BILL NUMBER: SBX1 28	CHAPTERED
	BILL TEXT

	CHAPTER  12
	FILED WITH SECRETARY OF STATE  MAY 22, 2001
	APPROVED BY GOVERNOR  MAY 22, 2001
	PASSED THE SENATE  MAY 10, 2001
	PASSED THE ASSEMBLY  MAY 10, 2001
	AMENDED IN ASSEMBLY  MAY 10, 2001
	AMENDED IN ASSEMBLY  APRIL 23, 2001
	AMENDED IN ASSEMBLY  APRIL 4, 2001
	AMENDED IN SENATE  MARCH 19, 2001
	AMENDED IN SENATE  MARCH 14, 2001
	AMENDED IN SENATE  MARCH 12, 2001
	AMENDED IN SENATE  MARCH 5, 2001

INTRODUCED BY   Senator Sher
   (Principal coauthors:  Senators Battin, Brulte, and Morrow)
   (Principal coauthors:  Assembly Members Calderon and Rod Pacheco)
   (Coauthor:  Assembly Member Wright)

                        FEBRUARY 5, 2001

   An act to add Section 42301.15 to, to add Chapter 7 (commencing
with Section 39910) to Part 2 of Division 26 of, and to add and
repeal Section 42314.3 of, the Health and Safety Code, and to amend
Sections 25514, 25521, 25523, 25531, and 25552 of, and to add and
repeal Sections 25519.5 and 25550.5 of, the Public Resources Code,
and to add Article 3.5 (commencing with Section 353.1) to Chapter 2.3
of Part 1 of Division 1 of the Public Utilities Code, relating to
the energy emergency, making an appropriation therefor, and declaring
the urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 28, Sher.  Energy siting of power plants:  unemployment
insurance.
   (1) Existing law contains various provisions relative to air
pollution control.
   This bill would require the State Air Resources Board, on or
before July 1, 2002, in consultation with air pollution control
districts, air quality management districts and the Independent
System Operator, to establish a schedule for the retrofit of certain
electrical generation facilities that would require completion of the
retrofits by December 31, 2004, except as specified.  The bill also
would require the state board, on or before July 1, 2001, to
implement a program for the banking, trading, and purchasing of
emission reduction credits for electrical generating facilities.
   The bill would, until January 1, 2004, authorize an applicant for
a permit for an electrical generating facility to pay an emissions
offset fee to the appropriate air pollution control district or air
quality management district for expenditure by the district to
purchase offsets for that facility.
   (2) Existing law provides for the restructuring of California's
electric power industry so that the price for the generation of
electricity is determined by a competitive market.
   Existing law requires the State Energy Resources Conservation and
Development Commission (Energy Commission) to certify all sites and
related facilities for thermal powerplants in the state, including a
new site and related facility or a change or addition to an existing
facility.  The Energy Commission is required to prepare a final
report and written decision after a public hearing on the application
for the powerplant.
   Existing law requires the Energy Commission to request the
appropriate local, regional, state, and federal agencies to make
comments and recommendations about the design, operation, and
location of facilities.
   This bill would require a public agency to use the staff report
submitted for a public hearing on an application in the same manner
as an environmental impact report or negative declaration for the
site or facilities, except as specified.
   This bill would require, until January 1, 2004, each local
government agency reviewing the application to file a preliminary
list of issues regarding the design, operation, location, and
financial impact of the facility with the Energy Commission within 45
days of the date the application for certification is deemed filed.
The bill would require the local jurisdiction to provide a final
list of those issues no later than 100 days after the application for
certification is deemed filed.  To the extent that the bill would
require the local jurisdiction to provide a new program or higher
level of service, it would impose a state-mandated local program.
   This bill would require the final report prepared by the Energy
Commission to additionally include findings and conclusions as to
whether increased property taxes due to the construction of the
project are sufficient to support needed local improvements and
public services required to serve the project.
   This bill would require the written decision prepared by the
Energy Commission after the public hearing to include a discussion of
any public benefits from the project including, but not limited to,
economic benefits, environmental benefits, and electricity
reliability benefits.
   This bill would clarify that decisions of the Energy Commission
are subject to judicial review by the Supreme Court of California.
   (3) Existing law authorizes the Energy Commission to establish a
process for the expedited review of applications to construct and
operate powerplants and thermal powerplants and related facilities.
   This bill would require the Energy Commission, until January 1,
2004, also to establish a process for the expedited review of a
repowering project.
   This bill would additionally delete the deadline for completed
applications for an expedited decision on simple cycle thermal
powerplants.
   (4) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations and other specified entities.
   This bill would require the commission to require each electrical
corporation under the operational control of the Independent System
Operator as of January 1, 2001, to modify tariffs so that all
customers that install new distributed energy resources, as defined,
in accordance with specified criteria are served under rates, rules,
and requirements identical to those of a customer within the same
rate schedule that does not use distributed energy resources, and to
withdraw any provisions in otherwise applicable tariffs that activate
other tariffs, rates, or rules if a customer uses distributed energy
resources.  The bill would require each electrical corporation, as
part of its distribution planning process, to consider nonutility
owned distributed energy resources as a possible alternative to
investments in its distribution system in order to ensure reliable
electric service at the lowest possible cost.  The bill would require
the commission, in establishing the rates under the provisions of
the bill, to create a firewall that segregates distribution cost
recovery, as described.
   The bill would require a local publicly owned electric utility, as
defined, or a local publicly owned utility otherwise providing
electrical service, to undertake a review of its rates, tariffs, and
rules, as prescribed, and to hold at least one noticed public meeting
to solicit public comment on the review and any recommended changes.

   The bill would require the commission to require each electrical
corporation to establish new tariffs on or before January 1, 2003,
for customers using distributed energy resources.  The bill would
continue to subject certain distributed energy resources, after
January 1, 2003, to preexisting tariffs under the bill, until June 1,
2011 or, for specified installations, until June 1, 2006.  The bill
would require the commission to prepare and submit to the
Legislature, on or before June 1, 2002, a report describing its
proposed methodology for determining the new rates and the process by
which it will establish those rates.
   The bill would require customers that install distributed energy
resources to annually report to the commission specific information
about the resources.  The bill would require the commission, in
consultation with air pollution control districts and air quality
management districts and the Energy Commission, to evaluate that
information, and, within two years of the effective date of the bill,
to prepare and submit to the Governor and the Legislature a report
recommending any changes to the above provisions that the commission
determines to be necessary.
   Because a violation of a requirement of the commission is a crime,
this bill would impose a state-mandated local program by creating a
new crime.
   (5) The bill would authorize a gas corporation public utility,
until June 1, 2002, to exercise the power of eminent domain for the
purpose of competing with another entity in the offering of natural
gas and services related to natural gas.  The bill would prohibit the
Public Utilities Commission from making a finding on a petition
filed by a gas corporation for those purposes.
   (6) The bill would appropriate not more than $3,250,000 from the
General Fund to the commission for expenditure, until January 1,
2005, in accordance with a prescribed schedule.
  (7) 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, including the creation of a State Mandates Claims Fund
to pay the costs of mandates that do not exceed $1,000,000 statewide
and other procedures for claims whose statewide costs exceed
$1,000,000.
   This bill would provide that with regard to certain mandates no
reimbursement is required by this act for a specified reason.
   With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
   (8) The bill would declare that it is to take effect immediately
as an urgency statute.
   Appropriation:  yes.


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


  SECTION 1.  Chapter 7 (commencing with Section 39910) is added to
Part 2 of Division 26 of the Health and Safety Code, to read:

      CHAPTER 7.  EXPEDITED AIR QUALITY IMPROVEMENT PROGRAM FOR
ELECTRICAL GENERATION

   39910.  The Legislature finds and declares that it is in the
interests of the people of the State of California to ensure that the
state board establish a unified, coordinated, and expedited process
for districts to retrofit electrical generating facilities in a
manner that protects public health and the environment and that
complies fully with applicable federal and state statutes and
regulations.
   39915.  On or before July 1, 2002, the state board, in
consultation with air quality management districts, air pollution
control districts, and the Independent System Operator, shall
establish a schedule for the retrofit of electric generation
facilities pursuant to retrofit criteria and procedures established
under the federal Clean Air Act (42 U.S.C. Section 7401 et seq.) or
this division.  The schedule shall require completion of any mandated
retrofits by December 31, 2004, or such later date as the state
board, in consultation with the Independent System Operator, air
pollution control districts, air quality management districts, and
the owners and operators of electrical generating facilities
determines is necessary to maintain electric system reliability.
Nothing in this section is intended to require the retrofit of a
generation facility that could not be required to be retrofitted by
an air quality management district or air pollution control district
under the law in effect on the effective date of the act adding this
chapter during the 2001-02 First Extraordinary Session.  The state
board shall suspend the deadline for the completion of a retrofit of
an electrical generation unit scheduled pursuant to this section if
it determines all of the following:
   (a) The owner of the generation unit proposes to replace or
repower the generation unit in a manner that complies with all
applicable laws and regulations.
   (b) The owner has filed the necessary applications for permits for
such replacement or repower prior to the suspension of the deadline
for the completion of the required retrofits.
   (c) The owner is diligently proceeding with the replacement or
repower of the unit and the state board determines that the
replacement or repower will be completed.
   39920.  On or before July 1, 2001, the state board shall implement
a program for tracking the emission reduction credits made available
by the program required under Section 39915, and for facilitating
the banking, trading, and purchasing of those credits in order to
expedite the construction of new, clean generating facilities in the
state.  The state board shall establish criteria for the development
of a state emission reduction credits bank, which shall ensure that a
specified percentage of emission reduction credits created pursuant
to section 39915 be contributed to the bank for the purpose of making
emission reduction credits available for new, clean generation
capacity.
  SEC. 2.  Section 42301.15 is added to the Health and Safety Code,
to read:
   42301.15.  Each district shall adopt an expedited program for the
permitting of standby electrical generation facilities, distributed
generation facilities, geothermal facilities, including wells, and,
where applicable, natural gas transmission facilities, that ensures
those facilities will be operated in a manner that protects public
health and air quality.  Upon request by a district, the Independent
System Operator and the Public Utilities Commission shall provide any
information necessary, as determined by the district, to implement
this section.
  SEC. 3.  Section 42314.3 is added to the Health and Safety Code, to
read:
   42314.3.  (a) The Legislature finds and declares all of the
following:
   (1) There is an urgent need to facilitate the siting of the
cleanest and least polluting new electrical generation and
repowering, as defined in subdivision (i) of Section 25550.5 of the
Public Resources Code in the state in order to displace older and
more polluting electrical generation.
   (2) Certain areas of the state currently lack sufficient air
emissions offsets needed to site clean new generation and repowering,
as defined in paragraph (1).
   (3) The purpose of this section is to provide a mechanism to
provide needed offsets for clean new electrical generation and
repowering, as defined in paragraph (1), for new facilities
constructed during the period of energy emergency currently being
experienced in the state.
   (4) Nothing in this section is intended, in any manner, to limit
or abridge the responsibilities and obligations of any party under
the federal Clean Air Act (42 U.S.C. Sec. 7401 et seq.), as that act
existed on January 1, 2001, including, but not limited to, the
requirement that emissions offsets be enforceable as established
pursuant to Section 173(a)(1) of that act (42 U.S.C. Sec. 7503(a)(1)
(A)), and that offsets be obtained by the time a source is to
commence operation pursuant to Section 173 (a)(1)(A) of that act (42
U.S.C. Sec. 7503(a)(1)(A)).
   (b) Each district shall identify and make available to the public
emission reduction credits that may be purchased by applicants for
electrical generation facilities and used to offset emissions from
those facilities pursuant to this section.  Each district shall
adopt, in a public hearing, standards for the implementation of this
section, including, but not limited to, quantification protocols,
emissions baselines, antibacksliding provisions, and monitoring,
recordkeeping, reporting, and testing requirements, to establish that
the offsets made available pursuant to this section are
quantifiable, verifiable, enforceable, real, and surplus.
   (c) To the extent permitted under the federal Clean Air Act (42
U.S.C.  Sec. 7401 et seq.), including, but not limited to, those
sections of the act referenced under paragraph (4) of subdivision
(a), in lieu of obtaining air emission offsets, an applicant for a
permit for an electrical generating facility may pay an emissions
offset fee to a district for expenditure by the district to purchase
offsets for that facility.  The applicant may post a bond in an
amount sufficient to cover the cost of the required emissions
offsets, provided that bond shall only be issued by an admitted
surety for the benefit of, and held by, the district.
   (d) Prior to commencement of operation, the owner or operator of
the facility shall obtain any required emissions offsets or a portion
of the required emissions offsets and shall forfeit a proportionate
amount of the offset fee or bond to the district in an amount
determined by the district to be sufficient to acquire and hold that
portion of the required emissions offsets not obtained by the
applicant.  Any forfeited funds shall be used by the district to
purchase offsets for the facility in the applicable air basin prior
to the commencement of operation of the facility.
   (e) In expending emissions offset fees, a district shall give
first priority to obtaining offsets from stationary sources that have
emissions comparable to those emissions that the electrical
generation facility will emit and shall meet all standards regarding
proximity of such offsets established under state and federal law,
and district rules and regulations.  To the extent stationary source
offsets are not available, the district shall expend offset fees to
obtain emissions reductions from other sources of a type and in an
amount equivalent to those offsets which would otherwise be required
to be obtained by the facility in order to operate.  However, a
district may expend funds for offsets from mobile or areawide sources
only after making a public determination that sufficient reductions
from stationary sources cannot be secured prior to commencement of
operation of the project.
   (f) Prior to accepting the payment of an emissions offset fee
pursuant to this section, and not less than 11 months prior to
commencement of the electrical generation facility, the governing
board or the air pollution control officer of a district shall hold a
duly noticed public hearing that meets all of the following
conditions:
   (1) Notice of the hearing shall be published at least 30 days
prior to the date of the hearing in all newspapers of general
circulation in the area to be affected by the electrical generation
facility's emissions.
   (2) At the hearing, the applicant demonstrates, to the
satisfaction of the governing board or the air pollution control
officer, that emissions offsets are not available to the applicant in
the district, or that the offsets are available only at a cost
which, for all practical purposes, make the offsets unavailable to
the applicant.
   (3) At the hearing, the district identifies those offsets that it
will purchase for use by the applicant and finds that those offsets
comply with the requirements of this section and with all applicable
requirements of state and federal law and district rules and
regulations, including, but not limited to, requirements that those
offsets are quantifiable, verifiable, enforceable, real, permanent,
and surplus and that they are, measured from a verified air emissions
baseline.
   (4) At the hearing, the district establishes the amount of
emissions offset fees or the portion of the bond to be paid by the
applicant.  The amount shall be sufficient to obtain the equivalent
amount of offsets as would otherwise be required to be obtained by
the applicant, and may include an additional amount not to exceed 3
percent to cover the district's administrative costs.
   (g) Not less than six months after the hearing conducted pursuant
to subdivision (f), the district shall publish and make available to
the public and the applicant the types and quantities of offsets that
it has secured.
   (h) This section may be utilized by a thermal powerplant subject
to Chapter 6 (commencing with Section 25500) of Division 15 of the
Public Resources Code.  However, to the extent this section is
utilized by a thermal powerplant subject to that chapter, the thermal
powerplant shall be required to demonstrate compliance with this
section in a manner consistent with the requirements of Section 25523
of the Public Resources Code.
   (i) A district may, by regulation, suspend or limit the
applicability of this section for any period of time or with respect
to a particular electrical generation facility if the district
determines that it would interfere with attainment or maintenance of
state or federal ambient air quality standards, or to the extent it
determines that adequate offsets are available at a reasonable price.
  District rules governing notice required for adoption or amendment
of regulations shall apply to this subdivision.
   (j) (1) This section shall remain in effect only until January 1,
2004, and as of that date is repealed, unless a later enacted
statute, which is enacted before January 1, 2004, deletes or extends
that date.
   (2) However, except as otherwise provided in this section, the
repeal of this section may not affect any electrical generation
facility for which offsets have been obtained pursuant to this
section prior to the date of the repeal.
  SEC. 4.  Section 25514 of the Public Resources Code is amended to
read:
   25514.  After conclusion of the hearings held pursuant to Section
25513 and no later than 300 days after the filing of the notice, a
final report shall be prepared and distributed.  The final report
shall include, but not be limited to, all of the following:
   (a) The findings and conclusions of the commission regarding the
conformity of alternative sites and related facilities designated in
the notice or considered in the notice of intention proceeding with
both of the following:
   (1) The 12-year forecast of statewide and service area electric
power demands adopted pursuant to subdivision (e) of Section 25305,
except as provided in Section 25514.5.
   (2) Applicable local, regional, state, and federal standards,
ordinances, and laws, including any long-range land use plans or
guidelines adopted by the state or by any local or regional planning
agency, which would be applicable but for the exclusive authority of
the commission to certify sites and related facilities; and the
standards adopted by the commission pursuant to Section 25216.3.
   (b) Any findings and comments submitted by the California Coastal
Commission pursuant to Section 25507 and subdivision (d) of Section
30413.
   (c) Any findings and comments submitted by the San Francisco Bay
Conservation and Development Commission pursuant to Section 25507 of
this code and subdivision (d) of Section 66645 of the Government
Code.
   (d) The commission's findings on the acceptability and relative
merit of each alternative siting proposal designated in the notice or
presented at the hearings and reviewed by the commission.  The
specific findings of relative merit shall be made pursuant to
Sections 25502 to 25516, inclusive.  In its findings on any
alternative siting proposal, the commission may specify modification
in the design, construction, location, or other conditions which will
meet the standards, policies, and guidelines established by the
commission.
   (e) Findings and conclusions with respect to the safety and
reliability of the facility or facilities at each of the sites
designated in the notice, as determined by the commission pursuant to
Section 25511, and any conditions, modifications, or criteria
proposed for any site and related facility proposal resulting from
the findings and conclusions.
   (f) Findings and conclusions as to whether increased property
taxes due to the construction of the project are sufficient to
support needed local improvements and public services required to
serve the project.
  SEC. 5.  Section 25519.5 is added to the Public Resources Code, to
read:
   25519.5.  (a) Each local government agency reviewing an
application pursuant to subdivision (f) of Section 25519 shall file a
preliminary list of issues regarding the design, operation,
location, and financial impacts of the facility with the commission
no later than 45 days after the date an application for certification
is deemed filed for purposes of Section 25522 and shall provide a
final list of those issues with the commission no later than 100 days
after the application for certification is deemed filed. Nothing in
this section may be construed to limit the right of a city, county,
or city and county, to comment on an application filed pursuant to
this chapter or to act as an intervenor or other party to a
proceeding established pursuant to this chapter.
   (b) This section shall remain in effect only until January 1,
2004, and as of that date is repealed, unless a later enacted
statute, which is enacted before January 1, 2004, deletes or extends
that date.
  SEC. 6.  Section 25521 of the Public Resources Code is amended to
read:
   25521.  No earlier than 90 nor later than 240 days after the date
of the filing of an application, the commission shall commence a
public hearing or hearings on the application in Sacramento, San
Francisco, Los Angeles, or San Diego, whichever city is nearest the
proposed site.  Additionally, the commission may hold a hearing or
hearings in the county in which the proposed site and related
facilities are to be located.  The commission hearings shall provide
a reasonable opportunity for the public and all parties to the
proceeding to comment upon the application and the commission staff
assessment and shall provide the equivalent opportunity for comment
as required pursuant to Division 13 (commencing with Section 21000).
Consistent with the requirements of this section, the commission
shall have the discretion to determine whether or not a hearing is to
be conducted in a manner that requires formal examination of
witnesses or that uses other similar adjudicatory procedures.
  SEC. 7.  Section 25523 of the Public Resources Code is amended to
read:
   25523.  The commission shall prepare a written decision after the
public hearing on an application, which includes all of the
following:
   (a) Specific provisions relating to the manner in which the
proposed facility is to be designed, sited, and operated in order to
protect environmental quality and assure public health and safety.
   (b) In the case of a site to be located in the coastal zone,
specific provisions to meet the objectives of Division 20 (commencing
with Section 30000) as may be specified in the report submitted by
the California Coastal Commission pursuant to subdivision (d) of
Section 30413, unless the commission specifically finds that the
adoption of the provisions specified in the report would result in
greater adverse effect on the environment or that the provisions
proposed in the report would not be feasible.
   (c) In the case of a site to be located in the Suisun Marsh or in
the jurisdiction of the San Francisco Bay Conservation and
Development Commission, specific provisions to meet the requirements
of Division 19 (commencing with Section 29000) of this code or Title
7.2 (commencing with Section 66600) of the Government Code as may be
specified in the report submitted by the San Francisco Bay
Conservation and Development Commission pursuant to subdivision (d)
of Section 66645 of the Government Code, unless the commission
specifically finds that the adoption of the provisions specified in
the report would result in greater adverse effect on the environment
or the provisions proposed in the report would not be feasible.
   (d) (1) Findings regarding the conformity of the proposed site and
related facilities with standards adopted by the commission pursuant
to Section 25216.3 and subdivision (d) of Section 25402, with public
safety standards and the applicable air and water quality standards,
and with other relevant local, regional, state, and federal
standards, ordinances, or laws.  If the commission finds that there
is noncompliance with any state, local, or regional ordinance or
regulation in the application, it shall consult and meet with the
state, local, or regional governmental agency concerned to attempt to
correct or eliminate the noncompliance.  If the noncompliance cannot
be corrected or eliminated, the commission shall inform the state,
local, or regional governmental agency if it makes the findings
required by Section 25525.
   (2) The commission may not find that the proposed facility
conforms with applicable air quality standards pursuant to paragraph
(1) unless the applicable air pollution control district or air
quality management district certifies, prior to the licensing of the
project by the commission, that complete emissions offsets for the
proposed facility have been identified and will be obtained by the
applicant within the time required by the district's rules or unless
the applicable air pollution control district or air quality
management district certifies that the applicant requires emissions
offsets to be obtained prior to the commencement of operation
consistent with Section 42314.3 of the Health and Safety Code and
prior to commencement of the operation of the proposed facility.  The
commission shall require as a condition of certification that the
applicant obtain any required emission offsets within the time
required by the applicable district rules, consistent with any
applicable federal and state laws and regulations, and prior to the
commencement of the operation of the proposed facility.
   (e) Provision for restoring the site as necessary to protect the
environment, if the commission denies approval of the application.
   (f) In the case of a site and related facility using resource
recovery (waste-to-energy) technology, specific conditions requiring
that the facility be monitored to ensure compliance with paragraphs
(1), (2), (3), and (6) of subdivision (a) of Section 42315 of the
Health and Safety Code.
   (g) In the case of a facility, other than a resource recovery
facility subject to subdivision (f), specific conditions requiring
the facility to be monitored to ensure compliance with toxic air
contaminant control measures adopted by an air pollution control
district or air quality management district pursuant to subdivision
(d) of Section 39666 or Section 41700 of the Health and Safety Code,
whether the measures were adopted before or after issuance of a
determination of compliance by the district.
   (h) A discussion of any public benefits from the project
including, but not limited to, economic benefits, environmental
benefits, and electricity reliability benefits.
  SEC. 8.  Section 25531 of the Public Resources Code is amended to
read:
   25531.  (a) The decisions of the commission on any application for
certification of a site and related facility are subject to judicial
review by the Supreme Court of California.
   (b) No new or additional evidence may be introduced upon review
and the cause shall be heard on the record of the commission as
certified to by it.  The review shall not be extended further than to
determine whether the commission has regularly pursued its
authority, including a determination of whether the order or decision
under review violates any right of the petitioner under the United
States Constitution or the California Constitution.  The findings and
conclusions of the commission on questions of fact are final and are
not subject to review, except as provided in this article.  These
questions of fact shall include ultimate facts and the findings and
conclusions of the commission.  A report prepared by, or an approval
of, the commission pursuant to Section 25510, 25514, 25516, or
25516.5, or subdivision (b) of Section 25520.5, shall not constitute
a decision of the commission subject to judicial review.
   (c) Subject to the right of judicial review of decisions of the
commission, no court in this state has jurisdiction to hear or
determine any case or controversy concerning any matter which was, or
could have been, determined in a proceeding before the commission,
or to stop or delay the construction or operation of any thermal
powerplant except to enforce compliance with the provisions of a
decision of the commission.
   (d) Notwithstanding Section 1250.370 of the Code of Civil
Procedure:
   (1) If the commission requires, pursuant to subdivision (a) of
Section 25528, as a condition of certification of any site and
related facility, that the applicant acquire development rights, that
requirement conclusively establishes the matters referred to in
Sections 1240.030 and 1240.220 of the Code of Civil Procedure in any
eminent domain proceeding brought by the applicant to acquire the
development rights.
   (2) If the commission certifies any site and related facility,
that certification conclusively establishes the matters referred to
in Sections 1240.030 and 1240.220 of the Code of Civil Procedure in
any eminent domain proceeding brought to acquire the site and related
facility.
   (e) No decision of the commission pursuant to Section 25516,
25522, or 25523 shall be found to mandate a specific supply plan for
any utility as prohibited by Section 25323.
  SEC. 9.  Section 25550.5 is added to the Public Resources Code, to
read:
   25550.5.  (a) Notwithstanding subdivision (a) of Section 25522 and
Section 25540.6, the commission shall establish a process to issue
its final decision on an application for certification for the
repowering of a thermal powerplant and related facilities within 180
days after the filing of the application for certification that, on
the basis of an initial review, shows that there is substantial
evidence that the project will not cause a significant adverse impact
on the environment or electrical system and that the project will
comply with all applicable standards, ordinances, regulations, and
statutes.  For purposes of this section, filing has the same meaning
as in Section 25522.
   (b) The repowering of a thermal powerplant and related facilities
reviewed under this process shall satisfy the requirements of Section
25520 and other necessary information required by the commission by
regulation, including the information required for permitting by each
local, state, and regional agency that would have jurisdiction over
the proposed repowering of a thermal powerplant and related
facilities but for the exclusive jurisdiction of the commission and
the information required for permitting by each federal agency that
has jurisdiction over the proposed repowering of a thermal powerplant
and related facilities.
   (c) After an application is filed under this section, the
commission shall not be required to issue a final decision on the
application within 180 days if it determines there is substantial
evidence in the record that the thermal powerplant and related
facilities may result in a significant adverse impact on the
environment or electrical system or does not comply with an
applicable standard, ordinance, regulation, or statute. Under this
circumstance, the commission shall make its decision in accordance
with subdivision (a) of Section 25522 and Section 25540.6, and a new
application shall not be required.
   (d) For an application that the commission accepts under this
section, any local, regional, or state agency that would have had
jurisdiction over the proposed thermal powerplant and related
facilities, but for the exclusive jurisdiction of the commission,
shall provide its final comments, determinations, or opinions within
100 days after the filing of the application.  The regional water
quality control board, as established pursuant to Chapter 4
(commencing with Section 13200) of Division 7 of the Water Code,
shall retain jurisdiction over any applicable water quality standard
that is incorporated into any final certification issued pursuant to
this chapter.
   (e) The repowering of a thermal powerplant and related facilities
that demonstrate superior environmental or efficiency performance
improvement shall receive first priority in review by the commission.

   (f) With respect to the repowering of a thermal powerplant and
related facilities reviewed under the process established by this
chapter, it shall be shown that the applicant has contracted with a
general contractor and has contracted for an adequate supply of
skilled labor to construct, operate, and maintain the plant.
   (g) With respect to a repowering of a thermal powerplant and
related facilities reviewed under the process established by this
chapter, it shall be shown that the thermal powerplant and related
facilities complies with all regulations adopted by the commission
that ensure that an application addresses
              disproportionate impacts in a manner consistent with
Section 65040.12 of the Government Code.
   (h) To implement this section, the commission may adopt emergency
regulations in accordance with Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code. For
purposes of that chapter, including, without limitation, Section
11349.6 of the Government Code, the adoption of the regulations shall
be considered by the Office of Administrative Law to be necessary
for the immediate preservation of the public peace, health, safety,
and general welfare.
   (i) For purposes of this section, "repowering" means a project for
the modification of an existing generation unit of a thermal
powerplant that meets all of the following criteria:
   (1) The project complies with all applicable requirements of
federal, state, and local laws.
   (2) The project is located on the site of, and within the existing
boundaries of, an existing thermal facility.
   (3) The project will not require significant additional
rights-of-way for electrical or fuel-related transmission facilities.

   (4) The project will result in significant and substantial
increases in the efficiency of the production of electricity,
including, but not limited to, reducing the heat rate, reducing the
use of natural gas, reducing the use and discharge of water, and
reducing air pollutants emitted by the project, as measured on a per
kilowatthour basis.
   (j) This section shall remain in effect only until January 1,
2004, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2004, deletes or extends
that date.
  SEC. 10.  Section 25552 of the Public Resources Code is amended to
read:
   25552.  (a) The commission shall implement a procedure, consistent
with Division 13 (commencing with Section 21000) and with the
federal Clean Air Act (42 U.S.C. Sec. 7401 et seq.), for an expedited
decision on simple cycle thermal powerplants and related facilities
that can be put into service on or before December 31, 2002,
including a procedure for considering amendments to a pending
application if the amendments specify a change from a combined cycle
thermal powerplant and related facilities to a simple cycle thermal
powerplant and related facilities.
   (b) The procedure shall include all of the following:
   (1) A requirement that, within 15 days of receiving the
application or amendment to a pending application, the commission
shall determine whether the application is complete.
   (2) A requirement that, within 25 days of determining that an
application is complete, the commission, or a committee of the
commission, shall determine whether the application qualifies for an
expedited decision pursuant to this section.  If an application
qualifies for an expedited decision pursuant to this section, the
commission shall provide the notice required by Section 21092.
   (c) The commission shall issue its final decision on an
application, including an amendment to a pending application, within
four months from the date on which it deems the application or
amendment complete, or at any later time mutually agreed upon by the
commission and the applicant, provided that the thermal powerplant
and related facilities remain likely to be in service on or before
December 31, 2002.
   (d) The commission shall issue a decision granting a license to a
simple cycle thermal powerplant and related facilities pursuant to
this section if the commission finds all of the following:
   (1) The thermal powerplant is not a major stationary source or a
modification to a major stationary source, as defined by the federal
Clean Air Act, and will be equipped with best available control
technology, in consultation with the appropriate air pollution
control district or air quality management district and the State Air
Resources Board.
   (2) The thermal powerplant and related facilities will not have a
significant adverse effect on the environment or the electrical
system as a result of construction or operation.
   (3) With respect to a project for a thermal powerplant and related
facilities reviewed under the process established by this section,
the applicant has contracted with a general contractor and has
contracted for an adequate supply of skilled labor to construct,
operate, and maintain the thermal powerplant.
   (e) In order to qualify for the procedure established by this
section, an application shall satisfy the requirements of Section
25523, and include a description of the proposed conditions of
certification that will do all of the following:
   (1) Assure that the thermal powerplant and related facilities will
not have a significant adverse effect on the environment as a result
of construction or operation.
   (2) Assure protection of public health and safety.
   (3) Result in compliance with all applicable federal, state, and
local laws, ordinances, and standards.
   (4) A reasonable demonstration that the thermal powerplant and
related facilities, if licensed on the expedited schedule provided by
this section, will be in service before December 31, 2002.
   (5) A binding and enforceable agreement with the commission, that
demonstrates either of the following:
   (A) That the thermal powerplant will cease to operate and the
permit will terminate within three years.
   (B) That the thermal powerplant will be recertified, modified,
replaced, or removed within a period of three years with a
cogeneration or combined-cycle thermal powerplant that uses best
available control technology and obtains necessary offsets, as
determined at the time the combined-cycle thermal powerplant is
constructed, and that complies with all other applicable laws,
ordinances, and standards.
   (6) Where applicable, that the thermal powerplant will obtain
offsets or, where offsets are unavailable, pay an air emissions
mitigation fee to the air pollution control district or air quality
management district based upon the actual emissions from the thermal
powerplant, to the district for expenditure by the district pursuant
to Chapter 9 (commencing with Section 44275) of Part 5 of Division 26
of the Health and Safety Code, to mitigate the emissions from the
plant.  To the extent consistent with federal law and regulation, any
offsets required pursuant to this paragraph shall be based upon a
1:1 ratio, unless, after consultation with the applicable air
pollution control district or air quality management district, the
commission finds that a different ratio should be required.
   (7) Nothing in this section shall affect the ability of an
applicant that receives approval to install simple cycle thermal
powerplants and related facilities as an amendment to a pending
application to proceed with the original application for a combined
cycle thermal powerplant or related facilities.
   (f) This section shall remain in effect only until January 1,
2003, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2003, deletes or extends
that date except that the binding commitments in paragraph (5) of
subdivision (e) shall remain in effect after that date.
  SEC. 11.  Article 3.5 (commencing with Section 353.1) is added to
Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code, to
read:

      Article 3.5.  Distributed Energy Resources

   353.1.  As used in this article, "distributed energy resources"
means any electric generation technology that meets all of the
following criteria:
   (a) Commences initial operation between May 1, 2001, and June 1,
2003, except that gas-fired distributed energy resources that are not
operated in a combined heat and power application must commence
operation no later than September 1, 2002.
   (b) Is located within a single facility.
   (c) Is five megawatts or smaller in aggregate capacity.
   (d) Serves onsite loads or over-the-fence transactions allowed
under Sections 216 and 218.
   (e) Is powered by any fuel other than diesel.
   (f) Complies with emission standards and guidance adopted by the
State Air Resources Board pursuant to Sections 41514.9 and 41514.10
of the Health and Safety Code.  Prior to the adoption of those
standards and guidance, for the purpose of this article, distributed
energy resources shall meet emissions levels equivalent to nine parts
per million oxides of nitrogen, or the equivalent standard taking
into account efficiency as determined by the State Air Resources
Board, averaged over a three-hour period, or best available control
technology for the applicable air district, whichever is lower,
except for distributed generation units that displace and therefore
significantly reduce emissions from natural gas flares or reinjection
compressors, as determined by the State Air Resources Control Board.
  These units shall comply with the applicable best available control
technology as determined by the air pollution control district or
air quality management district in which they are located.
   353.3.  (a) The commission shall require each electrical
corporation under the operational control of the Independent System
Operator as of January 1, 2001, to modify its tariffs so that all
customers installing new distributed energy resources in accordance
with the criteria described in Section 353.1 are served under rates,
rules, and requirements identical to those of a customer within the
same rate schedule that does not use distributed energy resources,
and to withdraw any provisions in otherwise applicable tariffs that
activate other tariffs, rates, or rules if a customer uses
distributed energy resources.
   (b) To qualify for the tariffs described in subdivision (a), each
customer with distributed energy resources that meet the criteria of
Section 353.1 shall participate in a real-time metering and pricing
program, when these programs become available, in which rates for any
energy purchased from the electrical corporation reflect the actual
cost to the electrical corporation of energy it purchases at the time
it is consumed by the customer.  Prior to the time these programs
become available, the customer shall participate in a time-of-use
pricing tariff.  On or before December 31, 2001, the commission shall
adopt a real time pricing tariff for the purpose of this section.
   (c) Except as specified in Section 353.7, customers may not be
subject to the application of additional rates or tariffs solely
because of their use of distributed energy resources to serve onsite
loads or over-the-fence transactions allowed under Sections 216 and
218.
   353.5.  Each electrical corporation, as part of its distribution
planning process, shall consider nonutility owned distributed energy
resources as a possible alternative to investments in its
distribution system in order to ensure reliable electric service at
the lowest possible cost.
   353.7.  Notwithstanding Section 353.3, nothing in this article may
result in any exemption from reasonable interconnection charges,
lead to any reduction in contributions by each customer class to
public purpose programs funded under Section 399.8, or relieve any
customer of any obligation determined by the commission to result
from participation in the purchase of power through the Department of
Water Resources pursuant to Division 27 (commencing with Section
80000) of the Water Code.
   353.9.  In establishing the rates required under this article, the
commission shall create a firewall that segregates distribution cost
recovery so that any net costs, taking into account the actual costs
and benefits of distributed energy resources, proportional to each
customer class, as determined by the commission, resulting from the
tariff modifications granted to members of each customer class may be
recovered only from that class.
   353.11.  A local publicly owned electric utility, as defined in
subdivision (d) of Section 9604, or a local publicly owned utility
otherwise providing electrical service, shall review at the earliest
practicable date its rates, tariffs, and rules to identify barriers
to and determine the appropriate balance of costs and benefits of
distributed energy resources in order to facilitate the installation
of these resources in the interests of their customer-owners and the
state, and shall hold at least one noticed public meeting to solicit
public comment on the review and any recommended changes.  However,
notwithstanding any other provision of this article, such an entity
has the sole authority to undertake such a review and to make
modifications to its rates, tariffs, and rules as the governing body
of that utility determines to be necessary.
   353.13.  (a) The commission shall require each electrical
corporation to establish new tariffs on or before January 1, 2003,
for customers using distributed energy resources, including, but not
limited to, those which do not meet all of the criteria described in
Section 353.1.  However, after January 1, 2003, distributed energy
resources that meet all of the criteria described in Section 353.1
shall continue to be subject only to those tariffs in existence
pursuant to Section 353.3, until June 1, 2011, except that
installations that do not operate in a combined heat and power
application will be subject to those tariffs in existence pursuant to
Section 353.3 only until June 1, 2006.  Those tariffs required
pursuant to this section shall ensure that all net distribution costs
incurred to serve each customer class, taking into account the
actual costs and benefits of distributed energy resources,
proportional to each customer class, as determined by the commission,
are fully recovered only from that class.  The commission shall
require each electrical corporation, in establishing those rates, to
ensure that customers with similar load profiles within a customer
class will, to the extent practicable, be subject to the same utility
rates, regardless of their use of distributed energy resources to
serve onsite loads or over-the-fence transactions allowed under
Sections 216 and 218.  Customers with dedicated facilities shall
remain responsible for their obligations regarding payment for those
facilities.
   (b) The commission shall prepare and submit to the Legislature, on
or before June 1, 2002, a report describing its proposed methodology
for determining the new rates and the process by which it will
establish those rates.
   353.15.  (a) In order to evaluate the efficiency, emissions, and
reliability of distributed energy resources with a capacity greater
than 10 kilowatts, customers that install those resources pursuant to
this article shall report to the commission, on an annual basis, all
of the following information, as recorded on a monthly basis:
   (1) Heat rate for the resource.
   (2) Total kilowatthours produced in the peak and off-peak periods,
as determined by the ISO.
   (3) Emissions data for the resource, as required by the State Air
Resources Board or the appropriate air quality management district or
air pollution control district.
   (b) The commission shall release the information submitted
pursuant to subdivision (a) in a manner that does not identify the
individual user of the distributed energy resource.
   (c) The commission, in consultation with the State Air Resources
Board, air quality management districts, air pollution control
districts, and the State Energy Resources Conservation and
Development Commission, shall evaluate the information submitted
pursuant to subdivision (a) and, within two years of the effective
date of the act adding this article, prepare and submit to the
Governor and the Legislature a report recommending any changes to
this article it determines necessary based upon that information.
  SEC. 12.  (a) Notwithstanding Section 625 of the Public Utilities
Code, from the effective date of this section to June 1, 2002,
inclusive, a gas corporation public utility may exercise the power of
eminent domain, including, but not limited to, any authority
provided by Title 7 (commencing with Section 1230.010) of Part 3 of
the Code of Civil Procedure, to condemn any property for the purpose
of competing with another entity in the offering of natural gas and
services related to natural gas.
   (b) The Public Utilities Commission may not make a finding on a
petition or complaint pending on the effective date of this section
that was filed pursuant to Section 625 of the Public Utilities Code
by a gas corporation public utility to condemn any property for the
purpose of competing with another entity in the offering of natural
gas and services related to natural gas.  The Public Utilities
Commission shall dismiss the petition or complaint.
   (c) This section shall become inoperative on June 1, 2002, and, as
of January 1, 2003, is repealed, unless a later enacted statute that
is enacted before January 1, 2003, deletes or extends the dates on
which it becomes inoperative and is repealed.
  SEC. 13.  The sum of not more than three million two hundred fifty
thousand dollars ($3,250,000) is hereby appropriated from the General
Fund to the State Energy Resources Conservation and Development
Commission for expenditure, until January 1, 2005, for the following
purposes:
   (a) Three million dollars ($3,000,000) to provide assistance to
cities and counties to expedite the review and analysis of
applications for electrical generating facilities which will assist
the state in meeting its urgent energy needs and ensuring system
reliability.  The moneys available pursuant to this subdivision shall
not be used to supplant funding available to a city or county
through the exercise of its existing fee authority.
   (b) Not more than two hundred fifty thousand dollars ($250,000) to
contract or conduct a study, in consultation with the Orange County
Sanitation District, of the remedies to mitigate effects of shoreline
water contamination located in the vicinity of the City of
Huntington Beach to be conducted concurrently with the Huntington
Beach Shoreline Contamination Study conducted by the Orange County
Sanitation District.
  SEC. 14.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution for certain
costs that may be incurred by a local agency or school district
because in that regard 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 XIIIB of the California Constitution.
   However, notwithstanding Section 17610 of the Government Code, if
the Commission on State Mandates determines that this act contains
other costs mandated by the state, reimbursement to local agencies
and school districts for those costs shall be made pursuant to Part 7
(commencing with Section 17500) of Division 4 of Title 2 of the
Government Code.  If the statewide cost of the claim for
reimbursement does not exceed one million dollars ($1,000,000),
reimbursement shall be made from the State Mandates Claims Fund.
  SEC. 15.  This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect.  The facts constituting the necessity are:
   In order to address the rapid, unforeseen shortage of electric
supply and energy available in the state, which endangers the health,
welfare, and safety of the people of this state, it is necessary for
this act to take effect immediately.