Electricity: demand response.

(1) The Public Utilities Act requires the Public Utilities Commission, in consultation with the Independent System Operator, to establish resource adequacy requirements for all load‑serving entities, as defined, in accordance with specified objectives. The definition of a "load-serving entity" excludes a local publicly owned electric utility. The act requires each load‑serving entity to maintain physical generating capacity adequate to meet its load requirements to provide reliable electric service. The act requires the Public Utilities Commission to determine the most efficient and equitable means for achieving prescribed objectives. The Warren-Alquist State Energy Resources Conservation and Development Act establishes the State Energy Resources Conservation and Development Commission and requires it to undertake a continuing assessment of trends in the consumption of electricity and other forms of energy, to analyze the social, economic, and environmental consequences of those trends and to collect from electric utilities, gas utilities, and fuel producers and wholesalers, and other sources, forecasts of future supplies and consumption of all forms of energy. That act requires the State Energy Resources Conservation and Development Commission, beginning November 1, 2003, and every 2 years thereafter, to adopt an integrated energy policy report that includes an overview of major energy trends and issues facing the state. This bill would include, as an objective for the resource adequacy requirements referenced above, establishing new or maintaining existing demand response products and tariffs that facilitate the economic dispatch and use of demand response that can either meet or reduce an electrical corporation's resource adequacy requirements, as determined by the Public Utilities Commission. The bill would additionally require each load-serving entity to maintain both electrical demand response and physical generating capacity adequate to meet its load requirements. The bill would require the Public Utilities Commission to determine the most efficient and equitable means to ensure that investments are made in new and existing demand response resources that are cost effective and help to achieve electrical grid reliability and the state's goals for reducing emissions of greenhouse gases. The bill would require the Public Utilities Commission to ensure appropriate valuation of both supply and load modifying demand response resources and to establish a mechanism to value load modifying demand response resources, including, but not limited to, the ability of demand response resources to help meet distribution needs, transmission system needs, and to help reduce a load-serving entity's resource adequacy obligation. The bill would require the Public Utilities Commission, State Energy Resources Conservation and Development Commission, and the Independent System Operator to ensure that changes in demand caused by load modifying demand response are expeditiously and comprehensively reflected in the integrated energy policy report forecast, as well as planning proceedings and associated analyses, and encourage reflection of these changes in demand in the operation of the grid. The bill would require the Public Utilities Commission, in establishing a demand response program, to take certain actions. (2) Under existing law, a violation of the Public Utilities Act or an order or direction of the Public Utilities Commission is a crime. This bill would be part of the Public Utilities Act and an order or other action of the Public Utilities Commission would be required to implement the bill. Because a violation of this bill or an order or other action of the Public Utilities Commission implementing those provisions would be a crime, and because the bill would make certain violations by a load‑serving entity a crime, this bill would thereby impose a state-mandated local program by creating new crimes and by expanding the definition of existing crimes. (3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.