Section 701.1 Of Article 1. Generally From California Public Utilities Code >> Division 1. >> Part 1. >> Chapter 4. >> Article 1.
701.1
. (a) (1) The Legislature finds and declares that, in addition
to other ratepayer protection objectives, a principal goal of
electric and natural gas utilities' resource planning and investment
shall be to minimize the cost to society of the reliable energy
services that are provided by natural gas and electricity, and to
improve the environment and to encourage the diversity of energy
sources through improvements in energy efficiency, development of
renewable energy resources, such as wind, solar, biomass, and
geothermal energy, and widespread transportation electrification.
(2) The amendment made to this subdivision by the Clean Energy and
Pollution Reduction Act of 2015 does not expand the authority of the
commission beyond that provided by other law.
(b) The Legislature further finds and declares that, in addition
to any appropriate investments in energy production, electrical and
natural gas utilities should seek to exploit all practicable and
cost-effective conservation and improvements in the efficiency of
energy use and distribution that offer equivalent or better system
reliability, and which are not being exploited by any other entity.
(c) In calculating the cost-effectiveness of energy resources,
including conservation and load management options, the commission
shall include, in addition to other ratepayer protection objectives,
a value for any costs and benefits to the environment, including air
quality. The commission shall ensure that any values it develops
pursuant to this section are consistent with values developed by the
State Energy Resources Conservation and Development Commission
pursuant to Section 25000.1 of the Public Resources Code. However, if
the commission determines that a value developed pursuant to this
subdivision is not consistent with a value developed by the State
Energy Resources Conservation and Development Commission pursuant to
subdivision (c) of Section 25000.1 of the Public Resources Code, the
commission may nonetheless use this value if, in the appropriate
record of its proceedings, it states its reasons for using the value
it has selected.
(d) In determining the emission values associated with the current
operating capacity of existing electric powerplants pursuant to
subdivision (c), the commission shall adhere to the following
protocol in determining values for air quality costs and benefits to
the environment. If the commission finds that an air pollutant that
is subject to regulation is a component of residual emissions from an
electric powerplant and that the owner of that powerplant is either
of the following:
(1) Using a tradable emission allowance, right, or offset for that
pollutant, which (A) has been approved by the air quality district
regulating the powerplant, (B) is consistent with federal and state
law, and (C) has been obtained, authorized, or acquired in a
market-based system.
(2) Paying a tax per measured unit of that pollutant.
The commission shall not assign a value or cost to that residual
pollutant for the current operating capacity of that powerplant
because the alternative protocol for dealing with the pollutant
operates to internalize its cost for the purpose of planning for and
acquiring new generating resources.
(e) (1) The values determined pursuant to subdivision (c) to
represent costs and benefits to the environment shall not be used by
the commission, in and of themselves, to require early
decommissioning or retirement of an electric utility powerplant that
complies with applicable prevailing environmental regulations.
(2) Further, the environmental values determined pursuant to
subdivision (c) shall not be used by the commission in a manner
which, when those values are aggregated, will result in advancing an
electric utility's need for new powerplant capacity by more than 15
months.
(f) This subdivision shall apply whenever a powerplant bid
solicitation is required by the commission for an electric utility
and a portion of the amount of new powerplant capacity, which is the
subject of the bid solicitation, is the result of the commission's
use of environmental values to advance that electric utility's need
for new powerplant capacity in the manner authorized by paragraph (2)
of subdivision (e). The affected electric utility may propose to the
commission any combination of alternatives to that portion of the
new powerplant capacity that is the result of the commission's use of
environmental values as authorized by paragraph (2) of subdivision
(c). The commission shall approve an alternative in place of the new
powerplant capacity if it finds all of the following:
(1) The alternative has been approved by the relevant air quality
district.
(2) The alternative is consistent with federal and state law.
(3) The alternative will result in needed system reliability for
the electric utility at least equivalent to that which would result
from bidding for new powerplant capacity.
(4) The alternative will result in reducing system operating costs
for the electric utility over those which would result from the
process of bidding for new powerplant capacity.
(5) The alternative will result in equivalent or better
environmental improvements at a lower cost than would result from
bidding for new powerplant capacity.
(g) This section does not require an electric utility to alter the
dispatch of its powerplants for environmental purposes.
(h) This section does not preclude an electric utility from
submitting to the commission any combination of alternatives to meet
a commission-identified need for new capacity, if the submission is
otherwise authorized by the commission.
(i) This section does not change or alter any provision of
commission decision 92-04-045, dated April 22, 1992.