BILL NUMBER: AB 69 ENROLLED
BILL TEXT
PASSED THE ASSEMBLY SEPTEMBER 12, 2001
PASSED THE SENATE SEPTEMBER 6, 2001
AMENDED IN SENATE SEPTEMBER 5, 2001
AMENDED IN SENATE JULY 17, 2001
AMENDED IN SENATE JUNE 19, 2001
AMENDED IN ASSEMBLY MAY 14, 2001
INTRODUCED BY Assembly Member Wright
(Coauthor: Assembly Member Robert Pacheco)
(Coauthor: Senators Alarcon and Murray)
DECEMBER 13, 2000
An act to add Section 9601.5 to the Public Utilities Code,
relating to electricity, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 69, Wright. Electricity: governmental entities in Los Angeles
County: contracts.
Existing law prohibits a city or municipally owned electric
utility from selling electric power to the retail customers of a
public utility unless the city or municipally owned electric utility
agrees to let the public utility make sales of electric power to its
retail customers. Existing law requires that a customer of a public
utility that purchases electricity through a direct transaction
contract pay certain generation-related transition charges.
This bill would permit specified governmental entities that are
served by the Southern California Edison Company within Los Angeles
County to purchase electricity for use in those areas from the Los
Angeles Department of Water and Power. The bill would require that
the electricity be used only for facilities owned or leased by a
governmental entity that are used for governmental purposes. The
bill would prohibit reselling the electricity. The bill would not
require that reciprocity of electrical sales be provided to the
Southern California Edison Company. The bill would exempt the sales
from specified generation-related transition charges.
The bill would authorize the Public Utilities Commission to limit
the right of governmental entities that purchase power from an
electrical corporation to purchase power from the Los Angeles
Department of Water and Power, if necessary to satisfy power purchase
or bond obligations of the Department of Water Resources, as
specified. The bill would authorize the governmental entity to elect
to purchase power from the Los Angeles Department of Water and Power
and avoid any limitation placed upon its power purchases by the
commission, by payment of the Department of Water Resources' net
unavoidable costs of future power procurement, as specified, and 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 the governmental
entity during the term of service. The governmental entity may
request a calculation of these costs prior to making an election.
This bill would declare that it is to take effect immediately as
an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) The ability of local agencies to secure stable and affordable
power is necessary to ensure that those agencies can provide
essential services such as health and public safety.
(b) The reality of rolling blackouts and higher electric costs for
those areas of local agencies served by investor-owned utilities
requires the state to assist local agencies.
(c) In some parts of the state there are local agencies in which
parts of the geographical area served by the local agency are served
by an investor-owned utility and the remaining parts are served by a
publicly owned utility that has surplus electrical generating
capacity.
(d) Allowing those local agencies to buy more of their electricity
from the publicly owned utility would reduce demand on the
investor-owned utility and help ensure reliable and affordable
electric power for the local agency.
SEC. 2. Section 9601.5 is added to the Public Utilities Code, to
read:
9601.5. (a) (1) This section is only applicable to the Los
Angeles Department of Water and Power and the governmental entities
described in subdivision (h).
(2) For purposes of this section, a "contract" means a direct
transaction as defined in Section 331 entered into pursuant to this
section by a governmental entity described in subdivision (h) and the
Los Angeles Department of Water and Power.
(b) Notwithstanding any other provision of law, a governmental
entity may enter into a contract for electricity to be delivered for
use within the geographical boundaries of the County of Los Angeles
in areas served by the Southern California Edison Company. The
electricity purchased may only be used for facilities owned or leased
by the governmental entity and used to perform governmental
services. The electricity may not be resold by the governmental
entity.
(c) This section may not be interpreted to require either a
governmental entity or the Los Angeles Department of Water and Power
to enter into a contract.
(d) The Southern California Edison Company shall deliver the
electricity provided by the Los Angeles Department of Water and Power
under a contract entered into pursuant to this section. The
delivery service shall be provided at the rates, terms, and
conditions approved by the commission and applicable to customers who
have entered into a direct transaction. Section 9602 and
subdivisions (a) and (c) of Section 9601 are not applicable to the
parties of a contract entered into pursuant to this section.
(e) If there is a legal challenge to a contract by the Southern
California Edison Company based on a theory of vested rights under
former Section 19 of Article XI of the California Constitution, as it
read on January 1, 1911, and a court determines that there is a
vested right affected by the contract which requires payment to the
Southern California Edison Company by either the governmental entity
or the Los Angeles Department of Water and Power for the right to
sell power in the service areas covered by the contract, then the
party which would have to make such payment may rescind the contract.
(f) A contract may not permit the Southern California Edison
Company to have a reciprocal right to sell electricity within the
service area of the Los Angeles Department of Water and Power. The
fact of a contract does not give the Southern California Edison
Company a legal right to sell electricity to the retail customers of
the Los Angeles Department of Water and Power. Subdivision (c) of
Section 9601 is not applicable to a contract entered into pursuant to
this section.
(g) Upon termination of a contract entered into pursuant to this
section, the default provider of power shall be the Southern
California Edison Company. Customers as described in subdivision (h)
who return to Southern California Edison Company for procurement
service shall be subject to the same terms and conditions as are
applicable to other returning direct access customers as authorized
by the commission pursuant to this code or any other applicable
provision of law.
(h) This section is only applicable to the following governmental
entities:
(1) The County of Los Angeles.
(2) The Los Angeles Unified School District.
(3) The Los Angeles County Metropolitan Transportation Authority.
(4) The Los Angeles County Office of Education.
(5) The Los Angeles Community College District.
(i) The commission may limit the right of a governmental entity
described in subdivision (h) that purchases power from an electrical
corporation, to purchase power from the Los Angeles Department of
Water and Power pursuant to this section, but only to the extent the
commission determines it is necessary to ensure satisfaction of any
power purchase obligation or bond obligation incurred by the
Department of Water Resources pursuant to Division 27 (commencing
with Section 80000) of the Water Code, to procure power to serve that
governmental entity.
(j) (1) Notwithstanding subdivision (i), a governmental entity
described in subdivision (h) may elect service from the Los Angeles
Department of Water and Power at any time pursuant to this section,
upon payment to the Department of Water Resources of 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 governmental entity 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 governmental entity, 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 governmental entity prior to making the election under
paragraph (1) may submit a request to the Department of Water
Resources for an estimate of each amount that would be due under
subparagraphs (1) and (2) of paragraph (1). The Department of Water
Resources shall provide the estimate to the governmental entity 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.
SEC. 3. The Legislature finds and declares that, because of the
unique circumstances applicable only to the County of Los Angeles, a
statute of general applicability cannot be enacted within the meaning
of subdivision (b) of Section 16 of Article IV of the California
Constitution. Therefore, this special statute is necessary.
SEC. 4. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to ensure that a reliable source of electricity is made
available to local governmental entities at reasonable prices and to
avoid a reduction in essential services provided by those
governmental entities, thereby preserving the public peace, health,
safety, and well-being, it is necessary for this act to take effect
immediately.