BILL NUMBER: AB 2499 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 12, 2004
AMENDED IN ASSEMBLY MARCH 26, 2004
INTRODUCED BY Assembly Member Jerome Horton
FEBRUARY 19, 2004
An act to add 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 energy resources.
LEGISLATIVE COUNSEL'S DIGEST
AB 2499, as amended, Jerome Horton. 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 new publicly owned electric
utilities, as defined, to meet certain resource adequacy
requirements. The bill would require a new publicly owned
electric utility, before commencing operation or
and providing electric energy to an additional
new retail end-use customer
customers 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 May 1,
2005, to develop and adopt the requirements that a new
publicly owned electric utility is required to meet in its long-term
resource plan. The bill would require the governing body of a
new 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 adopt requirements for former
customers of a new publicly owned electric utility that commence
taking electric commodity service from an electrical corporation
to prevent the subsidization of those former new publicly
owned electric utility customers by the existing
other 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 adopt requirements
, would make a failure to collect or pay the charge
meet those requirements 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.
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) 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. crisis, almost all of the publicly
owned utilities were established before 1990, the preponderance of
them being established before 1950.
(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
new 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 New PUBLICLY
OWNED ELECTRIC UTILITIES
25450. As used in this chapter, "publicly
"new 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 took legal action 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 new
publicly owned electric utilities, new 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 and
providing electric energy to any additional
retail end-use customer on or after July 1, 2005, a new
publicly owned electric utility shall obtain approval of a long-term
resource plan from the commission.
(c) On or before July May 1, 2005,
the commission shall develop and adopt the requirements that a
new 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 new 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 new
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 new
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 new publicly owned
electric utility's long-term resource plan pursuant to Section 25451.
(b) The public interest and necessity requires that the new
publicly owned electric utility provides retail electric
service and the anticipated public good outweighs the reasonably
identified risks.
25453. Nothing in this chapter limits any obligation of a
publicly owned electric utility, as defined in subdivision (d) of
Section 9604 of the Public Utilities Code, and not subject to this
chapter, to satisfy the resource adequacy requirements of their
electric load.
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.
378.5. The commission shall adopt requirements for former
customers of a new publicly owned electric utility, as defined in
Section 25450 of the Public Resources Code, that commence taking
electric commodity service from an electrical corporation to prevent
the subsidization of those former new publicly owned electric utility
customers by the other 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. ____ CORRECTIONS Digest
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