Cal. Pub. Util. Code § 451.7

(a) Nonbypassable or departing load surcharges, as defined by the commission, shall not apply to a reduction in kilowatthours of electricity that an electrical corporation customer consumes from the electrical grid in a metered interval due to industrial process heat recovery technology, up to a cap established by the commission.
(b) In order to receive the exemption pursuant to subdivision (a), the industrial process heat recovery technology shall meet all of the following requirements:
1. (1) The industrial process heat recovered to produce electricity is integral to the industrial process.
2. (2) The industrial process heat recovered to produce electricity is created by the industrial process.
3. (3) No supplemental firing or fuel use occurs to increase or to stabilize the steam’s temperature.
4. (4) The electricity generated by the industrial process heat recovery technology has zero marginal greenhouse gas emissions associated with it.
5. (5) The electricity generated by the industrial process heat recovery technology is fully self-consumed onsite during a manufacturing process.
6. (6) The electricity generated by the industrial process heat recovery technology is not exported to the electrical grid for sale into the wholesale market.
7. (7) The electricity generated by the industrial process heat recovery technology does not exceed 25 percent of the installing customer’s peak electrical load at the time of installation.
8. (8) The industrial process heat recovery technology has a minimum nameplate rating of 500 kilowatts.
9. (9) The industrial process heat recovery technology is installed on or after January 1, 2024.
(c) In implementing the exemption in subdivision (a), the commission shall minimize the cost impacts to all nonparticipating customers that are directly attributable to the nonbypassable or departing load charges of customers using industrial process heat recovery technology pursuant to subdivision (b).
(d) For purposes of this section, the following definitions apply:
1. (1) “Industrial process heat recovery” means a process that captures and reuses heat that would otherwise not be used, without any additional fuel input or supplemental firing, thereby reducing the electrical consumption of the industrial process.
2. (2) “Reduction” means a reduction from the baseline electrical load of the industrial process before installation of the industrial process heat recovery technology.