BILL NUMBER: AB 2006 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 25, 2004
AMENDED IN SENATE AUGUST 23, 2004
AMENDED IN SENATE AUGUST 17, 2004
AMENDED IN SENATE AUGUST 9, 2004
AMENDED IN SENATE JULY 29, 2004
AMENDED IN SENATE JULY 6, 2004
AMENDED IN SENATE JUNE 24, 2004
AMENDED IN ASSEMBLY MAY 24, 2004
AMENDED IN ASSEMBLY APRIL 12, 2004
INTRODUCED BY Assembly Member Nunez
(Coauthor: Senator Bowen)
FEBRUARY 13, 2004
An act to amend Sections 301 and 303 of, to add Sections 250,
303.5, 454.05, and 1001.7 to, to add Chapter 2.4 (commencing with
Section 400) to Part 1 of Division 1 of, and to repeal Section 330
of, the Public Utilities Code, relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 2006, as amended, Nunez. Electrical restructuring: Public
Utility Commission procedures.
(1) Section 1 of Article XII of the California Constitution
prescribes the membership, method of appointment, the term for
which vacancies are filled, and the method of removal of, members of
the Public Utilities Commission.
This bill would reiterate these provisions in statute.
(2) Existing law requires the Public Utilities Commission to adopt
an updated conflict-of-interest code and statement of incompatible
activities by February 28, 1998.
This bill would require the Public Utilities Commission to adopt
an updated conflict-of-interest code and statement of incompatible
activities by February 28, 2005.
(3) Existing law prohibits members of the Public Utilities
Commission from holding an official relationship with, or having a
financial interest in, any person or corporation subject to
commission regulation.
This bill would additionally preclude membership on the commission
by any person who, during the 2 years preceding appointment,
received a substantial portion of his or her income from any person
or corporation subject to commission regulation. The bill would
prohibit commission members from being employed by a person or
corporation subject to commission regulation, while a member of the
commission or within 2 years thereafter. The bill would prohibit
commission members from holding other public offices or positions.
The bill would require commission members to comply with provisions
respecting conflicts of officers and employees appointed within the
state civil service. The bill would prohibit a members and employees
of the commission from participating personally and substantially in
matters in which the person knows that the person, his or her spouse
or minor child, partner, any organization he or she serves or has
served as an officer, director, trustee, partner, or employee has a
direct or indirect financial interest or has had such an interest
during the two years prior to his or her appointment as a member of
the commission. The bill would prohibit any person who is a partner,
employer, or employee of a member or employee of the commission from
acting as an attorney, agent, or employee for any person other than
the state in connection with any matter in which the commission is a
party or has a direct or substantial interest.
(4) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations. Existing law authorizes the commission to fix just and
reasonable rates and charges. Under existing law, a public utility
has a duty to serve, including furnishing and maintaining adequate,
efficient, just and reasonable service, instrumentalities, equipment,
and facilities as are necessary to promote the safety, health,
comfort, and convenience of its patrons and the public. The existing
Public Utilities Act requires the commission, pursuant to electrical
restructuring, to authorize direct transactions between electricity
suppliers and retail end-use customers. However, other existing law
suspends the right of retail end-use customers to acquire service
from certain electricity suppliers after a period of time to be
determined by the commission, until the Department of Water Resources
no longer supplies electricity under that law.
This bill would require that, prior to adopting any settlement
agreement that is contested by any person or entity and involves a
ratepayer obligation over $10,000,000, the Public Utilities
Commission hold a hearing to review the settlement and any
alternative proposed by any person or entity, to ensure that the
proposed settlement achieves specified purposes. The bill would
require electrical corporations, commencing January 1, 2006, to
prepare and file at least every 3 years, and for the commission to
approve, a long-term integrated resource plan, as specified. The
bill would provide for the recovery of initial capital investment
made by an electrical corporation in generation resources specified,
if the investment is found to be reasonable and is approved by the
commission in the certificate of public convenience and necessity,
and the investment complies with the conditions specified by the
commission in the certificate of public convenience and necessity at
the time the investment is approved. The bill would also provide for
the recovery of an electrical corporation's full cost of contracting
for generation resources with another entity, as specified.
The bill would require the commission, by July 1, 2005, to prepare
and submit to the Governor and the Legislature, a comprehensive plan
to streamline the transmission siting process, and, on or before
December 31, 2005, to submit a prescribed report concerning siting
and authorization of upgrades, improvements, and additions to each
electrical corporation's transmission system infrastructure. The
bill would require the commission, in consultation with the
Independent System Operator, to establish resource adequacy
requirements to ensure that adequate physical generating capacity,
dedicated to serve all load requirements, is available to meet peak
demand plus requisite planning and operating reserves, and would
require the commission to implement and enforce these resource
adequacy requirements in a nondiscriminatory manner on all load
serving entities, excluding a local publicly owned electric utility,
the State Water Project, and customer generation, as defined. The
bill would require that the cost of meeting resource adequacy
requirements, including the costs associated with system reliability
and local area reliability found reasonable by the commission, be
fully recoverable from all customers taking service from the
electrical corporation on a nonbypassable basis at the time the
commitment to incur the cost is made or thereafter.
The bill , with a certain exception, would require a
majority vote of the commission membership at a public meeting in
order to approve any change in rates or alteration of any utility
classification, contract, practice, project, or rule that affects
rates directly or indirectly or to approve the settlement of any
judicial or administrative proceeding that would result in any of
those consequences. The bill would require that, prior to approving
an electrical corporation application for a certificate of public
convenience and necessity for the proposed construction of generation
resources, the commission include in the proceeding an opportunity
for any creditworthy party to submit, would require
and the commission to
consider, alternative proposals meeting specified criteria.
The bill would require the commission to find that the certificate of
public convenience and necessity achieves the best value for
ratepayers. The bill would require the commission to
reject the certificate of public convenience and necessity for
generation resources proposed to be constructed by an applicant
electrical corporation if the commission makes a specified
determination.
(5) Existing law states the intent of the Legislature and makes
various findings and declarations with respect to electrical
restructuring.
This bill would repeal that statement of intent and the
legislative findings and declarations.
(6) A violation of the Public Utilities Act or an order of the
commission is a crime under existing law.
Because a violation of the bill's provisions would be a violation
of the act, the bill would impose a state-mandated local program by
creating new crimes.
(7) 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. The Legislature finds and declares all of the
following:
(a) An adequate and reliable supply of electricity is essential to
the health, safety, and welfare of all California consumers.
(b) Safe, reliable, and affordable electric service is of utmost
importance to the consumers of this state and its economy.
(c) Electrical corporations have an obligation to provide their
customers with reliable electric service at just and reasonable
rates.
(d) In order to provide safe, reliable, and affordable electric
service to consumers, electrical corporations must provide needed
resources, including cost-effective energy efficiency and other
demand reduction measures, utility-owned and procured generation, new
and repowered generation, cogeneration, renewable generation,
transmission, distribution, and an adequately sized, well-trained
workforce, in a manner that produces the best value for ratepayers at
just and reasonable rates.
(e) In order to ensure that investments in resources are made in a
manner that produces the best value for ratepayers, electrical
corporations should prepare a long-term integrated resource plan for
commission review and approval, that achieves a diversified portfolio
of efficient, cost-effective, environmentally responsible supply and
demand resources.
(f) In order to ensure that a long-term integrated resource plan
will result in investments in physical generating capacity dedicated
to serving all load requirements, that is available to meet peak
demand and planning and operating reserves, at or deliverable to
locations and at times as may be necessary to ensure local area
reliability and system reliability, the commission shall adopt
resource adequacy requirements that apply equally to all load serving
entities.
(g) In order to ensure that the long-term integrated resource plan
achieves a diversified portfolio of efficient, cost-effective,
environmentally responsible, supply and demand resources, resource
adequacy requirements shall be met first through cost-effective
energy efficiency and other demand reduction measures.
(h) In order to attract sufficient capital to make investments in
needed resources, there must be assurance that reasonable costs and
investments, including a return of and on direct investments, and
payments made to third parties under contract with an electrical
corporation for non-utility-owned generation, are recoverable in
rates.
(i) California consumers will not receive reliable and affordable
electric service, nor will consumers avoid repetition of past
problems with excessive wholesale electricity prices, rolling
blackouts, and long-term supply contracts that threaten consumers
with billions of dollars in above-market electricity costs, unless a
durable framework is enacted to provide regulatory certainty and
market stability in support of investment in needed efficient,
cost-effective, environmentally responsible resources at just and
reasonable rates.
(j) Protecting the interests of consumers by ensuring that
investments made to provide safe, reliable electric service are
prudent and cost effective, should be the highest priority of
California regulatory policy and action.
(k) The Public Utilities Commission has an obligation to provide
an open regulatory forum where all persons affected by public utility
service and rates or otherwise affected by decisions made by the
commission, can observe and participate in the decisionmaking
process.
SEC. 1.5. Section 250 is added to the Public Utilities Code, to
read:
250. Prior to adopting any settlement agreement, including any
settlement of a judicial or administrative proceeding to which the
commission is a party or all incumbent commissioners are parties,
that is contested by any person or entity and that involves a
ratepayer obligation of greater than ten million dollars
($10,000,000) per ratemaking district , in addition to any
other requirement applicable to settlements, the commission shall
not approve the settlement before it has held a hearing to review the
settlement and any alternative proposed by any affected
person or entity, in order to ensure that the proposed settlement
agreement resolves the dispute at the lowest reasonable cost to
ratepayers, while balancing other public interest objectives,
including protection of public health and safety, promotion of a
sound economy, conservation of resources, preservation of
environmental quality, and promotion of adequate, just, and
reasonable service.
SEC. 2. Section 301 of the Public Utilities Code is amended to
read:
301. As provided in Section 1 of Article XII of the Constitution
of this state, the Public Utilities Commission consists of five
members appointed by the Governor and approved by the Senate, a
majority of the membership concurring, for staggered six-year terms.
A vacancy is filled for the remainder of the term. The Legislature
may remove a member for incompetence, neglect of duty, or corruption,
two-thirds of the membership of each house concurring.
SEC. 2.3. Section 303 of the Public Utilities Code is amended to
read:
303. (a) A public utilities commissioner may not hold an official
relation to nor have a financial interest in a person or corporation
subject to regulation by the commission. If any commissioner
acquires a financial interest in a corporation or person subject to
regulation by the commission other than voluntarily, his or her
office shall become vacant unless within a reasonable time he or she
divests himself or herself of the interest.
(b) The commission shall adopt an updated Conflict of Interest
Code and Statement of Incompatible Activities, by February 28, 2005,
in a manner consistent with applicable law.
SEC. 2.5. Section 303.5 is added to the Public Utilities Code, to
read:
303.5. (a) No person shall be a member of the commission who,
during the two years prior to appointment to the commission, received
any substantial portion of his or her income directly or indirectly
from any person or corporation subject to regulation by the
commission. No member of the commission shall be employed by any
person or corporation subject to regulation by the commission during
the term he or she is a member of the commission, or within two years
after he or she ceases to be a member of the commission.
(b) The members of the commission shall not hold any other elected
or appointed public office or position.
(c) The members of the commission and all employees of the
commission shall comply with all applicable provisions of Section
19990 of the Government Code.
(d) No person who is a member or employee of the commission shall
participate personally and substantially as a member or employee of
the commission, in any matter in which, to his or her knowledge, he
or she, his or her spouse, minor child, or partner, or any
organization in which he or she is serving, or has served as officer,
director, trustee, partner, or employee while serving as a member or
employee of the commission or within two years prior to her or his
appointment as a member of the commission, has a direct or indirect
financial interest.
(e) No person who is a partner, employer, or employee of a member
or employee of the commission shall act as an attorney, agent, or
employee for any person other than the state in connection with any
matter in which the commission is a party or has a direct and
substantial interest.
Sec. 2.7. Section 330 of the Public Utilities Code is repealed.
SEC. 3. Chapter 2.4 (commencing with Section 400) is added to Part
1 of Division 1 of the Public Utilities Code, to read:
CHAPTER 2.4. RELIABLE ELECTRIC SERVICE ACT OF 2004
400. This chapter shall be known, and may be cited, as the
Reliable Electric Service Act of 2004.
400.1. (a) An electrical corporation has an obligation to, and
shall, plan for and provide its customers with reliable electric
service at just and reasonable rates, pursuant to Section 451,
including those customers that take standby service from the
electrical corporation on a commission-approved rate schedule.
(b) For purposes of this chapter, "electric service" includes
providing adequate and efficient resources, including cost-effective
energy efficiency and other demand reduction resources, utility-owned
and procured generation resources, such as new and repowered
generation resources, cogeneration, and renewable generation
resources, transmission and distribution resources, metering,
billing, and employing an adequately sized, well-trained utility
workforce, including contracting for maintenance of generation
facilities.
(c) Notwithstanding subdivisions (a) and (b), an electrical
corporation has no obligation to plan for or procure electricity or
meet resource adequacy requirements for any customer that has entered
into a direct transaction.
400.5. (a) To ensure that adequate investments are made in
resources necessary to provide customers with reliable electric
service, the commission shall authorize an electrical corporation to
provide efficient, cost-effective resources, including cost-effective
energy efficiency and demand reduction resources, utility-owned and
procured generation resources, which may include, among other
resources, new and repowered generation resources, cogeneration, and
renewable generation resources, consistent with the electrical
corporation's long-term integrated resource plan approved pursuant to
Section 400.11 and its procurement plan adopted pursuant to Section
454.5.
(b) The commission shall, after public hearing, approve and
thereafter maintain just and reasonable rates sufficient to ensure
that the electrical corporation fully recovers both of the following:
(1) The electrical corporation's initial capital investment in
generation resources specified, found reasonable, and approved in the
certificate of public convenience and necessity if the investment
complies with the conditions specified by the commission in the
certificate of public convenience and necessity at the time the
investment is approved.
(2) The electrical corporation's full cost of contracting for
generation resources with another entity found reasonable pursuant to
Sections 454.5 and Article 16 (commencing with Section 399.11) of
Chapter 2.3, taking into account any collateral requirements and debt
equivalence associated with the contract, in a manner determined by
the commission to provide the best value to ratepayers.
(c) Nothing in this chapter alters the requirements of Section
451, 454.5, 455.5, 463, or 1005.5.
(d) It is the intent of the Legislature in enacting this section
to reaffirm California's traditional regulatory doctrine, under which
an electrical corporation has the obligation to provide reliable
electric service at just and reasonable rates, and the commission
ensures that the electrical corporation is afforded the means to
carry out this obligation, specifically including a reasonable
opportunity to fully recover from all customers of the electrical
corporation, in a manner determined by the commission pursuant to
this code, a return of, and a reasonable return on, reasonable
investments in utility-owned generation, transmission, and
distribution resources that are necessary to meet the utility's
obligation, the utility's reasonable costs to operate and maintain
those resources, and the utility's reasonable costs for nonutility
generation resources procured in accordance with Section 454.5 and
Article 16 (commencing with Section 399.11).
400.10. (a) To ensure that adequate investments necessary to meet
the electrical corporation's obligation to provide reliable electric
service are made, every electrical corporation shall, commencing on
January 1, 2006, and at least every three years thereafter, prepare
and file with the commission a long-term integrated resource plan.
(b) The long-term integrated resource plan shall accomplish all of
the following:
(1) Ensure that adequate resources are identified to serve the
utility's customers reliably.
(2) Provide for investments in, or procurement of, resources
proposed pursuant to Section 454.5 and Article 16 (commencing with
Section 399.11).
(3) Be consistent with Section 701.1 and Chapter 4 (commencing
with Section 25300) of Division 15 of the Public Resources Code.
(4) Achieve a diversified portfolio of efficient, cost-effective,
and environmentally responsible supply and demand resources to serve
the utility's customers.
(5) Provide for funding of all practicable and cost-effective
energy efficiency and load management resources.
(6) Provide for investments in, or procurement of, necessary
generation resources, and may include extensions, renewals, or
renegotiations of contracts for existing generation resources, new or
repowered generation, and cogeneration projects.
(7) Provide that an electrical corporation meets resource adequacy
requirements established by the commission pursuant to Section
400.22, for the electric load served by the electrical corporation.
For purposes of this chapter, "electric load served by the electrical
corporation, including load served under a standby tariff," does not
include the electrical load of customers who have entered into a
direct transaction.
(8) Include demand and supply forecasts for 5- and 10-year
periods. The demand forecasts shall reflect all energy efficiency
and load management programs approved by the commission.
(c) The long-term integrated resource plan may provide for
investments in distributed generation that would improve electrical
system reliability, thereby deferring or eliminating investments in
distribution facilities that would otherwise be needed to improve
system reliability, by either direct investment by the electrical
corporation or under contract with a retail customer or a third
party, if the commission finds that the investment in distributed
generation would accomplish both of the following:
(1) Result in overall cost savings for ratepayers due to deferral
or elimination of electric distribution projects.
(2) Provide the required reliability and operational
characteristics to support adequate service reliability to customers
in the affected area.
(d) If the distributed generation is provided under contract with
a retail customer or a third party to reduce distribution system
loads, the retail customer or third party shall maintain physical
assurance that the contracted load reduction will be available during
all required time periods.
400.11. The commission shall, after public hearing, review and
approve a long-term integrated resource plan for every electrical
corporation, including those revisions to the plan that the
commission determines are necessary to meet the requirements of
Section 400.10 and achieve best value for utility customers.
400.15. In accordance with an electrical corporation's long-term
integrated resource plan approved pursuant to Section 400.11, and
consistent with Sections 454.5 and 701.1 and Article 16 (commencing
with Section 399.11), to meet resource adequacy requirements, each
electrical corporation shall manage a diversified, efficient,
cost-effective, environmentally responsible portfolio of
non-utility-owned generation under contract with the utility, and
utility-owned generation, combining the potential benefits of a
competitive wholesale market, including operating efficiencies and
lower prices, with the stability of cost-based generation resources,
to achieve best value for ratepayers at just and reasonable rates.
400.18. (a) The commission shall, on or before July 1, 2005,
prepare and submit to the Governor and the Legislature, a
comprehensive plan to streamline the transmission siting process.
The plan shall, at a minimum, include recommendations to eliminate
regulatory overlap and duplication, and recommendations to reduce the
time needed to process a request for transmission improvements. The
commission shall consult with the State Energy Resources
Conservation and Development Commission, the Independent System
Operator, electrical corporations, and interested parties in the
development and preparation of the plan.
(b) On or before December 31, 2005, the commission shall prepare
and transmit a report to the Legislature summarizing the status of
proceedings for each site for authorization of construction of all
upgrades, improvements, or additions to the transmission system
infrastructure determined by the electrical corporation to be
necessary to ensure reliability and for which the electrical
corporation has filed an application for a certificate of public
convenience and necessity. The report shall include action that the
commission has taken or proposes to take to facilitate the siting and
authorization of those facilities and the schedule for completion in
order to address the reliability needs identified by the electrical
corporation. To the extent that the commission determines that the
transmission upgrade, improvement, or addition is not needed, the
commission shall identify the alternative it intends to pursue in
order to ensure reliability. The commission shall annually update
its report as part of its annual workplan.
400.22. (a) All electrical load serving entities, including
nonutility electric service providers and community choice
aggregators, shall be subject to the same requirements for resource
adequacy, resource diversity, cost-effective energy efficiency, and
the renewable portfolio standard, that are applicable to electrical
corporations pursuant to this section, or otherwise as required by
law, or by order or decision of the commission.
(b) The commission, in consultation with the Independent System
Operator, shall establish resource adequacy requirements to ensure
that adequate physical generating capacity dedicated to serving all
load requirements is available to meet peak demand and planning and
operating reserves, at or deliverable to locations and at times as
may be necessary to ensure local area reliability and system
reliability, at just and reasonable rates.
(c) The commission shall implement and enforce these resource
adequacy requirements in a nondiscriminatory manner as to all load
serving entities. The electrical corporation's costs of meeting
those resource adequacy requirements, including the costs associated
with system reliability and local area reliability, that are found
reasonable by the commission, shall be fully recoverable from those
customers taking service from the electrical corporation, at the time
the commitment to incur the cost is made or thereafter, on a fully
non-bypassable basis pursuant to rates that are just and reasonable,
as determined by the commission.
(d) Resource adequacy requirements established by the commission
shall provide for, and ensure, all of the following:
(1) System-wide and local area grid reliability.
(2) Adequate physical generating capacity dedicated to serve all
load requirements, including planning and operating reserves, where
and when it is needed.
(3) Adequate and timely investment in new generating capacity to
meet future load requirements, including planning and operating
reserves.
(4) Market power mitigation.
(5) Deliverability.
(6) In order to ensure that new resources can be constructed if
necessary to meet the need, resource commitments by load serving
entities shall be made sufficiently far in advance, and no less than
three years in advance of need.
(e) Load serving entities may procure physical generating capacity
through a market-based mechanism, provided that the commission,
after a hearing, determines that there is convincing factual evidence
that the mechanism will achieve all of the following:
(1) Adequate physical generating capacity dedicated to serve all
load requirements when and where the electricity is needed, including
planning and operating reserves to ensure local area reliability and
system reliability.
(2) Adequate and timely investment in new generating capacity to
meet future load requirements, including planning and operating
reserves.
(3) Electricity that is purchased through the market is
deliverable to the load for which it is purchased.
(4) Reliability of the electrical grid is not impaired.
(5) A prospective market monitoring process and market power
mitigation measures are in place that are sufficient to ensure a
well-functioning wholesale electricity market.
(f) The commission shall adopt rules and regulations necessary to
enforce resource adequacy requirements established pursuant to this
section uniformly among all load serving entities, including
establishing a uniform accounting mechanism to identify, count,
track, and verify all capacity needed to meet these resource adequacy
requirements for each load serving entity. Pursuant to its authority
to revoke or suspend registration pursuant to Section 394.25, the
commission shall suspend the registration for a specified period, or
revoke the registration, of an electric service provider that fails
to comply with the rules and regulations adopted by the commission to
enforce resource adequacy requirements.
(g) For purposes of this chapter, "load serving entity" does not
include a local publicly owned electric utility as defined in Section
9604, the State Water Resources Development System commonly known as
the State Water Project, or customer generation .
, if the customer generation (1) takes standby service
from the electrical corporation on a commission-approved rate
schedule that requires the customer's load serving entity to provide
for adequate backup planning and operating reserves for that customer
generation or (2) is not physically interconnected to the
transmission grid, so that if the customer generation fails, backup
power is not supplied from the electricity grid.
400.30. To ensure that the obligation to provide customers with
reliable electric service at just and reasonable rates is met by an
electrical corporation, the commission shall adopt rules and
regulations consistent with the policies and provisions of this
chapter.
400.40. Nothing in this chapter shall alter or affect any outcome
of a competitive procurement process conducted by an electrical
corporation pursuant to any other law, including Section 454.5, prior
to January 1, 2005.
400.50. Nothing in this chapter shall alter or affect the
implementation of the California Renewables Portfolio Standard
Program pursuant to Article 16 (commencing with Section 399.11).
400.60. (a) Nothing in this chapter limits the ability of any
customer to participate in a Community Choice Aggregation program
pursuant to Section 366.2.
(b) In designating the earliest possible date for implementation
of a community choice aggregation program, the commission shall
ensure that there will be no cost-shifting or stranding of
investments made pursuant to a long-term integrated resource plan of
the electrical corporation that has been approved by the commission
pursuant to Section 400.11. In considering approval of the
electrical corporation's long-term integrated resource plan, the
commission shall also ensure that the plan includes a reasonable
estimate of the customer load departure through community choice
aggregation, as such estimate is provided for by a community choice
aggregator pursuant to Section 366.2.
400.70. On or before June 30, 2006, the commission shall prepare
and submit to the Legislature a report describing the extent to which
existing rate allocations for each customer class reflect cost of
service and describing how the continuing costs resulting from the
energy crisis of 2000-01, including, but not limited to, bond charges
and above-market contract costs incurred by the Department of Water
Resources, are being recovered from each customer class.
SEC. 4. Section 454.05 is added to the Public Utilities Code, to
read:
454.05. Every Except as
provided in Section 455, every decision of the commission
pursuant to Section 454 that approves a change in rates or an
alteration of any utility classification, contract, practice,
project, or rule that affects rates directly or indirectly pursuant
to Section 454, or the settlement of any judicial or administrative
proceeding to which the commission is a party and that results in a
change in rates or a change in a utility classification, contract,
practice, project, or rule that affects rates directly or indirectly,
shall be made by vote of a majority of the commission membership in
a public meeting of the commission. A decision made in violation of
this section is void.
SEC. 5. Section 1001.7 is added to the Public Utilities Code, to
read:
1001.7. (a) Prior to approving a certificate of public
convenience and necessity for generation resources proposed to be
constructed by an applicant electrical corporation, the commission
shall do all of the following:
(a)
(1) Include in the proceeding a timely opportunity for any
other creditworthy party to submit a proposal for construction of
alternative generation resources if the proposal meets the same or
higher standards for cost to ratepayers and local area and
system-wide reliability as the proposal of the applicant electrical
corporation.
(b)
(2) Evaluate and determine whether a proposal for an
alternative generation resources project submitted pursuant to
subdivision (a), other than the proposal of the applicant electrical
corporation, would provide the same or lower cost to ratepayers, same
or better local area and system-wide reliability, and the same or
superior environmental benefits.
(c) Find that, consistent with subdivision (b) and Section 400.15,
the certificate of public convenience and necessity achieves the
best value for ratepayers.
(b) The commission shall reject the certificate of public
convenience and necessity for generation resources proposed to be
constructed by an applicant electrical corporation if the commission
determines that an alternative generation resources project submitted
pursuant to subdivision (a) provides all of the following:
(1) The same or superior local area and systemwide reliability
than the generation resource proposed to be constructed by an
applicant electrical corporation.
(2) The same or superior environmental benefits than the
generation resource proposed to be constructed by an applicant
electrical corporation
(3) A lower cost to ratepayers than the generation resource
proposed to be constructed by an applicant electrical corporation.
SEC. 6. 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.