BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2499|
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THIRD READING
Bill No: AB 2499
Author: Jerome Horton (D)
Amended: 7/2/04 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 7-2, 6/22/04
AYES: Bowen, Morrow, Alarcon, Dunn, Murray, Sher,
Vasconcellos
NOES: Battin, McClintock
SENATE APPROPRIATIONS COMMITTEE : 7-4, 8/4/04
AYES: Alpert, Bowen, Escutia, Karnette, Machado, Murray,
Speier
NOES: Battin, Ashburn, Johnson, Poochigian
NO VOTE RECORDED: Aanestad, Burton
ASSEMBLY FLOOR : 62-5, 5/26/04 - See last page for vote
SUBJECT : New publicly owned electric utilities
SOURCE : Southern California Edison
DIGEST : This bill requires every new local publicly
owned electric utility to meet resource adequacy
requirements equivalent to those established by the State
Public Utilities Commission for electrical corporations, as
specified.
ANALYSIS : Existing law requires electric corporations to
submit energy procurement plans to the State Public
Utilities Commission (PUC) for review and approval.
CONTINUED
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Electric corporations are required to maintain an
appropriate reserve level and to gradually increase their
renewable energy portfolios to meet a statewide goal of 20
percent by 2018.
This bill requires every new local publicly owned electric
utility (municipal utilities), established after January 1,
2001, to prepare long-term resource plans that meet the
same resource adequacy criteria required of electric
corporations.
This bill requires the local public utility, before
commencing operation or providing electricity on or after
January 1, 2006, to adopt findings in a public hearing that
the resource plan meets the adequacy requirements.
Comments
A number of municipal utilities were formed after the
energy crisis of 2001, as local governments sought to
increase electricity reliability in their communities.
According to the author's office, recently established
municipal utilities do not have experience in electricity
procurement and have little or no generation capacity. As
a result, new municipal utilities may not be able to meet
their resource needs and could jeopardize the reliability
of the distribution grid.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
There are unknown mandated, potentially reimbursable, costs
for the hearing provisions of the bill. Over the past two
years, approximately 20 cities have considered establishing
a new publicly owned electric utility; only two are
actually providing service. Assuming, for example, that
the costs of conducting a hearing and adopting specified
findings are $5,000 per hearing, increased costs could be
$50,000 per year. It is unknown to what extent such costs
could be recovered through the rates of new public
utilities.
Increased costs to new publicly owned electric utilities to
meet the resource requirements are unknown. Presumably,
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such cots would be recovered through the rates.
There are no increased costs to the PUC.
SUPPORT : (Verified 8/9/04)
Southern California Edison (source)
Congress of California Seniors
Pacific Gas and Electric Company
Sermpra
OPPOSITION : (Verified 8/9/04)
California Municipal Utilities Association
South San Joaquin Irrigation District
ASSEMBLY FLOOR :
AYES: Aghazarian, Bates, Berg, Bogh, Calderon, Campbell,
Canciamilla, Chu, Cogdill, Cohn, Corbett, Correa,
Daucher, Diaz, Dutra, Dymally, Firebaugh, Garcia,
Goldberg, Hancock, Harman, Jerome Horton, Jackson, Keene,
Kehoe, Koretz, La Suer, Laird, Leno, Levine, Longville,
Lowenthal, Maddox, Maldonado, Matthews, Maze, McCarthy,
Montanez, Mountjoy, Mullin, Nakanishi, Nakano, Nation,
Negrete McLeod, Oropeza, Parra, Pavley, Plescia, Reyes,
Richman, Ridley-Thomas, Salinas, Samuelian, Spitzer,
Strickland, Vargas, Wesson, Wiggins, Wolk, Wyland, Yee,
Nunez
NOES: Dutton, Frommer, Haynes, Houston, Steinberg
NO VOTE RECORDED: Benoit, Bermudez, Chan, Chavez, Cox,
Shirley Horton, La Malfa, Leslie, Lieber, Liu, Pacheco,
Runner, Simitian
NC:cm 8/9/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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