BILL NUMBER: SB 1575	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Soto

                        FEBRUARY 19, 2004

   An act to amend Sections 218, 366, and 366.2 of the Public
Utilities Code, relating to public utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1575, as introduced, Soto.  Direct transactions:  community
choice aggregation.
   The Public Utilities Act requires the Public Utilities Commission
to take actions as needed to facilitate direct transactions between
electricity suppliers and end-use customers, and authorizes the
voluntary aggregation of customers' electrical loads.  The act
specifically authorizes customers to aggregate their electrical loads
as members of their local community with community choice
aggregators, and authorizes a community choice aggregator to
aggregate the electrical load of interested electricity consumers
within its boundaries.  The act defines terms for its purposes.
   This bill would make technical, nonsubstantive changes to those
provisions.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  no.
State-mandated local program:  no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 218 of the Public Utilities Code is amended to
read:
   218.  (a) "Electrical corporation" includes every corporation or
person owning, controlling, operating, or managing any electric plant
for compensation within this state, except where electricity is
generated on or distributed by the producer through private property
solely for its own use or the use of its tenants and not for sale or
transmission to others.
   (b) "Electrical corporation" does not include a corporation or
person employing cogeneration technology or producing power from
other than a conventional power source for the generation of
electricity solely for any one or more of the following purposes:
   (1) Its own use or the use of its tenants.
   (2) The use of or sale to not more than two other corporations or
persons solely for use on the real property  on 
 at  which the electricity is generated or on real property
immediately adjacent thereto, unless there is an intervening public
street constituting the boundary between the real property on which
the electricity is generated and the immediately adjacent property
and one or more of the following applies:
   (A) The real property on which the electricity is generated and
the immediately adjacent real property is not under common ownership
or control, or that common ownership or control was gained solely for
purposes of sale of the electricity so generated and not for other
business purposes.
   (B) The useful thermal output of the facility generating the
electricity is not used on the immediately adjacent property for
petroleum production or refining.
   (C) The electricity furnished to the immediately adjacent property
is not utilized by a subsidiary or affiliate of the corporation or
person generating the electricity.
   (3) Sale or transmission to an electrical corporation or state or
local public agency, but not for sale or transmission to others,
unless the corporation or person is otherwise an electrical
corporation.
   (c) "Electrical corporation" does not include a corporation or
person employing landfill gas technology for the generation of
electricity for any one or more of the following purposes:
   (1) Its own use or the use of not more than two of its tenants
located on the real property on which the electricity is generated.
   (2) The use of or sale to not more than two other corporations or
persons solely for use on the real property on which the electricity
is generated.
   (3) Sale or transmission to an electrical corporation or state or
local public agency.
   (d) "Electrical corporation" does not include a corporation or
person employing digester gas technology for the generation of
electricity for any one or more of the following purposes:
   (1) Its own use or the use of not more than two of its tenants
located on the real property on which the electricity is generated.
   (2) The use of or sale to not more than two other corporations or
persons solely for use on the real property on which the electricity
is generated.
   (3) Sale or transmission to an electrical corporation or state or
local public agency, provided, however, that the sale or transmission
of the electricity service to a retail customer shall only be
provided through the transmission system of the existing local
publicly owned electric utility or electrical corporation of that
retail customer.
   (e) The amendments made to this section  at the 1987
portion of the 1987-88 Regular Session of the Legislature 
 by Chapter 880 of the Statutes of 1988  do not apply to any
corporation or person employing cogeneration technology or producing
power from other than a conventional power source for the generation
of electricity that physically produced electricity prior to January
1, 1989, and furnished that electricity to immediately adjacent real
property for use thereon prior to January 1, 1989.
  SEC. 2.  Section 366 of the Public Utilities Code is amended to
read:
   366.  (a) The commission shall take actions as needed to
facilitate direct transactions between electricity suppliers and
end-use customers.  Customers  shall be entitled to 
 may  aggregate their electrical loads on a voluntary
basis,  provided that   if  each customer
does so by a positive written declaration.  If no positive
declaration is made by a customer, that customer shall continue to be
served by the existing electrical corporation or its successor in
interest, except aggregation by community choice aggregators,
accomplished pursuant to Section 366.2.
   (b) Aggregation of customer electrical load shall be authorized by
the commission for all customer classes, including, but not limited
 ,  to  ,  small commercial or residential
customers.  Aggregation may be accomplished by private market
aggregators, special districts, or on any other basis made available
by market opportunities and agreeable by positive written declaration
by individual consumers, except aggregation by community choice
aggregators, which shall be accomplished pursuant to Section 366.2.

  SEC. 3.  Section 366.2 of the Public Utilities Code is amended to
read:
   366.2.  (a) (1) Customers shall be entitled to aggregate their
electric loads as members of their local community  with
  through  community choice aggregators.
   (2) Customers may aggregate their loads through a public process
with community choice aggregators, if each customer is given an
opportunity to opt out of their community's aggregation program.
   (3) If a customer opts out of a community choice aggregator's
program, or has no community choice program available, that customer
shall have the right to  continue to be served by the existing
electrical corporation or its successor in interest.
   (b) If a public agency seeks to serve as a community choice
aggregator, it shall offer the opportunity to purchase electricity to
all residential customers within its jurisdiction.
   (c) (1) Notwithstanding Section 366, a community choice aggregator
 is hereby authorized to   may  aggregate
the electrical load of interested electricity consumers within its
boundaries to reduce transaction costs to consumers, provide consumer
protections, and leverage the negotiation of contracts.  However,
the community choice aggregator may not aggregate electrical load if
that load is served by a local publicly owned electric utility, as
defined in subdivision (d) of Section 9604.  A community choice
aggregator may group retail electricity customers to solicit bids,
broker, and contract for electricity and energy services for those
customers.  The community choice aggregator may enter into agreements
for services to facilitate the sale and purchase of electricity and
other related services. Those service agreements may be entered into
by a single city or county, a city and county, or by a group of
cities, cities and counties, or counties.
   (2) Under community choice aggregation, customer participation may
not require a positive written declaration, but all customers shall
be informed of their right to opt out of the community choice
aggregation program.  If no negative declaration is made by a
customer, that customer shall be served through the community choice
aggregation program.
   (3) A community choice aggregator establishing electrical load
aggregation pursuant to this section shall develop an implementation
plan detailing the process and consequences of aggregation.  The
implementation plan, and any subsequent changes to it, shall be
considered and adopted at a duly noticed public hearing.  The
implementation plan shall contain all of the following:
   (A) An organizational structure of the program, its operations,
and its funding.
   (B) Ratesetting and other costs to participants.
   (C) Provisions for disclosure and due process in setting rates and
allocating costs among participants.
   (D) The methods for entering and terminating agreements with other
entities.
   (E) The rights and responsibilities of program participants,
including, but not limited to, consumer protection procedures, credit
issues, and shutoff procedures.
   (F) Termination of the program.
   (G) A description of the third parties that will be supplying
electricity under the program, including, but not limited to,
information about financial, technical, and operational capabilities.

   (4) A community choice aggregator establishing electrical load
aggregation shall prepare a statement of intent with the
implementation plan.  Any community choice load aggregation
established pursuant to this section shall provide for the following:

   (A) Universal access.
   (B) Reliability.
   (C) Equitable treatment of all classes of customers.
   (D) Any requirements established by state law or by the commission
concerning aggregated service.
   (5) In order to determine the cost-recovery mechanism to be
imposed on the community choice aggregator pursuant to subdivisions
(d), (e), and (f) that shall be paid by the customers of the
community choice aggregator to prevent shifting of costs, the
community choice aggregator shall file the implementation plan with
the commission, and any other information requested by the commission
that the commission determines is necessary to develop the
cost-recovery mechanism in subdivisions (d), (e), and (f).
   (6) The commission shall notify any electrical corporation serving
the customers proposed for aggregation that an implementation plan
initiating community choice aggregation has been filed, within 10
days of the filing.
   (7) Within 90 days after the community choice aggregator
establishing load aggregation files its implementation plan, the
commission shall certify that it has received the implementation
plan, including any additional information necessary to determine a
cost-recovery mechanism.  After certification of receipt of the
implementation plan and any additional information requested, the
commission shall then provide the community choice aggregator with
its findings regarding any cost recovery that must be paid by
customers of the community choice aggregator to prevent a shifting of
costs as provided for in subdivisions (d), (e), and (f).
   (8) No entity proposing community choice aggregation shall act to
furnish electricity to electricity consumers within its boundaries
until the commission determines the cost-recovery that must be paid
by the customers of that proposed community choice aggregation
program, as provided for in subdivisions (d), (e), and (f).  The
commission shall designate the earliest possible effective date for
implementation of a community choice aggregation program, taking into
consideration the impact on any annual procurement plan of the
electrical corporation that has been approved by the commission.
   (9) All electrical corporations shall cooperate fully with any
community choice aggregators that investigate, pursue, or implement
community choice aggregation programs.  Cooperation shall include
providing the entities with appropriate billing and electrical load
data, including, but not limited to, data detailing electricity needs
and patterns of usage, as determined by the commission, and in
accordance with procedures established by the commission. Electrical
corporations shall continue to provide all metering, billing,
collection, and customer service to retail customers that participate
in community choice aggregation programs.  Bills sent by the
electrical corporation to retail customers shall identify the
community choice aggregator as providing the electrical energy
component of the bill.  The commission shall determine the terms and
conditions under which the electrical corporation provides services
to community choice aggregators and retail customers.
   (10) (A) A city, county, or city and county that elects to
implement a community choice aggregation program within its
jurisdiction pursuant to this chapter shall do so by ordinance.
   (B) Two or more cities, counties, or cities and counties may
participate as a group in a community choice aggregation pursuant to
this chapter, through a joint powers agency established pursuant to
Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of
the Government Code, if each entity adopts an ordinance pursuant to
subparagraph (A).
   (11) Following adoption of aggregation through the ordinance
described in paragraph (10), the program shall allow any retail
customer to opt out and to continue to be served as a bundled service
customer by the existing electrical corporation, or its successor in
interest.  Delivery services shall be provided at the same rates,
terms, and conditions, as approved by the commission, for community
choice aggregation customers and customers that have entered into a
direct transaction where applicable, as determined by the commission.
  Once enrolled in the aggregated entity, any ratepayer that chooses
to opt out within 60 days or two billing cycles of the date of
enrollment may do so without penalty and shall be entitled to receive
default service pursuant to paragraph (3) of subdivision (a).
Customers that return to the electrical corporation for procurement
services shall be subject to the same terms and conditions as are
applicable to other returning direct access customers from the same
class, as determined by the commission, as authorized by the
commission pursuant to this code or any other provision of law.  Any
reentry fees to be imposed after the opt-out period specified in this
paragraph, shall be approved by the commission and shall reflect the
cost of reentry.  The commission shall exclude any amounts
previously determined and paid pursuant to subdivisions (d), (e), and
(f) from the cost of reentry.
   (12) Nothing in this section shall be construed as authorizing any
city or any community choice retail load aggregator to restrict the
ability of retail electricity customers to obtain or receive service
from any authorized electric service provider in a manner consistent
with law.
   (13) (A) The community choice aggregator shall fully inform
participating customers at least twice within two calendar months, or
60 days, in advance of the date of commencing automatic enrollment.
Notifications may occur concurrently with billing cycles.  Following
enrollment, the aggregated entity shall fully inform participating
customers for not less than two consecutive billing cycles.
Notification may include, but is not limited to, direct mailings to
customers, or inserts in water, sewer, or other utility bills.  Any
notification shall inform customers of both of the following:
   (i) That they are to be automatically enrolled and that the
customer has the right to opt out of the community choice aggregator
without penalty.
   (ii) The terms and conditions of the services offered.
   (B) The community choice aggregator may request the commission to
approve and order the electrical corporation to provide the
notification required in subparagraph (A).  If the commission orders
the electrical corporation to send one or more of the notifications
required pursuant to subparagraph (A) in the electrical corporation's
normally scheduled monthly billing process, the electrical
corporation shall be entitled to recover from the community choice
aggregator all reasonable incremental costs it incurs related to the
notification or notifications.  The electrical corporation shall
fully cooperate with the community choice aggregator in determining
the feasibility and costs associated with using the electrical
corporation's normally scheduled monthly billing process to provide
one or more of the notifications required pursuant to subparagraph
(A).
   (C) Each notification shall also include a mechanism by which a
ratepayer may opt out of community choice aggregated service.  The
opt out may take the form of a self-addressed return postcard
indicating the customer's election to remain with, or return to,
electrical energy service provided by the electrical corporation, or
another straightforward means by which the customer may elect to
derive electrical energy service through the electrical corporation
providing service in the area.
   (14) The community choice aggregator shall register with the
commission, which may require additional information to ensure
compliance with basic consumer protection rules and other procedural
matters.
   (15) Once the community choice aggregator's contract is signed,
the community choice aggregator shall notify the applicable
electrical corporation that community choice service will commence
within 30 days.
   (16) Once notified of a community choice aggregator program, the
electrical corporation shall transfer all applicable accounts to the
new supplier within a 30-day period from the date of the close of
their normally scheduled monthly metering and billing process.
   (17) An electrical corporation shall recover from the community
choice aggregator any costs reasonably attributable to the community
choice aggregator, as determined by the commission, of implementing
this section, including, but not limited to, all business and
information system changes, except for transaction-based costs as
described in this paragraph.  Any costs not reasonably attributable
to a community choice aggregator shall be recovered from ratepayers,
as determined by the commission.  All reasonable transaction-based
costs of notices, billing, metering, collections, and customer
communications or other services provided to an aggregator or its
customers shall be recovered from the aggregator or its customers on
terms and at rates to be approved by the commission.
   (18) At the request and expense of any community choice
aggregator, electrical corporations shall install, maintain and
calibrate metering devices at mutually agreeable locations within or
adjacent to the community aggregator's political boundaries.  The
electrical corporation shall read the metering devices and provide
the data collected to the community aggregator at the aggregator's
expense.  To the extent that the community aggregator requests a
metering location that would require alteration or modification of a
circuit, the electrical corporation shall only be required to alter
or modify a circuit if such alteration or modification does not
compromise the safety, reliability or operational flexibility of the
electrical corporation's facilities.  All costs incurred to modify
circuits pursuant to this paragraph, shall be born by the community
aggregator.
   (d) (1) It is the intent of the Legislature that each retail
end-use customer that has purchased power from an electrical
corporation on or after February 1, 2001, should bear a fair share of
the Department of Water Resources' electricity purchase costs, as
well as electricity purchase contract obligations incurred as of the
effective date of the act adding this section, that are recoverable
from electrical corporation customers in commission-approved rates.
It is further the intent of the Legislature to prevent any shifting
of recoverable costs between customers.
   (2) The Legislature finds and declares that this subdivision is
consistent with the requirements of Division 27 (commencing with
Section 80000) of the Water Code and Section 360.5, and is therefore
declaratory of existing law.
   (e) A retail end-use customer that purchases electricity from a
community choice aggregator pursuant to this section shall pay both
of the following:
   (1) A charge equivalent to the charges that would otherwise be
imposed on the customer by the commission to recover bond related
costs pursuant to any agreement between the commission and the
Department of Water Resources pursuant to Section 80110 of the Water
Code, which charge shall be payable until any obligations of the
Department of Water Resources pursuant to Division 27 (commencing
with Section 80000) of the Water Code are fully paid or otherwise
discharged.
   (2) Any additional costs of the Department of Water Resources,
equal to the customer's proportionate share of the Department of
Water Resources' estimated net unavoidable electricity purchase
contract costs as determined by the commission, for the period
commencing with the customer's purchases of electricity from the
community choice aggregator, through the expiration of all then
existing electricity purchase contracts entered into by the
Department of Water Resources.
   (f) A retail end-use customer purchasing electricity from a
community choice aggregator pursuant to this section shall reimburse
the electrical corporation that previously served the customer for
all of the following:
   (1) The electrical corporation's unrecovered past undercollections
for electricity purchases, including any financing costs,
attributable to that customer, that the commission lawfully
determines may be recovered in rates.
   (2) Any additional costs of the electrical corporation recoverable
in commission-approved rates, equal to the share of the electrical
corporation's estimated net unavoidable electricity purchase contract
costs attributable to the customer, as determined by the commission,
for the period commencing with the customer's purchases of
electricity from the community choice aggregator, through the
expiration of all then existing electricity purchase contracts
entered into by the electrical corporation.
   (g) (1) Any charges imposed pursuant to subdivision (e) shall be
the property of the Department of Water Resources.  Any charges
imposed pursuant to subdivision (f) shall be the property of the
electrical corporation.  The commission shall establish mechanisms,
including agreements with, or orders with respect to, electrical
corporations necessary to ensure that charges payable pursuant to
this section shall be promptly remitted to the party entitled to
payment.
   (2) Charges imposed pursuant to subdivisions (d), (e), and (f)
shall be nonbypassable.
   (h) Notwithstanding Section 80110 of the Water Code, the
commission shall authorize community choice aggregation only if the
commission imposes a cost-recovery mechanism pursuant to subdivisions
(d), (e), (f), and (g).  Except as provided by this subdivision,
this section shall not alter the suspension by the commission of
direct purchases of electricity from alternate providers other than
by community choice aggregators, pursuant to Section 80110 of the
Water Code.
   (i) (1) The commission shall not authorize community choice
aggregation until it implements a cost-recovery mechanism, consistent
with subdivisions (d), (e), and (f), that is applicable to customers
that elected to purchase electricity from an alternate provider
between February 1, 2001, and January 1, 2003.
   (2) The commission shall not authorize community choice
aggregation until it submits a report certifying compliance with
paragraph (1) to the Senate Energy, Utilities and Communications
Committee, or its successor, and the Assembly Committee on Utilities
and Commerce, or its successor.
   (3) The commission shall not authorize community choice
aggregation until it has adopted rules for implementing community
choice aggregation.
   (j) The commission shall prepare and submit to the Legislature, on
or before January 1, 2006, a report regarding the number of
community choices aggregations, the number of customers served by
community choice aggregations, third party suppliers to community
choice aggregations, compliance with this section, and the overall
effectiveness of community choice aggregation programs.