BILL ANALYSIS
AB 816
Page 1
ASSEMBLY THIRD READING
AB 816 (Reyes)
As Amended June 2, 2003
Majority vote
UTILITIES AND COMMERCE 11-1 APPROPRIATIONS 22-0
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|Ayes:|Reyes, Richman, Calderon, |Ayes:|Steinberg, Bates, Kehoe, |
| |Campbell, Canciamilla, La | |Corbett, Correa, Daucher, |
| |Malfa, | |Diaz, Firebaugh, |
| |La Suer, Levine, Maddox, | |Goldberg, Haynes, Leno, |
| |Nunez, Ridley-Thomas | |Maldonado, Nation, Nunez, |
| | | |Pacheco, Pavley, |
| | | |Ridley-Thomas, Runner, |
| | | |Samuelian, Wiggins, Yee, |
| | | |Laird |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Wolk | | |
| | | | |
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SUMMARY : States legislative intent to codify the Public
Utilities Commission decision on municipal departing load and
reinstates direct access. Specifically, this bill :
1)States legislative intent to codify PUC decision on exit fees
for municipal departing load provided that it would not result
in a cost shift to bundled customers.
2)Reinstates the right of retail end use customers to acquire
electric service from suppliers other than an investor owned
utility (IOU), once each of the following conditions are met:
a) PUC has established a cost responsibility surcharge for
customers that opt for direct transactions;
b) The state has issued revenue bonds to cover the
Department of Water Resources (DWR) electricity purchase
contract costs; and,
c) IOUs are procuring electricity, and are doing so under
new procurement rules enacted in 2002.
AB 816
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FISCAL EFFECT : Minor absorbable costs to PUC.
COMMENTS : As part of restructuring the electric industry, AB
1890 (Brulte), Chapter 856, Statutes of 1996, authorized retail
customers to purchase electricity either from the investor-owned
utilities or directly from other electricity suppliers. In
response to the electricity crisis in 2001, AB X1 1 (Keeley) in
part called on PUC to suspend direct access purchases, which PUC
did in a September 2001 decision.
In later proceedings, PUC determined that bundled service
customers of IOUs should not be burdened with additional costs
due to cost shifting from the significant migration of customers
from bundled to direct access prior to September 2001. PUC
subsequently imposed charges on direct access load, known as a
"cost responsibility surcharge" or "exit fees." Included among
the surcharge categories are bond-related costs and electricity
contract costs associated with procurement of power by DWR.
Local public utilities: AB 117 (Migden), Chapter 838, Statutes
of 2002, expressly made exit fees applicable to any retail
customer that purchases electricity from a "community choice
aggregator," which is similar to a municipal electric utility
except that the former continues to use IOU transmission and
distribution infrastructure.
PUC decision to impose cost responsibility charge on municipal
departing load: As part of the proceeding to implement ABX1 1
(Keeley), Chapter 4, Statutes of 2001, First Extraordinary
Session, PUC has on its agenda two proposed decisions to
implement cost responsibility charges (CRS) on municipal
departing load. Both decisions impose a CRS on municipal and
publicly owned utilities for DWR bond and power charges, tail
competition transition charges from AB 1890, and historic
procurement charges that only apply to Edison customers. The
main difference between the two decisions is that Commissioner's
Browns alternate decision is open to not imposing CRS charges on
new development or greenfields prior to February 1, 2001.
Direct access: AB 57 (Wright), Chapter 835, Statutes of 2002,
provided an electricity procurement framework for IOUs that
allows for long term electricity procurement with up front
approval of the procurement plans by PUC. The author states
that this is the appropriate time to reinstate the right of
retail customers to begin or to continue receiving some or all
AB 816
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of their power from electricity providers other than an IOU.
The author and proponents note that many direct access customers
are nearing the expiration of their contract for electricity
service with their providers. These customers may be forced
back to IOU bundled service, upsetting load predictions that may
have been made by the IOU, if the right to choose electricity
suppliers is called into question when the existing customers
attempt to renew the contracts.
Analysis Prepared by : Daniel Kim / U. & C. / (916) 319-2083
FN: 0001604