Key Energy Related Bills Introduced in the 2019-2020 Legislative Session

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The 2019-2020 California Legislative Session has reached its first deadline.  February 22, 2019 marked the deadline by which bills could be introduced for the first half of the Legislative Session. Lawmakers will begin Spring Recess April 12 and reconvene April 22.  The last day for bills to be passed out of the house of origin is May 31, 2019.

Below is a list of some of the key bills Stoel Rives’ Energy Team will be monitoring throughout the Legislative Session.  We note that some bills do not contain language beyond the “intent of the Legislature.”  However, we will continue to monitor these bills in case of substantive amendments.  These bills are set forth separately below under the heading “Legislative Intent.”

The majority of the bills introduced this Legislative Session relate in some way to California’s efforts to reduce greenhouse gas emissions and move to cleaner sources of generation, including legislation governing electric vehicles, energy storage, and renewable energy.  A number of bills introduced in February also attempt to address the impacts of wildfires, or to reduce wildfire risk.

ASSEMBLY BILLS

AB 40 (Ting, D)   Zero-emission vehicles: comprehensive strategy.

Status: Introduced December 3, 2018; referred to Committees on Transportation and Natural Resources January 24, 2019.

AB 40 would require by no later than January 1, 2021, the State Air Resources Board to develop a comprehensive strategy to ensure that the sales of new motor vehicles and new light-duty trucks in the state have transitioned fully to zero-emission vehicles, as defined, by 2040, as specified.

 AB 56 (Garcia, D)   Statewide central electricity procurement entity.

Status: Introduced December 3, 2018; referred to Committees on Utilities & Energy and Natural Resources January 17, 2019

Current law requires the Public Utilities Commission (“PUC”) and the State Energy Resources Conservation and Development Commission (“Energy Commission”) to undertake various actions in furtherance of meeting the state’s clean energy and pollution reduction objectives.  This bill would require the PUC and the Energy Commission to provide to the Legislature, by March 31, 2020, a joint assessment of options for establishing a central statewide entity to procure electricity for all end-use retail customers in the state.

AB 176 (Cervantes, D)   California Alternative Energy and Advanced Transportation Financing Authority: sales and use taxes: exclusions.

Status:  Introduced January 9, 2019; last amended February 25, 2019; referred to Committee on Natural Resources February 26, 2019

The California Alternative Energy and Advanced Transportation Financing Authority Act authorizes, until January 1, 2021, the California Alternative Energy and Advanced Transportation Financing Authority to provide financial assistance in the form of a sales and use tax exclusion for projects, including those that promote California-based manufacturing, California-based jobs, advanced manufacturing, reduction of greenhouse gases, or reduction in air and water pollution or energy consumption. The act prohibits the sales and use tax exclusions from exceeding $100,000,000 for each calendar year. This bill would extend the authorization to provide financial assistance in the form of a sales and use tax exclusion for qualifying projects and also would extend the sales and use tax exclusion until January 1, 2031.

AB 235 (Mayes, R)   Electrical corporations: local publicly owned electric utilities: California Wildfire Catastrophe Fund Act.

Status: Introduced January 18, 2019; referred to Committee on Utilities & Energy February 7, 2019

AB 235 would create the California Wildfire Catastrophe Fund Authority, which would be governed by a board of directors. The bill would 1) authorize electrical corporations and local publicly owned electric utilities to participate in the authority; 2) require each participating entity to make an initial contribution and annual contributions to the authority; and, 3) require the board to deposit those contributions into an account dedicated to receiving contributions from that participating entity.  Upon a participating entity incurring costs relating to a wildfire and submitting a claim for those costs to the board, the bill would require the board to reimburse the participating entity for those costs, as specified, and would require the board to determine if the participating entity will be required to make increased annual contributions over a specified period of years to make the authority’s applicable contribution pool whole.  This bill would authorize the board to take specified actions, including to issue bonds payable from, and secured by, a pledge of the board of all or any part of the contributions to the authority to finance claims by participating entities, as specified, and to sell those bonds at public or private sale. To pay a participating entity’s claim, the bill would require the board, if it determines it to be just and reasonable to do so, to secure a bond by a pledge of all or any part of the participating entity’s annual contributions.

AB 915 (Mayes, R)   California Renewables Portfolio Standards Program.

Status:  Introduced February 20, 2019; awaiting referral.

AB 915 would require that retail sellers and local publicly owned electric utilities procure a minimum quantity of electricity products from eligible renewable energy resources so that the total kilowatt-hours of those products sold to their retail end-use customers achieve 68 percent of retail sales by December 31, 2033, 76 percent by December 31, 2036, and 80 percent by December 31, 2038. The bill would revise the definition of “eligible renewable resource” for purposes of the program to include, on and after January 1, 2026, an electrical generation facility that has a specified point source emission level of carbon dioxide equivalent at, or below, a specified level, if the marginal increase in the cost of procurement from other eligible renewable energy resources exceeds a specified level.

AB 1371 (Cunningham, R)   California Renewables Portfolio Standard Program: offshore wind generation.

Status:  Introduced February 22, 2019; awaiting referral.

AB 1371 would require the PUC to determine appropriate targets for the procurement of offshore wind generation on behalf of retail end-use customers of retail sellers in California in order to meet the goals that eligible renewable energy resources supply 60 percent of retail sales of electricity to California end-use customers by December 31, 2030, and that eligible renewable energy resources and zero-carbon resources supply 100 percent of retail sales of electricity to California end-use customers and 100 percent of electricity procured to serve all state agencies by December 31, 2045.

AB 1411 (Reyes, D)   Integrated action plan for sustainable freight.

Status:  Introduced February 22, 2019; awaiting referral.

AB 1411 would establish as a state goal the deployment of 200,000 zero-emission medium- and heavy-duty vehicles and off-road vehicles and equipment, and the corresponding infrastructure to support them, by 2030. The bill would require the PUC, the state board, the Department of Transportation, the State Energy Resources Conservation and Development Commission, and the Governor’s Office of Business and Economic Development to develop and update by January 1, 2021, and at least every five years thereafter, an integrated action plan for sustainable freight that identifies strategies relating to that state goal.

SENATE BILLS

SB 255 (Bradford, D)   Women, minority, disabled veteran, and LGBT business enterprise procurement: electric service providers: energy storage system companies: community choice aggregators.

Status: Introduced February 12, 2019; referred to Committee on Energy, Utilities, and Communications February 22, 2019.

Current law directs the PUC to require every electrical corporation, gas corporation, water corporation, wireless telecommunications service provider, and telephone corporation with annual gross revenues exceeding $25,000,000, and their regulated subsidiaries and affiliates, to annually submit a detailed and verifiable plan for increasing procurement from women, minority, disabled veteran, and LGBT business enterprises, as defined, in all categories, including  renewable energy projects, as defined, and wireless telecommunications, broadband, smart grid, and rail projects. Existing law requires the reporting of certain information about the implementation of the plans. SB 255 would extend these requirements to electric service providers, community choice aggregators, and energy storage system companies, as defined, and would change the $25,000,000 annual gross revenue threshold above which these requirements become applicable to $1,000,000 in gross annual California revenues.

SB 288 (Wiener, D)   Electricity: self-generation and storage.

Status:  Introduced February 13, 2019; referred to Committee on Energy, Utilities, and Communications February 21, 2019.

SB 288 would require by January 1, 2021 the PUC and the governing board of each local publicly owned electric utility to, among other things, create one or more tariffs that offer fair compensation for customer-sited energy storage systems that export electricity to the electrical grid and to consider one or more tariffs for customer-sited energy storage and renewable energy systems to support grid reliability and community resiliency in the event of emergencies or grid outages.

SB 350 (Caballero, D)   California Renewables Portfolio Standard Program: irrigation districts.

Status:  Introduced February 19, 2019; referred to Committee on Energy, Utilities, and Communications February 28, 2019.

SB 350 would authorize the PUC to consider a multiyear centralized resource adequacy mechanism, among other options, to most efficiently and equitably meet specified resource adequacy objectives.

SB 515 (Caballero, D)   California Renewables Portfolio Standard Program: bioenergy renewable feed-in tariff.

Status:  Introduced February 21, 2019; awaiting referral.

Pursuant to current law, the PUC has adopted resolutions establishing fuel or feedstock procurement requirements for generation from bioenergy projects intended to reduce wildfire risks that are applicable to the state’s 3 largest electrical corporations.  SB 515 would expand the fuels and feedstocks that are eligible to meet these wildfire risk reduction fuel and feedstock requirements to include salvaged vegetation from wildlife clean up, biomass diverted from specified higher fire-risk zones, and biomass from commission-designated sources.

SB 520 (Hertzberg, D)   Electrical service: provider of last resort.

Status:  Introduced February 21, 2019; awaiting referral.

SB 520 would authorize the PUC to develop threshold attributes, as specified, for a load-serving entity to serve as a provider of last resort to provide electrical service to retail end users in California.  The bill would authorize the commission to establish a structure, such as an auction, to determine which load-serving entity should serve as the provider of last resort and what benefits a load-serving entity would receive if selected to serve as the provider of last resort.

SB 549 (Hill, D)   Public Utilities Commission: rates: capital structure changes.

Status:  Introduced February 22, 2019; awaiting referral.

Under current law, the PUC has regulatory authority over public utilities, including electrical corporations. Current law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable.  SB 549 would prohibit the commission from approving any capital structure change or increase in rates for the Pacific Gas and Electric Company unless the Legislature, by statute, authorizes the capital structure change or increase in rates.

SB 772 (Bradford, D)   Long duration bulk energy storage: procurement.

Status:  Introduced February 22, 2019; awaiting referral.

SB 772 would require the ISO, on or before June 30, 2022, to complete a competitive solicitation process for the procurement of one or more long duration energy storage projects that in aggregate have at least 2,000 megawatts capacity, but not more than 4,000 megawatts, except as provided.  The bill would require that the competitive solicitation process provide for cost recovery from load-serving entities within the California Independent System Operator (CAISO) controlled electrical grid that the CAISO determines is just and reasonable and that takes into account the distribution of benefits from the long duration bulk energy storage.

LEGISLATIVE INTENT

The following bills are those which identify the Legislature’s intent to take action.  While substantive language is not contained in these bills as of this writing, we will continue to monitor them throughout the Legislative Session.

AB 281 (Frazier, D)   Transmission and distribution lines: undergrounding.

Status:  Introduced January 28, 2019;

AB 281 states it is the intent of the Legislature to enact legislation to require electrical corporations and local publicly owned electric utilities to take certain actions related to electric transmission and distribution lines and equipment in high fire risk areas.

AB 801 (Levine, D)   Solar energy systems.

Status: Introduced February 20, 2019; awaiting referral.

AB 801 states that it is the intent of the Legislature to enact legislation to remove obstacles to the expansion of community-shared solar electric generation systems as an option for onsite solar electric generation requirements in California.

AB 877 (Gabriel, D)   Energy: solar energy and energy storage systems. 

Status:  Introduced February 20, 2019; awaiting referral.

AB 877 states it is intent of the Legislature to authorize the Energy Commission to develop criteria for solar energy systems and energy storage systems.

AB 1208 (Ting, D)   Energy storage systems.

Status:  Introduced February 21, 2019; awaiting referral.

AB 1208 states it is the intent of the Legislature to enact legislation related to energy storage systems.

AB 1698 (Wicks, D)   Infrastructure investment and financing.

Status:  Introduced February 22, 2019; awaiting referral.

AB 1698 states it is the intent of the Legislature to establish and provide initial funding for the Resilient Activities and Development Agency and the California Resourcient Infrastructure Corporation, as provided.

AB 1733 (Salas, D)   California Renewables Portfolio Standard Program.

Status:  Introduced February 22, 2019; awaiting referral.

AB 1733 states it is the intent of the Legislature to enact legislation that relates to the California Renewables Portfolio Standard Program.

AB 1762 (Boerner Horvath, D)   California Renewables Portfolio Standard Program.

Status:  Introduced February 22, 2019; awaiting referral.

The California Renewables Portfolio Standard Program requires the PUC to establish a renewables portfolio standard requiring all retail sellers, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources during specified compliance periods. The program additionally requires each local publicly owned electric utility, as defined, to procure a minimum quantity of electricity products from eligible renewable energy resources to achieve the targets established by the program.  AB 1762 would state it is the intent of the Legislature to enact legislation to reform the program.

SB 766 (Stern, D)   Clean energy electrical grid solutions.

Status:  Introduced February 22, 2019; awaiting referral.

Current law establishes numerous programs, such as the Electric Program Investment Charge program, to provide financial assistance to programs for the technological development of energy storage, renewable energy, and integration of renewable energy into the electrical grid. SB 766 states it is the intent of the Legislature to enact legislation to accelerate investment in and deployment of clean energy electrical grid solutions to make the electrical grid more reliable and fire resilient.

SB 774 (Stern, D)   Electricity: local clean energy generation and storage systems.

Status:  Introduced February 22, 2019; awaiting referral.

The Warren-Alquist State Energy Resources Conservation and Development Act establishes the Energy Commission with various responsibilities with respect to developing and implementing the state’s energy policies.  SB 774 states it is the intent of the Legislature to enact later legislation to require the commission to develop and implement a program to deploy local clean energy generation and storage systems throughout California, as specified.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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