BILL ANALYSIS
AB 8 X1
Page 1
ASSEMBLY THIRD READING
AB 8 X1 (Migden)
As Amended March 12, 2001
Majority vote
ENERGY 14-0 APPROPRIATIONS 19-0
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|Ayes:|Wright, Pescetti, Briggs, |Ayes:|Migden, Bates, Alquist, |
| |Canciamilla, Diaz, | |Aroner, Ashburn, Cedillo, |
| |Jackson, Keeley, Leonard, | |Corbett, Correa, Daucher, |
| |Migden, Oropeza, Reyes, | |Goldberg, Maldonado, |
| |Steinberg, Vargas, Wesson | |Robert Pacheco, Shelley, |
| | | |Canciamilla, Thomson, |
| | | |Wesson, Wiggins, Wright, |
| | | |Zettel |
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SUMMARY : Expands the authority of the Electricity Oversight
Board (EOB) by amending Public Utilities Code Section 335 to
allow EOB to act on any matters made subject to the approval or
determination by EOB, and to investigate any matter to ensure
that the interests of California's citizens and consumers are
served, protected, and represented in relation to the electric
transmission grid and generation and related costs.
Specifically, this bill :
1)Subjects electric generation and transmission facilities to
availability standards, by adding Section 342 to the Public
Utilities Code to:
a) Require owners or operators of generating facilities in
California to comply with all standards approved or
established pursuant to the measure;
b) Require the Independent Service Operator (ISO) to
prepare and submit a proposed protocol for scheduling of
transmission and generation equipment outages for the
purposes of maintenance, repair or upgrade to EOB and
resubmit the protocol at least annually;
c) Authorize EOB to review and approve or direct revision
of the proposed protocol as it deems appropriate or
necessary to protect the public interest after notice and
public hearing;
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d) Require ISO to use an approved protocol for scheduling
maintenance or other planned outages of equipment,
including preparation of a coordinated outage plan to be
submitted to EOB at least quarterly;
e) Require ISO to develop and submit proposed generation
facility maintenance criteria to EOB and to maintain
records of generation facility outages which are provided
to EOB daily;
f) Require generating facilities with 50 megawatt (MW) or
greater capacity to provide a monthly report to ISO and
EOB, identifying any times during the month when the
facility was unavailable to produce electricity or had a
reduced capacity, including the reasons for such
unavailability or reduced capacity;
g) Allow ISO and EOB to engage in audits or inspections of
facilities that fail to comply with procedures, criteria or
standards established in this measure;
h) Require generators to provide access to facilities and
records to ISO and EOB to reasonably perform such audits;
and,
i) Authorize EOB, after public notice and hearing, to
assess a monetary penalty against owners or operators found
to have failed to comply with criteria, standards or
procedures pursuant to this bill.
2)Appropriates $575,000 from the General Fund (GF) to EOB for
purposes described in Public Utilities Code Section 342 that
require electric generation and transmission facilities to be
subject to various prescribed availability standards.
EXISTING LAW establishes EOB to oversee ISO and the Power
Exchange in California. The purpose of EOB is to ensure the
success of electricity industry restructuring and ensure a
reliable supply of electricity. EOB is granted various powers
in order to carry out these purposes.
FISCAL EFFECT : Appropriates $575,000 from the GF.
COMMENTS : There is a high probability of electricity supply
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shortages continuing to cause rolling blackouts throughout
California, as declared in the January 17, 2001 Executive Order
D-23-01 issued by Governor Davis. Conservation and service
restriction measures are insufficient to alleviate the supply
problem and the supply problem poses a threat to public health,
safety and welfare. The need to ensure that generating
facilities in California are effectively and appropriately
maintained and operated is critical.
This bill addresses the need to maintain a reliable, stable
supply of energy through expansion of authority of EOB and ISO.
This bill allows EOB to have full knowledge of operational
conditions throughout the state, and to approve protocols for
scheduling generation facility maintenance. Finally, this bill
allows EOB to assess monetary penalties on generation facilities
for failure to comply with criteria and procedures established
under its authority.
The current electricity supply situation suggests a need to
maintain records of outages, scheduled maintenance, load
reduction, etc. of generation facilities to assess supply
capacity and to address supply proactively. This bill does this
by vesting more oversight power with EOB and ISO than is
currently provided for in statute. SB 39 X1 (Speier), pending
in the Senate, also addresses these issues but vests authority
for oversight of the generating facilities with the California
Public Utilities Commission (CPUC). SB 39 X1 expands the
statutory definition of "public utility" to include wholesale
energy suppliers, to put these entities within the jurisdiction
of CPUC, except with regard to rates. SB 39 X1 has broader
provisions for oversight more appropriate to a state agency,
such as prevention of exercise of market power, however both
bills may have problems with enforceability.
Essentially, this bill allows for control of how and when
generating facilities may shut down for maintenance or repairs
or for other specified purposes in an attempt to deal with
California's energy supply problems. This can be viewed as
punitive to generating facilities currently in operation,
including those under the control of municipal utilities, which
operate responsibly and provide electricity capacity as needed
and as safe and practical for their operating purposes. The
Federal Energy Regulatory Commission's Report on California's
generation facility operation in response to allegations of
gaming by generators to raise prices and shutting down when
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there was no operational need to do so, indicated that these
situations were not taking place.
The California Municipal Utilities Association (CMUA), in its
opposition letter, points out its generating facilities operate
for the benefit of their customer-owners. They coordinate
maintenance scheduling through Pacific Gas & Electric and
Southern California Edison pursuant to existing contracts. CMUA
believes imposition of integrated maintenance scheduling with
other generators not under control of a municipal utility
imposes conditions of a dysfunctional market upon them and their
customers.
Analysis Prepared by : Kelly Boyd / E. C. & A. / (916) 319-2083
FN: 0000170