BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1201|
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THIRD READING
Bill No: SB 1201
Author: Torlakson (D)
Amended: 4/26/04
Vote: 27 - Urgency
SENATE ENERGY, U.&C. COMMITTEE : 6-0, 4/13/04
AYES: Bowen, Alarcon, Dunn, McClintock, Murray, Sher
NO VOTE RECORDED: Morrow, Battin, Vasconcellos
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Electrical restructuring: BART
SOURCE : Author
DIGEST : This bill authorizes the Bay Area Rapid Transit
District to receive electric service from a local
publicly-owned supplier of electricity under the same terms
as they presently have.
ANALYSIS :
Existing Law
1.Permits the Bay Area Rapid Transit District (BART) to
purchase "preference power" from a federal power
marketing agency, requires Pacific Gas and Electric
Company (PG&E) to deliver that power via its transmission
and distribution facilities without discrimination or
delay, and requires PG&E to bill BART as though all power
is delivered to a single point (SB 184 [Kopp], Chapter
CONTINUED
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681, Statutes of 1995).
2.Exempts BART's load served by preference power from the
"competition transition charge" (CTC) collected pursuant
to AB 1890 (Brulte), Chapter 856, Statutes of 1996.
This bill permits BART to purchase electricity on the same
terms from a local publicly-owned electric utility.
Background
Until 1994, BART was served by PG&E. Under the federal
Reclamation Project Act of 1939, BART qualifies as a
"preference entity" to purchase and receive hydropower from
the Central Valley Project (CVP). This federal power is
marketed by the Western Area Power Administration (WAPA).
In 1994, BART received, under a 10-year contract, an
allocation of federal reclamation project power from the
CVP through WAPA.
The provisions of SB 184 and AB 1890 referenced above
enabled BART to receive its allocation of federal
preference power at its multiple delivery points in the Bay
Area via PG&E's transmission and distribution system,
without paying many of the costs associated with retail
service.
BART has sought another preference power contract from WAPA
to replace the current contract, which ends in 2006.
Demand for low-cost federal preference power is high, and
costs and other terms are not as favorable as they have
been in the past. BART must give notice to WAPA by June
whether it wants to continue buying power from WAPA under a
new contract. BART is seeking this urgency bill to give it
another supply option if contracting with WAPA doesn't work
out.
A local publicly-owned ("municipal") electric utility could
sell excess power to BART in much the same way as WAPA
currently does, provided PG&E is required to deliver it to
BART's facilities within PG&E's service area. While the
cost may not be as low as the federal preference power, it
is likely to be lower than the alternative - bundled retail
service from PG&E. BART's other previous option, direct
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access, is not available currently as direct access has
been suspended pursuant to AB 1X (Keeley), Chapter 4,
Statutes of 2001.
Comments
This bill is the latest in a series of special statutes
allowing BART to seek lower-cost alternatives to PG&E
service in the wholesale market. BART's argument for
special treatment is that electricity costs are a major
part of its operating costs (which are funded by taxpayers
and fare revenues) and BART requires access to wholesale
electricity to provide cost-effective transit services.
BART is also unique in that it departed PG&E service before
electric restructuring or the 2000/2001 energy crisis, so
the costs incurred during that time, which are now embedded
in PG&E's bundled rates and recovered from departing
customers through surcharges, were not incurred to serve
BART.
BART was among several parties who obtained an exemption
from the "nonbypassable" charges that AB 1890 required for
recovery of IOU generation-related costs that could be
stranded by customer departure to other suppliers. The
current exemption applies only to the extent BART's load is
served by federal preference power, and not if BART load is
served via the direct access or bundled service options.
As an adjunct to permitting BART to purchase electricity
from a municipal utility, this bill would extend the CTC
exemption to BART load served by a municipal utility. Most
of the original elements of the CTC have been fully
collected. The remaining charge ("tail CTC") is collected
to pay for pre-existing contracts with qualifying
facilities which are still in effect. Although BART has
been exempt from the costs of these contracts, the
contracts were entered by PG&E prior to BART's departure.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 5/10/04)
Bay Area Rapid Transit District (source)
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NC:cm 5/11/04 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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