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: 8/23/04 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. The bill also provides that the South Coast Air
Quality Management District shall exempt vehicles used for
electric utility high voltage work from any fleet rules
requiring the use of alternative fuel.
CONTINUED
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Senate Floor Amendments of 8/23/04 add the language
providing the fleet rule exemption for utility trucks.
ANALYSIS : Existing law requires electric corporations to
submit energy procurement plans to the State Public
Utilities Commission (PUC) for review and approval.
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.
This bill requires the South Coast Air Quality Management
District (SCAQMD) to exempt vehicles used for electric
utility high-voltage construction and maintenance
operations from its existing fleet rules
requiring the use of alternative fuels, sunsetting January
1, 2010.
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.
Fleet Rules
SCAQMD's Rule 1196 currently applies to utility trucks
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owned by the Los Angeles Department of Water and Power.
Proponents argue that health and safety concerns warrant an
exemption for utility trucks (similar to the exemption
currently afforded to police and fire vehicles) because
truck fueled by alternative fuels (e.g., natural gas) don't
have sufficient power to operate hydraulic lifts used for
power line maintenance.
SCAQMD contends that it has waived alternative fuel
requirements for applications where alternative fuel
engines/vehicles do not meet performance specifications.
SCAQMD says an administrative remedy to the problems exist
and has been used where appropriate. SCAQMD says a blanket
exemption could have a significant impact Rule 1196's
ability to achieve emission reductions.
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,
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
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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 8/22/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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