BILL NUMBER: ABX2 9 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 13, 2001
PASSED THE ASSEMBLY SEPTEMBER 13, 2001
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 and 366 of, and to add Section 381.1
to, the Public Utilities Code, relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 9, 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. The bill would require a
retail end-use customer electing to purchase power from a community
choice 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.
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" 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.
(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.