BILL NUMBER: AB 1169 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 1, 2004
AMENDED IN SENATE JULY 1, 2003
AMENDED IN ASSEMBLY MAY 1, 2003
INTRODUCED BY Assembly Member Bermudez
FEBRUARY 21, 2003
An act to amend Section 366.1 851 of
the Public Utilities Code, relating to electric power
public utilities .
LEGISLATIVE COUNSEL'S DIGEST
AB 1169, as amended, Bermudez. Aggregation: Magnolia
Power Project Public utilities: telephone
corporations: disposition of property .
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including telephone corporations.
Under the existing Public Utilities Act, a public utility is required
to seek commission approval prior to selling, leasing, assigning,
mortgaging, or otherwise disposing of or encumbering any property
necessary or useful in the performance of its duties to the public.
This bill would provide that a property or asset that is necessary
or useful in the performance of a telephone corporation's duties to
the public is a property or asset that is essential to the delivery
of service to end users, on a wholesale or retail basis, when the
property or asset is currently and actively being used to provide
service to end users, the telephone corporation has a present
intention to use the property or asset to provide service to end
users, or the telephone corporation has an obligation to make the
property or asset available to wholesale telecommunications providers
to provide service to end users. The bill would authorize a
telephone corporation to designate certain property or asset as
surplus and not necessary or useful in the performance of its duties
to the public and the telephone corporation would not be required to
obtain the commission's approval to dispose of or encumber that
surplus property or asset. The bill would authorize a telephone
corporation to dispose of or encumber any property or asset with a
fair market value of less than $5 million if the telephone
corporation has no present obligation to make the property or asset
available to any wholesale telecommunications provider to provide
service to end users. As to any property with a fair market value of
$5 million or more, the bill would require the commission to permit
a telephone corporation to make a filing to dispose of the property
or asset in accordance with the procedures adopted by the commission
in the commission's Rules of Practice and Procedure applicable to
advice letter filings. The bill would require the commission to
apply those procedures in issuing a resolution to the filing,
including the procedures relating to protests. The bill would
authorize the commission to treat an advice letter filing as an
application filing in specific cases.
Under existing law, a city with rights and obligations to the
Magnolia Power Project, as defined, may serve as a community
aggregator on behalf of all retail end-use customers within its
jurisdiction, if the project has been constructed and is otherwise
capable of beginning deliveries of electricity to the existing
project participants, as defined.
This bill would make changes to reflect that the project is being
constructed. The bill would modify the definition of the term
"existing project participant" to mean the Magnolia Power Project B
participant, as defined in lease revenue bonds issued for the
project. The bill would specifically authorize an existing project
participant to serve as a community aggregator on behalf of all
electric service accounts of the ABC Unified School District.
Vote: majority. Appropriation: no. Fiscal committee:
no yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 366.1 851 of the
Public Utilities Code is amended to read:
366.1. (a) As used in this section, the following terms have
851. (a) No public utility other than a common carrier
by railroad subject to Part 1 of the Interstate Commerce Act (Title
49, U.S.C.) shall may sell, lease,
assign, mortgage, or otherwise dispose of or encumber the whole or
any part of its railroad, street railroad, line, plant, system, or
other property necessary or useful in the performance of its duties
to the public, or any franchise or permit or any right thereunder,
nor by any means whatsoever, directly or indirectly, merge or
consolidate its railroad, street railroad, line, plant, system, or
other property, or franchises or permits or any part thereof, with
any other public utility, without first having secured from the
commission an order authorizing it so to do
to do so . Every such sale, lease,
assignment, mortgage, disposition, encumbrance, merger, or
consolidation made other than in accordance with the order of the
commission authorizing it is void. The permission and approval of
the commission to the exercise of a franchise or permit under Article
1 (commencing with Section 1001) of Chapter 5 of this part, or the
sale, lease, assignment, mortgage, or other disposition or
encumbrance of a franchise or permit under this article
shall does not revive or validate any lapsed or
invalid franchise or permit, or enlarge or add to the powers or
privileges contained in the grant of any franchise or permit, or
waive any forfeiture.
Nothing in this section shall prevent
prevents the sale, lease, encumbrance or other disposition by
any public utility of property which that
is not necessary or useful in the performance of its duties to
the public, and any disposition of property by a public utility shall
be conclusively presumed to be of property which
that is not useful or necessary in the performance of its
duties to the public, as to any purchaser, lessee or encumbrancer
dealing with such the property in good
faith for value ; provided, however, that nothing in this
section shall . This section does not apply to
the interchange of equipment in the regular course of transportation
between connecting common carriers.
(b) For a telephone corporation, a property or asset that is
"necessary or useful in the performance of its duties to the public"
under subdivision (a), means an operational property or asset owned
by the telephone corporation that is essential to the delivery of
service to end users, on a wholesale or retail basis, and is any of
the following:
(1) The property or asset is currently and actively being used by
the telephone corporation to provide service to end users.
(2) The telephone corporation has a present intention to use the
property or asset to provide service to end users.
(3) The telephone corporation has a present obligation to make the
property or asset available to wholesale telecommunications
providers to provide service to end users.
(c) A telephone corporation may designate, wholly or partially,
any property or asset as surplus and not "necessary or useful in the
performance of its duties to the public" pursuant to subdivision (a),
if the property or asset is any of the following:
(1) The property or asset consists of vacant or unused office or
administrative space.
(2) The property or asset consists of vacant or unused space on a
utility pole or tower or in utility conduit, provided that the
telephone corporation complies with all other applicable statutory
provisions and commission general orders regarding pole, tower, and
conduit attachments.
(3) The property or asset consists of vacant or unimproved real
estate that the telephone corporation does not have a present
intention to use to provide service to end users, or does not have a
present obligation to make available to wholesale providers to
provide service to end users.
(4) The property or asset is accounted for as a nonoperating asset
on the books of the telephone corporation.
(5) The property or asset is no longer being actively used by the
telephone corporation or a wholesale telecommunications provider to
provide service to end users, and the telephone corporation has no
present intention to use the property or asset to provide service to
end users, or no present obligation to make the property or asset
available to wholesale telecommunications providers to provide
service to end users.
(d) A telephone corporation is not required to obtain commission
approval prior to disposing of or encumbering any property or asset
with a fair market value of less than five million dollars
($5,000,000), if the telephone corporation has no present obligation
to make the property or asset available to any wholesale
telecommunications provider to provide service to end users.
(e) The commission shall permit a telephone corporation to make a
filing to dispose of a property or asset with a fair market value in
excess of five million dollars ($5,000,000), as required in
subdivision (a), in accordance with the procedures adopted by the
commission in the commission's Rules of Practice and Procedure
applicable to advice letter filings. The commission shall apply
those procedures in issuing a resolution to a filing under this
subdivision, including the procedures relating to protests. The
commission retains authority to treat an advice letter filing as an
application filing in specific cases, and to eliminate the filing
requirement altogether for classes of filings under this section.
(f) A telephone corporation is not required to obtain commission
approval to dispose of or encumber property or assets that are
surplus under subdivision (c). the following
meanings:
(1) "Department" means the Department of Water Resources with
respect to its power program described in Chapter 2 (commencing with
Section 80100) of Division 27 of the Water Code.
(2) "Existing project participant" means the Magnolia Power
Project B participant, as defined in the Magnolia Power Project B
lease revenue bonds, issued on March 15, 2003.
(3) "Magnolia Power Project" means a natural gas-fired electric
generating facility being constructed at an existing site in Burbank
and for which an application for certification has been approved by
the State Energy Resources Conservation and Development Commission
and for which a certificate to construct and operate has been
granted.
(b) Notwithstanding Section 80110 of the Water Code or any
commission decision ordering the suspension of direct access, if the
Magnolia Power Project has been constructed and is otherwise capable
of beginning deliveries of electricity to the existing project
participants, an existing project participant may serve as a
community aggregator on behalf of all retail end-use customers within
its jurisdiction, including all electric service accounts of the ABC
Unified School District. Nothing is this section may be construed
to restrict the existing project participant to reliance solely on
output from the Magnolia Power Project in its right to serve all
retail end-use customers within its jurisdiction.
(c) Subdivision (b) may not become operative until both of the
following occur:
(1) The commission implements a cost-recovery mechanism,
consistent with subdivision (d), that is applicable to customers that
elected to purchase electricity from an alternate provider between
February 1, 2001, and January 1, 2003.
(2) The commission submits a report certifying its satisfaction of
paragraph (1) to the Senate Energy, Utilities and Communications
Committee, or its successor, and the Assembly Committee on Utilities
and Commerce, or its successor.
(d) (1) It is the intent of the Legislature that each retail
end-use customer that has purchased power from an electrical
corporation on or after February 1, 2001, should bear a fair share
of the department's power purchase costs, as well as power purchase
contract obligations incurred as of January 1, 2003, that are
recoverable from electrical corporation customers in
commission-approved rates. It is the further intent of the
Legislature to prevent any shifting of recoverable costs between
customers.
(2) The Legislature finds and declares that this subdivision is
consistent with the requirements of Section 360.5 and Division 27
(commencing with Section 80000) of the Water Code, and is therefore
declaratory of existing law.
(e) A retail end-use customer purchasing power from a community
aggregator pursuant to subdivision (b) shall reimburse the department
for all of the following:
(1) A charge equivalent to the charge that would otherwise be
imposed on the customer by the commission to recover bond related
costs pursuant to an agreement between the commission and the
department pursuant to Section 80110 of the Water Code. That charge
shall be payable until all obligations of the department pursuant to
Division 27 (commencing with Section 80000) of the Water Code are
fully paid or otherwise discharged.
(2) The costs of the department, equal to the share of the
department's estimated net unavoidable power purchase contract costs
attributable to the customer, as determined by the commission, for
the period commencing with the customer's purchases of electricity
from a community aggregator, through the expiration of all then
existing power purchase contracts entered into by the department.
(f) A retail end-use customer purchasing power from a community
aggregator pursuant to subdivision (b) shall reimburse the electrical
corporation that previously served the customer for all of the
following:
(1) The electrical corporation's unrecovered past
undercollections, including all financing costs attributable to that
customer, that the commission lawfully determines may be recovered in
rates.
(2) The costs of the electrical corporation recoverable in
commission-approved rates, equal to the share of the electrical
corporation's estimated net unavoidable power purchase contract costs
attributable to the customer, as determined by the commission, for
the period commencing with the customer's purchases of electricity
from the community aggregator, through the expiration of all then
existing power purchase contracts entered into by the electrical
corporation.
(g) (1) A charge or cost imposed pursuant to subdivision (e), and
all revenues received to pay the charge or cost, shall be the
property of the department. A charge or cost imposed pursuant to
subdivision (f), and all revenues received to pay the charge or cost,
shall be the property of the particular electrical corporation. The
commission shall establish mechanisms, including agreements with, or
orders with respect to, electrical corporations necessary to ensure
that the revenues received to pay a charge or cost payable pursuant
to this section are promptly remitted to the party entitled to those
revenues.
(2) A charge or cost imposed pursuant to this section shall be
nonbypassable.