BILL NUMBER: AB 2499 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 16, 2004
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, 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 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 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 or providing
electricity to new retail end-use customers
any new or additional electrical service area on or after
January 1, 2006, to obtain commission approval of a resource
plan, and submit its resources plan to the commission
and would require the commission to determine if the plan meets the
requirements for resource adequacy. The bill would require a new
publicly owned electric utility to update the plan in
conformance with regulations adopted by the commission. The bill
would require the governing body of a new publicly
owned electric utility to adopt findings, as specified, before
commencing operation or providing 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 to any new
or additional electrical service area, on or after January 1, 2006
. By imposing new requirements on new local publicly owned
electrical utilities, this bill would impose a state-mandated local
program.
(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 review the plans
to determine if they 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 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
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
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 those
requirements that are applicable to an electrical corporation,
including reserve requirements.
(b) Before commencing operation and or
providing electricity to any retail end-use customer
new or additional electrical service area on or
after January 1, 2006, a new publicly owned electric utility shall
obtain certification from the commission that its resource
plan submit its resource plan to the commission and
the commission shall determine if the 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
(d) 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 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 commencing operation or
providing electricity to any new or additional electrical service
area on or after January 1, 2006, 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.
(a) That the resource plan of the new publicly owned electric
utility meets the adequacy requirements of subdivision (a) of Section
25308. In adopting this finding, a new publicly owned electric
utility shall include a discussion of the determination made by the
commission pursuant to subdivision (b) of Section 25308, whether the
plan meets the requirements for resource adequacy.
(b) The public interest and necessity require that the new
publicly owned electric utility provide retail 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. 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.