PUC §399.32: (a) It is the policy of the state and the intent of the Legislature to encourage electrical generation from eligible renewable energy resources.

(a) It is the policy of the state and the intent of the Legislature to encourage electrical generation from eligible renewable energy resources. (b) As used in this section, “electric generation facility” means an electric generation facility located within the service territory of, and developed to sell electricity to, a local publicly owned electric utility, and that meets all of the following criteria: (1) Has an effective capacity of not more than three megawatts. (2) Is interconnected and operates in parallel with the electrical transmission and distribution grid. (3) Is strategically located and interconnected to the electrical transmission and distribution grid in a manner that optimizes the deliverability of electricity generated at the facility to load centers. (4) Is an eligible renewable energy resource pursuant to this article. (c) A local publicly owned electric utility that sells electricity at retail to 75,000 or more customers shall adopt a standard tariff for electricity purchased from an electric generation facility by July 1, 2013. (d) The governing board of the local publicly owned electric utility shall ensure that the tariff adopted pursuant to subdivision (c) reflects the value of every kilowatthour of electricity generated on a time-of-delivery basis, and shall consider avoided costs for distribution and transmission system upgrades, whether the facility generates electricity in a manner that offsets peak demand on the distribution circuit, and all current and anticipated environmental and greenhouse gases reduction compliance costs. The governing board may adjust this value based on the other attributes of renewable generation. The governing board shall ensure, with respect to rates and charges, that ratepayers that do not receive service pursuant to the tariff are indifferent to whether a ratepayer with an electric generation facility receives service pursuant to the tariff. (e) A local publicly owned electric utility that sells electricity at retail to 75,000 or more customers shall make the tariff available to the owner or operator of an electric generation facility within the service territory of the utility, upon request, on a first-come-first-served basis, until the utility meets its proportionate share of a statewide cap of 750 megawatts cumulative rated generation capacity served under this section and Section 399.20. The proportionate share shall be calculated based on the ratio of the utility’s peak demand compared to the total statewide peak demand. (f) The local publicly owned electric utility may make the terms of the tariff available to owners and operators of an electric generation facility in the form of a standard contract. (g) Every kilowatthour of electricity purchased from an electric generation facility shall count toward meeting the local publicly owned electric utility’s renewables portfolio standard annual procurement targets for purposes of Section 399.30. (h) (1) A local publicly owned electric utility may establish performance standards for any electric generation facility that has a capacity greater than one megawatt to ensure that those facilities are constructed, operated, and maintained to generate the expected annual net production of electricity and do not impact system reliability. (2) A local publicly owned electric utility may reduce the three megawatt capacity limitation of paragraph (1) of subdivision (b) if the utility finds that a reduced capacity limitation is necessary. (i) Within 10 days of receipt of a request for a tariff pursuant to this section from an owner or operator of an electric generation facility, the local publicly owned electric utility that receives the request shall post a copy of the request on its Internet Web site. The information posted on the Internet Web site shall include the name of the city in which the facility is located, but information that is proprietary and confidential, including, but not limited to, address information beyond the name of the city in which the facility is located, shall be redacted. (j) A local publicly owned electric utility may deny a tariff request pursuant to this section if the local publicly owned electric utility makes any of the following findings: (1) The electric generation facility does not meet the requirements of this section. (2) The transmission or distribution grid that would serve as the point of interconnection is inadequate. (3) The electric generation facility does not meet all applicable state and local laws and building standards, and utility interconnection requirements. (4) The aggregate of all electric generating facilities on a distribution circuit would adversely impact utility operation and load restoration efforts of the distribution system. (k) Upon receiving a notice of denial from a local publicly owned electric utility, the owner or operator of the electric generation facility denied a tariff pursuant to this section shall have the right to appeal that decision to the governing board of the local publicly owned electric utility. (l) In order to ensure the safety and reliability of electric generation facilities, the owner of an electric generation facility receiving a tariff pursuant to this section shall provide an inspection and maintenance report to the local publicly owned electric utility at least once every other year. The inspection and maintenance report shall be prepared at the owner’s or operator’s expense by a California-licensed contractor who is not the owner or operator of the electric generation facility. A California-licensed electrician shall perform the inspection of the electrical portion of the generation facility. (m) The contract between the electric generation facility receiving the tariff and the local publicly owned electric utility shall contain provisions that ensure that construction of the electric generating facility complies with all applicable state and local laws and building standards, and utility interconnection requirements. (n) (1) All construction and installation of facilities of the local publicly owned electric utility, including at the point of the output meter or at the transmission or distribution grid, shall only be performed by that local publicly owned electric utility. (2) All interconnection facilities installed on the local publicly owned electric utility’s side of the transfer point for electricity between the local publicly owned electric utility and the electrical conductors of the electric generation facility shall be owned, operated, and maintained only by the local publicly owned electric utility. The ownership, installation, operation, reading, and testing of revenue metering equipment for electric generating facilities shall be performed only by the local publicly owned electric utility.