AB 876

This bill does all of the following: 1) makes changes to renewable portfolio

standards that apply to electric providers; 2) imposes biofuel requirements on

electric providers; 3) requires electric utilities to make certain purchases of

renewable energy; and 4) imposes duties on the the Public Service Commission (PSC)

regarding distributed generation facilities.

Renewable portfolio standards.

Current law generally requires electric

utilities and retail electric cooperatives (electric providers) to ensure that, in a given

year, a specified percentage of the electricity that the electric provider sells to

customers or members is renewable energy. These requirements are commonly

referred to as renewable portfolio standards (RPSs), and they include deadlines that

apply to an electric provider's renewable energy percentage (REP). An electric

provider's REP for a particular year is the percentage that results from dividing the

electric provider's renewable resource credits (RRCs) by the total electricity sold by

the electric provider in that year. There are two types of RRCs. The first type is based

on electricity derived from renewable energy. An electric provider creates one RRC

of that type for each megawatt hour of electricity derived from renewable energy that

the electric provider sells to customers or members. The second type is based on

specified energy-related uses that displace the use of nonrenewable energy. Electric

providers, as well as their customers and members, may create the second type of

RRC, pursuant to rules promulgated by the PSC. Electric providers may use RRCs

that they create, or purchase RRCs created by others, to comply with an REP for a

particular year.

Regarding the first type of RRC described above, the bill allows an electric

provider to create two RRCs, instead of one RRC, for each megawatt hour of

electricity that meets specified requirements. First, the electricity must be

generated by either: 1) a facility that generates electricity and thermal energy used

for industrial, commercial, heating, or cooling purposes; or 2) a facility that generates

electricity from direct radiant energy received from the sun. Second, the electric

generating facility must commence operation prior to January 1, 2020. Third, if the

electricity is purchased by an electric utility, the purchase must satisfy certain

requirements. Fourth, the electric generating facility must be located in this state.

Regarding the second type of RRC described above, the bill makes changes to the

solar energy-related uses that are eligible to create RRCs, including defining

integrated light pipe technology that is eligible to create RRCs.

The bill also makes changes to REPs. For the year 2009, current law prohibited

an electric provider from decreasing its REP below its baseline renewable percentage

(BRP), which is defined as the average of the electric provider's REP for 2001, 2002,

and 2003. For the year 2010, current law required an electric provider to increase

its REP at least two percentage points above its BRP. For the years 2011 to 2014,