BILL ANALYSIS
AB 54 X1
Page 1
ASSEMBLY THIRD READING
AB 54 X1 (Wright)
As Amended February 28, 2001
2/3 vote. Urgency
ENERGY 17-0
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|Ayes:|Wright, Pescetti, Briggs, | | |
| |John Campbell, | | |
| |Canciamilla, Dickerson, | | |
| |Dutra, Jackson, Leonard, | | |
| |Migden, Oropeza, Reyes, | | |
| |Richman Steinberg, | | |
| |Vargas, Wesson, Zettel | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Permits specified governmental entities that are
served by the Southern California Edison (SCE) Company within
Los Angeles County to purchase electricity for use in those
areas from the Los Angeles Department of Water and Power
(LADWP). Specifically, this bill :
1)Permits specified governmental entities to enter into a direct
transaction contract for electricity to be delivered for use
within the geographic boundaries of the County of Los Angeles
to be served by SCE.
1)Exempts the sales from specified generation-related transition
charges.
1)Requires that the electricity be used only for facilities
owned or leased by a governmental entity that are used for
governmental purposes, and prohibits reselling the
electricity.
EXISTING LAW :
1)Prohibits a local publicly-owned electric utility or an
investor-owned utility (IOU) from selling electric power to
the retail customers of another city or municipally-owned
electric utility or IOU unless the first utility has agreed to
let the second utility make sales of electric power to the
retail customers of the first utility.
AB 54 X1
Page 2
1)Requires that a customer of a public utility that purchases
electricity through a direct transaction contract pay certain
generation-related transition charges.
FISCAL EFFECT : Unknown
COMMENTS :
1)Local Agencies' Power Needs . Facing mounting cash-flow
problems, SCE is no longer able to procure power for its
customers beyond what it produces through its retained
generation assets. AB1 X1 (Keeley) Chapter 4, Statutes of
2001, signed into law earlier this month, requires the
Department of Water Resources to cover the full "net short" of
IOUs, and to a limited extent, the net short of municipal
utilities. The net short is the electricity needs of
customers that are not met by the generation resources owned
or under contract to the utilities. Unlike IOUs, LADWP has
surplus generating capacity. It is a "net seller" of
electricity; it sells more than it buys in the wholesale
electricity market. In Los Angeles County, there are
numerous local agencies in which part of the geographical area
served by the agency is served by SCE and the remaining parts
are served by LADWP. This bill would allow specified local
agencies and school districts with facilities located in the
SCE service territory to purchase power from LADWP to serve
those facilities. The list of eligible public agencies
includes the County of Los Angeles, the Los Angeles Unified
School District (LAUSD); the Los Angeles County Metropolitan
Transportation Authority; the Los Angeles County Office of
Education; and, the Los Angeles Community College District.
The electricity purchased could only be used for facilities
owned and leased by the governmental entity and used to
perform governmental services, and could not be resold by the
governmental entity.
1)Purpose of the Bill . LADWP has surplus generating capacity.
By allowing local agencies to buy more of their electricity
from LADWP, this bill would reduce demand on SCE by
approximately 120 megawatts (MW), which is one-third of the
360 MW shortfall during a Stage III emergency, when reserves
drop below 1.5%. This bill would also reduce energy costs for
specified local public agencies and educational institutions,
including LAUSD, the largest school district in the state.
AB 54 X1
Page 3
This would reduce the need to reimburse the agencies for high
energy costs, as several measures currently in the Assembly
would do.
1)Reciprocal Competition . Competition between utilities, both
public and private, is prohibited unless the right to compete
for customers is reciprocal. Under AB 1890 (Brulte), Chapter
854, Statutes of 1996, an IOU or publicly-owned electric
utility cannot enter into a direct access relationship with
customers in the service territory of another publicly-owned
electric utility or IOU unless it has agreed to let the other
utility sell power to its own customers. This bill permits
specified governmental entities that are served by SCE within
Los Angeles County to purchase electricity from LADWP, and
would exempt these transactions from the reciprocity
provisions of AB 1890.
Analysis Prepared by : Joseph Lyons / E. C. & A. / (916)
319-2083
FN: 0000129