BILL NUMBER: AB 2499 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 26, 2004
INTRODUCED BY Assembly Member Jerome Horton
FEBRUARY 19, 2004
An act to add Section 366.8 Chapter 5.5
(commencing with Section 25450) to Division 15 of the Public
Resources Code, and to add Section 378.5 to the Public
Utilities Code, relating to public utilities.
energy resources.
LEGISLATIVE COUNSEL'S DIGEST
AB 2499, as amended, Jerome Horton. Electrical service:
reliability Energy Commission: publicly owned
electric utilities: long-term resource plans .
(1) The Warren-Alquist State Energy Resources Conservation and
Development Act establishes the State Energy Resources Conservation
and Development Commission (Energy Commission) and requires it to
certify sufficient sites and related facilities that are required to
provide a supply of electricity sufficient to accommodate projected
demand for power statewide. The act also requires the Energy
Commission to undertake a continuing assessment of trends in the
consumption of electricity and other forms of energy and to analyze
the social, economic, and environmental consequences of those trends
and to collect from electric utilities, gas utilities, and fuel
producers and wholesalers and other sources, forecasts of future
supplies and consumption of all forms of energy.
This bill would require publicly owned electric utilities, as
defined, to meet certain resource adequacy requirements. The bill
would require a publicly owned electric utility, before commencing
operation or providing electric energy to an additional retail
end-use customer on or after July 1, 2005, to obtain Energy
Commission approval of a long-term resource plan, and to update the
plan at least every 3 years. The bill would require the Energy
Commission, on or before July 1, 2005, to develop and adopt the
requirements that a publicly owned electric utility is required to
meet in its long-term resource plan. The bill would require the
governing body of a publicly owned electric utility to adopt
findings, as specified, before providing electric service or
expending funds or incurring any risk or liability, contractual,
contingent or otherwise, to provide that service.
(2) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations, and authorizes the Public Utilities Commission to
establish rules for all public utilities, subject to control by the
Legislature.
The bill would require the Public Utilities Commission to impose a
nonbypassable charge on former customers of an electrical
corporation that take electric commodity service from a publicly
owned electric utility to prevent the subsidization of those
customers by the existing customers of the electrical corporation.
(3) Existing law makes a violation of an order or requirement of
the Public Utilities Commission a crime.
This bill, by requiring the Public Utilities Commission to impose
a new charge, would make a failure to collect or pay the charge a new
crime, thereby imposing a state-mandated local program.
(4) 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.
Existing law, the Public Utilities Act, states that it is the
policy of the state and the intent of the Legislature, to reaffirm
that each electrical corporation continue to operate its electric
distribution grid in its service territory and do so in a safe,
reliable, efficient, and cost-effective manner.
This bill would state that it is the intent of the Legislature to
enact legislation to ensure that all customers who receive electrical
service from a newly created entity are provided with reliable
service.
Vote: majority. Appropriation: no. Fiscal committee:
no yes . State-mandated local program:
no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 366.8 is added to the Public Utilities
SECTION 1. The Legislature finds and declares all of the
following:
(a) The reliable supply of electricity is essential to the health,
safety, and economic well-being of all state consumers.
(b) Due to the interconnected nature of the electric transmission
and distribution systems, all California customers have vested
interest in ensuring that all state utilities provide reliable
electric service.
(c) Since the California electricity crisis, there has been a
renewed interest in creating publicly owned utilities. Before the
crisis, the last publicly owned utility was established in the late
1940s.
(d) It is in the interest of all state consumers to ensure that
newly formed publicly owned utilities provide reliable service.
(e) To ensure that customers of newly formed publicly owned
electric utilities receive reliable service, each such entity should
adopt a resource plan to ensure reliable service for their customers.
(f) The State Energy Resources Conservation and Development
Commission should use its technical expertise to evaluate, certify,
and enforce those resource plans and provide assistance in the
preparation of these plans. Customers of a newly formed publicly
owned electric utility should be allowed to review and comment on the
resource plan.
(g) The Public Utilities Commission should establish rules to
ensure that there is no cost-shifting between customers that remain
with their existing utility and customers that receive service from
newly created publicly owned electric utilities.
SEC. 2. Chapter 5.5 (commencing with Section 25450) is added to
Division 15 of the Public Resources Code, to read:
CHAPTER 5.5. RESOURCE ADEQUACY FOR PUBLICLY OWNED ELECTRIC
UTILITIES
25450. As used in this chapter, "publicly owned electric utility"
means a local publicly owned electrical utility, as defined in
subdivision (d) of Section 9604 of the Public Utilities Code, that
declared its intention to establish a publicly owned electric utility
on or after January 1, 2001 and that provides electric energy
commodity service to new or additional retail customers on or after
July 1, 2005.
25451. (a) In order to provide reliable and sustainable electric
commodity service to end-use retail customers of publicly owned
electric utilities, publicly owned electric utilities shall meet the
same requirements for resource adequacy as applicable to an
electrical corporation, including reserve requirements.
(b) Before commencing operation or providing electric energy to
any additional retail end-use customer on or after July 1, 2005, a
publicly owned electric utility shall obtain approval of a long-term
resource plan from the commission.
(c) On or before July 1, 2005, the commission shall develop and
adopt the requirements that a publicly owned electric utility is
required to meet in its long-term resource plan to ensure compliance
with subdivision (a).
(d) After receiving approval of its initial long-term resource
plan, a publicly owned electric utility shall submit updates to its
long-term resource plan to the energy commission at least once every
three years.
(e) The long-term resource plans submitted to the commission under
this section shall be made available for public inspection, subject
to the confidentiality requirements of Section 25322.
(f) Any person or entity may challenge the adequacy of a publicly
owned electric utility's long-term resource plan submitted under this
section in accordance with rules adopted by the commission.
25452. Before providing electric service or expending funds or
incurring any risk or liability, contractual, contingent, or
otherwise, to provide that service, the governing body of a publicly
owned electric utility shall adopt, in a public hearing that allows
for public participation, both of the following findings, supported
by a written record:
(a) The commission has approved the publicly owned electric
utility's long-term resource plan pursuant to Section 25451.
(b) The public interest and necessity requires that the publicly
owned electric utility provides retail electric service and the
anticipated public good outweighs the reasonably identified risks.
SEC. 3. Section 378.5 is added to the Public Utilities Code to
read:
378.5. The commission shall impose a nonbypassable charge on
former customers of an electrical corporation that take electric
commodity service from a publicly owned electric utility, as defined
in Section 25450 of the Public Resources Code, to prevent the
subsidization of those customers by the existing customers of the
electrical corporation.
SEC. 4. 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. Code, to read:
366.8. It is the intent of the Legislature to enact legislation
to ensure that all customers who receive electrical service from a
newly created entity are provided with reliable service.