BILL NUMBER: ABX2 9 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 13, 2001
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
and 366 of, and to add Section 381.1 to, 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 authorize a community
choice 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. The bill would require a
retail end-use customer electing to purchase power from a community
aggregator to pay specified amounts for Department of Water Resources
costs, as defined. The bill would require the commission to ensure
that the net unavoidable costs of power procurement by any electrical
corporation are not shifted onto the electrical corporation's
remaining customers.
(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 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 9 of the 2001-02 Second Extraordinary Session of the
Legislature:
(1) Any 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 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.
(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" 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) 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 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 community choice aggregator may group retail electricity
customers to solicit bids, broker, and contract for electric power
and energy services for those customers. The 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 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 community choice
aggregation program. If no negative declaration is made by a
customer, that customer shall be served through the community choice
aggregation program.
(3) A community choice aggregator establishing load aggregation
pursuant to this section shall develop an implementation plan
detailing the process and consequences of aggregation. 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 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 cities,
counties, or cities and counties that investigate, pursue, or
implement community choice aggregation programs. Cooperation shall
include providing 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 community choice aggregation programs.
Bills sent by the electrical corporation to retail customers shall
identify the 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 community choice aggregators and retail customers.
(5) (A) A city, county, or city and county that elects to
implement a community choice aggregation program within its
jurisdiction pursuant to this chapter shall do so by ordinance.
(B) Two or more cities, counties, or cities and counties may
participate as a group in a community choice aggregation pursuant to
this chapter, through a joint powers authority 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) Following adoption of aggregation through the ordinance
described in paragraph (5), such a program shall allow any retail
customer to opt out and choose any supplier 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). 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 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 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 community choice aggregator may contract with the
electrical corporation for the 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 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's authority to collect funds pursuant to this
section for purposes of paragraph (3) of subdivision (b) shall become
inoperative on March 31, 2002.
(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.
(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.
(e) (1) Any retail end-use customer that purchases power from a
community choice aggregator pursuant to this section shall pay to the
Department of Water Resources both of the following amounts:
(A) The difference, if any, between the Department of Water
Resources' total actual procurement costs, including financing costs,
and the rates collected by the Department of Water Resources from
that customer during the term of service.
(B) The Department of Water Resources' net unavoidable cost of
future power procurement, including any financing costs, attributable
to that customer, as determined by the Department of Water
Resources.
(2) Any amounts due pursuant to this subdivision 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.
(3) A community aggregator at the request of a participating
customer shall submit a request to the Department of Water Resources
for an estimate of each amount that would be due under paragraph (1)
for the customer. The Department of Water Resources shall provide
the estimate to the customer and to the Legislature within 30 days of
the request. The estimate of each amount shall include the
calculations and a description of the methodology used in making the
estimates.
(f) The commission shall develop rules to ensure that the net
unavoidable costs of power procurement by an electrical corporation
are not shifted onto the electrical corporation's remaining
customers, but are the responsibility of the electrical corporation's
former customers being served by a community, municipal or private
aggregator, that shall be resolved through contract assignment,
reasonable exit fees, or any other reasonable means.
SEC. 3. Section 381.1 is added to the Public Utilities Code, to
read:
381.1. 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.