PROPOSITION 7

    This initiative measure is submitted to the people of California in accordance

with the provisions of Section 8 of Article II of the California Constitution.

    This initiative measure amends sections of the Public Utilities Code and

amends and adds sections to the Public Resources Code; therefore, existing

provisions proposed to be deleted are printed in strikeout type and new

provisions proposed to be added are printed in italic type to indicate that they

are new.

PROPOSED LAW

               THE SOLAR AND CLEAN ENERGY ACT OF 2008

SECTION 1. TITLE

    This measure shall be known as "The Solar and Clean Energy Act of

2008."

    SEC. 2. FINDINGS AND DECLARATIONS

The people of California find and declare the following:

    A. Global warming and climate change is now a real crisis. With the polar

ice caps continuing to melt, temperatures rising worldwide, increasing

greenhouse gases, and dramatic climate changes occurring, we are quickly

reaching the tipping point. California is facing a serious threat from rising sea

levels, increased drought, and melting Sierra snowpack that feed our water

supply. California needs solar and clean energy to attack the climate changes

which threaten our state.

    B. California suffers from drought, air pollution, poor water quality, and

many other environmental problems. Very little has been done because the

special energy interests block change. Californians must take energy reform

into their own hands. The alternative to dirty energy is solar and clean

energy.

    C. California can provide the leadership needed to attack global warming

and climate change.

    D. The Solar and Clean Energy Act will help reduce air pollution in

California. With this initiative, we can help clean up our air and build a

healthier, cleaner environment for our children.

    E. Our traditional sources of power rely too much on fossil fuels and foreign

energy that are getting more and more expensive and less reliable. This

initiative will encourage investment in solar and clean energy sources that in

the long-run are cheaper and are located here in California, and in the shortterm,

California's investment in solar and clean energy will result in no more

than a 3 percent increase in electric rates--a small price to pay for a healthier

and cleaner environment.

    F. The Solar and Clean Energy Act will put California on the path to energy

independence by requiring all electric utilities to produce 50 percent of their

electricity from clean energy sources like solar and wind by 2025. Right now,

over 22 percent of California's greenhouse gases comes from electricity

generation but around 10 percent of California's electricity comes from solar

and clean energy sources, leaving Californians vulnerable to high energy

costs, to political instability in the Middle East, and to being held hostage by

big oil companies.

    G. The Solar and Clean Energy Act encourages new technology to produce

electricity. Many people are familiar with the solar power that comes from

panels that can be placed on rooftops, but there is dramatic new technology

that allows solar energy to be generated from concentrations of solar mirrors

in the desert. These mirrors are so efficient that a large square array, eleven

miles on a side, may be able to generate enough electricity to meet all of

California's needs and at a lower cost than we are paying today. The desert

could lead us to energy independence.

    H. The current law says we are supposed to have 20 percent solar and clean

energy but we are still at around 10 percent and even big government-owned

utilities like those in Los Angeles and Sacramento lobbied successfully to

exempt themselves from the law. The Solar and Clean Energy Act provides

incentives, tough standards, and penalties for those who do not comply.

    I. The Solar and Clean Energy Act will benefit California's economy.

Building facilities for solar and clean energy sources and transmission lines to

transport that electricity will create good jobs that pay the prevailing wage.

These jobs will bring new investments and new jobs to California and

strengthen California's economy.

    J. Global warming and California's reliance on fossil fuels and foreign

energy are a matter of statewide concern, as is the implementation of statewide

standards for the sources of electricity production and the permitting of solar

and clean energy plants and related transmission facilities. Accordingly, the

people find that these matters are not municipal affairs, as that term is used in

Section 5 of Article XI of the California Constitution, but are instead matters

of statewide concern.

    SEC. 3. PURPOSE AND INTENT

    It is the intent of the people of California in enacting this measure to:

    A. Address global warming and climate change, and protect the endangered

Sierra snowpack by reducing California's carbon-based greenhouse gas

emissions;

    B. Tap proven technologies such as solar, geothermal, wind, biomass, and

small hydroelectric to generate clean energy throughout California and meet

renewable energy targets without raising taxes on any California taxpayer;

    C. Require all California utilities--including government-owned utilities

like the Los Angeles Department of Water and Power--to procure electricity

from solar and clean energy resources, in the following timeframes:

    1. 20 percent by 2010;

    2. 40 percent by 2020; and,

    3. 50 percent by 2025;

    D. Fast-track all approvals for the development of solar and clean energy

plants and related transmission facilities while guaranteeing all environmental

protections--including the Desert Protection Act;

    E. Create production incentives for the development and construction of

solar and clean energy plants and related transmission facilities;

    F. Assess penalties upon all utilities that fail to meet renewable resource

targets, and prohibit these utilities from passing on these penalties to

consumers;

    G. Permit long-term 20 year contracts for solar and clean energy to assure

marketability and financing of solar and clean energy plants;

    H. Cap price impacts on consumers' electricity bills at less than 3 percent.

Over the long-term, studies have shown that consumer electricity costs will

decline;

    I. Grant the Public Utilities Commission the powers to enforce compliance

of the renewables portfolio standard upon privately owned utilities, assess

penalties for non-compliance, and prohibit utilities from passing on penalties

to consumers;

    J. Grant the California State Energy Resources Conservation and

Development Commission (the Energy Commission) the powers to:

    1. Enforce compliance of the renewables portfolio standard upon

government-owned utilities, assess penalties to those utilities for noncompliance,

and prohibit the utilities from passing on penalties to consumers;

    2. Adopt rules to fast-track all approvals for the development of solar and

clean energy resources and plants while guaranteeing all environmental

protections--including the Desert Protection Act;

    3. Allocate funds to purchase, sell, or lease real property, personal property

or rights-of-way for the development and use of the property and rights-of-way

for the generation and/or transmission of solar and clean energy, and to upgrade

existing transmission lines; and,

    4. Identify and designate Solar and Clean Energy Zones--primarily in the

desert.

    SEC. 4. Section 387 of the Public Utilities Code is amended to read:

387. (a) Each governing body of a local publicly owned electric utility, as

defined in Section 9604, shall be responsible for implementing and enforcing

a implement the renewables portfolio standard as established and defined in

this article that recognizes the intent of the Legislature to encourage renewable

resources, while taking into consideration the effect of the standard on rates,

reliability, and financial resources and the goal of environmental

improvement.

   (b) Each local publicly owned electric utility shall report, on an annual

basis, to its customers and to the State Energy Resources Conservation and

Development Commission, the following:

   (1) Expenditures of public goods funds collected pursuant to Section 385 for

eligible renewable energy resource development. Reports shall contain a

description of programs, expenditures, and expected or actual results.

   (2) The resource mix used to serve its customers by fuel type. Reports shall

contain the contribution of each type of renewable energy resource with

separate categories for those fuels that are eligible renewable energy resources

as defined in Section 399.12, except that the electricity is delivered to the local

publicly owned electric utility and not a retail seller. Electricity shall be

reported as having been delivered to the local publicly owned electric utility

from an eligible renewable energy resource when the electricity would qualify

for compliance with the renewables portfolio standard if it were delivered to a

retail seller.

    (3) The utility's status in implementing a renewables portfolio standard

pursuant to subdivision (a) and the utility's progress toward attaining the

standard following implementation.

    SEC. 5. Section 399.25 of the Public Utilities Code is amended to read:

    399.25. (a) Notwithstanding any other provision in Sections 1001 to 1013,

inclusive, an application of an electrical corporation for a certificate authorizing

the construction of new transmission facilities shall be deemed to be necessary

to the provision of electric service for purposes of any determination made

under Section 1003 if the commission finds that the new facility is necessary

to facilitate achievement of the renewable power goals established in Article

16 (commencing with Section 399.11).

    (b) (a) With respect to a transmission facility described in subdivision (a)

any transmission facilities deemed to be necessary by the Energy Commission

to facilitate achievement of the renewables portfolio standard established in

Article 16 (commencing with Section 399.11) of the Public Utilities Code, the

commission shall take all feasible actions to ensure that the transmission rates

established by the Federal Energy Regulatory Commission are fully reflected

in any retail rates established by the commission. These actions shall include,

but are not limited to:

    (1) Making findings, where supported by an evidentiary record, that those

transmission facilities provide benefit to the transmission network and are

necessary to facilitate the achievement of the renewables portfolio standard

established in Article 16 (commencing with Section 399.11).

    (2) Directing the utility to which the generator will be interconnected,

where the direction is not preempted by federal law, to seek the recovery

through general transmission rates of the costs associated with the transmission

facilities.

    (3) Asserting the positions described in paragraphs (1) and (2) to the Federal

Energy Regulatory Commission in appropriate proceedings.

    (4) Allowing recovery in retail rates of any increase in transmission costs

incurred by an electrical corporation a retail seller resulting from the

construction of the transmission facilities that are not approved for recovery in

transmission rates by the Federal Energy Regulatory Commission after the

commission determines that the costs were prudently incurred in accordance

with subdivision (a) of Section 454.

    (b) Notwithstanding subdivision (a), a retail seller shall not recover any

costs paid through the Solar and Clean Energy Transmission Account to

facilitate the construction of any transmission facilities.

    SEC. 6. Section 399.11 of the Public Utilities Code is amended to read:

    399.11. The Legislature people finds find and declares declare all of the

following:

    (a) In order to attain a the target targets of generating 20 percent of total

retail sales of electricity in California from eligible renewable energy resources

by December 31, 2010, 40 percent of total retail sales of electricity in California

from eligible renewable energy resources by December 31, 2020, and 50

percent of total retail sales of electricity in California from eligible renewable

energy resources by December 31, 2025, and for the purposes of increasing the

diversity, reliability, public health and environmental benefits of the energy

mix to address global warming and climate change, and to protect the

endangered Sierra snowpack, it is the intent of the Legislature people that the

commission and the State Energy Resources Conservation and Development

Commission implement the California Renewables Portfolio Standard Program

described in this article.

    (b) Increasing California's reliance on eligible renewable energy resources

may promote stable electricity prices, protect public health, improve

environmental quality, stimulate sustainable economic development, create

new employment opportunities, and reduce reliance on imported fuels.

    (c) The development of eligible renewable energy resources and the delivery

of the electricity generated by those resources to customers in California may

ameliorate air quality problems throughout the state, address global warming

and climate change, protect the endangered Sierra snowpack, and improve

public health by reducing the burning of fossil fuels and the associated

environmental impacts and by reducing in-state fossil fuel consumption.

    (d) The California Renewables Portfolio Standard Program is intended to

complement the Renewable Energy Resources Program administered by the

State Energy Resources Conservation and Development Commission and

established pursuant to Chapter 8.6 (commencing with Section 25740) of

Division 15 of the Public Resources Code.

    (e) New and modified electric transmission facilities may be necessary to

facilitate the state achieving its renewables portfolio standard targets.

    SEC. 7. Section 399.12 of the Public Utilities Code is amended to read:

    399.12. For purposes of this article, the following terms have the following

meanings:

    (a) "Conduit hydroelectric facility" means a facility for the generation of

electricity that uses only the hydroelectric potential of an existing pipe, ditch,

flume, siphon, tunnel, canal, or other manmade conduit that is operated to

distribute water for a beneficial use.

    (b) "Delivered" and "delivery" have the same meaning as provided in

subdivision (a) of Section 25741 of the Public Resources Code.

    (c) "Eligible renewable energy resource" means an electric generating a

solar and clean energy facility that meets the definition of "in-state renewable

electricity generation facility" in Section 25741 of the Public Resources Code,

subject to the following limitations:

    (1) (A) An existing small hydroelectric generation facility of 30 megawatts

or less shall be eligible only if a retail seller owned or procured the electricity

from the facility as of December 31, 2005. A new hydroelectric facility is not

an eligible renewable energy resource if it will cause an adverse impact on

instream beneficial uses or cause a change in the volume or timing of

streamflow.

    (B) Notwithstanding subparagraph (A), a conduit hydroelectric facility of

30 megawatts or less that commenced operation before January 1, 2006, is an

eligible renewable energy resource. A conduit hydroelectric facility of 30

megawatts or less that commences operation after December 31, 2005, is an

eligible renewable energy resource so long as it does not cause an adverse

impact on instream beneficial uses or cause a change in the volume or timing

of streamflow.

    (2) A facility engaged in the combustion of municipal solid waste shall not

be considered an eligible renewable energy resource unless it is located in

Stanislaus County and was operational prior to September 26, 1996.

    (d) "Energy Commission" means the State Energy Resources Conservation

and Development Commission.

    (e) "Local publicly owned electric utility" has the same meaning as provided

in subdivision (d) of Section 9604.

(f) "Procure" means that a retail seller receives delivered electricity

generated by an eligible renewable energy resource that it owns or for which it

has entered into an electricity purchase agreement. Nothing in this article is

intended to imply that the purchase of electricity from third parties in a

wholesale transaction is the preferred method of fulfilling a retail seller's

obligation to comply with this article.

    (g) "Renewables portfolio standard" means the specified percentage of

electricity generated by eligible renewable energy resources that a retail seller

is required to procure pursuant to this article.

    (h) (1) "Renewable energy credit" means a certificate of proof, issued

through the accounting system established by the Energy Commission

pursuant to Section 399.13, that one unit of electricity was generated and

delivered by an eligible renewable energy resource.

    (2) "Renewable energy credit" includes all renewable and environmental

attributes associated with the production of electricity from the eligible

renewable energy resource, except for an emissions reduction credit issued

pursuant to Section 40709 of the Health and Safety Code and any credits or

payments associated with the reduction of solid waste and treatment benefits

created by the utilization of biomass or biogas fuels.

    (3) No electricity generated by an eligible renewable energy resource

attributable to the use of nonrenewable fuels, beyond a de minimus quantity,

as determined by the Energy Commission, shall result in the creation of a

renewable energy credit.

    (i) "Retail seller" means an entity engaged in the retail sale of electricity to

end-use customers located within the state, including any of the following:

    (1) An electrical corporation, as defined in Section 218.

    (2) A community choice aggregator. The commission shall institute a

rulemaking to determine the manner in which a community choice aggregator

will participate in the renewables portfolio standard program subject to the

same terms and conditions applicable to an electrical corporation.

    (3) An electric service provider, as defined in Section 218.3, for all sales of

electricity to customers beginning January 1, 2006. The commission shall

institute a rulemaking to determine the manner in which electric service

providers will participate in the renewables portfolio standard program. The

electric service provider shall be subject to the same terms and conditions

applicable to an electrical corporation pursuant to this article. Nothing in this

paragraph shall impair a contract entered into between an electric service

provider and a retail customer prior to the suspension of direct access by the

commission pursuant to Section 80110 of the Water Code.

    (4) "Retail seller" does not include any of the following:

    (A) A corporation or person employing cogeneration technology or

producing electricity consistent with subdivision (b) of Section 218.

    (B) The Department of Water Resources acting in its capacity pursuant to

Division 27 (commencing with Section 80000) of the Water Code.

    (C) A local publicly owned electric utility.

    SEC. 8. Section 399.13 of the Public Utilities Code is amended to read:

    399.13. The Energy Commission shall do all of the following:

    (a) Certify eligible renewable energy resources that it determines meet the

criteria described in subdivision (b) of Section 399.12.

    (b) Design and implement an accounting system to verify compliance with

the renewables portfolio standard by retail sellers, to ensure that electricity

generated by an eligible renewable energy resource is counted only once for

the purpose of meeting the renewables portfolio standard of this state or any

other state, to certify renewable energy credits produced by eligible renewable

energy resources, and to verify retail product claims in this state or any other

state. In establishing the guidelines governing this accounting system, the

Energy Commission shall collect data from electricity market participants that

it deems necessary to verify compliance of retail sellers, in accordance with

the requirements of this article and the California Public Records Act (Chapter

3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government

Code). In seeking data from electrical corporations retail sellers, the Energy

Commission shall request data from the commission. The commission shall

collect data from electrical corporations retail sellers and remit the data to the

Energy Commission within 90 days of the request.

    (c) Establish a system for tracking and verifying renewable energy credits

that, through the use of independently audited data, verifies the generation and

delivery of electricity associated with each renewable energy credit and

protects against multiple counting of the same renewable energy credit. The

Energy Commission shall consult with other western states and with the

Western Electricity Coordinating Council in the development of this system.

    (d) Certify, for purposes of compliance with the renewable renewables

portfolio standard requirements by a retail seller, the eligibility of renewable

energy credits associated with deliveries of electricity by an eligible renewable

energy resource to a local publicly owned electric utility, if the Energy

Commission determines that the following conditions have been satisfied:

    (1) The local publicly owned electric utility that is procuring the electricity

is in compliance with the requirements of Section 387.

    (2) The local publicly owned electric utility has established an the annual

renewables portfolio standard targets target comparable to those applicable to

an electrical corporation required by Section 399.15, is procuring sufficient

eligible renewable energy resources to satisfy the targets, and will not fail to

satisfy the targets in the event that the renewable energy credit is sold to

another retail seller.

    (e) Institute a rulemaking proceeding to determine the manner in which a

local publicly owned electric utility will comply with Section 387 and implement

the renewables portfolio standard program. The Energy Commission shall

utilize the same processes and have the same powers to enforce the renewables

portfolio standard program with respect to local publicly owned electric

utilities as the commission has with respect to retail sellers, including, but not

limited to, those processes and powers specified in Sections 399.14 and 399.15

related to the review and adoption of a renewable energy procurement plan,

establishment of flexible rules for compliance, and imposition of annual

penalties for failure to comply with a local publicly owned electric utility's

renewable energy procurement plan. The Energy Commission shall not have

any authority to approve or disapprove the terms, conditions, or pricing of any

renewable energy resources contract entered into by a local publicly owned

electric utility, or authority pursuant to Section 2113.

    SEC. 9. Section 399.14 of the Public Utilities Code is amended to read:

    399.14. (a) (1) The commission shall direct each electrical corporation

retail seller to prepare a renewable energy procurement plan that includes the

matter in paragraph (3), to satisfy its obligations under the renewables portfolio

standard. To the extent feasible, this procurement plan shall be proposed,

reviewed, and adopted by the commission as part of, and pursuant to, a general

procurement plan process. The commission shall require each electrical

corporation retail seller to review and update its renewable energy procurement

plan as it determines to be necessary.

    (2) The commission shall adopt, by rulemaking, all of the following:

    (A) A process for determining market prices pursuant to subdivision (c) of

Section 399.15. The commission shall make specific determinations of market

prices after the closing date of a competitive solicitation conducted by an

electrical corporation for eligible renewable energy resources.

    (B)(A) A process that provides criteria for the rank ordering and selection of

least-cost and best-fit eligible renewable energy resources to comply with the

annual California Renewables Portfolio Standard Program obligations on a

total cost basis. This process shall consider estimates of indirect costs

associated with needed transmission investments and ongoing utility expenses

resulting from integrating and operating eligible renewable energy resources.

    (C)(B) (i) Flexible rules for compliance, including rules permitting retail

sellers to apply excess procurement in one year to subsequent years or

inadequate procurement in one year to no more than the following three years.

The flexible rules for compliance shall apply to all years, including years

before and after a retail seller procures at least 20 50 percent of total retail sales

of electricity from eligible renewable energy resources.

    (ii) The flexible rules for compliance shall address situations where, as a

result of insufficient transmission, a retail seller is unable to procure eligible

renewable energy resources sufficient to satisfy the requirements of this

article. Any rules addressing insufficient transmission shall require a finding

by the commission that the retail seller has undertaken all reasonable efforts to

do all of the following:

    (I) Utilize flexible delivery points.

    (II) Ensure the availability of any needed transmission capacity.

    (III) If the retail seller is an electric corporation, to construct needed

transmission facilities.

    (IV) Nothing in this subparagraph shall be construed to revise any portion

of Section 454.5.

    (D)(C) Standard terms and conditions to be used by all electrical

corporations retail sellers in contracting for eligible renewable energy

resources, including performance requirements for renewable generators. A

contract for the purchase of electricity generated by an eligible renewable

energy resource shall, at a minimum, include the renewable energy credits

associated with all electricity generation specified under the contract. The

standard terms and conditions shall include the requirement that, no later than

six months after the commission's approval of an electricity purchase

agreement entered into pursuant to this article, the following information

about the agreement shall be disclosed by the commission: party names,

resource type, project location, and project capacity.

    (3) Consistent with the goal of procuring the least-cost and best-fit eligible

renewable energy resources, the renewable energy procurement plan submitted

by an electrical corporation a retail seller shall include all of the following:

    (A) An assessment of annual or multiyear portfolio supplies and demand to

determine the optimal mix of eligible renewable energy resources with

deliverability characteristics that may include peaking, dispatchable, baseload,

firm, and as-available capacity.

    (B) Provisions for employing available compliance flexibility mechanisms

established by the commission.

    (C) A bid solicitation setting forth the need for eligible renewable energy

resources of each deliverability characteristic, required online dates, and

locational preferences, if any.

    (4) In soliciting and procuring eligible renewable energy resources, each

electrical corporation retail seller shall offer contracts of no less than 10 20

years in duration, unless the commission approves of a contract of shorter

duration.

    (5) In soliciting and procuring eligible renewable energy resources, each

electrical corporation retail seller may give preference to projects that provide

tangible demonstrable benefits to communities with a plurality of minority or

low-income populations.

    (b) The commission may authorize a retail seller to enter into a contract of

less than 10 20 years' duration with an eligible renewable energy resource, if

the commission has established, for each retail seller, minimum quantities of

eligible renewable energy resources to be procured either through contracts of

at least 10 20 years' duration or from new facilities commencing commercial

operations on or after January 1, 2005.

    (c) The commission shall review and accept, modify, or reject each electrical

corporation's retail seller's renewable energy procurement plan prior to the

commencement of renewable procurement pursuant to this article by an

electrical corporation a retail seller.

    (d) The commission shall review the results of an eligible renewable energy

resources solicitation submitted for approval by an electrical corporation a

retail seller and accept or reject proposed contracts with eligible renewable

energy resources based on consistency with the approved renewable energy

procurement plan. If the commission determines that the bid prices are elevated

due to a lack of effective competition among the bidders, the commission shall

direct the electrical corporation retail seller to renegotiate the contracts or

conduct a new solicitation.

    (e) If an electrical corporation fails to comply with a commission order

adopting a renewable energy procurement plan, the commission shall exercise

its authority pursuant to Section 2113 to require compliance. The commission

shall enforce comparable penalties on any other retail seller that fails to meet

annual procurement targets established pursuant to Section 399.15.

    (f) (1) The commission may authorize a procurement entity to enter into

contracts on behalf of customers of a retail seller for deliveries of eligible

renewable energy resources to satisfy annual renewables portfolio standard

obligations. The commission may not require any person or corporation to act

as a procurement entity or require any party to purchase eligible renewable

energy resources from a procurement entity.

    (2) Subject to review and approval by the commission, the procurement

entity shall be permitted to recover reasonable administrative and procurement

costs through the retail rates of end-use customers that are served by the

procurement entity and are directly benefiting from the procurement of eligible

renewable energy resources.

    (g) Procurement and administrative costs associated with long-term

contracts entered into by an electrical corporation a retail seller for eligible

renewable energy resources pursuant to this article, and approved by the

commission no more than 10 percent over the market price determined by the

Energy Commission pursuant to subdivision (c) of Section 399.15, shall be

deemed reasonable per se for electricity delivered on or before January 1,

2030, and shall be recoverable in rates.

    (h) Construction, alteration, demolition, installation, and repair work on an

eligible renewable energy resource that receives production incentives or

funding pursuant to Section Sections 25742, 25743 or 25751.5 of the Public

Resources Code, including work performed to qualify, receive, or maintain

production incentives is "public works" for the purposes of Chapter 1

(commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.

    (i) The commission shall impose annual penalties up to the amount of the

shortfall in kilowatthours multipied by one cent ($0.01) per kilowatthour on

any retail seller that fails to meet the annual procurement targets established

pursuant to Section 399.15. The commission shall not cap the penalty that may

be imposed on a retail seller under this section. All penalties assessed and

collected pursuant to this section shall be paid or transferred annually to the

Solar and Clean Energy Transmission Account administered by the Energy

Commission pursuant to Section 25751.5 of the Public Resources Code and

shall be used for programs designed to foster the development of new in-state

transmission and renewable electricity generation facilities. Penalties paid or

transferred by any retail seller pursuant to this section shall not be recoverable

by the retail seller either directly or indirectly in rates.

    (j) Penalties assessed pursuant to subdivision (i) may be waived upon a

finding by the commission that there is good cause for a retail seller's failure

to comply with a commission order adopting a renewable energy procurement

plan. A finding by the commission that there is good cause for failure to comp1y

with a commission order adopting a renewable energy procurement plan shall

be made if the commission determines that any one of the following conditions

are met:

    (1) The deadline or milestone changed due to circumstances beyond the

retail seller's control, including, but not limited to, administrative and legal

appeals, seller non-performance, insufficient response to a competitive

solicitation for eligible renewable energy resources, and lack of effective

competition.

    (2) The retail seller demonstrates a good faith effort to meet the target,

including, but not limited to, executed contracts that provide future deliveries

sufficient to satisfy current year deficits.

    (3) The target was missed due to unforeseen natural disasters or acts of God

that prevent timely completion of the project deadline or milestone.

    (4) The retail seller is unable to receive energy from eligible renewable

energy resources due to inadequate electric transmission lines.

    (5) For any year up to and including December 31, 2013, a local publicly

owned electric utility demonstrates that, despite its good faith effort, it has had

insufficient time to meet the annual procurement targets established in Section

399.15.

    SEC. 10. Section 399.15 of the Public Utilities Code is amended to read:

    399.15. (a) In order to fulfill unmet long-term resource needs, reduce

greenhouse gas emissions, address global warming and climate change,

protect the endangered Sierra snowpack, and lessen California's dependence

on fluctuating fuel prices, the commission shall establish a renewables

portfolio standard requiring all electrical corporationsretail sellers to procure

a minimum quantity of electricity generated by eligible renewable energy

resources as a specified percentage of total kilowatthours sold to their retail

end-use customers each calendar year, subject to limits on the total amount of

costs expended above the market prices determined in subdivision (c), to

achieve the targets established under this article.

    (b) The commission shall implement annual procurement targets for each

retail seller as follows:

    (1)  Notwithstanding Section 454.5, each Each retail seller shall, pursuant to

subdivision (a), increase its total procurement of eligible renewable energy

resources by at least an additional 1 2 percent of retail sales per year so that 20

percent of its retail sales are procured from eligible renewable energy resources

no later than December 31, 2010, 40 percent of its retail sales are procured

from eligible renewable energy resources no later than December 31, 2020,

and 50 percent of its retail sales are procured from eligible renewable energy

resources no later than December 31, 2025. A retail seller with 20 percent of

retails sales procured from eligible renewable energy resources in any year

shall not be required to increase its procurement of renewable energy resources

in the following year.

    (2) For purposes of setting annual procurement targets, the commission

shall establish an initial baseline for each retail seller based on the actual

percentage of retail sales procured from eligible renewable energy resources in

2001, and to the extent applicable, adjusted going forward pursuant to Section

399.12.

    (3) Only for purposes of establishing these targets, the commission shall

include all electricity sold to retail customers by the Department of Water

Resources pursuant to Section 80100 of the Water Code in the calculation of

retail sales by an electrical corporation a retail seller.

    (4) A retail seller is required to accept all bilateral offers for electricity

generated by eligible renewable energy resources that are less than or equal

to the market prices established pursuant to subdivision (c), except that a

retail seller is not obligated to accept a bilateral offer for any year in which the

retail seller has procured sufficient renewable energy resources to meet its

annual target established pursuant to this subdivision. In the event that a retail

seller fails to procure sufficient eligible renewable energy resources in a given

year to meet any annual target established pursuant to this subdivision, the

retail seller shall procure additional eligible renewable energy resources in

subsequent years to compensate for the shortfall, subject to the limitation on

costs for electrical corporations established pursuant to subdivision (d).

    (c) The Energy Commission commission shall determine by a rulemaking

proceeding establish a methodology to determine the market price of electricity

for terms corresponding to the length of contracts with eligible renewable

energy resources, and the methodology for making that determination that

considers in consideration of the following:

    (1) The long-term market price of electricity for fixed price contracts,

determined pursuant to an electrical corporation's a retail seller's general

procurement activities as authorized by the commission.

    (2) The long-term ownership, operating, and fixed-price fuel costs

associated with fixed-price electricity from new generating facilities.

    (3) The value of different products including baseload, peaking, and asavailable

electricity.

    (4) Natural gas price forecasts that are consistent with forecasts used for

procurement of other resources, including loading order resources.

    (5) The value and benefits of renewable resources, including, but not limited

to, hedging value and carbon emissions reductions.

    (6) The value and benefits of baseload generation.

    (d) A retail seller shall not be required to enter into long-term contracts

with operators of eligible renewable energy resources that exceed by more

than 10 percent the market prices established pursuant to subdivision (c) for

electricity delivered on or before January 1, 2030. The commission shall allow

a retail seller to limit its annual procurement obligation to the quantity of

eligible renewable energy resources that can be procured at no more than 10

percent over the market price established pursuant to subdivision (c). Indirect

costs associated with the purchase of eligible renewable energy resources by

a retail seller, including imbalance energy charges, sale of excess energy,

decreased generation from existing resources, or transmission upgrades, are

recoverable in rates, as authorized by the commission. The commission shall

establish, for each electrical corporation, a limitation on the total costs

expended above the market prices determined in subdivision (c) for the

procurement of eligible renewable energy resources to achieve the annual

procurement targets established under this article.

    (1) The cost limitation shall be equal to the amount of funds transferred to

each electrical corporation by the Energy Commission pursuant to subdivision

(b) of Section 25743 of the Public Resources Code and the 51.5 percent of the

funds which would have been collected through January 1, 2012, from the

customers of the electrical corporation based on the renewable energy public

goods charge in effect as of January 1, 2007.

    (2) The above market costs of a contract selected by an electrical corporation

may be counted toward the cost limitation if all of the following conditions are

satisfied:

    (A) The contract has been approved by the commission and was selected

through a competitive solicitation pursuant to the requirements of subdivision

    (d) of Section 399.14.

    (B) The contract covers a duration of no less than 10 years.

    (C) The contracted project is a new or repowered facility commencing

commercial operations on or after January 1, 2005.

    (D) No purchases of renewable energy credits may be eligible for

consideration as an above market cost.

    (E) The above market costs of a contract do not include any indirect expenses

including imbalance energy charges, sale of excess energy, decreased

generation from existing resources, or transmission upgrades.

    (3) If the cost limitation for an electrical corporation is insufficient to

support the total costs expended above the market prices determined in

subdivision (c) for the procurement of eligible renewable energy resources

satisfying the conditions of paragraph (2), the commission shall allow the

electrical corporation to limit its procurement to the quantity of eligible

renewable energy resources that can be procured at or below the market prices

established in subdivision (c).

    (4) Nothing in this section prevents an electrical corporation from

voluntarily proposing to procure eligible renewable energy resources at above

market prices that are not counted toward the cost limitation. Any voluntary

procurement involving above market costs shall be subject to commission

approval prior to the expense being recovered in rates.

    (e) The establishment of a renewables portfolio standard shall not constitute

implementation by the commission of the federal Public Utility Regulatory

Policies Act of 1978 (Public Law 95-617).

    (f) The Energy Commission commission shall consult with the Energy

Commission commission in calculating market prices under subdivision (c).

and The Energy Commission and the commission shall consult with each other

in establishing other renewables portfolio standard policies.

    SEC. 11. Section 1001 of the Public Utilities Code is amended to read:

    1001. Except as otherwise provided in Division 15 (commencing with

Section 25000) of the Public Resources Code, no No railroad corporation

whose railroad is operated primarily by electric energy, street railroad

corporation, gas corporation, electrical corporation, telegraph corporation,

telephone corporation, water corporation, or sewer system corporation shall

begin the construction of a street railroad, or of a line, plant, or system, or of

any extension thereof, without having first obtained from the commission a

certificate that the present or future public convenience and necessity require

or will require such construction.

    This article shall not be construed to require any such corporation to secure

such certificate for an extension within any city or city and county within

which it has theretofore lawfully commenced operations, or for an extension

into territory either within or without a city or city and county contiguous to

its street railroad, or line, plant, or system, and not theretofore served by a

public utility of like character, or for an extension within or to territory already

served by it, necessary in the ordinary course of its business. If any public

utility, in constructing or extending its line, plant, or system, interferes or is

about to interfere with the operation of the line, plant, or system of any other

public utility or of the water system of a public agency, already constructed,

the commission, on complaint of the public utility or public agency claiming to

be injuriously affected, may, after hearing, make such order and prescribe such

terms and conditions for the location of the lines, plants, or systems affected as

to it may seem just and reasonable.

    SEC. 12. Section 25107 of the Public Resources Code is amended to

read:

    25107. "Electric transmission line" means any electric powerline carrying

electric power from a thermal powerplant or a solar and clean energy plant

located within the state to a point of junction with any interconnected

transmission system. "Electric transmission line" does not include any

replacement on the existing site of existing electric powerlines with electric

powerlines equivalent to such existing electric powerlines or the placement of

new or additional conductors, insulators, or accessories related to such electric

powerlines on supporting structures in existence on the effective date of this

division or certified pursuant to this division.

    SEC. 13. Section 25110 of the Public Resources Code is amended to

read:

    25110. "Facility" means any electric transmission line, or thermal

powerplant, or solar and clean energy plant, or both electric transmission line

and thermal powerplant or solar and clean energy plant, and extensions,

modifications, upgrades of existing electric transmission lines, regulated

according to the provisions of this division.

    SEC. 14. Section 25137 is added to the Public Resources Code, to read:

    25137. "Solar and clean energy plant" means any electrical generating

facility using wind, solar photovoltaic, solar thermal, biomass, biogas,

geothermal, fuel cells using renewable fuels, digester gas, municipal solid

waste conversion, landfill gas, ocean wave, ocean thermal, or tidal current

technologies, with a generating capacity of 30 megawatts or more, or small

hydroelectric generation of 30 megawatts or less, and any facilities appurtenant

thereto. Exploratory, development, and production wells, resource

transmission lines, and other related facilities used in connection with a

renewable project or a renewable development project are not appurtenant

facilities for the purposes of this division.

    SEC. 15. Section 25502 of the Public Resources Code is amended to

read:

    25502. Each person proposing to construct a thermal powerplant, solar

and clean energy plant, or electric transmission line on a site shall submit to

the commission a notice of intention to file an application for the certification

of the site and related facility or facilities. The notice shall be an attempt

primarily to determine the suitability of the proposed sites to accommodate

the facilities and to determine the general conformity of the proposed sites and

related facilities with standards of the commission and assessments of need

adopted pursuant to Sections 25305 to 25308, inclusive. The notice shall be in

the form prescribed by the commission and shall be supported by such

information as the commission may require.

    Any site and related facility once found to be acceptable pursuant to Section

25516 is, and shall continue to be, eligible for consideration in an application

for certification without further proceedings required for a notice under this

chapter.

    SEC. 16. Section 25517 of the Public Resources Code is amended to

read:

    25517. Except as provided in Section 25501, no construction of any thermal

powerplant, solar and clean energy plant, or electric transmission line shall be

commenced by any electric utility without first obtaining certification as

prescribed in this division. Any onsite improvements not qualifying as

construction may be required to be restored as determined by the commission

to be necessary to protect the environment, if certification is denied.

    SEC. 17. Section 25522 of the Public Resources Code is amended to

read:

    25522. (a) Except as provided in subdivision (c) of Section 25520.5 and

Section 25550, within 18 months of the filing of an application for certification,

or within 12 months if it is filed within one year of the commission's approval

of the notice of intent, or at any later time as is mutually agreed by the

commission and the applicant, the commission shall issue a written decision as

to the application.

    (b) The commission shall determine, within 45 days after it receives the

application, whether the application is complete. If the commission determines

that the application is complete, the application shall be deemed filed for

purposes of this section on the date that this determination is made. If the

commission determines that the application is incomplete, the commission

shall specify in writing those parts of the application which are incomplete and

shall indicate the manner in which it can be made complete. If the applicant

submits additional data to complete the application, the commission shall

determine, within 30 days after receipt of that data, whether the data is

sufficient to make the application complete. The application shall be deemed

filed on the date when the commission determines the application is complete

if the commission has adopted regulations specifying the informational

requirements for a complete application, but if the commission has not adopted

regulations, the application shall be deemed filed on the last date the

commission receives any additional data that completes the application.

    SEC. 18. 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 or solar and clean energy plant 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. 19. Section 25540.6 of the Public Resources Code is amended to

read:

    25540.6. (a) Notwithstanding any other provision of law, no notice of

intention is required, and the commission shall issue its final decision on the

application, as specified in Section 25523, within 12 months after the filing of

the application for certification of the powerplant and related facility or

facilities, or at any later time as is mutually agreed by the commission and the

applicant, for any of the following:

    (1) A thermal powerplant which will employ cogeneration technology, a

thermal powerplant that will employ natural gas-fired technology, or a solar

and clean energy plant solar thermal powerplant.

    (2) A modification of an existing facility.

    (3) A thermal powerplant or solar and clean energy plant which it is only

technologically or economically feasible to site at or near the energy source.

    (4) A thermal powerplant with a generating capacity of up to 100

megawatts.

    (5) A thermal powerplant or solar and clean energy plant designed to

develop or demonstrate technologies which have not previously been built or

operated on a commercial scale. Such a research, development, or commercial

demonstration project may include, but is not limited to, the use of renewable

or alternative fuels, improvements in energy conversion efficiency, or the use

of advanced pollution control systems. Such a facility may not exceed 300

megawatts unless the commission, by regulation, authorizes a greater capacity.

Section 25524 does not apply to such a powerplant and related facility or

facilities.

    (b) Projects exempted from the notice of intention requirement pursuant to

paragraph (1), (4), or (5) of subdivision (a) shall include, in the application for

certification, a discussion of the applicant's site selection criteria, any

alternative sites that the applicant considered for the project, and the reasons

why the applicant chose the proposed site. That discussion shall not be required

for cogeneration projects at existing industrial sites. The commission may also

accept an application for a noncogeneration project at an existing industrial

site without requiring a discussion of site alternatives if the commission finds

that the project has a strong relationship to the existing industrial site and that

it is therefore reasonable not to analyze alternative sites for the project.

    SEC. 20. Section 25541 of the Public Resources Code is amended to

read:

    25541. The commission may exempt from this chapter thermal

powerplants with a generating capacity of up to 100 megawatts, and

modifications to existing generating facilities that do not add capacity in

excess of 100 megawatts, and solar and clean energy plants, if the commission

finds that no substantial adverse impact on the environment or energy

resources will result from the construction or operation of the proposed facility

or from the modifications.

    SEC. 21. Section 25541.1 of the Public Resources Code is amended to

read:

    25541.1. It is the intent of the Legislature  people to encourage the

development of thermal powerplants or solar and clean energy plants using

resource recovery (waste-to-energy) technology. Previously enacted incentives

    (3)   for the production of electrical energy from nonfossil fuels in commercially

scaled projects have failed to produce the desired results. At the same time, the

state faces a growing problem in the environmentally safe disposal of its solid

waste. The creation of electricity by a thermal powerplant or solar and clean

energy plant using resource recovery technology addresses both problems by

doing all of the following:

    (a) Generating electricity from a nonfossil fuel of an ample, growing

supply.

    (b) Conserving landfill space, thus reducing waste disposal costs.

    (c) Avoiding the health hazards of burying garbage.

Furthermore, development of resource recovery facilities creates new

construction jobs, as well as ongoing operating jobs, in the communities in

which they are located.

    SEC. 22. Section 25542.5 is added to the Public Resources Code, to read:

    25542.5. The Energy Commission shall, on an annual basis, publish a

report that identifies and designates Solar and Clean Energy Zones in the

state of California based on geographic areas identified by the Energy

Commission's Public Interest Energy Research Program as having potential

for solar and clean energy resources.

    SEC. 23. Section 25550 is added to the Public Resources Code, to read:

    25550. (a) Notwithstanding subdivision (a) of Section 25522, and Section

25540.6, the commission shall establish a process to issue its final certification

for any solar and clean energy plant and related facilities within six months

after the filing of the application for certification that, on the basis of an initial

review, shows that there is substantia1 evidence that the project will not cause

a significant adverse impact on the environment or electrical transmission

and distribution system and will comp1y with all applicable standards,

ordinances, or laws. For purposes of this section, filing has the same meaning

as in Section 25522.

    (b) Solar and clean energy plants 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 solar and clean energy plant

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 solar and clean energy plant and related

facilities.

    (c) After acceptance of an application under this section, the commission

shall not be required to issue a six-month final decision on the application if it

determines there is substantial evidence in the record that the solar and clean

energy plant and related facilities will likely result in a significant adverse

impact on the environment or electrical system or does not comply with an

applicable standard, ordinance, or law. 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, all

local, regional, and state agencies that would have had jurisdiction over the

proposed solar and clean energy plant and related facilities, but for the

exclusive jurisdiction of the commission, shall provide their final comments,

determinations, or opinions within 100 days after the filing of the application.

The regional water quality control boards, 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) Applicants of solar and clean energy plants and related facilities that

demonstrate superior environmental or efficiency performance shall receive

priority in review.

    (f) With respect to a solar and clean energy plant and related facilities

reviewed under the process established by this section, it shall be shown that

the applicant has a contract 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 solar and clean energy plant and related facilities

reviewed under the process established by this section, it shall be shown that

the solar and clean energy plant 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) This section shall not apply to an application filed with the commission

on or before January 1, 2009.

    (i) To implement this section, the commission may adopt emergency

regulations in accordance with Chapter 3.5 (commencing with Section 11340)

of Part 2 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.

    (j) All solar and clean energy plants receiving certification pursuant to this

section shall be considered a public works project subject to the provisions of

Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor

Code, and the Department of Industrial Relations shall have the same authority

and responsibility to enforce those provisions as it has under the Labor

Code.

    SEC. 24. Chapter 6.6 (commencing with Section 25560) is added to

Division 15 of the Public Resources Code, to read:

    25560. No electrical corporation as defined in Section 218 of the Public

Utilities Code shall begin the construction of a transmission line or of any

extension, modification, or upgrade thereof, without having first obtained

from the commission a certificate that the present or future public convenience

and necessity require or will require such construction.

This chapter shall not be construed to require any such corporation to

secure such certificate for an extension within any city or city and county

within which it has theretofore lawfully commenced operations, or for an

extension into territory either within or without a city or city and county

contiguous to its transmission line or system, and not theretofore served by a

public utility of like character, or for an extension within or to territory

already served by it, necessary in the ordinary course of its business. If any

public utility, in constructing or extending its line or system, interferes or is

about to interfere with the operation of the line or system of any other public

utility or of the water system of a public agency, already constructed, the

commission, on complaint of the public utility or public agency claiming to be

injuriously affected, may, after hearing, and in consultation with the Public

Utilities Commission make such order and prescribe such terms and conditions

for the location of the lines or systems affected as to it may seem just and

reasonable.

    25561. (a) The commission shall exempt the construction of any line or

system, or extension thereof, located outside the boundaries of the state from

the requirements of Section 25560, upon the application of the public utility

constructing that line or system, or extension thereof, if the public utility

derives 75 percent or more of its operating revenues from outside the state, as

recorded in the fiscal period immediate1y before the filing of the application,

unless the commission determines that the public interest requires that the

construction should not be exempt from Section 25560.

    (b) Except as provided in subdivision (c), the commission shall make the

determination denying the exemption, as specified in subdivision (a), within

90 days after the public utility files the application for exemption with the

commission. If the commission fails to make this determination within that 90-

day period, the construction of that line or system, or extension thereof, is

exempt from the requirements of Section 25560.

    (c) The commission and the public utility filing the application for exemption

may, if both agree, extend the time period within which the commission is

required to make the determination denying the exemption, for not more than

an additional 60 days after the expiration of the 90-day period specified in

subdivision (b).

25562. (a) The commission, as a basis for granting any certificate

pursuant to Section 25560, shall give consideration to the following factors:

    (1) Community values.

    (2) Recreational and park areas.

    (3) Historical and aesthetic values.

    (4) Influence on environment, except that in the case of any line or system

or extension thereof located in another state which will be subject to

environmental review pursuant to the National Environmental Policy Act of

1969 (Chapter 55 (commencing with Section 4321) of Title 42 of the United

States Code) or similar state laws in the other state, the commission shall not

consider influence on the environment unless any emissions or discharges

therefrom would have a significant influence on the environment of this state.

    (5) Proximity to and related effect on populated areas and whether

alternative locations are reasonably available and appropriate.

    (6) Value and benefits of baseload generation.

    (b) With respect to any electrical transmission line required to be

constructed, modified, or upgraded to provide transmission from a thermal

powerplant or a solar and clean energy plant, and for which a certificate is

required pursuant to the provisions of Division 15 (commencing with Section

25000), the decision granting such other certificate shall be conclusive as to

all matters determined thereby and shall take the place of the requirement for

consideration by the commission of the six factors specified in subdivision (a)

of this section.

    (c) As a condition for granting any certificate pursuant to Section 25560,

the commission shall require compliance with the California Desert Protection

Act of 1994 (commencing with Section 410aaa of Title 16 of the United States

Code).

    25563. In considering an application for a certificate for an electric

transmission facility pursuant to Section 25560, the commission shall consider

cost-effective alternatives to transmission facilities that meet the need for an

efficient, reliable, and affordable supply of electricity, including, but not

limited to, demand-side alternatives such as targeted energy efficiency,

ultraclean distributed generation, as defined in Section 353.2 of the Public

Utilities Code, and other demand reduction resources. The provisions of this

section shall not apply to any electrical transmission line required to be

constructed, modified, or upgraded to provide transmission from a solar and

clean energy plant.

    25564. Every electrical corporation submitting an application to the

commission for a certificate authorizing the new construction of any electric

transmission line or extension, not subject to the provisions of Chapter 6

(commencing with Section 25500), shall include all of the following information

in the application in addition to any other required information:

    (a) Preliminary engineering and design information on the project. The

design information provided shall include preliminary data regarding the

operating characteristics of the line or extension.

    (b) A project implementation plan showing how the project would be

contracted for and constructed. This plan shall show how all major tasks

would be integrated and shall include a timetable identifying the design,

construction, completion, and operation dates for each major component of

the line or extension.

    (c) An appropriate cost estimate, including preliminary estimates of the

costs of financing, construction, and operation of the line or extension.

    (d) The corporation shall demonstrate the financial impact of the line or

extension construction on the corporation's ratepayers, stockholders, and on

the cost of the corporation's borrowed capital. The cost analyses shall be

performed for the projected useful life of the line or extension.

    (e) A design and construction management and cost control plan which

indicates the contractual and working responsibilities and interrelationships

between the corporation's management and other major parties involved in

the project. This plan shall also include a construction progress information

system and specific cost controls.

    25565. Every electrical corporation submitting an application to the

commission for a certificate authorizing the new construction of an electric

transmission line or extension, which is subject to the provisions of Chapter 6

(commencing with Section 25500), shall include in the application the

information specified in subdivisions (b), (c), and (e) of Section 25564, in

addition to any other required information. The corporation may also include

in the application any other information specified in Section 25564.

    25566. Before any certificate may issue under this chapter, every applicant

for a certificate shall file in the office of the commission a certified copy of the

applicant's articles of incorporation or charter. Every applicant for a

certificate shall file in the office of the commission such evidence as is required

by the commission to show that the applicant has received the required consent,

franchise, or permit of the proper county, city and county, city, or other public

authority.

    25567. (a) The commission may, with or without hearing, issue the

certificate as requested for, or refuse to issue it, or issue it for the construction

of a portion only of the contemplated electric transmission line or extension

thereof, or for the partial exercise only of the right or privilege, and may attach

to the exercise of the rights granted by the certificate such terms and conditions,

including provisions for the acquisition by the public of the franchise or permit

and all rights acquired thereunder and all works constructed or maintained by

authority thereof, as in its judgment the public convenience and necessity

require; provided, however, that before issuing or refusing to issue the

certificate, the commission shall hold one or more hearings addressing any

issues raised in a timely application for a hearing by any person entitled to be

heard.

    (b) When the commission issues a certificate for the new construction of an

electric transmission line or extension, the certificate shall specify the

operating and cost characteristics of the transmission line or extension,

including, but not limited to, the size, capacity, cost, and all other characteristics

of the transmission line or extension which are specified in the information

which the electrical corporations are required to submit, pursuant to Section

25564 or 25565.

    (c) Notwithstanding any other provision in this chapter, an application for

a certificate authorizing the construction of new transmission facilities shall

be deemed to be necessary to the provision of electric service for purposes of

any determination made under Section 25564 if the commission finds that the

new facility is necessary to facilitate achievement of the renewables portfolio

standard as established in Article 16 (commencing with Section 399.11) of the

Public Utilities Code and the eligible renewable energy resources requirement

as established in Chapter 8.6 (commencing with Section 25740) of this

division.

    25568. (a) Whenever the commission issues to an electrical corporation a

certificate authorizing the new construction of a transmission line, or of any

extension, modification, or upgrade thereof estimated to cost greater than fifty

million dollars ($50,000,000), the commission shall specify in the certificate a

maximum cost determined to be reasonable and prudent for the facility. The

commission shall determine the maximum cost using an estimate of the

anticipated construction cost, taking into consideration the design of the

project, the expected duration of construction, an estimate of the effects of

economic inflation, and any known engineering difficulties associated with

the project.

    (b) After the certificate has been issued, the corporation may apply to the

commission for an increase in the maximum cost specified in the certificate.

The commission may authorize an increase in the specified maximum cost if it

finds and determines that the cost has in fact increased and that the present or

future public convenience and necessity require construction of the project at

the increased cost; otherwise, it shall deny the application.

    (c) After construction has commenced, the corporation may apply to the

commission for authorization to discontinue construction. After a showing to

the satisfaction of the commission that the present or future public convenience

and necessity no longer require the completion of construction of the project,

and that the construction costs incurred were reasonable and prudent, the

commission may authorize discontinuance of construction and the Public

Utilities Commission may authorize recovery of those construction costs

which the commission determines were reasonable and prudent.

    (d) In any decision by the Public Utilities Commission establishing rates for

an electrical corporation reflecting the reasonable and prudent costs of the

new construction of any transmission line, or of any extension, modification,

or upgrade thereof, when the commission has found and determined that the

addition or extension is used and useful, the Public Utilities Commission shall

consider whether or not the actual costs of construction are within the

maximum cost specified by the commission.

    SEC. 25. Section 25740 of the Public Resources Code is amended to

read:

    25740. It is the intent of the Legislature people in establishing this

program, to address global warming and climate change, and protect the

endangered Sierra snowcaps by increasing increase the amount of electricity

generated from eligible renewable energy resources per year, so that it equals

at least 20 percent of total retail sales of electricity in California per year by

December 31, 2010., at least 40 percent of total retail sales of electricity in

California per year by December 31, 2020, and at least 50 percent of total

retail sales of electricity in California per year by December 31, 2025.

    SEC. 26. Section 25740.1 is added to the Public Resources Code, to read:

    25740.1. The people find that the construction of electric transmission

facilities necessary to facilitate the achievement of California's renewables

portfolio standard targets will provide the maximum economic benefit to all

customer classes that funded the New Renewable Resources Account.

    SEC. 27. Section 25743 of the Public Resources Code is amended to

read:

    25743. (a) The commission shall terminate all production incentives

awarded from the New Renewable Resources Account prior to January 1,

2002, unless the project began generating electricity by January 1, 2007.

    (b) (1) The commission shall, by March 1, 2008, transfer to electrical

corporations serving customers subject to the renewable energy public goods

charge the remaining unencumbered funds in the New Renewable Resources

Account.

    (2) The Public Utilities Commission shall ensure that each electrical

corporation allocates funds received from the commission pursuant to

paragraph (1) in a manner that maximizes the economic benefit to all customer

classes that funded the New Renewable Resources Account. In considering

and approving each electrical corporation's proposed allocations, and

consistent with Section 25740.1, the Public Utilities Commission shall

encourage and give the highest priority to allocations for the construction of,

or payment to supplement the construction of, any new or modified electric

transmission facilities necessary to facilitate the state achieving its renewables

portfolio standard targets.

(c) All projects receiving funding, in whole or in part, pursuant to this

section shall be considered public works projects subject to the provisions of

Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor

Code, and the Department of Industrial Relations shall have the same authority

and responsibility to enforce those provisions as it has under the Labor

Code.

    SEC. 28. Section 25745 is added to the Public Resources Code, to read:

    25745. The Energy Commission shall use its best efforts to attract and

encourage investment in solar and clean energy resources, facilities, research

and development from companies based in the United States to fulfill the

purposes of this chapter.

    SEC. 29. Section 25751.5 is added to the Public Resources Code, to read:

25751.5. (a) The Solar and Clean Energy Transmission Account is hereby

established within the Renewable Resources Trust Fund.

    (b) Beginning January 1, 2009, the total annual adjustments adopted

pursuant to subdivision (d) of Section 399.8 of the Public Utilities Code shall

be allocated to the Solar and Clean Energy Transmission Account.

    (c) Funds in the Solar and Clean Energy Transmission Account shall be

used, in whole or in part, for the following purposes:

    (1) The purchase of property or right-of-way pursuant to the commission's

authority under Chapter 8.9 (commencing with Section 25790).

    (2) The construction of, or payment to supplement the construction of, any

new or modified electric transmission facilities necessary to facilitate the state

achieving its renewables portfolio standard targets.

    (d) Title to any property or project paid for in whole pursuant to this section

shall vest with the commission. Title to any property or project paid for in part

pursuant to this section shall vest with the commission in a part proportionate

to the commission's share of the overall cost of the property or project.

    (e) Funds deposited in the Solar and Clean Energy Transmission Account

shall be used to supplement, and not to supplant, existing state funding for the

purposes authorized by subdivision (c).

    (f) All projects receiving funding, in whole or in part, pursuant to this

section shall be considered public works projects subject to the provisions of

Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor

Code, and the Department of Industrial Relations shall have the same authority

and responsibility to enforce those provisions as it has under the Labor

Code.

    SEC. 30. Chapter 8.9 (commencing with Section 25790) is added to

Division 15 of the Public Resources Code, to read:

    25790. The Energy Commission may, for the purposes of this chapter,

purchase and subsequently sell, lease to another party for a period not to

exceed 99 years, exchange, subdivide, transfer, assign, pledge, encumber, or

otherwise dispose of any real or personal property or any interest in property.

Any such lease or sale shall be conditioned on the development and use of the

property for the generation and/or transmission of renewable energy.

25791. Any lease or sale made pursuant to this chapter may be made

without public bidding but only after a public hearing.

    SEC. 31. Severability

The provisions of this act are severable. If any provision of this act, or part

thereof, is for any reason held to be invalid under state or federal law, the

remaining provisions shall not be affected, but shall remain in full force and

effect.

    SEC. 32. Amendment

    The provisions of this act may be amended to carry out its purpose and

intent by statutes approved by a two-thirds vote of each house of the Legislature

and signed by the Governor.

    SEC. 33. Conflicting Measures

    (a) This measure is intended to be comprehensive. It is the intent of the

people that in the event that this measure and another initiative measure

relating to the same subject appear on the same statewide election ballot, the

provisions of the other measure or measures are deemed to be in conflict with

this measure. In the event this measure shall receive the greater number of

affirmative votes, the provisions of this measure shall prevail in their entirety,

and all provisions of the other measure or measures shall be null and void.

    (b) If this measure is approved by voters but superseded by law by any other

conflicting ballot measure approved by the voters at the same election, and the

conflicting ballot measure is later held invalid, this measure shall be self

executing and given full force of law.

    SEC. 34. Legal Challenge

    Any challenge to the validity of this act must be filed within six months of

the effective date of this act.