portfolio content requirements of paragraph (2) or (3) of subdivision (b) of Section 399.16 shall not be counted as excess procurement. Contracts of any duration for electricity products meeting the portfolio content requirements of paragraph (2) or (3) of subdivision (b) of Section 399.16 that are credited towards a compliance period shall not be deducted from a retail sellers procurement for purposes of calculating excess procurement.
(iii)If a retail seller notifies the commission that it will comply with the provisions of subdivision (b) for the compliance period beginning January 1, 2017, the provisions of clauses (i) and (ii) shall take effect for that retail seller for that compliance period.
(C)Standard terms and conditions to be used by all electrical corporations in contracting for eligible renewable energy resources, including performance requirements for renewable generators. A contract for the purchase of electricity generated by an eligible renewable energy resource, at a minimum, shall include the renewable energy credits associated with all electricity generation specified under the contract. The standard terms and conditions shall include the requirement that, no later than six months after the commissions approval of an electricity purchase agreement entered into pursuant to this article, the following information about the agreement shall be disclosed by the commission: party names, resource type, project location, and project capacity.
(D)An appropriate minimum margin of procurement above the minimum procurement level necessary to comply with the renewables portfolio standard to mitigate the risk that renewable projects planned or under contract are delayed or canceled. This paragraph does not preclude an electrical corporation from voluntarily proposing a margin of procurement above the appropriate minimum margin established by the commission.
(5)Consistent with the goal of increasing Californias reliance on eligible renewable energy resources, the renewable energy procurement plan shall include all of the following:
(A)An assessment of annual or multiyear portfolio supplies and demand to determine the optimal mix of eligible renewable energy resources with deliverability characteristics that may include peaking, dispatchable, baseload, firm, and as-available capacity.
(B)Potential compliance delays related to the conditions described in paragraph (5) of subdivision (b) of Section 399.15.
(C)A bid solicitation setting forth the need for eligible renewable energy resources of each deliverability characteristic, required online dates, and locational preferences, if any.
(D)A status update on the development schedule of all eligible renewable energy resources currently under contract.
(E)Consideration of mechanisms for price adjustments associated with the costs of key components for eligible renewable energy resource projects with online dates more than 24 months after the date of contract execution.
(F)An assessment of the risk that an eligible renewable energy resource will not be built, or that construction will be delayed, with the result that electricity will not be delivered as required by the contract.
(6)In soliciting and procuring eligible renewable energy resources, each electrical corporation shall offer contracts of no less than 10 years duration, unless the commission approves of a contract of shorter duration.
(7)In soliciting and procuring eligible renewable energy resources for California-based projects, each electrical corporation shall give preference to renewable energy projects that provide environmental and economic benefits to communities afflicted with poverty or high unemployment, or that suffer from high emission levels of toxic air contaminants, criteria air pollutants, and greenhouse gases.
(8)In soliciting and procuring eligible renewable energy resources, each retail seller shall consider the best-fit attributes of resource types that ensure a balanced resource mix to maintain the reliability of the electrical grid.
(b)A retail seller may enter into a combination of long- and short-term contracts for electricity and associated renewable energy credits. Beginning January 1, 2021, at least 65 percent of the procurement a retail seller counts toward the renewables portfolio standard requirement of each compliance period shall be from its contracts of 10 years or more in duration or in its ownership or ownership agreements for eligible renewable energy resources.
(c)The commission shall review and accept, modify, or reject each electrical corporations renewable energy resource procurement plan prior to the commencement of renewable energy procurement pursuant to this article by an electrical corporation. The commission shall assess adherence to the approved renewable energy resource procurement plans in determining compliance with the obligations of this article.
(d)Unless previously preapproved by the commission, an electrical corporation shall submit a contract for the generation of an eligible renewable energy resource to the commission for review and approval consistent with an approved renewable energy resource procurement plan. If the commission determines that the bid prices are elevated due to a lack of effective competition among the bidders, the commission shall direct the electrical corporation to renegotiate the contracts or conduct a new solicitation.
(e)If an electrical corporation fails to comply with a commission order adopting a renewable energy resource procurement plan, the commission shall exercise its authority to require compliance.
(f)(1)The commission may authorize a procurement entity to enter into contracts on behalf of customers of a retail seller for electricity products from eligible renewable energy resources to satisfy the retail sellers renewables portfolio standard procurement requirements. The commission shall not require any person or corporation to act as a procurement entity or require any party to purchase eligible renewable energy resources from a procurement entity.
(2)Subject to review and approval by the commission, the procurement entity shall be permitted to recover reasonable administrative and procurement costs through the retail rates of end-use customers that are served by the procurement entity and are directly benefiting from the procurement of eligible renewable energy resources.
(g)Procurement and administrative costs associated with contracts entered into by an electrical corporation for eligible renewable energy resources pursuant to this article and approved by the commission are reasonable and prudent and shall be recoverable in rates.
(h)Construction, alteration, demolition, installation, and repair work on an eligible renewable energy resource that receives production incentives pursuant to Section 25742 of the Public Resources Code, including work performed to qualify, receive, or maintain production incentives, are public works for the purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.
SEC. 2.By July 1, 2017, the commission shall update the criteria for the rank ordering and selection of least-cost and best-fit eligible renewable energy resources adopted pursuant to subparagraph (A) of paragraph (4) of subdivision (a) of Section 399.13 to identify the value of maintaining existing baseload resources to achieve the goal of a balanced portfolio of eligible renewable energy resources.
SECTION 1.Section 454.51 of the Public Utilities Code is amended to read:454.51.The commission shall do all of the following:
(a)Identify a diverse and balanced portfolio of resources needed to ensure a reliable electricity supply that provides optimal integration of renewable energy resources in a cost-effective manner. The portfolio shall rely upon zero carbon-emitting resources to the maximum extent reasonable and be designed to achieve any statewide greenhouse gas emissions limit established pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code) or any successor legislation.
(b)Direct each electrical corporation to include, as part of its proposed procurement plan, a strategy for procuring best-fit and least-cost resources to satisfy the portfolio needs identified by the commission pursuant to subdivision (a).
(c)Ensure that the net costs of any incremental renewable energy integration resources procured by an electrical corporation to satisfy the need identified in subdivision (a) are allocated on a fully nonbypassable basis consistent with the treatment of costs identified in paragraph (2) of subdivision (c) of Section 365.1.
(d)Permit community choice aggregators to submit proposals for satisfying their portion of the renewable energy resource integration need identified in subdivision (a). If the commission finds this need is best met through long-term procurement commitments for resources, community choice aggregators shall also be required to make long-term commitments for resources. The commission shall approve proposals pursuant to this subdivision if it finds all of the following:
(1)The resources proposed by a community choice aggregator will provide equivalent integration of renewable energy resources.
(2)The resources proposed by a community choice aggregator will promote the efficient achievement of state energy policy objectives, including reductions in emissions of greenhouse gases.
(3)Bundled customers of an electrical corporation will be indifferent from the approval of the community choice aggregator proposals.
(4)All costs resulting from nonperformance will be borne by the electrical corporation or community choice aggregator responsible for them.
The commission shall do all of the following:
(a)Identify a diverse and balanced portfolio of resources needed to ensure a reliable electricity supply that provides optimal integration of renewable energy resources in a cost-effective manner. The portfolio shall rely upon zero carbon-emitting resources to the maximum extent reasonable and be designed to achieve any statewide greenhouse gas emissions limit established pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code) or any successor legislation.
(b)Direct each electrical corporation to include, as part of its proposed procurement plan, a strategy for procuring best-fit and least-cost resources to satisfy the portfolio needs identified by the commission pursuant to subdivision (a).
(c)Ensure that the net costs of any incremental renewable energy integration resources procured by an electrical corporation to satisfy the need identified in subdivision (a) are allocated on a fully nonbypassable basis consistent with the treatment of costs identified in paragraph (2) of subdivision (c) of Section 365.1.
(d)Permit community choice aggregators to submit proposals for satisfying their portion of the renewable energy resource integration need identified in subdivision (a). If the commission finds this need is best met through long-term procurement commitments for resources, community choice aggregators shall also be required to make long-term commitments for resources. The commission shall approve proposals pursuant to this subdivision if it finds all of the following:
(1)The resources proposed by a community choice aggregator will provide equivalent integration of renewable energy. energy resources.
(2)The resources proposed by a community choice aggregator will promote the efficient achievement of state energy policy objectives, including reductions in emissions of greenhouse gas emissions. gases.
(3)Bundled customers of an electrical corporation will be indifferent from the approval of the community choice aggregator proposals.
(4)All costs resulting from nonperformance will be borne by the electrical corporation or community choice aggregator responsible for them.
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Date
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Status
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|---|---|
| May 11, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on APPR. Read second time and amended. |
| Jun 13, 2016 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Jun 9, 2016 | Referred to Com. on E., U., & C. |
| May 27, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 67. Noes 0. Page 4960.) |
| May 27, 2016 | Read third time. Passed. Ordered to the Senate. |
| May 27, 2016 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 19, 2016 | Read second time. Ordered to Consent Calendar. |
| May 18, 2016 | From committee: Do pass. To Consent Calendar. (Ayes 20. Noes 0.) (May 18). |
| May 12, 2016 | Re-referred to Com. on APPR. |
| Feb 19, 2016 | Introduced. To print. |
| Apr 19, 2016 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 9. Noes 0.) (April 18). Re-referred to Com. on APPR. |
| Apr 6, 2016 | From committee: Do pass and re-refer to Com. on NAT. RES. with recommendation: To Consent Calendar. (Ayes 15. Noes 0.) (April 6). Re-referred to Com. on NAT. RES. |
| Mar 28, 2016 | Re-referred to Com. on U. & C. |
| Mar 17, 2016 | Referred to Coms. on U. & C. and NAT. RES. |
| Mar 17, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on U. & C. Read second time and amended. |
| Feb 22, 2016 | Read first time. |
| Feb 21, 2016 | From printer. May be heard in committee March 22. |
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Date
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Description
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Location
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Votes
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|---|---|---|---|---|
| May 27, 2016 | AB 2700 BROWN Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
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| May 18, 2016 | Do pass. To Consent Calendar. | Assembly Standing Committee on Appropriations |
Passed |
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| Apr 18, 2016 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Natural Resources |
Passed |
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| Apr 6, 2016 | Do pass and be re-referred to the Committee on [Natural Resources] with recommendation: To Consent Calendar | Assembly Standing Committee on Utilities and Commerce |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
ABPCA Bill Id:AB 2700
Author:(Brown) – As Amended Ver:May 11, 2016
Policy Committee: | Utilities and Commerce | Vote: | 15 - 0 |
Natural Resources | 9 - 0 |
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill modifes the "least-cost, best-fit" (LCBF) criteria used by California Public Utilities Commission (PUC) to rank contracts under the Renewable Portfolio Standard (RPS). Specifically, this bill expands the workforce considerations in the LCBF process to include the jobs retained by contracting with existing renewable resources.
FISCAL EFFECT:
State costs are absorbable within existing resources.
COMMENTS:
- Purpose. According to the author, California utilities’ portfolios have become less diverse, not more. The procurement of new wind, solar thermal and solar PV has gone up dramatically while the procurement of biomass and geothermal has declined significantly.
This bill seeks to encourage the PUC to rank existing renewable projects in a more favorable manner relative to existing jobs.
- Background. The RPS requires retail electricity sellers to procure 50% of their retail sales from eligible renewable energy resources by 2030 and thereafter.
Certain biomass facilities have been unable to secure new contracts with utilities because the utilities have satisfied their RPS procurement requirements using other, lower-cost resources. The inability to secure new contracts has led to the closure of several biomass plants and loss of jobs in their communities. Contracts with existing geothermal plants are also at risk of not being renewed and new geothermal projects have not ranked favorably in the RPS selection process.
Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081
Date of Hearing: April 18, 2016
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
ABPCA Bill Id:AB 2700 (
Author:Salas) – As Amended Ver:March 17, 2016
SUBJECT: Electrical corporation: California Renewables Portfolio Standard Program: procurement plans
SUMMARY: Requires the Public Utilities Commission (PUC) to update the "least-cost, best-fit" (LCBF) criteria used to rank contracts under the Renewables Portfolio Standard (RPS) to identify the value of maintaining existing baseload resources to achieve the goal of a balanced portfolio of eligible renewable energy resources.
EXISTING LAW:
- Requires "retail sellers" of electricity, i.e., investor-owned utilities (IOUs), energy service providers (ESPs) and community choice aggregators (CCAs), as well as publicly-owned utilities (POUs), to procure 50% of their retail electricity sales from eligible renewable energy resources by 2030 and thereafter, including interim targets of 25% by 2016, 33% by 2020, 40% by 2024, and 45% by 2027.
- Requires the PUC to direct each IOU to include in its proposed procurement plan a strategy for procuring a diverse portfolio of resources that provide a reliable electricity supply, including renewable energy integration needs, using zero carbon-emitting resources to the maximum extent reasonable.
- Requires the PUC to adopt a process that provides criteria for the rank ordering and selection of LCBF resources to comply with the RPS obligations on a total cost and best-fit basis. Among other things, the LCBF process must take into account workforce recruitment, training, and retention efforts, including the employment growth associated with the construction and operation of eligible renewable energy resources, and goals for recruitment and training of women, minorities, and disabled veterans.
- Requires each retail seller, in soliciting and procuring RPS resources, to consider the best-fit attributes of resource types that ensure a balanced resource mix to maintain the reliability of the electrical grid.
THIS BILL:
- Requires the PUC, by July 1, 2017, to update the LCBF criteria to identify the value of maintaining existing baseload resources to achieve the goal of a balanced portfolio of eligible renewable energy resources.
- Adds "jobs retained associated with contracting for existing eligible renewable energy resources" to the workforce considerations that the LCBF process must take into account.
FISCAL EFFECT: Unknown
COMMENTS:
- Author's statement:
AB 2700 requires the CPUC to update the LCBF criteria so that this analysis comprehensively reflects the values appropriately outlined in statute of particular renewable resources. This is significant given the range of renewable procurement options available to California public utilities.
The (RPS) states that the objective of the program is to ensure that the most cost-effective and efficient investments in renewable energy resources are vigorously pursued and that the objectives of the program shall be to increase renewable generation from facilities located in state, while protecting system reliability, fostering resource diversity and obtaining the greatest environmental benefits for California residents. Statute further requires utilities to give preference to renewable energy projects that provide environmental and economic benefits to communities afflicted with poverty or high unemployment, or that suffer from high emission levels of toxic air contaminants, criteria air pollutants, and greenhouse gases.
California has a diverse and abundant supply of new and existing intermittent and baseload renewable resources. Together, these resources can and should play a significant role in meeting California’s low carbon and clean energy policies. But the utilities’ portfolios have become less diverse, not more. The procurement of new wind, solar thermal and solar PV has gone up dramatically while the procurement of biomass and geothermal has declined significantly.
California’s renewables portfolio needs to be balanced and diversified. Diversity promotes reliability by balancing intermittent resources like wind and solar with baseload and balancing renewable resources such as biomass and geothermal. AB 2700 is intended to correct this problem and avoid unnecessary costs burdening ratepayers and negative impacts that the loss of these resources will have on communities.
- More fit. Certain biomass facilities have been unable to secure new contracts with utilities because the utilities have satisfied their RPS procurement requirements using other, lower-cost resources. The inability to secure new contracts has led to the closure of several biomass plants and loss of jobs in their communities. Contracts with existing geothermal plants are also at risk of not being renewed and new geothermal projects have not ranked favorably in the RPS selection process.
This bill seeks balanced procurement selection by encouraging the PUC to rank existing renewable projects in a more favorable manner relative to existing jobs and to identify the value of maintaining existing baseload resources.
- Double referral. This bill passed the Assembly Utilities and Commerce Committee by a vote of 15-0 on April 6, 2016.
REGISTERED SUPPORT / OPPOSITION:
Support
Agricultural Council of California
Associated California Loggers
Becerra Ag
California Biomass Energy Alliance
California Farm Bureau Federation
California Forestry Association
DG Fairhaven Power LLC
IHI Generation
IHI Power Services
Rio Bravo Fresno
Rio Bravo Rocklin
Tuolumne County Chamber of Commerce
Wadham Energy LP
Wilson Ag
13 Individuals
Opposition
None on file
Analysis Prepared by: Lawrence Lingbloom / NAT. RES. / (916) 319-2092
Date of Hearing: April 6, 2016
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Mike Gatto, Chair
ABPCA Bill Id:AB 2700 (
Author:Salas) – As Amended Ver:March 17, 2016
SUBJECT: Electrical corporation: California Renewables Portfolio Standard Program: procurement plans
SUMMARY: Revises the Renewable Portfolio Standard (RPS) related to job creation and requires the California Public Utilities Commission (CPUC) to update criteria used to rank RPS projects. Specifically, this bill:
- Revises existing provision related to job creation that is to be used in the ranking of RPS projects to include consideration of jobs retained that are associated with contracting for existing eligible renewable energy resources.
- Requires the CPUC to update the criteria it uses to rank RPS projects relative to the additional job creation provisions added by this bill and to identify the value of maintaining existing baseload resources to achieve the goal of a balanced portfolio of eligible renewable energy resources.
EXISTING LAW:
- Establishes requirements for electric service providers to procure 50% of their electricity supplies from renewable energy by 2030, otherwise known as the RPS. (Public Utilities Code Section 399.12)
- Requires the CPUC, in implementing the RPS to adopt, by rulemaking, criteria for the ranking and selection of least-cost and best-fit (LCBF) eligible renewable energy on a total cost and best-fit basis that takes into account estimates of indirect costs associated with needed transmission investments; the cost impact of procuring the eligible renewable energy resources on the electrical corporation’s electricity portfolio; the viability of the project to construct and reliably operate the eligible renewable energy resource, including the developer’s experience, the feasibility of the technology used to generate electricity, and the risk that the facility will not be built, or that construction will be delayed, with the result that electricity will not be supplied as required by the contract; workforce recruitment, training, and retention efforts, including the employment growth associated with the construction and operation of eligible renewable energy resources and goals for recruitment and training of women, minorities, and disabled veterans, and; estimates of electrical corporation expenses resulting from integrating and operating eligible renewable energy resources, including, but not limited to, any additional wholesale energy and capacity costs associated with integrating each eligible renewable resource. (Public Utilities Code Section 399.12 (a)(4)(A))
- Requires the CPUC to establish, no later than December 31, 2015, a method for determining expenses resulting from integrating and operating eligible renewable energy resources. (Public Utilities Code Section 399.12 (a)(4)(A))
FISCAL EFFECT: Unknown.
COMMENTS:
- Author's Statement: "It is important to promote a policy that will help ensure the state’s renewable portfolio standard procurement process creates a more level playing field and evaluates all renewable resources comprehensively. The result will be a more diverse and cost-effective portfolio of renewable energy resources, which will help to balance the grid and maintain reliability while keeping consumer electric rates affordable.
"AB 2700 requires the CPUC to update the LCBF criteria so that this analysis comprehensively reflects the values appropriately outlined in statute of particular renewable resources. This is significant given the range of renewable procurement options available to California public utilities."
- Belly of the Duck: The new infamous "duck chart" developed by the California Independent System Operator (CAISO) shows that, left unaddressed, generation from renewable power will grow to a point where there will be excess generation on the electric grid both in mid-day and days when demand for electricity is low (spring and fall). This is driven mainly by the selection of primarily one generation technology in the RPS contract process: the CPUC's most recent RPS report shows that as much as 75% of all RPS procurement coming on line in 2015 is solar technology.[1] The belly of the duck represents the net load for electricity after all generation and load is taken into account. The tail and neck of the duck represents the speed at which generation must be made available as the sun sets and the solar projects stop generating. For the most part, the electricity needed for the ramps will be provided by natural gas generation facilities. This could lead to problems with maintaining a reliable transmission system due to the need to respond quickly to the changing real-time conditions because natural gas generators take time to start up (several hours or more). As a result, gas generators must be held in standby-mode to be ready when called upon to replace the output that was previously provided by the solar projects. (Note that simultaneous with the renewable "overgeneration" California is importing electricity from out of state).
Another way to address the ramp, though, would be to diversify RPS procurement so that the belly fills and the tail and neck flatten – which would have the effect of reducing the ramps at help with reliable operation of the transmission system. Other forms of renewable generation, such as biomass and geothermal facilities are both capable of generating electricity at any time of the day.
Certain biomass facilities have been unable to secure new contracts with utilities because the utilities have satisfied their RPS procurement requirements using other resources. Thus, leading to closure and loss of jobs in their communities. Utilities are also planning not to renew geothermal projects and new geothermal projects have not ranked favorably in the RPS selection process.
This bill seeks balanced procurement selection by encouraging the CPUC to rank existing renewable projects in a more favorable manner relative to existing jobs and to identify the value of maintaining existing baseload resources.
- Support: Supporters state that a LCBF criteria reflected is an important recognition of the distinct value brought by biomass facilities, helping to diversify an increasingly homogenous renewable portfolio and lead to a more level playing field. Further, they state that this bill will lead to more use of biomass for electric generation and assist with lowering the risk of wildfires.
REGISTERED SUPPORT / OPPOSITION:
Support
Associated California Loggers
California Farm Bureau Federation
CalForests
Humboldt/Mendocino Redwood Companies
Pacific Ultrapower Chinese Station (11 employees of)
Opposition
None on file
Analysis Prepared by: Sue Kateley / U. & C. / (916) 319-2083
Bill Co-Author(s):