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<ns0:Id>20250SB__091398AMD</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-01-27</ns0:ActionDate>
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<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2026-03-11</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Becker</ns0:AuthorText>
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<ns0:Legislator>
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<ns0:House>SENATE</ns0:House>
<ns0:Name>Becker</ns0:Name>
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<ns0:Title> An act to add Section 380.1 to the Public Utilities Code, relating to energy. </ns0:Title>
<ns0:RelatingClause>energy</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Resource adequacy: aggregated distributed capacity resources.</ns0:Subject>
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<html:p>Existing law vests the Public Utilities Commission (PUC) with regulatory authority over public utilities, including electrical corporations. Existing law requires the PUC, in consultation with the Independent System Operator, to establish resource adequacy requirements for all electrical corporations, electric service providers, and community choice aggregators. Existing law requires that the resource adequacy program achieve specified objectives, including that it establish new or maintain existing demand response products and tariffs, as specified.</html:p>
<html:p>This bill would require the PUC, in coordination with the State Energy Resources Conservation and Development Commission and the Independent System Operator, on or before June 30, 2027, to enhance existing
market-integrated pathways for aggregated distributed capacity resources, as defined, to qualify as resource adequacy capacity, as specified. The bill would require the PUC to allow electrical corporations, electric service providers, and community choice aggregators to include aggregated distributed capacity resources in resource adequacy filings and commission-ordered procurement, as specified. The bill would require the commission, on or before June 30, 2027, to develop recommendations for changes to the Independent System Operator’s proxy demand resource and the distributed energy resource aggregation participation models to be consistent with the commission’s requirements for aggregated distributed capacity resources pursuant to these provisions, and to request that the Independent System Operator implement these changes in a new or existing initiative.</html:p>
<html:p>Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the PUC is a crime.</html:p>
<html:p>Because the provisions of this bill would be part of the act and a violation of a PUC action implementing the bill’s requirements would be a crime, the bill would impose a state-mandated local program.</html:p>
<html:p>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.</html:p>
<html:p>This bill would provide that no reimbursement is required by this act for a specified reason.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_778F276D-BD24-4A13-9A0A-22B608364DA7">
<ns0:Num>SECTION 1.</ns0:Num>
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
The Legislature finds and declares all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
California faces increasing peak and net peak electricity demand due to continued growth and extreme temperatures during summer and winter months.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Distributed energy resources can provide reliable, cost-effective dispatchable capacity that reduces the need for new fossil-fueled generation.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
When distributed energy resources
are dispatched instead of fossil-fueled generation, it reduces greenhouse gas emissions in furtherance of the state’s climate targets and it reduces air pollution in the communities adjacent to the generation facilities that would otherwise have been dispatched.
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<html:p>
(4)
<html:span class="EnSpace"/>
During recent summer reliability events, distributed energy resources delivered verifiable performance to support electrical grid stability. However, these resources’ ability to provide capacity is undervalued because, under current market and regulatory rules, they do not receive the full resource adequacy capacity value that they could provide.
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<html:p>
(5)
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Unfortunately, the amount of demand response participating in resource adequacy has dramatically declined in recent years even though there are many more distributed energy resources today that could be available to support the electrical grid.
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<html:p>
(6)
<html:span class="EnSpace"/>
The Independent System Operator is actively pursuing reforms through its demand and distributed energy market integration initiative to improve participation models for distributed energy resources, including the proxy demand resource and the distributed energy resource participation models.
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<html:p>
(7)
<html:span class="EnSpace"/>
Coordination among the Public Utilities Commission, the State Energy Resources Conservation and Development Commission, and the Independent System Operator is necessary to establish a durable, transparent, and timely pathway for more distributed energy resources to qualify for resource adequacy.
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<html:p>
(b)
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It is the intent of the Legislature to address barriers that have unnecessarily limited the ability for distributed energy resources to qualify for resource adequacy capacity so that distributed energy resources can more easily
be used, where cost effective, to meet electrical grid reliability standards while lowering costs for ratepayers, supporting decarbonization goals, and reducing air pollution.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 380.1 is added to the
<ns0:DocName>Public Utilities Code</ns0:DocName>
, to read:
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<ns0:Num>380.1.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
On or before June 30, 2027, the commission, in coordination with the Energy Commission and the Independent System Operator, shall enhance existing market-integrated pathways for aggregated distributed capacity resources to qualify as resource adequacy capacity, including by ensuring all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Aggregated distributed capacity resources are able to qualify for local, system, or flexible resource adequacy capacity within any qualifying capacity or successor methodology adopted by the commission.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Aggregate distributed capacity resources are eligible to receive resource adequacy credit for full capacity value, including energy exported past the utility
meter.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Reasonable and standardized requirements allow distributed resources within an aggregated distributed capacity resource that meet those requirements to be settled using device telemetry without the need for a revenue-grade meter.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Qualifying capacity methodologies are consistent with the device-level measurement provisions of this section, credit both load reductions and net exports of energy during any hour of the day, fully integrate these resources into the current resource adequacy construct and counting conventions, and allow aggregated distributed capacity resources to combine different types of distributed resources and technologies.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Multiple enrollment is authorized, allowing multiple devices to participate behind the same utility point of interconnection, including in separate programs, if
there is no duplicate compensation for the same load reduction or energy export.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Consumer data privacy is protected without unduly burdensome requirements on aggregated distributed capacity resource providers for enrollment and energy usage data access, such as requiring utility login, meter-level data sharing authorization, or other requirements that would limit the growth of aggregated distributed capacity resources, unless there is a clear statutory requirement or a clear and compelling need for the privacy requirements. To the extent feasible, the commission shall allow the use of opt-out enrollment structures and streamlined data access authorization processes to reduce the barriers to enrolling distributed resources into aggregated distributed capacity resources.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
To the extent feasible, all capacity determinations are technology neutral, based on measured
performance, and weather normalized, allowing the broadest set of device types and technologies to be included within an aggregated distributed capacity resource and putting the burden on the aggregated distributed capacity resource provider to ensure that it can deliver, in total across all of its distributed resources, the promised demand reduction or electricity supply when called upon.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
Alignment with the Independent System Operator’s existing market participation models for aggregated distributed capacity resources, as modified pursuant to subdivision (d).
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The commission shall allow load-serving entities to include aggregated distributed capacity resources in resource adequacy filings and commission-ordered procurement pursuant to Section 454.54.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
In adopting rules for aggregated distributed capacity
resource participation in the resource adequacy program or in new procurement orders, the commission shall not do either of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Adopt requirements for procurement or resource adequacy, including contract terms, that would disincentivize load-serving entities from contracting with aggregated distributed capacity resources in favor of other types of resources lower in the loading order in the state’s energy action plan, except to the extent necessary to implement procurement of eligible resources with a construction and development lead time of at least five years, as described in Section 454.52.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Adopt requirements that would limit entities that are not load-serving entities in their ability to develop and manage aggregated distributed capacity resources and offer those resources for resource adequacy capacity or other procurement, including through limitations on
enrollment authorization.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
On or before June 30, 2027, the commission shall develop recommendations for changes to the Independent System Operator’s proxy demand resource and the distributed energy resource aggregation participation models, including the must-offer obligation for each participation model, to be consistent with the commission’s requirements for aggregated distributed capacity resources pursuant to this section, and shall request that the Independent System Operator implement these changes in a new or existing initiative.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
For purposes of this section, both of the following definitions apply:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Aggregated distributed capacity resource” means an aggregation of one or more distributed resources, as defined in Section 769, that are capable of supplying electricity to, or reducing electricity
demand on, the electrical distribution system when called upon to do so.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Load-serving entity” has the same meaning as defined in Section 380.
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<ns0:Num>SEC. 3.</ns0:Num>
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<html:p>
No reimbursement is required by this act pursuant to Section 6 of Article XIII
<html:span class="ThinSpace"/>
B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII
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B of the California Constitution.
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