BILL ANALYSIS Appropriations Committee Fiscal Summary ------------------------------------------------------------ | |80(Havice) | |-------------------------------+----------------------------| | | | |-------------------------------+----------------------------| |Hearing Date: 8/5/02 |Amended: 6/25/02 | |-------------------------------+----------------------------| |Consultant: Lisa Matocq |Policy Vote: E, U & C | | |8-0 | | | | ------------------------------------------------------------ ____________________________________________________________ ___ BILL SUMMARY: AB 80 authorizes the cities participating in the Magnolia Power Project to aggregate their electricity loads and provide direct access to their residents. Fiscal Impact (in thousands) Major Provisions 2002-03 2003-04 2004-05 Fund DWR Potential unknown unrecovered costs, Special* to be offset by cost recovery mechanism PUC Probably not substantial costs. Costs Special** should be offset by fee revenues. *Electric Power Fund **Public Utilities' Reimbursement Account STAFF COMMENTS: In community aggregation, a city or county (or other specified entity) may purchase electricity on behalf of, and provide it directly to, its residents. Investor-owned utilities customers' right to obtain power from alternate providers was suspended in 2001, in order to ensure a sufficient revenue stream to cover the costs of the Department of Water Resources' (DWR) power purchasing program. This bill authorizes cities participating in the Magnolia Power Project to aggregate their load and provide direct access to their residents. The power plant project is pending approval by California Energy Commission, and is intended to generate additional resources for five cities (Anaheim, Colton, Glendale, Burbank, and Pasadena) and to accommodate the loads of two other cities (San Marcos and Cerritos). Most of the residents of San Marcos and Cerritos currently receive their electricity from Southern California Edison. Because the five cities are already operating municipal utilities, the bill effectively authorizes the cities of San Marcos and Cerritos to act as community aggregators and provide direct access to their residents. The bill requires the PUC to develop a cost recovery mechanism for DWR's uncollected costs, including financing, of providing service to those customers who subsequently receive service from the cities of San Marcos and Cerritos. Staff notes that a prior and unrelated version of this bill was held on this Committee's Suspense File last year. AB 117 (Migden), pending in this Committee, establishes a general exception to the direct access suspension for community aggregation by cities and counties serving their own residents. A number of other bills would establish, to some extent, exceptions to the direct access suspension.