BILL NUMBER: AB 1 ENROLLED
BILL TEXT
PASSED THE ASSEMBLY SEPTEMBER 6, 2001
PASSED THE SENATE SEPTEMBER 4, 2001
AMENDED IN SENATE JULY 17, 2001
AMENDED IN ASSEMBLY MAY 24, 2001
AMENDED IN ASSEMBLY APRIL 16, 2001
INTRODUCED BY Assembly Member Aanestad
DECEMBER 4, 2000
An act to amend Section 399.8 of the Public Utilities Code,
relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 1, Aanestad. Electrical restructuring: energy efficiency
programs.
Under the Public Utilities Act, the Public Utilities Commission,
until January 1, 2012, requires electrical corporations to identify a
separate rate component to collect a system benefits charge to fund
energy efficiency, renewable energy, and research, development, and
demonstration programs.
This bill would establish a dispute resolution process for the
Large Nonresidential Standard Performance Contract Program funded
under these provisions.
A violation of the act is a crime. Because a violation of the
provisions of this bill would be a crime, this bill would impose a
state-mandated local program by creating a new crime.
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.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 399.8 of the Public Utilities Code, as added by
Chapter 1050 of the Statutes of 2000, is amended to read:
399.8. (a) In order to ensure that the citizens of this state
continue to receive safe, reliable, affordable, and environmentally
sustainable electric service, it is the policy of this state and the
intent of the Legislature that prudent investments in energy
efficiency, renewable energy, and research, development and
demonstration shall continue to be made.
(b) (1) Every customer of an electrical corporation, shall pay a
nonbypassable system benefits charge authorized pursuant to this
article. The system benefits charge shall fund energy efficiency,
renewable energy, and research, development and demonstration.
(2) Local publicly owned electric utilities shall continue to
collect and administer system benefits charges pursuant to Section
385.
(c) (1) The commission shall require each electrical corporation
to identify a separate rate component to collect revenues to fund
energy efficiency, renewable energy, and research, development and
demonstration programs authorized pursuant to this section beginning
January 1, 2002, through January 1, 2012. The rate component shall
be a nonbypassable element of the local distribution service and
collected on the basis of usage.
(2) This rate component may not exceed, for any tariff schedule,
the level of the rate component that was used to recover funds
authorized pursuant to Section 381 on January 1, 2000. If the
amounts specified in paragraph (1) of subdivision (d) are not
recovered fully in any year, the commission shall reset the rate
component to restore the unrecovered balance, provided that the rate
component may not exceed, for any tariff schedule, the level of the
rate component that was used to recover funds authorized pursuant to
Section 381 on January 1, 2000. Pending restoration, any annual
shortfalls shall be allocated pro rata among the three funding
categories in the proportions established in paragraph (1) of
subdivision (d).
(d) The commission shall order San Diego Gas and Electric Company,
Southern California Edison Company, and Pacific Gas and Electric
Company to collect these funds commencing on January 1, 2002, as
follows:
(1) Two hundred twenty-eight million dollars ($228,000,000) per
year in total for energy efficiency and conservation activities, one
hundred thirty-five million dollars ($135,000,000) in total per year
for renewable energy, and sixty-two million five hundred thousand
dollars ($62,500,000) in total per year for research, development and
demonstration. The funds for energy efficiency and conservation
activities shall continue to be allocated in proportions established
for the year 2000 as set forth in paragraph (1) of subdivision (c) of
Section 381.
(2) The amounts shall be adjusted annually at a rate equal to the
lesser of the annual growth in electric commodity sales or inflation,
as defined by the gross domestic product deflator.
(e) The commission and the Energy Commission shall retain and
continue their oversight responsibilities as set forth in Sections
381, 383, 383.5, and 445, and Chapter 7.1 (commencing with Section
25620) of the Public Resources Code.
(f) (1) On or before January 1, 2004, the Governor shall appoint
an independent review panel including, but not limited to, members
with expertise on the energy service needs of large and small
electricity consumers, system reliability issues, and energy-related
public policy. On or before January 1, 2005, the panel shall prepare
and submit to the Legislature and the Energy Commission a report
evaluating the energy efficiency, renewable energy, and research,
development and demonstration programs funded under this section.
Reasonable costs associated with the review in each of the three
program categories, including technical assistance, may be charged to
the relevant program category under procedures to be developed by
the commission for energy efficiency and by the Energy Commission for
renewable energy and research, development and demonstration.
(2) The report shall also assess all of the following:
(A) Whether ongoing programs are consistent with the statutory
goals.
(B) Whether potential synergies among the program categories
described in paragraph (1) that could provide enhanced public value
have been identified and incorporated in the programs.
(C) If established targets for increased renewable generation are
likely to be achieved.
(D) What changes should be made to result in a more efficient use
of public resources.
(3) The report shall also compare the Energy Commission's programs
with efforts undertaken by other states and assess, as an
alternative, the relative costs and benefits of adopting a tradable
minimum renewable energy requirement in California. The evaluation
shall include recommendations intended to optimize renewable resource
development at the least cost.
(4) For energy efficiency programs, the report shall include an
evaluation of all of the following:
(A) The net benefits secured for residential customers, taking
into account both public and private costs, including improvements in
that customer group's ability to avoid or reduce consumption of
relatively costly peak electricity.
(B) Whether the programs provide a balance of benefits to all
sectors that contribute to the funding.
(C) The extent to which competition in energy markets including,
but not limited to, load participation in ancillary services markets,
and improvements in technology affect the continuing need for such
programs.
(D) The status and growth of the private, competitive energy
services industry that provides energy efficiency services and other
energy products to customers.
(E) The commercial availability of any new technologies that
reduce electricity demands during high-priced periods.
(F) Customers' willingness and ability to reduce consumption or
adopt energy efficiency measures without program support.
(G) The extent to which the programs have delivered cost-effective
energy efficiency not adequately provided by markets and as a result
have reduced energy demand and consumption.
(H) The relative cost effectiveness of program expenditures
compared to other current or potential expenditures to enhance system
reliability.
(5) The report shall include specific recommendations aimed at
assisting the Legislature in determining whether to change or
eliminate the collection of the system benefits charge on or after
January 1, 2007.
(6) The panel may update and revise the report as needed.
(g) Promptly after receiving the panel's report, the commission
shall convene a proceeding to address implementation of the panel's
energy efficiency recommendations.
(h) An applicant for the Large Nonresidential Standard Performance
Contract Program funded pursuant to paragraph (1) of subdivision (b)
and an electrical corporation shall promptly attempt to resolve
disputes that arise related to the program's guidelines and
parameters prior to entering into a program agreement. The applicant
shall provide the electrical corporation with written notice of any
dispute. Within 10 business days after the date of receipt of the
notice, the parties shall meet to resolve the dispute. If the
dispute is not resolved within 10 business days after the meeting,
the electrical corporation shall notify the applicant of his or her
right to file a complaint with the commission, which complaint shall
describe the grounds for the complaint, injury, and relief sought.
The commission shall issue its findings in response to a filed
complaint within 30 business days of the date of receipt of the
complaint. Prior to issuance of its findings, the commission shall
provide a copy of the complaint to the electrical corporation, which
shall provide a response to the complaint to the commission within
five business days of the date of receipt. During the dispute
period, the amount of estimated financial incentives shall be held in
reserve until the dispute is resolved.
SEC. 2. Section 399.8 of the Public Utilities Code, as added by
Chapter 1051 of the Statutes of 2000, is amended to read:
399.8. (a) In order to ensure that the citizens of this state
continue to receive safe, reliable, affordable, and environmentally
sustainable electric service, it is the policy of this state and the
intent of the Legislature that prudent investments in energy
efficiency, renewable energy, and research, development and
demonstration shall continue to be made.
(b) (1) Every customer of an electrical corporation, shall pay a
nonbypassable system benefits charge authorized pursuant to this
article. The system benefits charge shall fund energy efficiency,
renewable energy, and research, development and demonstration.
(2) Local publicly owned electric utilities shall continue to
collect and administer system benefits charges pursuant to Section
385.
(c) (1) The commission shall require each electrical corporation
to identify a separate rate component to collect revenues to fund
energy efficiency, renewable energy, and research, development and
demonstration programs authorized pursuant to this section beginning
January 1, 2002, through January 1, 2012. The rate component shall
be a nonbypassable element of the local distribution service and
collected on the basis of usage.
(2) This rate component may not exceed, for any tariff schedule,
the level of the rate component that was used to recover funds
authorized pursuant to Section 381 on January 1, 2000. If the
amounts specified in paragraph (1) of subdivision (d) are not
recovered fully in any year, the commission shall reset the rate
component to restore the unrecovered balance, provided that the rate
component may not exceed, for any tariff schedule, the level of the
rate component that was used to recover funds authorized pursuant to
Section 381 on January 1, 2000. Pending restoration, any annual
shortfalls shall be allocated pro rata among the three funding
categories in the proportions established in paragraph (1) of
subdivision (d).
(d) The commission shall order San Diego Gas and Electric Company,
Southern California Edison Company, and Pacific Gas and Electric
Company to collect these funds commencing on January 1, 2002, as
follows:
(1) Two hundred twenty-eight million dollars ($228,000,000) per
year in total for energy efficiency and conservation activities, one
hundred thirty-five million dollars ($135,000,000) in total per year
for renewable energy, and sixty-two million five hundred thousand
dollars ($62,500,000) in total per year for research, development and
demonstration. The funds for energy efficiency and conservation
activities shall continue to be allocated in proportions established
for the year 2000 as set forth in paragraph (1) of subdivision (c) of
Section 381.
(2) The amounts shall be adjusted annually at a rate equal to the
lesser of the annual growth in electric commodity sales or inflation,
as defined by the gross domestic product deflator.
(e) The commission and the Energy Commission shall retain and
continue their oversight responsibilities as set forth in Sections
381, 383, 383.5, and 445, and Chapter 7.1 (commencing with Section
25620) of Division 15 of the Public Resources Code.
(f) (1) On or before January 1, 2004, the Governor shall appoint
an independent review panel including, but not limited to, members
with expertise on the energy service needs of large and small
electricity consumers, system reliability issues, and energy-related
public policy. On or before January 1, 2005, the panel shall prepare
and submit to the Legislature and the Energy Commission a report
evaluating the energy efficiency, renewable energy, and research,
development and demonstration programs funded under this section.
Reasonable costs associated with the review in each of the three
program categories, including technical assistance, may be charged to
the relevant program category under procedures to be developed by
the commission for energy efficiency and by the Energy Commission for
renewable energy and research development and demonstration.
(2) The report shall also assess all of the following:
(A) Whether ongoing programs are consistent with the statutory
goals.
(B) Whether potential synergies among the program categories
described in paragraph (1) that could provide enhanced public value
have been identified and incorporated in the programs.
(C) If established targets for increased renewable generation are
likely to be achieved.
(D) What changes should be made to result in a more efficient use
of public resources.
(3) The report shall also compare the Energy Commission's programs
with efforts undertaken by other states and assess, as an
alternative, the relative costs and benefits of adopting a tradable
minimum renewable energy requirement in California. The evaluation
shall include recommendations intended to optimize renewable resource
development at the least cost.
(4) For energy efficiency programs, the report shall include an
evaluation of all of the following:
(A) The net benefits secured for residential customers, taking
into account both public and private costs, including improvements in
that customer group's ability to avoid or reduce consumption of
relatively costly peak electricity.
(B) Whether the programs provide a balance of benefits to all
sectors that contribute to the funding.
(C) The extent to which competition in energy markets including,
but not limited to, load participation in ancillary services markets,
and improvements in technology affect the continuing need for such
programs.
(D) The status and growth of the private, competitive energy
services industry that provides energy efficiency services and other
energy products to customers.
(E) The commercial availability of any new technologies that
reduce electricity demands during high-priced periods.
(F) Customers' willingness and ability to reduce consumption or
adopt energy efficiency measures without program support.
(G) The extent to which the programs have delivered cost-effective
energy efficiency not adequately provided by markets and as a result
have reduced energy demand and consumption.
(H) The relative cost effectiveness of program expenditures
compared to other current or potential expenditures to enhance system
reliability.
(5) The report shall include specific recommendations aimed at
assisting the Legislature in determining whether to change or
eliminate the collection of the system benefits charge on or after
January 1, 2007.
(6) The panel may update and revise the report as needed.
(g) Promptly after receiving the panel's report, the commission
shall convene a proceeding to address implementation of the panel's
energy efficiency recommendations.
(h) An applicant for the Large Nonresidential Standard Performance
Contract Program funded pursuant to paragraph (1) of subdivision (b)
and an electrical corporation shall promptly attempt to resolve
disputes that arise related to the program's guidelines and
parameters prior to entering into a program agreement. The applicant
shall provide the electrical corporation with written notice of any
dispute. Within 10 business days after receipt of the notice, the
parties shall meet to resolve the dispute. If the dispute is not
resolved within 10 business days after the date of the meeting, the
electrical corporation shall notify the applicant of his or her right
to file a complaint with the commission, which complaint shall
describe the grounds for the complaint, injury, and relief sought.
The commission shall issue its findings in response to a filed
complaint within 30 business days of the date of receipt of the
complaint. Prior to issuance of its findings, the commission shall
provide a copy of the complaint to the electrical corporation, which
shall provide a response to the complaint to the commission within
five business days of the date of receipt. During the dispute
period, the amount of estimated financial incentives shall be held in
reserve until the dispute is resolved.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB 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 XIIIB of the California Constitution.