BILL NUMBER: AB 2499 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 20, 2004
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 Sections 25142, 25308, 25309, and
25310 to 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: new
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 and providing electric energy
electricity to new retail end-use customers on or after
July 1, 2005 January 1, 2006 , 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 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 in conformance
with regulations adopted by the Energy Commission . 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. The bill would exclude expenditures for the preparation
of plans related to provision of service from this prohibition.
(2) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations , and . Existing law
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 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
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 adopt
requirements, would make a failure to 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 with regard to certain mandates
no reimbursement is required by this act for a
specified reason reasons .
With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
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, 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 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 the resource plans
and , provide assistance in the
preparation of these plans , and certify that the plans conform
to resource adequacy requirements . 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, "new
SEC. 2. Section 25142 is added to the Public Resources Code, to
read:
25142. "New publicly owned electric utility" means a local
publicly owned electrical electric
utility, as defined in subdivision (d) of Section 9604 of the Public
Utilities Code, that 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 retail
customers on or after July 1, 2005 January 1,
2006 .
25451.
SEC. 3. Section 25308 is added to the Public Resources Code, to
read:
25308. (a) In order to provide reliable and sustainable
electric commodity service to end-use retail
retail end-use customers of new publicly owned electric
utilities, new publicly owned electric utilities shall meet
the same equivalent requirements for resource
adequacy as applicable to an electrical corporation, including
reserve requirements.
(b) Before commencing operation and providing electric energy to
any 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 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). January 1, 2006, a new publicly
owned electric utility shall obtain certification from the commission
that its resource plan meets the requirements for resource adequacy
pursuant to subdivision (a).
(c) The resource plan of a new publicly owned electric utility
shall conform to any information submission or filing requirements
specified by the commission pursuant to Section 25301.
(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. its resource plan to the commission, in
conformance with regulations adopted by the commission.
SEC. 4. Section 25309 is added to the Public Resources Code, to
read:
25309. Before providing electric service or expending funds
or incurring any risk or liability, contractual, contingent, or
otherwise, except for expenditures for the preparation of plans
related to the provision of that service, 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 certified
the new publicly owned electric utility's long-term
resource plan pursuant to Section 25451.
25308.
(b) The public interest and necessity requires
require that the new publicly owned electric utility
provides provide retail electric service
and the anticipated public good outweighs the reasonably identified
risks.
25453.
SEC. 5. Section 25310 is added to the Public Resources Code, to
read:
25310. Nothing in this chapter limits any obligation of a
local 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 adopt requirements for former
customers of a new publicly owned electric utility, as defined in
Section 25450 25142 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 certain 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 and
because as to certain other costs, a local agency or school district
has the authority to levy service charges, fees, or assessments
sufficient to pay for the program or level of service mandated by
this act, within the meaning of Section 17556 of the Government Code.
However, notwithstanding Section 17610 of the Government Code, if
the Commission on State Mandates determines that this act contains
other costs mandated by the state, reimbursement to local agencies
and school districts for those costs shall be made pursuant to Part 7
(commencing with Section 17500) of Division 4 of Title 2 of the
Government Code. If the statewide cost of the claim for
reimbursement does not exceed one million dollars ($1,000,000),
reimbursement shall be made from the State Mandates Claims Fund
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