BILL ANALYSIS
AB 28 X2
Page 1
ASSEMBLY THIRD READING
AB 28 X2 (Migden)
As Introduced May 17, 2001
Majority vote
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;
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,
AB 28 X2
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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
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
AB 28 X2
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authority.
The current electricity supply situation suggests a need to
maintain records of outages, scheduled maintenance, and load
reduction 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) addressed these issues but
vested authority for oversight of the generating facilities with
the California Public Utilities Commission (CPUC). SB 39 X1
expanded 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 had
broader provisions for oversight more appropriate to a state
agency, such as prevention of exercise of market power, however
both bills may have had 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 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
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