BILL NUMBER: AB 816	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Reyes
   (Principal coauthors:  Assembly Members Canciamilla and Richman)

                        FEBRUARY 20, 2003

   An act to add Section 9607.5 to the Public Utilities Code, and to
amend Section 80110 of the Water Code, relating to electric power.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 816, as introduced, Reyes.  Public Utilities Commission: direct
transactions.
   (1) Existing law authorizes the Department of Water Resources to
administer existing contracts for the purchase of electric power, and
to sell power to retail end use customers and, with specified
exceptions, local publicly owned electric utilities, at not more than
the department's acquisition costs.
   This bill would require a municipality that forms a local publicly
owned electric utility or an existing local publicly owned electric
utility that annexes any portion of an electrical corporation's
service area, to pay the department's electricity purchase costs in
the same manner as those costs have been imposed on retail end use
customers and community choice aggregators pursuant to existing law.
The bill would require the commission to establish a cost recovery
mechanism for the recovery of the department's electricity purchase
costs.  The bill would prohibit the formation of a local publicly
owned electric utility, or the annexation of any portion of an
electrical corporation's service area by an existing local publicly
owned electric utility, until the Public Utilities Commission
establishes the cost recovery mechanism.  The bill would require a
local publicly owned electric utility to promptly remit to the party
entitled to payment any charge imposed pursuant to these provisions.

   (2) 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.  Existing law suspends, after a period
of time to be determined by the commission, the right of a retail end
use customer to acquire electricity from other electric service
providers pursuant to direct transactions, until the department no
longer supplies electricity under those provisions.
   This bill would require the commission to reinstate the right of
retail end use customers to acquire electricity from other electric
service providers subject to specified conditions.  Because a
violation of an order of the commission is a crime under existing
law, the bill would impose a state-mandated local program by creating
a new crime.
  (3) 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 9607.5 is added to the Public Utilities Code,
to read:
   (a) To prevent cost shifting of recoverable costs between
customers, a municipality that forms a local publicly owned electric
utility or an existing local publicly owned electric utility that
annexes any portion of an electrical corporation's service area,
shall pay the Department of Water Resources' electricity purchase
costs in the same manner as those costs have been imposed on retail
end use customers and community choice aggregators pursuant to
subdivisions (d), (e), (f), and (g) of Section 366.1.  The commission
shall establish a cost recovery mechanism for the recovery of the
Department of Water Resources' electricity purchase costs.
   (b) A local publicly owned electric utility may not be formed, and
an existing local publicly owned electric utility may not annex any
portion of an electrical corporation's service area, until the
commission establishes a cost recovery mechanism pursuant to
subdivision (a).
   (c) A local publicly owned electric utility shall promptly remit
to the party entitled to payment any charges imposed pursuant to this
section.
  SEC. 2.  Section 80110 of the Water Code is amended to read:
   80110.   (a)  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   Utilities 
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 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  
   (b) 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.   reinstated by the Public
Utilities Commission, once each of the following conditions are met:

   (1) The Public Utilities Commission has established a cost
responsibility surcharge for customers that opt for direct
transactions.  Each retail end use customer that has purchased power
from an electrical corporation on or after February 1, 2001, shall
bear a fair share of the department's electricity purchase costs that
are recoverable from electrical corporation customers in
commission-approved rates.
   (2) The State of California has issued revenue bonds pursuant to
Chapter 2.5 (commencing with Section 80130).
   (3) The electrical corporations are procuring electricity under
procurement plans pursuant to Section 454.5 of the Public Utilities
Code.
   (c)  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  
those  customers.
  SEC. 3.  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.