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. (a) The commission, in consultation with the Independent
System Operator, shall establish resource adequacy requirements for
all load-serving entities.
(b) In establishing resource adequacy requirements, the commission
shall achieve all of the following objectives:
(1) Facilitate development of new generating capacity and
retention of existing generating capacity that is economic and
needed.
(2) Establish new or maintain existing demand response products
and tariffs that facilitate the economic dispatch and use of demand
response that can either meet or reduce an electrical corporation's
resource adequacy requirements, as determined by the commission.
(3) Equitably allocate the cost of generating capacity and demand
response in a manner that prevents the shifting of costs between
customer classes.
(4) Minimize enforcement requirements and costs.
(5) Maximize the ability of community choice aggregators to
determine the generation resources used to serve their customers.
(c) Each load-serving entity shall maintain physical generating
capacity and electrical demand response adequate to meet its load
requirements, including, but not limited to, peak demand and planning
and operating reserves. The generating capacity or electrical demand
response shall be deliverable to locations and at times as may be
necessary to maintain electric service system reliability and local
area reliability.
(d) Each load-serving entity shall, at a minimum, meet the most
recent minimum planning reserve and reliability criteria approved by
the Board of Directors of the Western Systems Coordinating Council or
the Western Electricity Coordinating Council.
(e) The commission shall implement and enforce the resource
adequacy requirements established in accordance with this section in
a nondiscriminatory manner. Each load-serving entity shall be subject
to the same requirements for resource adequacy and the renewables
portfolio standard program that are applicable to electrical
corporations pursuant to this section, or otherwise required by law,
or by order or decision of the commission. The commission shall
exercise its enforcement powers to ensure compliance by all
load-serving entities.
(f) The commission shall require sufficient information,
including, but not limited to, anticipated load, actual load, and
measures undertaken by a load-serving entity to ensure resource
adequacy, to be reported to enable the commission to determine
compliance with the resource adequacy requirements established by the
commission.
(g) An electrical corporation's costs of meeting or reducing
resource adequacy requirements, including, but not limited to, the
costs associated with system reliability and local area reliability,
that are determined to be reasonable by the commission, or are
otherwise recoverable under a procurement plan approved by the
commission pursuant to Section 454.5, shall be fully recoverable from
those customers on whose behalf the costs are incurred, as
determined by the commission, at the time the commitment to incur the
cost is made, on a fully nonbypassable basis, as determined by the
commission. The commission shall exclude any amounts authorized to be
recovered pursuant to Section 366.2 when authorizing the amount of
costs to be recovered from customers of a community choice aggregator
or from customers that purchase electricity through a direct
transaction pursuant to this subdivision.
(h) The commission shall determine and authorize the most
efficient and equitable means for achieving all of the following:
(1) Meeting the objectives of this section.
(2) Ensuring that investment is made in new generating capacity.
(3) Ensuring that existing generating capacity that is economic is
retained.
(4) Ensuring that the cost of generating capacity and demand
response is allocated equitably.
(5) Ensuring that community choice aggregators can determine the
generation resources used to serve their customers.
(6) Ensuring that investments are made in new and existing demand
response resources that are cost effective and help to achieve
electrical grid reliability and the state's goals for reducing
emissions of greenhouse gases.
(i) In making the determination pursuant to subdivision (h), the
commission may consider a centralized resource adequacy mechanism
among other options.
(j) The commission shall ensure appropriate valuation of both
supply and load modifying demand response resources. The commission,
in an existing or new proceeding, shall establish a mechanism to
value load modifying demand response resources, including, but not
limited to, the ability of demand response resources to help meet
distribution needs and transmission system needs and to help reduce a
load-serving entity's resource adequacy obligation pursuant to this
section. In determining this value, the commission shall consider how
these resources further the state's electrical grid reliability and
the state's goals for reducing emissions of greenhouse gases. The
commission, Energy Commission, and Independent System Operator shall
jointly ensure that changes in demand caused by load modifying demand
response are expeditiously and comprehensively reflected in the
Energy Commission's Integrated Energy Policy Report forecast, as well
as in planning proceedings and associated analyses, and shall
encourage reflection of these changes in demand in the operation of
the grid.
(k) For purposes of this section, "load-serving entity" means an
electrical corporation, electric service provider, or community
choice aggregator. "Load-serving entity" does not include any of the
following:
(1) A local publicly owned electric utility.
(2) The State Water Resources Development System commonly known as
the State Water Project.
(3) Customer generation located on the customer's site or
providing electric service through arrangements authorized by Section
218, if the customer generation, or the load it serves, meets one of
the following criteria:
(A) It takes standby service from the electrical corporation on a
commission-approved rate schedule that provides for adequate backup
planning and operating reserves for the standby customer class.
(B) It is not physically interconnected to the electrical
transmission or distribution grid, so that, if the customer
generation fails, backup electricity is not supplied from the
electrical grid.
(C) There is physical assurance that the load served by the
customer generation will be curtailed concurrently and commensurately
with an outage of the customer generation.