SB 1301: Natural gas: greenhouse gas allowance: allocation.

Under the Public Utilities Act, the Public Utilities Commission has regulatory jurisdiction over public utilities, including electrical corporations and gas corporations. A violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime. The California Global Warming Solutions Act of 2006 and its implementing regulations provide for a greenhouse gas emissions limit to be achieved through a market-based compliance mechanism. That mechanism includes the requirement that certain greenhouse gas producers acquire allowances for their emissions. Those regulations specifically provide for the direct allocation of greenhouse gas allowances to gas corporations.

A decision of the commission requires the gas corporations to return to certain customers the proceeds generated from the sale of those greenhouse gas allowances as a bill credit in an equal, non-volumetric manner, and to conduct outreach and education activities to customers receiving the bill credit.

The Public Utilities Act authorizes the commission to allocate 15% of the revenues received by an electrical corporation as a result of the auction of greenhouse gas allowances for clean energy and energy efficiency projects established pursuant to statute that are administered by electrical corporations or a qualified 3rd-party administrator approved by the commission and requires the commission to direct the balance of the revenues to be credited directly to the residential, small business, and emissions-intensive trade-exposed retail customers of the electrical corporations, as specified.

This bill would require authorize the commission, no later than June 1, 2017, commission to require up to 25% of revenues received by a gas corporation as a result of the auction of greenhouse gas allowances to be used for clean energy and energy efficiency projects or programs approved by the commission, as specified. The bill would require the commission to require each gas corporation to annually report and post on its Internet Web site all expenditures of these revenues and the quantified reductions in greenhouse gases from projects or programs funded under these provisions. Because the provisions of this bill require or authorize action by the commission to implement its requirements, and a violation of these commission-ordered requirements would be a crime, 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 a specified reason.