BILL NUMBER: AB 816 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 25, 2003
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 amended, Reyes. Local publicly owned electric
utilities: 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. Existing law imposes on
retail end use customers of electrical corporations and community
choice aggregators nonbypassable charges to repay certain costs of
the department and electrical corporations.
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 additionally impose on a local publicly
owned electric utility that begins serving electricity to existing or
new load in the service territory of an electrical corporation, as
that territory existed on February 1, 2001, responsibility for those
repayment costs, as determined by the Public Utilities Commission.
The bill would require the local publicly owned electric utility to
determine the appropriate method by which to recover the costs
imposed from its customers. The bill would require the cost recovery
mechanism to ensure that any charges payable to the department and
to the electrical corporation by a retail end use customer are
promptly remitted to the party entitled to payment .
(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. customers, a local publicly owned electric
utility that begins serving electricity to existing or new load in
the service territory of an electrical corporation, as that territory
existed on February 1, 2001, is responsible for the costs described
in subdivisions (d), (e), (f), and (g) of Section 366.2, as
determined by the commission.
(b) The local publicly owned electric utility is not responsible
for the costs described in subdivisions (d), (e), (f), and (g) of
Sections 366.2 when it serves new load within its exclusive electric
service territory as that territory existed on February 1, 2001.
(c) The local publicly owned electric utility shall determine the
appropriate method by which to recover the costs imposed pursuant to
this section from its customers. The cost recovery mechanism shall
ensure that any charges payable to the Department of Water Resources
and to the electrical corporation by a retail end use customer are
promptly remitted to the party entitled to payment. Charges imposed
pursuant to this section are nonbypassable.
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 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.
(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 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 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.