CC - Item 5C - Endorse or Oppose Prop 70 0
ROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: OLIVER CHI, CITY MANAGER V "tip
DATE: JULY 22, 2008
SUBJECT: ENDORSE OR OPPOSE PROPOSITION 7 - THE SOLAR AND CLEAN
ENERGY ACT OF 2008
SUMMARY
On November 4, 2008, California voters will be asked to consider Proposition 7, the
Solar and Clean Energy Act of 2008 Act. The League of California Cities is part of a
broad coalition that includes governments, renewable energy providers,
environmentalists, business and labor leaders that oppose this ballot measure.
Attached are the amendment to the text of Version 1 of the Solar and Clean Energy Act
of 2008 (Attachment A), the initiative analysis from the California Legislative. Analyst's
Office (Attachment B), and the summary from the League of California Cities'
Committee on Environmental Quality (Attachment C).
Staff Recommendation
Staff recommends that the City Council take a position on whether to endorse or
oppose Proposition 7.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Submitted by:
Aileen Flores
Public Affairs Manager
Attachments: A - Amended Text of Version 1 of the Solar and Clean Energy Act of 2008
B - Initiative Analysis from the California Legislative Analyst's Office
C - Summary from the League of California Cities' Committee on Environmental Quality
APPROVED FOR CITY COUNCIL AGENDA:
ATTACHAME NT A
, mdt. #I S
October 22, 2007
VIA PERSONAL DELIVERY
Office of the Attorney General
A'I-I'N: Initiative Coordinator
1300 1 Street
Sacramento. CA 95814
vo,CEIV~
OCT 2 2 2007
INITIATIVE COORDINATOR
ATTORNEY GENERAL'S OFFICE
Re: Amendment to Version 1 ofThc Solar rind Clean LnerkvAct of 2008
Proposed Initiative Number 07-0066
.
Dear Initiative Coordinator:
Please find enclosed an amendment to the text of Version 1 of The Solar and Clean Energy Act
of 2005 (the "Act"), Proposed Initiative Number 07-0066, previously submitted to your office
for title and summary on October 5, 2007. 'fhe amendment reflects and incorporates changes to
the California Public Utilities Code and Public Resources Code made under the newly-enacted
Senate Bill 1036 while maintaining the original purpose and intent of the Act.
The amendment is submitted within 15 days of your office's receipt of the initial draft petition
and thus, does not c6nst1tute a new measure.
Please contact my attorney, Randall W. Keen, if you have any questions. Mr. Keen can be
reached at the law firm of Manatt, Phelps and Phillips, 1 1355 W. Olympic Boulevard, Laos
Angeles, California 90064, (310) 312-4000.
'fhank you.
/f inccrely,
Ilim Gonzalez
,I 1168272.1
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'rhis initiative measure is submitted to the people of California in accordance with the
provisions of Section S of Article II of the California Constitution.
This initiative measure amends, repeals and adds sections to the Public Utilities Code and
the Public Resources Code; therefore existing provisions proposed to be deleted are printed in
strikeow-t-ytx and new provisions proposed to be added are printed in italic type to indicate that
they are new.
PROPOSED LAW
THE.SObIR AND CLh tA' ENERGYACT OF 2008
SECTION 1. TITLE
This metlsni'c shall be known as "The Solar and Clean Energy Art of 2005."
SEC 2. FINDINGS AND DECLARATIONS
'rile people of California find and declare the following:
A. Global wartning and climate change is now a real crisis. With the polar ice caps
continuing to melt, temperatures rising worldwide. increasing greenhouse gases, and dramatic
climate changes occurring, we are quickly reaching the tipping point. California is facing a
serious thwat from rising sea levels, increased drought, and melting Sierra snowpack that feed
our water supply. California needs solar and clcnn energy to attack the climate changes which
threaten our state.
13. California suffers from drought, air pollution, poor water quality, and many other
environmental problems. Very little has been done because the special energy interests block
change. Californians must take energy reform into their own hands, The alternative to dirty
energy is solar and clean energy.
C. California can provide the leadership needed to attack global warming and
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climate change.
U. The Solar and Clean Energy Act will help reduce air pollution in California.
With this initiative, we can help clean up our air and build a healthier, cleaner environment for
our children.
E. Our traditional sources of power rely too much on fossil fuels and foreign energy
that are getting more and more expensive and less reliable. This initiative will encourage
investment in solar and dean energy sources that in the long-nm are cheaper zinc] are located here
in California, zinc] in the short-tenn. California's investment in solar and clean energy will result
in no more than a 3 percent increase in electric rates a small price to pay for a healthier and
cleaner environment.
The Soler and Clean Energy Act will put California On.thc path 10 energy
independence by requiring all electric utilities to produce 50 percent of their electricity from
clean energy sources like solar and wind by 2025. Right now, over 22 percent of California's
greenhouse- gases comes from electricity generation but around 10 percent of California's
electricity comes from solar and clean energy sources, leaving Californians vulnerable to high
energy costs, to political instability in the Middle Gast, and to being held hostage by big oil
companies.
G. The Solar and Clean Energy Act encourages new technology to produce
eleclricitY. Many people are familiar with the solar power that comes from panes that can be
placed on rooftops, but there is dramatic new technology that allows solar energy to be generated
from concentrations of solar mirrors in the desert. These mirrors are so efficient that a large
square array, eleven miles on a side, may be able to generate enough electricity m meet all of
California's needs and at it lower cost than we are paying today. The desert could lead its m
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energy independence.
The current law says we ❑re supposed to have 20 percent sofa and clean energy
but we arc still at around 10 percent and even big government-owned utilities like those in Los
Angeles and Sacramento lobbied successfully to exempt themselves from the law. The Solar Ind
Clean Energy Act provides incentives, tough standards, and penalties fur those who do not
comply.
The Solar and Clean Energy Act will benefit California's economy. Building
facilities for solar and clean energy sources and transmission lines to uansport Olin electricity
will create good jobs that pay the prevailing wage. Thesejobs will bring new investments and
newjobs to California and strengthen California's economy.
Global warming and California's reliance mt fossil fuels and foreign energy are it
matter of statewide concern, as is the implementation of statewide sutndards for the sources of
electricity production and the permitting of solar and clean energy plants and related
transmission facilities. Accordingly, the People find that these matters are not municipal affairs.
as that tenn is used in Section 5 of Article S1 of the California Constitution, but are instead
matters of statewide concern.
tili:C 3. PURPOSE AND INTENT
h is the intent of the people of California in enacting this measure to:
A. Address global warming and clinnaic change, and protect the endangered Sierra
snowpack by reducing California's carbon-based greenhouse gas emissions;
B. Tap proven technologies such as solar, geothermal, wind, biomass, and small
hydroelectric to generate clean energy throughout California and meet renewable energy targets
without raising taxes on any California taxpayer:
C. Require all California utilities including government-owned utilities like the.
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Los Angeles Department of Water and Power to procure electricity front solar and clean
energy resources, in the following tintefrantes:
20 percent by 2010;
2. 40 percent by 2020; and.
3. 50 percent by 2025;
D. Fast-track all approvals for the development of solar and clean energy plants and
related transmission facilities while guaranteeing all environmental protections including the
Desert Protection Act;
I Create production incentives for the development and construction of solar and
clean energy plants and related transmission facilities:
F. Assess penalties upon till utilities than fail to meet renewable resource targets, and
prohibit these utilities front passing on these penalties to consumers;
G. Permit lon term 20 year contracts for solar and clean energy to assure
marketability and financing of solar and clean energy plants;
11. Cap price impacts on consumers' electricity bills at less than 3 percent. Over the
long-tent, studies have shown that consumer electricity costs will decline;
Grant the Public Utilities Commission the powers to enforce compliance of the
renewablcs portfolio standard upon privately-owned utilities, assess penalties for non-
compliance, and prohibit utilities front passing-on penalties to consumers;
Grant the California State Encrgy Resources Conservation and Development
Commission (the " Fnergy Commission') the powers to:
Enforce compliance of the renewables portfolio standard upon
government-owned utilities, assess penalties to those utilities for non-
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compliance, and prohibit the utilities from passing-on penalties to
consumers;
2. Adopt rules to fast-track all approvals for the development of solar and
clean energy resources and plants while guaranteeing all environmental
protections including the Desert Protection Act;
3. Allocate funds to purchase, sell, or lease real property, personal property
or rights of way for the development and use of the property and rights of
way for the generation and/or transmission of solar and clean energy, and
to upgrade existing transmission lines: and.
4. Identify and designate Solar and Clean Energy Zones primarily in the
desert.
SIC 4. Section 387 of the Public Utilities Code is amended to read as follows:
387. (a) Each governing body of it local publicly owned electric utility, as defined in
Section 9604, shall be retipE nsiblr fa inaplen rx+n~ trx~ ettfare=it a implemem the renewables
portfolio standard as established (rile/ d f led ill this article ilttt reeso he-4 litent-oIL-4 lie
L-egisl nE ura-to•eneou rhge-rare wErbla-h~aourc-es-while-kr ki ng-inlareons ialertttiotrl he-effect-erf-the
sHtndard atrrttte5 relit bi4tty anEt ftm neia{ researees turd tie n{ of enµiromnentt (itnprovernent.
(b) Eoch local publicly owned electric utility shall report, on cut annual basis, to its
customers and to the State Energy Resources Conservauion and Development Commission, the
following:
(1) Expenditures of public goods funds collected pursuant to Section 385 for eligible
renewable energy resource development. Reports shall contain a description of programs.
expenditures, and expected or actual results.
(2) The resource mix used to serve its customers by flICIJVpe. Reports shall contain the
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contribution of each type of renewable energy resource with separate categories for those fuels
that are eligible renewable energy resources as defined in Section 399.12; wieept4rat--the
eleetrteiij is delivered-ke-the-lead put7l+ely Hwneel eketri~ eri}it± a+td-new- retail selleF.
Electricity shall be reported as having been delivered to the local publicly owned electric utility
front an eligible renewable energy resource when the electricity would qualify for compliance
with the renewables portfolio standard-iFit wete Eel7ver ko r~itttl tiller.
(3) The utility's status in implementing a renewables portfolio standard pursuant to
subdivision (a) and the utility's progress toward attaining the standard following implementation.
SEC S. Section 399.25 of the Public Utilities Code is amended to read as follows:
399.25 (t }P E'+Ftv+Nlstanehtt; any etheFprovis+ot +tt Seek+ons-1001 ro-lk l3;
+nelusive-un-etpl)I+c~tttinn-Hf-ant-eleetrianl-cerportttiHrrfor-tt-eertiliEztte~tuthorM+n~ Ihe-eetntruetien
Of new F ttnstt} s ictrt-ti eilit e slut lF FxLcketTteENe 4 z tteeessary to tlTr }xovisiFt of eltr e se+ ea
f Fptt }TE se e{ ntj dete nT t n Ent TTnde t tTdcSeeFiet 4043 if-tlTefo+Ttm s orrGtt ls-that -tl a tew
ft eibw irneee;snrv to (eilitate aehievernerx oFkhe renewablz power goal~establ in
a6{i31tT#nen@nTo wFtllvweENfln 399.11).
(b) (a) Willi respect to N-kfitntiilTlStilHlrhlEtll tFj'~d@Sei9lR'El-H7-tinlHhayhlHtT-(ik) [nlq
transmission jocilities deemed to be necessmy by the F,nergy Commission to jocililate
achievement ojthe renewables portfolio standard established in Article 16 (commencing with
Section 399.11) ojthe Public Utilities Corte, the commission shall take all feasible actions to
ensure that the uNansn7issian rates established by the Federal Energy Regulatory Commission arc
fully renecied in any retail rates established by the commission.'11Tese actions shall include, but
are not limited to:
(1) Iv9aking findings, wheresupporaed by an evidentiary record, that those transmission
facilities provide benefit to the transmission network and are necessary to facilitate the
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achievement of the renewables portfolio standard established in Article 16 (commencing with
Section 399.11
(2) Directing the utility to which the generator will be interconnected, where the direction
is not preempted by federal law, to seek the recovery through general transmission rates of the
costs associated with the transmission facilities.
(3) Asserting the positions described in paragraphs (1) and (2) to the Federal Energy
Regulatory Commission in appropriate proceedings.
(4) Allowing recovery in retail rates of any increase in transmission costs incurred by an
aleetf xarttt ea o retail seller resulting from the construction of the transmission facilities
that are not approved for recovery in transmission rates by the Federal Energy Regulatory
Commission after the commission determines that the costs were prudently incurred in
accordance with subdivision (a) of Section 454,
(eq(b) Notwithstanding subdivision (a), a retail seller shall not recover any casts paid
through the Solar and Clean I, nerp, Transmission Account to facilitate the construction afanv
transmission facilities.
SEC 6. Section 399.11 of the Public Utilities Code is amended to read as follows:
399.11. The Leg+shnure People finds and declares all of the following:
(a) In order to attain a the targets of generating 20 percent of total retail sales of
electricity in California from eligible renewable energy resources by December 31, 2010, 40
percent of total retail soles rrf'elecu'icity in California from eligible renewable energy resources
by December 31. 2020, and 50 percent cf total retail sales of electricity in California from
eligible renewable energy resources by December 31, 2025. and for the purposes of increasing
the diversity, reliability, public health and environmental benefits of the energy mix to address
global warming and climate change, and to protect the endangered Sierra s'nowpack, it is the
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intent of the Legislature People that the commission and the State Encrgy Resources
Conservation and Development Commission implement the California Renewables Portfolio
Standard Program described in this article.
(b) Increasing California's reliance on eligible renewable energy resources may promote
stable electricity prices, protect public health, improve environmental quality, stimulate
sustainable economic devclopment, create flow employment opportunities, and reduce reliance
nn imported fuels.
(c)'llie development of eligible renewable energy resources and the delivery of the
electricity generated by those resources to customers in California may ameliorate air quality
problems throughout the state, address global warming and climate change, protect the
endangered Sierra.+nowpack, and improve public health by inducing the burning of fossil fttels
and the associated environmental impacts and by reducing in-state fossil fuel consumption.
(d) The California Renewables Portfolio Standard Program is intended to complement the
Renewable Energy Resources Program administered by the State Encrgy Resources
Conservation and Development Commission and established pursuant to Chapter 8.6
(commencing with Section 25740) of Division 15 of the Public Resources Code.
(c) New and modified electric transmission facilities may be necessary to facilitate the
state achieving its renewables portfolio standard targets.
St?C 7. Section 399.12 of the Public Utilities Code is amended to read its follows:
399.12. Pot' purposes of this article, the following terms have the following
meanings:
(a) "Delivered" and "delivery" have the same meaning, as provided in subdivision (a) of
Section 25741 of the, Public Resources Code.
(b) "Eligible renewable energy resource" means en•eleetri~ gene along a solar and cleat
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energy facility that meets the definition of "in-state renewable electricity generation facility" in
Section 25741 of the Public Resources Code, subject to the following limitations:
(I )(A) An existing small hydroelectric generation facility of 30 megawatts or less shall be
eligible only if it retail seller owned or procured the electricity from the facility as of December
31, 2005. A new hydroelectric facility is not an eligible renewable energy resource if it will
require a new or increased appropriation or diversion of water from it watercourse.
(13) Notwithstanding subparagraph (A), an existing conduit hydroelectric facility, as
defined by Section 823a of -fitle 16 of the United States Code, of 30 megawatts or less, shall be
an eligible renewable energy resource. A new conduit hydroelectric facility, as defined by
Section 823a of Title 16 of the United States Code, of 30 megawatts or less, shall be an eligible
renewable energy resource so long as it does not require it new or increased appropriation or
diversion of water from a watercourse.
(3) A facility engaged in the combustion of Municipal solid waste shall not be considered
all eligible renewable energy resource unless it is located in Stanislaus County and was
operational prior to September 26, 1996.
(c) -Energy Commission" means the State Energy Resources Conservation and
Development Commission.
(d) "Local publicly owned electric utility" has die same meeting as provided in
subdivision (d) of Section 9604.
(e) "Procure" means that it retail seller receives delivered electricity generated by an
eligible renewable energy resource that it owns or for which it has entered into an electricity
purchase agreement. 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
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obligation to comply with this article.
(0 "Renewables portfolio standard" ntcans the specified percentage of electricity
generited by eligible renewable energy resources that a retail seller is required to procure
pursuant to this article.
(g)(1) "Renewable energy credit" ntcans it certificate of proof, issued through the
accounting system established by the Energy Commission pursuant to Section 399.13, that one
unit of electricity was generated and delivered by an eligible renewable energy resource.
(2) "Renewable energy credit" includes ill renewable and environmental attributes
associated with the production of electricity from the eligible renewable energy resource, except
for an emissions reduction credit issued pursuant to Section 40709 of the Health and Safety Code
and any credits or payments associated with the reduction of solid waste and neatucnt benefits
created by the utilization of biomass or hiogas fuels.
(3) No electricity generated by an eligible renewable energy resource attributable to the
use of nonrenewable fuels, beyond a de minimus quantity, as determined by the Energy
Commission, shall result in the creation of a renewable energy credit.
(h) "Retail seller" means an entity engaged in the retail sale of electricity to end-use
utstonters located within the slue, including any of the following:
(I) An electrical corporation, as defined in Section 215.
(2) A community choice aggregator. 'file commission shall institute a rulentaking to
determine the manner in which a community choice aggregator will participate in the rencwables
portfolio standard program subject to the saute terms and conditions applicable to an electrical
corporation.
(3) An electric service provider, as defined in Section 215.3, for all sales of electricity to
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customers beginning January 1. 2006. The commission shall institute a rulemaking to determine
the manner in which electric service providers will participate in the renewables portfolio
standard program. 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 at 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 801 10
of the Water Code.
(4) "Retail seller" does not include any of the following:
(A) A corporation or person employing cogeneration technology or producing electricity
consistent with subdivision (b) of Section 218.
(fi) The Department of Water Resources acting in its capacity putsuat to Division 27
(commencing with Section 80000) of the Water Code.
(E}-r~-lex-al-Irubl iely-omitted-eleetriGUti4ity-
SIC 8. Section 399.13 of the Public Utilities Code is amended to read as follows:
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 (b) of Section 399.11
(b) Design and implement at accounting system to verify compliance with the
renewables portfolio standard by retail sellers, to ensure that electricity generated by an eligible
renewable energy resource is counted only once for the purpose of meeting the renewables
portfolio standard of this state or any other state, to certify renewable energy credits produced by
eligible renewable energy resources, and to verity retail product claims in this state or any other
sure. In establishing the guidelines governing this accounting system, the Energy Commission
shall collect data from electricity ntau'kct participants that it deems necessary to verify
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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 I of the
Government Code). In seeking data Ilnm eleeuie}I-eorl rftien retail sellers, the Energy
Commission shall request data from the commission. The commission shall collect data from
eleet+iznl 2arperetion;,-recoil sellers and remit the data to the Energy Commission within 90 days
of the request.
(c) Establish a system for tracking and verifying renewable energy credits that, through
the use of independently audited data. verifies the generation and delivery of electricity
associated with each renewable energy credit and protects against multiple counting of the same
renewable energy credit. The Energy Commission shall consult with other western states and
with the Western Electricity Coordinating Council in the development of this system.
(d) Certify, for purposes of compliance with the renewable renewables portfolio standard
requirements by a retail seller, the eligibility of renewable energy credits associated with
deliveries of electricity by at eligible renewable energy resource tg it local publicly owned
electric utility, if the Energy Commission determines that the following conditions have been
satisfied:
{I) The local publicly owned electric utility that is procuring the electricity is in
compliance with the requirements of Section 387.
(2) "Ihe local publicly owned electric utility has established mi-the annual renewables
portfolio standardl rargers tafget-eon"Irable to ifilsz-aMieable-te-nrt-eleetriettl earportu+on
required by Section 399.15. is procuring sufficient eligible renewable energy resources to satisfy
the targets, and will not fail to satisfy the targets in dte event that the renewable energy credit is
sold to another retail seller.
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(e) institute a ralemaking proceeding to determine the manner in which it local
publicly owned electric utiliq, will comply with Section 387 and implement the ra+ervable.s
portfolio standard program. The Energy Commission shall utilize the some processes and have
the same powers to enforce tlhe reuewables portfolio smndard program with respect to local
publicly owned electric utilities as the commission has with respect to retail sellers, including
but not limited to those processes and porters specified in Sections .399.14 and 399.15 related to
the review and adoption of a renewable energy procurement plan, establishment of fle.rible ruler
for complioace, and iugrosition of n annual penalties for failure to cmrytly with a local publicly
owned electric utility's renewable energy procurement plan. The Energy Commission shall not
have ar+v audrarhy to approve at- disapprove the ternhs, conditions or pricing of any renewable
energy resources contract enterer) into by it local publicly owned electric utility, or authoritS
pursuant to Section 2113,
SEC 9. Section 399.14 of the Public Utilities Code is amended to read as follows:
399.14. (a) (1) The commission shall direct each elxttieal eory ,tian retrill seller to
prepare a renewable energy procurement plan that includes the matter in paragraph (3), to satisfy
its obligations under the renewables portfolio standard. To the extent feasible, this procurement
plan shall be propose(], reviewed, and adopted by the commission as part of, and pursuant to, a
general procuren+ent plan process. The commission shall require each eleet+aeal-cihr>eMttr3n
retail seller to review and update its renewable energy procurement plan as it determines to be
necessary.
(2) The commission shall adopt, by rulentaking, all of the following:
( 1) A flr r {ar deter+nini+ +tx+rl et pe ees pt+rsuan+ to sttbdi+isie+t-(e) Of~Seetien
399 1a Ix ea+Hr+ si<r+ ha{{ +rttt#rpzz'tFrdetzrt+++tticns of-Hiarket wiees t+{ter, the ele i+tg
date-a{-tt-ean+f+et+ei~e-sakisitati~n-c~ndue+eEl-l>y-ttt+-eleetrisa4-eerpera+iot+-ter-e! igtl+le-renewable
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energy-resources:
(A4(A) A process that provides criteria for the rank ordering and selection of least-cost
and best-fit eligible renewable energy resources to comply with the annual California
Renewahles 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)(U) (i) Flexible ales for compliance, including rules permitting retail sellers to apply
excess procurement in one year to subsequent years or inadequate procurement in one year to no
more than the following three years. The flexible rules for compliance shall apply to all years,
including years before and after a retail seller procures at least 39 50 percent of total retail sales
of electricity froth eligible renewable energy resources.
(ii) The flexible rules for compliance shall address situations where, as a result of
insufficient transmission, a retail seller is unable to procure eligible renewable energy resources
sufficient to satisfy the requirements of this article. Any rules addressing insufficient
transmission shall requite a finding by the commission that the retail seller has undertaken all
reusonable efforts to do all of the following:
(1) Utilize flexible delivery points.
(II) Ensure the availability of any needed transmission capacity.
(III) If the retail seller is in electric corporation, to construct needed transmission
facilities.
(IV) Nothing in this subparagraph shall be construed to revise any portion of Section
454.5.
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f14)(C) Standard terms and conditions to be used by all e:a2t;;z. zer~srutee~remil
sellers in contracting for eligible renewable energy resources, including performance
requirements for renewable generators. A contract for the purchase of electricity generated by an
eligible renewable energy resource shall, at a minimum, include the renewable energy credits
associated with all electricity generation specified under the contract. 'llu standard terms and
conditions shall include the requirement that, no later than six months after the commission's
approval of an electricity purchase agreement entered into pursuant to this article, the following
information about the agreement shall be disclosed by the commission: party names, resource
type, project location, and project capacity.
(3) Consistent with the goal of procuring the least-cost and best-in eligible renewable
energy resources, the renewable energy procurement plan submitted by utreleet+ic l cY rportuion
a retail seller shall include all of the following:
(A) An assessment of annual or multiyear portfolio supplies and demand to determine the
optimal nux of eligible renewable energy resources with detiverability characteristics that may
include peaking, dispatehable, baseload, firm, and as-available capacity.
(11) Provisions for employing available compliance flexibility mechanisms established by
tile coil) III ission.
(C) A bit] solicitation setting forth the need for eligible renewable energy resources of
each deliverability characteristic, required online dates, and locational preferences, if any.
(4) In soliciting and procuring eligible renewable energy resources, each eleCIFieat
0iiporatiotl-retail seller shall offer contracts of no less than -1-0 20 years in duration, unless the
commission approves of a contract of shorter duration.
(5) In soliciting and procuring eligible renewable energy resources, each eleetrieal
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eorporat+en-retail seller may give preference to projects that provide tangible demonstrable
benefits to communities with it plurality of minority or low-income populations.
(b) The commission may authorize it retail seller to enter into a contract of less than 4-0 20
years' duration with an eligible renewable energy resource, if the commission has established,
for each retail seller, minimum quantities of eligible renewable energy resources to be procured
either through contracts of at least -10 20 years' duration or from new facilities commencing
commercial operations on or after January 1, 2005.
(c) The commission shall review and accept, modify, or reject each electrieul
eerpar-attatrs-retrtil seller's renewable energy procurement plan prior to the commencement of
renewable procurement pursuant to this article by un-elec-trieak-oqrtjrt+tio+ra rcmil seller.
(d) The commission shall review the resadts of an eligible renewable energy resources
solicitation submitted for approval by a+relec+r ea! a+r +ie ru retrtil seller and accept or reject
proposed contracts with eligible renewable energy resources based on consistency with the
approved renewable energy procurement plan. If the commission determines that the bid prices
are elevated clue to a lack of effective competition among the bidders, the commission shall
direct the aket+teai eerporntiea retail seller to renegotiate the contracts or conduct a new
solicitation.
(e) If an electrical corporation fails to comply with it commission order adopting a
renewable energy procurement plan, the commission shall cxcrcise its authority pursuant to
Section 2113 to require compliance. q'he eort+m SSio+rsl+tl6ertforee eo+3frnF~lertx+a4+ies+at+-ta+y
et4te~+rn++I~e4leFtltat-feil~to-rt+eet-a++mtal-pros-+tretment-t~ bets-o~stabfis4+e+1-pursuaet-to3eetit~+t
399.15:
(f) (1) The commission may authorize it procurement entity to enter into contracts on
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behalf of customers of a retail seller for deliveries of eligible renewable energy resources to
satisfy annual renewables portfolio standard obligations. The commission may not require any
person or corporation to act as a procurement entity or require any party to purchase eligible
renewable energy resources front a procurement entity.
(2) Subject to review and approval by the commission, the procurement entity shall be
permitted to recover reasonable administrative and procurement costs through the retail rates of
end-use customers that are served by the procurement entity and are directly benefiting from the
procurement of eligible renewable energy resources.
(g) Procurement and administrative costs associated with long-terns contracts entered into
by s n eleet rent ca flatti rn retail seller for eligible renewable energy resources pursuant to
this article, nn l app E Ved ty the esnmtiss on-Ito snore than 10 percent over the nmrkel price
determined by the Energy Commission pursumu to subdivision (c) of Section 399.15, shall be
deemed reasonable per se for electricity delivered on or before January 1, 2030, and shall be
recoverable in rates.
(h) Construction, alteration, demolition, installation, and repair work on an eligible
renewable energy resource that receives production incentives or funding pursuant to Section
Sections 25712, 25743 or 25751.5 of the Public Resources Code, including work performed to
qualify, receive, or maintain production incentives is "public works" for the purposes of Chapicr
I (CO11111MICiog With Section 1720) of Part 7 of Division 2 of the Labor Code.
(i) The commission shall impose annual penalties up to the amount of the shortfall in
kilorcrrtthours multiplied by I cent per kilmranhour on any retail seller that fails to meet the
annual procurement to gets establisher) pursuant to Section 399.15. The commission shall not
cap the penalq that ma.v be imposed on a retail seller antler this section. All penalties assessed
17
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and collected pursuant to this section shall he paid or transferred annualh, to the Solar and
Clean Energy Transmission Account administered by the Energy Commission pursuant to
section 257$1,5 of the Public Rayouices Code and shall be used for programs designer] to foster
the development of new in-state transmission and renewable electricity generation j'aciliiies.
Penalties paid or transferred by any retail seller pursuant to this section shall not be recoverable
by the retail seller either directly or indirecty in rates.
(I) Penalties assessed pursuant to subdivision (i) may be waived upon a finding by the
commission that there is good cause for it retail seller's failure to comply with a commission
order adopting a renewable energy procurement plant A finding by the commission that there is
good cause for failure to comply with a commission order adopting a renewable energy
procurement plan shall be made if the commission determines that any one of the following
conditions are met:
(l) The deadline or milestone changed due to circumstances beyond the retail seller's
control. including. but not limited to, administrative and legal appeals, seller n n-perfor na nce.
insujfciem response to a competitive .solicitation for eligible renewable energy resaurces, and
lack of effective competition.
(2) The renal seller demonstrates a good faith effort to meet the target. including but flat
limiter( to executed contracts that provide fitture deliveries suffucieu to satisfy ,urrea year
deficits.
(3) The target Bras missed due to unforeseen natural disasters or acts of Cod that prevent
timely completion of the project deadline or milestone.
7'he retail seller is unable to receive energy from eligible renewable energy resources
due to inadequate electric, transmission liner.
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•
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(5) ror oily year rip to and including December 31, 2013, a loyal publich' onvred electric
utility demonstrates that, despite its good faith effort, it has had insufficient time to meet
the annual procurement targets established in Section 399.15.
SGC 10. Section 399.15 ol'the Public Utilities Code is amended to read as follows:
399.15. (a) In order to fulfill unmet long-term resource needs, reduce greenhouse
gas emissions, address global rearming and climate change, protect the endangered Sierra
snowpack, and lessen California's dependence on fluctuating fuel prices, the commission shall
establish a renewables portfolio standard requiring all elzeEt cal eot}>atat ens retail sellers to
procure it minimum quantity of electricity generated by eligible renewable energy resources as it
specified percentage of total kilowatthours sold to their retail end-use customers each calendar
year- ubjeeHerlifnits-on-the ~ate[4 unounH>Ferrsts-exixuded n{xivz the muarket pneas-daterniited
#rad~#v+t:iolt-{e}-te-tae#ieve-the tat Betts-este#fttibed-umde+-t#irtufiela.
(b) The commission shall implement annual procurement targets for each retail seller as
follows:
(1) Notwithstanding Section 454.5, each Balch retail seller shall, pursuant to subdivision
(a), increase its total procurement of eligible renewable energy resources by at least an additional
-1-2 percent of rctail sales per year so that 20 percent of its retail sales arc procured from eligible
renewable energy resources no later than December 31, 2010, 40 percent of its retail sales are
procurer! from eligible renewable energy resources no inter that December 31, 2020, and 50
percent of its retail sales are procured from eligible renewable energy resources no later than
December 31. 2025.
r1-mail-seller-with~0 percent-oFrztnil sales-pra=eyed-fronralig+b4z
t~trweuHe-enzr~re;;oeree:;-ie-tstty-yeer;lett I1-not-he-r~3ttieed-to-ffuelensa-its-praettrzsyuc~tit-of
fenzwttble-energwesoktren ttl 4he fal~aw+n~ ye lF
(2) For purposes of setting annual procurement targets. the commission shall establish an
19
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initial baseline for each retail seller 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 Section 399.12.
(3) Only for purposes of establishing these targets, the commission shall include all
electricity 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 eleetfiea4-eerporttioirn recoil
seller,
(4) r1 retail seller is required to accept all bilateral offers for electricity generated by
eligible renewable energy resources that are less than or equal to the market prices established
pursuot to subdivision (c,). except that a retail seller is not obligated to accept a bilateral offer
for any year in which the retail seller has procured sufficient renewable energy resources to
meet its annual target established pursuant to this subdivision. lathe event-that trraktil-seRe
f 6lstopr~eure-sef#'ieient-eligible-renewnble-energy-reseurees-in-n-given-year-t et-airy-uIIflua
target esti bfished parse tx-tercltis-subdivision-tb~retatl~ zNer shall p eeurz~dditional zl+a+bla
rerteweblz zne gy rrs>urez irrsttb zryneat yzar to eor~tpzttsatz for the sltertfttll-stlbjzet to the
limilatiorron eo is IE Feketrio=ttl-eorp ation~estt bl+slteclttnrstrn+x to sabdi siort (cl)
(c) The Larergy Commission commission-shall determine by a rulernakirrg proceeding
esfablislrrmethrxlolegy t+eletzrntine the market price of electricity for terms corresponding to
the length of contracts with eligible renewable energy resources: and the methodology for
making that determination that considers in-e< rtsit{ertttie t oFthc following:
(1) The Ions term market price of electricity for fixed price contracts. determined
pursuant to as zleeteical-coal oration s-a retail seller's general procurement activities as
authorized by the commission.
20
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(2) The long-term ownership, operating, and fired-price fuel costs associated with fixed-
price electricity from new generating facilities.
(3) The value of different products including bascload, peaking. and as-available
electricity.
(4) Nanunl gas' price farecartr that ire can.ri.rtent +vith jurcca,cr.r us'erl fin' prucurenhent ref
other resources, including loading order resources.
(S) The value and benefits of renewable resources, including bill not limited to hedging
value and carbon emissions redactions.
fh) The value. and benefits of baseload generation.
(d) A retail seller shall not be required to enter into long-term contracts with operators of
eligible renewable, energy resources that exceed by more than l0 percen the market prices
established pursuant la subdivision (e•) fin' electricity deliverer) on or before January 1, 2030.
The commission shall allow a retail s'eller to limit its annual procurement obligation to the
quantiq of eligible reviewable energy resources that can be procured at no more than 10 percent
over the market price established pursuant to subdivision (e). Indirect costs associated with the
purchase of eligible renewable energy resources by (I retail seller, including imbalance energ),
charger. sale of excess energy, degreaser) generation from e-rivi ng resources, or uMINIM issiarh
upgrades, are recoverable in rates, (rs awhoried b), the commission. =l 4te shoo scion shn{}
esk+b}islt-for-~+eh-glee++<iea}-aorpar.•+tien-+r}i mitntion-o+rthe-tort+l-ec+sts-ezpe+ttlet}-above-the
tnar'kat }trieert}eter y 'tied-in-suMivis a r(e)-far t}+e pry trz+t e++t of e}+o b}e rz xwa}3}e e+xrgy
resatrees-Eaae}ticve-tk+e-ant+t+a}-prasurrme++t-te aetfestablishec4-unt}e~ta3is-a~ie}r.
-{-}-}--T-}~-et+st-#ttRitatie++-s#+a{ I--be-et{that-tt~-the-a+nat+nt-af-€u++ds--t rausfarred-to--et+c b
e}~uaen I-eat~oratien-}ry-the-~+tergy-C-timmi ssian-ftt+r~ua++~te~ttbdi+i s ien{ b}a}--Seetiott~-~4=13-a f
21
• •
Version I (revised)
the Rub{ ~ke;eurez Eedz uacl tl+e ~F:S yeree+t tlK }t+utls which +veuld hale been ealleeia,
t#rauglrkutuat~-1-28.}~-f+•tu+rthe-eust.~niers-a Ftha-e{eetrtc}7}-eer~titz+tietrbaset}-on-t}+e-reuzwttbla
energy-~u4+Fie-gF~t++l4-el+asdz-irreffeet-a~;~Fdanaar}~I-2A4~7,
-{3~F4+e-ubavz-niatrket-casts-c+f-t+-et>nt+act-sel eater}-by-au-e}eetr'i e+t }-eor}~a rn tion-ntay-be
eouutzEl hawatEk} eosNtaaNn3a+r+iil14 the4ollowiugt }it+o }s are siai4ed:
-'A) "'ht eaatrazt has bez++ aNl+reizd tl+~ea+r n+ siatr and avng ; eIRted thfough a
ei3+tt}>et tiveso}ieitat ot+ }+ut twit to the tz }u fz t+cut -obsul+tf+~ s ou {a}efzSee+iot+399.11,
-E13}-'{:{tz-eentr+tet-covers-u-clur;n iou-o}i+trless-t hut+-}0-yzurs,
-(C}-l +a c 3ntr+etz }yjrojzet s a new or-re} awzrzd fa itit}-eatmileneing eot+tt+tereittl
a}+ertuiens~++r ar-aRi~r-let+ttttry-I~){)S-
EF3) P a }+tt s F retxw Hle e ergy-credits may be et a b{e I~r ou Eleratiau us at+
alxave-oatrket-cost,
-(}s}I=he alx+ve-market accts of a eontr et tk+-net-it ehtele+uty indirect esenses inelucting
imbaltmee energreharoes-st+{z o{-elees cv ergy dzerzased azazratiotrfr m eais6n.- re! ourees
or-+fatr,;tuissifat iipgmdes-
(3}l>;t}te-eosN itoitation-fer-~vt-eleeutett I-eatq+t+raliott-is-iusufGeieut-to-saN}tart-the-fetal
casts-ek}xn<lecl-:tl»+e-t}tz-natrl<et-}3+ices:lzter+ninecf-+n~;u}>ilivisia+r f c-)-far~he-}+roEaret+tent~?f
eligible
rzttei bk-energy-resotuec at sfyhtg the eaac}iBetts of }xtr++gra}!t dte eommissio+t
sltal}-ellew-thrzleetrizrr}-ecK }+et;3tian-to-limit-its-}+rtteurzt}+zrtt-tf+-tl+e-c}utmtity-o€-eFigible-rzr+ewt+ble
energy-r:~soaraes-tbat-ra+t-}>e-}>roeura<Iztt-or-betatt~t}t~ +aarkety+riees-zstab}sshed-i++-suhth~isieu
(
-(4)ztiatltiag-itt-this-eztion-}+raventsiut•elzetric~4-e<a-yaratiotr-from vt>Iuatar+ly-}+ra}tas}ng
9)
• •
Version I (revised)
te-Ixc+e++re-e4 oihke--renewn+h}e-e++ergy-reso+++~ces-++t-nlaove-+xnrke+-prices-f{+nt-++re-++et-eountecl
tow t+tl N+e eostiitn+tt+4ion l+iwelsnta y r+rc EUre+rent-i+w fvi++g +bove n++++kel eoste-shall-be
:++bjeet-ta-eo+x+++issie+ra{+Nr++val-pr+e+-tA-tl+e-ekpence-bei+~-+atfx<erecl-i+xatzs-
(e) The establishment of a renewables portfolio standard shall not constitute
implementation by the commission of the federal Public Utility Regulatory Policies Act of 1975
(Public Law 95-617).
(1) 'file Energy Commission eenxxssiE++ shall consult with the !snergy-Commission
canunis.sion in calculating market prices under subdivision (c). and the Energy Commission and
the commission shall consult with each other in establishing ether renewables portfolio standard
policies.
SEC 11. Section 1001 of the Public Utilities Code is amended to read as follows:
100 L Except cis odtenvise provided in Division 15 (commencing +vith Section 25000) of
the Public Resources Code, no-No railroad corporation whose railroad is operated primarily by
electric energy, street railroad corporation, gas corporation, electrical corporation, telegraph
corporation, telephone corporation, water corporation, or sewer system corporation shall begin
the construction ol'a street railroad, or of a line, plant, or system, or of any extension thereof,
without having first obtained from the commission a certificate that the present or future public
convenience and necessity require or will require such construction.
This article shall not be COnstruecl to require any such corporation to secure such
certificate for an extension within any city or city and county within which it has theretofore
I:lWf ally commenced operations, or for an extension into territory either within or without a city
or city and county Contiguous to its street railroad, or line, plant, or system, and not theretofore
served by a public utility of like character, or for an extension within or to territory already
served by it, necessary in the ordinary course of its business. If any public utility, in constructing
23
Version I (revised)
or extending its line, plant, or system, interferes or is about to interfere with the operation of ttte
line, plant, or system of any other public utility or of the water system of it public agency.
already constructed, the commission, on complaint of the public utility or public agency claiming
to be injuriously affected, may. after hearing, make such order and prescribe such terms and
conditions for the location of the lines, plants, or systems affected as to it may seem just and
reasonable.
SEC 12. Section 25107 of the Public Resources Code is amended to read as follows:
25107. "Electric transmission line" means any electric powerline carrying electric
power front a thermal powerplant or a solar and clean energy plant located within the state to a
point ofjunction with any interconnected transmission system. "Electric transmission line" does
not include any replacement on the existing site of exiting electric powerlines with electric
powerlines equivalent to such existing electric powerlines or the placement of new or additional
conductors, insulators, or accessories related to such electric powerlines on supporting structures
in existence our the effective (late of this division or certified pursuant to this division.
SIC 13, Section 251 10 of the Public Resources Code is amended to read as follows:
25110. "Facility" means any electric transmission line, or-thermal powerplant, orsolar
anti clean energy plant, or both clectic transmission line and thermal powerplant or solar and
clean energy plant, and emen.sions, modifications, upgrades of existing electric transmission
lines, regulate(] according to the provisions of this division.
SEC 14. Section 25137 of the public Resources Code is added to read as follows:
25137. "Solar and clean energy plant" mesons any electrical generating facility
using wind. solar photovoltaic, solar thermal, bioumss, biogas, geothermal, fitel cells using
renewable fuels. digester gar, municipal solid waste conversion, landfill gas, ocean ware, ocean
thermal, or third current technologies, with a generating capaciq, of 30 n+egawans or more, or
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small hydroelectric generation of 30 megawatts or lent, and any facilities appurtenant thereto.
Ftploratoq, development, and production wells, resource transmission lines, and other related
facilities used in connection it ith a renewable project or a renewable development project are
1101 nppurlemau facilities ftm the purposes of this division.
SEC 15. Section 25502 of the Public Resources Code is amended to read as follows:
25502. Each person proposing to construct a thermal powerplant, solar and clean energy
plant, or electric transmission line on a site shall submit to the commission a notice of intention
to file an application for the certification of the site and related facility or facilities. The notice
shall be an attempt primarily to determine the suitability of the proposed sites to accommodate
the facilities and to determine the general conformity of the proposed sites and related facilities
with standards of the commission and assessmcnls of need adopted pursuant to Sections 25305 to
25305, inclusive. The notice shall lie in-the form prescribed by the commission and shall be
supported by such information as the commission may require.
Any site and related facility once found to be acceptable pursuant to Section 25516 is,
and shall continue to be, eligible for consideration in an application for certification without
lmiller prneeedings required for it notice under this chapter.
SEC 16. Section 25517 of the Public Resources Code is amended to read as follows:
25517. Except as provided in Section 25501, no construction of any thermal
powerplant. solar and clean energy plant, or electric transmission line shall be commenced by
any electric utility without first obtaining certification as prescribed in this division. Any onsite
improvements not qualifying as construction may be required to be restored as determined by the
commission to be necessary to protect the environment, if certification is denied.
SEC 17. Section 25522 of the Public Resources Code is amended to read as follows:
25522. (a) Except as provided in subdivision (c) of Section 25520.5 cad Section
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Version I (revised)
25550, within 13 months of th8 filing of an application for certification, or within 12 months if it
is filed within one year of the commission's approval of the notice of intent, or at any later time
as is nmtually agreed by the commission and the applicant, the commission shall issue ar written
decision as to the application.
(b) The commission shall determine, within 45 days after it receives the application,
whether the application is complete. If the commission determines that the application is
complete, the application shall be deemed filed for purposes of this section on the date that this
determination is made. If the commission detenmines that the application is incomplete, the
commission shall specify in writing those parts of the application which are incomplete in(] shall
indicate the manner in which it can be made complete. If the applicant submits additional data to
complete the application, the commission shall determine, within 30 days after receipt of that
data, whether the data is sufficient to make the application complete. The application shall be
deemed filed on the date when the commission determines the application is complete if the
commission has adopted regulations specifying the infomnational requirements for a complete
application, but if the commission has not adopted regulations, the application shall be deemed
tiled on the last date the commission receives any additional data that completes the application.
SEC 18. Section 25531 of the Public Resources Code is amended to read as follows:
25531. (a) The decisions of the commission on any application for certification of
a site and related facility arc subject tojudicial review by the Supreme Count of California.
(b) No new or additional evidence may be introduced upon review and the cause shall be
hear(] on the record of the commission as certified to by it. The review shall not be extended
further than to determine whether the commission has regularly pursued its authority. including a
determination of whether the order or decision Wider review violates :illy right of the petitioner
under the United States Constitution or the California Constitution. The findings and
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conclusions of the commission on questions of fact are final and are not subject to review, except
as provided in this article, These 9ucstions of fact shall include ultimate facts and file fuldings
and conclusions of the commission. A report prepared by, or an approval of, the commission
pursuant to Section 25510. 25514, 25516, or 25516.5. or subdivision (b) of Section 25520.5,
Shall not constitute a decision of the commission subject to judicial review.
(c) Subject to the right of judicial review of decisions of the commission, no court in this
state has jurisdiction to hear or determine any case or controversy concerning any matter which
was, or could have been, determined in a proceeding before the commission, or to stop m delay
the construction or operation of any thermal powerplant or solar and clean energy plant except
to enforce compliance with the provisions of a decision of the commission.
(d) Notwithstanding Section 1250.370 of the Code of Civil Procedure:
(1) If the commission requires, pursuant to subdivision (a) of Section 25525, as a
condition of certification of anv site and related facility, that the applicant acquire development
rights, that requirement conclusively establishes the matters referred to in Sections 1240.030 and
1240.220 of the Code of Civil Procedure in any eminent domain proceeding brought by the
applicant to acquire the development lights.
(2) If the commission certifies any site and related facility, that certification conclusively
establishes the matters referred to in Sections 1240.030 and 1240220 of the Code of Civil
Procedure in any eminent domain proceeding brought to acquire the site and related facility.
(e) No decision of the commission pursuant tit Section 25516, 25522, or 25523 shall be
found to mandate it specific supply plan for any utility as prohibited by Section 25323.
SGC 19. Section 25540.6 of the Public Resources Code is amended to read as follows:
25540.6. (a) Notwithstanding any other provision of law, no notice of intention is
required, and the commission shall issue its final decision on the application, as specified in
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Section 25523. within 12 months after the filing of the application for certification of the
powerplant and related facility or facilities, or at any later time :is is mutually agreed by the
commission and the applicant, for any of the following:
(I ) A thermal powerplant which will employ cogeneration technology, a thermal
powerplant that will employ natural gas-fired technology. or a solar and cleat energy plant~-o} w
tlter+ttal-rxjwerpl{t+n.
(2) A modification of an existing facility.
(3) A thermal powerplant or solar and cleat energy plan which it is only technologically
or economically feasible to site at or near the energy source.
(4) A thermal powerplant with it generating capacity of up to 100 megawatts.
(5) A thermal powerplant or solar and cleat energy plant designed to develop or
demonstrate technologies which have not previously been built or operated on a commercial
scale. Such a research, development, or commercial demonstration project may include. but is
not limited to, the use of renewable or alternative fuels, improvements in energy conversion
efficiency, or the use of advanced pollution control systems. Such a facility ntay not exceed 300
megawatts unless the commission, by regulation, authorizes a greater capacity. Section 25524
does not apply to such a powerplant and related facility or facilities.
(b) Projects exempted from the notice of intention requirement pursuant to paragraph (1),
(4), or (5) of subdivision (a) shall include, in tine application for certification, a discussion of the
applicant's site selection criteria, any alternative sites that the applicant considered for the
project, and the reasons why the applicant chose the proposed site. That discussion shall not be
required for cogeneration projects at existing industrial sites. The commission may also accept
an application fora noncogeneration project at an existing industrial site without requiring a
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discussion of site alternatives if the commission finds that the project has it strong relationship to
the existing industrial site and that it is therefore reasonable not to analyze alternative sites for
the project.
SE'C 20. Section 25541 of the Public Resources code is amended to read as follows:
25541. The commission may exempt from this chapter thermal powerplants with
a generating capacity of up to 100 megawatts.-end modifications to existing generating facilities
that do not add capacity in excess of 100 megawatts, and solar and clean energy plants. if the
commission finds that no substantial adverse impact on the environment or energy resources will
result from the construction or operation of the proposed facility or from the modifications.
SEC 21. Section 25541.1 of the public Resources Code is :upended to read as follows:
255,11. t It is the intent of the Cegiskuure l,'copk~ to encourage the development of
thermal powcrplants or solar and clean energy plants using resource recovery (waste-to-energy)
technology. Previously enacted incentives for the production of electrical energy front nonfossil
fuels in commercially scaled projects have failed to produce the desired results. At the same
time, the state faces it growing problem in the environmentally safe disposal of its solid waste.
The creation of electricity by a thermal powerpla t or solar and clean energy plant using
resource recovery technology addresses both problems by doing all of the following:
(a) Generating electricity from a nonfossil fuel of an ample, growing supply.
(b) Conserving landfill space, thus reducing waste disposal costs.
(c) Avoiding the health hazards of burying garbage.
Furthermore, development of resource recovery facilities creates new construction jobs,
as well as ongoing operating jobs, in the communities in which they are located.
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SEC 22. Section 25542.5 of the Public Resources Code is added to read as follows:
25542.5. The Energy Commission shall, on nn annual basis, publish a report that
identifies and designates Solar and Clean Energy Tones in the state of California based on
geographic areas identified by the Energy Commission's Public Interest Energy Research
Program as having potential for solar and clean energy) esources.
SEC 23. Section 25550 of the Public Resources Code is added to read as follows:
25550. (a) Notwithstanding subdivision (a) of Section 25522, and Section 25540.6
dre commission shall establish a process to issue its final certification for tmy solar and clean
energy plant and related facilities within six months after the filing oJ'the application far
certification that, on the basis of an initial review, shows that there is .substantial evidence that
the project will not cause a significant adverse impact on the environment at- electrical
transmission and distribution systenr and will comply with all applicable standards, ordinanc'es,
or lau-.s. For purposes of this section, fr/ing'has the sane meaning acs in Section 25522.
(b) Solar raid dear energy plants and re.laied facilities reviewed under this process shall
satisfy the requirements of Section 25520 and other necessary information required by the
commission, by regulation, including the information required for permitting by each local,
state, raid regional agency that world have jur'isdicdon over the proposed solar and clean
energy plan and related facilities butJo'the e.rcht.sive jurisdiction of tine commission and the
information required for permitting by each federal agency that has jurisdiction over the
proposed solar and clear energy plant and related facilities.
(c) After acceptance of an application under this section, the commission shall not be
required to issue a six-month final decision on the application if it determines there is substantial
evidence in the record that the solar and clean energy plan and related facilities will likely
result in a significant adverse impact nn the environment at- electrical sY iem or does not congn/y
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with all applicable standard. ordinance. or law. Under this circumstance. the commission shall
make its decision in accordance with subdivision (a) (!f Section 25522 and Section 25540.6, and
a new application shall not be required.
(an f,or an application that the couunission accepts under this section, all local, regional,
and state agencies that would have herd jurisdiction over the proposed solar cold clear energy
plant and related facilities. but for the exclusive jurisdiction of the commission, shall provide
their final comments, determinations, or opinions widtin 100 days after the filing of the
application. The regional inner quality control boards, as established pursuant to Chapter 4
(commencing with Section 13200) of Division 7 of the Water Code, shall retain jurisdiction over
any applicable water quality standard that is incorporated into any final certification issued
pursuant to this chapter.
(e) Applicants of solar anal clean energy plants and related facilities that demonstrate
superior environmental or efficiency performance shall receive priority in review.
(n With respect to a solar and clean energy plant told related facilities reviewed under
the process established by this section, it shall be shown that the applicant has a contract with a
general contractor and has contracted for all adequate supply of skilled labor to construct,
ojrerae, and maintain the plant.
(g) With respect to a solar turd clean cnegy plant and related facilities reviewed under
the process established by this section, it shall be shown that the solar and clean energy plat
and related facifities complies with all regulations adopted by the commission that ensure that
an application addresses disproportionae impacts in a manner consistent with Section 65040.12
of the Government Coale.
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(h) This section shall not apply to all application filed with the commission on at- before
January 1, 2009.
(i) To implement this section, the commission may adopt emergency regulations in
accordance with Chapter 3.5 (cornmencing with Section 11340) of Part 2 of Division 3 of Title 2
of the Government Code. For purposes of that chapter, including without limitation, Section
11349.6 of the Government Code, the adoption oj'the regulations shall be considered by tle
Ofjice of Administrative Law to be necessary for the immediate presernation t !f the public peace.
health, sthfetp, and general welfare.
U) All solar and clean energy plants receiving certification pursuant to this section shall
be considered a public works project subject to tie provisions of Chapter I (conuihencing with
.Seaion 1720) (!f Part 7 of Division 2 0f the. Labor Code, and the Department of Inrbrstrial
Relations shall have the same authorirv and responsibility to enforce those provisions as it bets
under the. Labor Code.
SGT 24. Chapter 6.6 of Division 15 of the Public Resources Code is added to read as
follows:
25560. No electrical corporation as defined is Section 218 oj'the Public. Utilities Cade
shall begin the construction of a transmission line or of mq• extension, modification, or upgrade
thereof hs itlunt havirhg first obtained froth the couurui.ssion n certiftcate flat tlhe present or f uhrre
public convenience and necessity require or will require such construction.
'I'bis chapter shall not be construed to require an), such corporation to secure such
cerifhcate for an extension within any city or city and county within which it has theretoj6re
lam fully commenced operations, or for can extension into territory either within or without a ciI.y
ar cite and county contiguous 10 its transmission line or system, and not theretofore served b), a
public utitiq of like character, or jar an extension within or to territory already served by it,
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necessary in the ordinary course of its business. If any public utility, ill Constructing or
extending its line or system, interferes w' is about to interfere with the operation of the line or
system of an, other public utility, at- of the water system of a public agency, aleadY constructed,
the commission, on complaint of the public utility or public agency claiming to be btjuriouslp
affected, ma}, after hearing, and in consultation with the Public Utilities C'ommiss'ion make such
order and prescribe such terms and conditions for the location of the lines or svs'tems affected as
to it ma), seem just and reasonable.
25561. (a) The commission shall exempt the consnvction of art' line ar system, of
extension thereof, located outside the boundaries of the state front the requirements of Section
25560, upon the application of the public utility constructing that line at- s)tstem, or extension
thereof if the public wilirv derives 75 percent or noire of its operating revenues from outside the
state, as recorded in the fiscal period immediateh, before the filing of the application, unless rite
commission determines that the public interest requires that the construction should not be
exempt from Section 25560.
(b) Eveept as provided in subdivision (c), the commission shalt make the determination
denying the exemption, as specified in subdivision (a), within 90 days alter the public utility files
the application for exemption with the commission. If dre conn+issioru fails to stake this
determination within that 90-dory period, the construction of that lime ors stem, or estension
thereof, is exempt from the requirements of Section 25560.
(c) The commission and the public utility filing the application for exemption may, if both
agree, extend the tinte period within which the commission is required to make the determination
denying the exemption, for not more than an additional 60 dais after the expiration of the 90-day
period specified in subdivision (b).
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25562. (a) The commission. as a basis jor granting any certificate pursuant to Section
25560, shall give consideration to the following factors:
Gbmmmnity values.
(2) Recreational and park areas.
(3) Historical and aesdtetic values.
(4) Influence on environment, except than in the case of any line or system at- extension
thereof located in another state which will be subject to environmental review pursuant to the
National Environmental Policy Act of 1969 (Chapter 55 (commencing with Section 4321) of Title
42 of the United Stater Code) or similar state laws in the other state, the commission shall not
consider influence oil the environment unless an' emissions or discharges therefrom world have
a significant influence art the environment of this state.
(5) Proximity to and related effect oat populated areas and whether alternative locations
are reasonably available and appropriate.
(6) Value and benefits of baselonl gener(ition.
(b) With respect to (illy electrical transmission line required to be constructed, modified
or upgraded to provide transmission front a thermal powerplont a' a solar and clean energy
plan, and for which it certificate is required pursuant to the provisions of Division 15
(commencing with Section 25000), the decision graving such other certificate, shall be
conclusive as to all nutters determined thereby and shall take the place of the requirement jor
cahsideradon by the commission of the .six factors .specified in subdivision (a) of this section.
(c) As a condition for granting any certificate pursuant to Section 25560, the commission
shall require compliance with the California Desert Protection Act of 1994 (commencing wad
Section 410aam of Tide 16 of the United Saves Code).
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25563• in considering an application for a cenificcne for an electric transmission
faciliq• pursuant to Section 25560, the commission shall consider cost-effective alternatives to
nansinission jocilities than meet the need for an efficient, reliable, and affordable supply of
e'le'ctric//P, including, but not limited to, demand-side alternative's such as targeted energy
efficiency, ultraclean distributed generatia n, cis deftned in Section 353.2 oj'the Public Utilities
Cade. and otter demand reduction resources. The provisions of this section shall not apply to
arq' electrical transmission line required to be constructed, modified or upgraded to provide
iran•smiss'iat from a solar and clean energy plant.
25564. Every electrical corporation stibntitting an application to die conuuission for a
certificate authorizing the new construction of anv electric i rat.smiss•ion line or extension, not
subject to the provisions of Chapter 6 (commencing with Section 25500), shell include all of the
following information in the application in addition to aqv other required information:
(a) Prelimina?y engineering and design in formation on the project. The design
information provided shall include preliminmy data regarding the operating characteristics of
the line or extension.
(b) A project implementation plan showing how the project would be contracted for and
consoucted. This plan shall show how all major tasks world he integrated and shall include a
lbnetabde identifying the design, construction, completion, and operation elates for each major
component of the line or extension.
(c.) An appropriate cost estimate, including preliminary estimates of the costs of
financing, consiruction, and cperauion of the line or extension.
(d) The corporation shall dentons'trnte die financial impact o ilhe line or extension
conshraction on the corporation's ratepan•ers. stockholder,:, and on the cost of the corporation's
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borrowed capital. The cost analyses shall he performed for the projected useful life of the fine or
extension.
(e) A design and construction management and cost control plan which indicates the
contractual and working responsibilities anal interrelationships between the corporation's
management and outer major parties involved in the project. This plan shall rtlso include ct
construction progress it formation system a tl specific cost controls.
25565. Etey electrical corporation submitting tut application to the commission for a
certifcare authorizing the new construction of an electric transmission line or extension, which
is subject to the provisions a!f Chapter 6 (commencing with Section 25500), shall include in the
application the information specified in subdivisions (b), (c.), and (e) of Section 25564, in
addition ro taut otter required information. 7'he corporation may also include in the application
on). other information specified in Section 25564.
25506. Before any certificate may issue trader this chapter, every applicant for a
certificate shad! file in tine offce of the commission a certified copy of the applicaw's articles of
incorporation or chanter. Every applicant for a certificate shall file in the office of the
commission such evidence as is required by file commission to show than the applicant has
received the required consent, franchise, or permit of the proper cowery, city and taut), ci(y, or
otter public authority.
25567. (a) The commission maY, with at- without hearing, issue the certificate as
requested for, or refuse to issue it, or issue it for the construction of a portion only of the
contenglated electric transmission line or extension thereof, or for the partial exercise only of
fine right ru' privilege, and ntm attach to the exercise of the rights granted by the certificate such
terns and conditions, including provisions for the acquisition by the public of tie franchise at
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permit and all rights acquired thereunder and all works constructed or maintained by authority
thereof, as in its judgment the public convenience and necessity require; provided, however, that
before issuing or refusing to issue the certificate, the commission shall hold one or more
hearings addressing anp issues raised in a timely application for a hearing by atn, person
enticed to be heard.
(b) When the commission issues a certificate for the new construction of all electric
iran.snnission line or ertension, the certificate shall.specify the operating and cost characteristics
of the transmission line or ertension, including, but not limited to, the size, capacity, cost, and all
other characteristics of the transmission line o- extension which are specified in the information
which the electrical corporations are. required to submit, pursuant to Section 25564 or 25565.
(c) Notwithstanding any other provision in this chapter, an application for a certificate
authorizing the construction of new transmission facilities shall be deemed to be aeces.saty to the
provision of electric, service far purposes of any determination made mnler Section 25564 if file
commission funds that the new facility is necessan, ro jacilitate achievement of the renesvables
portfolio standard acs established in Article 16 (commencing with Section 399.11) of the Public
Utilities Coale and the eligible renewable energy resources requirement as established in Article
8.6 (commencing with Section 25740) of this Division.
25568. (a) Whenever the commission issues to an electrical corporation a certificate
authorizing ilia new construction of a transmission line, or oj'any extension, modification, or
upgrade thereof estimated to cost greater than fifty million dollars (.550,000,000), the
comuni.ssion shall specify in the certificate a maximum cost determined io be reasonable and
prudent for the facility. The commission shall determine the tnavinmm cost using an estimate of
the anticipated construction cost, taking into consideration the design of the project, the
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expected duration of construction, an estimate of the effects of economic inflation, one] any
known engineering dijTicrdtie.s associated with the project.
(b) After the certificate has been issued, the corporation miry apply to the couunission for
an increase in the rnaviniu r cost specified in the certrfcate. The commission ala), authorize all
increase in the specified maximum cost if it finds and determines that the cost has in fact
increased and that the present or future public, convenience and necessity require construction of
the. project at the increased cost: othenvise, it shall deny the application.
(c) After construction has commenced, the corporation may apply to the conuni.ssion for
audrori:ation to discmuinue construction. After a showing to the satisfaction of the concussion
that the present or future public convenience and necessitt• no longer require the completion of
construction of the project. and that the construction costs incurred were reasonable and
prudent, the commission may authorize discontinuance of construction and the Public Utilities
Commission may authorize recoven• of those construction costs which the commission
determines were reasonable and prudent.
(d) In any decision by the Public Utilities Commission establishing rates for ant electrical
corporation reflecting the reasonable and prudent costs of the new construction of arry
trmuurission line,.or of any extension. modification, or upgrtitle thereof. when the commission
ha.s found title/ elalw- incel liar the addition or e.tension is used and useful, the Public Utilities
Commission shall consider whether or not the actual costs of construction are within the
maximum cost specified by the commission.
SEC 25. Section 25740 of the Public Resources Code is :upended to read as follows:
257,10, it is the intent of the 1 e slatttra Prople in establishing this program. to
address global warming and climate change. and protect the endangered Sierra snowcaps by
increasing ifs-the amount of elect icily generated from eligible renewable energy resources
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per year, so that it equals at least 20 percent of total retail sales of electricity in California per
year by December 31, 2010-, of least 40 percent of total retail sales of electririt, in California
per Year G}' December 3l, 2020, and at least SO percent of total retail sales of electricity in
California per Year by December 31, 2025.
SEC 26. Section 25740.1 of the Public Resources Coale is added as follows:
257=10.1 7'he People find that the crneenvetion of electric transmission faaciGdes.
necessary ro facilitate the achievement of California's renewables portfolio standard targets will
provide the maximum economic benefit to all customer classes that funded tire Mew Renewable
Resources Account.
SEC 27. Section 25743 of the Public Resources Code is :upended to read as follows:
25743. (a) The commission shall terminate all production incentives awarded from the
New Renewable RCSOUrces Account prior to January I. 2002, unless the project began
generating electricity by January I, 2007.
(b) (1) The commission shall, by March I, 2005, transfer to electrical corporations
serving customers subject to the renewable energy public goods charge the remaining
unencumbered funds in the New Renewable Resources Account.
(2) The Public Utilities Commission shall ensure that each electrical corporation
allocates funds received from the commission pursuant to paragraph (1) in it nmnuer that
maximizes the economic benefit to :dl customer classes than funded the New Renewable
Resources Account. In considering and approving each electrical corporation's proposed
allocations, and consistent with Section 25740.1, the Public Utilities Commission shall
encourage and give the highest priority to allocenions fir tire construction of, or payment to
supplement the construction of, am' new or modified electric transmission facilities necessary to
facilitate the state achieving its renewables poti )lio .siandard raigets.
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(c) All projects receiving funding, in whole or in part, pursuant to this section shall be
considered public works projects subject to the provisions of Chapter / (commencing with
Section 1720) of Part 7 of Division 2 of the Labor Code, and the Department of bndustrial
Relations shall have the same authority and responsibility to er farce those provisions as it has
under the Labor Code.
SIC 28. Section 257,15 of the Public Resources Code is added to read as follows:
25745. The Energy Commission shall use its best efforts to attract and encourage
investment in solar and clean energy resources, facilities, research and development from
companies based in the United States to fulfill the purposes of this chapter.
SI;C 29. Section 25751.5 of the Public Resources Code is added to read as follows:
25751.5 (u) Tic Solar and Clean Energy Transmission Account is hereby established
within the Renewable Resource Trust Fund.
(b) Beginning January 1, 2009, the total annual adjustments adopted pursuant to .Section
399.5(d) of the Public Utilities Code shall be allocated to the Solar and Clean F_nergy
Transmission Account.
(c•) Funds in the Solar and Clean Energy Transmission Account shall be used. in whole
or in part, for the following purposes:
(1) Tic purchase of property or right-of-11-ay p+rsucuhl to the commission's authority
under Chapter 8.9 of Division 15 of the Public Resources Code;
(2) The construmiot of or payment to supplement the consrr•uction of, any new or
modified electric ronsmission facilities necessary to facilitate the state achieving its rene+vables
portfolio standard targets.
(d) Title to any property or project paid for in whole pursuant to this section shat/ vest
with the commission. Title to any properq' or project paid jor in part pursuant to this section
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dull vest with the commission in a part proportionate a, the commission's share of the overall
cost of the property at- project.
(e) Funds deposited in the Solar and Clean Energy Transmission Account shall be used
to supplement, and not to supplant, existing state fimding for the purposes authorized by section
(f) All projects receiving funding, in whole or in part, pursuant to this section shall be
considered public works projects subject to the provisions of Chapter I (commencing with
Section 1720) of Part 7 of Division 2 of the Gabor Code. and the Department of Industrial
Relations shall have the .same authority and responsibility to enforce those provisions as it has
under the (tabor Code.
SEC 30. Chapter 8.9 of Division 15 of tile Public Resources Code is added to read as
follows:
25790. The Energy Commission mar. for tine purposes of this chapter. purchase
and subsequently sell, lease to another party for a period not to ercead 99 years, ea change.
subdivide, transfer, assign, pledge, encumber. or othenvise dispose of any real or personal
property m- any interest in propery. Any such lease or stile shall be conditioned on the
development and use of the property for the generation anel/or artnsuti.ssimt of renewable energy.
25791. Any lease or sole made pursuant to this chapter may be made without
public, bidding but only after a public: hearing.
SGC 31. Severability.
The provisions of this Act are severable. 11 any provision of this Act, or part thereof, is
for any reason held to be invalid under state or federal law, the remaining provisions shall not be
affected, but shall remain in full force and effect.
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SRC 32. Amendment
The provisions of this Act may be amended to carry out its purpose and intent by statutes
approved by a two-thirds vote of each house of the Legislature and signed by the governor.
SRC 33. Conflicting 69casures
(a) ']'his measure is intended to be comprehensive. It is the intent of the People that in the
event that this measure and another initiative measure relating to the same subject appear on the
same statewide election ballot, the provisions of the other measure or measures are deemed to be
in conflict with this measure. In the event this measure shall receive the greater number of
affirnmuive vote, the provisions of this measure shall prevail in their entirety, and all provisions
of the other measure or measures shall be null and void.
(b) If this measure is approved by voters hm superseded hY law by :my other conflicting
ballot measure approved by the voters at the same election, and the conflicting ballot measure is
later held invalid. this measure shall be self-executing and given full force of law.
SEC 34. Legal Challenge
Any challenge to the validity of this Act must be riled within six months of the effective
date of this Act.
41166990.1
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July 14, 2008
Dr. Timothy McClarney
True North Research
741 Garden View Court Suite 208
Encinitas, California 92024
Dear Dr. McClarney:
Letter of Agreement for Survey of Residents
This letter shall be our Agreement regarding the Survey of Residents described below
("Services") to be provided by True North Resarch ("Contractor") as an independent
contractor to the City of Rosemead for the City's Community Survey ("Project").
The Services to be provided include the following: The scope of services that we
propose to perform for the City includes all tasks associated with designing, conducting
and analyzing the survey, as well as presenting the results.
The scope of services includes:
• Meet with City staff and representatives to discuss the research objectives,
methodology, and potential challenges and issues surrounding the study.
• Communicate throughout the study via in-person meetings, email and conference calls
as appropriate.
• Develop a random sampling plan that will produce data that is representative of the
current profile of adults in the City.
• Work collaboratively with City staff to develop a draft questionnaire, review and make
revisions as needed until all parties approve of the instrument.
• Pre-test the survey instrument to ensure its integrity.
• Professionally translate the survey into Spanish, Mandarin/Cantonese, and
Vietnamese.
• CATI (Computer Assisted Telephone Interviewing) program the finalized survey
instrument to ensure accurate and reliable data collection using live telephone
interviewers.
• Collect quality telephone interviews according to a strict interviewing protocol and
using professional, bilingual interviewers. ,
• Process the data, which includes conducting validity checks, cleaning, recoding,
coding any
True North Research
July 14, 2008
Page 2 of 3
open-end responses, and adjusting for strategic oversampling (if used) through a
statistical procedure known as 'weighting'.
• Analyze the survey results and prepare a thorough report on the findings, including a
detailed question-by-question analysis, description of the methodology, an executive
summary of the key findings and conclusions/recommendations, as well as a
comprehensive set of crosstabulations showing how the answers varied by subgroups
of respondents. The report will include extensive full-color graphics displaying the
findings, as well as insightful narrative discussion of the results and their implications for
the City's planning and performance management efforts.
• Prepare 3 full-color hard-copies of the final report, as well as an electronic copy to
allow the City to post the report on its website and reproduce the report as needed.
• Prepare a PowerPoint presentation
Contractor shall perform all Services under this Letter of Agreement in a skillful and
competent manner, consistent with the standards generally recognized as being
employed by professionals in the same discipline in the State of California, and
consistent with all applicable laws. Contractor represents that it, its employees and
subcontractors have all licenses, permits, qualifications and approvals of whatever
nature that are legally required to perform the Services, including a City Business
License, and that such licenses and approvals shall be maintained throughout the term
of this Agreement. Compensation for the above services shall be based on the actual
amount of time spent in adequately performing the Services, and shall be billed at the
project rate of $24,8900. However, unless expressly agreed to in writing in advance by
the City, the cost to the City for the Services shall not exceed $24,890.00
Contractor is aware of the requirements of California Labor Code Section 1720, et seq.,
and 1770, et seq., as well as California Code of Regulations, Title 8, Section 1600, et
seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and
the performance of other requirements on "public works" and "maintenance" projects. If
the Services are being performed as part of an applicable "public works" or
"maintenance" project, as defined by the Prevailing Wage Laws, and if the total
compensation is $1,000 or more, Contractor agrees to fully comply with such Prevailing
Wage Laws. City shall provide Contractor with a copy of the prevailing rates of per
diem wages in effect at the commencement of this Agreement. Contractor shall make
copies of the prevailing rates of per diem wages for each craft, classification or type of
worker needed to execute the Services available to interested parties upon request, and
shall post copies at the Contractor's principal place of business and at the project site.
Contractor shall defend, indemnify and hold the City, its elected officials, officers,
employees and agents free and harmless from any claim or liability arising out of any
failure or alleged failure to comply with the Prevailing Wage Laws.
Contractor shall provide proof of commercial general liability and automobile insurance
to the City in amounts and with policies, endorsements and conditions required by the
City for the Services. If Contractor is an employer or otherwise hires one or more
employees during the term of this Project, Contractor shall also provide proof of workers
compensation coverage for such employees, which meets all requirements of state law.
True North Research
July 14, 2008
Page 3 of 3
Invoices shall be submitted to the City monthly as performance of the Services
progresses. City shall review and pay the approved charges on such invoices in a
timely manner. Services on the Project shall begin immediately and be completed
approximately 8 to 10 weeks from start to final presentation, unless extended by the
City in writing. The City may terminate this Letter of Agreement at any time with or
without cause. If the City finds it necessary to terminate this Letter of Agreement
without cause before Project completion, Contractor shall be entitled to be paid in full for
those Services adequately completed prior to the notification of termination. Contractor
may terminate this Letter of Agreement for cause only.
Contractor warrants that the individual who has signed this Agreement has the legal
power, right and authority to make this Agreement and bind the Contractor hereto. If
you agree with the terms of this Letter of Agreement, please indicate by signing and
dating two original agreements where indicated below and return both to the
undersigned. Once the documents are fully executed, one original will be returned to
you for your records.
CITY OF ROSEMEAD
Approved by:
TRUE NORTH RESEARCH
Reviewed and Accepted by Contractor:
Oliver Chi Signature
City Manager
Attest: Name
Gloria Molleda
City Clerk
Title
Date
[If cost is $10,000 or less, signature lines below for city attorney may be removed]
Approved as to Form:
Garcia Calderon Ruiz LLP
City Attorney
02/08
G:\FORMS\Purchasing\Model - Letter of Agreement - Services.dot
1400 K STI BM
SACMMENTO, CA 95914
PIC(916) 658-8200
ex: (916) 658-8240
~0EA oUE
CITIES
June 30, 2008
Aileen Flores
Public Affairs Manager
City of Rosemead
8838 E. Valley Blvd.
Rosemead, CA 91770
Category.
Program:
Dear Aileen:
Public Safety
Public Safety Business Unit
IX~ XACITICti.OFG
The 2008 Helen Putnam Award for Excellence juries have completed the very difficult task of
evaluating all applications received this year in the 11 categories. Each nomination submitted
shows that California's cities have strong leadership, are well managed and are responsive to
changing community needs. The juries, which consisted of elected and appointed city officials were
most impressed with the caliber of the applications. You should be proud of your accomplishments!
While your city's application was not selected as one of the Award for Excellence winners, your
application and program are a tribute to you and to the city's leadership. You, and all who are
involved in the project are to be congratulated.
We will be sharing the information on all the applications through the League Library and on the
League Web page (www.cacities.org).
On behalf of the League of California Cities we are pleased to present you with the enclosed
certificate. Thank you for your participation in the 2008 Award for Excellence Program and we
encourage you to submit an application in 2009.
Sincerely,
Chris McKenzie, Executive Director
Enclosure: Certificate
Note: If you have any questions, please contact Melissa Lienau at 916-658-8216 or
mlienau@cacities.org
2007 Initiative Analysis: The Solar and Clean Ener0 of 2008
LAOS
m,uas o, ecrvin
Subject Areas Products
November 29, 2007
S:temap
Other Resources
AFTACHMENT" 1 B, ^ 1225 PM
Search
Ballot/ Initiatives careers About Us
Pursuant to Elections Code Section 9005, we have reviewed the proposed initiative "The Solar and Clean
Energy Act of 2008" version 2, Amendment #1-S
(A.G. File No. 07-0067).
Background
Provision of Electricity Service. Californians generally receive their electricity service from one of three
types of providers: investor owned utilities (IOUs), local publicly owned (municipal) utilities, and electric
service providers (ESPS).
The state's three largest electricity IOUs-Pacific Gas and Electric, Southern California Edison, and San Diego
Gas and Electric-each have a' unique, defined geographic service area and are legally required to serve
customers within their respective service areas. The California Public Utilities Commission (PUC) regulates
IOUs' rates and how their electricity service is to be provided to the customer. These conditions on electricity
rates and provision are commonly referred to as "terms of service."
A municipal electric utility is a local governmental entity that provides electricity service to residents and
businesses in its local area. Municipal electric utilities set their own terms of service and are not regulated by
PUC. Major municipal electric utilities include the Los Angeles Department of Water and Power and the
Sacramento Municipal Utility District.
The ESPS provide retail electricity service to customers who have chosen not to receive service from the
utility that serves their area, but instead have entered into "direct access" contracts with ESPS that deliver
electricity through the local utility's transmission and distribution system. In response. to the energy crisis
that arose in late 2000, state law since 2001 has suspended new direct access for IOU customers. This
suspension will continue to about 2015. There are currently around 20 registered ESPS operating in the state,
generally serving large industrial and commercial businesses. The ESPs also provide electricity to certain state
and local government entities, such as the California State University system, several University of California
campuses, some community college districts, and some local school districts. Under current law, the ESPS
are required to register with PUC for licensing purposes, but their rates and terms of service are not
regulated by PUC. However, PUC has applied certain additional requirements on ESPS, including a
requirement to demonstrate adequacy of electricity supply to meet anticipated demand.
While individual customers currently are barred from entering into new direct access contracts, existing law
allows a city or county to aggregate all the electrical demand of the residents, businesses, and municipal
users under its jurisdiction and to meet this demand through contracting with an electricity provider other
than the local utility, such as an ESP. This variation on direct access is referred to as "community choice
aggregation." At present, no community choice aggregator (CCA) exists to provide electricity service in
California, though proposals to create CCAs are under development.
Currently, the IOUs account for about 68 percent of retail electricity sales in the state, municipal utilities
account for around 24 percent, and ESPS account for around 8 percent.
Electricity Infrastructure Siting. Four principal components comprise California's system for generating
and delivering electricity-electricity generating facilities; the interconnected, interstate electricity
transmission grid; electricity transmission lines that tie generation facilities to the grid; and electricity
distribution lines that connect the electricity grid to electricity consumers. Regulatory responsibility for siting
(permitting) this infrastructure is held by one or more federal, state, and local agencies, depending on the
particular infrastructure at issue.
Siting authority for an electricity generating facility is determined by the type and size of the facility to be
operated. The Federal Energy Regulatory Commission (FERC) has permit authority for hydroelectric
generating facilities, such as dams. The state's Energy Resources Conservation and Development Commission
(Energy Commission) issues permits for thermal electricity generating facilities capable of generating
50 megawatts or more of electricity. Most other electricity generating facilities-including many types of
renewable energy generating facilities, such as wind turbines and nonthermal solar arrays-are permitted by
local government.
Permitting authority over electricity transmission lines depends upon the function of the line to be built, as
well as the type of electricity provider that will own the line. A line tying an electricity generating facility to
http://www.lao.ca.gov/ballot/2007/070788.aspx Page 1 of 5
2007 Initiative Analysis: The Solar and Clean Ener00 f 2008 • 7/15/08 12:25 PM
the electricity grid generally is permitted by the entity that permits the generation facility. (For example, the
Energy Commission would have permitting authority over a line that connects a 50 megawatt thermal power
plant to the transmission grid.) Construction of a transmission line that is part of the electricity transmission
grid is subject to FERC permitting, as well as the permitting authority of the entity that regulates the service
provider proposing the line. (For example, in addition to federal permitting authority, a transmission line
within the grid is also subject to permitting by the PUC if an IOU proposes the line.) Finally, distribution lines
generally are permitted by local government.
Energy Commission's Permit Processing Time Frames Specified in Statute. Existing statute defines the
time frames within which the Energy Commission must issue a decision on an application to construct and
operate a thermal electricity generating plant or an electricity transmission line under its siting jurisdiction.
Those time frames are
18 months for most applications, or 12 months for applications meeting certain conditions.
Renewables Portfolio Standard. Current law requires that electricity providers that are retail sellers
increase their share of electricity generated from renewable sources (such as solar or wind power) by at least
1 percent per year so that, by the close of 2010, 20 percent of each electricity provider's retail sales are
generated from renewable energy sources. This requirement is known as the renewables portfolio standard
(RPS) and is enforceable by PUC. Statute defines "retail sellers" as IOUs, ESPs, and CCAs, while specifically
excluding from that definition municipal utilities, the Department of Water Resources, or an operator of a
cogeneration (combined heat and power) facility. Of retail sellers, only IOUs currently are required to submit
to PUC a procurement plan that describes how the IOU will meet its RPS targets at the least possible cost. In
addition, IOUs must offer procurement contracts for renewable resources of no less than ten years, with
specified exceptions.
A retail seller that fails to meet its RIPS target in a given year is required to compensate for that shortfall by
procuring additional renewable energy in the following year. Should an IOU fail to meet its RIPS target, the
PUC may impose penalties. The PUC has capped the amount of these penalties administratively. Current law
does not direct the use of these penalty monies, which generally are deposited in the state General Fund.
Current law does not require municipal utilities to meet the same RPS that retail sellers are required to
meet. Rather, statute directs each municipal utility to implement and enforce its own renewable portfolio
standard. However, no state agency enforces municipal utility compliance or imposes penalties on a
municipal utility for failing to meet its renewable portfolio standard objectives. Nor is there a statutory
requirement that a municipal utility increase annually its procurement of renewable resources, as is required
of a retail seller. Finally, a municipal utility is not bound by a statutory definition of the energy sources that
count towards attainment of the RPS objectives required of retail sellers.
The different classes of electricity providers vary in their progress towards achieving the state's RPS goal of
generating 20 percent of electricity from renewable resources by 2010. As of 2006 (the last year for which
data are available), the IOUs as a group had 13 percent of their electricity generated from renewable
resources, whereas ESPS had 2 percent generated from those same types of resources. Using their own,
various definitions of "renewable resources," the municipal utilities together had nearly 12 percent of their
electricity generated from renewable resources. However, if the statutory definition of renewable resources
(which does not include large hydroelectric electricity facilities) is applied, their renewable count falls to just
over 7 percent.
Addressing the Potentially Higher Cost of Renewable Energy. Recently enacted legislation (Chapter 685,
Statutes of 2007 [SB 1036, Perata]), effective January 1, 2008, ends a program, administered by the Energy
Commission and funded by a surcharge on IOU electricity ratepayers, that made subsidy payments to
renewable energy producers. The payments were referred to as "supplemental energy payments" or "SEPS,"
and were made when the price of renewable energy exceeded the market price of electricity as determined
by PUC. Under law prior to Chapter 685, IOUs were required to purchase renewable energy at above-market
prices only to the extent that SEP funding was available to subsidize the above-market cost. In this regard,
the availability of SEP funding acted as a cost limitation on the requirement that IOUs purchase additional
renewable energy at above-market prices.
Under Chapter 685, IOUs are still required to purchase renewable energy at above-market cost. However, as
part of the rate-setting process, PUC is required to establish for each IOU a limitation on total above-market
costs for renewable energy, taking into account unspent monies collected to date for the SEP program, as
well as monies that would have been collected in the future for SEPs. This limitation will determine the
amount of renewable energy that each IOU is required to purchase at above-market costs.
Proposal
Overview of Measure. This measure makes a number of changes regarding RIPS and permitting for
electricity infrastructure. In particular, it raises RPS targets for electricity providers, applies these
requirements to municipal utilities, and gives the Energy Commission authority to enforce municipal utility
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compliance with the RPS. In addition, the measure expands the scope of RPS enforcement to include ESPs
and CCAs, and increases the minimum length of contracts for renewable energy. The measure expands
penalties for failure to meet RPS requirements, removes current caps on these penalties, and directs the use
of these penalty revenues. The measure also grants authority for the Energy Commission to purchase, sell,
or lease property to further achievement of the RIPS requirements. In addition, the measure transfers certain
electricity infrastructure permitting responsibilities from PUC and from local government to the Energy
Commission. Finally, the measure shifts responsibility for market price determination from PUC to the Energy
Commission. Each of these components is described below.
Establishes Additional, Higher RPS Targets. The measure adds two new, higher RPS targets-40 percent
by 2020 and 50 percent by 2025. Each electricity provider would need to meet the targets by increasing its
share of electricity generation from renewable energy by at least 2 percent a year, rather than the current 1
percent.
Makes RPS Requirements Enforceable on Municipal Utilities. The measure requires municipal utilities
generally to comply with the same RPS as required of retail electricity sellers and places the authority to
enforce this requirement in the Energy Commission. The measure, however, specifies that the Energy
Commission does not have the authority to approve or disapprove a municipal utility's renewable resources
energy contract, including its terms or conditions.
Expands Scope of RPS Enforcement Over Retail Sellers. The measure expands PUC's current RPS-related
enforcement mechanisms over IOUs to include ESPs and CCAs as well. The enforcement mechanisms include
review and adoption of renewable resources procurement plans, related rate-setting authority, establishment
of flexible rules for compliance, and penalty authority. The measure grants to the Energy Commission similar
RPS-related enforcement authority over municipal utilities.
Revises RPS-Related Contracting Period and Obligations. The measure requires electricity providers
(both retail sellers and municipal utilities) to offer renewable energy procurement contracts of no less than
20 years, with certain exceptions, and further requires an electricity provider to accept all offers for
renewable energy that are at or below the market price of electricity established by the Energy Commission.
Prescribes PenaltyAmounts and Directs Use of Penalty Monies. The measure prescribes by formula
monetary penalties against an electricity provider that fails to procure sufficient amounts from renewable
energy-one cent per kilowatt hour by which the provider falls short of the applicable RPS target. The
measure specifies that neither PUC (in the case of IOUs, ESPs, and CCAs) nor the Energy Commission (in the
case of municipal utilities) shall cap the amount of any penalty. In addition, the measure states that no
electricity provider shall recover through rates the cost of any penalties. The measure also provides the
conditions under which PUC or the Energy Commission, as applicable, may waive the statutorily prescribed
penalty, such as when the electricity provider demonstrates a "good faith effort" to meet RPS.
The measure creates the Solar and Clean Energy Transmission Account, and directs that any RPS-related
penalties (along with other specified fee-based revenues) be deposited into the account. Monies in the
account are to be used to facilitate, through property or right-of-way acquisition and construction of
transmission facilities, development of transmission infrastructure necessary to achieve the RPS. The measure
specifies that the Energy Commission will hold title to any properties acquired with funds in the Solar and
Clean Energy Transmission Account and gives the commission the authority to exercise its ownership rights
over any such property.
Expands Energy Commission's Permitting Authority. The measure expands the Energy Commission's
existing permitting authority in two major ways, not limited to the RPS. First, the measure newly grants the
commission the authority to permit new nonthermal renewable energy power plants capable of producing 30
megawatts of electricity or more, as well as related infrastructure, such as electricity transmission lines that
unite the plant with the transmission network grid. Currently, this permitting authority rests with local
governments. Second, the measure gives the Energy Commission the authority to permit IOUs to construct
new transmission lines within the network grid, currently a power solely of the PUC at the state level. It is
unclear, however, whether the measure has divested the PUC of this authority in giving it to the Energy
Commission.
The measure specifies that the Energy Commission is to issue a permit for a qualifying renewable energy
plant or related facility within six months of the filing of an application. However, the commission is not
required to issue the permit within the six-month time frame if there is evidence that the facility would
cause significant harm to the environment or the electrical system or in some way does not comply with
legal or other specified standards.
Shifts Responsibility for Market Price Determination. The market price for electricity serves as a
reference point against which the cost of renewable energy is measured for cost recovery purposes. The
measure shifts from PUC to the Energy Commission responsibility for determining the market price of
electricity.
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Declares Limited Impact of Measure on Ratepayer Electricity Bills. In its findings and declarations, the
measure states that, in the "short term," the measure will result in no more than a 3 percent increase in
electricity rates. However, the measure includes no specific provisions to implement this declaration.
Fiscal Effects
State Administrative Costs to Implement Measure. The measure will increase the administrative costs of
the Energy Commission by approximately $2.4 million. These increased administrative costs result from the
new duties given to the commission by the measure-including enforcement of municipal utility compliance
with the RPS, determination of the market price of electricity, and acquisition and management of property
to facilitate transmission development. Administrative costs also reflect increased workload resulting from the
measure's expansion of the commission's existing electricity facility permitting authority to include a broader
universe of renewable power plants and IOU-constructed transmission lines within the electricity network.
While some of these new responsibilities for the Energy Commission currently are carried out by the PUC-
namely, the electricity market price determination and IOU-related transmission permitting-we do not
expect that there would be significant offsetting reductions in PUC's costs as a result. This conclusion is based
on two reasons. First, to the extent that the measure is legally interpreted as requiring PUC to continue
carrying out some of the duties that the measure assigns to the Energy Commission, there likely will not be
offsetting savings to PUC. Second, in other cases, the transfer of responsibility from PUC to the Energy
Commission may be reflected in reduced workload delays at PUC, not reduced personnel costs.
Under current law, additional costs imposed by the measure on the Energy Commission will be funded by
fees paid by electricity customers. However, because these fees are set in statute, a statutory change to the
current electricity surcharge may be required to accommodate the increased costs to the extent that
reserves are not adequate to cover them.
In addition, the measure's other requirements will increase administrative costs of PUC by up to $1 million.
These additional costs will result from greater workload related to the increased RPS targets, such as
procurement plan review, validation of renewable resource potential to meet electricity demands, and other
related analysis, and the addition of ESPS and CCAS to the universe of entities subject to specified RIPS
regulatory requirements and rate-setting administered by PUC. Under current law, these additional costs will
be funded by fees paid by electricity customers.
Unknown Administrative Savings to Local Governments. By shifting permitting responsibility for certain
renewable energy facilities from local government to the Energy Commission, the measure will result in
administrative savings of an unknown, but not likely significant, amount to local governments.
Unknown Impact on State and Local Government Costs and Revenues. The primary fiscal effect of this
measure on state and local governments would result from any effect it would have on electricity rates.
Changes in electricity rates would affect government costs since state and local governments are large
consumers of electricity. The measure could result in higher electricity rates and in turn higher costs to
government, particularly in the short term, to the extent that there is increased procurement of more
expensive renewable energy (relative to conventional energy) that would not occur but for the measure's
mandates. However, the potential for higher electricity rates to the customer, Including state and local
governments, would be limited by the measure's retention of the cost limitation on mandated purchases of
renewable energy at prices above the market price for electricity as provided by current law. In addition, any
increase in costs due to increased electricity rates, particularly in the short run, could be offset to an
unknown degree by longer-term cost savings, to the extent that the measure advances development of
renewable energy resources so as to lower their cost from what they otherwise would be.
State and local revenues also would be affected by the measure's impact on electricity rates since tax
revenues received by governments are affected by business profits, personal income, and taxable sales-all
of which in turn are affected by what individuals and businesses pay for electricity. However, as is the case
with state and local government costs, the measure's potential to lower state and local government revenues
due to higher electricity rates would be limited by the measure's retention of the cost limitation as provided
by current law and by any longer-term cost savings resulting from advances in the development of
renewable energy resources.
Summary
In summary, the initiative would have the following fiscal effects:
• State administrative costs of up to $3.4 million annually for the regulatory activities of the Energy
Resources Conservation and Development Commission and the California Public Utilities Commission,
paid for by fee revenues.
Potential, unknown increased costs and reduced revenues, particularly in the short term, to state and
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• 7/15/08 12:25 PM
local governments resulting from the measure's potential to increase retail electricity rates, with
possible offsetting cost savings and revenue increases, to an unknown degree, over the long term to
the extent the measure hastens renewable energy development.
Return to Initiatives and Propositions
Return to Legislative Analyst's Office Home Page
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• •
ATTACHMENT C
COMMITTEE ON ENVIRONMENTAL QUALITY
Solar and Clean Energy Act of 2008
April 2008
1. The Solar and Clean Energy Act of 2008.
Pulicv Question:
• Should the Environmental Quality Policy Committee take an "Oppose" position on the Solar and
Clean Energy Act of 2008?
Staff Recommendation: Take an "Oppose" position on the Solar and Clean Energy Act of 2008 based
on existing League policy.
Leneuc Executive Board: The League Executive Board, in a memo to city officials dated March 18,
2008 (see attachment H) recommended that city officials delay endorsing or opposing this proposed
initiative until the League analysis is complete and a position on the measure is adopted by the relevant
policy committees and the League board of directors.
Initiative Summary: Legal Title and Summary given on 12/14/2007; circulation deadline is 5/12/2008
with 433,971 signatures required.
The initiative includes a "Purpose and Intent" section which would specify the following:
o Require ALL utilities to provide 20% of power from renewable sources by 2010, 40% by 2020,
and 50% by 2025. (Current law requires that 20 percent of electricity sold to customers by
renewable by 2010; state agencies and the Governor have established a33 percent target by
2020).
• The initiative would change the definition of `retail seller' and would include publicly-owned
utilities in the new definition.
• Would fast-track approvals for development of solar and clean energy plants and related
transmission facilities.
o Would create production incentives; create new assessment of penalties for utilities that don't
comply; require 20-year long term contracts for solar and clean energy (current length is 10 years
for contracts).
o Caps impacts on consumer electricity bills at 3 percent, (specifies no pass-through of rate increase
to consumers).
• Gives the Public Utilities Commission (PUC) the power to enforce compliance of RPS upon
privately-owned utilities, assess penalties, and prohibit utilities from passing on penalties to
consumers.
o Grants power to California State Energy Resources Conservation and Development Commission
(Energy Commission) to oversee compliance and penalty assessment for government-owned
utilities.
o Grants power to the Energy Commission to allocate funds to purchase, sell, or lease property,
personal property or rights of way for the development and use of the property and rights of way
for the generation/transmission of solar and clean energy, and to upgrade existing transmission
lines.
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Makes a number of "Findings and Declarations" regarding climate change and other
environmental factors in California, including California's reliance on dirty energy. Makes
reference to "government-owned utilities like those in Los Angeles and Sacramento [who]
lobbied successfully to exempt themselves from the law."
States that this issue is a matter of statewide concern and therefore would apply to all cities
including charter cities.
Existing League Policy: The League has clear existing policy regarding municipally-owned utilities
under Environmental Quality:
• The League supports the constitutional right of municipal utilities to operate outside the jurisdiction
of the California Public Utilities Commission (PUC) and opposes any legislation that would erode the
ability of municipal utilities to operate, or place them under PUC control.
• The League opposes legislation that dictates the mix of generating sources (i.e., hydro, coal, biomass,
wind, etc.) used by municipal utilities.
• The League is neutral on legislation to require municipal electric utilities to include a "renewable
portfolio standard" (RPS) in their mix of electricity, as long as the requirement is the same as that
which applies to investor owned utilities. The League opposes legislation that requires municipal
electric utilities to meet an PPS that is stronger than that applied to investor owned utilities.
• Municipal Utilities. The autonomy of municipal utilities should not be eroded. The League will
oppose any legislation that harms municipal utilities.
• The League opposes air quality legislation that restricts the land use authority of cities. (The initiative
is portrayed as `fix' to poor air quality).
Fiscal Impact: The Attorney General's Title and Summary identifies "potential state administrative costs
of up to $3.4 million annually for the regulatory activities of the Energy Resources Conservation and
Development Commission and the California Public Utilities Commission, paid for by fee revenues.
Potential, unknown increased costs and reduced revenues, particularly in the short term, to state and local
governments resulting from the measure's potential to increase retail electricity rates, with possible
offsetting cost savings and revenue increases, to an unknown degree, over the long term to the extent the
measure hastens renewable energy development."
Other Issues: There are a number of problems that League staff has identified with this initiative. The
main problems are as follows:
Pre-empty Local Land Use Authority. Initiative reassigns permitting authority from locals to the
Energy Commission for approval of solar and clean energy plants and related facilities within their
jurisdictions. Local agencies would have 100 days after a project application is filed with the
Commission to provide final comments, determinations, or opinions to the Commission. It is unclear
whether the Commission has any obligation to defer to a city's determination - for example, what
happens when a plant location does not comply with the city's general plan.
• Triggers Prevailing Wage. Initiative would trigger prevailing wage for private projects (which are
currently not subject to the prevailing wage requirement). Any project filed with the CEC would be
subject to the prevailing wage even if the project was funded entirely with private funds.
• Removes Local Control Over Resource Mix. Existing law in Public Utilities Code encourages
municipalities who own utilities to consider renewable energy, while taking into consideration rates,
reliability, financial resources, and the goal of environmental improvement. (This act would remove
local control over local decisions on resource mix and may impact a utility's financial resources.
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Also, as technologies become cheaper and more efficient, there is nothing in this existing code section
that would prevent a govemment-owned utility from making the decision to switch technologies or
pursue a different resource mix).
Support/Sponsors of Initiative: Jim Gonzalez is the Campaign Chair of "Californians for Solar and
Clean Energy" and the filer of the initiative. You can view the campaign website at
www.solarandclcanenergy.ore. There are a number of endorsers including former Senators Martha
Escutia and John Vasconccllos.
Opposition: Opposition to the measure ranges from renewable energy groups, labor, utilities to
environmental groups. Below are a few of the notables:
Center for Energy Efficiency and Renewable Technologies (CEERT)
California League of Conservation Voters
Natural Resources Defense Council
Environmental Defense
Union of Concerned Scientists
Vote Solar Initiative
Some renewable energy companies
Chapters of International Brotherhood of Electrical Workers
California Solar Energy Industries Association
American Wind Energy Association
(California Municipal Utilities Association (CMUA) - has concerns about the initiative, but hasn't taken
a position because the measure has not yet qualified)
Opposition Main Ar¢uments:
• Poorly drafted
• Language would actually reduce existing penalties for non-compliance
• 3% cap is unrealistic and no other cap like this exists for any other energy source
• Power shift to California Energy Committee
• Requirement of specific percentages of renewals doesn't ensure that it will happen
• Rigid and arbitrary timetable for permitting decisions - 100-day period
Related Initiatives and Legislation: The same group, Californians for Solar and Clean Energy, also tiled
another initiative for title and summary (Pile # 2007-067). This version reflects and incorporates changes
to the California Public Utilities Code and Public Resources Code made under SB 1036, which was
signed into law last fall.
SB 411 (Simitian and Perata), is currently located in the Assembly Appropriations Committee. SB 411
extends and expands the state's Renewable Portfolio Standard (RPS) to require the investor-owned
utilities (IOUs) and certain other retail sellers of electricity to increase their procurement of renewable
resources to at least 33% of retail sales by 2020. There are two other spot bills that were recently
introduced, AB 2792 (Blakeslee) and SB 1324 (Baffin), that deal with the same code sections as SB 411,
but there is no substantive language in either bill at this point.
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