BILL ANALYSIS
Appropriations Committee Fiscal Summary
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| |117(Migden) |
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|Hearing Date: 8/13/02 |Amended: 8/5/02 |
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|Consultant: Lisa Matocq |Policy Vote: E, U & C |
| |6-0 |
| | |
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BILL SUMMARY: AB 117, subject to certain conditions,
allows cities and counties to "aggregate" their electric
loads and provide service directly to their residents.
Fiscal Impact (in thousands)
Major Provisions 2002-03 2003-04
2004-05 Fund
PUC Unknown, probably not substantial, costs.
Special*
Costs should be offset by fee revenues.
DWR Uncollected costs should be recovered
Special**
through PUC cost recovery mechanism
*Public Utilities' Reimbursement Account (PURA)
**Electric Power Fund
STAFF COMMENTS: In community aggregation, a city or
county, for example, may purchase electricity on behalf of,
and provide it directly to, its residents. Certain
conditions must be met, one of which is that each customer
must "opt in". 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 Department of Water Resources' (DWR) costs of
purchasing electricity.
This bill (1) establishes an exception to the direct access
suspension for cities and counties providing service to
their own residents, (2) changes the "opt in" to an "opt
out" condition, (3) requires all non-investor-owned utility
electric service providers (ESPs) to register with the
Public Utilities Commission (PUC), and (4) requires the PUC
to require investor-owned utilities to continue to offer
energy efficiency programs, on a proportionate basis, in
the community aggregator's territory. These programs are
funded through the public goods surcharge.
The bill contains provisions to ensure DWR's cost recovery,
as well as the electrical corporation's when customers opt
out. Increased costs to the PUC are unknown, but probably
not substantial. PURA revenues are derived from an annual
fee charged to public utilities sufficient to cover the
costs of the PUC's annual budget. Therefore, any increased
costs to the PUC should be recovered through fee revenues.
The provisions of the bill relating to cities and counties
are permissive, therefore, and increased costs would be
nonreimbursable.
AB 9xx (Migden) of 2001 was similar to this bill and was
vetoed by Governor Davis. In his veto message, the
Governor stated, among other things, that there needed to
be more concise "cost-containment provisions for the
remaining IOU customers". This bill contains additional
cost-containment provisions. AB 80 (Havice), pending in
the Senate, establishes an exemption from the direct access
suspension for the cities of Cerritos and San Marcos.