BILL NUMBER: SB 1038	CHAPTERED
	BILL TEXT

	CHAPTER  515
	FILED WITH SECRETARY OF STATE  SEPTEMBER 12, 2002
	APPROVED BY GOVERNOR  SEPTEMBER 12, 2002
	PASSED THE SENATE  AUGUST 31, 2002
	PASSED THE ASSEMBLY  AUGUST 30, 2002
	AMENDED IN ASSEMBLY  AUGUST 30, 2002
	AMENDED IN ASSEMBLY  AUGUST 26, 2002
	AMENDED IN ASSEMBLY  AUGUST 15, 2002
	AMENDED IN ASSEMBLY  AUGUST 12, 2002
	AMENDED IN ASSEMBLY  JULY 5, 2001
	AMENDED IN SENATE  APRIL 25, 2001

INTRODUCED BY   Senator Sher
   (Principal coauthor:  Senator Bowen)
   (Principal coauthor:  Assembly Members Jackson and Wayne)
   (Coauthor:  Assembly Member Simitian)

                        FEBRUARY 23, 2001

   An act to amend Sections 25620, 25620.1, 25620.2, 25620.3,
25620.5, 25620.7, 25620.8, 25648, 25648.4, and 25684 of, to add
Section 25620.10 to, and to add and repeal Section 25620.9 of, the
Public Resources Code, to amend Sections 381, 383.5, 394.25, and 445
of, to add Sections 353.2, 383.6, and 2826.5 to, to add and repeal
Section 2826.6 of, and to repeal and amend Section 399.7 of, the
Public Utilities Code, relating to energy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1038, Sher.  Renewable energy.
   (1) Under the Public Utilities Act, the Public Utilities
Commission (commission) requires electrical corporations to identify
a separate rate component to fund cost-effective energy efficiency
and conservation activities, public interest research and
development, and development of renewable resources technology.  This
rate component is a nonbypassable element of local distribution and
collected on the basis of usage.  Existing law requires specified
electrical corporations to collect specific amounts to support each
of these programs.  Existing law also requires the State Energy
Resources Conservation and Development Commission (Energy Commission)
to transfer funds collected for these programs to specified funds.
Existing law requires the Energy Commission to develop, implement,
and administer the Public Interest Research, Development, and
Demonstration Program.  Existing law requires the program to consist
of a balanced portfolio that addresses California's energy and
environmental needs, technology opportunities, and system
reliability.  Existing law, until January 1, 2000, required the
Energy Commission to adopt regulations to ensure the success of
electricity industry restructuring in the transition to a new market
structure and to implement the program.  Existing law authorizes the
Energy Commission to solicit applications for awards, using a sealed
competitive bid, competitive negotiation process, multiparty
agreement, single source, or sole source method.
   This bill would restate the goal of the program. The bill would
require the Energy Commission to use a portfolio approach to achieve
the goal.
   This bill would require the Energy Commission to convene an
advisory board on a regular basis, composed of representatives from
the  commission, consumer organizations, environmental organizations,
and electrical corporations, to make recommendations to guide the
Energy Commission's selection of programs and projects to be funded.

   This bill would require the Energy Commission, not later than 3
months after the enactment of this bill to designate a panel of
independent experts with special expertise in public interest
research, development, and demonstration programs to conduct an
evaluation of the program and to submit a preliminary report to the
Governor and the Legislature not later than 15 months after the
enactment of this bill, and a final report not later than 30 months
after the enactment of this bill.
   Existing law authorizes the Energy Commission to solicit
applications for awards and specifies criteria for funding projects
under the program.
   This bill would require the Energy Commission to adopt regulations
governing the administration of the program, in accordance with
specified procedures, until January 1, 2007.
   The bill would make technical and conforming changes.
   (2) Existing law requires the Energy Commission to prepare and
submit to the Legislature by March 31 of each year, an annual report
on awards of grants made by the commission for public interest energy
research and development projects.
   This bill would require the report to set forth the actual costs
and results of programs or projects funded by the Energy Commission,
compared to their expected costs and benefits.
   (3) Existing law requires the commission to order electrical
corporations to spend a portion of the separate rate component
discussed above, to fund cost-effective energy efficiency and
conservation activities, public interest research and development,
and development of renewable resources technology.
   This bill would require the funding of in-state operation and
development of existing and new and emerging renewable resources
technologies to be made available pursuant to a specified provision
of existing law.  The bill would make additional technical,
nonsubstantive changes.
   The bill would require the Energy Commission to award electrical
corporations up to 10% of the funds transferred to the Public
Interest Research, Development, and Demonstration Fund, for public
interest research, development and demonstration projects for
transmission and distribution functions, in lieu of the commission
ordering electrical corporations to collect and spend funds for
investments in public interest research, development, and
demonstration projects for transmission and distribution functions.
   (4) Existing law defines "in-state renewable electricity
generation technology" for the purposes of these provisions.
Existing law defines, for the purposes of these provisions, "report"
as the Policy Report on AB 1890 Renewables Funding (March 1997,
Publication Number P500-97-002) submitted to the Legislature by the
Energy Commission.
   This bill would modify the definition of "in-state renewable
electricity generation technology" to no longer only include
facilities that were placed in operation after September 26, 1996.
The bill would include within the definition of "in-state renewable
electricity generation technology" a facility using fuel cells using
renewable fuels, ocean thermal, tidal current, and wave energy
generation technologies.  The bill would exclude from the definition
waste tire technologies.  The bill would provide that on and after
January 1, 2002, "report," for the purposes of these provisions,
means the report entitled "Investing in Renewable Electricity
Generation in California" (June 2001, Publication Number P500-00-022)
submitted to the Governor and the Legislature by the Energy
Commission.
   (5) Existing law requires 45% of the money collected for in-state
operation and development of existing and new and emerging renewable
resources technologies, up to $243,000,000, to be used for programs
that are designed to improve the competitiveness of existing in-state
renewable electricity generation technology facilities.  Existing
law requires 30% of the money collected for in-state operation and
development of existing and new and emerging renewable resources
technologies, up to $162,000,000, to be used for programs that are
designed to foster the development of new in-state renewable
electricity generation technology facilities.  Existing law requires
10% of the money collected for in-state operation and development of
existing and new and emerging renewable resources technologies, up to
$54,000,000, to be used for a multiyear, consumer-based program to
foster the development of emerging renewable technologies in
distributed generation applications.  Existing law requires 15% of
the money collected for in-state operation and development of
existing and new and emerging renewable resources technologies, up to
$81,000,000, to be used for programs designed to provide customer
credits for purchases of renewable energy produced by certified
energy providers, to disseminate information regarding renewable
energy technologies, to promote purchases of renewable energy, to
help develop a consumer market for renewable energy, and to help
develop a consumer market for renewable energy technologies.
   This bill would instead require 20% of the funds collected to
accomplish the funding of in-state operation and development of
existing and new and emerging renewable resources technologies, to be
spent by the San Diego Gas and Electric Company, the Southern
California Edison Company, and the Pacific Gas and Electric Company,
to be used for programs that are designed to improve the
competitiveness of specified eligible existing in-state renewable
electricity generation technology facilities.  The bill would instead
require 51.5% of the funds collected to accomplish the funding of
in-state operation and development of existing and new and emerging
renewable resources technologies, to be spent by the San Diego Gas
and Electric Company, the Southern California Edison Company, and the
Pacific Gas and Electric Company, to be used for programs that are
designed to foster the development of new in-state renewable
electricity generation technology facilities, including supplemental
energy payments under the California Renewables Portfolio Standard
Program, and would authorize the Energy Commission, in awarding
funding, to provide preference to projects that provide tangible
demonstrable benefits to communities with a plurality of minority or
low-income populations.  The bill would instead require 17.5% of the
funds collected to accomplish the funding of in-state operation and
development of existing and new and emerging renewable resources
technologies, to be spent by the San Diego Gas and Electric Company,
the Southern California Edison Company, and the Pacific Gas and
Electric Company, to be used for a multiyear, consumer-based program
to foster the development of emerging renewable technologies in
distributed generation applications and would authorize the Energy
Commission, in awarding funding, to provide preference to systems
that provide tangible demonstrable benefits to communities with a
plurality of minority or low-income populations.  The bill would
instead require 10% of the funds collected to accomplish the funding
of in-state operation and development of existing and new and
emerging renewable resources technologies, to be spent by the San
Diego Gas and Electric Company, the Southern California Edison
Company, and the Pacific Gas and Electric Company, to be used to
provide customer credits to customers that entered into direct
transactions on or before September 20, 2001, for purchases of
electricity produced by in-state renewable electricity generation
technology facilities.  The bill would require 1% of the funds
collected to accomplish the funding of in-state operation and
development of existing and new and emerging renewable resources
technologies, to be spent by the San Diego Gas and Electric Company
and the Pacific Gas and Electric Company, to be used to promote
renewable energy and to disseminate information on renewable energy
technologies, and to help develop a consumer market for renewable
energy and for small-scale emerging renewable energy technologies.
   This bill would require the Energy Commission, in consultation
with the commission, electrical corporations, publicly owned electric
utilities, and the Independent System Operator, to prepare and
submit to the Governor and the Legislature by December 1, 2003, a
comprehensive renewable sources of electricity development plan that
describes the renewable resources available in California, the costs
of developing and connecting these resources into the transmission
and distribution system, and recommendations for a plan for
development to achieve the target of increasing the amount of
electricity generated from renewable sources per year, so that it
equals 17% of the total electricity generated for consumption in
California.  The bill would further require the Energy Commission to
participate in commission proceedings that relate to or affect
efforts to stimulate the development of electricity generated from
renewable sources.
   These changes would only become operative if SB 1078 or SB 1524 is
enacted and becomes effective on or before January 1, 2003, and add
the California Renewables Portfolio Standard Program.
   (6) Existing law provides for the Renewable Resource Trust Fund in
the State Treasury and establishes certain accounts in the Renewable
Resource Trust Fund, including the Customer-Side Renewable Resource
Purchases Account.  Existing law provides that the money in the fund
and the accounts are continuously appropriated to the Energy
Commission.  Existing law provides that unallocated funds in any
account shall remain in the respective account until December 31,
2001.
   This bill would instead establish the Customer-Credit Renewable
Resources Account and the Renewable Resources Consumer Education
Account.  The bill would require that unallocated funds in any
account remain in the respective account until the Energy Commission
submits a specified report.
   This bill would require the commission, by December 1, 2003, to
prepare and submit to the Legislature, a comprehensive transmission
plan for renewable electricity generation facilities, to provide for
the rational, orderly, cost-effective expansion of transmission
facilities that may be necessary to facilitate the development of
renewable electricity generation facilities identified in the
renewable electricity generation resource plan.
   (7) Under existing law, the commission is vested with regulatory
authority over public utilities and is required to establish
requirements for the administration of power purchase contracts
between electrical corporations and private energy producers.
   This bill would authorize the City of Davis to receive a bill
credit, as defined, to a benefiting account, as defined, for
electricity supplied to the electrical grid by a photovoltaic
facility located within and partially owned by the city (PVUSA).  The
bill would require the commission to adopt a rate tariff for the
benefiting account.  The bill would also, until January 1, 2008,
authorize California State University, Fresno to receive a bill
credit, as defined, to a benefiting account, as defined, for
electricity supplied to the electrical grid by a biomass facility
located in Reedley and owned by California State University, Fresno
(the Dinuba Facility), and the bill would require the commission to
adopt a rate tariff for the benefiting account.  Because a violation
of the Public Utilities Act, a filed tariff, or an order of the
commission is a crime under existing law, the bill would impose a
state-mandated local program by creating a new crime.  The bill would
declare that, due to the special circumstances applicable only to
the PVUSA and the City of Davis, and to the Dinuba Facility and
California State University, Fresno, a general statute cannot be made
applicable within the meaning of Section 16 of Article IV of the
California Constitution, and the enactment of a special statute is
therefore necessary.
   (8) The Public Utilities Act authorizes the commission to
establish rates and fees for public utilities subject to its
jurisdiction.
   This bill would authorize the commission to consider energy
efficiency and emissions performance to encourage early compliance
with the air quality standards established by the State Air Resources
Board for ultra-clean and low-emission distributed generation, as
defined, in establishing those rates and fees.
   (9) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 25620 of the Public Resources Code is amended
to read:
   25620.  The Legislature hereby finds and declares all of the
following:
   (a) It is in the best interests of the people of this state that
the quality of life of its citizens be improved by providing
environmentally sound, safe, reliable, and affordable energy services
and products.
   (b) To improve the quality of life of this state's citizens, it is
proper and appropriate for the state to undertake public interest
energy research, development, and demonstration projects that are not
adequately provided for by competitive and regulated energy markets.

   (c) Public interest energy research, demonstration, and
development projects should advance energy science or technologies of
value to California citizens and should be consistent with the
policies of Section 399.7 of the Public Utilities Code.
   (d) The commission should use its adopted "Five-Year Investment
Plan, 2002 Through 2006 for the Public Interest Energy Research
(PIER) Program (Volume 1)" (P600-01-004a, March 1, 2001) to ensure
compliance with the policies and provisions of Section 399.7 of the
Public Utilities Code in the administration of public interest energy
research, demonstration, and development programs.
  SEC. 2.  Section 25620.1 of the Public Resources Code is amended to
read:
   25620.1.  (a) The commission shall develop, implement, and
administer the Public Interest Research, Development, and
Demonstration Program that is hereby created.  The program shall
include a full range of research, development, and demonstration
activities that, as determined by the commission, are not adequately
provided for by competitive and regulated markets.  The commission
shall administer the program consistent with the policies of Section
399.7 of the Public Utilities Code.
   (b) The goal of the program is to provide public value for the
benefit of California and its citizens through the development of
technologies which will improve environmental quality, enhance system
reliability, increase efficiency of energy-using technologies, lower
system costs, or provide other tangible benefits.
   (c) To achieve the goal established in subdivision (b), the
commission shall adopt a portfolio approach for the program that does
all of the following:
   (1) Effectively balances the risks, benefits, and time horizons
for various activities and investments that will provide tangible
benefits for California electricity ratepayers.
   (2) Emphasizes innovative energy supply and end use technologies,
focusing on their reliability, affordability, and environmental
attributes.
   (3) Includes projects that have the potential to enhance
transmission and distribution capabilities.
   (4) Includes projects that have the potential to enhance the
reliability, peaking power, and storage capabilities of renewable
energy.
   (5) Demonstrates a balance of benefits to all sectors that
contribute to the funding under Section 399.8 of the Public Utilities
Code.
   (6) Addresses key technical and scientific barriers.
   (7) Demonstrates a balance between short-term, mid-term, and
long-term potential.
   (8) Ensures that prior, current, and future research not be
unnecessarily duplicated.
   (9) Provides for the future market utilization of projects funded
through the program.
   (d) The commission shall review the portfolio adopted pursuant to
subdivision (c) in accordance with the "Five-Year Investment Plan,
2002 Through 2006 for the Public Interest Energy Research (PIER)
Program (Volume 1)" (P600-01-004a, March 1, 2001).
   (e) The term "award," as used in this chapter, may include, but is
not limited to, contracts, grants, interagency agreements, loans,
and other financial agreements designed to fund public interest
research, demonstration, and development projects or programs.
  SEC. 3.  Section 25620.2 of the Public Resources Code is amended to
read:
   25620.2.  (a) To ensure the efficient implementation and
administration of the Public Interest Research, Development, and
Demonstration Program, the commission shall do both of the following:

   (1) Develop procedures for the solicitation of award applications
for project or program funding, and to ensure efficient program
management.
   (2) Evaluate and select programs and projects, based on merit,
that will be funded under the program.
   (b) The commission shall adopt regulations to implement the
program, in accordance with the following procedures:
   (1) Prepare a preliminary text of the proposed regulation and
provide a copy of the preliminary text to any person requesting a
copy.
   (2) Provide public notice of the proposed regulation to any person
who has requested notice of the regulations prepared by the
commission.  The notice shall contain all of the following:
   (A) A clear overview explaining the proposed regulation.
   (B) Instructions on how to obtain a copy of the proposed
regulations.
   (C) A statement that if a public hearing is not scheduled for the
purpose of reviewing a proposed regulation, any person may request,
not later than 15 days prior to the close of the written comment
period, a public hearing conducted in accordance with commission
procedures.
   (3) Accept written public comments for 30 calendar days after
providing the notice required in paragraph (2).
   (4) Certify that all written comments were read and considered by
the commission.
   (5) Place all written comments in a record that includes copies of
any written factual support used in developing the proposed
regulation, including written reports and copies of any transcripts
or minutes in connection with any public hearings on the adoption of
the regulation.  The record shall be open to public inspection and
available to the courts.
   (6) Provide public notice of any substantial revision of the
proposed regulation at least 15 days prior to the expiration of the
deadline for public comments and comment period using the procedures
provided in paragraph (2).
   (7) Conduct public hearings, if a hearing is requested by an
interested party, that shall be conducted in accordance with
commission procedures.
   (8) Adopt any proposed regulation at a regularly scheduled and
noticed meeting of the commission.  The regulation shall become
effective immediately unless otherwise provided by the commission.
   (9) Publish any adopted regulation in a manner that makes copies
of the regulation easily available to the public.  Any adopted
regulation shall also be made available on the Internet.  The
commission shall transmit a copy of an adopted regulation to the
Office of Administrative Law for publication, or, if the commission
determines that printing the regulation is impractical, an
appropriate reference as to where a copy of the regulation may be
obtained.
   (10) Notwithstanding any other provision of law, this subdivision
provides an interim exception from the requirements of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code for regulations required to implement Sections
25620.1 and 25620.2 that are adopted under the procedures specified
in this subdivision.
   (11) This subdivision shall become inoperative on January 1, 2007,
unless a later enacted statute deletes or extends that date.
However, after January 1, 2007, the commission is not required to
repeat any procedural step in adopting a regulation that has been
completed before January 1, 2007, using the procedures specified in
this subdivision.
  SEC. 4.  Section 25620.3 of the Public Resources Code is amended to
read:
   25620.3.  (a) The commission may, consistent with the requirements
of this chapter, provide awards to any individual or entity for
planning, implementation, and administration of projects or programs
selected pursuant to Section 25620.5.
   (b) The commission may provide an award to a project or program
that includes a group of related projects, or to a party who
aggregates projects that directly benefit from the award.
   (c) The commission may establish multiparty agreements.  In a
multiparty agreement, the commission may be a signatory to a common
agreement among two or more parties.  These agreements include, but
are not limited to, cofunding, leveraged research, collaborations,
and membership arrangements.  If the commission enters into these
agreements, it shall be a party to these agreements and may share in
the roles, responsibilities, risks, investments, and results.
   (d) The commission may issue awards that include the ability to
make advance payments to prime contractors, to enable them to make
advance payments to a subcontractor that is a federal agency,
national laboratory, or state entity, on the condition that the
subcontract is binding and enforceable and includes specific
performance milestones.
   (e) The commission may issue awards that include the ability to
assign tasks on a work authorization basis.
   (f) Prior to making any award pursuant to this chapter for a
research, development, or demonstration program or project, the
commission shall identify the expected costs and any qualitative or
quantitative benefits of the proposed program or project.
  SEC. 5.  Section 25620.5 of the Public Resources Code is amended to
read:
   25620.5.  (a) The commission may solicit applications for awards,
using a sealed competitive bid, competitive negotiation process,
commission-issued intradepartmental master agreement, the methods for
selection of professional services firms set forth in Chapter 10
(commencing with Section 4525) of Division 5 of Title 1 of the
Government Code, interagency agreement, single source, or sole source
method.  When scoring teams are convened to review and score
proposals, the scoring teams may include persons not employed by the
commission, as long as employees of the state constitute no less than
50 percent of the membership of the scoring team. A person
participating on a scoring team may not have any conflict of interest
with respect to the proposal before the scoring team.
   (b) A sealed bid method may be used when goods and services to be
acquired can be described with sufficient specificity so that bids
can be evaluated against specifications and criteria set forth in the
solicitation for bids.
   (c) The commission may use a competitive negotiation process in
any of the following circumstances:
   (1) Whenever the desired award is not for a fixed price.
   (2) Whenever project specifications cannot be drafted in
sufficient detail so as to be applicable to a sealed competitive bid.

   (3) Whenever there is a need to compare the different price,
quality, and structural factors of the bids submitted.
   (4) Whenever there is a need to afford bidders an opportunity to
revise their proposals.
   (5) Whenever oral or written discussions with bidders concerning
the technical and price aspects of their proposals will provide
better results to the state.
   (6) Whenever the price of the award is not the determining factor.

   (d) The commission may establish interagency agreements.
   (e) The commission may provide awards on a single source basis by
choosing from among two or more parties or by soliciting multiple
applications from parties capable of supplying or providing similar
goods or services.  The cost to the state may be reasonable and the
commission shall only enter into a single source agreement with a
particular entity if the commission determines that it is in the
state's best interests.
   (f) The commission, in accordance with subdivision (g) and in
consultation with the Department of General Services, may provide
awards on a sole source basis when the cost to the state is
reasonable and the commission makes any of the following
determinations:
   (1) The proposal was unsolicited and meets the evaluation criteria
of this chapter.
   (2) The expertise, service, or product is unique.
   (3) A competitive solicitation would frustrate obtaining necessary
information, goods, or services in a timely manner.
   (4) The award funds the next phase of a multiphased proposal and
the existing agreement is being satisfactorily performed.
   (5) When it is determined by the commission to be in the best
interests of the state.
   (g) The commission may not use a sole source basis for an award
pursuant to subdivision (f), unless both of the following conditions
are met:
   (1) The commission, at least 30 days prior to taking an action
pursuant to subdivision (f), notifies the Joint Legislative Budget
Committee, in writing, of its intent to take the proposed action.
   (2) The Joint Legislative Budget Committee either approves or does
not disapprove the proposed action within 30 days from the date of
notification required by paragraph (1).
   (h) The commission shall submit semiannual reports to the
Legislative Analyst and to the appropriate fiscal and policy
committees of the Legislature that review bills relating to energy
and public utilities.  The reports shall contain an evaluation of the
progress and status of the implementation of this section.  In
addition, the reports shall identify each instance in which an
exemption authorized by subdivision (b) of Section 25620.3 was
utilized.
   (i) The provisions of this section are severable.  If any
provision of this section or its application is held to be invalid,
that invalidity shall not affect other provisions or applications
that can be given effect without the invalid provision or
application.
  SEC. 6.  Section 25620.7 of the Public Resources Code is amended to
read:
   25620.7.  (a) The commission may contract for, or through
interagency agreement obtain, technical, scientific, or
administrative services or expertise from one or more entities, to
support the program.  Funding for this purpose shall be made from
money in the Public Interest Research, Development, and Demonstration
Fund.
   (b) The commission may select the services or expertise described
in subdivision (a), pursuant to Section 25620.5.  In the event that
contracts or interagency agreements have been made to multiple
entities and their subcontractors for similar purposes, the
commission may select from among those entities the particular
expertise needed for a specified type of work.  Selection of the
particular expertise may be based solely on a review of
qualifications, including the specific expertise required,
availability of the expertise, or access to a resource of special
relevance to the work, including, but not limited to, a database,
model, technical facility, or a collaborative or institutional
affiliation that will expedite the quality and performance of the
work.
  SEC. 7.  Section 25620.8 of the Public Resources Code is amended to
read:
   25620.8.  The commission shall prepare and submit to the
Legislature an annual report, not later than March 31 of each year,
on awards made pursuant to this chapter.  The report shall include
information on the names of award recipients, the amount of awards,
and the types of projects funded, an evaluation of the success of any
funded projects, and any recommendations for improvements in the
program.  The report shall set forth the actual costs of programs or
projects funded by the commission, the results achieved, and how the
actual costs and results compare to the expected costs and benefits.
The commission shall establish procedures for protecting
confidential or proprietary information and shall consult with all
interested parties in the preparation of the annual report.
  SEC. 8.  Section 25620.9 is added to the Public Resources Code, to
read:
   25620.9.  (a) Not later than three months after the enactment of
this section, the commission shall designate a panel of independent
experts with special expertise in public interest research,
development, and demonstration programs.  In order to ensure
continuity in the evaluation of the public interest energy research,
demonstration, and development projects, the commission, when
practicable, shall select experts that served on prior independent
review panels.  The panel shall conduct a comprehensive evaluation of
the program established pursuant to this chapter.  The evaluation
shall include a review of the public value of programs established
pursuant to this chapter, including, but not limited to, the monetary
and nonmonetary benefits to public health and the environment, and
the benefit of providing funds for technology development that would
otherwise not be funded.
   (b) Not later than 15 months after the enactment of this section,
the panel designated pursuant to subdivision (a) shall submit a
preliminary report to the Governor and to the Legislature on its
findings and recommendations on the implementation of the program
established pursuant to this chapter.  The panel, not later than 30
months after the enactment of this section, shall submit a final
report to the Governor and to the Legislature, including any
additional findings and recommendations regarding implementation of
the program.
   (c) This section shall remain in effect only until July 1, 2006,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2007, deletes or extends that date.
  SEC. 9.  Section 25620.10 is added to the Public Resources Code, to
read:
   25620.10.  The commission shall regularly convene an advisory
board that shall make recommendations to guide the commission's
selection of programs and projects to be funded under this chapter.
The advisory board shall be made up of representatives from the
Public Utilities Commission, consumer organizations, environmental
organizations, and electrical corporations subject to the funding
requirements of Section 381 of the Public Utilities Code.
  SEC. 10.  Section 25648 of the Public Resources Code is amended to
read:
   25648.  (a) The commission shall make loans, and research contract
and grant awards, for purposes of making existing energy
technologies more efficient, cost-effective, and environmentally
acceptable, and to research, develop, demonstrate, and commercialize
new, cost-effective alternative sources of energy, technologies which
displace conventional fuels, and energy efficiency and conservation
devices.
   (b) In selecting projects, the commission shall consider, but is
not limited to, the list of opportunity technologies developed in the
most current energy development report produced pursuant to Section
25604, or a subset of those opportunity technologies.
   (c) The commission shall select the projects through competitive
bid procedures, including, but not limited to, invitations for bids,
requests for proposals, program opportunity notices, and multistep
bids using preapplications, by demonstrating the need for sole source
awards, or by evaluating small business grant and loan applications.

   (d) The criteria for the selection of projects shall include, but
not be limited to, all of the following factors:
   (1) The potential of the project to reduce energy consumption or
provide an alternative source of energy.
   (2) The financial, technical, and management strength of the
project applicant.
   (3) The near-term and long-term feasibility of the project.
   (4) The ability of the project technology to be used throughout
California.
   (5) The potential of the project for promoting diverse, secure,
and resilient energy supplies.
   (6) The potential of the project to displace petroleum.
   (7) The potential of the project for reducing adverse
environmental impacts.
   (8) The potential of the project to stimulate economic
development, employment, and tax revenues for California.
   (9) The potential of the project for reducing short-term and
long-term energy costs for the ratepayers of California.
   (10) The need of the project for state financing.
   (11) The ability of the project to attract private and other
public investment.
   (12) The investment payback period for the project.
   (13) The probability of success in overcoming the risk of the
project.
   (14) The potential for stimulating small business competition in
the field of alternative energy development.
   (15) The ability of the project to generate needed community
economic development for participating local jurisdictions.
   (16) The extent of the applicant's financial participation.
   (17) The degree of innovation of the project.
   (18) Whether the project is, in general, consistent with the
energy policies of California regarding the energy technologies and
priorities as set forth in the biennial report of the commission.
   (19) The cost of the project.
   (e) The commission shall apply the criteria specified in
subdivision (d) consistently within each competitive bid
solicitation.
   (f) Awards provided pursuant to this chapter are not subject to
Article 4 (commencing with Section 10335) of Chapter 2 of Part 2 of
Division 2 of the Public Contract Code.
  SEC. 11.  Section 25648.4 of the Public Resources Code is amended
to read:
   25648.4.  The commission shall apply this chapter to research,
development, demonstration, and commercialization projects that are
not subject to Chapter 6 (commencing with Section 3800) of Division
3, Chapter 7.1 (commencing with Section 25620), and Chapter 7.8
(commencing with Section 25680).
  SEC. 12.  Section 25684 of the Public Resources Code is amended to
read:
   25684.  (a) The commission shall make loans and repayable research
contracts, and may provide primary research contracts funding from
the account for the purposes of making energy technologies more
efficient and cost-effective, and to develop new cost-effective
alternative sources of energy.  The commission shall select
recipients through a procedure using an invitation for bids or a
request for proposals.  Each invitation for bids and request for
proposals shall specify the criteria to be used in selecting projects
for financing.  The criteria shall include, but not be limited to,
all of the following factors:
   (1) The potential of the project to reduce consumption and
increase the efficiency of nonrenewable energy sources and systems.
   (2) The financial, technical, and management strength of the
project applicant.
   (3) The near-term and long-term feasibility of the project.
   (4) The ability of the project technology to be used on other
applications throughout California.
   (5) The potential of the project for promoting diverse, secure,
and resilient energy supplies.
   (6) The potential of the project for reducing adverse
environmental impacts.
   (7) The potential of the project to stimulate economic
development, employment, and tax revenues for California.
   (8) The potential of the project for reducing short-term and
long-term energy costs for the ratepayers of California.
   (9) The need of the project for state financing.
   (10) The ability of the project to garner private investment.
   (11) The investment payback period for the project.
   (12) The probability of success in overcoming the risk of the
project.
   (13) The potential for stimulating small business competition in
the field of alternative energy development.
   (14) The ability of the project to generate needed community
economic development for participating local jurisdictions.
   (15) The extent of the applicant's financial participation.
   (16) The degree of innovation of the project.
   (17) Whether the project is in general agreement with the energy
policies of California regarding the energy technologies and
priorities as set forth in the biennial report of the commission.
   (b) Awards provided pursuant to this chapter are not subject to
Article 4 (commencing with Section 10335) of Chapter 2 of Part 2 of
Division 2 of the Public Contract Code.
  SEC. 13.  Section 353.2 is added to the Public Utilities Code, to
read:
   353.2.  (a) As used in this article, "ultra-clean and low-emission
distributed generation" means any electric generation technology
that meets all of the following criteria:
   (1) Commences initial operation between January 1, 2003, and
December 31, 2005.
   (2) Produces zero emissions during its operation or produces
emissions during its operation that are equal to or less than the
2007 State Air Resources Board emission limits for distributed
generation, except that technologies operating by combustion must
operate in a combined heat and power application with a 60-percent
system efficiency on a higher heating value.
   (b) In establishing rates and fees, the commission may consider
energy efficiency and emissions performance to encourage early
compliance with air quality standards established by the State Air
Resources Board for ultra-clean and low-emission distributed
generation.
  SEC. 14.  Section 381 of the Public Utilities Code is amended to
read:
   381.  (a) To ensure that the funding for the programs described in
subdivision (b) and Section 382 are not commingled with other
revenues, the commission shall require each electrical corporation to
identify a separate rate component to collect the revenues used to
fund these programs.  The rate component shall be a nonbypassable
element of the local distribution service and collected on the basis
of usage.  This rate component shall fall within the rate levels
identified in subdivision (a) of Section 368.
   (b) The commission shall allocate funds collected pursuant to
subdivision (a), and any interest earned on collected funds, to
programs that enhance system reliability and provide in-state
benefits as follows:
   (1) Cost-effective energy efficiency and conservation activities.

   (2) Public interest research and development not adequately
provided by competitive and regulated markets.
   (3) In-state operation and development of existing and new and
emerging renewable resource technologies defined as electricity
produced from other than a conventional power source within the
meaning of Section 2805, provided that a power source utilizing more
than 25 percent fossil fuel may not be included.
   (c) The Public Utilities Commission shall order the respective
electrical corporations to collect and spend these funds, as follows:

   (1) Cost-effective energy efficiency and conservation activities
shall be funded at not less than the following levels commencing
January 1, 1998, through December 31, 2001:  for San Diego Gas and
Electric Company a level of thirty-two million dollars ($32,000,000)
per year; for Southern California Edison Company a level of ninety
million dollars ($90,000,000) for each of the years l998, 1999, and
2000; fifty million dollars ($50,000,000) for the year 2001; and for
Pacific Gas and Electric Company
       a level of one hundred six million dollars ($106,000,000) per
year.
   (2) Research, development, and demonstration programs to advance
science or technology that are not adequately provided by competitive
and regulated markets shall be funded pursuant to Section 399.8.
   (3) In-state operation and development of existing and new and
emerging renewable resource technologies shall be funded at not less
than the following levels on a statewide basis:  one hundred nine
million five hundred thousand dollars ($109,500,000) per year for
each of the years 1998, 1999, and 2000, and one hundred thirty-six
million five hundred thousand dollars ($136,500,000) for the year
2001.  To accomplish these funding levels over the period described
herein the San Diego Gas and Electric Company shall spend twelve
million dollars ($12,000,000) per year, the Southern California
Edison Company shall expend no less than forty-nine million five
hundred thousand dollars ($49,500,000) for the years 1998, 1999, and
2000, and no less than seventy-six million five hundred thousand
dollars ($76,500,000) for the year 2001, and the Pacific Gas and
Electric Company shall expend no less than forty-eight million
dollars ($48,000,000) per year through the year 2001.  Additional
funding not to exceed seventy-five million dollars ($75,000,000)
shall be allocated from moneys collected pursuant to subdivision (d)
in order to provide a level of funding totaling five hundred forty
million dollars ($540,000,000).
   (4) Up to fifty million dollars ($50,000,000) of the amount
collected pursuant to subdivision (d) may be used to resolve
outstanding issues related to implementation of subdivision (a) of
Section 374.  Moneys remaining after fully funding the provisions of
this paragraph shall be reallocated for purposes of paragraph (3).
   (5) Up to ninety million dollars ($90,000,000) of the amount
collected pursuant to subdivision (d) may be used to resolve
outstanding issues related to contractual arrangements in the
Southern California Edison service territory stemming from the
Biennial Resource Planning Update auction.  Moneys remaining after
fully funding the provisions of this paragraph shall be reallocated
for purposes of paragraph (3).
   (6) The funding of in-state operation and development of existing
and new and emerging renewable resources technologies shall be made
available pursuant to Section 399.8.
   (d) Notwithstanding any other provisions of this chapter, the
commission may allow entities subject to its jurisdiction to extend
the period for competition transition charge collection up to three
months beyond its otherwise applicable termination of December 31,
2001, so as to ensure that the aggregate portion of the research,
environmental, and low-income funds allocated to renewable resources
shall equal five hundred forty million dollars ($540,000,000) and
that the costs specified in paragraphs (3), (4), and (5) of
subdivision (c) are collected.
   (e) Each electrical corporation shall allow customers to make
voluntary contributions through their utility bill payments as either
a fixed amount or a variable amount to support programs established
pursuant to paragraph (3) of subdivision (b).  Funds collected by
electrical corporations for these purposes shall be forwarded in a
timely manner to the appropriate fund as specified by the commission.

   (f) For purposes of this article, "emerging renewable technology"
means a new renewable technology, including, but not limited to, fuel
cells using renewable fuels and photovoltaic technology, that is
determined by the State Energy Resources Conservation and Development
Commission to be emerging from research and development and that has
significant commercial potential.
   (g) The commission's authority to collect funds pursuant to this
section, for purposes of paragraph (3) of subdivision (b), shall
become inoperative on March 31, 2002.
  SEC. 15.  Section 383.5 of the Public Utilities Code is amended to
read:
   383.5.  (a) It is the intent of the Legislature in establishing
this program, to increase the amount of renewable electricity
generated per year, so that it equals at least 17 percent of the
total electricity generated for consumption in California.
   (b) As used in this section, the following terms have the
following meaning:
   (1) "In-state renewable electricity generation technology" means a
facility that meets all of the following criteria:
   (A) The facility uses biomass, solar thermal, photovoltaic, wind,
geothermal, fuel cells using renewable fuels, small hydroelectric
generation of 30 megawatts or less, digester gas, municipal solid
waste conversion, landfill gas, ocean wave, ocean thermal, or tidal
current, and any additions or enhancements to the facility using that
technology.
   (B) The facility is located in the state or near the border of the
state with the first point of connection to the Western Electricity
Coordinating Council (WECC) transmission system located within this
state.
   (C) For the purposes of this subdivision, "solid waste conversion"
means a technology that uses a noncombustion thermal process to
convert solid waste to a clean burning fuel for the purpose of
generating electricity, and that meets all of the following criteria:

   (i) The technology does not use air or oxygen in the conversion
process, except ambient air to maintain temperature control.
   (ii) The technology produces no discharges of air contaminants or
emissions, including greenhouse gases as defined in Section 42801 of
the Health and Safety Code.
   (iii) The technology produces no discharges to surface or
groundwaters of the state.
   (iv) The technology produces no hazardous wastes.
   (v) To the maximum extent feasible, the technology removes all
recyclable materials and marketable green waste compostable materials
from the solid waste stream prior to the conversion process and the
owner or operator of the facility certifies that the those materials
will be recycled or composted.
   (vi) The facility at which the technology is used is in compliance
with all applicable laws, regulations, and ordinances.
   (vii) The technology meets any other conditions established by the
State Energy Resources Conservation and Development Commission.
   (viii) The facility certifies that any local agency sending solid
waste to the facility is in compliance with Division 30 (commencing
with Section 40000) of the Public Resources Code, has reduced,
recycled, or composted solid waste to the maximum extent feasible,
and shall have been found by the California Integrated Waste
Management Board to have diverted at least 30 percent of all solid
waste through source reduction, recycling and composting.
   (2) "Report" means the report entitled "Investing in Renewable
Electricity Generation in California" (June 2001, Publication Number
P500-00-022) submitted to the Governor and the Legislature by the
State Energy Resources Conservation and Development Commission.
   (3) "Energy Commission" means the State Energy Resources
Conservation and Development Commission.
   (c) (1) Twenty percent of the funds collected pursuant to
paragraph (6) of subdivision (c) of Section 381 shall be used for
programs that are designed to improve the competitiveness of existing
in-state renewable electricity generation technology facilities, and
to secure for the state the environmental, economic, and reliability
benefits that continued operation of those facilities will provide.
Eligibility for incentives under this subdivision shall be limited
to those technologies found eligible for funds by the Energy
Commission pursuant to paragraphs (5), (6), and (8) of subdivision
(c) of Section 399.6.
   (2) Any funds used to support in-state renewable electricity
generation technology facilities pursuant to this subdivision shall
be expended in accordance with the provisions of the report, subject
to all of the following requirements:
   (A) Of the funding for existing renewable electricity generation
technology facilities available pursuant to this subdivision, 75
percent shall be used to fund first tier technologies, including
biomass and solar electric technologies and 25 percent shall be used
to fund second tier wind technologies.
   (B) The Energy Commission shall reexamine the tier structure as
proposed in the report and adjust the structure to reflect market and
contractual conditions. The Energy Commission shall also consider
inflation when adjusting the structure.
   (C) The Energy Commission shall establish a cents per kilowatthour
production incentive, not to exceed the payment caps per
kilowatthour established in the report, as those payment caps are
revised in guidelines adopted by the commission, representing the
difference between target prices and the market clearing price for
electricity, if sufficient funds are available.  If there are
insufficient funds in any payment period to pay either the difference
between the target and market clearing price or the payment caps,
production incentives shall be based on the amount determined by
dividing available funds by eligible generation.  The market clearing
price for electricity shall be determined by the Energy Commission
based on the energy prices paid to nonutility power generators as
authorized by the commission, or on otherwise available measures of
market price.  For the first tier biomass technologies, the Energy
Commission shall establish a time-differentiated incentive structure
that encourages plants to run the maximum feasible amount of time and
that provides a higher incentive when the plants are receiving the
lowest price.  The Energy Commission may establish a different
incentive rate within the same technology tier to account for
discounted contracts.
   (D) Facilities that are eligible to receive funding pursuant to
this subdivision shall be registered in accordance with criteria
developed by the Energy Commission and those facilities may not
receive payments for any electricity produced that has any of the
following characteristics:
   (i) Is sold at monthly average rates equal to or greater than the
applicable target price, as determined by the Energy Commission.
   (ii)  Is that portion of electricity generation attributable to
the use of qualified agricultural biomass fuel, for a facility that
is receiving fuel-based incentives through the Agricultural
Biomass-to-Energy Incentive Grant Program established pursuant to
Part 3 (commencing with Section 1101) of Division 1 of the Food and
Agricultural Code.  Notwithstanding subdivision (f) of Section 1104
of the Food and Agricultural Code, facilities that receive funding
from the Agricultural Biomass-to-Energy Incentive Grant Program are
eligible to receive funding pursuant to this subdivision.
   (iii) Is used onsite or is sold to customers in a manner that
excludes competitive transition charge payments, or is otherwise
excluded from competitive transition charge payments.
   (d) (1) Fifty-one and one-half percent of the funds collected
pursuant to paragraph (6) of subdivision (c) of Section 381, shall be
used for programs designed to foster the development of new in-state
renewable electricity generation technology facilities, and to
secure for the state the environmental, economic, and reliability
benefits that continued operation of those facilities will provide.
   (2) Any funds used for new in-state renewable electricity
generation technology facilities pursuant to this subdivision shall
be expended in accordance with the report, subject to all of the
following requirements:
   (A) In order to cover the above market costs of renewable
resources as approved by the commission and selected by retail
sellers to fulfill their obligations under Article 16 (commencing
with Section 399.11), the Energy Commission shall award funds in the
form of supplemental energy payments, subject to the following
criteria:
   (i) The Energy Commission may establish caps on supplemental
energy payments.  The caps shall be designed to provide for a viable
energy market capable of achieving the goals of Article 16
(commencing with Section 399.11). The Energy Commission may waive
application of the caps to accommodate a facility, if it is
demonstrated to the satisfaction of the Energy Commission, that
operation of the facility would provide substantial economic and
environmental benefits to end use customers subject to the funding
requirements of Section 381.
   (ii) Supplemental energy payments shall be awarded only to
facilities that are eligible for funding under this subdivision.
   (iii) Supplemental energy payments awarded to facilities selected
by an electrical corporation pursuant to Article 16 (commencing with
Section 399.11) shall be paid for the lesser of 10 years, or the
duration of the contract with the electrical corporation.
   (iv) The Energy Commission shall reduce or terminate supplemental
energy payments for projects that fail either to commence and
maintain operations consistent with the contractual obligations to an
electrical corporation, or that fail to meet eligibility
requirements.
   (v) Funds shall be managed in an equitable manner in order for
retail sellers to meet their obligation under Article 16 (commencing
with Section 399.11).
   (B) The Energy Commission may determine as part of a solicitation,
that a facility that does not meet the definition of "in-state
renewable electricity generation technology" facility solely because
it is located outside the state, is eligible for funding under this
subdivision if it meets both of the following requirements:
   (i) It is located so that it is or will be connected to the
Western Electricity Coordinating Council (WECC) transmission system.

   (ii) It is developed with guaranteed contracts to sell its
generation to end use customers subject to the funding requirements
of Section 381, or to marketers that provide this guarantee for
resale of the generation, for a period of time at least equal to the
amount of time it receives incentive payments under this subdivision.

   (C) Facilities that are eligible to receive funding pursuant to
this subdivision shall be registered in accordance with criteria
developed by the Energy Commission and those facilities may not
receive payments for any electricity produced that has any of the
following characteristics:
   (i) Is sold under an existing long-term contract with an existing
in-state electrical corporation if the contract includes fixed energy
or capacity payments, except for that electricity that satisfies the
provisions of subparagraph (C) of paragraph (1) of subdivision (c)
of Section 399.6.
   (ii) Is used onsite or is sold to customers in a manner that
excludes competitive transition charge payments, or is otherwise
excluded from competitive transition charge payments.
   (iii) Is produced by a facility that is owned by an electrical
corporation or a local publicly owned electric utility as defined in
subdivision (d) of Section 9604.
   (iv) Is a hydroelectric generation project that will require a new
or increased appropriation of water under Part 2 (commencing with
Section 1200) of Division 2 of the Water Code.
   (D) Eligibility to compete for funds or to receive funds shall be
contingent upon having to sell the output of the renewable
electricity generation facility to customers subject to the funding
requirements of Section 381.
   (E) The Energy Commission may require applicants competing for
funding to post a forfeitable bid bond or other financial guaranty as
an assurance of the applicant's intent to move forward expeditiously
with the project proposed. The amount of any bid bond or financial
guaranty may not exceed 10 percent of the total amount of the funding
requested by the applicant.
   (F) In awarding funding, the Energy Commission may provide
preference to projects that provide tangible demonstrable benefits to
communities with a plurality of minority or low-income populations.

   (3) Repowered existing facilities shall be eligible for funding
under this subdivision if the capital investment to repower the
existing facility equals at least 80 percent of the value of the
repowered facility.
   (4) Facilities engaging in the combustion of municipal solid waste
or tires are not eligible for funding under this subdivision.
   (5) Production incentives awarded under this subdivision prior to
January 1, 2002, shall commence on the date that a project begins
electricity production, provided that the project was operational
prior to January 1, 2002, unless the Energy Commission finds that the
project will not be operational prior to January 1, 2002, due to
circumstances beyond the control of the developer.  Upon making a
finding that the project will not be operational due to circumstances
beyond the control of the developer, the Energy Commission shall pay
production incentives over a five-year period, commencing on the
date of operation, provided that the date that a project begins
electricity production may not extend beyond January 1, 2007.
   (6) Facilities generating electricity from biomass energy shall be
considered an in-state renewable electricity generation technology
facility to the extent that they certify to the satisfaction of the
Energy Commission that fuel utilization is limited to the following:

   (A) Agricultural crops and agricultural wastes and residues.
   (B) Solid waste materials such as waste pallets, crates, dunnage,
manufacturing, and construction wood wastes, landscape or
right-of-way tree trimmings, mill residues that are directly the
result of the milling of lumber, and rangeland maintenance residues.

   (C) Wood and wood wastes that meet all of the following
requirements:
   (i) Have been harvested pursuant to an approved timber harvest
plan prepared in accordance with the Z'berg-Nejedly Forest Practice
Act of 1973 (Ch. 8 (commencing with Sec. 4511), Pt. 2, Div. 4,
P.R.C.).
   (ii) Have been harvested for the purpose of forest fire fuel
reduction or forest stand improvement.
   (iii) Do not transport or cause the transportation of species
known to harbor insect or disease nests outside zones of infestation
or current quarantine zones, as identified by the Department of Food
and Agriculture or the Department of Forestry and Fire Protection,
unless approved by the Department of Food and Agriculture and the
Department of Forestry and Fire Protection.
   (e) (1) Seventeen and one-half percent of the funds collected
pursuant to paragraph (6) of subdivision (c) of Section 381 shall be
used for a multiyear, consumer-based program to foster the
development of emerging renewable technologies in distributed
generation applications.
   (2) Any funds used for emerging technologies pursuant to this
subdivision shall be expended in accordance with the report, subject
to all of the following requirements:
   (A) Funding for emerging technologies shall be provided through a
competitive, market-based process that shall be in place for a period
of not less than five years, and shall be structured so as to allow
eligible emerging technology manufacturers and suppliers to
anticipate and plan for increased sale and installation volumes over
the life of the program.
   (B) The program shall provide monetary rebates, buydowns, or
equivalent incentives, subject to subparagraph (C), to purchasers,
lessees, lessors, or sellers of eligible electricity generating
systems.  Incentives shall benefit the end-use consumer of renewable
generation by directly and exclusively reducing the purchase or lease
cost of the eligible system, or the cost of electricity produced by
the eligible system.  Incentives shall be issued on the basis of the
rated electrical capacity of the system measured in watts, or in the
amount of electricity production of the system, measured in
kilowatthours, determined by the Energy Commission.
   (C) Eligible distributed emerging technologies are photovoltaic,
solar thermal electric, fuel cell technologies that utilize renewable
fuels, and wind turbines of not more than 50 kilowatts rated
electrical generating capacity per customer site, and other
distributed renewable emerging technologies that meet the emerging
technology eligibility criteria established by the Energy Commission.
  Eligible electricity generating systems are intended primarily to
offset part or all of the consumer's own electricity demand, and
shall not be owned by local publicly owned electric utilities, nor be
located at a customer site that is not receiving distribution
service from an electrical corporation that is subject to Section 381
and contributing funds to support programs under this section.   All
eligible electricity generating system components shall be new and
unused, and shall not have been previously placed in service in any
other location or for any other application, and shall have a
warranty of not less than five years to protect against defects and
undue degradation of electrical generation output. Systems and their
fuel resource shall be located on the same premises of the end-use
consumer  where the consumer's own electricity demand is located, and
all eligible electricity generating systems shall be connected to
the utility grid in California.  The Energy Commission may require
eligible electricity generating systems to have meters in place to
monitor and measure a system's performance and generation.  Only
systems that will be operated in compliance with applicable law and
the rules of the commission shall be eligible for funding.
   (D) The Energy Commission shall limit the amount of funds
available for any system or project of multiple systems and reduce
the level of funding for any system or project of multiple systems
that has received, or may be eligible to receive, any government or
utility funds, incentives, or credit.
   (E) In awarding funding, the Energy Commission may provide
preference to systems that provide tangible demonstrable benefits to
communities with a plurality of minority or low-income populations.
   (F) In awarding funding, the Energy Commission shall develop and
implement eligibility criteria and a system that provides preference
to systems based upon system performance, taking into account
factors, including, but not limited to, shading, insolation levels,
and installation orientation.
   (f) (1) Ten percent of the funds collected pursuant to paragraph
(6) of subdivision (c) of Section 381 shall be used to provide
customer credits to customers that entered into a direct transaction
on or before September 20, 2001, for purchases of electricity
produced by registered in-state renewable electricity generating
facilities.
   (2) Any funds used for customer credits pursuant to this
subdivision shall be expended, as provided in the report, subject to
the following requirements:
   (A) Customer credits shall be awarded to California retail
customers located in the service territory of an electrical
corporation that is subject to Section 381 that is contributing funds
to support programs under this section, and that is purchasing
qualifying electricity from renewable electricity generating
facilities, through transactions traceable to specific generation
sources by any auditable contract trail or equivalent that provides
commercial verification that the electricity from the claimed
renewable electricity generating facilities has been sold once and
only once to a retail customer.
   (B) Credits awarded pursuant to this paragraph may be paid
directly to electric service providers, energy marketers,
aggregators, or generators if those persons or entities account for
the credits on the recipient customer's utility bills.  Credits may
not exceed one and one-half cents ($0.015) per kilowatthour.  Credits
awarded to members of the combined class of customers, other than
residential and small commercial customers, may not exceed one
thousand dollars ($1,000) per customer per calendar year. In no event
may more than 20 percent of the total customer incentive funds be
awarded to members of the combined class of customers other than
residential and small commercial customers.
   (C) The Energy Commission shall develop criteria and procedures
for the identification of energy purchasers and providers that are
eligible to receive funds pursuant to this paragraph through a
process consistent with this paragraph. These criteria and procedures
shall apply only to funding eligibility and may not extend to other
renewable marketing claims.
   (D) The commission shall notify the Energy Commission in writing
within 10 days of revoking or suspending the registration of any
electric service provider pursuant to paragraph (4) of subdivision
(b) of Section 394.25.
   (E) By March 31, 2003, the Energy Commission shall report to the
Governor and the Legislature on how to most effectively utilize the
funds for customer credits, including whether, and under what
conditions, the program should be continued.  The report shall
include an examination of trends in markets for renewable energy,
including the trading of nonenergy attributes, and the role of
customer credits in these markets.  The report will recommend an
appropriate funding allocation for the customer credits and how
implementation of the customer credits should be structured, if
appropriate.
   (F) Customer credits may not be awarded for the purchase of
electricity that is used to meet the obligations of a renewable
portfolio standard.
   (g) One percent of the funds collected pursuant to paragraph (6)
of subdivision (c) of Section 381 shall be used in accordance with
the report to promote renewable energy and to disseminate information
on renewable energy technologies, including emerging renewable
technologies, and to help develop a consumer market for renewable
energy and for small-scale emerging renewable energy technologies.
   (h) (1) The Energy Commission shall adopt guidelines governing the
funding programs authorized under this section and Section 399.13,
at a publicly noticed meeting offering all interested parties an
opportunity to comment.  Substantive changes to the guidelines may
not be adopted without at least 10 days' written notice to the
public.  The public notice of meetings required by this paragraph may
not be less than 30 days.  Notwithstanding any other provision of
law, any guidelines adopted pursuant to this section shall be exempt
from the requirements of Chapter 3.5 (commencing with Section 11340)
of Division 3 of Title 2 of the Government Code.  The Legislature
declares that the changes made to this paragraph by the act amending
this section during the 2002 portion of the 2001-02 Regular Session
are declaratory of, and not a change in existing law.
                        (2) Funds to further the purposes of this
section may be committed for multiple years.
   (3) Awards made pursuant to this section are grants, subject to
appeal to the Energy Commission upon a showing that factors other
than those described in the guidelines adopted by the Energy
Commission were applied in making the awards and payments.  Any
actions taken by an applicant to apply for, or become or remain
eligible and registered to receive, payments or awards, including
satisfying conditions specified by the Energy Commission, shall not
constitute the rendering of goods, services, or a direct benefit to
the Energy Commission.
   (i) The Energy Commission shall report to the Legislature on or
before May 31, 2000, and on or before May 31 of every second year
thereafter, regarding the results of the mechanisms funded pursuant
to this section.  Reports prepared pursuant to this subdivision shall
include a description of the allocation of funds among existing, new
and emerging technologies; the allocation of funds among programs,
including consumer-side incentives; and the need for the reallocation
of money among those technologies.  The reports shall discuss the
progress being made toward achieving the 17 percent target provided
in subdivision (a) by each funding category authorized pursuant to
subdivisions (c), (d), (e), (f), and (g) of this section.  The
reports shall also address the allocation of funds from interest on
the accounts described in this section, and money in the accounts
described in subdivision (e) of Section 381.  Notwithstanding
subdivisions (c), (d), (e), (f), and (g) of this section, money may
be reallocated without further legislative action among existing,
new, and emerging technologies and consumer-side programs in a manner
consistent with the report and with the latest report provided to
the Legislature pursuant to this subdivision, except that
reallocations may not reduce the allocation established in
subdivision (d) nor increase the allocation established in
subdivision (c).
   (j) The Energy Commission shall, by December 1, 2003, prepare and
submit to the Legislature a comprehensive renewable electricity
generation resource plan that describes the renewable resource
potential available in California, and recommendations for a plan for
development to achieve the target of increasing the amount of
electricity generated from renewable sources per year, so that it
equals 17 percent of the total electricity generated for consumption
in California by 2006.  The Energy Commission shall consult with the
commission, electrical corporations, and the Independent System
Operator, in the development and preparation of the plan.
   (k) The Energy Commission shall participate in proceedings at the
commission that relate to or affect efforts to stimulate the
development of electricity generated from renewable sources, in order
to obtain coordination of the state's efforts to achieve the target
of increasing the amount of electricity generated from renewable
sources per year, so that it equals 17 percent of the total
electricity generated for consumption in California by 2006.
  SEC. 16.  Section 383.6 is added to the Public Utilities Code, to
read:
   383.6.  The commission shall, by December 1, 2003, prepare and
submit to the Legislature, a comprehensive transmission plan for
renewable electricity generation facilities, to provide for the
rational, orderly, cost-effective expansion of transmission
facilities that may be necessary to facilitate the development of
renewable electricity generation facilities identified in the
renewable electricity generation resource plan prepared pursuant to
subdivision (j) of Section 383.5.  The commission shall consult with
the State Energy Resources Conservation and Development Commission,
the Independent System Operator, and electrical corporations in the
development of and preparation of the plan.
  SEC. 17.  Section 394.25 of the Public Utilities Code is amended to
read:
   394.25.  (a) The commission may enforce the provisions of Sections
2102, 2103, 2104, 2105, 2107, 2108, and 2114 against electric
service providers as if those electric service providers were public
utilities as defined in these code sections.  Notwithstanding the
above, nothing in this section grants the commission jurisdiction to
regulate electric service providers other than as specifically set
forth in this part.  Electric service providers shall continue to be
subject to the provisions of Sections 2111 and 2112.  Upon a finding
by the commission's executive director that there is evidence to
support a finding that the electric service provider has committed an
act constituting grounds for suspension or revocation of
registration as set forth in subdivision (b) of Section 394.25, the
commission shall notify the electric service provider in writing and
notice an expedited hearing on the suspension or revocation of the
electric service provider's registration to be held within 30 days of
the notification to the electric service provider of the executive
director's finding of evidence to support suspension or revocation of
registration.  The commission shall, within 45 days after holding
the hearing, issue a decision on the suspension or revocation of
registration, which shall be based on findings of fact and
conclusions of law based on the evidence presented at the hearing.
The decision shall include the findings of fact and the conclusions
of law relied upon.
   (b) An electric service provider may have its registration
suspended or revoked, immediately or prospectively, in whole or in
part, for any of the following acts:
   (1) Making material misrepresentations in the course of soliciting
customers, entering into service agreements with those customers, or
administering those service agreements.
   (2) Dishonesty, fraud, or deceit with the intent to substantially
benefit the electric service provider or its employees, agents, or
representatives, or to disadvantage retail electricity customers.
   (3) Where the commission finds that there is evidence that the
electric service provider is not financially or operationally capable
of providing the offered electric service.
   (4) The misrepresentation of a material fact by an applicant in
obtaining a registration pursuant to Section 394.
   (c) Pursuant to its authority to revoke or suspend registration,
the commission may suspend a registration for a specified period or
revoke the registration, or in lieu of suspension or revocation,
impose a moratorium on adding or soliciting additional customers.
Any suspension or revocation of a registration shall require the
electric service provider to cease serving customers within the
boundaries of investor-owned electrical corporations, and the
affected customers shall be served by the electrical corporation
until the time when they may select service from another service
provider.  Customers shall not be liable for the payment of any early
termination fees or other penalties to any electric service provider
under the service agreement if the serving electric service provider'
s registration is suspended or revoked.
   (d) The commission shall require any electric service provider
whose registration is revoked pursuant to paragraph (4) of
subdivision (b) to refund all of the customer credit funds that the
electric service provider received from the State Energy Resources
Conservation and Development Commission pursuant to paragraph (1) of
subdivision (f) of Section 383.5.  The repayment of these funds shall
be in addition to all other penalties and fines appropriately
assessed the electric service provider for committing those acts
under other provisions of law.  All customer credit funds refunded
under this subdivision shall be deposited in the Renewable Resource
Trust Fund for redistribution by the State Energy Resources
Conservation and Development Commission pursuant to Section 383.5.
This subdivision may not be construed to apply retroactively.
  SEC. 18.  Section 399.7 of the Public Utilities Code, as added by
Section 4 of Chapter 1050 of the Statutes of 2000, is repealed.
  SEC. 19.  Section 399.7 of the Public Utilities Code, as added by
Section 4 of Chapter 1051 of the Statutes of 2000, is amended to
read:
   399.7.  (a) In order to ensure that prudent investments in
research, development and demonstration of energy efficient
technologies continue to produce substantial economic, environmental,
public health, and reliability benefits, it is the policy of this
state and the intent of the Legislature that funds made available,
upon appropriation, for energy related public interest research,
development and demonstration programs shall be used to advance
science or technology that are not adequately provided by competitive
and regulated markets.
   (b) Notwithstanding any other provision of law, moneys collected
for public-interest research, development and demonstration pursuant
to this section shall be transferred to the Public Interest Research,
Development, and Demonstration Fund of the Energy Commission to be
held until further action by the Legislature.  The Energy Commission
shall prepare and submit to the Legislature, on or before March 1,
2001, an initial investment plan for these moneys, addressing the
application of moneys collected between January 1, 2002, and January
1, 2007.  The initial investment plan shall address the
recommendations of the PIER Independent Review Panel Report, dated
March 2000, to either transform the RD&D program within the Energy
Commission, or to administer it through, or in cooperation with, an
external organization.  The initial investment plan shall include
criteria that will be used to determine that a project provides
public benefits to California that are not adequately provided by
competitive and regulated markets.  On or before March 31, 2006, the
Energy Commission shall prepare an investment plan addressing the
application of moneys collected between January 1, 2007, and January
1, 2012.  No moneys may be expended in the years covered by these
plans without further legislative action.
   (c) In lieu of the commission retaining funds authorized pursuant
to Section 381 for investments made by electrical corporations in
public interest research, development, and demonstration projects for
transmission and distribution functions, up to 10 percent of the
funds transferred to the Energy Commission pursuant to subdivision
(b) shall be awarded to electrical corporations for public interest
research, development, and demonstration projects for transmission
and distribution functions consistent with the policies and subject
to the requirements of Chapter 7.1 (commencing with Section 25620) of
Division 15 of the Public Resources Code.
  SEC. 20.  Section 445 of the Public Utilities Code is amended to
read:
   445.  (a) The Renewable Resource Trust Fund is hereby created in
the State Treasury.
   (b) The following accounts are hereby created within the Renewable
Resource Trust Fund:
   (1) The Existing Renewable Resources Account.
   (2) New Renewable Resources Account.
   (3) Emerging Renewable Resources Account.
   (4) Customer-Credit Renewable Resource Purchases Account.
   (5) Renewable Resources Consumer Education Account.
   (c) The money in the fund may be expended for the state's
administration of this article only upon appropriation by the
Legislature in the annual Budget Act.
   (d) Notwithstanding Section 383, that portion of revenues
collected by electrical corporations for the benefit of in-state
operation and development of existing and new and emerging renewable
resource technologies, pursuant to paragraphs (3) and (6) of
subdivision (c) of Section 381, shall be transmitted to the State
Energy Resources Conservation and Development Commission (hereafter
the Energy Commission) at least quarterly for deposit in the
Renewable Resource Trust Fund.  After setting aside in the fund money
that may be needed for expenditures authorized by the annual Budget
Act in accordance with subdivision (c), the Treasurer shall
immediately deposit money received pursuant to this section into the
accounts created pursuant to subdivision (b) in proportions
designated by the Energy Commission for the current calendar year.
Notwithstanding Section 13340 of the Government Code, the money in
the fund and the accounts within the fund are hereby continuously
appropriated to the Energy Commission without regard to fiscal year
for the purposes enumerated in Section 383.5.
   (e) Upon notification by the Energy Commission, the Controller
shall pay all awards of the money in the accounts created pursuant to
subdivision (b) for purposes enumerated in Section 383.5.  The
eligibility of each award shall be determined solely by the Energy
Commission based on the procedures it adopts under subdivision (h) of
Section 383.5.  Based on the eligibility of each award, the Energy
Commission shall also establish the need for a multiyear commitment
to any particular award and so advise the Department of Finance.
Eligible awards submitted by the Energy Commission to the Controller
shall be accompanied by information specifying the account from which
payment should be made and the amount of each payment; a summary
description of how payment of the award furthers the purposes
enumerated in Section 383.5; and an accounting of future costs
associated with any award or group of awards known to the Energy
Commission to represent a portion of a multiyear funding commitment.

   (f) The Energy Commission may transfer funds between accounts for
cashflow purposes, provided that the balance due each account is
restored and the transfer does not adversely affect any of the
accounts.  The Energy Commission shall examine the cashflow in the
respective accounts on an annual basis, and shall annually prepare
and submit to the Legislature a report that describes the status of
account transfers and repayments.
   (g) The Energy Commission shall, on a quarterly basis, report to
the Legislature on the implementation of this article.  Those
quarterly reports shall be submitted to the Legislature not more than
30 days after the close of each quarter and shall include
information describing the awards submitted to the Controller for
payment pursuant to this article, the cumulative commitment of claims
by account, the relative demand for funds by account, a forecast of
future awards, and other matters the Energy Commission determines may
be of importance to the Legislature.
   (h) The Department of Finance, commencing March 1, 1999, shall
conduct an independent audit of the Renewable Resource Trust Fund and
its related accounts annually, and provide an audit report to the
Legislature not later than March 1 of each year for which this
article is operative.  The Department of Finance's report shall
include information regarding revenues, payment of awards, reserves
held for future commitments, unencumbered cash balances, and other
matters that the Director of Finance determines may be of importance
to the Legislature.
  SEC. 21.  Section 2826.5 is added to the Public Utilities Code, to
read:
   2826.5.  (a) As used in this section, the following terms have the
following meanings:
   (1) "Benefiting account" means an electricity account, or more
than one account, mutually agreed upon by Pacific Gas and Electric
Company and the City of Davis.
   (2) "Bill credit" means credits calculated based upon the
electricity generation component of the rate schedule applicable to a
benefiting account, as applied to the net metered quantities of
electricity.
   (3) "PVUSA" means the photovoltaic electricity generation facility
selected by the City of Davis, located at 24662 County Road, Davis,
California, with a rated peak electricity generation capacity of 600
kilowatts, and as it may be expanded, not to exceed one megawatt of
peak generation capacity.
   (4) "Net metered" means the electricity output from the PVUSA.
   (5) "Environmental attributes" associated with the PVUSA include,
but are not limited to, the credits, benefits, emissions reductions,
environmental air quality credits, and emissions reduction credits,
offsets, and allowances, however entitled resulting from the
avoidance of the emission of any gas, chemical, or other substance
attributable to the PVUSA.
   (b) The City of Davis may elect to designate a benefiting account,
or more than one account, to receive bill credit for the electricity
generated by the PVUSA, if all of the following conditions are met:

   (1) A benefiting account receives service under a time-of-use rate
schedule.
   (2) The electricity output of the PVUSA is metered for time of use
to allow allocation of each bill credit to correspond to the
time-of-use period of a benefiting account.
   (3) All costs associated with the metering requirements of
paragraphs (1) and (2) are the responsibility of the City of Davis.
   (4) All electricity delivered to the electrical grid by the PVUSA
is the property of Pacific Gas and Electric Company.
   (5) PVUSA does not sell electricity delivered to the electrical
grid to a third party.
   (6) The right, title, and interest in the environmental attributes
associated with the electricity delivered to the electrical grid by
the PVUSA are the property of Nuon Renewable Ventures USA, LLC.
   (c) A benefiting account shall be billed on a monthly basis, as
follows:
   (1) For all electricity usage, the rate schedule applicable to the
benefiting account, including any surcharge, exit fee, or other cost
recovery mechanism, as determined by the commission, to reimburse
the Department of Water Resources for purchases of electricity,
pursuant to Division 27 (commencing with Section 80000) of the Water
Code.
   (2) The rate schedule for the benefiting account shall also
provide credit for the generation component of the time-of-use rates
for the electricity generated by the PVUSA that is delivered to the
electrical grid.  The generation component credited to the benefiting
account may not include the surcharge, exit fee, or other cost
recovery mechanism, as determined by the commission, to reimburse the
Department of Water Resources for purchases of electricity, pursuant
to Division 27 (commencing with Section 80000) of the Water Code.
   (3) If in any billing cycle, the charge pursuant to paragraph (1)
for electricity usage exceeds the billing credit pursuant to
paragraph (2), the City of Davis shall be charged for the difference.

   (4) If in any billing cycle, the billing credit pursuant to
paragraph (2), exceeds the charge for electricity usage pursuant to
paragraph (1), the difference shall be carried forward as a credit to
the next billing cycle.
   (5) After the electricity usage charge pursuant to paragraph (1)
and the credit pursuant to paragraph (2) are determined for the last
billing cycle of a calendar year, any remaining credit resulting from
the application of this section shall be reset to zero.
   (d) Not more frequently that once per year, and upon providing
Pacific Gas and Electric Company with a minimum of 60 days notice,
the City of Davis may elect to change a benefiting account.  Any
credit resulting from the application of this section earned prior to
the change in a benefiting account that has not been used as of the
date of the change in the benefit account, shall be applied, and may
only be applied, to a benefiting account as changed.
   (e) Pacific Gas and Electric Company shall file an advice letter
with the Public Utilities Commission, that complies with this
section, not later than 10 days after the effective date of this
section, proposing a rate tariff for a benefiting account.  The
commission, within 30 days of the date of filing, shall approve the
proposed tariff, or specify conforming changes to be made by Pacific
Gas and Electric Company to be filed in a new advice letter.
   (f) The City of Davis may terminate its election pursuant to
subdivision (b), upon providing Pacific Gas and Electric Company with
a minimum of 60 days notice.  Should the City of Davis sell its
interest in the PVUSA, or sell the electricity generated by the
PVUSA, in a manner other than required by this section, upon the date
of either event, and the earliest date if both events occur, no
further bill credit pursuant to paragraph (2) of subdivision (b) may
be earned.  Only credit earned prior to that date shall be made to a
benefiting account.
   (g) The Legislature finds and declares that credit for a
benefiting account for the electricity output from the PVUSA are in
the public interest in order to value the production of this unique,
wholly renewable resource electricity generation facility located in,
and owned in part by, the City of Davis.  Because of the unique
circumstances applicable only to the PVUSA a statute of general
applicability cannot be enacted within the meaning of subdivision (b)
of Section 16 of Article IV of the California Constitution.
Therefore, this special statute is necessary.
  SEC. 22.  Section 2826.6 is added to the Public Utilities Code, to
read:
   2826.6.  (a) As used in this section, the following terms have the
following meanings:
   (1) "Benefiting account" means an electricity account, or more
than one account, mutually agreed upon by Pacific Gas and Electric
Company and California State University, Fresno, as selected by
California State University, Fresno.
   (2) "Bill credit" means credits calculated based upon the
electricity generation component of the rate schedule applicable to a
benefiting account, as applied to the net metered quantities of
electricity.
   (3) "Dinuba Facility" means the biomass facility located in
Reedley, California, that supplies 11.5 megawatts, using no more than
20 percent natural gas, to the electrical grid owned by Pacific Gas
and Electric Company.
   (4) "Environmental attributes" associated with the Dinuba Facility
include, but are not limited to, the credits, benefits, emissions
reductions, environmental air quality credits, and emissions
reduction credits, offsets, and allowances, however entitled
resulting from the avoidance of the emission of any gas, chemical, or
other substance attributable to the Dinuba Facility.
   (5) "Net metered" means the electricity output from the Dinuba
Facility.
   (b) California State University, Fresno may elect to designate a
benefiting account, or more than one account, to receive bill credit
for the electricity generated by the Dinuba Facility, if all of the
following conditions are met:
   (1) A benefiting account receives service under a time-of-use rate
schedule.
   (2) The electricity output of the Dinuba Facility is metered for
time of use to allow allocation of each bill credit to correspond to
the time-of-use period of a benefiting account.
   (3) All costs associated with the metering requirements of
paragraphs (1) and (2) are the responsibility of California State
University, Fresno.
   (4) All electricity delivered to the electrical grid by the Dinuba
Facility is the property of Pacific Gas and Electric Company.
   (5) The Dinuba Facility does not sell electricity delivered to the
electrical grid to a third party.
   (6) The right, title, and interest in the environmental attributes
associated with the electricity delivered to the electrical grid by
the Dinuba Facility are the property of Auxiliary Corporation of
California State University, Fresno.
   (c) A benefiting account shall be billed on a monthly basis, as
follows:
   (1) For all electricity usage, the rate schedule applicable to the
benefiting account shall be the rate schedule of the benefiting
account, including any surcharge, exit fee, or other cost recovery
mechanism, as determined by the Public Utilities Commission, to
reimburse the Department of Water Resources for purchases of
electricity, pursuant to Division 27 (commencing with Section 80000)
of the Water Code.
   (2) The rate schedule for the benefiting account shall also
provide credit for the generation component of the time-of-use rates
for the electricity generated by the Dinuba Facility that is
delivered to the electrical grid.  The generation component credited
to the benefiting account may not include the surcharge, exit fee, or
other cost recovery mechanism, as determined by the Public Utilities
Commission, to reimburse the Department of Water Resources for
purchases of electricity, pursuant to Division 27 (commencing with
Section 80000) of the Water Code.
   (3) If in any billing cycle, the charge pursuant to paragraph (1)
for electricity usage exceeds the billing credit pursuant to
paragraph (2), California State University, Fresno shall be charged
for the difference.
   (4) If in any billing cycle, the billing credit pursuant to
paragraph (2), exceeds the charge for electricity usage pursuant to
paragraph (1), the difference shall be carried forward as a credit to
the next billing cycle.
   (5) After the electricity usage charge pursuant to paragraph (1)
and the credit pursuant to paragraph (2) are determined for the last
billing cycle of a calendar year, any remaining credit resulting from
the application of this section shall be reset to zero.
   (d) Not more frequently that once per year, and upon providing
Pacific Gas and Electric Company with a minimum of 60 days notice,
California State University, Fresno may elect to change a benefiting
account.  Any credit resulting from the application of this section
earned prior to the change in a benefiting account that has not been
used as of the date of the change in the benefit account, shall be
applied, and may only be applied, to a benefiting account as changed.

   (e) Pacific Gas and Electric Company shall file an advice letter
with the Public Utilities Commission, that complies with this
section, not later than 10 days after the effective date of this
section, proposing a rate tariff for a benefiting account.  The
commission, within 30 days of the date of filing, shall approve the
proposed tariff, or specify conforming changes to be made by Pacific
Gas and Electric Company to be filed in a new advice letter.
   (f) California State University, Fresno may terminate its election
pursuant to subdivision (b), upon providing Pacific Gas and Electric
Company with a minimum of 60 days notice.  Should California State
University, Fresno sell its interest in the Dinuba Facility, or sell
the electricity generated by the Dinuba Facility, in a manner other
than required by this section, upon the date of either event, and the
earliest date if both events occur, no further bill credit pursuant
to paragraph (2) of subdivision (b) may be earned.  Only credit
earned prior to that date shall be made to a benefiting account.
       (g) The Legislature finds and declares that credit for a
benefiting account for the electricity output from the Dinuba
Facility is in the public interest in order to value the production
of this unique, renewable resource electricity generation facility
located in Reedley, and owned by California State University, Fresno.
  Because of the unique circumstances applicable only to the Dinuba
Facility, a statute of general applicability cannot be enacted within
the meaning of subdivision (b) of Section 16 of Article IV of the
California Constitution.  Therefore, this special statute is
necessary.
  (h) This section shall remain in effect only until January 1, 2008,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2008, deletes or extends that date.

  SEC. 23.  It is the intent of the Legislature, in adding Section
2826.5 to the Public Utilities Code, to establish a policy to provide
the City of Davis with a bill credit for the electricity generated
at a photovoltaic facility owned in part by the City of Davis known
as PVUSA.  PVUSA is a pioneering solar research project, which for
many years served as a partnership between public and private
utilities, government agencies, and private companies involved in the
photovoltaic industry.  PVUSA helped to research and demonstrate the
use of photovoltaics for utility scale applications, and helped the
industry learn more about how utilities could use photovoltaic
systems in their generation mix.  The City of Davis recently acquired
the project from the State Energy Resources Conservation and
Development Commission, and wishes to continue to utilize this
existing unique facility.  The goal of Section 2826.5 of the Public
Utilities Code is to provide the City of Davis flexibility in
benefiting from this photovoltaic electric generation project, while
preventing any negative consequences for other utility customers.
  SEC. 24.  It is the intent of the Legislature, in adding Section
2826.6 to the Public Utilities Code, to establish a policy to provide
California State University, Fresno with a bill credit for the
electricity generated at a biomass facility owned by California State
University, Fresno known as the Dinuba Facility or Dinuba Energy.
The Dinuba Facility, located in Reedley, was donated to the Auxiliary
Corporations of California State University, Fresno in 1999, which
completed extensive maintenance and repair efforts on the facility.
The Dinuba Facility began operations again in July 2001.  The Dinuba
Facility is located within 50 miles of the university, and uses
forest fuels and agricultural byproducts to generate electricity, and
may significantly contribute to reeducation in ambient particulate
matter in the Central Valley.  The goal of Section 2826.6 of the
Public Utilities Code is to provide California State University,
Fresno flexibility in benefiting from this biomass facility, while
preventing any negative consequences for other utility customers.
  SEC. 25.  Section 14 of this bill shall only become operative if
either, or both, Senate Bill 1078 or Senate Bill 1524 of the 2001-02
Regular Session of the Legislature is enacted and becomes effective
on or before January 1, 2003, and add the California Renewables
Portfolio Standard Program as Article 16 (commencing with Section
399.11) to Chapter 2.3 of Part 1 of Division 1 of the Public
Utilities Code.
  SEC. 26.  No reimbursement is required by this act pursuant to
Section 6 of Article X111 B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article X111 B of the California
Constitution.