Bill Text

The Renewable Portfolio Standards Sustainable Energy Act

An Act to Ensure Renewable Energy Is Included in the Portfolio of Electricity Resources Serving Our State in Order to Increase Energy Sustainability Over Time.

Summary: This energy bill requires certain providers of electric service to comply with a portfolio standard for renewable energy; authorizing the public utilities commission of the state to impose administrative fines against noncomplying providers under certain circumstances and to take other administrative actions to ensure compliance with the portfolio standard; requiring the governing bodies of certain counties and cities to adopt certain codes concerning energy efficiency; and providing other matters properly relating thereto.

The people of the state of <insert your state’s name here>, represented in the Legislature, do enact as follows:

Section 1. Short Title.

This Act shall be known and may be cited as the “RPS Sustainable Energy Act.”

Section 2.  Intent.

This bill requires that 15 percent of all electricity generated in state be derived from new renewables by <12 years after date of enactment>. This new law phases in the renewable energy commitment so that there are 5 percent of new renewables in the third year after enactment, 7 percent in the fifth year, nine percent in the seventh year, 11 percent in the ninth year, 13 percent in the eleventh year, and then reaching 15 percent in the twelfth year. The law allows the appropriate commission to develop a trading mechanism for renewable energy credits for the state’s utilities.

Section 3. Funding.

(A) The Public Utilities Commission Regulatory Fund is hereby created as a special revenue fund. Except as otherwise provided, all money collected by the commission pursuant to this Act must be deposited in the state treasury for credit to the fund.

(B) Money in the fund which belongs to the commission may be used only to defray the costs of:

(1) Maintaining staff and equipment to adequately regulate public utilities and other persons subject to the jurisdiction of the commission;

(2) Participating in all rate cases involving those persons; and

(3) Audits, inspections, investigations, publication of notices, reports, and retaining consultants connected with that regulation and participation.

(C) All claims against the fund must be paid as other claims against the state are paid.

(D) The commission must furnish upon request a statement showing the balance remaining in the fund as of the close of the preceding fiscal year.

Section 4. Definitions.

The words and terms defined in this Act have the meanings ascribed to them in this and other sections.

(A) “Commission” refers to the Public Service Commission or other appropriate energy governing body within the state.

(B) “Biomass” means organic matter that is available on a renewable basis, including:

(1) Organic material from a plant that is planted exclusively for the purpose of being used to produce electricity, provided that such plant is produced on land that was in crop production on the date this Act is enacted or is protected by the federal Conservation Reserve Program (CRP), and provided further that crop production on CRP lands does not prevent achievement of water quality protection, soil erosion prevention, or wildlife habitat enhancement purposes for which the land was primarily set aside;

(2) Any solid nonhazardous, cellulosic waste material that is segregated from other waste materials, and which is derived from:

(a) Waste pallets, crates, and dunnage, and landscape or right-of-way tree trimmings, but not including municipal solid waste (garbage) or post-consumer wastepaper; or

(b) Agriculture sources, including orchard tree crops, vineyard, grain, legumes, sugar, and other crop by-products or residues;

(3) Landfill methane;

(4) Animal wastes;

(5) “Biomass” does not include:

(a) Forestry resources;

(b) Agricultural resource waste material necessary for maintaining soil fertility or for preventing erosion;

(c) Unsegregated waste (garbage); or

(d) Paper that is commonly recycled.

(C) “Portfolio Standard” means a portfolio standard for renewable energy established by the commission pursuant to Section 10 of this Act.

(D) “Provider of electric service” and “provider” mean:

(1) Any person or entity that is in the business of selling electricity to retail customers in this state, regardless of whether the person or entity is otherwise subject to regulation by the commission;

(2) The term(s) does not include:

(a) This state or an agency or instrumentality of this state;

(b) A rural electric cooperative;

(c) A general improvement district; or

(d) A cooperative association, nonprofit corporation, nonprofit association or provider of electric service which is declared to be a public utility and which provides service only to its members.

(E) “Renewable energy” means:

(1)

(a) Biomass;

(b) Geothermal energy;

(c) Solar energy;

(d) Wind; or

(e) Low-impact, small-scale hydroelectric, and micro-hydro projects which are installations producing less than 20 megawatts of electricity;

(2) The term does not include coal, natural gas, oil, propane, or any other fossil fuel, or nuclear energy.

(F) “Renewable energy system” means:

(1) A facility or energy system that:

(a) Uses renewable energy to generate electricity; and

(b) Transmits or distributes the electricity that it generates from renewable energy via:

(i) A power line which is dedicated to the transmission or distribution of electricity generated from renewable energy and which is connected to a facility or system owned, operated, or controlled by a provider of electric service; or

(ii) A power line which is shared with not more than one facility or energy system generating electricity from nonrenewable energy and which is connected to a facility or system owned, operated, or controlled by a provider of electric service; or

(2) A solar thermal energy system that reduces the consumption of electricity.

(G) “Retail customer” means:

(1) A customer who purchases electricity at retail;

(2) The term includes, without limitation:

(a) This state, a political subdivision of this state, or an agency or instrumentality of this state, or political subdivision of this state when it purchases electricity at retail; and

(b) A landlord of a mobile home park or owner of a company town who is subject to any of the provisions above.

Section 5. Establishment of Portfolio Standard; Requirements; Subsidization of Solar Thermal Energy Systems; Renewable Energy Credits; Renewable Energy Fund.

(A) For each provider of electric service, the commission shall establish a portfolio standard for renewable energy that shall require each provider to generate or acquire electricity from renewable energy systems in an amount that is:

(1) For calendar years <two years after enactment> and <three years after enactment>, not less than 5 percent of the total amount of electricity sold by the provider to its retail customers in this state during that calendar year;

(2) For calendar years <four years after enactment> and <five years after enactment>, not less than 7 percent of the total amount of electricity sold by the provider to its retail customers in this state during that calendar year;

(3) For calendar years <six years after enactment> and <seven years after enactment>, not less than 9 percent of the total amount of electricity sold by the provider to its retail customers in this state during that calendar year;

(4) For calendar years <eight years after enactment> and <nine years after enactment>, not less than 11 percent of the total amount of electricity sold by the provider to its retail customers in this state during that calendar year;

(5) For calendar years <ten years after enactment> and <eleven years after enactment>, not less than 13 percent of the total amount of electricity sold by the provider to its retail customers in this state during that calendar year; and

(6) For calendar year <twelve years after enactment> and, for each calendar year thereafter, not less than 15 percent of the total amount of electricity sold by the provider to its retail customers in this state during that calendar year.

(B) If, for the benefit of one or more of its retail customers in this state, the provider has subsidized, in whole or in part, the acquisition or installation of a solar thermal energy system, which qualifies as a renewable energy system and which reduces the consumption of electricity, the total reduction in the consumption of electricity during each calendar year that results from the solar thermal energy system shall be deemed to be electricity that the provider generated or acquired from a renewable energy system for the purposes of complying with its portfolio standard.

(C) The commission may adopt regulations that establish a system of renewable energy credits that may be used by a provider to comply with its portfolio standard.

(D) The commission shall establish a renewable energy fund for the purpose of promoting renewable energy systems in the state. Any provider may comply with the requirements of this Act by paying $0.02/kWh into the fund for every kilowatt-hour it sells to retail customers in the state.

Section 6. Reports.

(A) Each provider of electric service shall submit to the commission an annual report that provides information relating to the actions taken by the provider to comply with its portfolio standard.

(B) Each provider shall submit the annual report to the commission after the end of each calendar year and within the time prescribed by the commission. The report must be submitted in a format approved by the commission.

(C) The commission may adopt regulations that require providers to submit to the commission additional reports during each calendar year.

(D) Each annual report and each additional report must include clear and concise information that sets forth:

(1) The amount of electricity which the provider generated or acquired from renewable energy systems during the reporting period and, if applicable, the amount of renewable energy credits that the provider acquired, sold, or traded during the reporting period to comply with its portfolio standard;

(2) The capacity of each renewable energy system owned, operated, or controlled by the provider, the total amount of electricity generated by each such system during the reporting period, and the percentage of that total amount which was generated directly from renewable energy;

(3) Whether, during the reporting period, the provider began construction on, acquired, or placed into operation any renewable energy system and, if so, the date of any such event; and

(4) Any other information that the commission by regulation may deem relevant.

Section 7. Regulations; Enforcement; Administrative Fines.

(A) The commission shall adopt regulations to carry out and enforce the provisions of this Act. The regulations adopted by the commission may include any enforcement mechanisms which are necessary and reasonable to ensure that each provider of electric service complies with its portfolio standard. Such enforcement mechanisms may include, without limitation, the imposition of administrative fines.

(B) If a provider does not comply with its portfolio standard for any calendar year, and the commission has not exempted the provider from the requirements of its portfolio standard, pursuant to this Act, the commission may impose an administrative fine against the provider or take other administrative action against the provider, or do both.

(C) The commission may impose an administrative fine against a provider based upon:

(1) Each kilowatt-hour of electricity that the provider does not generate or acquire from a renewable energy system or a solar renewable energy system during a calendar year in violation of its portfolio standard; or

(2) Any other reasonable formula adopted by the commission.

(D) In the aggregate, the administrative fines imposed against a provider for all violations of its portfolio standard for a single calendar year must not exceed the amount which is necessary and reasonable to ensure that the provider complies with its portfolio standard, as determined by the commission.

(E) If the commission imposes an administrative fine against a provider that is a public utility:

(1) The administrative fine is not a cost of service of the provider;

(2) The provider shall not include any portion of the administrative fine in any application for a rate adjustment or rate increase; and

(3) The commission shall not allow the provider to recover any portion of the administrative fine from its retail customers.

(F) All administrative fines imposed and collected pursuant to this Section must be deposited in the state general fund.

Section 8. Optional Pricing; Payment.

(A) A utility which supplies electricity in this state may apply to the commission for authority to charge, as part of a program of optional pricing, a higher rate for electricity that is derived from renewable energy.

(B) The program must provide the customers of the utility with the option of paying a higher rate for electricity to support the increased use by the utility of renewable energy resources in the generation of electricity.

Section 9. Savings Clause.

If any provision of this Act is found to be in invalid by a court of competent jurisdiction, such invalidity shall not affect the validity of the remaining provisions of this Act.

Section 10. Adoption of Regulations.

Not later than 180 days after the effective date of this Act, the commission shall adopt the regulations required by this Act.

Section 11. Effective Date.

This Act becomes effective upon passage and approval.