Chapter 3Department Powers

Section § 80820

Explanation

This law outlines the process and requirements for the California Department of Water Resources to procure energy resources. It allows the department to conduct competitive solicitations or enter contracts for energy resources, but only under specific conditions.

The department cannot make new contracts after January 1, 2035. When evaluating proposals, they must consider factors like project viability, financial strength, the ability to meet deadlines without cost increases, and environmental impacts.

Bids must certify whether construction is a 'public work' and ensure workers receive prevailing wages. Contractors must also use a skilled workforce, and failure to comply results in penalties.

There is an emphasis on using apprentices, maintaining payroll records, and possibly following a project labor agreement with specific hiring and wage provisions.

(a)Copy CA Water Code § 80820(a)
(1)Copy CA Water Code § 80820(a)(1) Consistent with Sections 380, 454.51, 454.52, 454.53, and 454.54 of the Public Utilities Code and this division, if the commission requests the department to procure eligible energy resources, and the department elects to exercise its central procurement function to conduct one or more competitive solicitations or enter into contracts for eligible energy resources pursuant to paragraph (4) of subdivision (a) of Section 454.52 of the Public Utilities Code, the commission, in consultation with the department, shall develop and adopt procedures and requirements that govern competitive procurement by, obligations on, and recovery of costs incurred by the department pursuant to this division.
(2)CA Water Code § 80820(a)(2) The commission and the department shall establish a procurement group to advise the department on the procurement undertaken pursuant to this division.
(3)CA Water Code § 80820(a)(3) The department shall not enter into new contracts pursuant to this division on or after January 1, 2035.
(b)CA Water Code § 80820(b) In evaluating the bids received through a solicitation, the department shall consider all of the following:
(1)CA Water Code § 80820(b)(1) For eligible energy resources dependent on the development of a project, that project’s viability, including, but not limited to, developer experience, developer financial strength and creditworthiness sufficient to eliminate financing contingencies, and the status of required permits and licenses, including a commitment to submit a consistency certification provided pursuant to the federal Coastal Zone Management Act of 1972 (16 U.S.C. Sec. 1451 et seq.) to the California Coastal Commission for offshore wind energy development projects, to the extent required.
(2)CA Water Code § 80820(b)(2) The ability to meet in-service dates offered during the solicitation and the ability to meet those in-service dates without escalation in cost.
(3)CA Water Code § 80820(b)(3) The useful life of the project.
(4)CA Water Code § 80820(b)(4) The capability to supply energy, capacity, and ancillary services at locations, times of day, and for durations that meet the state’s energy resource needs, as determined by the department and the commission.
(5)CA Water Code § 80820(b)(5) The bidder’s economic and local community impact, workforce development needs and opportunities, environmental impact mitigation plan, and equipment acquisition and supply chain investment plan.
(6)CA Water Code § 80820(b)(6) A plan to contribute to large-scale, regional, or statewide baseline and ongoing monitoring of coastal waters and wildlife, if applicable.
(7)CA Water Code § 80820(b)(7) Any other criteria determined by the commission or the department.
(c)CA Water Code § 80820(c) Every bid for the development of an eligible energy resource project selected by the department shall include the bidder’s certification that either of the following are true:
(1)CA Water Code § 80820(c)(1) The entirety of the construction of the eligible energy resource project is a public work for purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.
(2)CA Water Code § 80820(c)(2) The construction of the eligible energy resource project is not in its entirety a public work for which prevailing wages are required to be paid pursuant to Article 1 (commencing with Section 1720) of Chapter 1 of Part 7 of Division 2 of the Labor Code, but all construction workers employed on the project will be paid at least the general prevailing rate of per diem wages for the type of work and geographic area, as determined by the Director of Industrial Relations pursuant to Sections 1773 and 1773.9 of the Labor Code, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate. If the eligible energy resource project is subject to this paragraph, for those portions of the eligible energy resource project that are not a public work, all of the following requirements shall apply:
(A)CA Water Code § 80820(c)(2)(A) The bidder shall ensure that the prevailing wage requirement is included in all contracts for the performance of all construction work.
(B)CA Water Code § 80820(c)(2)(B) All contractors and subcontractors shall pay to all construction workers employed in the construction of the eligible energy resource project at least the general prevailing rate of per diem wages, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate.
(C)CA Water Code § 80820(c)(2)(C) All contractors and subcontractors performing construction work on the eligible energy resource project shall employ apprentices at no less than the ratio required in Section 1777.5 of the Labor Code.
(D)CA Water Code § 80820(c)(2)(D) Except as specified in subparagraph (F), all contractors and subcontractors performing construction work shall maintain and verify payroll records pursuant to Section 1776 of the Labor Code, make those records available for inspection and copying pursuant to Section 1776 of the Labor Code, and furnish those payroll records to the Labor Commissioner pursuant to Section 1771.4 of the Labor Code.
(E)CA Water Code § 80820(c)(2)(E) Except as specified in subparagraph (F), the obligation of the contractors and subcontractors to pay prevailing wages and employ apprentices may be enforced by the Labor Commissioner through the issuance of a civil wage and penalty assessment pursuant to Section 1741 of the Labor Code, which may be reviewed pursuant to Section 1742 of the Labor Code, within 18 months after the completion of the project, by an underpaid worker through an administrative complaint or civil action, or by a joint labor-management committee though a civil action pursuant to Section 1771.2 of the Labor Code. If a civil wage and penalty assessment is issued, the contractor, subcontractor, and surety on a bond issued to secure the payment of wages covered by the assessment shall be liable for liquidated damages pursuant to Section 1742.1 of the Labor Code.
(F)CA Water Code § 80820(c)(2)(F) Subparagraphs (D) and (E) do not apply if all contractors and subcontractors performing construction work on the eligible energy resource project are subject to a project labor agreement. The project labor agreement shall also include, but not be limited to, all of the following requirements:
(i)CA Water Code § 80820(c)(2)(F)(i) Provisions requiring payment of prevailing wages to all construction workers employed in the construction of the eligible energy resource project and for enforcement of that obligation through an arbitration procedure.
(ii)CA Water Code § 80820(c)(2)(F)(ii) Targeted hiring provisions, including a targeted hiring plan, on a craft-by-craft basis to address job access for local, disadvantaged, or underrepresented workers, as defined by a relevant local agency.
(iii)CA Water Code § 80820(c)(2)(F)(iii) Apprenticeship use provisions that commit all parties to increasing the share of work performed by state-registered apprentices above the state-mandated minimum ratio required in Section 1777.5 of the Labor Code.
(iv)CA Water Code § 80820(c)(2)(F)(iv) Apprenticeship use provisions that commit all parties to hiring and retaining a certain percentage of state-registered apprentices that have completed the multicraft core preapprenticeship training curriculum described in Section 14005 of the Unemployment Insurance Code.
(d)CA Water Code § 80820(d) Every bid for the development of an eligible energy resource project selected by the department shall include the bidder’s certification that a skilled and trained workforce will be used to perform all construction work on the eligible energy resource project, consistent with all of the following requirements:
(1)CA Water Code § 80820(d)(1) The bidder shall require in all contracts for the performance of work that every contractor and subcontractor at every tier will individually use a skilled and trained workforce to construct the eligible energy resource project.
(2)CA Water Code § 80820(d)(2) Every contractor and subcontractor shall use a skilled and trained workforce to construct the eligible energy resource project.
(3)CA Water Code § 80820(d)(3) Except as specified in subdivision (c), contractors and subcontractors that fail to use a skilled and trained workforce shall be subject to the penalties provided in Section 2603 of the Public Contract Code. Penalties for a contractor’s or subcontractor’s failure to comply with the requirement to use a skilled and trained workforce may be assessed by the Labor Commissioner within 18 months of completion of the project using the same procedures for issuance of civil wage and penalty assessments pursuant to Section 2603 of the Public Contract Code. Penalties shall be paid to the State Public Works Enforcement Fund.
(4)CA Water Code § 80820(d)(4) For purposes of this subdivision, a bidder shall be considered to be an “awarding body” under Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code. Except as specified in paragraph (5), the bidder shall retain records, including copies of monthly reports, that demonstrate compliance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code while the eligible energy resource project or contract is being performed and for three years after completion of the eligible energy resource project or contract. The bidder shall submit these records immediately upon request of the commission. When submitted to the commission, these records shall be a public record under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) and shall be open to public inspection.
(5)CA Water Code § 80820(d)(5) Paragraphs (3) and (4) do not apply if all contractors and subcontractors performing work on the eligible energy resource project are subject to a project labor agreement. The project labor agreement shall also include, but not be limited to, all of the following requirements:
(A)CA Water Code § 80820(d)(5)(A) Provisions requiring compliance with the skilled and trained workforce requirement and for enforcement of that obligation through an arbitration procedure.
(B)CA Water Code § 80820(d)(5)(B) Targeted hiring provisions, including a targeted hiring plan, on a craft-by-craft basis to address job access for local, disadvantaged, or underrepresented workers, as defined by a local agency.
(C)CA Water Code § 80820(d)(5)(C) Apprenticeship use provisions that commit all parties to increasing the share of work performed by state-registered apprentices above the state-mandated minimum ratio required by Section 1777.5 of the Labor Code.
(D)CA Water Code § 80820(d)(5)(D) Apprenticeship use provisions that commit all parties to hiring and retaining a certain percentage of state-registered apprentices that have completed the Multi-Craft Core preapprenticeship training curriculum described in Section 14005 of the Unemployment Insurance Code.
(e)CA Water Code § 80820(e) For purposes of this section, the following definitions apply:
(1)CA Water Code § 80820(e)(1) “Construction” means any new construction work and subsequent construction and construction maintenance work following initial completion that is contracted out to a contractor in the construction industry, including construction work on a barge, construction staging area, or construction area when being used as a construction work platform and the rigging and hoisting of construction materials directly from a barge, construction staging area, or construction area into the construction process for a construction project. “Construction” does not include the loading and unloading of cargo to and from vessels and the movement of cargo to and from vessels at any port facility to the cargo’s point of rest.
(2)CA Water Code § 80820(e)(2) “Project labor agreement” has the same meaning as defined in Section 2500 of the Public Contract Code.
(3)CA Water Code § 80820(e)(3) “Skilled and trained workforce” has the same meaning as defined in Section 2601 of the Public Contract Code.
energy procurement competitive solicitations project viability prevailing wages skilled workforce department contracts project labor agreement construction regulations energy resource bids workforce development procurement requirements environmental impact offshore wind development apprenticeship programs public work certification
(Added by Stats. 2023, Ch. 367, Sec. 15. (AB 1373) Effective October 7, 2023.)

Section § 80821

Explanation

This section outlines how the California Department of Water Resources, when involved in acquiring new energy resources, must coordinate with the energy commission and other local electric utilities. The department can recover costs from these activities through a special non-avoidable charge to electric users, but this needs approval to ensure it's reasonable and doesn't excessively raise customer costs.

An electrical company might be asked to help with bidding and contracting for these resources and will be reimbursed for its costs. Agreements must be made to cover any bond-related costs, and these charges need to be managed and adjusted to cover revenue requirements effectively, ensuring customers aren't excessively charged.

(a)Copy CA Water Code § 80821(a)
(1)Copy CA Water Code § 80821(a)(1) When conducting a solicitation pursuant to Section 80820, the department shall confer with the commission and other parties, including local publicly owned electric utilities that are voluntarily participating pursuant to Section 80822 and load-serving entities, for eligible energy resource procurement activities of an identified scope and duration. The department shall recover costs related to conducting the requested solicitations and all supporting work. Cost recovery may be effectuated, if determined to be just and reasonable by the commission before the procurement, through a nonbypassable charge approval process for load-serving entities and pursuant to Section 80822 for local publicly owned electric utilities.
(2)CA Water Code § 80821(a)(2) At the request of the department, the commission may require an electrical corporation to act as the agent of the department or to assist the department in conducting the solicitation, bid evaluation, or contract negotiation for new eligible energy resource procurement. The electrical corporation shall be reimbursed by the department for its reasonable costs, as determined by the commission.
(b)CA Water Code § 80821(b) If the department’s costs associated with the procurement of eligible energy resources pursuant to this division, including the costs related to bonds issued pursuant to Chapter 5 (commencing with Section 80840), costs related to contracting for eligible energy resources, and other costs to implement and administer this division, will be recovered through a commission proceeding, the commission shall review the procurement undertaken pursuant to this division and, if approved, issue an order governing the recovery of the department’s costs before the consummation of the contract only if both of the following conditions are satisfied:
(1)CA Water Code § 80821(b)(1) The recovery of the department’s costs, including those costs associated with the procurement process, the resulting transactions, and the associated costs, has been found to be just and reasonable and to be in the public interest.
(2)CA Water Code § 80821(b)(2) The recovery of the department’s costs, including, if authorized, costs associated with the issuance of bonds and the material terms of those bonds, including, without limitation, interest rates, rating, amortization, and maturity, through charges on customers does not unreasonably increase costs to customers on a net present value basis.
(c)CA Water Code § 80821(c) If the commission determines that a nonbypassable charge necessary to fund activities conducted by the department pursuant to this division is just and reasonable, the department shall ensure it has entered into an agreement with the commission for that nonbypassable charge before it begins to incur costs related to a specific activity under this division. If the purpose of the nonbypassable charge is to recover the department’s revenue requirement related to bond issuance debt service, the department shall ensure the agreement has the force and effect of an irrevocable financing order adopted in accordance with Article 5.5 (commencing with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code or that the commission has separately issued an irrevocable financing order related to the nonbypassable charge.
(d)CA Water Code § 80821(d) Any agreement between the department and the commission under this section shall provide for the administration of the nonbypassable charge, including both of the following requirements:
(1)CA Water Code § 80821(d)(1) The department shall notify the commission each year of the annual collections received by the department and the amount of any excess or deficiency in collections above or below the revenue requirement. The commission shall adjust charges in the subsequent year to reflect that excess or deficiency.
(2)CA Water Code § 80821(d)(2) During any period, if the department forecasts that the revenue requirement for that period will not be met and that collections will not be sufficient to fund the revenue requirement established pursuant to Section 80842, the department shall notify the commission in writing and the commission shall act within 60 days of receiving that notice to increase the nonbypassable charge so that the amounts collected during that period are sufficient to meet those obligations.
(e)CA Water Code § 80821(e) Any agreement between the department and the commission pursuant to this section that is solely for the purpose of imposing a nonbypassable charge to recover the department’s revenue requirement related to bond issuance debt service shall include a provision stating that the commission’s just and reasonable determination with respect to the revenue requirement is in effect for the duration of the bond term.
energy resource procurement nonbypassable charge cost recovery publicly owned electric utilities load-serving entities commission proceeding bond issuance debt service charge adjustment revenue requirement electric utilities coordination solicitation process electrical corporation reimbursement contract negotiation procurement costs financing order
(Added by Stats. 2023, Ch. 367, Sec. 15. (AB 1373) Effective October 7, 2023.)

Section § 80822

Explanation

This law allows the relevant department to set up a system for local publicly owned electric utilities to voluntarily buy energy resources through the department. This would be done on a contract-by-contract basis.

To take part, these utilities must agree to charge their customers a specific fee that cannot be avoided by switching providers. This fee must always cover the cost of their participation, according to specific terms mentioned in another section.

(a)CA Water Code § 80822(a) Pursuant to Section 80820, the department may establish a schedule and mechanism for a local publicly owned electric utility to voluntarily obtain from the department eligible energy resources to be acquired by the department through its central procurement function on a contract-by-contract basis.
(b)CA Water Code § 80822(b) In order to voluntarily participate, a local publicly owned electric utility shall commit to the imposition of a nonbypassable charge on its ratepayers sufficient at all times to fund its participation and on terms and conditions as set forth in Section 80826.
local publicly owned electric utility voluntary participation energy resources central procurement function contract-by-contract basis nonbypassable charge ratepayers fund participation imposition of charges energy procurement system public utility funding utility customer charge energy acquisition
(Added by Stats. 2023, Ch. 367, Sec. 15. (AB 1373) Effective October 7, 2023.)

Section § 80822.5

Explanation

This law gives utility companies, known as load-serving entities, the choice to buy extra renewable energy from the state beyond what they are already expected to buy. However, this can only happen if there's enough capacity, and the state's energy overseeing body, known as the commission, agrees to it.

Utility companies wanting more energy must let the state know in advance, and they have a responsibility to set up a charge on their customers' bills. This charge will cover the extra costs of obtaining more renewable energy. The exact amount will be decided by the state and approved by the commission as needed.

(a)CA Water Code § 80822.5(a) Load-serving entities shall have a voluntary option to obtain incremental eligible energy resources from the department beyond the amounts allocated to the load-serving entity from procurement pursuant to paragraph (1) of subdivision (a) of Section 80820, subject to the approval of the commission and a specific determination by the commission that sufficient capacity is available to accommodate the request to obtain amounts beyond those allocated to the load-serving entity.
(b)CA Water Code § 80822.5(b) The department, in consultation with the commission, may establish a schedule for load-serving entities to provide advance notice of an intent to obtain incremental eligible energy resources. Any load-serving entity exercising its option to voluntarily participate shall be obligated to impose a nonbypassable charge on its ratepayers sufficient to fund its allocated share of the costs of incremental eligible energy resources for the duration of the contract, as determined by the department and approved by the commission, if applicable.
load-serving entities incremental energy resources voluntary option renewable energy energy capacity commission approval advance notice nonbypassable charge ratepayers cost allocation energy procurement eligible energy resources utility companies renewable energy contracts energy planning
(Added by Stats. 2023, Ch. 367, Sec. 15. (AB 1373) Effective October 7, 2023.)

Section § 80823

Explanation

This law allows a state commission to instruct an electric company to handle the delivery and distribution of electricity that the department provides. The electric company can also act as an agent to manage billing and collection services. The company must be fairly paid for these services, and the arrangements must ensure the department gets paid too.

At the request of the department, the commission may order an electrical corporation, or its successor in the performance of a related service, to transmit or provide for the transmission of, and distribute all electricity made available by the department, and, as agent of the department, provide billing, collection, and other related services on terms and conditions that reasonably compensate the electrical corporation for its services and adequately secure payment to the department.
electricity distribution electrical corporation billing services collection services electricity transmission compensation terms payment security department agent electricity delivery service terms and conditions electric company obligations commission authority utility billing distribution of electricity customer billing and collection
(Added by Stats. 2023, Ch. 367, Sec. 15. (AB 1373) Effective October 7, 2023.)

Section § 80824

Explanation

This section allows the commission to create rules to manage how the agency enforces certain functions. This includes making sure specific charges that can't be avoided are collected and paid into a fund for the department.

The commission may issue rules regulating the enforcement of the agency function pursuant to Section 80823, including the collection of nonbypassable charges and payment into the fund on behalf of the department.
commission rules enforcement regulation agency function nonbypassable charges collection of charges payment into fund department funding rule issuance charge collection enforcement fund management
(Added by Stats. 2023, Ch. 367, Sec. 15. (AB 1373) Effective October 7, 2023.)

Section § 80825

Explanation

This section allows the department to recover its costs as part of its revenue needs if it has an agreement with the commission. It details how the department can inform the commission and participating local electric utilities about these costs and revenue needs. Furthermore, it states that the commission's existing authority from another section will apply, unless the first part overrides it.

(a)CA Water Code § 80825(a) If the department has executed an agreement with the commission pursuant to subdivision (c) of Section 80821, the department may recover its costs, as a revenue requirement, in the amounts sufficient and at the times necessary to fund the revenue requirement established pursuant to Section 80842, and shall advise the commission and each voluntarily participating local publicly owned electric utility, as the department determines to be appropriate and subject to the terms of the agreement.
(b)CA Water Code § 80825(b) For purposes of this division and except as otherwise provided in subdivision (a), the commission’s authority as set forth in Section 451 of the Public Utilities Code shall apply.
department cost recovery revenue requirement commission agreement local publicly owned utility Section 80842 Public Utilities Code electric utility funding cost recovery process department authority commission notification electric utility participation cost funding timing voluntary utility participation public utility authority
(Added by Stats. 2023, Ch. 367, Sec. 15. (AB 1373) Effective October 7, 2023.)

Section § 80826

Explanation

This section explains the responsibilities of a local publicly owned electric utility that chooses to join a central procurement function with the department. They must sign an agreement that acts like a strong financial order, ensuring they meet revenue needs to fund their involvement.

The agreement includes rules for handling revenue, specifically: the department must annually tell the utility how much money it collected and if there's a surplus or shortfall. The utility must then adjust its charges the next year to balance any discrepancies. If future revenue seems insufficient, the department must warn the utility, which then has 30 days to raise charges to ensure enough funds are collected to meet requirements.

(a)CA Water Code § 80826(a) A local publicly owned electric utility that voluntarily participates in the department’s central procurement function pursuant to Section 80822 shall enter into an agreement with the department for the revenue requirement to fund its participation and that agreement shall have the force and effect of an irrevocable financing order.
(b)CA Water Code § 80826(b) The agreement shall provide for the administration of the revenue requirement, including both of the following:
(1)CA Water Code § 80826(b)(1) A requirement that the department annually notify the local publicly owned electric utility of the annual collections received by the department with respect to the revenue requirement and the amount of any excess or deficiency in collections above or below the revenue requirement. The local publicly owned electric utility shall adjust charges in the subsequent year to reflect any such excess or deficiency.
(2)CA Water Code § 80826(b)(2) During any revenue requirement period, a requirement that, if the department forecasts that the revenue requirement for that period will not be met and that collections will not be sufficient to fund the revenue requirement established pursuant to Section 80842, the department notify the local publicly owned electric utility in writing and the local publicly owned electric utility shall act within 30 days of receiving that notice to increase the charge so that the amount collected during the period is sufficient to meet those obligations.
local publicly owned electric utility central procurement function revenue requirement irrevocable financing order annual collections excess or deficiency adjust charges insufficient funds written notification increase charges fund obligations Section 80822 Section 80842 financial order agreement administration
(Added by Stats. 2023, Ch. 367, Sec. 15. (AB 1373) Effective October 7, 2023.)

Section § 80827

Explanation

This law states that any money collected by electric utility companies, whether they're load-serving entities or publicly owned, and given to the department for eligible energy resources, must be deposited into a specific fund. This also includes any money paid for the sale or transfer of such energy resources.

All moneys collected by load-serving entities and local publicly owned electric utilities and remitted to the department for any eligible energy resources acquired and sold pursuant to this division, and all moneys paid directly or indirectly to or for the account of the department for any sale, exchange, transfer, or disposition of eligible energy resources acquired pursuant to this division, shall be deposited into the fund.
load-serving entities local publicly owned electric utilities eligible energy resources energy fund energy resource sale resource transfer energy resource disposition electric utility collections department remittances money deposit public energy funding energy resource exchange energy division fund deposit electric utility remittances
(Added by Stats. 2023, Ch. 367, Sec. 15. (AB 1373) Effective October 7, 2023.)

Section § 80828

Explanation

This law allows the department to set up the process and pricing for selling or getting rid of energy resources it has bought that are eligible for transaction.

The department may fix and establish the procedure and charges for the sale or other disposal of eligible energy resources purchased by the department.
energy resources sale procedure disposal process eligible energy resources charges for sale department authority pricing for disposal energy resource transaction establish process fix procedure charges regulation energy market transactions sell energy resources disposal of resources pricing structure
(Added by Stats. 2023, Ch. 367, Sec. 15. (AB 1373) Effective October 7, 2023.)