BILL NUMBER: AB 2499 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 14, 2004
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 Sections 25142, 25308, 25309, and 25310 to the
Public Resources Code, and to add Section 378.5 to the
Public Utilities Code, Resources Code, relating
to energy resources.
LEGISLATIVE COUNSEL'S DIGEST
AB 2499, as amended, Jerome Horton. Energy Commission: new
publicly owned electric utilities: 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 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 electricity to new retail end-use
customers on or after January 1, 2006, to obtain Energy
Commission commission approval of a resource
plan, and to update the plan in conformance with regulations adopted
by the Energy Commission commission .
The bill would require the governing body of a new publicly owned
electric utility to adopt findings, as specified, before providing
electric service electricity 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 the
provision of service from this prohibition. By imposing
new requirements on new local publicly owned electrical utilities,
this bill would impose a state-mandated local program.
(2) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations. 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 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 specified 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.
(2) 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, including the creation of a State Mandates Claims Fund
to pay the costs of mandates that do not exceed $1,000,000 statewide
and other procedures for claims whose statewide costs exceed
$1,000,000.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
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 the
resource plans, 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. Section 25142 is added to the Public Resources Code, to
read:
25142. "New publicly owned electric utility" means a local
publicly owned electric utility, as defined in subdivision (d) of
Section 9604 of the Public Utilities Code, that took legal
action to establish a commenced operations and
provided electricity and distribution service to retail customers
within its jurisdiction as an operating publicly owned electric
utility on or after January 1, 2001, and that provides
electric service electricity to new retail
customers on or after January 1, 2006.
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 electricity to retail
end-use customers of new publicly owned electric utilities, new
publicly owned electric utilities shall meet equivalent requirements
for resource adequacy as applicable to an electrical corporation,
including reserve requirements.
(b) Before commencing operation and providing electric
energy electricity to any retail end-use
customer on or after 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 resource plan, a new
publicly owned electric utility shall submit updates to 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
electricity 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 certified the new publicly owned electric
utility's resource plan pursuant to Section 25308.
(b) The public interest and necessity require that the new
publicly owned electric utility provide retail electric
service electricity and the anticipated public
good outweighs the reasonably identified risks.
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 25142 of the Public Resources Code, that commence taking
electric 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
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.
SEC. 6. Notwithstanding Section 17610 of the Government Code, if
the Commission on State Mandates determines that this act contains
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.