BILL ANALYSIS
AB 28 X2
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CONCURRENCE IN SENATE AMENDMENTS
AB 28 X2 (Migden)
As Amended August 21, 2001
Majority vote
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|ASSEMBLY: |63-6 |(May 24, 2001) |SENATE: |22-12|(September 12, |
| | | | | |2001) |
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Original Committee Reference: ENERGY
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;
AB 28 X2
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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)Sunsets January 1, 2003.
3)Deletes a provision relating to EOB's exercise of exclusive
right to decline to confirm appointments to the governing
board of ISO.
4)Is double-joined with SB 39 x2 (Speier).
The Senate amendments , due to concerns about future market
changes, or a change in the role of EOB, or its eventual demise,
the Senate added a sunset date for EOB oversight and inspection
role with regard to merchant generation facilities. The Senate
also deleted an existing provision of law which gave EOB
exclusive right to decline to confirm any appointments of
members to the governing board of the ISO. Finally, the Senate
double-joined this bill with SB 39 X2 (Speier), a related
measure outlining the California Public Utility Commission's
(CPUC) role with regard to compliance and enforcement activities
for merchant generation facilities .
AB 28 X2
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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.
AS PASSED BY THE ASSEMBLY , 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.
FISCAL EFFECT : Unknown
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.
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 X2 (Speier), also
addresses these issues but vests authority for compliance and
enforcement of the generating facilities with CPUC. SB 39 X2,
double-joined with this measure, has broader provisions for
oversight more appropriate to a state agency, such as prevention
of exercise of market power.
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, that
operate responsibly and provide electricity capacity as needed
AB 28 X2
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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. However, later testimony
before the Senate indicated that there were operational
irregularities which may have been attributable to attempt to
control price.
Analysis Prepared by : Kelly Boyd / E. C. & A. / (916) 319-2083
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