BILL NUMBER: AB 653 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 12, 2003
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, Chu, Correa, Montanez,
Ridley-Thomas, and Strickland)
(Coauthors: Senators Cedillo and Murray)
FEBRUARY 19, 2003
An act to add Section 454.6 to the Public Utilities Code, relating
to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 653, as amended, Nunez. Energy: 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 that the reasonable costs of owning
or operating, or of contracting for the output of, a
return of, and on, reasonable investment in facilities for
the generation of electricity, that meet certain criteria , are
fully recovered for the depreciable life of the facility or the term
of the contract .
The bill would make these provisions applicable to an application
filed by an electrical corporation on or before December 31,
2008 2006 .
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 454.6 is added to the Public Utilities
Code, to read:
454.6. (a) The Legislature finds and declares all of the
following:
(a) Investment in new and
(1) Investment in new or 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
(2) Investment in new or repowered efficient and
cost-effective facilities for the generation of electricity,
dedicated to the benefit of California consumers, for the life of the
facility , or if under contract, the term of the contract
, at just and reasonable rates, is in the public interest.
(c)
(3) Investment in repowered electric generation facilities is
beneficial to California consumers and necessary to replace our aging
fleet of electric generation facilities with more efficient and
cost-effective facilities that improve environmental quality, reduce
costs to consumers, and continue to provide economic benefits to the
communities in which they are located.
(4) 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
, or if under contract, the term of the contract, on a
cost-of-service basis.
SEC. 2. Section 454.6 is added to the Public Utilities Code, to
read:
454.6. (a)
(b) 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 (c),
investments in, or the costs of contracting for, the output of, new
or 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 useful 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)
(c) 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 , or
contracting for the output of, new and
or repowered electricity generation facilities that meet the
criteria of subdivision (a) (b) ,
including a return of, and on, reasonable investment in new
and or repowered electricity generating
facilities, is fully recovered for the life of the facility
are fully recovered for the depreciable life of the
facility or the term of the contract . This cost recovery
assurance for new and or 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
with an unaffiliated or unrelated entity for the portion of
electricity produced by a facility that is owned and operated by
another entity, that meets the criteria of subdivision (a)
(b) .
(c)
(d) The commission shall, in approving rates pursuant to
subdivision (c) for an electrical corporation's full cost of
contracting with another entity for electricity generated by a
facility that meets the criteria in subdivision (b), grant initial
consideration to approving rates for an electrical corporation's full
cost of contracting with another entity for electricity generated by
a repowered facility, if the contract terms offered by the repowered
facility are at least as favorable to ratepayers as a facility that
meets the criteria in subdivision (b) and has not been repowered.
(e) An electrical corporation may submit an application for the
cost recovery assurance described in paragraph (2) of subdivision (c)
for any facility for which an application for a license from the
State Energy Resources Conservation and Development Commission has
been submitted, but which has not been approved at the time the
electrical corporation submits the application pursuant to this
subdivision.
(f) 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 , as that section existed on
January 1, 2003 .
(d)
(g) This section applies to an application filed by an
electrical corporation on or before December 31, 2008
2006 .