BILL NUMBER: SB 1755 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 29, 2002
PASSED THE ASSEMBLY AUGUST 27, 2002
AMENDED IN ASSEMBLY AUGUST 25, 2002
AMENDED IN ASSEMBLY JUNE 30, 2002
AMENDED IN ASSEMBLY JUNE 24, 2002
AMENDED IN SENATE MAY 20, 2002
AMENDED IN SENATE APRIL 30, 2002
INTRODUCED BY Senator Soto
(Principal coauthor: Assembly Member Negrete McLeod)
(Coauthors: Senators Costa and Vincent)
(Coauthors: Assembly Members Calderon, Correa, Frommer, and
Oropeza)
FEBRUARY 21, 2002
An act to add Sections 31149.7 and 71663.5 to the Water Code,
relating to electric power.
LEGISLATIVE COUNSEL'S DIGEST
SB 1755, Soto. County water districts and municipal water
districts: electric power.
(1) The County Water District Law and the Municipal Water District
Law of 1911 grant to county water districts and municipal water
districts, respectively, prescribed powers relating to water and
other services.
This bill would authorize those districts to provide, generate,
and deliver electricity, and to construct, operate, and maintain
works, facilities, improvements, and property for that generation and
delivery. The bill would prohibit those districts from acquiring
property employed in the generation or delivery of electricity,
except by mutual agreement between the district and the property
owner. If a district elects to provide for its own generation of
electricity, the bill would require the Public Utilities Commission
to determine a cost-recovery mechanism to be imposed through a
nonbypassable charge, for reimbursement of the Department of Water
Resources and the electrical corporation for certain electricity
purchase costs, to prevent a shifting of costs to an electrical
corporation's bundled customers. Because a violation of an order or
decision of the commission is a crime, the bill would impose a
state-mandated local program.
(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.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 31149.7 is added to the Water Code, to read:
31149.7. (a) A district may provide, generate, and deliver
electric power, and may construct, operate, and maintain any and all
works, facilities, improvements, and property, or portion thereof,
necessary or convenient for that generation and delivery.
(b) The electric powerplant or plants and transmission lines
constructed pursuant to this section may be leased for operation.
The power generated shall be used by a district for its own purposes.
A district may sell surplus power to a public or private entity
that is engaged in the distribution or sale of electricity. For
purposes of this section, "for its own purposes" means a district
performing only functions in its capacity as a water district,
including, but not be limited to, any of the following:
(1) Pumping operations.
(2) Water treatment operations.
(3) Barrier intrusion operations.
(4) Desalination operations.
(c) Nothing in this section grants to a district the authority to
provide, sell, or deliver electric power at retail.
(d) A district may not acquire property employed in the generation
or delivery of electric power for public or private utility
purposes, except by mutual agreement between the district and the
owner of that property.
(e) (1) It is the intent of the Legislature, that each district
that has purchased electricity from an electrical corporation on or
after February 1, 2001, regardless of whether the district thereafter
generates its own electricity, bear a pro rata share of the
Department of Water Resources' electricity purchase costs, that 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
districts that generate their own electricity pursuant to this
section, to electrical corporation bundled 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 districts that generate their own electricity,
pursuant to this section.
(3) The Legislature finds and declares that the revisions of this
subdivision are consistent with the requirements of Chapter 4 of the
Statutes of 2001, First Extraordinary Session, and do not constitute
a change in, but are declaratory of existing law.
(f) A district that generates its own electricity pursuant to this
section shall be responsible for paying the following:
(1) A charge equivalent to the charges that would otherwise be
imposed on the district by the commission to recover bond related
costs pursuant to any agreement between the commission and the
Department of Water Resources pursuant to Section 80110 of the Water
Code, which charges shall be payable until all obligations of the
Department of Water Resources pursuant to Division 27 (commencing
with Section 80000) of the Water Code are fully paid or otherwise
discharged. All bond charges are the property of the Department of
Water Resources.
(2) If a district generates new offsite power, it shall be
responsible for the additional costs of the Department of Water
Resources, equal to the share of the Department of Water Resources'
estimated net unavoidable electricity purchase contract costs
attributable to the district as determined by the commission, for the
period commencing with the district's initial generation of its
offsite electricity, through the expiration of all then existing
electricity purchase contracts entered into by the Department of
Water Resources.
(g) A district generating its own electricity pursuant to this
section shall reimburse the electrical corporation that previously
served the district for all of the following:
(1) The electrical corporation's unrecovered past undercollections
for electricity purchases, including any financing costs,
attributable to that district, 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 electricity purchase contract
costs attributable to the district, as determined by the commission,
for the period commencing with the district's initial generation of
electricity pursuant to this section, through the expiration of all
then existing electricity purchase contracts entered into by the
electrical corporation.
(h) (1) Any charges imposed pursuant to subdivision (f) shall be
the property of the Department of Water Resources. Any charges
imposed pursuant to subdivision (g) shall be the property of the
particular electrical corporation. The commission shall establish
sufficient mechanisms, including agreements with, or orders with
respect to, electrical corporations as are necessary to ensure that
charges payable pursuant to this section shall be promptly remitted
to the party entitled to the payment.
(2) Charges imposed pursuant to this section shall be
nonbypassable.
(i) Prior to implementing this section, the commission shall
submit a report certifying its satisfaction of the provisions of this
section to the Senate Energy, Utilities and Communications
Committee, or its successor, and the Assembly Committee on Utilities
and Commerce, or its successor.
SEC. 2. Section 71663.5 is added to the Water Code, to read:
71663.5. (a) A district may provide, generate, and deliver
electric power, and may construct, operate, and maintain any and all
works, facilities, improvements, and property, or portion thereof,
necessary or convenient for that generation and delivery.
(b) The electric powerplant or plants and transmission lines
constructed pursuant to this section may be leased for operation.
The power generated shall be used by a district for its own purposes.
A district may sell surplus power to a public or private entity
that is engaged in the distribution or sale of electricity. For
purposes of this section, "for its own purposes" means a district
performing only functions in its capacity as a water district,
including, but not be limited to, any of the following:
(1) Pumping operations.
(2) Water treatment operations.
(3) Barrier intrusion operations.
(4) Desalination operations.
(c) Nothing in this section grants to a district the authority to
provide, sell, or deliver electric power at retail.
(d) A district may not acquire property employed in the generation
or delivery of electric power for public or private utility
purposes, except by mutual agreement between the district and the
owner of that property.
(e) (1) It is the intent of the Legislature, that each district
that has purchased electricity from an electrical corporation on or
after February 1, 2001, regardless of whether the district thereafter
generates its own electricity, bear a pro rata share of the
Department of Water Resources' electricity purchase costs, that 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
districts that generate their own electricity pursuant to this
section, to electrical corporation bundled 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 districts that generate their own electricity,
pursuant to this section.
(3) The Legislature finds and declares that the revisions of this
subdivision are consistent with the requirements of Chapter 4 of the
Statutes of 2001, First Extraordinary Session, and do not constitute
a change in, but are declaratory of existing law.
(f) A district that generates its own electricity pursuant to this
section shall be responsible for paying the following:
(1) A charge equivalent to the charges that would otherwise be
imposed on the district by the commission to recover bond related
costs pursuant to any agreement between the commission and the
Department of Water Resources pursuant to Section 80110 of the Water
Code, which charges shall be payable until all obligations of the
Department of Water Resources pursuant to Division 27 (commencing
with Section 80000) of the Water Code are fully paid or otherwise
discharged. All bond charges are the property of the Department of
Water Resources.
(2) If a district generates new offsite power, it shall be
responsible for the additional costs of the Department of Water
Resources, equal to the share of the Department of Water Resources'
estimated net unavoidable electricity purchase contract costs
attributable to the district as determined by the commission, for the
period commencing with the district's initial generation of its
offsite electricity, through the expiration of all then existing
electricity purchase contracts entered into by the Department of
Water Resources.
(g) A district generating its own electricity pursuant to this
section shall reimburse the electrical corporation that previously
served the district for all of the following:
(1) The electrical corporation's unrecovered past undercollections
for electricity purchases, including any financing costs,
attributable to that district, 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 electricity purchase contract
costs attributable to the district, as determined by the commission,
for the period commencing with the district's initial generation of
electricity pursuant to this section, through the expiration of all
then existing electricity purchase contracts entered into by the
electrical corporation.
(h) (1) Any charges imposed pursuant to subdivision (f) shall be
the property of the Department of Water Resources. Any charges
imposed pursuant to subdivision (g) shall be the property of the
particular electrical corporation. The commission shall establish
sufficient mechanisms, including agreements with, or orders with
respect to, electrical corporations as are necessary to ensure that
charges payable pursuant to this section shall be promptly remitted
to the party entitled to the payment.
(2) Charges imposed pursuant to this section shall be
nonbypassable.
(i) Prior to implementing this section, the commission shall
submit a report certifying its satisfaction of the provisions of this
section to the Senate Energy, Utilities and Communications
Committee, or its successor, and the Assembly Committee on Utilities
and Commerce, or its successor.
SEC. 3. 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.