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.