BILL ANALYSIS
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THIRD READING
Bill No: AB 9XX
Author: Migden (D)
Amended: 9/13/01 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 8-0, 8/29/01
AYES: Bowen, Morrow, Alarcon, Battin, Dunn, Murray, Sher,
Vincent
ASSEMBLY FLOOR : 71-1, 5/29/01 - See last page for vote
SUBJECT : Electrical restructuring: aggregation
SOURCE : Author
DIGEST : This bill restructures statutes that allow
certain entities to aggregate their electric loads, as
specified.
ANALYSIS : Current law permits marketers, public
agencies, cities, counties, and special districts to
aggregate their electric loads on a voluntary basis,
provided that each customer in their jurisdiction agrees to
participate by a positive written declaration (opt-in).
This bill creates new definitions for "community choice
aggregator," "municipal aggregator," and "private
aggregator." A "private aggregator" is essentially defined
in the same manner that all aggregators are defined in
current law, which requires a customer to "opt-in" to being
served by an aggregator. For a "community choice
CONTINUED
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aggregator" or a "municipal aggregator," a municipality or
group of municipalities can serve as aggregators for the
businesses and residential customers within the territory
of that agency after adopting an ordinance. If a customer
wants to be served by someone other than the entity
selected by the public agency, that customer can do so upon
written notice (opt-out) to the public agency pursuant to
the rules established by that agency.
Current law requires a public agency that seeks to
aggregate its load on behalf of residential customers to
offer the opportunity to purchase electricity to all
residential customers within the agency's jurisdiction.
This bill deletes that requirement.
Current law requires the investor-owned utilities (IOUs)
regulated by the California Public Utilities Commission
(PUC) to collect a non-bypassable surcharge on the
distribution component of each customer's bill based on
usage. That money is directed primarily to the PUC and is
used to fund four public purpose programs -- energy
efficiency and conservation activities, public interest
research and development, in-state development of renewable
resource technologies, and assistance to low-income
customers.
Current law requires municipal utilities to collect a
public goods surcharge from each of its customers that's at
least equal to the lowest percentage level of the three
largest IOUs in the state and to spend it on energy
efficiency and conservation activities, public interest
research and development, and in-state development of
renewable resource technologies as they see fit.
The bill specifies that electrical corporations are
entitled to recover their implementation costs from
ratepayers.
The bill clarifies that administrative costs for services
provided by an aggregator shall be recovered from the
aggregator or its customers, as determined b the PUC.
The bill ensures recovery of DWR's potential uncollected
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costs associated with any future purchases from which DWR
is obligated on the customer's behalf.
The bill requires that DWR provide the calculation and
methodology to the customer, within 30 days of request,
with a copy to the Legislature.
Background
The concept of community aggregation, wherein the governing
body of the community, such as the city council, could
choose an electricity supplier for the entire community,
was discussed but ultimately tabled during the 1996
electric restructuring debates. This bill resurrects that
concept by permitting the governing body to select a
provider of electricity which then becomes the default
provider for everyone in the community.
Community aggregation is akin to "municipalization light"
and/or direct access on a much grander scale. In a
municipalization, the municipal utility has to purchase or
build power plants and transmission lines, take over all
contracting, distribution, billing, and meter-reading
responsibilities from the IOU, and is regulated by its own
locally-elected board instead of the PUC.
Aggregation brings virtually none of those
responsibilities, because most of them stay with the
incumbent IOU. Under community aggregation, a community
simply tries to negotiate a contract to buy energy on
behalf of its residents and businesses. That power is then
delivered by the incumbent IOU and shows up on the
customer's bill in place of the energy that the IOU was
previously providing to its customers.
The public goods surcharge and accompanying programs were
created in the original electrical restructuring
legislation, AB 1890 (Brulte), Chapter 854, Statutes of
1996, and extended last year by SB 1194 (Sher), Chapter
1050, Statutes of 2000 and AB 995 (Wright), Chapter 1051,
Statutes of 2000. The public goods surcharge is a
per-kilowatt-hour fee paid by all electric customers to
fund four public goods categories: (1) energy efficiency;
(2) renewable energy sources; (3) research and development
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of alternative energy supplies; and (4) assistance to
low-income users.
The law requires the IOUs to spend specific amounts of
money or percentages of money from the baseline year 1994,
in each of the first three categories, while the fourth,
the low-income assistance program, is a needs-based
program. In contrast, Public Utilities Code Section 385
states that publicly-owned or municipal electric utilities
aren't required to comply with any particular spending
formula and have complete discretion over how they spend
their public goods monies.
The surcharge collected from each municipal customer can't
be less than the lowest percentage level of the three
largest electrical corporations in the state. Currently,
the surcharge directs about 2.85% of an IOU customer's
electric bill toward the public goods programs, raising an
estimated $228 million annually for the public goods
programs (excluding the low-income assistance program) in
the territories of the three IOUs.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/29/01)
California State Association of Counties
League of California Cities
One individual
ASSEMBLY FLOOR :
AYES: Aanestad, Alquist, Aroner, Ashburn, Bogh, Calderon,
John Campbell, Canciamilla, Cardenas, Cardoza, Cedillo,
Chavez, Chu, Cogdill, Cohn, Correa, Cox, Daucher, Diaz,
Dickerson, Dutra, Firebaugh, Frommer, Goldberg, Harman,
Havice, Horton, Jackson, Keeley, Kehoe, Kelley, Koretz,
La Suer, Leach, Leonard, Leslie, Liu, Longville,
Lowenthal, Maddox, Maldonado, Matthews, Migden, Nakano,
Nation, Negrete McLeod, Oropeza, Robert Pacheco, Rod
Pacheco, Papan, Pavley, Pescetti, Reyes, Richman, Runner,
Salinas, Shelley, Simitian, Steinberg, Strickland,
Strom-Martin, Thomson, Vargas, Washington, Wayne, Wesson,
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Wiggins, Wright, Wyland, Wyman, Zettel
NOES: Mountjoy
NC:cm 9/13/01 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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