Bill Text: CA SB765 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Energy: California Market Transformation Administrator.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2016-11-30 - From Assembly without further action. [SB765 Detail]

Download: California-2015-SB765-Amended.html

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BILL NUMBER: SB 765	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 6, 2015

INTRODUCED BY   Senator Wolk

                        FEBRUARY 27, 2015

   An act to amend Section  2827 of   399 of,
and to add Sections 399.5 and 399.6 to,  the Public Utilities
Code, relating to energy.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 765, as amended, Wolk. Net energy metering: eligible customer
generators. 
   The Reliable Electric Service Investment Act requires the Public
Utilities Commission (PUC), in evaluating energy efficiency
investments, to ensure that local and regional interests, multifamily
dwellings, and energy service industry capabilities are incorporated
into program portfolio design and that local governments,
community-based organizations, and energy efficiency service
providers are encouraged to participate in program implementation
where appropriate.  
   This bill would require the PUC, in ensuring that prudent
investments in energy efficiency are made and produce cost-effective
energy savings, reduce customer demand, and support the state's
greenhouse gas emissions reduction goals, to contract with an
independent entity to serve as the California Market Transformation
Administrator (CalMTA). The bill would require the PUC to require the
CalMTA to take certain actions, including, among other actions,
working in concert with other energy efficiency administrators that
are carrying out energy efficiency activities under the PUC's
oversight to incorporate long-term market transformation strategies
into the state's energy efficiency portfolio and to work with the
State Energy Resources Conservation and Development Commission to
encourage local publicly owned electric utilities to participate in
the CalMTA's planning efforts and provide funding for and support the
market transformation initiatives administered by the CalMTA to
ensure statewide consistency and full market deployment. Because a
violation of these requirements would be a crime, this bill would
impose a state-mandated local program. The bill would require the PUC
to consult with the CalMTA regarding demand-side energy management
programs.  
   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.  
   Existing law, relative to private energy producers, requires every
electric utility to develop a standard contract or tariff providing
for net energy metering and to make this contract or tariff available
to eligible customer-generators upon request for generation by a
renewable electrical generation facility. Existing law requires that
the net energy metering calculation be made by measuring the
difference between the electricity supplied to an eligible
customer-generator and the electricity generated by the eligible
customer-generator and fed back to the electrical grid over a
12-month period. Existing law establishes rules for the annualized
net metering calculation, which, among other things, authorizes an
eligible customer-generator with multiple meters to elect to
aggregate the electrical load of the meters located on the property
where the renewable electrical generation facility is located and on
all property adjacent or contiguous to the property on which the
generation facility is located, if those properties are solely owned,
leased, or rented by the eligible customer-generator. Existing law
specifies that an eligible customer-generator who elects to aggregate
under that provision is permanently ineligible to receive net
surplus electricity compensation and the electric utility would
retain any kilowatthours in excess of the eligible customer-generator'
s electricity load generated during the 12-month period. 

   This bill would delete this provision, thereby allowing an
eligible customer-generator who elects to aggregate to receive net
surplus electricity compensation. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  no   yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 399 of the   Public
Utilities Code   is amended to read: 
   399.  (a) This article shall be known, and may be cited, as the
Reliable Electric Service Investments Act.
   (b) The Legislature finds and declares that safe, reliable
electric service is of utmost importance to the citizens of this
state, and its economy.
   (c) The Legislature further finds and declares that in order to
ensure that the citizens of this state continue to receive safe,
reliable, affordable, and environmentally sustainable electric
service, it is essential that prudent investments continue to be made
in all of the following areas:
   (1) To protect the integrity of the electric distribution grid.
   (2) To ensure an adequately sized and trained utility workforce.
   (3) To ensure cost-effective energy efficiency improvements.
   (4) To achieve a sustainable supply of renewable energy.
   (5) To advance public interest research, development and
demonstration programs not adequately provided by competitive and
regulated markets.
   (d) It is the intent of the Legislature to reaffirm, without
requiring revision, California's doctrine, as reflected in regulatory
and judicial decisions, regarding electrical corporations'
reasonable opportunity to recover costs and investments associated
with their electric distribution grid and the reasonable opportunity
to attract capital for investment on reasonable terms.
   (e) The Legislature further finds and declares all of the
following:
   (1) Acting under applicable constitutional and statutory
authorities, the Public Utilities Commission and the boards of local
publicly owned electric utilities have included in regulated
electricity prices, investments that are essential to maintaining
system reliability, reducing California electricity users' bills, and
mitigating environmental costs of California users' electricity
consumption.
   (2) Among the most important of these "system benefits"
investments categories are energy efficiency, renewable energy, and
public interest research, development and demonstration (RD&D).
   (3) Energy efficiency investments funded from California's
usage-based charges on electricity distribution help improve
systemwide reliability by reducing demand in times and areas of
system congestion, and at the same time reduce all California
electricity users' costs. These investments also significantly reduce
environmental costs associated with California's electricity
consumption, including, but not limited to, degradation of the state'
s air, water, and land resources.
   (4) California's in-state renewable energy resources help
alleviate supply deficits that could threaten electric system
reliability, reduce environmental costs associated with California's
electricity consumption, and increase the diversity of the
electricity system's fuel mix, reducing electricity users' exposure
to fossil-fuel price volatility.
   (5) California's public interest RD&D investments enhance private
and regulated sector investment in electricity system technologies,
and are designed specifically to help ensure sustained improvement in
the economic and environmental performance of the distribution,
transmission, and generation and end-use systems that serve
California electricity users.
   (6) California has established a long tradition of recovering
system benefits investments through usage-based electricity charges,
which is reflected in at least two decades of electricity price
regulation by the commission, the boards of local publicly owned
electric utilities, and the mandate of the Legislature in Chapter 854
of the Statutes of 1996 (Assembly Bill 1890 of the 1995-96 Regular
Session of the Legislature) and Chapter 905 of the Statutes of 1997
(Senate Bill 90 of the 1997-98 Regular Session of the Legislature).
   (7) Unless the Legislature acts to extend the mandate of this
article for minimum levels of usage based system benefits charges,
California electricity users are at substantial risk of higher
economic and environmental costs and degraded reliability. 
   (f) (1) The Legislature further finds and declares all of the
following:  
   (A) Targeted energy efficiency market transformation initiatives
aimed at long-term transformation of defined markets are a necessary
component of a comprehensive, balanced, and cost-effective energy
efficiency portfolio.  
   (B) Because tensions can exist between market transformation
initiatives and energy efficiency resource acquisition strategies, it
is important to recognize the differences between what each of these
strategies can accomplish and to pursue both in California. 

   (C) The existing energy efficiency portfolio overseen by the
commission focuses on energy efficiency resource acquisition. 

   (D) The creation of a single entity with responsibility for
planning, coordinating, and managing the execution of statewide
energy efficiency market transformation initiatives in concert with
other state energy efficiency activities, subject to the commission's
oversight and that carries out its duties in consultation with the
Energy Commission and all interested local publicly owned electric
utilities, would assist the state in advancing its energy efficiency
and greenhouse gas reduction goals.  
   (2) It is the intent of the Legislature that demand-side energy
management programs should be coordinated, to the extent practicable,
to support utility customers in making well-informed, cost-effective
decisions about investments in onsite energy efficiency, demand
response, and renewable distributed generation, and to provide
efficiencies in the administration and delivery of ratepayer-funded
demand-side energy management programs in California. 
   SEC. 2.    Section 399.5 is added to the  
Public Utilities Code   , to read:  
   399.5.  (a) For purposes of this section and Section 399.6, the
following terms mean the following:
   (1) "Demand-side energy management programs" has the same meaning
as set forth in Section 323.5.
   (2) "California Market Transformation Administrator" or "CalMTA"
means a private contractor selected by the commission to coordinate
the planning and execution of the state's efforts to advance
electricity and natural gas energy efficiency through long-term
market transformation strategies.
   (3) "Market transformation" means a strategic process to intervene
in a market to create lasting change in market behavior by removing
identified barriers or exploiting opportunities to accelerate the
adoption of all cost-effective energy efficiency as a matter of
standard practice.
   (4) "Resources acquisition" means the generation of electricity or
natural gas savings that are sufficiently reliable, predictable, and
measurable to replace electricity or natural gas supplies in the
utility energy resource planning process.
   (b) (1) In carrying out its responsibilities to ensure that
prudent investments in energy efficiency are made and produce
cost-effective energy savings, reduce customer demand, and support
the state's greenhouse gas emissions reduction goals, the commission,
on or before July 1, 2017, shall contract with an independent entity
to serve as the California Market Transformation Administrator that
will coordinate the planning and execution of the state's efforts to
advance energy efficiency through long-term market transformation
strategies, as well as advise on and otherwise assist the commission
with the coordination of demand-side energy management programs under
the commission's jurisdiction.
   (2) The initial CalMTA contract shall be for a period of not less
than five years and may be terminated if the CalMTA fails to meet the
performance benchmarks established in the contract.
   (c) (1) An entity eligible to be a CalMTA shall have a mission
that is fully aligned with promoting energy efficiency and
conservation, including market transformation.
   (2) The CalMTA shall carry out its marketing, education, and
outreach-related energy efficiency market transformation and the
coordination of demand-side energy management programs under the
Energy Upgrade California brand name.
   (d) The commission shall require the CalMTA, at a minimum, to do
all of the following:
   (1) Work in concert with other energy efficiency administrators
carrying out energy efficiency activities under the commission's
oversight to incorporate long-term market transformation strategies
into the state's portfolio.
   (2) Create market conditions that will accelerate and sustain the
market adoption of emerging energy efficiency products, services, and
practices in California.
   (3) Meet interim and long-term targets adopted by the commission
related to the transformation of targeted markets, as well as provide
a cost-effective portfolio of market transformation initiatives over
the life of the contract.
   (4) Submit to the commission quarterly reports detailing
expenditures, and annual reports showing expenditures and progress
towards commission-established interim and long-term targets.
   (5) Contribute improved efficiencies in the delivery of
ratepayer-funded energy efficiency activities in California by taking
a statewide approach to defined markets targeted for transformation.

   (6) Coordinate the planning for and execution of market
transformation initiatives, as appropriate, with utility administered
energy efficiency activities, other energy efficiency activities
under the commission's jurisdiction, including, but not limited to,
energy efficiency activities administered by community choice
aggregators pursuant to Section 381.1, and low-income energy
efficiency programs in California, including the rate-payer funded
program required by Section 2790 and overseen by the commission, as
well as the federal Low-Income Home Energy Assistance Program
administered by the Department of Community Services and Development.

   (7) Build upon the energy efficiency expertise and capabilities
developed in the state, such as by providing flexibility for other
energy efficiency administrators to carry out some of the market
transformation activities identified by the CalMTA, so as to minimize
confusion and leverage existing relationships between utilities,
community choice aggregators, and other providers of energy
efficiency services, and their customers.
   (8) Work with the Energy Commission to encourage local publicly
owned electric utilities to participate in the CalMTA's planning
efforts and provide funding for and otherwise support the market
transformation initiatives administered by the CalMTA to ensure
statewide consistency and full market deployment.
   (9) Collaborate with regional and national energy efficiency
entities on market transformation efforts.
   (e) The commission shall protect ratepayers from performance risks
inherent in market transformation initiatives by, at a minimum,
doing all of the following:
   (1) Requiring a rigorous upfront vetting process for program
concepts, to be conducted either by the commission as part of its
oversight function or by the CalMTA. The CalMTA shall make a
convincing case that each proposed market intervention would produce
lasting energy efficiency benefits that would more than pay for the
long-term costs of the market intervention.
   (2) Balancing the level of ratepayer investment in market
transformation initiatives against resources acquisition initiatives,
such that:
   (A) The budget for market transformation initiatives, including
the budget to be managed by the CalMTA and the commission's costs
associated with managing the contract with the CalMTA, is initially
set by the commission at a level between 5 percent and 10 percent of
the total budget for energy efficiency activities overseen by the
commission, excluding low-income energy efficiency programs.
   (B) The reasonableness of the initial funding level for market
transformation initiatives is evaluated by the commission over the
course of the initial contract term with the CalMTA and adjusted as
the commission deems appropriate to support the objectives of this
section.
   (3) Continuously evaluating the market transformation initiatives
administered by the CalMTA and focusing on whether the targeted
markets are evolving in the manner intended, such that the
initiatives can be corrected mid-course or abandoned, as necessary,
to maximize long-term energy savings from the CalMTA's portfolio of
initiatives.
   (f) In implementing this section, the commission shall consult
with the Energy Commission to ensure that functions carried out by
the CalMTA are appropriately coordinated with the energy efficiency
related activities conducted or overseen by the Energy Commission.
   (g) The commission shall evaluate and adopt, as necessary, new
criteria to support and accurately evaluate the benefits of market
transformation.
   (h) The commission, in consultation with the Energy Commission and
the CalMTA, shall determine when and how to reflect potentially
achievable cost-effective electricity and natural gas savings from
energy efficiency market transformation initiatives in carrying out
its obligations pursuant to Sections 454.55 and 454.56. In setting
energy efficiency targets for electrical or gas corporations pursuant
to Section 454.55 or 454.56, the commission shall consider whether
energy savings expected to be delivered through market transformation
initiatives administered by the CalMTA should be excluded from the
targets established for the electrical or gas corporations. 
   SEC. 3.    Section 399.6 is added to the  
Public Utilities Code   , to read:  
   399.6.  (a) The commission shall consult with the CalMTA on how
best to integrate demand-side energy management programs to support
utility customers in making well-informed, cost-effective decisions
about investment in onsite energy efficiency, demand response, and
renewable distributed generation, as well as customer-sited energy
storage systems, and to provide economic and organizational
efficiencies in the administration and delivery of ratepayer-funded
demand-side energy management programs in California.
   (b) The commission shall consult with the CalMTA on how best to
design and deploy demand-side energy management programs and
encourage customer-sited energy storage systems so as to provide the
most cost-effective environmental and economic benefits from an
electric system planning and operation perspective.
   (c) The commission shall include in the contract executed with a
CalMTA pursuant to Section 399.5 the advisory functions specified in
this section related to integrating demand-side energy management
programs. 
   SEC. 4.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.  All matter omitted in this version of
the bill appears in the bill as introduced in the Senate, February
27, 2015. (JR11)