BILL NUMBER: AB 2499 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 2, 2004
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.
a chapter heading to, and to add Chapter 2 (commencing with
Section 9505) to, Division 4.8 of the Public Utilities Code, relating
to new locally owned public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 2499, as amended, Jerome Horton. Energy Commission:
new 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. The Public
Utilities Act imposes various duties and responsibilities on the
Public Utilities Commission with respect to the purchase of
electricity and requires the commission to review and adopt a
procurement plan and a renewable energy procurement plan for each
electrical corporation pursuant to the California Renewables
Portfolio Standard Program. Under existing law, the governing board
of a local publicly owned electric utility is responsible for
implementing and enforcing a renewables portfolio standard that
recognizes the intent of the Legislature to encourage renewable
resources, while taking into consideration the effect of the standard
on rates, reliability, and financial resources and the goal of
environmental improvement.
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 providing electricity to any new or
additional electrical service area on or after January 1, 2006, to
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 equivalent requirements for
resource adequacy as those requirements that are applicable to an
electrical corporation, including reserve requirements . The
bill would require a new publicly owned electric utility to adopt
findings, as specified a specified finding
regarding resource adequacy , before commencing operation or
providing electricity 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 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.
SECTION 1. A chapter heading is added to Division 4.8 (commencing
with Section 9500) of the Public Utilities Code, immediately
preceding Section 9500, to read:
CHAPTER 1. WEATHERIZATION PROGRAMS
SEC. 2. Chapter 2 (commencing with Section 9505) is added to
Division 4.8 of the Public Utilities Code, to read:
CHAPTER 2. NEW PUBLICLY OWNED ELECTRIC UTILITY RESOURCE
PLANNING
9505. "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.
SEC. 3. Section 25308 is added to the Public Resources Code, to
read:
25308. (a)
9506. 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 or providing electricity to any
new or additional electrical service area on or after January 1,
2006, a new publicly owned electric utility shall 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) 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.
9507. Before 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 adopt findings,
supported by a written record :
(a) That , 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. Section 9506.
SEC. 6.
SEC. 3. 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.