BILL NUMBER: SBX1 39	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 10, 2001
	AMENDED IN SENATE  APRIL 2, 2001
	AMENDED IN SENATE  MARCH 15, 2001
	AMENDED IN SENATE  FEBRUARY 27, 2001

INTRODUCED BY   Senator Speier

                        FEBRUARY 8, 2001

   An act to amend Sections 216 , 362, and 431 of, and to add Section
761.3 to, the Public Utilities Code, relating to public utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 39, as amended, Speier.  Public utilities.
   (1) Under existing law, ownership or operation of a facility that
has been certified by the Federal Energy Regulatory Commission as an
exempt wholesale generator is not sufficient to make a corporation or
person a public utility under the Public Utilities Act, a violation
of which is a crime.
   This bill would delete this provision.  To the extent that this
change would expand the class of utilities subject to the act, this
bill would impose a state-mandated local program by changing the
definition of an existing crime.
   (2) Existing law requires the Public Utilities Commission, in
proceedings, to ensure that facilities needed to maintain the
reliability of the electric supply remain available and operational,
consistent with maintaining open competition and avoiding an
overconcentration of market power.
   This bill would require the commission to require that generation
facilities located in California that have been disposed of pursuant
to specified existing law are operated by the persons or corporations
who own or control them in a manner that ensures their availability
to maintain the reliability of the electric supply system.  The bill
would authorize the commission to accomplish this by issuing orders
and directives that it determines to be necessary and appropriate,
after a hearing.  The bill would authorize the commission to ensure
electric service reliability by prohibiting economic or physical
withholding of the output of a divested generation facility from
delivery to or for the benefit of California end users.
   (3) Existing law requires the commission to annually determine a
fee to be paid by public utilities, except as specified, to produce a
total amount equal to that amount established in the authorized
commission budget for the same year.
   This bill would require the commission to annually determine a fee
to be paid by certain generation facilities subject to the
jurisdiction of the commission, or upon which the commission imposes
requirements, as prescribed. Because a violation of a requirement of
the commission is a crime, this bill would impose a state-mandated
local program by creating a new crime.
   (4) Under existing law, the commission has regulatory authority
over public utilities, including electric corporations.
   This bill would authorize the commission, in consultation with the
applicable control area operator, to prescribe inspection,
maintenance, and operating practices and procedures for any electric
plant used to produce or generate electric energy located in the
State of California that is necessary to ensure public health and
safety and electric service reliability and adequacy.  The bill would
exempt from this provision  , facilities that generate
electric energy from other than a conventional power source, as
defined, when the owner is a private energy producer, as defined
  an electric plant that produces or generates
electricity using cogeneration, a local publicly owned electric
utility, and a city and county operating as a public utility,
furnishing electricity  .
  (5) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  yes.
State-mandated local program:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Electric generating facilities and powerplants in California
are essential facilities for maintaining and protecting the public
health and safety of California residents and businesses.
   (b) It is in the public interest to ensure that electric
generating facilities and powerplants located in California are
effectively and appropriately maintained and efficiently operated.
   (c) Owners and operators of electric generating facilities and
powerplants are public utilities subject to the control of the
Legislature.
  SEC. 2.  Section 216 of the Public Utilities Code is amended to
read:
   216.  (a) "Public utility" includes every common carrier, toll
bridge corporation, pipeline corporation, gas corporation, electrical
corporation, telephone corporation, telegraph corporation, water
corporation, sewer system corporation, and heat corporation, where
the service is performed for, or the commodity is delivered to, the
public or any portion thereof.
   (b) Whenever any common carrier, toll bridge corporation, pipeline
corporation, gas corporation, electrical corporation, telephone
corporation, telegraph corporation, water corporation, sewer system
corporation, or heat corporation performs a service for, or delivers
a commodity to, the public or any portion thereof for which any
compensation or payment whatsoever is received, that common carrier,
toll bridge corporation, pipeline corporation, gas corporation,
electrical corporation, telephone corporation, telegraph corporation,
water corporation, sewer system corporation, or heat corporation, is
a public utility subject to the jurisdiction, control, and
regulation of the commission and the provisions of this part.
   (c) When any person or corporation performs any service for, or
delivers any commodity to, any person, private corporation,
municipality, or other political subdivision of the state, that in
turn either directly or indirectly, mediately or immediately,
performs that service for, or delivers that commodity to, the public
or any portion thereof, that person or corporation is a public
utility subject to the jurisdiction, control, and regulation of the
commission and the provisions of this part.
   (d) Ownership or operation of a facility that employs cogeneration
technology or produces power from other than a conventional power
source or the ownership or operation of a facility which employs
landfill gas technology does not make a corporation or person a
public utility within the meaning of this section solely because of
the ownership or operation of that facility.
   (e) Any corporation or person engaged directly or indirectly in
developing, producing, transmitting, distributing, delivering, or
selling any form of heat derived from geothermal or solar resources
or from cogeneration technology to any privately owned or publicly
owned public utility, or to the public or any portion thereof, is not
a public utility within the meaning of this section solely by reason
of engaging in any of those activities.
   (f) The ownership or operation of a facility that sells compressed
natural gas at retail to the public for use only as a motor vehicle
fuel, and the selling of compressed natural gas at retail from that
facility to the public for use only as a motor vehicle fuel, does not
make the corporation or person a public utility within the meaning
of this section solely because of that ownership, operation, or sale.

   (g) The ownership, control, operation, or management of an
electric plant used for direct transactions or participation directly
or indirectly in direct transactions, as permitted by subdivision
(b) of Section 365, sales into the Power Exchange referred to in
Section 365, or the use or sale as permitted under subdivisions (b)
to (d), inclusive, of Section 218, shall not make a corporation or
person a public utility within the meaning of this section solely
because of that ownership, participation, or sale.
  SEC. 3.  Section 362 of the Public Utilities Code is amended to
read:
   362.  (a) In proceedings pursuant to Section 455.5, 851, or 854,
the commission shall ensure that facilities needed to maintain the
reliability of the electric supply remain available and operational,
consistent with maintaining open competition and avoiding an
overconcentration of market power.  In order to determine whether the
facility needs to remain available and operational, the commission
shall utilize standards that are no less stringent than the Western
Systems Coordinating Council and North American Electric Reliability
Council standards for planning reserve criteria.
   (b) The commission shall require that generation facilities
located in California that have been disposed of in proceedings
pursuant to Section 851 are operated by the persons or corporations
who own or control them in a manner that ensures their availability
to maintain the reliability of the electric supply system.  The
commission may accomplish this by issuing orders and directives that
it determines to be necessary and appropriate, after a hearing.  The
commission may prevent an overconcentration of market power and
ensure electric service reliability by prohibiting economic or
physical withholding of the output of a divested generation facility
from delivery to or for the benefit of California end users.
  SEC. 4.  Section 431 of the Public Utilities Code is amended to
read:
   431.  (a) The commission shall annually determine a fee to be paid
by every electrical, gas, telephone, telegraph, water, sewer system,
and heat corporation and every other public utility providing
service directly to customers or subscribers and subject to the
jurisdiction of the commission other than a railroad, except as
otherwise provided in Article 2 (commencing with Section 421).  The
commission shall also annually determine a fee to be paid by every
generation facility subject to the jurisdiction of the commission
pursuant to subdivision (b) of Section 362 or upon which the
commission imposes requirements pursuant to Section 761.3.
   (b) The commission shall establish the annual fee to produce a
total amount equal to that amount established in the authorized
commission budget for the same year, including adjustments for
increases in employee compensation, other increases appropriated by
the Legislature, and an appropriate reserve to regulate public
utilities less the amount to be paid from special accounts or funds
pursuant to Section 402, reimbursements, federal funds, and any other
revenues, and the amount of unencumbered funds from the preceding
year.
   (c) This article does not apply to any electrical cooperative as
defined in Chapter 5 (commencing with Section 2776) of Part 2.
   (d) This article applies to radiotelephone utilities as defined in
Section 4902 as those provisions read on December 31, 1984.
  SEC. 5.  Section 761.3 is added to the Public Utilities Code, to
read:
   761.3.  (a) Notwithstanding Section 216,  and except as
provided in subdivision (b),  the commission, in consultation
with the applicable control area operator, may prescribe inspection,
maintenance, and operating practices and procedures for any electric
plant used to produce or generate electric energy located in the
State of California that is necessary to ensure public health and
safety and electric service reliability and adequacy.  Nothing in
this section authorizes the commission to regulate rates for
wholesale electric energy transactions in interstate commerce.

   (b) Subdivision (a) does not apply to facilities that generate
electric energy from other than a conventional power source, as
defined in Section 2805, when the owner is a private energy producer,
as defined in Section 2802.  
   (b) This section does not apply to any of the following:
   (1) An electric plant that produces or generates electricity using
cogeneration, as defined in Section 218.5.
   (2) A local publicly owned electric utility, as defined in
subdivision (d) of Section 9604.
   (3) A city and county operating as a public utility, furnishing
electric service as provided in Section 10001. 
  SEC. 6.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.