BILL NUMBER: SB 1519	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 20, 2002
	AMENDED IN ASSEMBLY  JUNE 13, 2002
	AMENDED IN SENATE  APRIL 18, 2002

INTRODUCED BY   Senator Bowen

                        FEBRUARY 20, 2002

   An act to amend Section 394 of, and to add Section 365.2 to, the
Public Utilities Code, relating to electric power.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1519, as amended, Bowen.  Department of Water Resources:
power.
   (1) 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.  Existing law directs the Public Utilities Commission
to suspend direct transactions between electricity suppliers and end
use customers of certain privately owned electrical corporations,
until the department no longer supplies electrical power.
   This bill would require the Public Utilities Commission, if it
determines there is a shifting of recoverable costs, as specified,
from customers who take service from an alternate provider to the
customers of an electrical corporation, to recover those costs from
each customer class in proportion to the load of each class that is
served by alternate providers.  The bill would declare this
requirement to be consistent with the requirements of specified
provisions of existing law, and therefore, declaratory of existing
law.
   This bill would require the commission to establish a mechanism to
allow customers of an electrical corporation for whom direct
transactions have been suspended, to elect to purchase renewable
power, as defined, from an alternate provider, as defined.  The bill
would prohibit implementation of the election to purchase renewable
power until the commission develops a cost-recovery mechanism, as
specified, that is applicable to customers that elected to purchase
electricity from an alternate provider between February 1, 2001, and
the effective date of this act.  The bill would authorize the
commission to require an electrical corporation to offer renewable
power service to its customers.  The bill would require a customer
that elects to purchase renewable power from an alternate provider to
reimburse the department  and the electrical corporation that
previously served the customer  for specified costs  and
charges  .   The bill would require a customer that
purchases power from a community choice aggregator to reimburse the
electrical corporation that previously served the customer for
specified costs.  The bill would authorize  the
department and  the commission to impose a charge, in
certain circumstances, upon a customer if the customer returns to
receiving electricity from the department or the electrical
corporation.  This charge would be the obligation of the alternate
provider where customers are involuntarily returned to receiving
electricity from the department or the electrical corporation.  The
bill would require each provider, as a condition of registration with
the commission as an electric service provider, to post a bond or
demonstrate insurance sufficient to cover the charge.  The bill would
require the commission to require each customer of an electrical
corporation to be notified of the conditions for purchasing power
from an alternate provider within 90 days of the effective date of
these provisions.  Because a violation of an order of the commission
is a crime under existing provisions of law, the bill would impose a
state-mandated local program by expanding the definition of a crime.

  (2) 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.  It is the intent of the Legislature, in enacting the
act adding this section, to establish a policy to govern the
circumstances under which retail end use customers may choose to
acquire service from energy providers other than the Department of
Water Resources.  The goal of that policy is to provide retail end
use customers the greatest possible flexibility in procuring power
while preventing any negative consequences for those customers who
continue to be served by the Department of Water Resources.  It is
further the intent of the Legislature to recognize the genuine
contributions of new and renewable sources of electrical generation
to affordable, clean, reliable, and sustainable electricity service
for all California residents.
  SEC. 2.  Section 365.2 is added to the Public Utilities Code, to
read:
   365.2.  (a) As used in this section, the following terms have the
following meanings:
   (1) "Alternate provider" means an entity, other than an electrical
corporation, supplying electricity to a retail end use customer
within the service territory of an electrical corporation as the
territory existed on February 1, 2001.
   (2) "Department" means the Department of Water Resources.
   (3) "Electrical corporation" means an electrical corporation, as
defined in Section 218, serving the retail end use customers for
which the department is procuring power pursuant to Division 27
(commencing with Section 80000) of the Water Code.
   (4) "Renewable power" means electricity produced from geothermal,
wind, solar, biomass, or landfill gas sources.
   (b) (1) It is the intent of the Legislature, that each retail end
use customer that has purchased power from an electrical corporation
on or after February 1, 2001, regardless of whether the customer
thereafter takes service from an alternate provider, bear a pro rata
share of the department's power purchase costs, as well as power
purchase contract obligations incurred as of the effective date of
this act, that are attributable to the customer and  area
  are  recoverable from electrical corporation
customers in commission-approved rates.  It is the further intent of
the Legislature to prevent any shifting of recoverable costs from
customers who take service from an alternate provider to electrical
corporation customers.
   (2) To the extent that any shifting of recoverable costs would
occur, in the determination of the commission, those costs shall be
recovered from each customer class in proportion to the load of each
class that is served by alternate providers.
   (3) The Legislature finds that this subdivision is consistent with
the requirements of Chapter 4 of the Statutes of 2001, First
Extraordinary Session, and is therefore declaratory of existing law.

   (c) The commission shall establish a mechanism to allow electrical
corporation retail end use customers, upon their election, to
purchase renewable power.  To accomplish this, the commission may
require an electrical corporation to offer renewable power to its
retail end use customers. Renewable power service may not be priced
in a manner that results in shifting costs onto customers taking
service under the standard tariffs of the electrical corporation.
   (d) (1) Notwithstanding Section 80110 of the Water Code, a retail
end use customer purchasing power from an electrical corporation, may
elect to purchase renewable power from an alternate provider, upon
payment of the costs described in  subdivision (e) 
 subdivisions (e) and (f)  , and pursuant to the terms and
conditions as may necessarily be imposed by the commission,
consistent with this section.
   (2) This subdivision shall not become operative until the
commission develops a cost-recovery mechanism, consistent with
subdivision (b), that is applicable to customers that elected to
purchase electricity from an alternate provider between February 1,
2001, and the effective date of this act adding this section.
   (3) Ninety days prior to implementing this subdivision, the
commission shall submit a report certifying its satisfaction of
paragraph (2) to the Senate Energy, Utilities and Communications
Committee, or its successor, and the Assembly Committee on Utilities
and Commerce, or its successor.
   (e) A retail end use customer that elects to purchase electricity
from an alternate provider  shall reimburse the department
for   pursuant to this section shall pay  all of
the following:  
   (1) The department's unrecovered actual cost of power procurement,
including any financing and administrative costs, attributable to
that customer, as determined by the commission.  The department's
actual cost shall be calculated as the difference, if any, between
the department's total actual procurement costs attributable to a
customer and the revenues collected by the department from the
customer during the customer's term of service with the department.
The commission shall publish, and update as necessary, a formula for
calculation of unrecovered costs that are due pursuant to this
subdivision.  
   (1) A charge equivalent to the charges that would otherwise be
imposed on the customer by the commission to recover bond related
costs pursuant to any agreement between the commission and the
department pursuant to Section 80110 of the Water Code.  The charge
shall be payable until all obligations of the department pursuant to
Division 27 (commencing with Section 80000) of the Water Code are
fully paid or otherwise discharged.  The revenue from the charge are
the property of the department. 
   (2) Any additional costs of the department, equal to the share of
the department's estimated net unavoidable power purchase contract
costs attributable to the customer, as determined by the commission,
for the period commencing with the customer's purchases of
electricity from an alternate provider, through the expiration of all
then existing power purchase contracts entered into by the
department.
   (f) A retail end use customer  purchasing power from a
community choice aggregator   that elects to purchase
electricity from an alternate provider  pursuant to this section
shall reimburse the electrical corporation that previously served
the customer for all of the following:
   (1) The electrical corporation's unrecovered past
undercollections, including any financing costs, attributable to that
customer, that the commission lawfully determines may be recovered
in rates.
   (2) Any additional costs of the electrical corporation recoverable
in commission-approved rates, equal to the share of the electrical
corporation's estimated net unavoidable power purchase contract costs
attributable to the customer, as determined by the commission, for
the period commencing with the customer's purchases of electricity
from the community choice aggregator, through the expiration of all
then existing power purchase contracts entered into by the electrical
corporation.
   (g)  The revenue from any charge or cost imposed pursuant to
subdivision (e) is the property of the department.  The revenues from
any charge or cost imposed pursuant to subdivision (f) is the
property of the electrical corporation, as applicable and as
determined by the commission.  The commission shall establish
mechanisms, including agreements with, or orders with respect to,
electrical corporations, necessary to ensure that costs recovered
pursuant to this section shall be promptly remitted to the party
entitled to the payment.
   (2) A charge or cost imposed pursuant to this section shall be
nonbypassable.
   (h)  If a nonresidential retail end use customer previously
served by an alternate provider thereafter purchases electricity from
an electrical corporation, the  department and the
commission may impose a charge equivalent to any unavoidable costs
imposed on the electricity portfolio of the department or an
electrical corporation, attributable to the load of that customer, if
the charge is necessary to avoid imposing costs on other customers
of the electrical corporation, or on the state.  If a customer is
involuntarily returned to electricity service from an electrical
corporation by an alternate provider, any such charge shall be the
obligation of the alternate provider except in the case of a customer
returned due to default in payment or other contractual obligations
or because the customer's contract has expired.  As a condition of
its registration pursuant to Section 394 of the Public Utilities
Code, an alternate provider shall post a bond or demonstrate
insurance sufficient to cover such a charge.  
   (h)  
   (i)  Within 90 days of the effective date of the act adding
this section, the commission shall require each electrical
corporation retail end use customer to be notified of conditions for
purchasing power from an alternate provider pursuant to this section.

  SEC. 3.  Section 394 of the Public Utilities Code is amended to
read:
   394.  (a) As used in this section, "electric service provider"
means an entity that offers electrical service to customers within
the service territory of an electrical corporation, but does not
include an electrical corporation, as defined in Section 218, or a
public agency that offers electrical service to residential and small
commercial customers within its jurisdiction, or within the service
territory of a local publicly owned electric utility.  "Electric
service provider" includes the unregulated affiliates and
subsidiaries of an electrical corporation, as defined in Section 218.

   (b) Each electric service provider shall register with the
commission.  As a precondition to registration, the electric service
provider shall provide, under oath, declaration, or affidavit, all of
the following information to the commission:
   (1) Legal name and any other names under which the electric
service provider is doing business in California.
   (2) Current telephone number.
   (3) Current address.
   (4) Agent for service of process.
   (5) State and date of incorporation, if any.
   (6) Number for a customer contact representative, or other
personnel for receiving customer inquiries.
   (7) Brief description of the nature of the service being provided.

   (8) Disclosure of any civil, criminal, or regulatory sanctions or
penalties imposed within the 10 years immediately prior to
registration, against the company or any owner, partner, officer, or
director of the company pursuant to any state or federal consumer
protection law or regulation, and of any felony convictions of any
kind against the company or any owner, partner, officer, or director
of the company.  In addition, each electric service provider shall
furnish the commission with fingerprints for those owners, partners,
officers, and managers of the electric service provider specified by
any commission decision applicable to all electric service providers.
  The commission shall submit completed fingerprint cards to the
Department of Justice.  Those fingerprints shall be available for use
by the Department of Justice and the Department of Justice may
transmit the fingerprints to the Federal Bureau of Investigation for
a national criminal history record check. The commission may use
information obtained from a national criminal history record check
conducted pursuant to this section to determine an electric service
provider's eligibility for registration.
   (9) Proof of financial viability.  The commission shall develop
uniform standards for determining financial viability and shall
publish those standards for public comment no later than March 31,
1998.  In determining the financial viability of the electric service
provider, the commission shall take into account the number of
customers the potential registrant expects to serve, the number of
kilowatthours of electricity it expects to provide, and any other
appropriate criteria to ensure that customers have adequate recourse
in the event of fraud or nonperformance.
   (10) Proof of technical and operational ability.  The commission
shall develop uniform standards for determining technical and
operational capacity and shall publish those standards for public
comment no later than March 31, 1998.
   (c) Any registration filing approved by the commission prior to
the effective date of this section which does not comply in all
respects with the requirements of subdivision (a) of Section 394
shall nevertheless continue in force and effect so long as within 90
days of the effective date of this section the electric service
provider undertakes to supplement its registration filing to the
satisfaction of the commission.  Any registration that is not
supplemented by the required information within the time set forth in
this subdivision shall be suspended by the commission and shall not
be reinstated until the commission has found the registration to be
in full compliance with subdivision (a) of Section 394.
   (d) Any public agency offering aggregation services as provided
for in Section 366 solely to retail electric customers within its
jurisdiction that has registered with the commission prior to the
enactment of this section may voluntarily withdraw its registration
to the extent that it is exempted from registration under this
chapter.
   (e) Before reentering the market, electric service providers whose
registration has been revoked shall file a formal application with
the commission that satisfies the requirements set forth in Section
394.1 and demonstrates the fitness and ability of the electric
service provider to comply with all applicable rules of the
commission.
   (f) Registration with the commission is an exercise of the
licensing function of the commission, and does not constitute
regulation of the rates or terms and conditions of service offered by
electric service providers.  Nothing in this part authorizes the
commission to regulate the rates or terms and conditions of service
offered by electric service providers.
  SEC. 4.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B 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 XIII B of the California
Constitution.