BILL NUMBER: SB 173 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 3, 2003
INTRODUCED BY Senator Dunn
FEBRUARY 12, 2003
An act to add Section 17206.7 to the Business and Professions
Code, and to add Section 391.1 to the Public Utilities Code, relating
to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 173, as amended, Dunn. Energy.
(1) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations, and authorizes the commission to fix just and
reasonable rates and charges. Existing law provides for a short-run
avoided cost methodology for the price paid by a public utility
electrical corporation for electricity generated by a nonutility,
qualifying small power production or qualifying cogeneration facility
(QF), as defined. This methodology includes adjustments to prices
based upon gas index prices.
This bill would require restrict the
commission to the use of only
gas price indexes determined by the commission to be
reliable and verified , and meeting listed requirements,
and would require the commission to establish standards
for reliability and verification for gas price indexes used to
establish or adjust prices paid to QFs by a public utility electrical
corporation. The bill would also restrict the commission, if
it establishes a price benchmark used to determine the reasonability
of utility natural gas purchases for the purpose of determining a
utility bonus payment, to the use of index prices that meet those
listed requirements. The bill would further provide that if
the commission determines that no reliable and verifiable gas price
index exists meeting the standards adopted by the commission, the
commission is required to establish and adjust the prices paid to QFs
by a public utility electrical corporation in an equitable manner,
consistent with the requirements of the federal Public Utility
Regulatory Policies Act of 1978.
(2) Existing law prohibits unfair competition, including any
unlawful, unfair, or fraudulent business act or practices. In an
action brought in the name of the people by the Attorney General or
any district attorney, and in specified instances by a county
counsel, city prosecutor, or city attorney, existing law provides
that any person who engages, has engaged, or proposes to engage in
unfair competition, is liable for a civil penalty not to exceed
$2,500 for each violation.
This bill would provide that any person engaging in an act of
unfair competition of making or proposing to make a false statement
or report for use in a gas index price, is liable for a civil penalty
not to exceed $25,000 for each violation.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 391.1 is added to the Public Utilities Code, to
read:
391.1. (a) (1) The commission shall
may use only gas price indexes determined by the
commission to be reliable and verified, for establishing or adjusting
prices paid to nonutility power generators by a public utility
electrical corporation pursuant to Section 390.
(2) The commission may determine an index to be reliable and
verified as required by paragraph (1) only if the published index
price calculations meet all of the following requirements:
(A) All transactions that comprise the published index price
calculations are transacted on an organized exchange subject to
regulation by the federal Commodity Futures Trading Commission.
(B) The exchange on which transactions are made is required by the
federal Commodity Futures Trading Commission to maintain and enforce
an internal auditing mechanism and to maintain records of trading
activity so a clear audit trail is possible.
(C) The exchange on which transactions are made is required to
conduct, with federal Commodity Futures Trading Commission oversight,
market surveillance and trade surveillance designed to prevent
market manipulation and other anticompetitive activity.
(D) The transactions that comprise the published index price are
reported to the exchange and timestamped within one minute of the
transaction.
(E) Transactions reported to the exchange include all of the
following information:
(i) Price.
(ii) Volume.
(iii) Delivery point.
(iv) Duration.
(v) Date and time of transaction.
(vi) Whether the transaction is a purchase or a sale.
(vii) Counterparty.
(b) The commission shall establish standards for reliability and
verification for gas price indexes used to establish or adjust prices
paid to nonutility power generators by a public utility electrical
corporation pursuant to Section 390.
(c) If the commission establishes a price benchmark, based on
a single index or a combination of published gas index prices, used
to determine the reasonability of utility natural gas purchases for
the purpose of determining a utility bonus payment, the commission
may use only index prices that meet the requirements of subdivision
(a).
(d) If the commission determines that no reliable and
verifiable gas price index exists meeting the standards adopted
pursuant to this section, the commission shall establish and adjust
the prices paid to nonutility power generators by a public utility
electrical corporation in an equitable manner, consistent with the
federal Public Utility Regulatory Policies Act of 1978 (
federal Public Law 95-617), including any
amendments to that act and the regulations adopted under that act by
the Federal Energy Regulatory Commission.
SEC. 2. Section 17206.7 is added to the Business and Professions
Code, to read:
17206.7. (a) Making a false statement or report for use in an
energy price index is unfair competition.
(b) Notwithstanding the maximum civil penalty in Section 17206,
any person who makes, has made, or proposes to make a false statement
or report for use in a gas price index pursuant to Section 390 of
the Public Utilities Code, shall be liable for a civil penalty not to
exceed twenty-five thousand dollars ($25,000) for each violation.
SEC. 3. (a) Subdivision (a) of Section 17206.7 of the Business and
Professions Code does not constitute a change in, but is declaratory
of, existing law.
(b) It is the intention of the Legislature in adding subdivision
(b) of Section 17206.7 of the Business and Professions Code, to
change existing law by providing for civil penalties in an amount
higher than would be available pursuant to Section 17206.