SB 886

Introduced by Senators Padilla and McNerney
(Coauthors: Senators Arreguín, Becker, Weber Pierson, and Wiener)
(Coauthors: Assembly Members Petrie-Norris, Calderon, Connolly, Harabedian, and Rogers)
An act to add Chapter 14 (commencing with Section 8540) to Division 4.1 of the Public Utilities Code, relating to electricity.
electricity
California Technology Innovation and Ratepayer Protection Act.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable.
This bill, the California Technology Innovation and Ratepayer Protection Act, would require the commission, on or before July 1, 2027, to establish separate tariffs for the interconnection of the participating customer facilities and the provision of transmission, distribution, and optional generation services to participating customers, as specified. The bill would require the commission, as part of establishing the separate tariffs, to, at a minimum, evaluate the risks and benefits of the separate tariffs to nonparticipating customers, ensure that the
		separate tariffs prevent the creation of stranded costs for, or cost shifts to, nonparticipating customers, and, for unbundled customers, ensure that charges generally included in the generation component of the unbundled customer’s consolidated bill are assessed as a separate line item on their bill. The bill would require that the interconnection tariff, among other things, require a participating customer that submits an application for interconnection of a data center to an electrical corporation to disclose whether an application for the same data center has been submitted in other electrical corporation service territories or other jurisdictions and to disclose each instance in which an application for the same data center has been submitted, assign cost responsibility for all transmission facility upgrades triggered by a new facility interconnection to the applicable participating customer, and
		require an early termination fee to be assessed against a participating customer under specified circumstances. The bill would require, for the generation tariff, a participating customer to prefund a contract of at least 10 years in duration through the load-serving entity, as defined, for the costs of procurement necessary to serve the participating customer, as provided. The bill would also require each electrical corporation to publish and update maps showing locations where participating customers can interconnect without the need for significant, costly, and time-consuming transmission upgrades.
Under existing law, a violation of any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because a violation of a commission action implementing this bill’s requirements would be a crime, the bill would impose a state-mandated local program.
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.
Chapter 14 (commencing with Section 8540) is added to Division 4.1 of the
Public Utilities Code
, to read:
14.
California Technology Innovation and Ratepayer Protection Act
8540.
This chapter shall be known, and may be cited, as the California Technology Innovation and Ratepayer Protection Act.
8541.
For purposes of this chapter, all of the following definitions apply:
(a) (1) “Data center” means a facility, or a part of a facility, that houses computing infrastructure, including graphics and central processing units, servers, storage devices, networking equipment, and associated power and cooling systems, for the primary purpose of processing, storing, or distributing electronic data, except as specified in paragraph (2).
(2) “Data center” does not include a publicly funded research facility, public safety facility, national security facility, publicly owned facility, or other utility facility, including, but not limited to, an asset of a facilities-based telecommunications
					 provider.
(b) “Electrical corporation” has the same meaning as defined in Section 218, but does not include an electrical cooperative, as defined in Section 2776.
(c) “Facility” means a physical property, a plant, a building, a structure, or stationary equipment, located on one or more contiguous or adjacent properties in actual physical contact or separated solely by a public roadway or public right-of-way and under common ownership or common control.
(d) “Load-Serving entity” has the meaning set forth in Section 380.
(e) “Nonparticipating customer” means a customer who does not receive electrical service pursuant to a tariff established pursuant to subdivision (a) of Section 8542.
(f) “Participating customer” means a data center with a minimum peak demand, as determined by the commission. The minimum peak demand determined by the commission shall not exceed 25 megawatts and, in making that determination, the commission shall consider the extent to which facility load has a material impact on electrical corporation costs.
(g) “Separate tariffs” means the tariffs established by the commission pursuant to subdivision (a) of Section 8542 and includes the transmission, distribution, generation, and interconnection tariffs described in Section 8542.
(h) “Unbundled customer” means a customer receiving the generation component of their electrical service from an entity that is different from the entity providing the transmission and distribution components of the customer’s electrical service.
8542.
(a) On or before July 1, 2027, the commission shall establish separate tariffs for the interconnection of participating customer facilities and the provision of transmission, distribution, and optional generation services to participating customers.
(b) The commission, as part of establishing the separate tariffs, shall do, at a minimum, all of the following:
(1) Evaluate the risks and benefits of the separate tariffs to nonparticipating customers.
(2) Ensure that the separate tariffs prevent the creation of stranded costs for, or cost shifts to, nonparticipating customers.
(3) For an unbundled customer, ensure that charges generally included in the generation component of the unbundled customer’s consolidated bill are assessed as a separate line item on the unbundled customer’s bill.
(c) In establishing the transmission and distribution tariffs, the commission shall do both of the following:
(1) Ensure the transmission and distribution tariffs are consistent with subdivision (b).
(2) Ensure the participating customer pays a reasonable share of the costs relating to wildfire mitigation, wildfire liability, electrification and environmental programs, and other societal cost obligations typically collected from
					 distribution-level ratepayers.
(d) In establishing the generation tariff, the commission shall do all of the following:
(1) Ensure the generation tariff is consistent with subdivision (b).
(2) Ensure the procurement of generation resources that support a load-serving entity’s ability to meet procurement requirements set forth by the commission, the clean energy targets set forth in Sections 399.15 and 454.52, and other state clean energy policies.
(3) Ensure the generation tariff assigns a participating customer any unique wholesale energy costs, including ancillary and reliability service costs attributable to rapid fluctuations in demand by the participating customer.
(4) (A) Require a participating customer to prefund a contract of at least 10 years in duration through a load-serving entity for the costs of procurement necessary to serve the participating customer. The procurement of resources to serve the participating customer shall be consistent with paragraph (2).
(B) Authorize a participating customer to reduce the requirement to prefund a contract by installing
					 zero-emission resources behind its meter, as determined by the load-serving entity.
(e) In establishing the interconnection tariff, the commission shall do all of the following:
(1) Ensure the interconnection tariff is consistent with subdivision (b).
(2) Require a participating customer that submits an application for interconnection of a data center to an electrical corporation to disclose whether an application for the same data center has been submitted in other electrical corporation service territories or other jurisdictions and to disclose each instance in which an application for the same data center has been submitted.
(3) Assign cost responsibility for all transmission facility upgrades triggered by a new facility
					 interconnection to the applicable participating customer. To the extent permitted under federal law, these costs should include shared transmission grid network upgrades needed to accommodate the interconnection of the participating customer’s facility or increase the flow of electricity across the electrical grid.
(4) Allow a participating customer to receive refunds of a portion of its initial nominal dollar contributions to interconnection costs only to the extent that actual annual net revenues received by the electrical corporation cover the costs of energization, the costs of providing electrical service, and other costs allocated by the commission to the participating customer. On an annual basis, the refund shall not be more than 75 percent of the annual net transmission revenue received by the electrical corporation from the participating customer. This limitation may delay the timing of the full recovery of refunds by the
					 participating customer.
(5) For a participating customer, require an early termination fee to be assessed against a participating customer that departs the electrical system within 10 years of the initial interconnection of the facility or fails to achieve adequate load ramp up, as determined by the commission. The early termination fee should not be less than the revenue gap associated with the originally projected demand and energy consumption of the facility over the minimum 10-year term.
(f) A participating customer shall certify to the commission that its facility meets the requirements of subdivisions (a) and (b) of Section 25545.3.3 of, and subdivisions (a) to (e), inclusive, of Section 25545.3.5 of, the Public Resources Code, notwithstanding the definition of “covered project” in Section 25545.3 of the Public Resources Code.
(g) The commission shall require each electrical corporation to publish and update maps showing locations where participating customers can interconnect without the need for significant, costly, and time-consuming transmission upgrades.
(h) This section does not modify the limits on direct transactions established pursuant to Section 365.1.
(i) This section does not authorize the commission to regulate the rates or terms and conditions of service offered by a community choice aggregator, consistent with Section 366.2, or an electric service provider, consistent with Section 394.
8543.
A participating customer shall participate in a new demand response program authorized by the commission that does not result in any net costs to a nonparticipating customer and supports load shifting, reliability, resource adequacy, and greenhouse gas emission reduction objectives.
8544.
This chapter does not limit or restrict the ability of a data center to receive generation services from an electric service provider or community choice aggregator. Generation services provided to a data center by an electric service provider or community choice aggregator shall meet the requirements specified in subdivision (d) of Section 8542.
SEC. 2.
No reimbursement is required by this act pursuant to Section 6 of Article XIII 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 XIII B of the California Constitution.
	 REVISIONS:
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