BILL NUMBER: AB 425	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 3, 2003
	AMENDED IN ASSEMBLY  MAY 29, 2003
	AMENDED IN ASSEMBLY  APRIL 30, 2003

INTRODUCED BY   Assembly Member Richman

                        FEBRUARY 14, 2003

   An act to amend Section 743.1 of the Public Utilities Code,
relating to public utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 425, as amended, Richman.  Electric service:  rates:
interruptible programs.
   (1) The Public Utilities Act authorizes the Public Utilities
Commission to establish rates for public utilities regulated by the
commission, including electrical corporations.  The act requires
electrical corporations to continue the availability to qualified
heavy industrial customers, until March 31, 2002, of optional
interruptible or curtailable service wherein the heavy industrial
customer is charged a rate that reflects a pricing incentive for
electing to operate under the optional or curtailable service.
   This bill would instead require an electrical corporation to
continue the availability to qualified customers, as defined, of
optional interruptible or curtailable service, and would require the
effective rate for that service to reflect a cost-based pricing
incentive.   The bill would require the commission to set the
incentive level and to authorize the continued availability of
optional interruptible or curtailable service until December 31,
2008.   The bill would  impose a penalty on
  require  a customer  receiving 
 electing to operate under the interruptible or curtailable
service  who does not   option to  comply
with the commitment to shed load in excess of the customer's firm
service level within the time period provided for in the tariff, if
called upon to do so by the electrical corporation.   The bill
would require the commission to establish a penalty for
noncompliance.   The bill would require an electrical
corporation to remove from the rate option any customer who, upon 2
consecutive requests from the electrical corporation, voluntarily
elects not to comply substantially with its commitment to shed load.
The bill would require an electrical corporation to eliminate by a
certain date any incentive not described above that is included in an
optional interruptible or curtailable service  rate  of
that electrical corporation as of January 1, 2004.    The bill
would require the commission to require each electrical corporation
to adopt and implement a plan for certification by a participating
customer of the manner in which the participating customer will
comply with the terms of the interruptible or curtailable service
option. 
   Because a violation of the act is a crime, this bill, by
continuing to require electrical corporations to offer optional
interruptible or curtailable service and by imposing new
requirements, would change the definition of a crime, thereby
imposing 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.
   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 743.1 of the Public Utilities Code is amended
to read:
   743.1.  (a) Electrical corporations shall continue the
availability to qualified customers of optional interruptible or
 curtailable service.  For purposes of this section, the term
"qualified customers" includes all customers with demand at, or in
excess of, 500 kilowatts.  The effective rate for interruptible or
  curtailable service.  The effective rate for
interruptible or  curtailable service to qualified customers
shall reflect a cost-based pricing incentive for electing to operate
under the interruptible or  curtailable service option.  The
commission shall initially set the cost-based pricing incentive for
the optional interruptible or curtailable service at a level equal to
the level of incentive authorized in the base interruptible program
rate option as of May 1, 2003.  The commission may subsequently adopt
a different cost-based pricing incentive level.  The commission
shall authorize the continued availability of optional interruptible
or curtailable service until December 31, 2008.  
curtailable service option. 
   (b) A customer  receiving   electing to
operate under the  interruptible or curtailable service 
who does not   option shall  comply with the
commitment to shed load in excess of the customer's firm service
level within the time period provided for in the tariff, if called
upon to do so by the electrical  corporation, shall pay a
noncompliance penalty initially set at   corporation.
The commission shall establish a noncompliance penalty of  nine
dollars and thirty cents ($9.30) per kilowatthour for excess power
taken.  The commission may subsequently adopt a different
noncompliance penalty  , if the commission makes a determination
that the penalty level is insufficient to ensure compliance with the
program  .  In addition to the noncompliance penalty, the
electrical corporation shall remove from the rate option any customer
who, upon two consecutive requests from the electrical corporation,
voluntarily elects not to comply substantially with its commitment to
shed load.
   (c) The commission shall require an electrical corporation to
eliminate any incentive not authorized pursuant to subdivision (a)
that is included in an optional interruptible or curtailable service
rate of that electrical corporation as of January 1, 2004, before the
earlier of the following dates:
   (1) January 1, 2005.
   (2) The date of the next final commission decision in the
allocation of revenue requirement and rate design phase of the
electrical corporation's general rate case proceeding.  
   (d) In order to further ensure the value of the interruptible or
curtailable service option, the commission shall require each
electrical corporation to adopt and implement plans for certification
by the participating customer of the manner in which a participating
customer will comply with the terms of the interruptible or
curtailable service option.
   (e) As used in this section, the term "qualified customers"
includes all customers with demand at, or in excess of, 500
kilowatts.  The commission, by order or decision, may exclude from
this definition any category of customer for which firm service is
essential for public health and safety. 
  SEC. 2.  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.