BILL NUMBER: SB 1876 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 17, 2002
INTRODUCED BY Senator Bowen
FEBRUARY 22, 2002
An act to amend Section 352 of, to add Sections 345.1,
345.3, and 345.5 to, to repeal Section 346 of, to repeal Article 2
(commencing with Section 334), Article 4 (commencing with Section
355), and Article 5 An act to amend Sections 348, 352,
372, and 377 of, to amend and renumber Section 454.1 of, to add
Sections 334, 337, 341.5, 367.5, 761.7, 857, and 858 to, to repeal
Sections 330, 346, 367, 367.7, 368, 369, 370, 371, 373, 376, 378, and
397 of, to repeal Article 2 (commencing with Section 334), and
Article 5 (commencing with Section 359) of Chapter 2.3 of Part
1 of, and to repeal and add Section 350 of, the Public Utilities
Code, relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 1876, as amended, Bowen. Electricity Oversight Board:
Independent System Operator: Power Exchange
Electrical restructuring .
(1) The existing restructuring of the electrical services industry
within the Public Utilities Act provides for the establishment of an
Independent System Operator and a Power Exchange as separately
incorporated public benefit nonprofit corporations. An Electricity
Oversight Board (Oversight Board) is also established to oversee the
Independent System Operator and the Power Exchange in order to ensure
the success of electric industry restructuring and to ensure a
reliable supply of electricity in the transition to a new market
structure. Pursuant to an order of the Federal Energy
Regulatory Commission, the Power Exchange has ceased to function.
The Oversight Board is granted various powers including,
but not limited to, requiring the revision of the bylaws of the
Independent System Operator and the approval of the entry of the
Independent System Operator into a multistate entity or a regional
organization.
This bill would repeal those provisions establishing, and granting
powers to, the Oversight Board. The bill would require the
Independent System Operator to revise its own bylaws, and would
require the Legislature to approve
legislative approval prior to the entry of the Independent
System Operator into a multistate entity or a regional organization.
Because any violation of the Public Utilities Act is a crime, the
bill, by establishing new duties for the Independent System Operator,
would impose a state-mandated local program by changing the
definition of a crime. The bill would repeal certain
provisions relating to the Power Exchange.
(2) The existing restructuring requires the Public Utilities
Commission to establish an effective mechanism that ensures recovery,
by electrical corporations, of certain transition costs from their
customers, as determined by the commission, including costs for
generation related assets and obligations, that were being collected
in commission-approved rates on December 20, 1995, that may become
uneconomic as a result of a competitive generation market. The
restructuring requires each electrical corporation to propose a cost
recovery plan for the recovery of the uneconomic costs. The
restructuring authorizes electrical corporations to apply to the
commission for an order determining that the uneconomic costs not be
collected from a particular class of customer or category of
electricity consumption. The restructuring also authorizes
electrical corporations to recover utility generation related plant
and regulatory assets to the extent that they remain unrecovered
after December 31, 2001, due to the electrical corporations' ability
to recover costs related to the implementation of direct access, the
Power Exchange, and the Independent System Operator. The
restructuring also requires the commission to authorize new optional
rate schedules and tariffs, including new service offerings, that
accurately reflect the loads, locations, conditions of service, cost
of service, and market opportunities of customer classes and
subclasses.
This bill would delete these provisions.
(3) The existing restructuring requires the commission to ensure
that public utility generation assets remain dedicated to service for
the benefit of California ratepayers.
This bill would recast this provision to require the commission to
ensure that utility retained generation remain dedicated to service
for the benefit of California ratepayers and would defined "utility
retained generation" as utility owned generation, qualifying facility
contracts, and other bilateral contracts entered into prior to
January 17, 2001. The bill would exempt the transfer or sale of
generation plants that are located outside the state and are owned
exclusively by companies not based in the state from these
provisions. The bill would require the commission to establish rates
designed to provide the public utility electrical corporation with a
reasonable opportunity to recover the reasonable costs of producing
power and ancillary service from utility retained generation
dedicated to the service of bundled service customers, operating and
capital costs, as defined, and a reasonable return of and on the
electrical corporation's depreciated book cost of investments in
retained generation assets, as defined.
(4) The existing restructuring requires the commission to
authorize an electrical corporation that is also a gas corporation
and served fewer than four million customers as of December 20, 1995,
to implement a rate cap mechanism that reflects price changes in the
fuel market under certain circumstances.
This bill would delete these provisions.
(5) Under existing law, the Public Utilities Act, the commission
is authorized to supervise and regulate every public utility in the
state and to take all actions that are necessary and convenient in
the exercise of that power and jurisdiction. The act also
establishes the California Consumer Power and Conservation Financing
Authority to finance generating facilities and other energy related
projects and programs.
This bill would grant the commission jurisdiction over any
corporation or holding company, as defined, that owns, controls,
operates of manages a public utility, for the limited purpose of
monitoring and enforcing any promises, commitments, conditions, or
written representations made to the commission or to the ratepayers
of the public utility.
This bill would prohibit an electrical corporation from executing
a sale, assignment, transfer, or other disposition of assets with a
value in excess of $10,000,000 unless the California Consumer Power
and Conservation Financing Authority is granted a right of first
refusal to purchase the assets at a price equivalent to the proposed
transfer price. The bill would require any gain or loss on sale
associated with the sale, transfer, or disposition of assets be
allocated exclusively to the ratepayers serviced by the electrical
corporation. Since a violation of the act is a crime under existing
provisions of law, the bill would impose a state-mandated local
program by expanding the definition of a crime.
This bill would establish a Ratepayer Refund Account for each
electrical corporation and would require all refunds recovered by an
electrical corporation resulting from any litigation or agreement
relative to the charging of excessive costs for wholesale power by
electric power generators and suppliers be credited to the electrical
corporation's account and would provide that those funds be held in
trust on behalf of the ratepayer.
(6) This bill would declare that its provisions are severable.
(7) 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. Section 330 of the Public Utilities Code is
repealed.
330. In order to provide guidance in carrying out this chapter,
the Legislature finds and declares all of the following:
(a) It is the intent of the Legislature that a cumulative rate
reduction of at least 20 percent be achieved not later than April 1,
2002, for residential and small commercial customers, from the rates
in effect on June 10, 1996. In determining that the April 1, 2002,
rate reduction has been met, the commission shall exclude the costs
of the competitively procured electricity and the costs associated
with the rate reduction bonds, as defined in Section 840.
(b) The people, businesses, and institutions of California spend
nearly twenty-three billion dollars ($23,000,000,000) annually on
electricity, so that reductions in the price of electricity would
significantly benefit the economy of the state and its residents.
(c) The Public Utilities Commission has opened rulemaking and
investigation proceedings with regard to restructuring California's
electric power industry and reforming utility regulation.
(d) The commission has found, after an extensive public review
process, that the interests of ratepayers and the state as a whole
will be best served by moving from the regulatory framework existing
on January 1, 1997, in which retail electricity service is provided
principally by electrical corporations subject to an obligation to
provide ultimate consumers in exclusive service territories with
reliable electric service at regulated rates, to a framework under
which competition would be allowed in the supply of electric power
and customers would be allowed to have the right to choose their
supplier of electric power.
(e) Competition in the electric generation market will encourage
innovation, efficiency, and better service from all market
participants, and will permit the reduction of costly regulatory
oversight.
(f) The delivery of electricity over transmission and distribution
systems is currently regulated, and will continue to be regulated to
ensure system safety, reliability, environmental protection, and
fair access for all market participants.
(g) Reliable electric service is of utmost importance to the
safety, health, and welfare of the state's citizenry and economy. It
is the intent of the Legislature that electric industry
restructuring should enhance the reliability of the interconnected
regional transmission systems, and provide strong coordination and
enforceable protocols for all users of the power grid.
(h) It is important that sufficient supplies of electric
generation will be available to maintain the reliable service to the
citizens and businesses of the state.
(i) Reliable electric service depends on conscientious inspection
and maintenance of transmission and distribution systems. To
continue and enhance the reliability of the delivery of electricity,
the Independent System Operator and the commission, respectively,
should set inspection, maintenance, repair, and replacement
standards.
(j) It is the intent of the Legislature that California enter into
a compact with western region states. That compact should require
the publicly and investor-owned utilities located in those states,
that sell energy to California retail customers, to adhere to
enforceable standards and protocols to protect the reliability of the
interconnected regional transmission and distribution systems.
(k) In order to achieve meaningful wholesale and retail
competition in the electric generation market, it is essential to do
all of the following:
(1) Separate monopoly utility transmission functions from
competitive generation functions, through development of independent,
third-party control of transmission access and pricing.
(2) Permit all customers to choose from among competing suppliers
of electric power.
(3) Provide customers and suppliers with open, nondiscriminatory,
and comparable access to transmission and distribution services.
(l) The commission has properly concluded that:
(1) This competition will best be introduced by the creation of an
Independent System Operator and an independent Power Exchange.
(2) Generation of electricity should be open to competition.
(3) There is a need to ensure that no participant in these new
market institutions has the ability to exercise significant market
power so that operation of the new market institutions would be
distorted.
(4) These new market institutions should commence simultaneously
with the phase in of customer choice, and the public will be best
served if these institutions and the nonbypassable transition cost
recovery mechanism referred to in subdivisions (s) to (w), inclusive,
are in place simultaneously and no later than January 1, 1998.
(m) It is the intention of the Legislature that California's
publicly owned electric utilities and investor-owned electric
utilities should commit control of their transmission facilities to
the Independent System Operator. These utilities should jointly
advocate to the Federal Energy Regulatory Commission a pricing
methodology for the Independent System Operator that results in an
equitable return on capital investment in transmission facilities for
all Independent System Operator participants.
(n) Opportunities to acquire electric power in the competitive
market must be available to California consumers as soon as
practicable, but no later than January 1, 1998, so that all customers
can share in the benefits of competition.
(o) Under the existing regulatory framework, California's
electrical corporations were granted franchise rights to provide
electricity to consumers in their service territories.
(p) Consistent with federal and state policies, California
electrical corporations invested in power plants and entered into
contractual obligations in order to provide reliable electrical
service on a nondiscriminatory basis to all consumers within their
service territories who requested service.
(q) The cost of these investments and contractual obligations are
currently being recovered in electricity rates charged by electrical
corporations to their consumers.
(r) Transmission and distribution of electric power remain
essential services imbued with the public interest that are provided
over facilities owned and maintained by the state's electrical
corporations.
(s) It is proper to allow electrical corporations an opportunity
to continue to recover, over a reasonable transition period, those
costs and categories of costs for generation-related assets and
obligations, including costs associated with any subsequent
renegotiation or buyout of existing generation-related contracts,
that the commission, prior to December 20, 1995, had authorized for
collection in rates and that may not be recoverable in market prices
in a competitive generation market, and appropriate additions
incurred after December 20, 1995, for capital additions to generating
facilities existing as of December 20, 1995, that the commission
determines are reasonable and should be recovered, provided that the
costs are necessary to maintain those facilities through December 31,
2001. In determining the costs to be recovered, it is appropriate
to net the negative value of above market assets against the positive
value of below market assets.
(t) The transition to a competitive generation market should be
orderly, protect electric system reliability, provide the investors
in these electrical corporations with a fair opportunity to fully
recover the costs associated with commission approved
generation-related assets and obligations, and be completed as
expeditiously as possible.
(u) The transition to expanded customer choice, competitive
markets, and performance based ratemaking as described in Decision
95-12-063, as modified by Decision 96-01-009, of the Public Utilities
Commission, can produce hardships for employees who have dedicated
their working lives to utility employment. It is preferable that any
necessary reductions in the utility workforce directly caused by
electrical restructuring, be accomplished through offers of voluntary
severance, retraining, early retirement, outplacement, and related
benefits. Whether workforce reductions are voluntary or involuntary,
reasonable costs associated with these sorts of benefits should be
included in the competition transition charge.
(v) Charges associated with the transition should be collected
over a specific period of time on a nonbypassable basis and in a
manner that does not result in an increase in rates to customers of
electrical corporations. In order to insulate the policy of
nonbypassability against incursions, if exemptions from the
competition transition charge are granted, a firewall shall be
created that segregates recovery of the cost of exemptions as
follows:
(1) The cost of the competition transition charge exemptions
granted to members of the combined class of residential and small
commercial customers shall be recovered only from those customers.
(2) The cost of the competition transition charge exemptions
granted to members of the combined class of customers other than
residential and small commercial customers shall be recovered only
from those customers. The commission shall retain existing cost
allocation authority provided that the firewall and rate freeze
principles are not violated.
(w) It is the intent of the Legislature to require and enable
electrical corporations to monetize a portion of the competition
transition charge for residential and small commercial consumers so
that these customers will receive rate reductions of no less than 10
percent for 1998 continuing through 2002. Electrical corporations
shall, by June 1, 1997, or earlier, secure the means to finance the
competition transition charge by applying concurrently for financing
orders from the Public Utilities Commission and for rate reduction
bonds from the California Infrastructure and Economic Development
Bank.
(x) California's public utility electrical corporations provide
substantial benefits to all Californians, including employment and
support of the state's economy. Restructuring the electric services
industry pursuant to the act that added this chapter will continue
these benefits, and will also offer meaningful and immediate rate
reductions for residential and small commercial customers, and
facilitate competition in the supply of electric power.
SEC. 2. Article 2 (commencing with Section 334) of Chapter
2.3 of Part 1 of the Public Utilities Code is repealed.
SEC. 2. Section 345.1 is added to the Public Utilities Code, to
read:
345.1.
SEC. 3. Section 334 is added to the Public Utilities Code, to
read:
334. The Legislature finds and declares that, in order to
ensure the success of electric the electrical
industry restructuring in the transition to a new market
structure, it is important to ensure a reliable supply of
electricity. Reliable electric service is of paramount importance to
the safety, health, and comfort of the people of California.
Transmission connections among electric utilities allow them to share
generation resources and reduce the number of powerplants necessary
to maintain a reliable system. The connections among utilities also
create exposure to events that can cause widespread and extended
transmission and service outages that reach far beyond the
originating utility service area. California utilities and those in
the western United States voluntarily adhere to reliability standards
developed by the Western Systems Coordinating Council. The economic
cost of extended electricity outages, such as those that occurred in
California and throughout the Western Systems Coordinating Council
on July 2, 1996, and August 10, 1996, to California's residential,
commercial, agricultural, and industrial customers is significant.
The proposed restructuring of the electricity industry would transfer
responsibility for ensuring short- and long-term reliability away
from electric utilities and regulatory bodies to the Independent
System Operator and various market-based mechanisms. The Legislature
has an interest in ensuring that the change in the locus of
responsibility for reliability does not expose California citizens to
undue economic risk in connection with system reliability.
SEC. 3. Section 345.3 is added to the Public Utilities Code, to
read:
345.3.
SEC. 4. Section 337 is added to the Public Utilities Code, to
read:
337. (a) The Independent System Operator governing board
shall be composed of a five-member independent governing board of
directors appointed by the Governor and subject to confirmation by
the Senate. Any reference in this chapter or in any other provision
of law to the Independent System Operator governing board means the
independent governing board appointed under this subdivision.
(b) A member of the independent governing board appointed under
subdivision (a) may not be affiliated with any actual or potential
participant in any market administered by the Independent System
Operator.
(c) (1) All appointments shall be for three-year terms.
(2) There is no limit on the number of terms that may be served by
any member.
(d) The Independent System Operator shall revise its articles of
incorporation and bylaws in accordance with this section, and shall
make filings with the Federal Energy Regulatory Commission as it
determines to be necessary.
(e) For the purposes of the initial appointments to the
Independent System Operator governing board, as provided in
subdivision (a), the Governor shall appoint one member to a one-year
term, two members to a two-year term, and two members to a three-year
term.
SEC. 4. Section 345.5 is added to the Public Utilities Code, to
read:
345.5.
SEC. 5. Section 341.5 is added to the Public Utilities Code, to
read:
341.5. The Independent System Operator bylaws shall contain
provisions that identify matters within state jurisdiction. The
bylaws shall also contain provisions that state that the approval
function of California's bylaws with respect to the matters within
state jurisdiction do not preclude the Federal Energy Regulatory
Commission from taking any action necessary to address undue
discrimination or other violations of the Federal Power Act (16
U.S.C. Sec. 791a et seq.) or to exercise any other commission
responsibility under the Federal Power Act. In taking any action,
the Federal Energy Regulatory Commission shall give due respect to
California's jurisdictional interests in the functions of the
Independent System Operator, and shall attempt to accommodate state
interests to the extent those interests are not inconsistent with the
Federal Energy Regulatory Commission's statutory responsibilities.
The bylaws shall state that any future agreement regarding the
apportionment of the Independent System Operator board appointment
function among participating states associated with the expansion of
the Independent System Operator into a multistate entity shall be
filed with the Federal Energy Regulatory Commission pursuant to
Section 205 of the Federal Power Act (16 U.S.C. Sec. 824d).
SEC. 5.
SEC. 6. Section 346 of the Public Utilities Code is
repealed.
SEC. 6.
SEC. 7. Section 348 of the Public Utilities Code is amended to
read:
348. The Independent System Operator shall adopt inspection,
maintenance, repair, and replacement standards for the transmission
facilities under its control no later than September 30, 1997. The
standards, which shall be performance or prescriptive standards, or
both, as appropriate, for each substantial type of transmission
equipment or facility, shall provide for high quality, safe, and
reliable service. In adopting its standards, the Independent System
Operator shall consider: cost, local geography and weather,
applicable codes, national electric industry practices, sound
engineering judgment, and experience. The Independent System
Operator shall also adopt standards for reliability, and safety
during periods of emergency and disaster. The Independent
System Operator shall report to the Oversight Board, at such times as
the Oversight Board may specify, on the development and
implementation of the standards in relation to facilities under the
operational control of the Independent System Operator.
The Independent System Operator shall require each transmission
facility owner or operator to report annually on its compliance with
the standards. That report shall be made available to the public.
SEC. 8. Section 350 of the Public Utilities Code is
repealed.
SEC. 7.
SEC. 9. Section 350 is added to the Public Utilities Code,
to read:
350. (a) It is the intent of the Legislature to provide for the
development of regional electricity transmission markets in the
western states and to improve the access of consumers served by the
Independent System Operator to those markets.
(b) The preferred means by which the voluntary evolution described
in subdivision (a) should occur is through the adoption of a
regional compact or other comparable agreement among cooperating
party states, the retail customers of which states would reside
within the geographic territories served by the Independent System
Operator.
(c) The agreement described in subdivision (b) should provide for
all of the following:
(1) An equitable process for the appointment or confirmation by
party states of members of the governing boards of the Independent
System Operator.
(2) A respecification of the size, structure, representation,
eligible membership, nominating procedures, and member terms of
service of the governing boards of the Independent System Operator.
(3) Mechanisms by which each party state, jointly or separately,
can oversee effectively the actions of the Independent System
Operator as those actions relate to ensuring electricity system
reliability within the party state and to matters that affect
electricity sales to the retail customers of the party state or
otherwise affect the general welfare of the electricity consumers and
the general public of the party state.
(4) The adherence by publicly owned and investor-owned utilities
located in party states to enforceable standards and protocols to
protect the reliability of the interconnected regional transmission
and distribution systems.
SEC. 8.
SEC. 10. Section 352 of the Public Utilities Code is amended
to read:
352. The Independent System Operator may not enter into a
multistate entity or a regional organization as authorized in Section
350 unless that entry is approved by the Legislature.
SEC. 9. Article 4 (commencing with Section 355) of Chapter 2.3 of
Part 1 of the Public Utilities Code is repealed.
SEC. 10.
SEC. 11. Article 5 (commencing with Section 359), of Chapter
2.3 of Part 1 of the Public Utilities Code is repealed.
SEC. 11.
SEC. 12. Section 367 of the Public Utilities Code is repealed.
367. The commission shall identify and determine those costs and
categories of costs for generation-related assets and obligations,
consisting of generation facilities, generation-related regulatory
assets, nuclear settlements, and power purchase contracts, including,
but not limited to, restructurings, renegotiations or terminations
thereof approved by the commission, that were being collected in
commission-approved rates on December 20, 1995, and that may become
uneconomic as a result of a competitive generation market, in that
these costs may not be recoverable in market prices in a competitive
market, and appropriate costs incurred after December 20, 1995, for
capital additions to generating facilities existing as of December
20, 1995, that the commission determines are reasonable and should be
recovered, provided that these additions are necessary to maintain
the facilities through December 31, 2001. These uneconomic costs
shall include transition costs as defined in subdivision (f) of
Section 840, and shall be recovered from all customers or in the case
of fixed transition amounts, from the customers specified in
subdivision (a) of Section 841, on a nonbypassable basis and shall:
(a) Be amortized over a reasonable time period, including
collection on an accelerated basis, consistent with not increasing
rates for any rate schedule, contract, or tariff option above the
levels in effect on June 10, 1996; provided that, the recovery shall
not extend beyond December 31, 2001, except as follows:
(1) Costs associated with employee-related transition costs as set
forth in subdivision (b) of Section 375 shall continue until fully
collected; provided, however, that the cost collection shall not
extend beyond December 31, 2006.
(2) Power purchase contract obligations shall continue for the
duration of the contract. Costs associated with any buy-out,
buy-down, or renegotiation of the contracts shall continue to be
collected for the duration of any agreement governing the buy-out,
buy-down, or renegotiated contract; provided, however, no power
purchase contract shall be extended as a result of the buy-out,
buy-down, or renegotiation.
(3) Costs associated with contracts approved by the commission to
settle issues associated with the Biennial Resource Plan Update may
be collected through March 31, 2002; provided that only 80 percent of
the balance of the costs remaining after December 31, 2001, shall be
eligible for recovery.
(4) Nuclear incremental cost incentive plans for the San Onofre
nuclear generating station shall continue for the full term as
authorized by the commission in Decision 96-01-011 and Decision
96-04-059; provided that the recovery shall not extend beyond
December 31, 2003.
(5) Costs associated with the exemptions provided in subdivision
(a) of Section 374 may be collected through March 31, 2002, provided
that only fifty million dollars ($50,000,000) of the balance of the
costs remaining after December 31, 2001, shall be eligible for
recovery.
(6) Fixed transition amounts, as defined in subdivision (d) of
Section 840, may be recovered from the customers specified in
subdivision (a) of Section 841 until all rate reduction bonds
associated with the fixed transition amounts have been paid in full
by the financing entity.
(b) Be based on a calculation mechanism that nets the negative
value of all above market utility-owned generation-related assets
against the positive value of all below market utility-owned
generation related assets. For those assets subject to valuation,
the valuations used for the calculation of the uneconomic portion of
the net book value shall be determined not later than December 31,
2001, and shall be based on appraisal, sale, or other divestiture.
The commission's determination of the costs eligible for recovery and
of the valuation of those assets at the time the assets are exposed
to market risk or retired, in a proceeding under Section 455.5, 851,
or otherwise, shall be final, and notwithstanding Section 1708 or any
other provision of law, may not be rescinded, altered or amended.
(c) Be limited in the case of utility-owned fossil generation to
the uneconomic portion of the net book value of the fossil capital
investment existing as of January 1, 1998, and appropriate costs
incurred after December 20, 1995, for capital additions to generating
facilities existing as of December 20, 1995, that the commission
determines are reasonable and should be recovered, provided that the
additions are necessary to maintain the facilities through December
31, 2001. All "going forward costs" of fossil plant operation,
including operation and maintenance, administrative and general, fuel
and fuel transportation costs, shall be recovered solely from
independent Power Exchange revenues or from contracts with the
Independent System Operator, provided that for the purposes of this
chapter, the following costs may be recoverable pursuant to this
section:
(1) Commission-approved operating costs for particular
utility-owned fossil powerplants or units, at particular times when
reactive power/voltage support is not yet procurable at market-based
rates in locations where it
is deemed needed for the reactive power/voltage support by the
Independent System Operator, provided that the units are otherwise
authorized to recover market-based rates and provided further that
for an electrical corporation that is also a gas corporation and that
serves at least four million customers as of December 20, 1995, the
commission shall allow the electrical corporation to retain any
earnings from operations of the reactive power/voltage support plants
or units and shall not require the utility to apply any portions to
offset recovery of transition costs. Cost recovery under the cost
recovery mechanism shall end on December 31, 2001.
(2) An electrical corporation that, as of December 20, 1995,
served at least four million customers, and that was also a gas
corporation that served less than four thousand customers, may
recover, pursuant to this section, 100 percent of the uneconomic
portion of the fixed costs paid under fuel and fuel transportation
contracts that were executed prior to December 20, 1995, and were
subsequently determined to be reasonable by the commission, or 100
percent of the buy-down or buy-out costs associated with the
contracts to the extent the costs are determined to be reasonable by
the commission.
(d) Be adjusted throughout the period through March 31, 2002, to
track accrual and recovery of costs provided for in this subdivision.
Recovery of costs prior to December 31, 2001, shall include a
return as provided for in Decision 95-12-063, as modified by Decision
96-01-009, together with associated taxes.
(e) (1) Be allocated among the various classes of customers, rate
schedules, and tariff options to ensure that costs are recovered from
these classes, rate schedules, contract rates, and tariff options,
including self-generation deferral, interruptible, and standby rate
options in substantially the same proportion as similar costs are
recovered as of June 10, 1996, through the regulated retail rates of
the relevant electric utility, provided that there shall be a
firewall segregating the recovery of the costs of competition
transition charge exemptions such that the costs of competition
transition charge exemptions granted to members of the combined class
of residential and small commercial customers shall be recovered
only from these customers, and the costs of competition transition
charge exemptions granted to members of the combined class of
customers, other than residential and small commercial customers,
shall be recovered only from these customers.
(2) Individual customers shall not experience rate increases as a
result of the allocation of transition costs. However, customers who
elect to purchase energy from suppliers other than the Power
Exchange through a direct transaction, may incur increases in the
total price they pay for electricity to the extent the price for the
energy exceeds the Power Exchange price.
(3) The commission shall retain existing cost allocation
authority, provided the firewall and rate freeze principles are not
violated.
SEC. 13. Section 367.5 is added to the Public Utilities Code, to
read:
367.5. (a) The commission shall establish a Ratepayer Refund
Account for each electrical corporation. All refunds recovered by an
electrical corporation, either directly or indirectly by way of
offset against amounts otherwise owed by the electrical corporation,
resulting from any litigation or agreement relative to the charging
of excessive costs for wholesale power by electric power generators
and suppliers, shall be credited to the electrical corporation's
account.
(b) All funds held by an electrical corporation that are required
by this section to be credited to the Ratepayer Refund Account of the
corporation are property of the ratepayers and shall be held in
trust on their behalf.
SEC. 14. Section 367.7 of the Public Utilities Code is repealed.
367.7. (a) It is the intent of the Legislature in enacting this
section to ensure that individual customers do not experience rate
increases as a result of the allocation of transition costs, in
accordance with paragraph (2) of subdivision (e) of Section 367.
(b) The commission shall implement a methodology whereby the Power
Exchange energy credit for a customer with a meter installed on or
after June 30, 2000, that is capable of recording hourly data is
calculated based on the actual hourly data for that customer. The
Power Exchange energy credit for a customer with a meter installed
before June 30, 2000, that is capable of recording hourly data shall,
at the election of the customer, on a one-time basis before June 30,
2000, be calculated based on either (1) the actual hourly data for
that customer or (2) the average load profile for that customer
class. If the customer fails to make an election, that customer's
Power Exchange energy credit shall continue to be based on the
average load profile for that customer class.
(c) Additional incremental billing costs incurred as a result of
the methodology implemented by the commission pursuant to
subdivision (b) may be recoverable through rates for that customer
class, if the commission finds that the costs are reasonable.
(d) The methodology implemented by the commission pursuant to
subdivisions (b) and (c) shall not result in any shifts in cost
between customer classes and shall be consistent with the firewall
provision set forth in subdivision (e) of Section 367.
SEC. 15. Section 368 of the Public Utilities Code is repealed.
368. Each electrical corporation shall propose a cost recovery
plan to the commission for the recovery of the uneconomic costs of an
electrical corporation's generation-related assets and obligations
identified in Section 367. The commission shall authorize the
electrical corporation to recover the costs pursuant to the plan if
the plan meets the following criteria:
(a) The cost recovery plan shall set rates for each customer
class, rate schedule, contract, or tariff option, at levels equal to
the level as shown on electric rate schedules as of June 10, 1996,
provided that rates for residential and small commercial customers
shall be reduced so that these customers shall receive rate
reductions of no less than 10 percent for 1998 continuing through
2002. These rate levels for each customer class, rate schedule,
contract, or tariff option shall remain in effect until the earlier
of March 31, 2002, or the date on which the commission-authorized
costs for utility generation-related assets and obligations have been
fully recovered. The electrical corporation shall be at risk for
those costs not recovered during that time period. Each utility
shall amortize its total uneconomic costs, to the extent possible,
such that for each year during the transition period its recorded
rate of return on the remaining uneconomic assets does not exceed its
authorized rate of return for those assets. For purposes of
determining the extent to which the costs have been recovered, any
over-collections recorded in Energy Costs Adjustment Clause and
Electric Revenue Adjustment Mechanism balancing accounts, as of
December 31, 1996, shall be credited to the recovery of the costs.
(b) The cost recovery plan shall provide for identification and
separation of individual rate components such as charges for energy,
transmission, distribution, public benefit programs, and recovery of
uneconomic costs. The separation of rate components required by this
subdivision shall be used to ensure that customers of the electrical
corporation who become eligible to purchase electricity from
suppliers other than the electrical corporation pay the same
unbundled component charges, other than energy, that a bundled
service customer pays. No cost shifting among customer classes, rate
schedules, contract, or tariff options shall result from the
separation required by this subdivision. Nothing in this provision
is intended to affect the rates, terms, and conditions or to limit
the use of any Federal Energy Regulatory Commission-approved contract
entered into by the electrical corporation prior to the effective
date of this provision.
(c) In consideration of the risk that the uneconomic costs
identified in Section 367 may not be recoverable within the period
identified in subdivision (a) of Section 367, an electrical
corporation that, as of December 20, 1995, served more than four
million customers, and was also a gas corporation that served less
than four thousand customers, shall have the flexibility to employ
risk management tools, such as forward hedges, to manage the market
price volatility associated with unexpected fluctuations in natural
gas prices, and the out-of-pocket costs of acquiring the risk
management tools shall be considered reasonable and collectible
within the transition freeze period. This subdivision applies only
to the transaction costs associated with the risk management tools
and shall not include any losses from changes in market prices.
(d) In order to ensure implementation of the cost recovery plan,
the limitation on the maximum amount of cost recovery for nuclear
facilities that may be collected in any year adopted by the
commission in Decision 96-01-011 and Decision 96-04-059 shall be
eliminated to allow the maximum opportunity to collect the nuclear
costs within the transition cap period.
(e) As to an electrical corporation that is also a gas corporation
serving more than four million California customers, so long as any
cost recovery plan adopted in accordance with this section satisfies
subdivision (a), it shall also provide for annual increases in base
revenues, effective January 1, 1997, and January 1, 1998, equal to
the inflation rate for the prior year plus two percentage points, as
measured by the consumer price index. The increase shall do both of
the following:
(1) Remain in effect pending the next general rate case review,
which shall be filed not later than December 31, 1997, for rates that
would become effective in January 1999. For purposes of any
commission-approved performance-based ratemaking mechanism or general
rate case review, the increases in base revenue authorized by this
subdivision shall create no presumption that the level of base
revenue reflecting those increases constitute the appropriate
starting point for subsequent revenues.
(2) Be used by the utility for the purposes of enhancing its
transmission and distribution system safety and reliability,
including, but not limited to, vegetation management and emergency
response. To the extent the revenues are not expended for system
safety and reliability, they shall be credited against subsequent
safety and reliability base revenue requirements. Any excess
revenues carried over shall not be used to pay any monetary sanctions
imposed by the commission.
(f) The cost recovery plan shall provide the electrical
corporation with the flexibility to manage the renegotiation,
buy-out, or buy-down of the electrical corporation's power purchase
obligations, consistent with review by the commission to assure that
the terms provide net benefits to ratepayers and are otherwise
reasonable in protecting the interests of both ratepayers and
shareholders.
(g) An example of a plan authorized by this section is the
document entitled "Restructuring Rate Settlement" transmitted to the
commission by Pacific Gas and Electric Company on June 12, 1996.
SEC. 16. Section 369 of the Public Utilities Code is repealed.
369. The commission shall establish an effective mechanism that
ensures recovery of transition costs referred to in Sections 367,
368, 375, and 376, and subject to the conditions in Sections 371 to
374, inclusive, from all existing and future consumers in the service
territory in which the utility provided electricity services as of
December 20, 1995; provided, that the costs shall not be recoverable
for new customer load or incremental load of an existing customer
where the load is being met through a direct transaction and the
transaction does not otherwise require the use of transmission or
distribution facilities owned by the utility. However, the
obligation to pay the competition transition charges cannot be
avoided by the formation of a local publicly owned electrical
corporation on or after December 20, 1995, or by annexation of any
portion of an electrical corporation's service area by an existing
local publicly owned electric utility.
This section shall not apply to service taken under tariffs,
contracts, or rate schedules that are on file, accepted, or approved
by the Federal Energy Regulatory Commission, unless otherwise
authorized by the Federal Energy Regulatory Commission.
SEC. 17. Section 370 of the Public Utilities Code is repealed.
370. The commission shall require, as a prerequisite for any
consumer in California to engage in direct transactions permitted in
Section 365, that beginning with the commencement of these direct
transactions, the consumer shall have an obligation to pay the costs
provided in Sections 367, 368, 375, and 376, and subject to the
conditions in Sections 371 to 374, inclusive, directly to the
electrical corporation providing electricity service in the area in
which the consumer is located. This obligation shall be set forth in
the applicable rate schedule, contract, or tariff option under which
the customer is receiving service from the electrical corporation.
To the extent the consumer does not use the electrical corporation's
facilities for direct transaction, the obligation to pay shall be
confirmed in writing, and the customer shall be advised by any
electricity marketer engaged in the transaction of the requirement
that the customer execute a confirmation. The requirement for
marketers to inform customers of the written requirement shall cease
on January 1, 2002.
SEC. 18. Section 371 of the Public Utilities Code is repealed.
371. (a) Except as provided in Sections 372 and 374, the
uneconomic costs provided in Sections 367, 368, 375, and 376 shall be
applied to each customer based on the amount of electricity
purchased by the customer from an electrical corporation or alternate
supplier of electricity, subject to changes in usage occurring in
the normal course of business.
(b) Changes in usage occurring in the normal course of business
are those resulting from changes in business cycles, termination of
operations, departure from the utility service territory, weather,
reduced production, modifications to production equipment or
operations, changes in production or manufacturing processes, fuel
switching, including installation of fuel cells pending a contrary
determination by the California Energy Resources Conservation and
Development Commission in Section 383, enhancement or increased
efficiency of equipment or performance of existing self-cogeneration
equipment, replacement of existing cogeneration equipment with new
power generation equipment of similar size as described in paragraph
(1) of subdivision (a) of Section 372, installation of demand-side
management equipment or facilities, energy conservation efforts, or
other similar factors.
(c) Nothing in this section shall be interpreted to exempt or
alter the obligation of a customer to comply with Chapter 5
(commencing with Section 119075) of Part 15 of Division 104 of the
Health and Safety Code. Nothing in this section shall be construed
as a limitation on the ability of residential customers to alter
their pattern of electricity purchases by activities on the customer
side of the meter.
SEC. 19. Section 372 of the Public Utilities Code is amended to
read:
372. (a) It is the policy of the state to encourage and support
the development of cogeneration as an efficient, environmentally
beneficial, competitive energy resource that will enhance the
reliability of local generation supply, and promote local business
growth. Subject to the specific conditions provided in this section,
the commission shall determine the applicability to customers of
uneconomic costs as specified in Sections 367, 368, 375, and
376 Section 375 . Consistent with this state
policy, the commission shall provide that these costs shall not apply
to any of the following:
(1) To load served onsite or under an over the fence arrangement
by a nonmobile self-cogeneration or cogeneration facility that was
operational on or before December 20, 1995, or by increases in the
capacity of such a the facility to the
extent that such the increased capacity
was constructed by an entity holding an ownership interest in or
operating the facility and does not exceed 120 percent of the
installed capacity as of December 20, 1995, provided that prior to
June 30, 2000, the costs shall apply to over the fence arrangements
entered into after December 20, 1995, between unaffiliated parties.
For the purposes of this subdivision, "affiliated" means any person
or entity that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common on
control with another specified entity. "Control" means either of the
following:
(A) The possession, directly or indirectly, of the power to direct
or to cause the direction of the management or policies of a person
or entity, whether through an ownership, beneficial, contractual, or
equitable interest.
(B) Direct or indirect ownership of at least 25 percent of an
entity, whether through an ownership, beneficial or equitable
interest.
(2) To load served by onsite or under an over the fence
arrangement by a nonmobile self-cogeneration or cogeneration facility
for which the customer was committed to construction as of December
20, 1995, provided that the facility was substantially operational on
or before January 1, 1998, or by increases in the capacity of
such a the facility to the extent that
the increased capacity was constructed by an entity holding an
ownership interest in or operating the facility and does not exceed
120 percent of the installed capacity as of January 1, 1998, provided
that prior to June 30, 2000, the costs shall apply to over the fence
arrangements entered into after December 20, 1995, between
unaffiliated parties.
(3) To load served by existing, new, or portable emergency
generation equipment used to serve the customer's load requirements
during periods when utility service is unavailable, provided
such the emergency generation is not operated
in parallel with the integrated electric grid, except on a momentary
parallel basis.
(4) After June 30, 2000, to any load served onsite or under an
over the fence arrangement by any nonmobile self-cogeneration or
cogeneration facility.
(b) Further, consistent with state policy, with respect to
self-cogeneration or cogeneration deferral agreements, the commission
shall do the following:
(1) Provide that a utility shall execute a final self-cogeneration
or cogeneration deferral agreement with any customer that, on or
before December 20, 1995, had executed a letter of intent (or similar
documentation) to enter into the agreement with the utility,
provided that the final agreement shall be consistent with the terms
and conditions set forth in the letter of intent and the commission
shall review and approve the final agreement.
(2) Provide that a customer that holds a self-cogeneration or
cogeneration deferral agreement that was in place on or before
December 20, 1995, or that was executed pursuant to paragraph (1) in
the event the agreement expires, or is terminated, may do any of the
following:
(A) Continue through December 31, 2001, to receive utility service
at the rate and under terms and conditions applicable to the
customer under the deferral agreement that, as executed, includes an
allocation of uneconomic costs consistent with subdivision
(e) of Section 367 .
(B) Engage in a direct transaction for the purchase of electricity
and pay uneconomic costs consistent with Sections 367, 368,
375, and 376 Section 375 .
(C) Construct a self-cogeneration or cogeneration facility of
approximately the same capacity as the facility previously deferred
, provided that the costs provided in Sections 367, 368,
375, and 376 shall apply consistent with subdivision (e) of Section
367, unless otherwise authorized by the commission pursuant
to subdivision (c).
(3) Subject to the fire wall described in subdivision (e)
of Section 367 provide Provide that the
ratemaking treatment for self-cogeneration or cogeneration deferral
agreements executed prior to December 20, 1995, or executed pursuant
to paragraph (1) shall be consistent with the ratemaking treatment
for the contracts approved before January 1995.
(c) The commission shall authorize, within 60 days of the receipt
of a joint application from the serving utility and one or more
interested parties, applicability conditions as follows:
(1) The costs identified in Sections 367, 368, 375, and
376 Section 375 shall not, prior to June 30,
2000, apply to load served onsite by a nonmobile self-cogeneration or
cogeneration facility that became operational on or after December
20, 1995.
(2) The costs identified in Sections 367, 368, 375, and
376 Section 375 shall not, prior to June 30,
2000, apply to any load served under over the fence arrangements
entered into after December 20, 1995, between unaffiliated entities.
(d) For the purposes of this subdivision, all onsite or over the
fence arrangements shall be consistent with Section 218 as it existed
on December 20, 1995.
(e) To facilitate the development of new microcogeneration
applications, electrical corporations may apply to the commission for
a financing order to finance the transition costs to be recovered
from customers employing the applications.
(f) To encourage the continued development, installation, and
interconnection of clean and efficient self-generation and
cogeneration resources, to improve system reliability for consumers
by retaining existing generation and encouraging new generation to
connect to the electric grid, and to increase self-sufficiency of
consumers of electricity through the deployment of self-generation
and cogeneration, both of the following shall occur:
(1) The commission and the Electricity Oversight Board
shall determine if any policy or action undertaken by the
Independent System Operator, directly or indirectly, unreasonably
discourages the connection of existing self-generation or
cogeneration or new self-generation or cogeneration to the grid.
(2) If the commission and the Electricity Oversight Board
find finds that any policy or action of the
Independent System Operator unreasonably discourages, the connection
of existing self-generationor cogeneration or new self-generation or
cogeneration to the grid, the commission and the Electricity
Oversight Board shall undertake all necessary efforts to
revise, mitigate, or eliminate that policy or action of the
Independent System Operator.
SEC. 20. Section 373 of the Public Utilities Code is
repealed.
373. (a) Electrical corporations may apply to the commission for
an order determining that the costs identified in Sections 367, 368,
375, and 376 not be collected from a particular class of customer or
category of electricity consumption.
(b) Subject to the fire wall specified in subdivision (e) of
Section 367, the provisions of this section and Sections 372 and 374
shall apply in the event the commission authorizes a nonbypassable
charge prior to the implementation of an Independent System Operator
and Power Exchange referred to in subdivision (a) of Section 365.
SEC. 21. Section 376 of the Public Utilities Code is repealed.
376. To the extent that the costs of programs to accommodate
implementation of direct access, the Power Exchange, and the
Independent System Operator, that have been funded by an electrical
corporation and have been found by the commission or the Federal
Energy Regulatory Commission to be recoverable from the utility's
customers, reduce an electrical corporation's opportunity
to recover its utility
generation-related plant and regulatory assets by the end of the year
2001, the electrical corporation may recover unrecovered utility
generation-related plant and regulatory assets after December 31,
2001, in an amount equal to the utility's cost of commission-approved
or Federal Energy Regulatory Commission approved
restructuring-related implementation programs. An electrical
corporation's ability to collect the amounts from retail customers
after the year 2001 shall be reduced to the extent the Independent
System Operator or the Power Exchange reimburses the electrical
corporation for the costs of any of these programs.
SEC. 22. Section 377 of the Public Utilities Code is amended to
read:
377. (a) The commission shall continue to regulate the
facilities for the generation of electricity owned by any public
utility prior to January 1, 1997, that are subject to commission
regulation until the owner of those facilities has applied to the
commission to dispose of those facilities and has been authorized by
the commission under Section 851 to undertake that disposal.
Notwithstanding any other provision of law, no facility for the
generation of electricity owned by a public utility may be disposed
of prior to January 1, 2006. The commission shall ensure that
public utility generation assets remain dedicated to service
for the benefit of California ratepayers utility
retained generation remain dedicated for the benefit of the public
utility's bundled service customers. Nothing in this section may be
construed to compel any electrical corporation to renew or
renegotiate an expiring contract. For purposes of this section,
"utility retained generation" means utility owned generation,
qualifying facility contracts, and other bilateral contracts entered
into prior to January 17, 2001. This section does not apply to the
transfer or sale of generation plants that are located outside the
state and are owned exclusively by companies not based in the state.
(b) The commission shall establish rates designed to provide the
public utility electrical corporation with a reasonable opportunity
to recover the reasonable costs of producing power and ancillary
services from utility retained generation assets dedicated to the
service of bundled service customers. The rates shall provide a
reasonable opportunity for the public utility electrical corporation
to recover reasonable operating costs and capital costs, including a
reasonable return of and on the public utility electrical corporation'
s depreciated book cost of investments in utility retained generation
assets.
(c) "Operating costs" include all customary categories of
operating costs, consistent with historical regulatory practices,
including any costs charged by the Independent System Operator to the
electrical corporation as the generator or scheduling coordinator of
the power.
(d) "The electrical corporation's depreciated book cost of
investment in utility retained generation assets" shall initially be
set at the amounts recorded on its books of account as of December
31, 2001, as verified and approved by the commission. The cost of
major capital additions and improvements to a public utility's
retained generation assets shall be reviewed and approved by the
commission, in the manner set forth in Sections 1005 and 1005.5, in
advance of the public utility being allowed to invest in major
capital additions or improvements.
(e) The commission shall continue to determine the appropriate
means for recovery of decommissioning costs.
SEC. 23. Section 378 of the Public Utilities Code is repealed.
378. The commission shall authorize new optional rate schedules
and tariffs, including new service offerings, that accurately reflect
the loads, locations, conditions of service, cost of service, and
market opportunities of customer classes and subclasses.
SEC. 24. Section 397 of the Public Utilities Code is repealed.
397. (a) Notwithstanding subdivision (a) of Section 368, to
ensure the continued safe and reliable provision of electric service
during the transition to competition, and to limit the effect of fuel
price volatility in electric rates paid by California consumers, it
is in the public interest to allow an electrical corporation which is
also a gas corporation and served fewer than four million customers
as of December 20, 1995, to file with the commission a rate cap
mechanism which shall include a Fuel Price Index Mechanism requiring
limited adjustments in an electrical corporation's authorized System
Average Rate in effect on June 10, 1996, to reflect price changes in
the fuel market. The commission shall authorize an electrical
corporation to implement a rate cap mechanism which includes a Fuel
Price Index Mechanism provided the following criteria are met:
(1) The Fuel Price Index Mechanism shall be based on the Southern
California Border Index price for natural gas as published
periodically in Natural Gas Intelligence Magazine. The "Starting
Point" of the Fuel Price Index Mechanism shall be defined as the
California Border Index price as published in Natural Gas
Intelligence for January 1, 1996.
(2) The Fuel Price Index Mechanism shall include a "deadband"
defined as a price range for natural gas that is any price up to 10
percent higher, or lower, than the Starting Point.
(3) The electrical corporation shall not file for a change in its
authorized System Average Rate unless the California Border Index
price, on a 12-month, rolling average basis, is outside the deadband.
If the published California Border Index is outside of the
deadband, the electrical corporation shall increase, or decrease, its
authorized System Average Rate by an amount equal to the product of
25 percent multiplied by the percentage by which the 12-month rolling
average natural gas price is higher, or lower, than the deadband.
(4) In no case shall an electrical corporation's authorized System
Average Rate under the Fuel Price Index Mechanism exceed the average
of the authorized system average rates for the two largest
electrical corporations as of June 10, 1996.
(5) This section shall become inoperative on December 31, 2001.
SEC. 25. Section 454.1 of the Public Utilities Code, as added by
Section 6 of Chapter 1040 of the Statutes of 2000, is amended and
renumbered to read:
454.1.
454.5. (a) Reasonable expenditures by transmission owners
that are electrical corporations to plan, design, and engineer
reconfiguration, replacement, or expansion of transmission facilities
are in the public interest and are deemed prudent if made for the
purpose of facilitating competition in electric generation markets,
ensuring open access and comparable service, or maintaining or
enhancing reliability, whether or not these expenditures are for
transmission facilities that become operational.
(b) The commission and the Electricity Oversight Board
shall jointly shall facilitate the efforts of
the state's transmission owning electrical corporations to obtain
authorization from the Federal Energy Regulatory Commission to
recover reasonable expenditures made for the purposes stated in
subdivision (a).
(c) Nothing in this section alters or affects the recovery of the
reasonable costs of other electric facilities in rates pursuant to
the commission's existing ratemaking authority under this code or
pursuant to the Federal Power Act (41 Stat. 1063; 16 U.S.C. Secs.
791a, et seq.). The commission may periodically review and adjust
depreciation schedules and rates authorized for an electric plant
that is under the jurisdiction of the commission and owned by
electrical corporations and periodically review and adjust
depreciation schedules and rates authorized for a gas plant that is
under the jurisdiction of the commission and owned by gas
corporations, consistent with this code.
SEC. 26. Section 761.7 is added to the Public Utilities Code, to
read:
761.7. Any electrical corporation or holding company, as defined
in Section 79b(a)(7)(A) of Title 15 of the United States Code, that
owns, controls, operates, or manages a public utility shall be
subject to the jurisdiction, control, and regulation of the
commission for the limited purpose of monitoring and enforcing any
promises, commitments, conditions, or written representations made to
the commission or to the ratepayers of the public utility.
SEC. 27. Section 857 is added to the Public Utilities Code, to
read:
857. No electrical corporation may execute a sale, assignment,
transfer, or other disposition of assets with a value in excess of
ten million dollars ($10,000,000) unless the California Consumer
Power and Conservation Financing Authority is granted a right of
first refusal to purchase the assets at a price equivalent to the
proposed transfer price.
SEC. 28. Section 858 is added to the Public Utilities Code, to
read:
858. Any gain or loss on sale associated with the sale, transfer,
or disposition of assets that have been included in the rate base of
an electrical corporation shall be allocated exclusively to the
ratepayers served by the electrical corporation. Gain or loss on
sale shall be calculated as the difference between the transfer or
sale price and the net depreciated book value of the assets at the
time of the transfer.
SEC. 29. The provisions of this act are severable. If any
provision of this act or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
SEC. 30. 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.