BILL NUMBER: ABX2 9 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 6, 2001
AMENDED IN ASSEMBLY MAY 24, 2001
INTRODUCED BY Assembly Member Migden
(Coauthor: Senator Alarcon)
MAY 15, 2001
An act to amend Sections 331, 366, and 381 of the Public Utilities
Code, relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 9, as amended, Migden. Electrical restructuring: aggregation.
(1) Existing law, relating to transactions between electricity
suppliers and end-use customers, authorizes specified entities to
aggregate electrical loads, and defines an "aggregator" as one of
those specified entities that provides specified power supply
services, including combining the loads of multiple end-use customers
and facilitating the sale and purchase of electrical energy,
transmission, and other services on behalf of the end-use customers.
This bill would, instead, authorize customers to aggregate their
electric loads as individual consumers with private aggregators, as
defined, or as members of their local community with community choice
aggregators, as defined. The bill would , with regard to
authorize a community choice
aggregators, authorize any municipality or any group of
municipalities acting together aggregator to
aggregate the electrical load of interested electricity consumers
within its boundaries.
Under the bill, any community choice aggregator would be obligated
to the Department of Water Resources for an amount equal to the net
unavoidable cost, calculated as prescribed, of power procurement for
the department attributable to the customers of the community choice
aggregator including, but not limited to, any financing costs, as
determined by the department.
(2) Existing law requires the Public Utilities Commission to order
specified electrical corporations to collect and spend certain funds
for prescribed public benefit programs, including
cost-effective energy efficiency , and
conservation programs .
The bill would require the commission to authorize
municipal aggregators to file for a pro rata share of energy
efficiency funds collected from their customers by electrical
corporations. The bill would require the commission to authorize a
municipality to spend the funds on energy efficiency measures that
benefit its customers, subject to any rules adopted by the commission
to ensure accurate accounting, verification, and adherence to a plan
filed by the entity require the administrator of
cost-effective energy efficiency and conservation programs to direct
a proportional share of its approved energy efficiency program
activities for which the community aggregator's customers are
eligible, to the community aggregator's territory .
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 331 of the Public Utilities Code is amended to
read:
331. The definitions set forth in this section govern the
construction of this chapter.
(a) "Broker" means an entity that arranges the sale and purchase
of electric energy, transmission, and other services between buyers
and sellers, but does not take title to any of the power sold.
(b) "Community choice aggregator" or "municipal aggregator" means
any of the following entities, if that entity is not within the
jurisdiction of a municipal utility district that provided electrical
service as of the effective date of amendments to this section made
by Assembly Bill 48 of the 2001-02 First 9 of
the 2001-02 Second Extraordinary Session of the Legislature:
(1) Any municipality city, county, or city
and county whose governing board elects to combine the loads
of its residents, businesses, and municipal facilities in a
communitywide electricity buyers' program.
(2) Any group of municipalities cities,
counties, or cities and counties whose governing boards have
elected to combine the loads of their programs , through the
formation of a joint powers authority established under Chapter 5
(commencing with Section 6500) of Division 7 of Title 1 of the
Government Code .
(3) Any county or irrigation district whose governing board has
elected to administer the combined programs of consenting
municipalities within its jurisdiction.
(4) Any county or irrigation district whose governing board elects
to combine the loads of its residents, businesses, and facilities in
unincorporated areas.
(5) Any municipal utility district that did not provide electrical
service as of the effective date of amendments to this section made
by Assembly Bill 48 of the 2001-02 First Extraordinary Session of the
Legislature.
(c) "Direct transaction" means a contract between any one or more
electric generators, marketers, or brokers of electric power and one
or more retail customers providing for the purchase and sale of
electric power or any ancillary services.
(d) "Fire wall" means the line of demarcation separating
residential and small commercial customers from all other customers
as described in subdivision (e) of Section 367.
(e) "Marketer" means any entity that buys electric energy,
transmission, and other services from traditional utilities and other
suppliers, and then resells those services at wholesale or to an
end-use customer.
(f) "Microcogeneration facility" means a cogeneration facility of
less than one megawatt.
(g) "Private Aggregator" means any marketer, broker, or public
agency not qualifying as a community choice aggregator that combines
the loads of multiple end-use customers in facilitating the sale and
purchase of electric energy, transmission, and other services on
behalf of these customers.
(h) "Restructuring trusts" means the two tax-exempt public benefit
trusts established by Decision D. 96-08-038 of the commission to
provide for design and development of the hardware and software
systems for the Power Exchange and the Independent System Operator,
respectively, and that may undertake other activities, as needed, as
ordered by the commission.
(i) "Small commercial customer" means a customer that has a
maximum peak demand of less than 20 kilowatts.
SEC. 2. Section 366 of the Public Utilities Code is amended to
read:
366. (a) (1) The commission shall take actions as needed to
facilitate direct transactions between electricity suppliers and
end-use customers. Customers shall be entitled to aggregate their
electric loads as individual consumers with private aggregators, or
as members of their local community with community choice
aggregators.
(2) Customers may aggregate their loads with private aggregators
on a voluntary basis, if each customer does so by a positive written
declaration.
(3) Customers may aggregate their loads through a public process
with community choice aggregators, if each customer is given an
opportunity to opt out of their community's aggregation program.
(4) If a customer makes no positive declaration to aggregate with
a private aggregator, opts out of a community choice aggregator's
program, or has no community choice program available, that customer
shall continue to be served by the existing electrical corporation or
its successor in interest.
(b) Private aggregation of customer electrical load shall be
authorized by the commission for all customer classes, including, but
not limited to small commercial or residential customers. Private
aggregation may be accomplished by private market aggregators,
special districts, and public agencies not qualifying as community
choice aggregators, or on any other basis made available by market
opportunities and agreeable by positive written declaration by
individual consumers.
(c) (1) Any municipality or any group of municipalities acting
together
(c) If a public agency seeks to serve as a community aggregator on
behalf of residential customers, it shall be obligated to offer the
opportunity to purchase electricity to all residential customers
within its jurisdiction.
(d) (1) A community choice aggregator is hereby authorized
to aggregate the electrical load of interested electricity consumers
within its boundaries to reduce transaction costs to consumers,
provide consumer protections, and leverage the negotiation of
contracts. However, the municipality or group of
municipalities community choice aggregator may
not aggregate electrical load if that load is served by a local
publicly owned electric utility, as defined in subdivision (d) of
Section 9604. A municipality or group of municipalities
community choice aggregator may group retail
electricity customers to solicit bids, broker, and contract for
electric power and energy services for those customers. The
municipality or group of municipalities community
choice aggregator may enter into agreements for services to
facilitate the sale and purchase of electric energy and other related
services. Those service agreements may be entered into by a single
city or county, a city and county, or by a group of cities, cities
and counties, or counties.
(2) Under municipal community choice
aggregation, customer participation may not require a positive
written declaration, but all customers shall be informed of their
right to opt out of the municipal community
choice aggregation program. If no negative declaration is made
by a customer, that customer shall be served through the
municipality's community choice aggregation
program.
(3) A municipality or group of municipalities
community choice aggregator establishing load aggregation
pursuant to this section shall develop an implementation plan
, for review by its citizens, detailing the
process and consequences of aggregation. Any municipal
The implementation plan, and any subsequent changes to
it, shall be considered and adopted at a duly noticed public
hearing. Any community choice load aggregation established
pursuant to this section shall provide for universal access,
reliability, and equitable treatment of all classes of customers and
shall meet any requirements established by state law or by the
commission concerning aggregated service. A municipality or
group of municipalities community choice aggregator
establishing load aggregation shall prepare a statement of
intent with the implementation plan. The plan shall include all of
the following:
(A) An organizational structure of the program, its operations,
and its funding.
(B) Ratesetting and other costs to participants.
(C) The methods for entering and terminating agreements with other
entities.
(D) The rights and responsibilities of program participants.
(E) Termination of the program.
(4) All electrical corporations shall cooperate fully with
municipalities cities, counties, or cities
and counties that investigate, pursue, or implement community
choice aggregation programs. Cooperation shall include providing
municipalities with all billing and load data. Electrical
cities, counties, or cities and counties
with appropriate billing and load data, including, but not limited
to, data detailing energy needs and patterns of usage, as determined
by the commission, and in accordance with procedures established by
the commission. Electrical corporations shall continue to
provide all metering, billing, collection, and customer service to
retail customers that participate in municipal
community choice aggregation programs. Bills sent by the
electrical corporation to retail customers shall identify the
municipal community choice aggregator
as providing the energy component of the bill. The commission shall
determine the terms and conditions under which the electrical
corporation provides services to municipal
community choice aggregators and retail customers.
(5) (A) A city, county, or city and county that elects to
implement a municipal aggregation program
community choice aggregation program within its jurisdiction
pursuant to this chapter may shall do
so by ordinance.
(B) Two or more municipalities cities,
counties, or cities and counties may participate as a group in
a municipal community choice
aggregation pursuant to this chapter, through a joint powers
authority or other means established pursuant
to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1
of the Government Code , if each entity adopts an ordinance
pursuant to subparagraph (A).
(6) Participation by any retail customer in a municipal
aggregation program shall be voluntary. Following adoption of
(6) Following adoption of aggregation through the
votes specified above ordinance described in paragraph
(5) , such a program shall allow any retail customer to opt
out and choose any supplier or provider. Within 30 days of
the date the aggregated entity is fully operational, a customer shall
be transferred to the aggregated entity or provider
as provided by applicable commission policies. Delivery services
shall be provided at the same rates, terms, and conditions, as
approved by the commission, for community choice aggregation
customers and customers who have entered into a direct transaction
where applicable, as determined by the commission . Once
enrolled in the aggregated entity, any ratepayer that chooses to opt
out within 180 days of the date of enrollment may do so without
penalty and shall be entitled to receive default service pursuant to
paragraph (4) of subdivision (a) , as if the customer was
originally enrolled therein . Customers who return to
the electrical corporation for procurement services shall be subject
to the same terms and conditions as are applicable to other
returning direct access customers from the same class, as determined
by the commission, as authorized by the commission pursuant to this
code or any other provision of law. No community choice aggregation
customer returning to default service may be charged for any cost
associated with obligations incurred on behalf of the customer that
were paid by the customer or the community choice aggregator during
the time the customer was served by the community choice aggregator
. Any re-entry fees to be imposed after the 180-day opt-out
period shall be approved by the commission and shall reflect the cost
of re-entry.
(7) Nothing in this section shall be construed as authorizing any
city or any municipal community choice
retail load aggregator to restrict the ability of retail electric
customers to obtain or receive service from any authorized service
provider.
(8) (A) The aggregated entity shall fully inform participating
customers in advance of 30 days in advance of
the date of commencing automatic enrollment, and for not less
than three consecutive billing cycles following enrollment.
Notification may include, but is not limited to, direct mailings to
customers, or inserts in water, sewer, or other utility bills. Any
notification shall inform customers of both of the following:
(i) That they are to be automatically enrolled and that the
customer has the right to opt out of the aggregated entity without
penalty.
(ii) The terms and conditions of the services offered.
(B) The municipal community choice
aggregator may contract with the electrical corporation for
notification required in subparagraph (A). If the aggregated entity
elects to send one or more of the notifications required pursuant to
subparagraph (A) in the electrical corporation's normally scheduled
monthly billing process, the electrical corporation shall be entitled
to recover from the aggregator all reasonable costs it incurs
related to the notification or notifications. The electrical
corporation shall fully cooperate with the aggregated entity in
determining the feasibility and costs associated with using the
electrical corporation's normally scheduled monthly billing process
to provide one or more of the notifications required pursuant to
subparagraph (A).
(C) Each notification shall also include a mechanism by which a
ratepayer may opt out of municipal community
choice aggregated service. The opt-out may take the form of a
self-addressed return postcard indicating the customer's election to
remain with, or return to, service provided by the electrical
corporation, or another straightforward means by which the customer
may elect to derive electrical service through the electrical
corporation providing service in the area.
(9) The aggregated entity shall register with the commission,
which may require additional information to ensure compliance with
basic consumer protection rules and other procedural matters.
(10) Once the community choice aggregator's contract is signed,
the community choice aggregator shall notify the applicable
electrical corporation that community choice service will commence
within 30 days.
(11) Once notified of a community choice aggregator program, the
electrical corporation shall transfer all applicable accounts to the
new supplier within a 30-day period from the date of the close of
their normally scheduled monthly metering and billing process.
(12) An electrical corporation may recover from ratepayers all
reasonable costs, as determined by the commission, of implementing
Assembly Bill 9 of the 2001-02 Second Extraordinary Session,
including, but not limited to, all business and information system
changes, except for transaction-based costs as described in this
paragraph. All reasonable transaction-based costs of notices,
billing, metering, collections, and customer communications or other
services provided by an aggregator or its customers shall be
recovered from the aggregator or its customers on terms and at rates
to be approved by the commission.
SEC. 3. Section 381 of the Public Utilities Code is amended to
read:
381. (a) To ensure that the funding for the programs described in
subdivision (b) and Section 382 is not commingled with other
revenues, the commission shall require each electrical corporation to
identify a separate rate component to collect the revenues used to
fund these programs. The rate component shall be a nonbypassable
element of the local distribution service and collected on the basis
of usage. This rate component shall fall within the rate levels
identified in subdivision (a) of Section 368.
(b) The commission shall allocate funds collected pursuant to
subdivision (a), and any interest earned on collected funds, to
programs that enhance system reliability and provide in-state
benefits as follows:
(1) Cost-effective energy efficiency and conservation activities.
(2) Public interest research and development not adequately
provided by competitive and regulated markets.
(3) In-state operation and development of existing and new and
emerging renewable resource technologies defined as electricity
produced from other than a conventional power source within the
meaning of Section 2805, provided that a power source utilizing more
than 25 percent fossil fuel may not be included.
(c) The commission shall order the respective electrical
corporations to collect and spend these funds, as follows:
(1) Cost-effective energy efficiency and conservation activities
shall be funded at not less than the following levels commencing
January 1, 1998, through December 31, 2001: for San Diego Gas and
Electric Company a level of thirty-two million dollars ($32,000,000)
per year; for Southern California Edison Company a level of ninety
million dollars ($90,000,000) for each of the years l998, 1999, and
2000; fifty million dollars ($50,000,000) for 2001; and for Pacific
Gas and Electric Company a level of one hundred six million dollars
($106,000,000) per year.
(2) Research, development, and demonstration programs to advance
science or technology that are not adequately provided by competitive
and regulated markets shall be funded at not less than the following
levels commencing January 1, 1998 through December 31, 2001: for
San Diego Gas and Electric Company a level of four million dollars
($4,000,000) per year; for Southern California Edison Company a level
of twenty-eight million five hundred thousand dollars ($28,500,000)
per year; and for Pacific Gas and Electric Company a level of thirty
million dollars ($30,000,000) per year.
(3) In-state operation and development of existing and new and
emerging renewable resource technologies shall be funded at not less
than the following levels on a statewide basis: one hundred nine
million five hundred thousand dollars ($109,500,000) per year for
each of the years 1998, 1999, and 2000, and one hundred thirty-six
million five hundred thousand dollars ($136,500,000) for 2001. To
accomplish these funding levels over the period described herein the
San Diego Gas and Electric Company shall spend twelve million dollars
($12,000,000) per year, the Southern California Edison Company shall
expend no less than forty-nine million five hundred thousand dollars
($49,500,000) for the years 1998, 1999, and 2000, and no less than
seventy-six million five hundred thousand dollars ($76,500,000) for
2001, and the Pacific Gas and Electric Company shall expend no less
than forty-eight million dollars ($48,000,000) per year through the
year 2001. Additional funding not to exceed seventy-five million
dollars ($75,000,000) shall be allocated from moneys collected
pursuant to subdivision (d) in order to provide a level of funding
totaling five hundred forty million dollars ($540,000,000).
(4) Up to fifty million dollars ($50,000,000) of the amount
collected pursuant to subdivision (d) may be used to resolve
outstanding issues related to implementation of subdivision (a) of
Section 374. Moneys remaining after fully funding the provisions of
this paragraph shall be reallocated for purposes of paragraph (3).
(5) Up to ninety million dollars ($90,000,000) of the amount
collected pursuant to subdivision (d) may be used to resolve
outstanding issues related to contractual arrangements in the
Southern California Edison service territory stemming from the
Biennial Resource Planning Update auction. Moneys remaining after
fully funding the provisions of this paragraph shall be reallocated
for purposes of paragraph (3).
(d) Notwithstanding any other provisions of this chapter, entities
subject to the jurisdiction of the commission shall extend the
period for competition transition charge collection up to three
months beyond its otherwise applicable termination of December 31,
2001, so as to ensure that the aggregate portion of the research,
environmental, and low-income funds allocated to renewable resources
shall equal five hundred forty million dollars ($540,000,000) and
that the costs specified in paragraphs (3), (4), and (5) of
subdivision (c) are collected.
(e) Each electrical corporation shall allow customers to make
voluntary contributions through their utility bill payments as either
a fixed amount or a variable amount to support programs established
pursuant to paragraph (3) of subdivision (b). Funds collected by
electrical corporations for these purposes shall be forwarded in a
timely manner to the appropriate fund as specified by the commission.
(f) The commission shall determine how to utilize funds for
purposes of paragraphs (1) and (2) of subdivision (b), provided that
only those research and development funds for transmission and
distribution functions shall remain with the regulated public
utilities under the supervision of the commission. The commission
shall provide for the transfer of all research and development funds
collected for purposes of paragraph (2) of subdivision (b) other than
those for transmission and distribution functions and funds
collected for purposes of paragraph (3) of subdivision (b) to the
California Energy Resources Conservation and Development Commission
pursuant to administration and expenditure criteria to be established
by the Legislature.
(g)
(f) The commission's authority to collect funds pursuant to
this section for purposes of paragraph (3) of subdivision (b) shall
become inoperative on March 31, 2002.
(h)
(g) For purposes of this article, "emerging renewable
technology" means a new renewable technology, including, but not
limited to, photovoltaic technology, that is determined by the
California Energy Resources Conservation and Development Commission
to be emerging from research and development and that has significant
commercial potential.
(i) The commission shall authorize municipal aggregators to file
for a pro rata share of energy efficiency funds collected from their
customers by electrical corporations. The commission shall authorize
municipalities to spend the funds on energy efficiency measures that
benefit their customers, subject to any rules adopted by the
commission to ensure accurate accounting, verification, and adherence
to a plan filed by the entity.
SEC. 4. Nothing in this act relieves any customer served by a
municipal aggregator of any obligation for the purchase of power
incurred on behalf of the customer prior to the election of the
aggregating entity to act as a municipal aggregator, including, but
not limited to, any obligations imposed pursuant to Chapter 4 of the
Statutes of 2001, First Extraordinary Session, or Section 332.1 of
the Public Utilities Code, as determined by the Public Utilities
Commission.
(h) The commission shall require the administrator of
cost-effective energy efficiency and conservation programs to direct
a proportional share of its approved energy efficiency program
activities for which the community aggregator's customers are
eligible, to the community aggregator's territory. The commission
shall also direct the administrator to work with the community
aggregator to accommodate any unique community program needs by
placing more, or less, emphasis on particular approved programs to
the extent that these special shifts in emphasis in no way diminish
the effectiveness of broader statewide or regional programs. If the
community aggregator proposes energy efficiency programs other than
programs already approved for implementation in its territory, it
shall do so under established commission policies and procedures.
SEC. 4. A community choice aggregator is obligated to the
Department of Water Resources for an amount equal to the net
unavoidable cost of power procurement for the Department of Water
Resources attributable to the customers of the community choice
aggregator, including, but not limited to, any financing costs, as
determined by the Department of Water Resources. The Department of
Water Resources' net unavoidable cost shall be calculated as the
difference, if any, between its total actual procurement costs and
the rates collected by the Department of Water Resources from the
customer during the term of service. Any amounts due pursuant to
this section for the purchase of power may be payable in installments
over a term coincident with the term of bonds issued to finance the
purchase of that power.