BILL NUMBER: AB 428 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Richman
FEBRUARY 14, 2003
An act to add Section 367.6 to the Public Utilities Code, and to
amend Section 80110 of the Water Code, relating to energy resources.
LEGISLATIVE COUNSEL'S DIGEST
AB 428, as introduced, Richman. Electrical corporations: core
supply portfolio: core bundled customers.
(1) Under existing law, the Public Utilities Commission regulates
electrical corporations. The Public Utilities Act requires the
commission to authorize direct transactions between electricity
suppliers and end use customers. However, other existing law
suspends the right of retail end use customers to acquire direct
access service from certain electricity suppliers after a period of
time to be determined by the commission until the Department of Water
Resources no longer supplies electricity under a certain provision
of law.
This bill would delete that suspension.
The bill would require the commission, on or before January 1,
2006, to adopt guidelines for the appropriate composition of a core
portfolio of electricity supplies to be established by each
electrical corporation to meet the needs of the electrical
corporation's bundled core customers, as defined, and provide an
adequate reserve capacity. Under the bill, commencing January 1,
2006, an electric corporation would have no obligation to serve a
noncore customer, as defined, except by contract for a term of no
less than 3 years and on terms approved by the commission that
reimburse the electrical corporation for all costs of providing
electrical service. Commencing on that date, noncore customers would
be served either by direct transactions or by contract with an
electrical corporation. The bill would require the commission, on or
before January 1, 2006, to adopt rules to allow residential bundled
core customers to elect to be served by direct transactions in a
manner that fully accounts for their cost of service by the
electrical corporation and payments for a proportionate share of
system costs, bond payments, and public benefits charges. The bill
would require the commission to adopt corresponding rules for
nonresidential bundled core customers on or before January 1, 2012.
Because a violation of a rule or order of the commission is a crime,
this bill would create a new 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. It is the intent of the Legislature to provide for the
construction of electric generation capacity to meet the needs of a
growing state and replace this state's most polluting and inefficient
generation plants by phasing in a retail market for the largest,
most financially stable customers.
SEC. 2. Section 367.6 is added to the Public Utilities Code, to
read:
367.6. (a) As used in this section, the following terms have the
following meanings:
(1) "Bundled core customers" include all customers with a maximum
peak demand of less than 500 kilowatts, or a maximum peak demand as
determined by the commission pursuant to subdivision (b), who are not
being served, or who elect not to be served, through direct
transactions.
(2) "Noncore customers" include all customers with a maximum peak
demand of 500 kilowatts or greater, or a maximum peak demand as
determined by the commission pursuant to subdivision (b).
(b) Commencing January 1, 2008, and every two years thereafter,
the commission shall reduce the maximum peak demand threshold by an
amount sufficient to convert the bundled core customers with the
largest peak demand prior to reduction of the threshold to noncore
customers, who shall contract for electricity service from third
parties or an electric corporation to meet all growth in electricity
demand forecasted by the State Energy Resources Conservation and
Development Commission during the following five-year period and any
reduction in the aggregate supply of electricity provided by
Department of Water Resources contracts pursuant to Division 27
(commencing with Section 80000) of the Water Code. The commission
may not lower the threshold beyond 100 kilowatts maximum peak demand.
(c) On or before January 1, 2006, the commission shall adopt
guidelines for the appropriate composition of a core portfolio of
electricity supplies to be established by each electrical corporation
to meet the needs of the electrical corporation's bundled core
customers and provide an adequate reserve capacity. The commission
shall include a minimum renewable energy component and demand-side
management programs, including, but not limited to, time-of-use rates
and reserve requirements established by the State Energy Resources
Conservation and Development Commission.
(d) (1) The core supply portfolio shall also include the following
components:
(A) Output of the generation assets retained by the electrical
corporation under commission regulation.
(B) The total amount of Department of Water Resources contract
electricity purchased to supply bundled customers.
(C) Other supplies purchased by the electrical corporation under
contracts to serve the needs of its core customers.
(D) Any spot market supplies required to provide for core demand.
(2) The commission shall ensure that noncore customers are
responsible for an appropriate amount of the costs of the Department
of Water Resources contracts to the extent those costs exceed the
average cost of the remaining supply components of the core supply
portfolio.
(e) Commencing January 1, 2006, an electric corporation has no
obligation to serve any noncore customer except by contract for a
term of not less than three years and on terms approved by the
commission that reimburse the electrical corporation for all costs of
providing electrical service.
(f) Commencing January 1, 2006, noncore customers may not be
served from the core portfolio. Noncore customers shall be served by
direct transactions, as described in Section 365, or by contract
with an electrical corporation as described in subdivision (e).
Customers may aggregate their load at multiple locations in order to
be classified as noncore customers. Any noncore customer who elects
to remain with, or return to, service from its electrical corporation
rather than engage in direct transactions shall provide the
electrical corporation at least 18 months' advance written notice of
that election.
(g) (1) On or before January 1, 2006, the commission shall adopt
rules to allow residential bundled core customers to elect to be
served by direct transactions in a manner that fully accounts for
their cost of service by the electrical corporation and payments for
a proportionate share of system costs, bond payments, and public
benefits charges.
(2) On or before January 1, 2012, the commission shall adopt rules
to allow nonresidential bundled core customers to elect to be served
by direct transactions in a manner that fully accounts for their
cost of service by the electrical corporation and payments for a
proportionate share of system costs, bond payments, and public
benefits charges.
SEC. 3. Section 80110 of the Water Code is amended to read:
80110. The department shall retain title to all power sold by it
to the retail end use customers. The department shall be entitled to
recover, as a revenue requirement, amounts and at the times necessary
to enable it to comply with Section 80134, and shall advise the
commission as the department determines to be appropriate. Such
revenue requirements may also include any advances made to the
department hereunder or hereafter for purposes of this division, or
from the Department of Water Resources Electric Power Fund, and
General Fund moneys expended by the department pursuant to the
Governor's Emergency Proclamation dated January 17, 2001. For
purposes of this division and except as otherwise provided in this
section, the Public Utility Commission's
commission's authority as set forth in Section 451 of the
Public Utilities Code shall apply, except any just and reasonable
review under Section 451 shall be conducted and determined by the
department. The commission may enter into an agreement with the
department with respect to charges under Section 451 for purposes of
this division, and that agreement shall have the force and effect of
a financing order adopted in accordance with Article 5.5 (commencing
with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public
Utilities Code, as determined by the commission. In no case shall
the commission increase the electricity charges in effect on
the date that the act that adds this section becomes effective
February 1, 2001 for residential customers for
existing baseline quantities or usage by those customers of up to 130
percent of existing baseline quantities, until such time as the
department has recovered the costs of power it has procured for the
electrical corporation's retail end use customers as provided in this
division. After the passage of such period of time after
the effective date of this section as shall be determined by the
commission, the right of retail end use customers pursuant to Article
6 (commencing with Section 360) of Chapter 2.3 of Part 1 of Division
1 of the Public Utilities Code to acquire service from other
providers shall be suspended until the department no longer supplies
power hereunder. The department shall have the same rights
with respect to the payment by retail end use customers for power
sold by the department as do providers of power to such customers.
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.