BILL NUMBER: SBX2 25 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Knight
MAY 17, 2001
An act to amend Section 743 of the Public Utilities
add Section 80110.5 to the Water Code, relating
to public utilities energy resources .
LEGISLATIVE COUNSEL'S DIGEST
SB 25, as introduced, Knight. Electrical corporations:
interruptible service contracts Military basics:
purchase of power .
Existing law authorizes the Department of Water Resources to enter
into contracts for the purchase of electric power, to sell power to
retail end-use customers and, with certain exceptions, to local
publicly owned electric utilities at not more than the department's
acquisition costs. Existing law provides that the department retains
title to all power sold by it to the retail end-use customers.
After the passage of a specified period of time, existing law
suspends the right of retail end-use customers to acquire service
from other providers until the department no longer supplies power
under that provisions.
This bill would prohibit the suspension, pursuant to that
provision, of the right of a military base to acquire service from
other providers as a retail end-use customer.
Existing law permits the Public Utilities Commission to approve
contracts, of not more than 10 years' duration, between an electrical
corporation and a heavy industrial customer in which the electrical
corporation buys from the heavy industrial customer the right to
interrupt the customer's service on short notice, as determined by
the commission. Existing law also requires every electrical
corporation furnishing electricity to a heavy industrial company to
file with the commission a tariff providing rates that are lower than
the system average rate.
This bill would require the commission to annually provide a
30-day period for heavy industrial customers that have entered into a
contract with an electrical corporation for interruptible service to
opt-out of that contract. The bill would also prohibit the
commission from suspending any portion of the interruptible tariffs
that allow a heavy industrial customer to opt-out of an interruptible
service contract.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 743 of the Public Utilities Code is
SECTION 1. Section 80110.5 is added to the Water Code, to read:
80110.5. Notwithstanding Section 80110, the right of a military
base to acquire service directly from other providers as a retail
end-use customer may not be suspended pursuant to that section.
amended to read:
743. (a) As used in this section, "steel producer" means a
producer of steel products in California which in 1981 or any
subsequent year produced at least 75,000 tons of rolled or finished
steel and which has a maximum demand for electricity of 4,000
kilowatts or more at one plant location. Any steel producer which
transfers any substantial amount of employment from its facilities in
this state to any out-of-state facility or otherwise substantially
reduces employment at its facilities in this state below the June 30,
1985, level, or fails to maintain and make reasonable and prudent
investments in its facilities, as determined by the commission, is
ineligible for any electric rate established pursuant to this
section.
(b) As used in this section, "frozen food processor" means a
corporation or person engaged in the processing of food in
California, which food is classified according to the Standard
Industrial Classification Manual, 1972, in Industry No. 2037 and
Industry No. 2038 of Group 203, of Food and Kindred Products Major
Group 20, as specified in Section 2900.3 of Title 7 of the Code of
Federal Regulations. "Processing of food" includes the
postprocessing storage of frozen food in a warehouse, or other
facility, until the frozen food leaves the control or responsibility
of the frozen food processor or until the frozen food processor no
longer has an obligation to store the food.
(c) As used in this section, "system average rate" means total
jurisdictional revenues of the electrical corporation divided by
total jurisdictional sales.
(d) Every electrical corporation furnishing electricity to a steel
producer, frozen food processor, or other heavy-industry customer,
as determined and specified by the electrical corporation, shall
prepare and file tariffs providing rates which shall be lower than
the system average rate and take into consideration all of the
following:
(1) Specific service requirements of individual customers,
including, but not limited to, reliability, interruptability,
quantity of use, and requirements of voltage.
(2) Incentives to achieve conservation, improvements in
efficiency, and time-of-day load shifting.
(3) Implementation at the option of the customer.
(4) Cost of service.
(e) The commission shall consider and approve tariffs which shall
be consistent with this section and which shall be in effect on and
after July 1, 1992.
(f) (1) The commission may approve contracts between an electrical
corporation and its heavy industrial customers as determined by the
electrical corporation, of not more than ten years' duration, in
which the electrical corporation buys from the heavy industrial
customer the right to interrupt the customer's service on short
notice, as determined by the commission. The payment mechanism may
include a discounted rate for service. In approving and determining
the reasonableness of these contracts, the commission may consider,
among other things, the price paid by the electrical corporation for
the right to interrupt, the value of that right to the utility system
and its ratepayers, and the benefits to the ratepayers and the
people of the state of retaining heavy industrial customers.
Throughout the term of any of these contracts, the commission shall
have the right to amend the contract. Every contract subject to this
subdivision shall include a provision indicating that the contract
is subject to amendment by the commission as provided in this
subdivision. This subdivision does not supersede the requirement of
subdivision (d) that the commission establish a heavy industrial
tariff.
(2) (A) Notwithstanding paragraph (1), the commission shall
annually provide a 30-day period for heavy industrial customers that
have entered into a contract with an electrical corporation for
interruptible service to opt-out of that contract.
(B) The commission shall not suspend any portion of the
interruptible tariffs that allow heavy industrial customers to
opt-out of an interruptible service contract.