BILL NUMBER: ABX1 1 AMENDED
BILL TEXT
AMENDED IN SENATE JANUARY 30, 2001
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
(Principal coauthor: Assembly Member Hertzberg)
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.
(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
for the purchase of electric power. The bill would authorize the
department to sell power to retail end use customers and , with
specified exceptions, 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 provide, with specified exceptions,
that nothing in the bill authorizes the department to take ownership
of transmission or , generation, or
distribution enterprise for purposes of the act
assets, as specified . 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 and
the Treasurer , as specified.
The bill would establish in the State Treasury the Department of
Water Resources Electric 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 $500,000,000
$495,755,000 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 appropriate $4,245,000
to the department for the 2000-01 fiscal year for administrative cost
incurred by the department for purposes of the bill. 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.
(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.
SEC. 2. Section 360.5 is added to the Public Utilities
Coded Code , 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 generation
related component of the retail rate and the sum of the costs
of the utility's own generation, qualified
qualifying facility contracts, bilaterial
existing bilateral contracts, and transmission
and distribution ancillary services . 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
, by each electrical corporation, upon receipt by the electrical
corporation of the revenues from its retail end use customers,
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. 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. Nothing in this section shall be construed to
obligate the department for any procurement cost obligations of any
electrical corporation that may have existed as of the effective date
of 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 may
be sold, to the extent practicable, as determined by the department,
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, 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.
(d) "Fund" means the Department of Water Resources Electric Power
Fund established by Section 80200.
(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.
(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 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.
80102. (a) Contracts under this division may provide for the
assignment thereof on any terms and conditions as the contracts may
specify.
(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.
(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
electric procurement portion of 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
, until such time as the department has recovered the costs of
power it has procured for the electrical corporation's retail end use
customers as provided in this division . 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 acquire service from 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
received by an electrical corporation pursuant to Section
80106 in the process of collection, and pending their
payment transfer to the department, they shall
be segregated by the electrical corporation on terms and
conditions established by the department and 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.
The department may not sell power to any local publicly owned
electric utility, as defined in Section 9604 of the Public Utilities
Code, which is itself a net seller of power. 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.
80120. The department may fix and establish the procedure and
charges for the sale or other disposal of power purchased by the
department.
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:
(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. No excess salary authorized under this section may
be paid on or after January 1, 2003. The excess portion of a salary
authorized under this section may not be considered salary in the
calculation of final compensation for purposes of benefits under the
Public Employees' Retirement System.
(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.
(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.
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. In addition, before the issuance of bonds, the
department shall establish a mechanism to ensure that the bonds will
be sold at investment grade ratings and repaid on a timely basis from
pledged revenues. This mechanism may include, but is not limited
to, an agreement between the department and the commission as
described in Section 80110.
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 and the
State Treasurer. The Department of Finance shall notify the
Chairperson of the Joint Legislative Budget Committee and the
chairperson of the committee in each house that considers
appropriations of its written determination . 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. (a) 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)
(1) 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)
(2) The amounts necessary to pay for power purchased by it
and to deliver it to purchasers, including the cost of electric
power and transmission, scheduling, and other related expenses
incurred by the department, 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)
(3) Reserves in such amount as may be determined by the
department from time to time to be necessary or desirable.
(4) 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.
(5) Repayment to the General Fund of 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.
(6) The administrative costs of the department incurred in
administering this division.
(b) The department shall notify the commission of its revenue
requirement pursuant to Section 80110.
CHAPTER 3. DEPARTMENT OF WATER RESOURCES ELECTRIC
PURCHASES POWER FUND
80200. (a) There is hereby established in the State Treasury the
Department of Water Resources Electric 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 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.
(4) Repayment to the General Fund of 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) Except as provided in subdivision (b) of Section 5 of the
statute adding this section, the administrative costs of the
department incurred in administering this division shall be provided
in the annual Budget Act.
(c)
(d) 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)
(e) 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
discharged, the rights, powers, duties, and existence
of the department and the commission 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
80250. The department shall make quarterly and annual reports to
the Governor and the Legislature regarding its activities and
expenditures pursuant to this division.
CHAPTER 5. TERMINATION OF AUTHORITY TO CONTRACT
80260. The department shall not contract for the purchase of
electrical power on and after January 1, 2003. This section does not
effect
80260. On and after January 1, 2003, the department shall not
contract under this division for the purchase of electrical power.
This section does not affect 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
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. 5. The sum up to five hundred million dollars ($500,000,000)
is hereby transferred from the General Fund to the Department of
Water Resources Electric 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 five hundred million dollars
($500,000,000) shall be repaid from the fund to the General Fund at
the earliest possible time.
SEC. 5. The following sums are hereby transferred or appropriated
from the General Fund, as follows:
(a) Four hundred ninety-five million seven hundred fifty-five
thousand dollars ($495,755,000) is hereby transferred to the
Department of Water Resources Electric 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
ninety-five million seven hundred fifty-five thousand dollars
($495,755,000) shall be repaid from the fund to the General Fund at
the earliest possible time.
(b) Four million two hundred forty-five thousand dollars
($4,245,000) is appropriated to the department for the 2000-01 fiscal
year for the administrative costs incurred by the department for the
purposes of Division 27 (commencing with Section 80000) of the Water
Code.
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 and the chairperson of the
committee in each house that considers appropriations .
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.