BILL NUMBER: AB 816 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 6, 2003
AMENDED IN ASSEMBLY APRIL 8, 2003
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 , except as specified, would additionally
impose on a local publicly owned electric utility that
begins serving electricity after February 1, 2001,
initiates electric service to existing or new load
customers 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. By imposing new responsibilities on local publicly owned
electric utilities, this bill would impose a state-mandated local
program.
(2) Under existing law, the commission has regulatory authority
over public utilities, including electrical corporations, and
authorizes the commission to fix just and reasonable rates and
charges. Existing law requires the commission to authorize direct
transactions between electricity suppliers and end use customers
, also known as direct access . 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 with a load requirement of 500
kilowatts or more to acquire electricity from other electric
service providers subject to specified conditions. The bill
would require the commission, in considering the procurement plan of
an electrical corporation, to set the amount of direct access
permitted to minimize the potential that the electrical corporation
will enter into commitments that the subsequent exercise of direct
access will render unnecessary or excessive. The bill would require
the commission to adopt rules it determines to be necessary to
implement the reinstatement of direct access, including any notice
requirements imposed as a condition of direct access, and provisions
to ensure the prompt recovery by an electrical corporation of costs
it incurs to reinstate and administer direct access. Because a
violation of an a rule or 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, including the creation of a State Mandates Claims Fund
to pay the costs of mandates that do not exceed $1,000,000 statewide
and other procedures for claims whose statewide costs exceed
$1,000,000.
This bill would provide that with regard to certain mandates no
reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
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 (1) Except as specified in
paragraph (2), to prevent cost shifting of recoverable costs
between customers, a local publicly owned electric utility that
begins serving electricity after February 1, 2001, to
existing or new load , after February 1, 2004,
initiates electric service to existing or new customers 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.
(2) Notwithstanding paragraph (1), a municipality that provides
electric service and annexes adjoining territory within the service
territory of an electrical corporation, or any new customer of the
municipality not previously served by the electrical corporation and
located within adjoining territory annexed by the municipality, is
not responsible for payment of the costs described in subdivisions
(d), (e), (f), and (g) of Section 366.2, commencing with the date of
completion of the annexation, if all of the following requirements
are met:
(A) The municipality is operating its own local publicly owned
utility.
(B) The municipality was serving all electric customers residing
within its corporate boundaries before February 1, 2001.
(C) The municipality, on or after February 1, 2001, annexed
adjoining territory within the service territory of an electrical
corporation.
(D) The municipality provides all municipal services, including,
but not limited to, electricity, to residents of the annexed area.
(b) The local publicly owned electric utility is not responsible
for the costs described in subdivisions (d), (e), (f), and (g) of
Sections Section 366.2 when it serves
new load within its exclusive electric service territory as that
exclusive electric service 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.
Those 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 State of Emergency Proclamation, dated January 17, 2001.
For purposes of this division and except as otherwise provided in
this section, the 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 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 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
(b) The commission shall reinstate the right of retail end
customers with a load requirement of 500 kilowatts or more to acquire
service from other electric service providers 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 commission
, once each of the following conditions are met:
(1) The 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 including
costs described in subdivisions (d), (e), (f), and (g) of Section
366.2 .
(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.
(4) The commission has resolved all outstanding issues in the
direct access phase of commission Rulemaking 02-01-011.
(5) The commission has adopted rules for the treatment of direct
access customers who voluntarily or involuntarily return to
electrical corporation bundled service. The rules adopted by the
commission shall ensure that electric corporation customers receiving
bundled service are indifferent to cost shifting caused by direct
access customers returning to bundled service.
(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.
(d) The commission, in considering the procurement plan of an
electrical corporation, shall set the amount of direct access
permitted to minimize the potential that the electrical corporation
will enter into commitments that the subsequent exercise of direct
access will render unnecessary or excessive.
(e) The commission shall adopt rules it determines to be necessary
to implement the reinstatement of direct access pursuant to this
section, including any notice requirements imposed as a condition of
direct access, and provisions to ensure the prompt recovery by an
electrical corporation of costs it incurs to reinstate and administer
direct access.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution for
certain costs that may be incurred by a local agency or school
district because in that regard 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.
However, notwithstanding Section 17610 of the Government Code, if
the Commission on State Mandates determines that this act contains
other costs mandated by the state, reimbursement to local agencies
and school districts for those costs shall be made pursuant to Part 7
(commencing with Section 17500) of Division 4 of Title 2 of the
Government Code. If the statewide cost of the claim for
reimbursement does not exceed one million dollars ($1,000,000),
reimbursement shall be made from the State Mandates Claims Fund.