BILL NUMBER: AB 653	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 8, 2003
	AMENDED IN SENATE  AUGUST 18, 2003
	AMENDED IN SENATE  JULY 9, 2003
	AMENDED IN ASSEMBLY  MARCH 24, 2003

INTRODUCED BY   Assembly Member Nunez
    (Coauthors:  Assembly Members Calderon, Hancock, Jackson,
Koretz, Laird, Lieber, Montanez, Pavley, and Yee) 
    (Coauthors:  Senators Bowen, Chesbro, Ducheny, Romero,
and Soto) 
    (Coauthors:  Assembly Members Calderon, Chu, Correa,
Montanez, Ridley-Thomas, and Strickland) 
    (Coauthors:  Senators Cedillo and Murray) 

                        FEBRUARY 19, 2003

   An act to  amend Section 15814.15 of the Government Code,
relating to energy efficiency   add Section 454.6 to the
Public Utilities Code, relating to energy  .


	LEGISLATIVE COUNSEL'S DIGEST


   AB 653, as amended, Nunez.  Energy  efficiency:  public
buildings   :  electricity generation facilities: rates
 . 
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations,
and authorizes the commission to fix just and reasonable rates and
charges.  Under existing law, a public utility has a duty to serve,
including furnishing and maintaining such adequate, efficient, just
and reasonable service, instrumentalities, equipment, and facilities
as are necessary to promote the safety, health, comfort, and
convenience of its patrons and the public.
   This bill would require the commission, upon application by an
electrical corporation, and subject to public hearing, to approve and
maintain rates that ensure a return of, and on, reasonable
investment in facilities for the generation of electricity, that meet
certain criteria.
   The bill would make these provisions applicable to an application
filed by an electrical corporation on or before December 31, 2008.
 
   Existing law authorizes the State Public Works Board, until
January 1, 2005, to issue revenue bonds, notes, and bond anticipation
notes to finance the cost of cogeneration equipment, alternative
energy equipment, and conservation measures in public buildings.
   This bill would delete the repeal date of these provisions, thus
making this authority permanent and would make projects that combine
conservation measures and alternative energy equipment eligible for
funding under these provisions.  This bill also would require the
board, in determining whether to issue funding for projects under
these provisions, to evaluate each project in its entirety and
analyze the costs and financial and energy savings over the full life
of the project.  It would authorize the board, when analyzing a
project, to consider any additional value added by product warranties
associated with the project. 
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  yes.
State-mandated local program:  no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  
  SECTION 1.  Section 15814.15 of the Government Code is 

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Investment in new and repowered efficient and cost-effective
facilities for the generation of electricity that meet all applicable
environmental requirements is necessary and essential to ensure that
adequate generating capacity is available to reliably meet the needs
of California consumers.
   (b) Investment in new and repowered efficient and cost-effective
facilities for the generation of electricity, dedicated to the
benefit of California consumers, for the life of the facility, at
just and reasonable rates, is in the public interest.
   (c) It is the intent of the Legislature to facilitate investment
in the construction and operation of new and repowered facilities for
the generation of electricity, licensed by the State Energy
Resources Conservation and Development Commission, that meet the
long-term resource needs of public utilities and are dedicated to the
benefit of California consumers for the life of the facility on a
cost-of-service basis.
  SEC. 2.  Section 454.6 is added to the Public Utilities Code, to
read:
   454.6.  (a) In order to ensure that adequate generating capacity
is available to meet the electricity needs of California consumers in
a reliable, efficient, and cost-effective manner, the commission may
authorize an electrical corporation to recover in rates pursuant to
subdivision (b), investments in new and repowered facilities for the
generation of electricity, that meet all of the following criteria at
the time the investments are proposed to the commission:
   (1) The electricity generated by the facility is dedicated to
serving ratepayers of the electrical corporation for the depreciable
life of the facility or the term of the contract on a cost-of-service
basis.
   (2) The electricity generated by the facility meets the long-term
resource adequacy needs of the electrical corporation.
   (3) The electricity generated by the facility is fully
dispatchable by the electrical corporation for the benefit of the
ratepayers of the electrical corporation.
   (4) The facility is licensed by the State Energy Resources
Conservation and Development Commission and meets all currently
applicable environmental and transmission interconnection
requirements.
   (5) The investment in the facility and the ratemaking treatment is
in the public interest.
   (b) In order to ensure that adequate investment in electricity
generating capacity is made as expeditiously as possible, upon
application by the electrical corporation, and subject to public
hearing, the commission shall approve and maintain rates that ensure
that the reasonable costs of owning and operating new and repowered
electricity generation facilities that meet the criteria of
subdivision (a), including a return of, and on, reasonable investment
in new and repowered electricity generating facilities, is fully
recovered for the life of the facility.  This cost recovery assurance
for new and repowered electricity generation facilities shall apply
on a nondiscriminatory basis to either of the following:
   (1) Investments by the electrical corporation.
   (2) The electrical corporation's full cost of contracting for the
portion of electricity produced by a facility that is owned and
operated by another entity, that meets the criteria of subdivision
(a).
   (c) As used in this section, the term "repowered" means a facility
that undergoes "repowering," as defined in Section 25550.5 of the
Public Resources Code.
   (d) This section applies to an application filed by an electrical
corporation on or before December 31, 2008.    amended
to read:
   15814.15.  (a) The board may issue revenue bonds, notes, including
commercial paper notes and other forms of negotiable short-term
indebtedness, and bond anticipation notes pursuant to Chapter 5
(commencing with Section 15830) to finance the cost of cogeneration
equipment, alternative energy equipment, projects that combine
conservation measures and alternative energy equipment, and
conservation measures constituting the public buildings authorized by
this chapter.  The total amount of revenue bonds, notes, including
commercial paper notes and other forms of negotiable short-term
indebtedness, and bond anticipation notes authorized to be issued
pursuant to this section in each of the 10 fiscal years beginning
with the 1982-83 fiscal year is fifty million dollars ($50,000,000),
for a total of five hundred million dollars ($500,000,000).  Any
portion of the authorization not used in any fiscal year may be used
in any future fiscal year.
   (b) The board, in determining whether to issue funding under
subdivision (a) for projects proposed by the Department of General
Services, shall evaluate each project in its entirety and analyze the
costs and financial and energy savings over the full life of the
project.  In analyzing a project, the board also may consider any
additional value added by product warranties associated with the
project.                                 ____ CORRECTIONS
Heading -- Authors lines 2, 3, 4, and 6.
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