BILL NUMBER: ABX1 1 AMENDED
BILL TEXT
AMENDED IN SENATE JANUARY 29, 2001
AMENDED IN SENATE JANUARY 25, 2001
AMENDED IN ASSEMBLY JANUARY 16, 2001
INTRODUCED BY Assembly Members Keeley and Migden
JANUARY 3, 2001
An act to amend Section 366.5 of , and to add Section 360.5
to, and to repeal Section 355.1 of, the Public Utilities Code,
and to add Division 27 (commencing with Section 80000) to the Water
Code, relating to electric power, making an appropriation therefor,
and declaring the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 1, as amended, Keeley. Power exchanges: Department
of Water Resources: electric power.
(1) The Public Utilities Act establishes the Power Exchange
to provide an efficient competitive auction, open on a
nondiscriminatory basis to all electric power suppliers, that meets
the loads of all exchange customers at efficient prices. Existing
law authorizes the Public Utilities Commission to investigate issues
associated with multiple qualified exchanges, and requires the
commission, if it determines that allowing electrical corporations to
purchase from multiple qualified exchanges is in the public
interest, to prepare and submit findings and recommendations to the
Legislature on or before June 1, 2001. Existing law prohibits the
implementation by the commission of certain commission decisions
regarding other exchanges, as specified.
This bill would repeal those provisions, regarding multiple
qualified exchanges.
(2) Existing law prohibits any change in the aggregator or
supplier of electric power for certain customers from being made
until the change has been verified.
This bill would provide that electric power sold to customers
pursuant to the bill is not subject to those provisions.
(2)
(3) Under existing law relating to the Central Valley
Project, the Department of Water Resources has the authority to fix
and establish the prices, rates, and charges at which the resources
and facilities made available by the project are sold and disposed
of, and to enter into contracts and agreements and do any and all
things that the department determines to be necessary, convenient, or
expedient for the accomplishment of the purposes and objectives of
that existing law.
This bill would authorize the department to enter into contracts
and agreements for the purchase and sale
of electric power and to fix and establish the
procedure and charges for the sale or other disposal of power
purchased by the department . The bill would
authorize the department to sell power to retail end use customers
and to local publicly owned electric utilities at not more than the
department's acquisition costs, as specified. The bill would
prohibit the department from contracting for the purchase of
electrical power on and after January 2, 2003. The bill would
prohibit the department from entering into or engaging in a
transmission or distribution enterprise for purposes of the act. The
bill would also authorize the department to hire and appoint
additional employees and contract for the services of public and
private entities.
The bill would authorize the department to issue revenue bonds not
to exceed a certain amount, containing specified terms and
conditions, upon authorization by written determination of the
department and with the approval of the Director of Finance, as
specified.
The bill would establish in the State Treasury the Department of
Water Resources Electric Purchases Power
Fund, to be continuously appropriated to the department, and
available for the purposes described above. The bill would require
all revenues payable to the department under the bill to be deposited
in the fund. The bill would require that payments from the fund be
made only for certain purposes. The bill would transfer up to
$400,000,000 $500,000,000 from the
General Fund to the fund for the purposes described above and require
repayment to the General Fund at the earliest possible time.
The bill would permit the Department of Finance to authorize the
creation of deficiencies for this appropriation.
This bill would require the Public Utilities Commission to
calculate the California Procurement Adjustment and would further
require the commission to determine the amount of the adjustment
payable to the department for deposit into the fund.
The bill would require the Bureau of State Audits to conduct a
financial and performance audit of the department's implementation of
the bill.
(3)
(4) This bill would declare that it is to take effect
immediately as an urgency statute.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 355.1 of the Public Utilities Code is
repealed.
355.1. The commission may investigate issues associated with
multiple qualified exchanges. If the commission determines that
allowing electrical corporations to purchase from multiple qualified
exchanges is in the public interest, the commission shall prepare and
submit findings and recommendations to the Legislature on or before
June 1, 2001. Prior to June 1, 2001, the commission may not
implement the part of any decision authorizing electrical
corporations to purchase from exchanges other than the Power
Exchange. That portion of any decision of the commission adopted
prior to January 1, 2001, but after June 1, 2000, authorizing
electrical corporations to purchase from multiple qualified
exchanges, may not be implemented.
SEC. 2. Section 360.5 is added to the Public Utilities Coded, to
read:
360.5. The commission shall determine that portion of each
existing electrical corporation's retail rate effective on January 5,
2001, that is equal to the difference between the retail rate and
the sum of the costs of the utility's own generation, qualified
facility contracts, bilaterial contracts, and transmission and
distribution. That portion of the retail rate shall be known as the
California Procurement Adjustment. The commission shall further
determine the amount of the California Procurement Adjustment that is
allocable to the power sold by the department. That amount shall be
payable to the department for deposit in the Department of Water
Resources Electric Power Fund, established by Section 80200 of the
Water Code. The amount determined pursuant to this subdivision shall
be known as the Fixed Department of Water Resources Set-Aside.
SEC. 3. Section 366.5 of the Public Utilities Code is
amended to read:
366.5. (a) No change in the aggregator or supplier of electric
power for any small commercial customer may be made until one of the
following means of confirming the change has been completed:
(1) Independent third-party telephone verification.
(2) Receipt of a written confirmation received in the mail from
the consumer after the consumer has received an information package
confirming the agreement.
(3) The customer signs a document fully explaining the nature and
effect of the change in service.
(4) The customer's consent is obtained through electronic means,
including, but not limited to, computer transactions.
(b) No change in the aggregator or provider of electric power for
any residential customer may be made over the telephone until the
change has been confirmed by an independent third-party verification
company, as follows:
(1) The third-party verification company shall meet each of the
following criteria:
(A) Be independent from the entity that seeks to provide the new
service.
(B) Not be directly or indirectly managed, controlled, or
directed, or owned wholly or in part, by an entity that seeks to
provide the new service or by any corporation, firm, or person who
directly or indirectly manages, controls, or directs, or owns more
than 5 percent of the entity.
(C) Operate from facilities physically separate from those of the
entity that seeks to provide the new service.
(D) Not derive commission or compensation based upon the number of
sales confirmed.
(2) The entity seeking to verify the sale shall do so by
connecting the resident by telephone to the third-party verification
company or by arranging for the third-party verification company to
call the customer to confirm the sale.
(3) The third-party verification company shall obtain the customer'
s oral confirmation regarding the change, and shall record that
confirmation by obtaining appropriate verification data. The record
shall be available to the customer upon request. Information
obtained from the customer through confirmation shall not be used for
marketing purposes. Any unauthorized release of this information is
grounds for a civil suit by the aggrieved resident against the
entity or its employees who are responsible for the violation.
(4) Notwithstanding paragraphs (1), (2), and (3), an aggregator or
provider of electric power shall not be required to comply with
these provisions when the customer directly calls an aggregator or
provider of electric power to change service providers. However, an
aggregator or provider of electric power shall not avoid the
verification requirements by asking a customer to contact an
aggregator or provider of electric power directly to make any change
in the service provider.
(c) No change in the aggregator or provider of electric power for
any residential customer may be made via an Internet transaction, in
which the customer accesses the website of the aggregator or
provider, unless both of the following occur with respect to
confirming the change:
(1) In addition to any other information gathered in the course of
the transaction, the customer shall be asked to read and respond to
a separate screen that states, in easily legible text, the following:
"I acknowledge that in entering this transaction I am voluntarily
choosing to change the entity that supplies me with my electric
power."
(2) The separate screen shall offer the customer the option to
complete or terminate the transaction.
(d) (1) No change in the aggregator or provider of electric power
for any residential customer may be made via a written transaction
unless the change has been confirmed, as provided in this
subdivision. In order to comply with this subdivision, in addition
to any other information gathered in the course of the transaction,
and in addition to any other signature required, the customer shall
be asked to sign and date a document separate from that written
transaction, containing the following words printed in 10-point type
or larger:
"I acknowledge that in signing this contract or agreement, I am
voluntarily choosing to change the entity that supplies me with
electric power."
(2) The acknowledgment document described in paragraph (1) may not
be included with a check or in connection with a sweepstakes
solicitation.
(e) Any aggregator or provider of electric power offering
electricity service to residential and small commercial customers
that switches the electric service of a customer without the customer'
s consent shall be liable to the aggregator or provider of electric
power offering electricity services previously selected by the
customer in an amount equal to all charges paid by the customer after
the violation and shall refund to the customer any amount in excess
of the amount that the customer would have been obligated to pay had
the customer not been switched.
(f) An aggregator or provider of electric power shall keep a
record of the confirmation of a change pursuant to subdivision (b),
(c), or (d) for two years from the date of that confirmation, and
shall make those records available, upon request, to the customer and
to the commission in the course of a commission investigation of a
customer complaint or an investigation pursuant to subdivision (c) of
Section 394.2.
(g) Public agencies are exempt from this section to the extent
they are serving customers within their jurisdiction.
(h) Notwithstanding subdivisions (c) and (d), the commission may
require third-party verification for all residential changes to
electric service providers if it finds that the application of
subdivisions (c) and (d) results in the unauthorized changing of a
customer's electric service provider.
(i) An electrical corporation is exempt from this section for
customers that default to the service of the electrical corporation.
(j) Electric power sold to customers pursuant to Section 80100 of
the Water Code is not subject to this section.
SEC. 1.5.
SEC. 4. Division 27 (commencing with Section 80000) is added
to the Water Code, to read:
DIVISION 27. PURCHASE AND SALE OF ELECTRIC POWER
CHAPTER 1. GENERAL PROVISIONS AND DEFINITIONS
80000. The Legislature hereby finds and declares all of the
following:
(a) The furnishing of reliable reasonably priced electric service
is essential for the safety, health, and well-being of the people of
California. A number of factors have resulted in a rapid, unforeseen
shortage of electric power and energy available in the state and
rapid and substantial increases in wholesale energy costs and retail
energy rates, with statewide impact, to such a degree that it
constitutes an immediate peril to the health, safety, life and
property of the inhabitants of the state, and the public interest,
welfare, convenience and necessity require the state to participate
in markets for the purchase and sale of power and energy.
(b) In order for the department to adequately and expeditiously
undertake and administer the critical responsibilities established in
this division, it must be able to obtain, in a timely manner,
additional and sufficient personnel with the requisite expertise and
experience in energy marketing, energy scheduling, and accounting.
80002. Nothing in this division shall be construed to reduce or
modify any electrical corporation's obligation to serve. The
commission shall issue orders it determines are necessary to carry
out this section.
80002.5. It is the intent of the Legislature that power acquired
by the department under this division shall be sold to all retail end
use customers being served by electrical corporations, and to those
local publicly owned electric utilities requesting such power. Power
sold by the department to retail end use customers shall be
allocated pro rata among all classes of customers to the extent
practicable.
80003. (a) The development and operation of a program as provided
in this division is in all respects for the welfare and the benefit
of the people of the state, for the improvement of their
prosperity and their living conditions to protect the
public peace, health, and safety, and constitutes an essential
governmental purpose .
(b) This division shall be construed in a manner so as to
effectuate the purposes and objectives thereof.
80004. (a) The powers and responsibilities of the department
established under this division are within the scope of the primary
duties of the department, but are not governed by the provisions
relating to the State Water Resources Development System.
(b) The Department of Water Resources Electric Purchases Fund,
established by Section 80200, and the money in that fund are separate
and distinct from any other fund and money administered by the
department.
80010. As used in this division, unless the context otherwise
requires, the following terms have the following meanings:
(a) "Bonds" means bonds, notes, or other evidences of
indebtedness issued solely for the purposes of paying the cost of
electric power and transmission, scheduling, and other related
expenses incurred by the department on and after the effective date
of this division, or to reimburse expenditures from the fund for
those purposes; repaying to the General Fund any advances made to the
department from appropriations made to the fund pursuant hereto or
hereafter for purposes of this division, any advances made to the
department from the Water Resources Electric Power Fund, and General
Fund moneys expended by the department pursuant to the Governor's
Emergency Proclamation dated January 17, 2001; establishing or
maintaining reserves in connection with the bonds; costs of issuance
of bonds or incidental to their payment or security; capitalized
interest; or to renew or refund any bonds.
(b) "Commission" means the Public Utilities Commission.
(c) "Electrical corporation" has the same meaning as that
term is defined in Section 218 of the Public Utilities Code.
(b)
(d) "Fund" means the Department of Water Resources Electric
Power Fund established by Section 80200.
(c)
(e) "Local publicly owned electric utility" includes the
entities defined in subdivision (d) of Section 9604 of the Public
Utilities Code and publicly owned utilities that provide electricity.
(d)
(f) "Power" means electric power and energy, including, but not
limited to, capacity and output, or any of them.
(g) "Public utility" has the same meaning as that term is
defined in Section 216 of the Public Utilities Code.
80012. The department shall do those things necessary and
authorized under Chapter 2 (commencing with Section 80100) to make
power available directly or indirectly to electric consumers in
California. Except as otherwise stated, nothing in this division
authorizes the department to take ownership of the transmission,
generation, or distribution assets of any electrical corporation in
this state.
80014. (a) The department and commission may adopt
regulations for purposes of this division as emergency regulations in
accordance with Chapter 3.5 (commencing with Section 11340) of Part
1 of Division 3 of Title 2 of the Government Code. For purposes of
that Chapter 3.5, including Section 11349.6 of the Government Code,
the adoption of the regulations shall be considered by the Office of
Administrative Law to be necessary for the immediate preservations of
the public peace, health and safety, and general welfare.
Notwithstanding subdivision (e) of Section 11346.1 of the Government
Code, the regulations shall be repealed 180 days after their
effective date, unless the adopting authority or agency complies with
that Chapter 3.5, as provided in subdivision (e) of Section 11346.1
of the Government Code.
(b) Unless the department determines that application of any such
provision to such contracts is detrimental to accomplishing the
purposes of this division, the provisions of the Government Code and
Public Contract Code applicable to state contracts, including, but
not limited to, advertising and competitive bidding requirements and
prompt payment requirements, apply to contracts entered into under
this division.
80016. All state agencies and other official state organizations,
and all persons connected therewith, shall and are hereby authorized
to, at the request of the department, give the department reasonable
assistance or other cooperation in carrying out the purposes of this
division.
CHAPTER 2. POWER PROGRAM
Article 1. Powers of the Department
80100. Upon those terms, limitations, and conditions as it
prescribes, the department may do any of the following:
(a) (1) Contract contract with any person,
local publicly owned electric utility, or other entity for the
purchase of power on such terms and for such periods as the
department determines and at such prices the department deems
appropriate taking into account all of the following:
(a) The intent of the program described in this division is to
achieve an overall portfolio of contracts for energy resulting in
reliable service at the lowest possible price per
kilowatthour.
(b) The need to have contract supplies to fit each aspect of the
overall energy load profile.
(c) The desire to secure as much low-cost power as possible under
contract.
(d) The duration and timing of contracts made available from
sellers.
(e) The length of time sellers of electricity offer to sell such
electricity.
(f) The desire to secure as much firm and nonfirm renewable energy
as possible. Prior to commencement of the program described in this
division, the department shall assess the need for power in the
state in consultation with the Public Utilities Commission and local
publicly owned electric utilities and electrical corporations in the
state and such other entities in the state as the department
determines are appropriate. The department may also enter into
options or forward contracts with respect to the foregoing, and
contract with any person, local publicly owned electric utility, or
other entity for transmission, scheduling, and other related power
services necessary or desirable to accomplish the purposes of this
division.
(2) Sell, exchange, transfer, or otherwise dispose of, or grant
options with respect to any power acquired by the department pursuant
to this division, directly or indirectly, whichever results in the
lowest cost to retail end-use customers, at the department's
acquisition costs plus those costs as provided in paragraphs (2) to
(5), inclusive, of subdivision (b) of Section 80200, either to
electric consumers of electrical corporations, or to any local
publicly owned electric utility in California; however, to the extent
any acquired power is not required for use within the state, and if
it is otherwise advantageous or necessary, the power may be sold,
exchanged, transferred, or otherwise disposed of outside California
to any person or entity.
(3) In addition, contracts
80102. (a) Contracts under this division may provide for
the assignment thereof on any terms and conditions as the contracts
may specify.
(4)
(b) Any contract for the purchase or sale of
electric power shall contain any contractual terms and security
provisions as are determined by the department to be necessary or
appropriate and the department may enter into such arrangements
as may be necessary or appropriate to implement the foregoing .
(b) A contract with an electric corporation for the utility to
purchase electric power from the department shall include a provision
giving the department an enforceable security interest in assets of
the utility to secure the payment for the power sold to the utility.
If the utility defaults on the contract, the department is
authorized to take possession of those assets, including
transmission, distribution, and generation assets, and to operate
those assets.
(c) Notwithstanding any other provision of law, the department may
pay or provide for the payment of power or use of transmission or
distribution facilities and other related services prior to the
delivery or utilization thereof, provided that the department
determines that prepayment is beneficial to ratepayers and that
adequate provision has been made for the security of the department.
80104. Upon the delivery of power to them, the retail end use
customers shall be deemed to have purchased that power from the
department. Payment for any sale shall be a direct obligation of the
retail end use customer to the department.
80106. (a) The department may contract with the related
electrical corporation or its successor in the performance of related
service, for the electrical corporation or its successor in the
performance of related service, to transmit or provide for the
transmission of, and distribute the power and provide billing,
collection, and other related services, as agent of the department,
on terms and conditions that reasonably compensate the electrical
corporation for its services.
(b) At the request of the department, the commission shall order
the related electrical corporation or its successor in the
performance of related service, to transmit or provide for the
transmission of, and distribute the power and provide billing,
collection, and other related services, as agent of the department,
on terms and conditions that reasonably compensate the electrical
corporation for its services.
80108. The commission may issue rules regulating the enforcement
of the agency function pursuant this division, including collection
and payment to the department.
80110. The department shall retain title to all power sold by it
to the retail end use customers. The department shall be entitled to
recover, as a revenue requirement, amounts and at the times necessary
to enable it to comply with Section 80134, and shall advise the
commission as the department determines to be appropriate. Such
revenue requirements may also include any advances made to the
department hereunder or hereafter for purposes of this division, or
from the Department of Water Resources Electric Power Fund, and
General Fund moneys expended by the department pursuant to the
Governor's Emergency Proclamation dated January 17, 2001. For
purposes of this division and except as otherwise provided in this
section, the Public Utility Commission's authority as set forth in
Section 451 of the Public Utilities Code shall apply, except any just
and reasonable review under Section 451 shall be conducted and
determined by the department. The commission may enter into an
agreement with the department with respect to charges under Section
451 for purposes of this division, and that agreement shall have the
force and effect of a 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, as determined by the
commission. In no case shall the commission increase the electricity
charges in effect on the date that the act that adds this section
becomes effective for residential customers for existing baseline
quantities or usage by those customers of up to 130 percent of
existing baseline quantities. After the passage of such period of
time after the effective date of this section as shall be determined
by the commission, the right of retail end use customers pursuant to
Article 6 (commencing with Section 360) of Chapter 2.3 of Part 1 of
Division 1 of the Public Utilities Code to be served by other
providers shall be suspended until the department no longer supplies
power hereunder. The department shall have the same rights with
respect to the payment by retail end use customers for power sold by
the department as do providers of power to such customers.
80112. All money collected with respect to any power acquired and
sold pursuant to this division and the Governor's Emergency
Proclamation dated January 17, 2001, and all money paid directly or
indirectly to or for the account of the department with respect to
any sale, exchange, transfer, or disposition of power acquired
pursuant hereto, shall constitute property of the department and
shall be deposited in the fund in accordance with subdivision (b) of
Section 80200. To the extent any moneys are held by an electrical
corporation pursuant to Section 80106 in the process of collection,
and pending their payment to the department, they shall be held in
trust for the benefit of the department.
80114. The commission shall take those actions necessary to
ensure that all, or a portion of, the component rates that are
available to electrical corporations for the purchase of their net
short position of electricity are used to recover the revenue
requirements established pursuant to this division.
80116. The department may sell any power acquired by the
department pursuant to this division to retail end use customers, and
to local publicly owned electric utilities, at not more than the
department's acquisition costs, including transmission, scheduling,
and other related costs, plus other costs as provided in Section
80200, or exchange power with any person or public or private entity.
However, to the extent that any acquired power is not required for
use within the state, if it is otherwise advantageous and necessary,
the power may be sold, transferred, or otherwise disposed of, or an
option may be granted with respect to the power, to any person or
public or private entity. Except to maintain system integrity, the
department shall sell the power that is to be delivered to retail end
use customers within the service area of the electrical corporations
that purchase power from the electrical corporations directly to the
retail end use customers.
(c) Fix
80120. The department may fix and establish the procedure
and charges for the sale or other disposal of power purchased by the
department. With respect to electricity made available to
customers of electrical corporations, those customers shall be
responsible for costs at no more than the rates established by the
Public Utilities Commission in effect on the date the electricity is
made available to the customers.
(d)
80122. The department may do any of the following as may
be, in the determination of the department, necessary for the
purposes of this division:
(1)
(a) Hire and appoint employees as required, at salary levels
determined by the director to be competitive to attract and retain
persons with the necessary expertise and skills. Prior to hiring or
appointing an employee at a salary in excess of a salary approved by
the Department of Personnel Administration, the director shall submit
the proposed salary to the Director of Finance who shall submit it
to the Legislature in accordance with Section 27.00 of the annual
Budget Act.
(2)
(b) Engage the services of private parties to render
professional and technical assistance and advice and other
services in carrying out the purposes of this division.
(3)
(c) Contract for the services of other public agencies.
(d) The State Personnel Board and the Department of Personnel
Administration shall assist the department in expediting the hiring
of personnel necessary and desirable for the timely and successful
implementation and administration of the department's duties and
responsibilities pursuant to this division.
(e) Borrow money in anticipation of the receipt of revenues or for
cash flow management, and for such purpose issue notes or other
evidence of indebtedness and provide for repayment with respect
thereto, and to renew or refund any such notes or other evidence of
indebtedness. However, any such notes or other evidence of
indebtedness shall be payable solely from the fund and shall mature
within 90 days of issuance.
CHAPTER 2.5. BONDS
80130. The department may incur indebtedness and issue bonds as
evidence thereof, provided that bonds may not be issued in an amount
the debt service on which, to the extent payable from the fund, is
expected by the department to exceed the amounts expected to be
available in the fund for their payment. In no event shall the
department authorize the issuance of bonds (excluding notes issued in
anticipation of the issuance of bonds and retired from the proceeds
of those bonds) in an aggregate amount greater than the amount
calculated by multiplying by a factor of four the annual revenues
generated by the California Procurement Adjustment, as determined by
the commission pursuant to subdivision (a) of Section 360.5.
80132. (a) Bonds may be issued by the department upon
authorization by written determination of the director of the
department with the approval of the Director of Finance. The bonds
shall be sold at such prices and in such manner, and on such terms
and conditions, as shall be specified in such determination, and such
determination may contain or authorize any other provision,
condition, or limitation not inconsistent herewith and such
provisions as may be deemed reasonable and proper for the security of
the bondholders. Bonds may mature at such time or times, and bear
interest at such rate or rates, which may be fixed or variable and be
determined by reference to an index or such other method, as shall
be specified in such determination. Neither the person executing the
determination to issue bonds nor any person executing bonds shall be
personally liable therefor or be subject to any personal liability
or accountability by reason of the issuance thereof.
(b) In the discretion of the department, any bonds may be secured
by a trust agreement by and between the department and a corporate
trustee, which may be any trust company or bank having trust powers
within or without the state, or the State Treasurer. Notwithstanding
any other provision of law, the State Treasurer shall not be deemed
to have a conflict of interest by reason of acting as such trustee.
The department may enter into such contracts or arrangements as it
shall deem to be necessary or appropriate for the issuance and
further security of the bonds.
(c) Bonds shall be legal investments for all trust funds, the
funds of all insurance companies, banks both commercial and savings,
trust companies, executors, administrators, trustees, and other
fiduciaries, for state school funds, pension funds, and, for any
funds that may be invested in county, school, or municipal bonds.
(d) Notwithstanding that bonds may be payable from a special fund,
they shall be deemed to be negotiable instruments for all purposes.
(e) Any and all bonds, their transfer and the income therefrom
shall at all times be free from taxation of every kind by the state
and by all political subdivisions of the state.
(f) Bonds shall not be deemed to constitute a debt or liability of
the state or of any political subdivision thereof, other than the
department, or a pledge of the faith and credit of the state or of
any such political subdivision, other than the department, but shall
be payable solely from the funds herein provided for. All bonds
shall contain a statement to the following effect: "Neither the faith
and credit nor the taxing power of the State of California is
pledged to the payment of the principal of or interest on this bond."
The issuance of bonds shall not directly or indirectly or
contingently obligate the state or any political subdivision thereof
to levy or to pledge any form of taxation whatever therefor or to
make any appropriation for their payment.
(g) The department may pledge or assign any revenues under any
obligation entered into, and rights to receive the same, and moneys
on deposit in the fund and income or revenue derived from the
investment thereof, as security for the department's obligations
hereunder. It is the intention of the Legislature that any pledge of
moneys, revenues, or property made by the department shall be valid
and binding from the time when the pledge is made; that the moneys,
revenues, or property so pledged and thereafter collected from retail
end use customers, or paid directly or indirectly to or for the
account of the department, is hereby made, and shall immediately be,
subject to the lien of such pledge without any physical delivery
thereof or further act; that the lien of any such pledge shall be
valid and binding as against all parties having claims of any kind in
tort, contract, or otherwise against the department irrespective of
whether such parties have notice thereof, and that no resolution or
instrument by which such pledge or lien created pursuant to this
subdivision is expressed, confirmed, or approved need be filed or
recorded in order to perfect such pledge or lien. The provisions
hereof shall in all respects govern the creation, perfection,
priority, and enforcement of any lien created hereby or hereunder.
80134. The department shall, and in any obligation entered into
pursuant to this division may covenant to, at least annually, and
more frequently as required, establish and revise revenue
requirements sufficient, together with any moneys on deposit in the
fund, to provide all of the following:
(a) The amounts necessary to pay the principal of and premium, if
any, and interest on all bonds as and when the same shall become due.
(b) The amounts necessary to pay for power purchased by it and to
deliver it to purchasers, or to make payments under any other
contracts, agreements, or obligations entered into by it pursuant
hereto, in the amounts and at the times the same shall become due.
(c) Reserves in such amount as may be determined by the department
from time to time to be necessary or desirable.
CHAPTER 3. DEPARTMENT OF WATER RESOURCES ELECTRIC PURCHASES
FUND
80200. (a) There is hereby established in the State Treasury the
Department of Water Resources Electric Purchases
Power Fund. Notwithstanding Section 13340 of the
Government Code, all moneys in the fund are continuously
appropriated, without regard to fiscal year, to the department, and
shall be available for the purposes of this division. It is the
intent of the Legislature that this fund be a continuation of the
fund created in Chapter 3 of the Statutes of 2001 (SB 7 of the First
2001-02 Extraordinary Session).
(b) All revenues payable to the department under this division
shall be deposited in the fund. Notwithstanding any other provision
of law, interest accruing on money in the fund shall remain in the
fund and shall be used for the purposes of this division. Payments
from the fund may be made only for the purposes authorized by this
division, including, but not limited to, payments for any of the
following:
(1) The cost of electric power purchased
and transmission, scheduling, and other related expenses incurred
by the department.
(2) The pooled money investment rate on funds advanced for
electric power purchases prior to the receipt of payment for those
purchases by the purchasing entity.
(3) Payment of any bonds or other contractual obligations
authorized by this division.
(3)
(4) Repayment to the General Fund of any advances
made to the department from that fund. appropriations
made to the fund pursuant hereto or hereafter for purposes of this
division, appropriations made to the Department of Water Resources
Electric Power Fund, and General Fund moneys expended by the
department pursuant to the Governor's Emergency Proclamation dated
January 17, 2001. It is the intent of the Legislature that such
repayment be made as soon as practicable.
(5) The administrative costs of the department incurred in
administering this division.
(c) The administrative costs of the department incurred in
administering this division shall be provided in the annual Budget
Act.
(d)
(c) Obligations authorized by this division shall be payable
solely from the fund. Neither the full faith and credit nor the
taxing power of the state are or may be pledged for any payment under
any obligation authorized by this division.
(d) While any obligations of the department incurred under this
division remain outstanding and not fully performed or discharged,
the powers, duties, and existence of the department shall not be
diminished or impaired in any manner that will affect adversely the
interests and rights of the holders of or parties to such
obligations. The department may include this pledge and undertaking
of the state in the department's obligations.
CHAPTER 4. REPORTING
80300.
80250. The department shall make quarterly and annual
reports to the Governor and the Legislature regarding its activities
pursuant to this division .
CHAPTER 5. TERMINATION OF AUTHORITY TO CONTRACT
80310.
80260. The department shall not contract for the purchase
of electrical power on and after January 1, 2003. This section does
not effect the authority of the department to administer contracts
entered into prior to that date or the department's authority to sell
electricity.
CHAPTER 6. AUDIT
80320.
80270. The Bureau of State Audits shall conduct a financial
and performance audit of the department's implementation of this
division. The audit shall be completed before December 31, 2001.
The bureau shall issue a final report on or before March 31, 2003.
SEC. 2.
SEC. 5. The sum up to four hundred million dollars
($400,000,000) five hundred million dollars
($500,000,000) is hereby transferred from the General Fund to
the Department of Water Resources Electric Purchases
Power Fund, established by Section 80200 of the
Water Code, for the purposes of Division 27 (commencing with Section
80000) of the Water Code. The four hundred million dollars
($400,000,000) shall be Code. The five hundred
million dollars ($500,000,000) shall be repaid from the fund to
the General Fund at the earliest possible time.
SEC. 3.
SEC. 6. The Department of Finance may authorize the creation of
deficiencies for the appropriation made by Section 5 of the act
adding this section. No deficiency may be approved under this
section any sooner than 10 days after written notification of the
proposed deficiency is given to the Chairperson of the Joint
Legislative Budget Committee.
SEC. 7. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to address the rapid, unforeseen shortage of electric
power and energy available in the state and rapid and substantial
increases in wholesale energy costs and retail energy rates, that
endanger the health, welfare, and safety of the people of this state,
it is necessary for this act to take effect immediately.