BILL NUMBER: ABX2 26	ENROLLED
	BILL TEXT

	PASSED THE ASSEMBLY  SEPTEMBER 15, 2001
	PASSED THE SENATE  SEPTEMBER 14, 2001
	AMENDED IN SENATE  SEPTEMBER 14, 2001
	AMENDED IN SENATE  AUGUST 28, 2001
	AMENDED IN SENATE  JUNE 19, 2001

INTRODUCED BY   Assembly Member Calderon

                        MAY 17, 2001

   An act to amend Section 32960 of the Financial Code, to amend
Sections 25415 and 25443 of the Public Resources Code, and to amend
Section 353.13 of the Public Utilities Code, relating to energy, and
declaring the urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 26, Calderon.  Electrical energy:  State Energy Resources
Conservation and Development Commission:  energy loans:  electrical
corporations:  tariffs.
   (1) The existing State Assistance Fund for Enterprise Act of 1989
establishes the State Assistance Fund for Energy, California Business
and Industrial Development Corporation.  Under the act, the
corporation, until July 1, 2001, is authorized to make energy
efficiency improvement loans to small businesses for a fixed rate of
interest for a term not exceeding 5 years.
   This bill would extend the operative date of the act until July 1,
2011.
   (2) Under existing law, a school, hospital, public care
institution, or a unit of local government may submit an application
to the State Energy Resources Conservation and Development Commission
for an allocation for the purposes of financing projects such as
energy audits, energy conservation and operating procedures, energy
conservation measures, energy conservation projects, and technical
assistance programs.  Existing law requires each eligible institution
to which an allocation has been made to repay the principal amount
of the allocation, plus interest, as specified.  Under existing law,
the commission, except as specified, must periodically set interest
rates on the loans based on surveys of existing financial markets and
at rates not lower than the Pooled Money Investment Account.
   This bill would instead require the interest rates to be not less
than 3% per annum.
   (3) Existing law requires the commission to provide loans to local
jurisdictions for purposes that include purchase, maintenance, and
evaluation of both energy efficient equipment for existing and new
facilities and small power production systems, and to improve the
operating efficiency of existing local transportation systems.
Existing law requires the commission, except as specified, to
periodically set interest rates on the loans based on surveys of
existing financial markets and at rates not lower than the Pooled
Money Investment Account.
   This bill would instead require the interest rates to be not less
than 3% per annum.
   (4) Existing law requires the Public Utilities Commission to
require each electrical corporation to establish new tariffs on or
before January 1, 2003, for customers using distributed energy
resources.
   This bill would require the commission, in establishing those
tariffs, to consider coincident peakload, and the reliability of the
onsite generation, as determined by the frequency and duration of
outages, so that customers with more reliable onsite generation and
those that reduce peak demand pay a lower cost-based rate.
   (5) The bill would declare that it is to take effect immediately
as an urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 32960 of the Financial Code is amended to read:

   32960.  This chapter shall become inoperative on July 1,  2011,
and, as of January 1,  2012, is repealed, unless a later enacted
statute, which becomes effective on or before January 1, 2012,
deletes or extends the dates on which it becomes inoperative and is
repealed.
  SEC. 2.  Section 25415 of the Public Resources Code is amended to
read:
   25415.  (a) Each eligible institution to which an allocation has
been made under this chapter shall repay the principal amount of the
allocation, plus interest, in not more than 22 equal semiannual
payments, as determined by the commission.  The first semiannual
payment shall be made on or before December 22 of the fiscal year
following the year in which the project is completed.
   (b) Notwithstanding any other provision of law, the commission
shall, unless it determines that the purposes of this chapter would
be better served by establishing an alternative interest rate
schedule, periodically set interest rates on the loans based on
surveys of existing financial markets and at rates not less than 3
percent per annum.
   (c) The governing body of each eligible institution shall annually
budget an amount at least sufficient to make the semiannual payments
required in this section.  The amount shall not be raised by the
levy of additional taxes but shall instead be obtained by a savings
in energy costs.
  SEC. 3.  Section 25443 of the Public Resources Code is amended to
read:
   25443.  (a) Principal and interest payments on loans under this
article shall be returned to the commission and shall be used to make
additional loans to local jurisdictions pursuant to Section 25442 or
to provide financial assistance to local jurisdictions pursuant to
Section 25441.
   (b) Notwithstanding any other provision of law, the commission
shall, unless it determines that the purposes of this chapter would
be better served by establishing an alternative interest rate
schedule, periodically set interest rates on the loans based on
surveys of existing financial markets and at rates not less than 3
percent per annum.
  SEC. 4.  Section 353.13 of the Public Utilities Code is amended to
read:
   353.13.  (a) The commission shall require each electrical
corporation to establish new tariffs on or before January 1, 2003,
for customers using distributed energy resources, including, but not
limited to, those that do not meet all of the criteria described in
Section 353.1.  However, after January 1, 2003, distributed energy
resources that meet all of the criteria described in Section 353.1
shall continue to be subject only to those tariffs in existence
pursuant to Section 353.3, until June 1, 2011, except that
installations that do not operate in a combined heat and power
application will be subject to those tariffs in existence pursuant to
Section 353.3 only until June 1, 2006.  Those tariffs required
pursuant to this section shall ensure that all net distribution costs
incurred to serve each customer class, taking into account the
actual costs and benefits of distributed energy resources,
proportional to each customer class, as determined by the commission,
are fully recovered only from that class.  The commission shall
require each electrical corporation, in establishing those rates, to
ensure that customers with similar load profiles within a customer
class will, to the extent practicable, be subject to the same utility
rates, regardless of their use of distributed energy resources to
serve onsite loads or over-the-fence transactions allowed under
Sections 216 and 218.  Customers with dedicated facilities shall
remain responsible for their obligations regarding payment for those
facilities.
   (b) The commission shall prepare and submit to the Legislature, on
or before June 1, 2002, a report describing its proposed methodology
for determining the new rates and the process by which it will
establish those rates.
   (c) In establishing the tariffs, the commission shall consider
coincident peakload, and the reliability of the onsite generation, as
determined by the frequency and duration of outages, so that
customers with more reliable onsite generation and those that reduce
peak demand pay a lower cost-based rate.
  SEC. 5.  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 implement energy conservation and efficiency measures
as soon as possible, to protect the public peace, health, and safety,
it is necessary that this act take effect immediately.