US Laws, Codes, Statutes & Cases

399.11.  The Legislature finds and declares all of the following:
   (a) In order to attain a target of 20 percent renewable energy for
the State of California and for the purposes of increasing the
diversity, reliability, public health and environmental benefits of
the energy mix, it is the intent of the Legislature that the
California Public Utilities Commission and the State Energy Resources
Conservation and Development Commission implement the California
Renewables Portfolio Standard Program described in this article.
   (b) Increasing California's reliance on renewable energy resources
may promote stable electricity prices, protect public health,
improve environmental quality, stimulate sustainable economic
development, create new employment opportunities, and reduce reliance
on imported fuels.
   (c) The development of renewable energy resources may ameliorate
air quality problems throughout the state and improve public health
by reducing the burning of fossil fuels and the associated
environmental impacts.
   (d) The California Renewables Portfolio Standard Program is
intended to complement the Renewable Energy Program administered by
the State Energy Resources Conservation and Development Commission
and established pursuant to Chapter 8.6 (commencing with Section
25740) of Division 15 of the Public Resources Code.



399.12.  For purposes of this article, the following terms have the
following meanings:
   (a) "Eligible renewable energy resource" means an electric
generating facility that is one of the following:
   (1) The facility meets the definition of  "in-state renewable
electricity generation facility" in Section 25741 of the Public
Resources Code.
   (2) A geothermal generation facility originally commencing
operation prior to September 26, 1996, shall be eligible for purposes
of adjusting a retail seller's baseline quantity of eligible
renewable energy resources except for output certified as incremental
geothermal production by the Energy Commission, provided that the
incremental output was not sold to an electrical corporation under
contract entered into prior to September 26, 1996.  For each facility
seeking certification, the Energy Commission shall determine
historical production trends and establish criteria for measuring
incremental geothermal production that recognizes the declining
output of existing steamfields and the contribution of capital
investments in the facility or wellfield.
   (3) The output of a small hydroelectric generation facility of 30
megawatts or less procured or owned by an electrical corporation as
of the date of enactment of this article shall be eligible only for
purposes of establishing the baseline of an electrical corporation
pursuant to paragraph (3) of subdivision (a) of Section 399.15.  A
new hydroelectric facility is not an eligible renewable energy
resource if it will require a new or increased appropriation or
diversion of water under Part 2 (commencing with Section 1200) of
Division 2 of the Water Code.
   (4) A facility engaged in the combustion of municipal solid waste
shall not be considered an eligible renewable resource unless it is
located in Stanislaus County and was operational prior to September
26, 1996.  Output from such facilities shall be eligible only for the
purpose of adjusting a retail seller's baseline quantity of eligible
renewable energy resources.
   (b) "Energy Commission" means the State Energy Resources
Conservation and Development Commission.
   (c) "Retail seller" means an entity engaged in the retail sale of
electricity to end-use customers, including any of the following:
   (1) An electrical corporation, as defined in Section 218.
   (2) A community choice aggregator.  The commission shall institute
a rulemaking to determine the manner in which a community choice
aggregator will participate in the renewables portfolio standard
subject to the same terms and conditions applicable to an electrical
corporation.
   (3) An electric service provider, as defined in Section 218.3
subject to the following conditions:
   (A) An electric service provider shall be considered a retail
seller under this article for sales to any customer acquiring service
after January 1, 2003.
   (B) An electric service provider shall be considered a retail
seller under this article for sales to all its customers beginning on
the earlier of January 1, 2006, or the date on which a contract
between an electric service provider and a retail customer expires.
Nothing  in this subdivision may require an electric service provider
to disclose the terms of the contract to the commission.
   (C) The commission shall institute a rulemaking to determine the
manner in which electric service providers will participate in the
renewables portfolio standard.  The electric service provider shall
be subject to the same terms and conditions applicable to an
electrical corporation pursuant to this article.  Nothing in this
paragraph shall impair a contract entered into between an electric
service provider and a retail customer prior to the suspension of
direct access by the commission pursuant to Section 80110 of the
Water Code.
   (4) "Retail seller" does not include any of the following:
   (A) A corporation or person employing cogeneration technology or
producing power consistent with subdivision (b) of Section 218.
   (B) The Department of Water Resources acting in its capacity
pursuant to Division 27 (commencing with Section 80000) of the Water
Code.
   (C) A local publicly owned electrical utility as defined in
subdivision (d) of Section 9604.
   (d) "Renewables portfolio standard" means the specified percentage
of electricity generated by eligible renewable energy resources that
a retail seller is required to procure pursuant to Sections 399.13
and 399.15.



399.13.  The Energy Commission shall do all of the following:
   (a) Certify eligible renewable energy resources that it determines
meet the criteria described in subdivision (a) of Section 399.12.
   (b) Design and implement an accounting system to verify compliance
with the renewables portfolio standard by retail sellers, to ensure
that renewable energy output is counted only once for the purpose of
meeting the renewables portfolio standard of this state or any other
state, and for verifying retail product claims in this state or any
other state.  In establishing the guidelines governing this system,
the Energy Commission shall collect data from electricity market
participants that it deems necessary to verify compliance of retail
sellers, in accordance with the requirements of this article and the
California Public Records Act (Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code).  In seeking
data from electrical corporations, the Energy Commission shall
request data from the commission.  The commission shall collect data
from electrical corporations and remit the data to the Energy
Commission within 90 days of the request.
   (c) Allocate and award supplemental energy payments pursuant to
Chapter 8.6 (commencing with Section 25740) of Division 15 of the
Public Resources Code, to eligible renewable energy resources to
cover above-market costs of renewable energy.



399.14.  (a) The commission shall direct each electrical corporation
to prepare renewable energy procurement plans as described in
paragraph (3) 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.
   (1) (A) The commission shall not require an electrical corporation
to conduct procurement to fulfill the renewables portfolio standard
until the commission determines either of the following:
   (i) The electrical corporation has attained an investment grade
credit rating as determined by at least two major rating agencies.
   (ii) The electrical corporation is able to procure eligible
renewable energy resources on reasonable terms, those resources can
be financed if necessary, and the procurement will not impair the
restoration of an electrical corporation's creditworthiness.  This
provision shall not apply before April 1, 2004, for any electrical
corporation that on June 30, 2003, is in federal court under Chapter
11 of the federal bankruptcy law.
   (B) Within 90 days of the commission's determination as provided
in subparagraph (A), an electrical corporation shall conduct
solicitations to implement a renewable energy procurement plan.  The
determination required by this paragraph shall apply only to the
requirements established pursuant to this article.  The requirements
established for an electrical corporation pursuant to Section 454.5
shall be governed by that section.
   (2) Not later than six months after the effective date of this
section, the commission shall adopt, by rule, for all electrical
corporations, all of the following:
   (A) A process for determining market prices pursuant to
subdivision (c) of Section 399.15.  The commission shall make
specific determinations of market prices after the closing date of a
competitive solicitation conducted by an electrical corporation for
eligible renewable energy resources.  In order to ensure that the
market price established by the commission pursuant to subdivision
(c) of Section 399.15 does not influence the amount of a bid
submitted through the competitive solicitation in a manner that would
increase the amount ratepayers are obligated to pay for renewable
energy, and in order to ensure that the bid price does not influence
the establishment of the market price, the electrical corporation
shall not transmit or share the results of any competitive
solicitation for eligible renewable energy resources until the
commission has established market prices pursuant to subdivision (c)
of Section 399.15.
   (B) A process that provides criteria for the rank ordering and
selection of least-cost and best-fit renewable resources to comply
with the annual California Renewables Portfolio Standard Program
obligations on a total cost basis.  This process shall consider
estimates of indirect costs associated with needed transmission
investments and ongoing utility expenses resulting from integrating
and operating eligible renewable energy resources.
   (C) Flexible rules for compliance including, but not limited to,
permitting electrical corporations to apply excess procurement in one
year to subsequent years or inadequate procurement in one year to no
more than the following three years.
   (D) Standard terms and conditions to be used by all electrical
corporations in contracting for eligible renewable energy resources,
including performance requirements for renewable generators.
   (3) Consistent with the goal of procuring the least-cost and
best-fit eligible renewable energy resources, the renewable energy
procurement plan submitted by an electrical corporation shall
include, but is not limited to, all of the following:
   (A) An assessment of annual or multiyear portfolio supplies and
demand to determine the optimal mix of renewable generation resources
with deliverability characteristics that may include peaking,
dispatchable, baseload, firm, and as-available capacity.
   (B) Provisions for employing available compliance flexibility
mechanisms established by the commission.
   (C) A bid solicitation setting forth the need for renewable
generation of each deliverability characteristic, required online
dates, and locational preferences, if any.
   (4) In soliciting and procuring eligible renewable energy
resources, each electrical corporation shall offer contracts of no
less than 10 years in duration, unless the commission approves of a
contract of shorter duration.
   (5) In soliciting and procuring eligible renewable energy
resources, each electrical corporation may give preference to
projects that provide tangible demonstrable benefits to communities
with a plurality of minority or low-income populations.
   (b) The commission shall review and accept, modify, or reject each
electrical corporation's renewable procurement plan 90 days prior to
the commencement of renewable procurement pursuant to this article
by the electrical corporation.
   (c) The commission shall review the results of a renewable energy
resources solicitation submitted for approval by an electrical
corporation and accept or reject proposed contracts with eligible
renewable energy resources based on consistency with the approved
renewable procurement plan.  If the commission determines that the
bid prices are elevated due to a lack of effective competition
amongst the bidders, the commission shall direct the electrical
corporation to renegotiate such contracts or conduct a new
solicitation.
   (d) If an electrical corporation fails to comply with a commission
order adopting a renewable procurement plan, the commission shall
exercise its authority pursuant to Section 2113 to require
compliance.
   (e) Upon application by an electrical corporation, the commission
may authorize another entity to enter into contracts on behalf of
customers of the electrical corporation for deliveries of eligible
renewable energy resources to satisfy the annual portfolio standard
obligations, subject to similar terms and conditions applicable to an
electrical corporation.  The commission shall allow the procurement
entity to recover reasonable costs through retail rates subject to
review and approval.
   (f) Procurement and administrative costs associated with long-term
contracts entered into by an electrical corporation for eligible
renewable energy resources pursuant to this article, at or below the
market price determined by the commission pursuant to subdivision (c)
of Section 399.15, shall be deemed reasonable per se, and shall be
recoverable in rates.
   (g) For purposes of this article, "procure" means that a utility
may acquire the renewable output of electric generation facilities
that it owns or for which it has contracted.  Nothing in this article
is intended to imply that the purchase of electricity from third
parties in a wholesale transaction is the preferred method of
fulfilling a retail seller's obligation to comply with this article.

   (h) Construction, alteration, demolition, installation, and repair
work on an eligible renewable energy resource that receives
production incentives or supplemental energy payments pursuant to
Sections 25742 and 25743 of the Public Resources Code, including, but
not limited to, work performed to qualify, receive, or maintain
production incentives or supplemental energy payments is "public
works" for the purposes of Chapter 1 (commencing with Section 1720)
of Part 7 of Division 2 of the Labor Code.


399.15.  (a) In order to fulfill unmet long-term resource needs, the
commission shall establish a renewables portfolio standard requiring
all electrical corporations to procure a minimum quantity of output
from eligible renewable energy resources as a specified percentage of
total kilowatthours sold to their retail end-use customers each
calendar year, if sufficient funds are made available pursuant to
paragraph (2), and Section 399.6 and Chapter 8.6 (commencing with
Section 25740) of Division 15 of the Public Resources Code, to cover
the above-market costs of eligible renewables, and subject to all of
the following:
   (1) An electric corporation shall not be required to enter into
long-term contracts with eligible renewable energy resources that
exceed the market prices established pursuant to subdivision (c) of
this section.
   (2) The Energy Commission shall provide supplemental energy
payments from funds in the New Renewable Resources Account in the
Renewable Resource Trust Fund to eligible renewable energy resources
pursuant to Chapter 8.6 (commencing with Section 25740) of Division
15 of the Public Resources Code, consistent with this article, for
above-market costs.  Indirect costs associated with the purchase of
eligible renewable energy resources, such as imbalance energy
charges, sale of excess energy, decreased generation from existing
resources, or transmission upgrades shall not be eligible for
supplemental energy payments, but shall be recoverable by an
electrical corporation in rates, as authorized by the commission.
   (3) For purposes of setting annual procurement targets, the
commission shall establish an initial baseline for each electrical
corporation based on the actual percentage of retail sales procured
from eligible renewable energy resources in 2001, and, to the extent
applicable, adjusted going forward pursuant to subdivision (a) of
Section 399.12.
   (b) The commission shall implement annual procurement targets for
each electrical corporation as follows:
   (1) Beginning on January 1, 2003, each electrical corporation
shall, pursuant to subdivision (a), increase its total procurement of
eligible renewable energy resources by at least an additional 1
percent of retail sales per year so that 20 percent of its retail
sales are procured from eligible renewable energy resources no later
than December 31, 2017.  An electrical corporation with 20 percent of
retail sales procured from eligible renewable energy resources in
any year shall not be required to increase its procurement of such
resources in the following year.
   (2) Only for purposes of establishing these targets, the
commission shall include all power sold to retail customers by the
Department of Water Resources pursuant to Section 80100 of the Water
Code in the calculation of retail sales by an electrical corporation.

   (3) In the event that an electrical corporation fails to procure
sufficient eligible renewable energy resources in a given year to
meet any annual target established pursuant to this subdivision, the
electrical corporation shall procure additional eligible renewable
energy resources in subsequent years to compensate for the shortfall
if sufficient funds are made available pursuant to paragraph (2), and
Section 399.6 and Chapter 8.6 (commencing with Section 25740) of
Division 15 of the Public Resources Code, to cover the above-market
costs of eligible renewables.
   (4) If supplemental energy payments from the Energy Commission, in
combination with the market prices approved by the commission, are
insufficient to cover the above-market costs of eligible renewable
energy resources, the commission shall allow an electrical
corporation to limit its annual procurement obligation to the
quantity of eligible renewable energy resources that can be procured
with available supplemental energy payments.
   (c) The commission shall establish a methodology to determine the
market price of electricity for terms corresponding to the length of
contracts with renewable generators, in consideration of the
following:
   (1) The long-term market price of electricity for fixed price
contracts, determined pursuant to the electrical corporation's
general procurement activities as authorized by the commission.
   (2) The long-term ownership, operating, and fixed-price fuel costs
associated with fixed-price electricity from new generating
facilities.
   (3) The value of different products including baseload, peaking,
and as-available output.
   (d) The establishment of a renewables portfolio standard shall not
constitute implementation by the commission of the federal Public
Utility Regulatory Policies Act of 1978 (Public Law 95-617).
   (e) The commission shall consult with the Energy Commission in
calculating market prices under subdivision (c) and establishing
other renewables portfolio standard policies.



399.16.  The Energy Commission may consider an electric generating
facility that is located outside the state to be an eligible
renewable energy resource if it meets the criteria described in
Section 399.12 and all of the following requirements:
   (a) It is located so that it is, or will be, connected to the
Western Electricity Coordinating Council (WECC) transmission system.

   (b) It is developed with guaranteed contracts to sell its
generation, and demonstrates delivery of energy, to a retail seller
or the Independent System Operator.
   (c) It participates in the accounting system to verify compliance
with the renewables portfolio standard by retail sellers, once
established by the Energy Commission pursuant to subdivision (b) of
Section 399.13.


399.17.  (a) Subject to the provisions of this section, the
requirements of this article apply to an electrical corporation with
60,000 or fewer customer accounts in California that serves retail
end-use customers outside California.
   (b) For an electrical corporation with 60,000 or fewer customer
accounts in California that serves retail end-use customers outside
California, an eligible renewable energy resource includes a facility
that is located outside California, if the facility is connected to
the Western Electricity Coordinating Council (WECC) transmission
system, provided all of the following conditions are met:
   (1) The electricity generated by the facility is procured by the
electrical corporation on behalf of its California customers, and is
not used to fulfill renewable energy procurement requirements in
other states.
   (2) The electrical corporation participates in, and complies with,
the accounting system administered by the Energy Commission pursuant
to subdivision (b) of Section 399.13.
   (3) The Energy Commission verifies that the electricity generated
by the facility is eligible to meet the annual procurement targets of
this article.
   (c) The commission shall determine the annual procurement targets
for an electrical corporation with 60,000 or fewer customer accounts
in California that serves retail end-use customers outside
California, as a specified percentage of total kilowatthours sold by
the electrical corporation to its retail end-use customers in
California in a calendar year.
   (d) An electrical corporation with 60,000 or fewer customer
accounts in California that serves retail end-use customers outside
California, may use an integrated resource plan prepared in
compliance with the requirements of another state utility regulatory
commission, to fulfill the requirement to prepare a renewable energy
procurement plan pursuant to this article, provided the plan meets
the requirements of Sections 399.11, 399.12, 399.13, and 399.14, as
modified by this section.
   (e) Procurement and administrative costs associated with long-term
contracts entered into by an electrical corporation with 60,000 or
fewer customer accounts in California that serves retail end-use
customers outside California, for eligible renewable energy resources
pursuant to this article, at or below the market price determined by
the commission pursuant to subdivision (c) of Section 399.15, shall
be deemed reasonable per se, and shall be recoverable in rates of the
electrical corporation's California customers, provided the costs
are not recoverable in rates in other states served by the electrical
corporation.