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2004 Legislative Archive

State Energy Legislation

The 2003-2004 Legislative Session saw a wide array of energy-related bills. 

OCTOBER 2004 UPDATE: Activity on legislative bills sent to the Governor:

  • AB135: Authorizes the CEC to expend up to $60 million of funding allocated to the Renewable Resources Trust Fund for emerging renewable technologies-- primarily to fund incentives for small-scale PV projects. Approved by Governor 9/29/04.
  • AB594: Establishes Net Metering agreement between City and County of San Francisco and PG&E for up to 5 MW of solar power. Approved by Governor 9/25/04.
  • AB1684: Requires stricter NOx emission standards for DG technologies receiving rebates in the Self-Generation Incentive Program beginning 1/1/2005. Makes waste gas projects eligible for rebates. Approved by Governor on 9/22/04.
  • AB2006: Relates to electric resource adequacy measures for state. Originally addressed customer choice through re-establishment of direct access for larger electric customers. Vetoed by Governor on 9/25/04.
  • AB2473: Strengthens existing law prohibiting local governments from placing onerous restrictions on installing solar energy systems that meet specified requirements. Approved by Governor 9/25/04.
  • SB1478: Amends Renewable Energy Resource Program to accelerate implementation date for the 20% renewable energy requirement from 2017 to 2010. Authorizes a Renewable Energy Credit ( REC) trading program and other REC provisions. Vetoed by Governor on 9/24/04.

The following involve electricity regulation and distributed energy resources. 

Early versions of Electricity Regulation bills: Proposals could deregulate up to 30 percent of the state’s power market. Current state law bars customers from terminating their regulated utility's electric service and signing contracts with unregulated suppliers until 2013, when all the expensive, long-term power contracts signed by the state during the crisis of 2000-01 expire. These “partial deregulation” bills address “direct access” and “core/non-core” electricity customers. [State law allows direct access contracts in effect before the 2001 ban to continue. Generally--core customers are residential and small commercial. Non-core are industrial, large commercial. 18% of electricity in SDG&E territory is provided under direct access contracts.]

AB 2006 (Nunez) Reliable Electric Service Act of 2004
Bill would allow non-core (large electricity customers) to leave regulated power service sooner if they pay exit fees to cover their obligation under the power contracts. Bill would require large customers who retain local utility electricity service give FIVE years notice of departure plans for a private, unregulated supplier. (Introduced 2/13/04, in Utilities and Commerce Committee.)

AB 428 (Richman) Electrical corporations:  core , noncore, and core-elect customers.
Bill would establish four new classes of IOU customers who may opt for direct access under different conditions - "core," "non-core," "core-elect," and customers taking retail service from affiliated generators. “Core" is defined as customers with demand under 500 kilowatts ( kW), "non-core" to include customers with demand of 500 kW, subject to the CPUC lowering the threshold to 200 kW and permitting multiple customers to aggregate, and "core-elect" customers as non-core customers that choose to be served by an IOU's procurement plan.
(Introduced 2/14/03, passed assembly 6/3/03 and moved to senate.)

2004 Distributed Energy Resources Bills:  One proposal could end funding the SelfGen Incentive Program early if the legislature determines the need for funding no longer exists. The other extends qualifying DG definitions to 2008.  The latter bill also 1) requires the ISO to establish and maintain a capacity market that recognizes the value of generation capacity supplied by DER as being functionally equivalent to central station generation, and 2) would require each electrical corporation, as part of its distribution planning process, to establish a minimum target for nonutility owned distributed energy resources in its procurement plans.

AB 2593 (Calderon) Self Generation Incentive Program
This bill would require the commission, in any year that it determines that the self-generation incentive program has sufficient funds available to meet the reasonable anticipated demand for incentives for that year, to suspend for the year any further collection of funds from ratepayers to support the program. (Introduced 2/20/04 and referred to Assembly Utilities and Commerce Committee.)

SB 1398 (Morrow) Distributed Energy Resources
Several provisions in this bill aimed at streamlining the permitting process for DER, including: requiring the state board to develop guidelines for districts to permit the installation of distributed energy resources, as prescribed; expanding the DER definition to include generation technology commencing initial operation by June 1, 2008; and modifying the ultra-clean and low-emission  DG requirement to require technologies operating by combustion in a combined heat and power ( CHP) application operate with a 60-percent system efficiency on a higher heating value. Also, this bill would require each electrical corporation, in setting rates and establishing tariffs, to treat customer use of distributed energy resources as a reduction of customer load. The bill would require the ISO to establish and maintain an ongoing demand reduction tariff that allows for the participation of distributed energy resources no later than January 1, 2005.  The bill would require the ISO to establish and maintain a capacity market that recognizes the value of generation capacity supplied by distributed energy resources as being functionally equivalent to central station generation.   The bill would additionally require each electrical corporation, as part of its distribution planning process, to establish a minimum target for nonutility owned distributed energy resources in its procurement plans.  The bill would require the commission to authorize each electrical corporation to retain certain ratepayer savings as profits. (Senate Energy, Utilities and Communications Cmt. Introduced 2/18/04.)

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