BILL NUMBER: AB 1889 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 2, 2004
INTRODUCED BY Assembly Member Chu
FEBRUARY 5, 2004
An act to repeal Section 367.7 of amend
Sections 216, 331, 335, 339, 340, 341.2, 341.5, 359, and 361 of, and
to repeal Sections 338, 355, 356, 367.7, 373, and 376 of, the
Public Utilities Code, relating to electrical restructuring.
LEGISLATIVE COUNSEL'S DIGEST
AB 1889, as amended, Chu. Electrical restructuring: Power
Exchange.
The existing restructuring of the electrical industry within the
Public Utilities Act provides for the establishment of a Power
Exchange as an incorporated public benefit nonprofit corporation
and requires the Public Utilities Commission to implement a
methodology for the Power Exchange to administer energy credit for a
customer with a meter that is capable of recording hourly data
.
This bill would repeal this
requirement delete various provisions pertaining to
the creation, duties, and regulatory oversight of the Power Exchange
.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 216 of the Public Utilities Code is
amended to read:
216. (a) "Public utility" includes every common carrier, toll
bridge corporation, pipeline corporation, gas corporation, electrical
corporation, telephone corporation, telegraph corporation, water
corporation, sewer system corporation, and heat corporation, where
the service is performed for, or the commodity is delivered to, the
public or any portion thereof.
(b) Whenever any common carrier, toll bridge corporation, pipeline
corporation, gas corporation, electrical corporation, telephone
corporation, telegraph corporation, water corporation, sewer system
corporation, or heat corporation performs a service for, or delivers
a commodity to, the public or any portion thereof for which any
compensation or payment whatsoever is received, that common carrier,
toll bridge corporation, pipeline corporation, gas corporation,
electrical corporation, telephone corporation, telegraph corporation,
water corporation, sewer system corporation, or heat corporation, is
a public utility subject to the jurisdiction, control, and
regulation of the commission and the provisions of this part.
(c) When any person or corporation performs any service for, or
delivers any commodity to, any person, private corporation,
municipality, or other political subdivision of the state, that in
turn either directly or indirectly, mediately or immediately,
performs that service for, or delivers that commodity to, the public
or any portion thereof, that person or corporation is a public
utility subject to the jurisdiction, control, and regulation of the
commission and the provisions of this part.
(d) Ownership or operation of a facility that employs cogeneration
technology or produces power from other than a conventional power
source or the ownership or operation of a facility which employs
landfill gas technology does not make a corporation or person a
public utility within the meaning of this section solely because of
the ownership or operation of that facility.
(e) Any corporation or person engaged directly or indirectly in
developing, producing, transmitting, distributing, delivering, or
selling any form of heat derived from geothermal or solar resources
or from cogeneration technology to any privately owned or publicly
owned public utility, or to the public or any portion thereof, is not
a public utility within the meaning of this section solely by reason
of engaging in any of those activities.
(f) The ownership or operation of a facility that sells compressed
natural gas at retail to the public for use only as a motor vehicle
fuel, and the selling of compressed natural gas at retail from that
facility to the public for use only as a motor vehicle fuel, does not
make the corporation or person a public utility within the meaning
of this section solely because of that ownership, operation, or sale.
(g) Ownership or operation of a facility that has been certified
by the Federal Energy Regulatory Commission as an exempt wholesale
generator pursuant to Section 32 of the Public Utility Holding
Company Act of 1935 (Chapter 2C (commencing with Section 79) of Title
15 of the United States Code) does not make a corporation or person
a public utility within the meaning of this section, solely due to
the ownership or operation of that facility.
(h) The ownership, control, operation, or management of an
electric plant used for direct transactions or participation directly
or indirectly in direct transactions, as permitted by subdivision
(b) of Section 365, sales into the Power Exchange referred
to in Section 365, or the use or sale as permitted under
subdivisions (b) to (d), inclusive, of Section 218, shall not make a
corporation or person a public utility within the meaning of this
section solely because of that ownership, participation, or sale.
SEC. 2. Section 331 of the Public Utilities Code is amended to
read:
331. The definitions set forth in this section shall govern the
construction of this chapter.
(a) "Aggregator" means any marketer, broker, public agency, city,
county, or special district, that combines the loads of multiple
end-use customers in facilitating the sale and purchase of electric
energy, transmission, and other services on behalf of these
customers.
(b) "Broker" means an entity that arranges the sale and purchase
of electric energy, transmission, and other services between buyers
and sellers, but does not take title to any of the power sold.
(c) "Direct transaction" means a contract between any one or more
electric generators, marketers, or brokers of electric power and one
or more retail customers providing for the purchase and sale of
electric power or any ancillary services.
(d) "Fire wall" means the line of demarcation separating
residential and small commercial customers from all other customers
as described in subdivision (e) of Section 367.
(e) "Marketer" means any entity that buys electric energy,
transmission, and other services from traditional utilities and other
suppliers, and then resells those services at wholesale or to an
end-use customer.
(f) "Microcogeneration facility" means a cogeneration facility of
less than one megawatt.
(g) "Restructuring trusts trust "
means the two tax-exempt public benefit
trusts trust established by Decision 96-08-038
of the Public Utilities Commission to provide for the
design and development of the hardware and software systems for the
Power Exchange and the Independent System
Operator, respectively, and that may undertake
other activities, as needed, as ordered by the commission.
(h) "Small commercial customer" means a customer that has a
maximum peak demand of less than 20 kilowatts.
SEC. 3. Section 335 of the Public Utilities Code is amended to
read:
335. In order to ensure that the interests of the people of
California are served, a five-member Electricity Oversight Board is
hereby created as provided in Section 336. For purposes of this
chapter, any reference to the Oversight Board shall mean the
Electricity Oversight Board. Its functions shall be all of the
following:
(a) To oversee the Independent System Operator and the
Power Exchange .
(b) To determine the composition and terms of service and
to exercise the exclusive right to decline to confirm the
appointments of specific members of the governing board of the Power
Exchange.
(c) To serve as an appeal board for majority decisions
of the Independent System Operator governing board, as they relate to
matters subject to exclusive state jurisdiction, as specified in
Section 339.
(d) Those members of the Power Exchange governing board whose
appointments the Oversight Board has the exclusive right to decline
to confirm include proposed governing board members representing
agricultural end users, industrial end users, commercial end users,
residential end users, end users at large, nonmarket participants,
and public interest groups.
(e)
(c) To investigate any matter related to the wholesale
market for electricity to ensure that the interests of California's
citizens and consumers are served, protected, and represented in
relation to the availability of electric transmission and generation
and related costs, during periods of peak demand.
SEC. 4. Section 338 of the Public Utilities Code is repealed.
338. The Oversight Board shall have the exclusive right to
approve procedures and the qualifications for Power Exchange
governing board members specified in subdivision (d) of Section 335,
all of whom shall be required to be electricity customers in the area
served by the Power Exchange. The Power Exchange governing board
shall include, but not be limited to, representatives of
investor-owned electric distribution companies, publicly owned
electric distribution companies, nonutility generators, public buyers
and sellers, private buyers and sellers, industrial end-users,
commercial end-users, residential end-users, agricultural end-users,
public interest groups, and nonmarket participant representatives.
The structural composition of the Power Exchange governing board
existing on July 1, 1999, shall remain in effect until an agreement
with a participating state is legally in effect. However, prior to
such an agreement, California shall retain the right to change the
Power Exchange governing board into a nonstakeholder board. In the
event of such a legislative change, revised bylaws shall be filed
with the Federal Energy Regulatory Commission under Section 205 of
the Federal Power Act (16 U.S.C.A. Sec. 824d).
SEC. 5. Section 339 of the Public Utilities Code is amended to
read:
339. (a) The Oversight Board is the appeal board for majority
decisions of the Independent System Operator governing board relating
to matters that are identified in subdivision (b) as they pertain to
the Independent System Operator.
(b) The following matters are subject to California's exclusive
jurisdiction:
(1) Selections by California of governing board members, as
described in Sections 335 , 337, and 338 and
337 .
(2) Matters pertaining to retail electric service or retail sales
of electric energy.
(3) Ensuring that the purposes and functions of the Independent
System Operator and Power Exchange are consistent
with the purposes and functions of California nonprofit public
benefit corporations, including duties of care and conflict of
interest standards for directors of the corporations.
(4) State functions assigned to the Independent System Operator
and Power Exchange under state law.
(5) Open meeting standards and meeting notice requirements.
(6) Appointment of advisory representatives representing state
interests.
(7) Public access to corporate records.
(8) The amendment of bylaws relevant to these matters.
(c) Only members of the Independent System Operator governing
board may appeal a majority decision of the Independent System
Operator related to any of the matters specified in subdivision (b)
to the Oversight Board.
SEC. 6. Section 340 of the Public Utilities Code is amended to
read:
340. The Oversight Board shall take the steps that are necessary
to ensure the earliest possible incorporation of the Independent
System Operator and the Power Exchange as separately
as an incorporated public benefit, nonprofit
corporations corporation under the
Corporations Code.
SEC. 7. Section 341.2 of the Public Utilities Code is amended to
read:
341.2. The Bagley-Keene Open Meeting Act (Article 9 (commencing
with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2
of the Government Code) applies to meetings of the Oversight Board.
In addition to the allowances of that act, the Oversight Board may
hold a closed session to consider the appointment of one or
more candidates to the governing board of the Power Exchange,
deliberate on matters involving the removal of a member of the
governing board of the Power Exchange, or to consider a
matter based on information that has received a grant of confidential
status pursuant to regulations of the Oversight Board, provided that
any action taken on such a matter shall be taken by vote in an open
session.
SEC. 8. Section 341.5 of the Public Utilities Code is amended to
read:
341.5. (a) The Independent System Operator and Power
Exchange bylaws shall contain provisions that identify
those matters specified in subdivision (b) of Section 339 as matters
within state jurisdiction. The bylaws shall also contain provisions
which state that California's bylaws approval function with respect
to the matters specified in subdivision (b) of Section 339 shall not
preclude the Federal Energy Regulatory Commission from taking any
action necessary to address undue discrimination or other violations
of the Federal Power Act (16 U.S.C.A. Sec. 791a et seq.) or to
exercise any other commission responsibility under the Federal Power
Act. In taking any such action, the Federal Energy Regulatory
Commission shall give due respect to California's jurisdictional
interests in the functions of the Independent System Operator
and Power Exchange and to attempt to accommodate
state interests to the extent those interests are not inconsistent
with the Federal Energy Regulatory Commission's statutory
responsibilities. The bylaws shall state that any future agreement
regarding the apportionment of the Independent System Operator
and Power Exchange board appointment function
among participating states associated with the expansion of the
Independent System Operator and Power Exchange
into a multistate entities entity
shall be filed with the Federal Energy Regulatory Commission
pursuant to Section 205 of the Federal Power Act (16 U.S.C.A. Sec.
824d).
(b) Any necessary bylaw changes to implement the provisions of
Section 335, 337, 338, 339, or subdivision (a) of
this section, or changes required pursuant to an agreement as
contemplated by subdivision (a) of this section with a participating
state for a regional organization, shall be effective upon approval
of the respective governing boards and the Oversight Board and
acceptance for filing by the Federal Energy Regulatory Commission.
SEC. 9. Section 355 of the Public Utilities Code is repealed.
355. The Power Exchange shall provide an efficient competitive
auction, open on a nondiscriminatory basis to all suppliers, that
meets the loads of all exchange customers at efficient prices.
SEC. 10. Section 356 of the Public Utilities Code is repealed.
356. The Power Exchange governing board may form appropriate
technical advisory committees comprised of market and nonmarket
participants to advise the governing board on relevant issues.
SEC. 11. Section 359 of the Public Utilities Code is amended to
read:
359. (a) It is the intent of the Legislature to provide for the
evolution of the Independent System Operator and the Power
Exchange into a regional organizations
organization to promote the development of
regional electricity transmission markets in the western states and
to improve the access of consumers served by the Independent System
Operator and the Power Exchange to those markets.
(b) The preferred means by which the voluntary evolution described
in subdivision (a) should occur is through the adoption of a
regional compact or other comparable agreement among cooperating
party states, the retail customers of which states would reside
within the geographic territories served by the Independent System
Operator and the Power Exchange .
(c) The agreement described in subdivision (b) should provide for
all of the following:
(1) An equitable process for the appointment or confirmation by
party states of members of the governing boards of the Independent
System Operator and the Power Exchange .
(2) A respecification of the size, structure, representation,
eligible membership, nominating procedures, and member terms of
service of the governing boards of the Independent System Operator
and the Power Exchange .
(3) Mechanisms by which each party state, jointly or separately,
can oversee effectively the actions of the Independent System
Operator and the Power Exchange as those actions
relate to the assurance of electricity system reliability within the
party state and to matters that affect electricity sales to the
retail customers of the party state or otherwise affect the general
welfare of the electricity consumers and the general public of the
party state.
(4) The adherence by publicly owned and investor-owned utilities
located in party states to enforceable standards and protocols to
protect the reliability of the interconnected regional transmission
and distribution systems.
SEC. 12. Section 361 of the Public Utilities Code is amended to
read:
361. The commission shall ensure that any funds secured by the
restructuring trusts trust established
for the purposes of developing the Independent System Operator
and the Power Exchange shall be placed at the
disposal of the Independent System Operator and the Power
Exchange respectively .
SEC. 13. Section 367.7 of the Public Utilities Code is
repealed.
SEC. 14. Section 373 of the Public Utilities Code is repealed.
373. (a) Electrical corporations may apply to the commission for
an order determining that the costs identified in Sections 367, 368,
375, and 376 not be collected from a particular class of customer or
category of electricity consumption.
(b) Subject to the fire wall specified in subdivision (e) of
Section 367, the provisions of this section and Sections 372 and 374
shall apply in the event the commission authorizes a nonbypassable
charge prior to the implementation of an Independent System Operator
and Power Exchange referred to in subdivision (a) of Section 365.
SEC. 15. Section 376 of the Public Utilities Code is repealed.
376. To the extent that the costs of programs to accommodate
implementation of direct access, the Power Exchange, and the
Independent System Operator, that have been funded by an electrical
corporation and have been found by the commission or the Federal
Energy Regulatory Commission to be recoverable from the utility's
customers, reduce an electrical corporation's opportunity to recover
its utility generation-related plant and regulatory assets by the end
of the year 2001, the electrical corporation may recover unrecovered
utility generation-related plant and regulatory assets after
December 31, 2001, in an amount equal to the utility's cost of
commission-approved or Federal Energy Regulatory Commission approved
restructuring-related implementation programs. An electrical
corporation's ability to collect the amounts from retail customers
after the year 2001 shall be reduced to the extent the Independent
System Operator or the Power Exchange reimburses the electrical
corporation for the costs of any of these programs.