Existing law requires the State Energy Resources Conservation and Development Commission to implement and administer the Distributed Electricity Backup Assets Program to incentivize the construction of distributed energy assets that would serve as on-call emergency supply or load reduction for the electrical grid during extreme events. Existing law requires the commission to also implement and administer the Demand Side Grid Support Program to incentivize dispatchable customer load reduction and backup generation operation as on-call emergency supply or load reduction for the electrical grid during extreme events. Existing law requires the Department of Water Resources to implement projects, purchases, and contracts to carry out the purposes of those programs. Existing law authorizes the department to construct, own and operate, or contract for specified types of electrical generation and energy storage facilities for these purposes.

The California Global Warming Solutions Act of 2006 establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act requires the state board to adopt regulations to require the reporting and verification of statewide greenhouse gas emissions, as provided. The act also requires the state board to adopt greenhouse gas emissions limits and emissions reduction measures by regulation, including the use of market-based compliance mechanisms.

This bill would expressly require facilities constructed by the department or under a contract with the department for purposes of the Distributed Electricity Backup Assets Program or the Demand Side Grid Support Program to comply with the regulations adopted by the state board.

Existing law requires the State Energy Resources Conservation and Development Commission to implement and administer the Distributed Electricity Backup Assets Program to incentivize the construction of distributed energy assets that would serve as on-call emergency supply or load reduction for the electrical grid during extreme events. Existing law requires the commission to also implement and administer the Demand Side Grid Support Program to incentivize dispatchable customer load reduction and backup generation operation as on-call emergency supply or load reduction for the electrical grid during extreme events. Existing law requires the Department of Water Resources to implement projects, purchases, and contracts to carry out the purposes of those programs. Existing law authorizes the department to construct, own and operate, or contract for specified types of electrical generation and energy storage facilities for these purposes.

The California Global Warming Solutions Act of 2006 establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act requires the state board to adopt regulations to require the reporting and verification of statewide greenhouse gas emissions, as provided. The act also requires the state board to adopt greenhouse gas emissions limits and emissions reduction measures by regulation, including the use of market-based compliance mechanisms.

This bill would expressly require facilities constructed by the department or under a contract with the department for purposes of the Distributed Electricity Backup Assets Program or the Demand Side Grid Support Program to comply with the regulations adopted by the state board.

Existing law requires the State Energy Resources Conservation and Development Commission to implement and administer the Distributed Electricity Backup Assets Program to incentivize the construction of distributed energy assets that would serve as on-call emergency supply or load reduction for the electrical grid during extreme events. Existing law requires the commission to also implement and administer the Demand Side Grid Support Program to incentivize dispatchable customer load reduction and backup generation operation as on-call emergency supply or load reduction for the electrical grid during extreme events. Existing law requires the Department of Water Resources to implement projects, purchases, and contracts to carry out the purposes of those programs. Existing law authorizes the department to construct, own and operate, or contract for specified types of electrical generation and energy storage facilities for these purposes.

The California Global Warming Solutions Act of 2006 establishes the State Air Resources Board as the state agency responsible for monitoring and regulating sources emitting greenhouse gases. The act requires the state board to adopt regulations to require the reporting and verification of statewide greenhouse gas emissions, as provided. The act also requires the state board to adopt greenhouse gas emissions limits and emissions reduction measures by regulation, including the use of market-based compliance mechanisms.

This bill would expressly require facilities constructed by the department or under a contract with the department for purposes of the Distributed Electricity Backup Assets Program or the Demand Side Grid Support Program to comply with the regulations adopted by the state board.

Existing law prohibits a telephone or telegraph corporation from making certain categories of personal information available to any other person or corporation without first obtaining the residential subscribers consent in writing.

This bill would make nonsubstantive changes to this provision.

CONCURRENCE IN SENATE AMENDMENTS

CSA2 Bill Id:AB 1061

Author:(Rendon)

As Amended Ver:August 14, 2023

Majority vote

SUMMARY

Original Committee of Reference: Communications and Conveyance Committee

Expressly requires facilities constructed by the Department of Water Resources (DWR) or under a contract with DWR for purposes of the Electric Supply Strategic Reliability Reserve Program (ESSRRP) to comply with California Air Resources Board (CARB) regulations regarding mandatory reporting of greenhouse gas (GHGs) emissions and compliance with the cap-and-trade program.

Senate Amendments

Current Committee Recommendation: Concur

Delete the entirety of the Assembly version of this bill, and insert its current contents.

COMMENTS

DWR called on to support energy reliability during extreme events. In August 2020, a massive heat wave across the western United States led the California Independent System Operator (CAISO) – the operator for much of the state's electrical grid—to implement rotating outages across the state in order to stave off more devastating blackouts. In 2021, the Bootleg Fire in Oregon threatened interstate transmission lines, significantly reducing the power imported into California. Governor Newsom issued executive orders during both events to shore up electric reliability. The July 2021 Executive Order directed DWR to secure and deploy temporary and emergency power generation to supplement existing grid resources. In May 2022, analysis by the state's primary energy agencies and CAISO, found that additional generating resources were needed to address extreme weather events, massive fires, supply chain constraints, and other factors which then led to legislative actions in 2022 that called on DWR to secure energy resources to address extreme events.

Electric Supply Strategic Reliability Reserve Program. In June 2022, Budget Trailer Bills, AB 205 (Budget Committee), Chapter 61, Statutes of 2022, AB 178 (Ting), Chapter 45, Statutes of 2022, and AB 180 (Ting), Chapter 44, Statutes of 2022, were signed into law. These three pieces of legislation collectively established the ESSRRP and set forth new responsibilities and activities by DWR, funded by the newly established Electricity Supply Reliability Reserve Fund (ESSRF), separate from the State Water Project. DWR established temporary energy resources and created a new deputy director-level division with 25 staff – the Division of Statewide Water and Energy. The Division oversees the ESSRRP along with the State Power Augmentation Program which was developed in July 2021 in response to an executive order to quickly deploy 120 megawatts (MW) of new generation. Under the ESSRRP, DWR acts as a power provider of last resort to help maintain electricity reliability. As part of the program, DWR contracts directly with power facilities and also enters into agreements with the state's large electric investor-owned utilities (IOUs) to reimburse for the value of firm imported energy resources they contract to import to support summer reliability.

Current procurement and GHGs emissions of existing DWR contracts. In response to Governor Newsom's Emergency Proclamation issued July 2021, DWR secured contracts to procure, install, and license four temporary natural gas turbine generator units totaling 120 MW at existing power generation sites located in the Cities of Roseville (two units owned by Roseville) and Yuba City (two units owned by Calpine). These units were operational on September 22, 2021, and have received ESSRF payments. Current agreements allow the units to remain available for operation until the end of 2023; though as of August 2023, DWR reported they are in negotiations with both facilities to extend their operations beyond 2023. Per DWR's January 2023 ESSRF progress report, the Calpine units emitted 954 and 1,072 carbon dioxide (CO₂) tons during their use in 2022, and the Roseville units emitted 208 and 257 CO₂ tons during their use in 2022. In their August 2023 update, DWR noted the Calpine units emitted 357.4 and 328.5 CO₂ tons during their use from January-June 2023, and the Roseville units emitted 245.1 and 185.2 CO₂ tons during their use from January-June 2023.

In their August 2023 ESSRF update, DWR reported a total of 187,586 metric tons of CO₂ equivalent (MT CO₂e) from imported firm energy for July-September 2022. In the case of these resources, the scheduling coordinators (who schedule into the CAISO market and are largely the large electric IOUs) are responsible for the GHG allowance costs for the cap-and-trade program. Although, according to DWR, some individual sellers were responsible for paying the GHG allowance costs themselves. In addition to these energy resources, DWR is also in varying stages of contract discussions and execution for other resources, largely natural gas based, including the once-through-cooling plants at AES Alamitos, AES Huntington Beach, and Ormond.

This bill explicitly states that the contracts and facilities DWR contracts or procures for the ESSRRP must comply with CARB's Mandatory Reporting Requirements for GHGs and the cap-and-trade program's emissions reductions. Under the current regulatory requirements, energy generation facilities that emit 10,000 MT CO₂e emissions are required to report their GHG emissions, and facilities that emit 25,000 metric tons of CO₂ are subject to the cap-and-trade regulations to reduce emissions. As such, these requirements would seem to apply to all energy generation units, regardless of whether they are procured by another entity or DWR.

According to the Author

According to the author, "California has made significant strides to meet power demand and prevent outages during extreme weather events, such as heatwaves. Among other actions, the Department of Water Resources (DWR) has been charged with procuring and maintaining resources to ensure power supply reliability during these times. Currently, statute does not explicitly state that these actions must be subject to carbon accounting standards. AB 1061 requires that any resources procured or maintained by DWR, as part of what is known as the Electricity Supply Strategic Reliability Reserve Program, be subject to cap-and-trade and have their greenhouse gas emissions reported to the Air Resources Board. This will balance the need to procure these backup power sources with holding them to the same emissions standards as other resources."

Arguments in Support

The Environmental Defense Fund and Natural Resources Defense Council write in support of this measure, noting that "current law does not explicitly state that resources procured by DWR must have their GHG emissions reported to CARB." According to the supporters, this bill will "establish consistency" by "eliminating statutory ambiguity" and "holding these backup resources to the same emissions standards as other resources."

Arguments in Opposition

None on file.

FISCAL COMMENTS

Unknown. This bill is keyed non-fiscal by the Legislative Counsel.

VOTES

ASM COMMUNICATIONS AND CONVEYANCE: 13-0-0

YES: Boerner Horvath, Jim Patterson, Bonta, Davies, Garcia, Holden, Hoover, Low, Maienschein, Papan, Luz Rivas, Rodriguez, Weber

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

ASSEMBLY FLOOR: 79-0-1

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

ABS, ABST OR NV: Essayli

SENATE FLOOR: 31-8-1

YES: Allen, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dodd, Durazo, Eggman, Glazer, Gonzalez, Hurtado, Laird, Limón, McGuire, Menjivar, Min, Newman, Padilla, Portantino, Roth, Rubio, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener

NO: Alvarado-Gil, Dahle, Grove, Jones, Nguyen, Niello, Seyarto, Wilk

ABS, ABST OR NV: Ochoa Bogh

ASM UTILITIES AND ENERGY: 13-0-2

YES: Garcia, Jim Patterson, Bauer-Kahan, Calderon, Wendy Carrillo, Connolly, Holden, Muratsuchi, Reyes, Santiago, Schiavo, Ting, Wallis

ABS, ABST OR NV: Chen, Mathis

UPDATED

VERSION: August 14, 2023

CONSULTANT: Laura Shybut / U. & E. / (916) 319-2083 FN: 0002372

Date of Hearing: September 11, 2023

ASSEMBLY COMMITTEE ON UTILITIES AND ENERGY

Eduardo Garcia, Chair

ABPCA Bill Id:AB 1061 (

Author:Rendon) – As Amended Ver:August 14, 2023

SUBJECT: Electricity Supply Strategic Reliability Reserve Program

SUMMARY: Expressly requires facilities constructed by the Department of Water Resources (DWR) or under a contract with DWR for purposes of the Electric Supply Strategic Reliability Reserve Program (ESSRRP) to comply with California Air Resources Board (CARB) regulations regarding mandatory reporting of greenhouse gas (GHGs) emissions and compliance with the cap-and-trade program.

EXISTING LAW:

1. Establishes the ESSRRP which among its provisions, authorizes DWR to construct or contract for electricity to secure resources for summer reliability or to preserve the option to extend the life of specified facilities, including nonnuclear facilities, new energy storage outside the coastal zone, zero-emission generation facilities outside the coastal zone, and zero-emission generation capacity. (Water Code § 80700.5 et seq.)
2. Requires DWR to issue a written report to the Joint Legislative Budget Committee, quarterly in 2023 and annually thereafter, detailing the actions undertaken by DWR in the period since the previous report was submitted including, the resources procured and the associated GHG emissions, and criteria and toxic pollutants. (Water Code § 80730)
3. Requires the California Energy Commission (CEC) to implement and administer the Distributed Electricity Backup Assets Program to incentivize the construction of distributed energy assets that would serve as on-call emergency supply or load reduction for the electrical grid during extreme events. (Public Resources Code § 25791)
4. Establishes the California Global Warming Solutions Act of 2006, which provides the California Air Resources Board (CARB) as the state agency responsible for monitoring and regulating sources emitting GHGs. Requires CARB to adopt regulations to require the reporting and verification of statewide GHG emissions. Requires CARB to adopt GHG emissions limits and emissions reduction measures by regulation, including the use of market-based compliance mechanisms. (Health and Safety Code §§ 38530 and 38570)

FISCAL EFFECT: This bill is nonfiscal.

BACKGROUND:

DWR called on to support energy reliability during extreme events. In August 2020, a massive heat wave across the western United States led the California Independent System Operator (CAISO)—the operator for much of the state's electrical grid—to implement rotating outages across the state in order to stave off more devastating blackouts. In 2021, the Bootleg Fire in Oregon threatened interstate transmission lines, significantly reducing the power imported into California. Governor Newsom issued executive orders during both events to shore up electric reliability. The July 2021 Executive Order directed DWR to secure and deploy temporary and emergency power generation to supplement existing grid resources. In May 2022, analysis by the state’s primary energy agencies and CAISO, found that additional generating resources were needed to address extreme weather events, massive fires, supply chain constraints, and other factors which then led to legislative actions in 2022 that called on DWR to secure energy resources to address extreme events.

Electric Supply Strategic Reliability Reserve Program. In June 2022, Budget Trailer Bills, AB 205 (Committee on Budget, Chapter 61, Statutes of 2022), AB 178 (Ting, Chapter 45, Statutes of 2022), and AB 180 (Ting, Chapter 44, Statutes of 2022), were signed into law. These three pieces of legislation collectively established the ESSRRP and set forth new responsibilities and activities by DWR, funded by the newly established Electricity Supply Reliability Reserve Fund (ESSRF), separate from the State Water Project. DWR established temporary energy resources and created a new deputy director-level division with 25 staff – the Division of Statewide Water and Energy. The Division oversees the ESSRRP along with the State Power Augmentation Program which was developed in July 2021 in response to an executive order to quickly deploy 120 megawatts (MW) of new generation. Under the ESSRRP, DWR acts as a power provider of last resort to help maintain electricity reliability. As part of the program, DWR contracts directly with power facilities and also enters into agreements with the state’s large electric investor-owned utilities (IOUs) to reimburse for the value of firm imported energy resources they contract to import to support summer reliability.

Current procurement and GHGs emissions of existing DWR contracts. In response to Governor Newsom's Emergency Proclamation issued July 2021, DWR secured contracts to procure, install, and license four temporary natural gas turbine generator units totaling 120 MW at existing power generation sites located in the Cities of Roseville (two units owned by Roseville) and Yuba City (two units owned by Calpine). These units were operational on September 22, 2021, and have received ESSRF payments. Current agreements allow the units to remain available for operation until the end of 2023; though as of August 2023, DWR reported they are in negotiations with both facilities to extend their operations beyond 2023. Per DWR's January 2023 ESSRF progress report, the Calpine units emitted 954 and 1,072 carbon dioxide (CO₂) tons during their use in 2022, and the Roseville units emitted 208 and 257 CO₂ tons during their use in 2022. In their August 2023 update, DWR noted the Calpine units emitted 357.4 and 328.5 CO₂ tons during their use from January-June 2023, and the Roseville units emitted 245.1 and 185.2 CO₂ tons during their use from January-June 2023.

In their August 2023 ESSRF update, DWR reported a total of 187,586 metric tons of CO₂ equivalent (MT CO₂e) from imported firm energy for July-September 2022. In the case of these resources, the scheduling coordinators (who schedule into the CAISO market and are largely the large electric IOUs) are responsible for the GHG allowance costs for the cap-and-trade program. Although, according to DWR, some individual sellers were responsible for paying the GHG allowance costs themselves. In addition to these energy resources, DWR is also in varying stages of contract discussions and execution for other resources, largely natural gas based, including the once-through-cooling plants at AES Alamitos, AES Huntington Beach, and Ormond.

COMMENTS:

1. Author’s Statement. According to the author, “"California has made significant strides to meet power demand and prevent outages during extreme weather events, such as heatwaves. Among other actions, the Department of Water Resources (DWR) has been charged with procuring and maintaining resources to ensure power supply reliability during these times. Currently, statute does not explicitly state that these actions must be subject to carbon accounting standards. AB 1061 requires that any resources procured or maintained by DWR, as part of what is known as the Electricity Supply Strategic Reliability Reserve Program, be subject to cap-and-trade and have their greenhouse gas emissions reported to the Air Resources Board. This will balance the need to procure these backup power sources with holding them to the same emissions standards as other resources."
2. Purpose. This bill explicitly states that the contracts and facilities DWR contracts or procures for the ESSRRP must comply with CARB's Mandatory Reporting Requirements for GHGs and the cap-and-trade program's emissions reductions. Under the current regulatory requirements, energy generation facilities that emit 10,000 MT CO₂e emissions are required to report their GHG emissions, and facilities that emit 25,000 metric tons of CO₂ are subject to the cap-and-trade regulations to reduce emissions. As such, these requirements would seem to apply to all energy generation units, regardless of whether they are procured by another entity or DWR.
3. Related Legislation.

SB 123 (Committee on Budget) extended the date, from September 2022 to October 2023, by when electric IOUs may be reimbursed for above-market costs for imported energy and capacity products delivered or capable of being delivered to the state through the ESSRRP. Status: Chapter 52, Statutes of 2023.

SB 124 (Committee on Budget) extended the date, from September 2022 to October 2023, by when electric IOUs may be reimbursed for above-market costs for imported energy and capacity products delivered or capable of being delivered to the state, clarified that DWR must present an investment plan to the CEC, rather than the contracts, and makes additional clarifying changes. Status: Chapter 53, Statutes of 2023.

1. Prior Legislation.

AB 209 (Committee on Budget) made further changes to the ESSRRP, including: narrowing what resources could be procured; authorizing procurement of nonnuclear generating resources whose operating life may be extended; prohibiting DWR procurement of energy storage and energy generation facilities located in specified coastal areas; and limiting the use of any resources using fossil fuels to only extreme events. Status: Chapter 251, Statutes of 2022.

AB 178 (Ting) appropriated $700 million to DWR for ESSRRP. Status: Chapter 45, Statutes of 2022.

AB 180 (Ting) appropriated $1.5 billion to DWR for ESSRRP. Status: Chapter 44, Statutes of 2022.

AB 205 (Committee on Budget) included various provisions related to energy, including the establishment of the ESSRRP which continuously appropriates moneys into the accounts to the CEC for the implementation of the Distributed Electricity Backup Assets Program and the Demand Side Grid Support Program. Status: Chapter 61, Statutes of 2022.

AB 32 (Nuñez) required, under the Global Warming Solutions Act of 2006, CARB to approve a statewide GHG emissions limit equivalent to the statewide GHG emissions level in 1990 to be achieved by 2020 and to ensure that statewide GHG emissions are reduced to at least 40% below the 1990 level by 2030. The bill also required CARB to consider a market mechanism for achieving the GHG reductions and requires mandatory reporting of GHGs by entities that emit GHGs. Status: Chapter 488, Statutes of 2006.

REGISTERED SUPPORT / OPPOSITION:

Support

Environmental Defense Fund
Natural Resources Defense Council

Opposition

None on file.

Analysis Prepared by: Laura Shybut / U. & E. / (916) 319-2083

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1061

Author:(Rendon)

As Amended Ver:August 14, 2023

Majority vote

SUMMARY

Expressly requires facilities constructed by the Department of Water Resources (DWR) or under a contract with DWR for purposes of the Electric Supply Strategic Reliability Reserve Program (ESSRRP) to comply with California Air Resources Board (CARB) regulations regarding mandatory reporting of greenhouse gas (GHGs) emissions and compliance with the cap-and-trade program.

Senate Amendments

Delete the entirety of the Assembly version of this bill, and insert its current contents.

COMMENTS

DWR called on to support energy reliability during extreme events. In August 2020, a massive heat wave across the western United States led the California Independent System Operator (CAISO), the operator for much of the state's electrical grid, to implement rotating outages across the state in order to stave off more devastating blackouts. In 2021, the Bootleg Fire in Oregon threatened interstate transmission lines, significantly reducing the power imported into California. Governor Newsom issued executive orders during both events to shore up electric reliability. The July 2021 Executive Order directed DWR to secure and deploy temporary and emergency power generation to supplement existing grid resources. In May 2022, analysis by the state’s primary energy agencies and CAISO, found that additional generating resources were needed to address extreme weather events, massive fires, supply chain constraints, and other factors which led to legislative actions in 2022 that called on DWR to secure energy resources to address extreme events.

Electric Supply Strategic Reliability Reserve Program. In June 2022, Budget Trailer Bills, AB 205 (Committee on Budget), Chapter 61, Statutes of 2022, AB 178 (Ting), Chapter 45, Statutes of 2022, and AB 180 (Ting), Chapter 44, Statutes of 2022, were signed into law. These three pieces of legislation collectively established the ESSRRP and set forth new responsibilities and activities by DWR, funded by the newly established Electricity Supply Reliability Reserve Fund (ESSRF), separate from the State Water Project. DWR established temporary energy resources and created a new deputy director-level division with 25 staff – the Division of Statewide Water and Energy – which oversees the ESSRRP along with the State Power Augmentation Program which was developed in July 2021 in response to an executive order to quickly deploy 120 megawatts (MW) of new generation. Under the ESSRRP, DWR acts as a power provider of last resort to help maintain electricity reliability. As part of the program, DWR contracts directly with power facilities and also enters into agreements with the state’s large electric investor-owned utilities (IOUs) to reimburse for the value of firm imported energy resources to support summer reliability.

Current procurement and GHGs emissions of existing DWR contracts. In response to Governor Newsom's Emergency Proclamation issued July 2021, DWR secured contracts to procure, install, and license four temporary natural gas turbine generator units totaling 120 MW at existing power generation sites located in the Cities of Roseville (two units owned by Roseville) and Yuba City (two units owned by Calpine). These units were operational on September 22, 2021, and are expected to receive ESSRF payments. Current agreements allow the units to remain available for operation until the end of 2023. Per DWR's January 2023 ESSRF progress report, the Calpine units emitted 954 and 1,072 carbon dioxide (CO₂) tons during their use in 2022, and the Roseville units emitted 208 and 257 CO₂ tons during their use in 2022. DWR has noted its intent to extend the contracts before their current agreements expire.

In addition to these energy resources, DWR is also in varying stages of contract discussions and execution for other resources, largely natural gas based, including the once-through-cooling plants at AES Alamitos, AES Huntington Beach, and Ormond. As of January 31, 2023, DWR had secured 1,646 MW from imported energy for summer 2022 with a maximum budget of $150 million. In the case of these resources, the scheduling coordinators (who schedule into the CAISO market and are largely the large electric IOUs) are responsible for the GHG allowance costs for the cap-and-trade program. Although, according to DWR, some individual sellers were responsible for paying the GHG allowance costs themselves.

This bill explicitly states that the contracts and facilities DWR contracts or procures for the ESSRRP must comply with CARB's Mandatory Reporting Requirements for GHGs and the cap-and-trade program's emissions reductions. Under the current regulatory requirements, energy generation facilities that emit 10,000 metric tons of CO₂ equivalent emissions are required to report their GHG emissions, and facilities that emit 25,000 metric tons of CO₂ are subject to the cap-and-trade regulations to reduce emissions. As such, these requirements would seem to apply to all energy generation units, regardless of whether they are procured by another entity or DWR.

According to the Author

According to the Author, "California has made significant strides to meet power demand and prevent outages during extreme weather events, such as heatwaves. Among other actions, the Department of Water Resources (DWR) has been charged with procuring and maintaining resources to ensure power supply reliability during these times. Currently, statute does not explicitly state that these actions must be subject to carbon accounting standards. AB 1061 requires that any resources procured or maintained by DWR, as part of what is known as the Electricity Supply Strategic Reliability Reserve Program, be subject to cap-and-trade and have their greenhouse gas emissions reported to the Air Resources Board. This will balance the need to procure these backup power sources with holding them to the same emissions standards as other resources."

Arguments in Support

The Environmental Defense Fund and Natural Resources Defense Council write in support of this measure, noting that "current law does not explicitly state that resources procured by DWR must have their GHG emissions reported to CARB." According to the supporters, this bill will "establish consistency" by "eliminating statutory ambiguity" and "holding these backup resources to the same emissions standards as other resources."

Arguments in Opposition

None on file.

FISCAL COMMENTS

None.

VOTES:

ASM COMMUNICATIONS AND CONVEYANCE: 13-0-0

YES: Boerner Horvath, Jim Patterson, Bonta, Davies, Garcia, Holden, Hoover, Low, Maienschein, Papan, Luz Rivas, Rodriguez, Weber

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

ASSEMBLY FLOOR: 79-0-1

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

ABS, ABST OR NV: Essayli

SENATE FLOOR: 31-8-1

YES: Allen, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dodd, Durazo, Eggman, Glazer, Gonzalez, Hurtado, Laird, Limón, McGuire, Menjivar, Min, Newman, Padilla, Portantino, Roth, Rubio, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener

NO: Alvarado-Gil, Dahle, Grove, Jones, Nguyen, Niello, Seyarto, Wilk

ABS, ABST OR NV: Ochoa Bogh

UPDATED

VERSION: August 14, 2023

CONSULTANT: Laura Shybut / U. & E. / (916) 319-2083 FN: 0001872

 THIRD READING  

Bill No: AB 1061

Author: Rendon (D), et al.

Amended: 8/14/23 in Senate

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 14-2, 7/10/23

AYES: Bradford, Ashby, Becker, Caballero, Dodd, Durazo, Eggman, Gonzalez, McGuire, Min, Newman, Rubio, Skinner, Stern

NOES: Seyarto, Wilk

NO VOTE RECORDED: Dahle, Grove

ASSEMBLY FLOOR: 79-0, 5/30/23 - See last page for vote

SUBJECT: Electricity Supply Strategic Reliability Reserve Program

SOURCE: Author

DIGEST:

This bill requires, expressly, facilities constructed by the Department of Water Resources (DWR) or under a contract with the DWR for purposes of the Electric Supply Strategic Reliability Reserve Program (ESSRRP) to comply with regulations regarding mandatory reporting of greenhouse gas (GHGs) emissions and compliance with the cap-and-trade program to reduce GHGs.

Senate Floor Amendments of 8/14/23 address chaptering conflicts with the recently chaptered energy budget trailer bills, SB 123 (Committee on Budget, Chapter 52, Statutes of 2023) and SB 124 (Committee on Budget, Chapter 53, Statutes of 2023).

ANALYSIS:

Existing law:

1. Establishes the ESSRRP which among its provisions, authorizes the DWR to construct or contract for electricity to secure resources for summer reliability or to preserve the option to extend the life of specified facilities, including nonnuclear facilities, new energy storage outside the coastal zone, zero-emission generation facilities outside the coastal zone, and zero-emission generation capacity. (Water Code §80700.5 et seq.)
2. Requires the DWR to issue a written report to the Joint Legislative Budget Committee, quarterly in 2023 and annually thereafter, detailing the actions undertaken by the DWR in the period since the previous report was submitted including, the resources procured and the associated GHG emissions, and criteria and toxic pollutants. (Water Code §80730)
3. Requires the State Energy Resources Conservation and Development Commission (also known as the California Energy Commission (CEC)) to implement and administer the Distributed Electricity Backup Assets Program to incentivize the construction of distributed energy assets that would serve as on-call emergency supply or load reduction for the electrical grid during extreme events. (Public Resources Code §25791)
4. Establishes the California Global Warming Solutions Act of 2006, which provides the California Air Resources Board (CARB) as the state agency responsible for monitoring and regulating sources emitting GHGs. Requires the CARB to adopt regulations to require the reporting and verification of statewide GHG emissions. Requires the CARB to adopt GHG emissions limits and emissions reduction measures by regulation, including the use of market-based compliance mechanisms. (Health and Safety Code §§38530 and 38570)

This bill expressly requires facilities constructed by the DWR or under a contract with the DWR for purposes of the ESSRRP to comply with regulations adopted by the CARB. Specifically, the regulations for:

1. Mandatory reporting of GHG emissions.

1. Compliance with the cap-and-trade program to reduce GHGs.

Background

1. DWR called on to support energy reliability during extreme events. In August 2020, a massive heat wave across the western United States led the California Independent System Operator (CAISO), the operator for much of the state’s electrical grid, to implement rotating outages across the state in order to stave off more devastating blackouts. In 2021, the Bootleg Fire in Oregon threatened electricity transmission lines and significantly reduced power imported into California. Governor Newsom issued executive orders during both events to shore up electric reliability. The July 2021 Executive Order directed DWR to secure and deploy temporary and emergency power generation to supplement existing grid resources. In May 2022, analysis by the state’s primary energy agencies and CAISO, found that additional generating resources were needed to address extreme weather events, massive fires, supply chain constraints, and other factors which led to legislative actions that called on DWR to secure energy resources to address extreme events.
2. Electric Supply Strategic Reliability Reserve Program. In June 2022, Budget Trailer Bills, AB 205 (Committee on Budget, Chapter 61, Statutes of 2022),
   AB 178 (Ting, Chapter 45, Statutes of 2022), and AB 180 (Ting, Chapter 44, Statutes of 2022), were signed into law. These three pieces of legislation collectively established the ESSRRP and set forth new responsibilities and activities by DWR, funded by the newly established Electricity Supply Reliability Reserve Fund (ESSRF), and separate from the State Water Project. DWR established temporary energy resources and created a new deputy director-level division with 25 staff – the Division of Statewide Water and Energy – which oversees the ESSRRP along with the State Power Augmentation Program which was developed in July 2021 in response to executive order direction to quickly deploy 120 megawatts (MW) of new generation. Under the ESSRRP, DWR acts as a power provider of last resort to help maintain electricity reliability. As part of the program, DWR contracts directly with power facilities and also enters into agreements with the state’s large electric investor-owned utilities (IOUs) to reimburse for the value of imported firm energy resources to support summer reliability.
3. Current procurement and GHGs emissions of existing DWR contracts. As of the most recent ESSRRP progress report, January 31, 2023, DWR secured 1,646 MW from imported energy for summer 2022 with a maximum budget of $150 million (the upcoming report – now delayed – should provide invoicing details). In the case of these resources, the scheduling coordinators (who schedule into the CAISO market and are largely the large electric IOUs) are responsible for the GHG allowance costs for the cap-and-trade program. Although, some individual sellers were responsible for paying the GHG allowance costs themselves, according to DWR.

In response to Governor Newsom’s Emergency Proclamation issued July 2021, DWR secured contracts to procure, install, and license four temporary natural gas turbine generator units totaling 120 MW at existing power generation sites located in the Cities of Roseville (two units owned by Roseville) and Yuba City (two units owned by Calpine). These units were operational on September 22, 2021, and during the September 2022 heat wave, as such, they are expected to receive ESSRF payments. Current agreements allow the units to remain available for operation until the end of 2023. Per DWR’s January 2023 ESSRF progress report, the Calpine units emitted 954 and 1,072 carbon dioxide (CO₂) tons during their use in 2022, and the Roseville units emitted 208 and 257 CO₂ tons during their use in 2022. DWR has noted its intent to extend the contracts before their current agreements expire.

In addition to these energy resources, DWR is also in varying stages of contract discussions and execution for other resources, including a gas plant owned by California State University at Channel Islands and Enchanted Rock Electric LLC for three separate plants operating in local publicly owned utilities service territories within the San Joaquin Valley (City of Lodi, Modesto Irrigation District, and Turlock Irrigation District). Additionally, DWR has recently entered into contracts for capacity from three natural gas plants subject to the once-through-cooling regulations by the State Water Resources Control Board (SWRCB) – AES Alamitos, AES Huntington Beach, and Ormond. The capacity contracts provide that should the SWRCB extend the compliance dates for these facilities to adhere to the regulations (as proposed by the Statewide Advisory Committee on Cooling Water Intake Structures), the plants could be available on standby for extreme events. DWR has also entered into an agreement with Pacific Gas & Electric as the owner and operator of the Diablo Canyon Nuclear Power Plant to secure necessary funding for fuel purchases and management to maintain the option of extending the use of the facility (hinged on extended licensing) beyond the current retirement dates.

Comments

Need for this bill. This bill explicitly states that the contracts and facilities DWR contracts or procures for the ESSRRP must comply with the CARB Mandatory Reporting Requirements for GHGs and the CARB cap-and-trade program emissions reductions. Under the current regulatory requirements, energy generation facilities that emit 10,000 metric tons of CO₂ equivalent emissions are required to report their GHG emissions under the mandatory reporting regulations, and facilities that emit 25,000 metric tons of CO₂ are subject to the cap-and-trade regulations to reduce emissions. As such, these requirements would seem to apply to all energy generation units, regardless of whether they are procured by another entity or DWR.

The ESSRRP contracts for facilities and energy resources are intended to be available as a last resort, generally during extreme summer heat events. As such, it is unlikely that these facilities, in particular, will surpass the threshold to require either the mandatory reporting or cap-and-trade participation. However, some of these facilities may be co-located with existing facilities that necessitate aggregated reporting, as in the case of Roseville Energy Park. Based on conversations with DWR staff, the City of Roseville has included the emissions from the two units contracted by DWR into the City’s aggregated emissions for all the units on the premise, including those that provide routine power to the utility’s service territory.

Nonetheless, explicitly requiring the GHG reporting and cap-and-trade emissions reductions compliance requirements of the DWR contracted facilities does not seem to be harmful and could provide assurance that the facilities and contracts entered into by DWR under the ESSRRP are not exempted from the requirements applied to other energy generation resources serving load in the state.

Related/Prior Legislation

SB 123 (Committee on Budget, Chapter 52, Statutes of 2023) extended the date, from September 2022 to October 2023, by when electric IOUs may be reimbursed for above-market costs for imported energy and capacity products delivered or capable of being delivered to the state.

SB 124 (Committee on Budget, Chapter 53, Statutes of 2023), extended the date, from September 2022 to October 2023, by when electric IOUs may be reimbursed for above-market costs for imported energy and capacity products delivered or capable of being delivered to the state, clarified that DWR must present an investment plan to the CEC, rather than the contracts, and makes additional clarifying changes.

AB 209 (Committee on Budget, Chapter 251, Statutes of 2022) made further changes to the ESSRRP, including: narrowing what resources could be procured; authorizing procurement of nonnuclear generating resources whose operating life may be extended; prohibiting DWR procurement of energy storage and energy generation facilities located in specified coastal areas; and limiting the use of any resources using fossil fuels to only extreme events.

AB 178 (Ting, Chapter 45, Statutes of 2022) appropriated $700 million for strategic energy reliability by DWR.

AB 180 (Ting, Chapter 44, Statutes of 2022) appropriated $1.5 billion to DWR for strategic energy reliability reserve.

AB 205 (Committee on Budget, Chapter 61, Statutes of 2022) included various provisions related to energy, including the establishment of the ESSRRP which continuously appropriates moneys into the accounts to the CEC for the implementation of the Distributed Electricity Backup Assets Program and the Demand Side Grid Support Program.

AB 209 (Committee on Budget, Chapter 251, Statutes of 2022) made various statutory changes to implement the energy related provisions of the 2022 Budget Act. Specified that eligible recipients of the Demand Side Grid Support Program shall include all energy customers, except those already enrolled in a demand response or energy load reduction programs, as specified. The bill authorized CEC, in consultation with the California Public Utilities Commission, to adopt additional participation requirements or limitations.

AB 32 (Nuñez, Chapter 488, Statutes of 2006) required, under the Global Warming Solutions Act of 2006, CARB to approve a statewide GHG emissions limit equivalent to the statewide GHG emissions level in 1990 to be achieved by 2020 and to ensure that statewide GHG emissions are reduced to at least 40 percent below the 1990 level by 2030. The bill also required CARB to consider a market mechanism for achieving the GHG reductions and requires mandatory reporting of GHGs by entities that emit GHGs.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 8/22/23)

Environmental Defense Fund

OPPOSITION: (Verified 8/22/23)

None received

ARGUMENTS IN SUPPORT: According to the author:

California has made significant strides to meet power demand and prevent outages during extreme weather events, such as heatwaves. Among other actions, the Department of Water Resources (DWR) has been charged with procuring and maintaining resources to ensure power supply reliability during these times. Currently, statute does explicitly state that these actions must be subject to carbon accounting standards. AB 1061 requires that any resources procured or maintained by DWR, as part of what is known as the Electricity Supply Strategic Reliability Reserve Program, be subject to cap-and-trade and have their greenhouse gas emissions reported to the Air Resources Board. This will balance the need to procure these backup power sources with holding them to the same emissions standards as other resources.

ASSEMBLY FLOOR: 79-0, 5/30/23

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

NO VOTE RECORDED: Essayli

Prepared by: Nidia Bautista / E., U. & C. / (916) 651-4107

8/22/23 11:38:09

**** END ****

SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Steven Bradford, Chair

2023 - 2024 Regular

Bill No: Hearing Date: 7/10/2023

SUBJECT: Electricity Supply Strategic Reliability Reserve Program

DIGEST: This bill expressly requires facilities constructed by the Department of Water Resources (DWR) or under a contract with the DWR for purposes of the Electric Supply Strategic Reliability Reserve Program (ESSRRP) to comply with regulations regarding mandatory reporting of greenhouse gas (GHGs) emissions and compliance with the cap-and-trade program to reduce GHGs.

ANALYSIS:

Existing law:

1. Requires the State Energy Resources Conservation and Development Commission (also known as the California Energy Commission (CEC)) to implement and administer the Distributed Electricity Backup Assets Program to incentivize the construction of distributed energy assets that would serve as on-call emergency supply or load reduction for the electrical grid during extreme events. (Public Resources Code §25791)
2. Requires DWR to implement projects, purchases, and contracts to carry out the purposes of those programs. Authorizes the DWR to construct, own and operate, or contract for specified types of electrical generation and energy storage facilities to secure resources for summer reliability. (Water Code §80710)
3. Establishes the California Global Warming Solutions Act of 2006 which provides the California Air Resources Board (CARB) as the state agency responsible for monitoring and regulating sources emitting GHGs. Requires the CARB to adopt regulations to require the reporting and verification of statewide greenhouse gas emissions. Requires the CARB to adopt GHG emissions limits and emissions reduction measures by regulation, including the use of market-based compliance mechanisms. (Health and Safety Code §§38530 and 38570)

This bill expressly requires facilities constructed by the DWR or under a contract with the DWR for purposes of the Electric Supply Strategic Reliability Reserve Program to comply with regulations adopted by the CARB. Specifically, the regulations for:

(1) mandatory reporting of GHG emissions; and

(2) compliance with the cap-and-trade program to reduce GHGs.

Background

DWR called on to provide energy reliability. In August 2020, a massive heat wave across the western United States led the California Independent System Operator (CAISO), the operator for much of the state’s electrical grid, to implement rotating outages across the state in order to stave off more devastating blackouts. In 2021, the Bootleg Fire in Oregon threatened electricity transmission lines and significantly reduced power imported into California. Governor Newsom issued executive orders during both events to shore up electric reliability. The July 2021 Executive Order directed DWR to secure and deploy temporary and emergency power generation to supplement existing grid resources. In May 2022, analysis by the state’s primary energy agencies and CAISO, found that additional generating resources were needed to address extreme weather events, massive fires, supply chain constraints, and other factors which led to legislative actions that called on DWR to secure energy resources to address extreme events.

Electric Supply Strategic Reliability Reserve Program (ESSRRP). In June 2022, Budget Trailer Bills, AB 205, AB 178, and AB 180, were signed into law. The three pieces of legislation collectively established the ESSRRP and set forth new responsibilities and activities by DWR funded by the newly established Electricity Supply Reliability Reserve Fund (ESSRF). DWR promptly established temporary energy resources, created a new Deputy Director-level division with 25 staff. The Division of Statewide Water and Energy which oversees the ESSRRP and the State Power Augmentation Program which was developed in July 2021 in response to executive order direction to quickly deploy 120 megawatts (MW) of new generation in 2021. Under the ESSRRP, DWR acts as a power provider of last resort to help maintain electricity reliability. As part of the program, DWR contracts directly with power facilities and also enters into agreements with the state’s large electric investor-owned utilities (IOUs) to reimburse for the value of imported firm energy resources to support summer reliability.

Current procurement and GHGs emissions of existing DWR contracts. As of the most recent progress report, January 31, 2023, DWR secured 1,646 MW from imported energy for Summer 2022 with a maximum budget of $150 million (the upcoming report, now delayed, will provide invoicing details). In the case of these resources, the scheduling coordinators (who schedule into the CAISO market) are responsible for the GHG allowance costs for the cap-and-trade program – namely the large electric IOUs. Although, some individual sellers were responsible for paying the GHG allowance costs.

DWR has also secured contracts to procure, install, and license four temporary natural gas turbine generator units totaling 120 MW, at existing power generation sites located in Roseville (two units owned by Roseville) and Yuba City (two units owned by Calpine). The units were operational on September 22, 2021 and during the September 2022 heat wave, as such they are expected to receive ESSRF payments. Current agreements allow the units to remain available for operation until the end of 2023. Per DWR’s January 2023 ESSRF progress report, the Calpine units emitted 954 and 1,072 carbon dioxide (CO₂) tons during their use in 2022, and the Roseville units emitted 208 and 257 CO₂ tons during their use in 2022.

In addition to these energy resources, DWR is also in varying stages of contract discussions and execution for other resources, including a plant owned by California State University Channel Islands and Enchanted Rock Electric LLC for three separate contracts for plants in local publicly owned utilities in the San Joaquin Valley (Lodi, Modesto Irrigation District, and Turlock Irrigation District). DWR is also in discussions regarding three once-through-cooling natural gas plants that if the State Water Resources Control Board extends the compliance dates for these facilities (as proposed by the Statewide Advisory Committee on Cooling Water Intake Structures) could be available on standby for extreme events. DWR has also entered into an agreement with Pacific Gas & Electric as the owner and operator of the Diablo Canyon Nuclear Power Plant to secure necessary funding for fuel purchases and management to maintain the option of extending the use of the facility (hinged on extended licensing) beyond the current retirement dates.

Comments

Need for this bill. This bill would explicitly state that the contracts and facilities DWR secures for the ESSRRP must comply with the CARB Mandatory Reporting Requirements for GHGs and the CARB cap-and-trade program. In the case of the mandatory reporting, the threshold is 10,000 metric tons of carbon dioxide equivalent (CO₂e) emissions, and for the cap-and-trade program it is 25,000 metric tons of CO₂e. As the ESSRRP contracts and facilities are intended to be available as a last resort, generally during extreme summer heat events, it is unlikely that these facilities will surpass the threshold to require either the mandatory reporting or cap-and-trade compliance. However, as some of these facilities may be co-located with existing facilities, as in the case of Roseville Energy Park, based on conversations with DWR, the City of Roseville has folded these emissions into its aggregated emissions for the all the units on the premise. Although it is not clear whether all the facilities and contracts, including those that may be executed in the future, would fall below the thresholds to trigger reporting or participation in the cap-and-trade program, explicitly requiring this compliance does not seem to be harmful and could provide assurance that these facilities are not exempted from the requirements applied to other power facilities in the state and imported resources.

Need for amendments. Due to the passage of recent budget trailer bills, the author and committee may wish to amend this bill to prevent any chaptering issues with SB 123 (Committee on Budget, 2023) and SB 124 (Committee on Budget, 2023).

Prior/Related Legislation

AB 178 (Ting, Chapter 45, Statutes of 2022) appropriated $700 million dollars for strategic energy reliability by DWR.

AB 180 (Ting, Chapter 44, Statutes of 2022) appropriated $1.5 billion to DWR for strategic energy reliability reserve.

AB 205 (Committee on Budget, Chapter 61, Statutes of 2022) included various provisions related to energy, including establishing the ESSRRP which continuously appropriates moneys into the accounts to the CEC for the implementation of the Distributed Electricity Backup Assets Program and the Demand Side Grid Support Program.

AB 209 (Committee on Budget, Chapter 251, Statutes of 2022) made various statutory changes to implement the energy related provisions of the 2022 Budget Act. Specifies that eligible recipients of the Demand Side Grid Support Program shall include all energy customers, except those already enrolled in a demand response or energy load reduction programs, as specified. The bill authorizes CEC, in consultation with the CPUC, to adopt additional participation requirements or limitations.

AB 32 (Nuñez/Pavley, Chapter 488, Statutes of 2006) required, under the Global Warming Solutions Act of 2006, CARB to approve a statewide GHG emissions limit equivalent to the statewide GHG emissions level in 1990 to be achieved by 2020 and to ensure that statewide GHG emissions are reduced to at least 40 percent below the 1990 level by 2030. The bill also requires CARB to consider a market mechanism for achieving the GHG reductions and requires mandatory reporting of GHGs by entities that emit GHGs.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

None received

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: According to the author:

California has made significant strides to meet power demand and prevent outages during extreme weather events, such as heatwaves. Among other actions, the Department of Water Resources (DWR) has been charged with procuring and maintaining resources to ensure power supply reliability during these times. Currently, statute does explicitly state that these actions must be subject to carbon accounting standards. AB 1061 requires that any resources procured or maintained by DWR, as part of what is known as the Electricity Supply Strategic Reliability Reserve Program, be subject to cap-and-trade and have their greenhouse gas emissions reported to the Air Resources Board. This will balance the need to procure these backup power sources with holding them to the same emissions standards as other resources.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1061

Author:(Boerner)

As Amended Ver:March 9, 2023

Majority vote

SUMMARY

This bill would require the California Public Utilities Commission (CPUC) to report to the Legislature on the performance of telephone corporations in meeting the customer service quality rules established by the CPUC.

Major Provisions

1. Requires the California Public Utilities Commission (CPUC) to report to the Legislature on the performance of telephone corporations in meeting the customer service quality rules established by the CPUC.

COMMENTS

1. Existing law requires the CPUC to establish service quality mandates for telephone corporations. The CPUC's service quality rules for landline telephone service are mainly contained in General Order (GO) 133D, which implements the Telecommunications Customer Service Act of 1993. GO 133D has rules for installation times and commitments, response to customer service requests, out-of-service time periods, and the amount of time it takes for a service representative to pick up when a customer calls to complain. GO 133D also requires landline telephone providers to submit reports every three months.
2. CPUC Rulemaking to consider amendments to GO 133D. In March 2022, in response to a petition filed by the Public Advocate's Office of the Public Utilities Commission (CalAdvocates), the CPUC initiated a new rulemaking proceeding to consider amendments to General Order 133D. In granting the petition to open a new rulemaking, the CPUC noted that recent findings in certain cases suggest that the existing penalty framework, which permits investment in lieu of penalties, is ineffective in remedying identified service quality deficiencies. Additionally, past evaluation of the network condition of the major wireline telephone providers, through the Network Exam report, found that service quality had declined overall in the years observed by the report, 2010-2017. As the CPUC considers updates to General Order 133D, this bill would require the CPUC to report to the legislature on the performance of the telephone corporations in meeting customer service mandates.

According to the Author

"As the CPUC considers changes to General Order 133 it is important for the public and Legislators to know how telephone corporations are currently performing. This bill requires the CPUC to report to the Legislature on this topic, but does not prescribe the specific manner how that should occur. For example, the reporting could be accomplished by a formal report to the Committee on Communications & Conveyance or through an oversight hearing."

Arguments in Support

No support on file.

Arguments in Opposition

No opposition on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

1. The CPUC anticipates significant costs to collect, compile and analyze service quality data from each of the state's service providers. CPUC reports it would request five new permanent positions at a cost of $902,000 annually and two three-year limited-term positions at a cost of $380,000 annually, as well as $6 million one-time and $3 million ongoing to implement a new IT project to collect, compile and analyze data (Public Utilities Reimbursement Account).

VOTES

ASM COMMUNICATIONS AND CONVEYANCE: 13-0-0

YES: Boerner Horvath, Jim Patterson, Bonta, Davies, Garcia, Holden, Hoover, Low, Maienschein, Papan, Luz Rivas, Rodriguez, Weber

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

UPDATED

VERSION: March 9, 2023

CONSULTANT: Emilio Perez / C. & C. / (916) 319-2637 FN: 0000734

Date of Hearing: May 17, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 1061

Author:(Boerner Horvath) – As Amended Ver:March 9, 2023

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the California Public Utilities Commission (CPUC) to report to the Legislature on telephone corporations’ provision of service to telecommunication customers, as required by current law.

FISCAL EFFECT:

CPUC anticipates significant costs to collect, compile and analyze service quality data from each of the state’s service providers. CPUC reports it would request five new permanent positions at a cost of $902,000 annually and two three-year limited-term positions at a cost of $380,000 annually, as well as $6 million one-time and $3 million ongoing to implement a new IT project to collect, compile and analyze data (Public Utilities Reimbursement Account).

COMMENTS:

Background and Purpose. The CPUC regulates the quality of landline telephone service provided by the state’s telephone corporations. Generally, the CPUC does this through General Order 133D, which is a series of rules that establish uniform minimum standards of service to be observed in the operation of public utility telephone corporations. (The CPUC also regulates the rates charged by telephone corporations, though not through General Order 133D.)

In response to a petition by the Public Advocate’s Office—a unit within the CPUC that statute charges with representing and advocating on behalf of the interests of public utility customers and subscribers to obtain the lowest possible rate for service consistent with reliable and safe service levels—the CPUC recently opened a proceeding to examine service quality standards for communications services, including landline telephone, voice over internet protocol (VoIP)/internet phone, cellphone/wireless phone and internet/broadband services. The CPUC describes the goal of the proceeding as to ensure all Californians have adequate access to public safety and emergency services, public health and educational resources, and other benefits these services can provide.

The CPUC has divided the proceeding into two phases. The first phase focuses on landline telephone, VoIP/internet phone and cellphone/wireless phone services, while the second phase will focus on internet/broadband services.

This bill requires the CPUC to report to the Legislature on telephone corporations’ provision of customer service. It is unclear if the bill is in response to either the Public Advocate’s Office petition or the CPUC proceeding.

Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081

Date of Hearing: March 29, 2023

ASSEMBLY COMMITTEE ON COMMUNICATIONS AND CONVEYANCE

Tasha Boerner Horvath, Chair

ABPCA Bill Id:AB 1061 (

Author:Boerner Horvath) – As Amended Ver:March 9, 2023

SUBJECT: Telecommunications services

SUMMARY: This bill would require the California Public Utilities Commission (CPUC) to report to the Legislature on the performance of telephone corporations in meeting customer service mandates. Specifically, this bill:

EXISTING LAW:

1. Establishes the California Public Utilities Commission (CPUC), with regulatory authority over public utilities, including telephone corporations.
2. Establishes the Telecommunications Customer Service Act of 1993, which requires the CPUC to require telephone corporations to provide certain customer services to telecommunication customers, as specified.

FISCAL EFFECT: Unknown.

COMMENTS:

1. General Order 133D establishes service quality mandates for telephone corporations. The CPUC’s service quality rules for landline telephone service are mainly contained in General Order (GO) 133D, which implements the Telecommunications Customer Service Act of 1993. GO 133D has rules for installation times and commitments, response to customer service requests, out-of-service time periods, and the amount of time it takes for a service representative to pick up when a customer calls to complain. GO 133D also requires landline telephone providers to submit reports every three months.
2. Rulemaking to consider amendments to GO 133D. In March 2022, in response to a petition filed by the Public Advocate’s Office of the Public Utilities Commission (CalAdvocates), the CPUC initiated a new rulemaking proceeding to consider amendments to General Order 133D. In granting the petition to open a new rulemaking, the CPUC noted that recent findings in certain cases suggest that the existing penalty framework, which permits investment in lieu of penalties, is ineffective in remedying identified service quality deficiencies. Additionally, past evaluation of the network condition of the major wireline telephone providers, through the Network Exam report, found that service quality had declined overall in the years observed by the report, 2010-2017. As the CPUC considers updates to General Order 133D, this bill would require the CPUC to report to the legislature on the performance of the telephone corporations in meeting customer service mandates

REGISTERED SUPPORT / OPPOSITION:

Support

None on File

Opposition

None on File

Analysis Prepared by: Emilio Perez / C. & C. / (916) 319-2637