BILL NUMBER: AB 380	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 12, 2005

INTRODUCED BY   Assembly Member Nunez

                        FEBRUARY 11, 2005

   An act to add  Section 380   Sections 380 and
9620  to the Public Utilities Code, relating to electricity.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 380, as amended, Nunez.  Electricity: electrical restructuring:
resource adequacy.
   The California Constitution establishes the Public Utilities
Commission, and provides it with jurisdiction over all public
utilities. The Constitution grants the commission certain general
powers over all public utilities, subject to control by the
Legislature, and authorizes the Legislature, unlimited by the other
provisions of the Constitution, to confer additional authority and
jurisdiction upon the commission, that is cognate and germane to the
regulation of public utilities.
   The existing Public Utilities Act imposes various duties and
responsibilities on the commission with respect to the purchase of
electricity and requires the commission to review and adopt a
procurement plan and a renewable energy procurement plan for each
electrical corporation pursuant to the California Renewables
Portfolio Standard Program.  Existing law relative to electrical
restructuring, authorizes electrical service to be provided, in
certain circumstances, by electric service providers, as defined, and
community choice aggregators, as defined.
   This bill would require the commission, in consultation with the
Independent System Operator, to establish resource adequacy
requirements to ensure that adequate physical generating capacity,
dedicated to serving all load requirements, is available to meet peak
demand plus requisite planning and operating reserves, and would
require the commission to implement and enforce these resource
adequacy requirements in a nondiscriminatory manner on all load
serving entities  , with certain exceptions  . The bill
would require that the cost of meeting resource adequacy
requirements, including the costs associated with system reliability
and local area reliability found reasonable by the commission, be
fully recoverable from all customers taking service from an
electrical corporation on a nonbypassable basis at the time the
commitment to incur the cost is made or thereafter. The bill would
require that all load serving entities, including electric service
providers and community choice aggregators, are subject to the same
requirements for resource adequacy, resource diversity,
cost-effective energy efficiency, and the renewables portfolio
standard, as are applicable to  an  electrical
 corporation   corporations  .  
   Existing law relative to electrical restructuring states the
intent of the Legislature that the state's local publicly owned
electric utilities, as defined, and electrical corporations should
commit control of their transmission facilities to the Independent
System Operator.  
   This bill would require that every local publicly owned electric
utility serving end-use customers ensure that adequate physical
generating capacity dedicated to serving all of its load requirements
is available to meet peak demand and planning and operating
reserves, at or deliverable to locations and at times as may be
necessary to ensure local area reliability and system reliability, at
just and reasonable rates. The bill would require that every local
publicly owned electric utility report to the State Energy Resources
Conservation and Development Commission that information required by
the commission relative to the utility's resource plan and status in
meeting its resource plan, thereby imposing a state-mandated local
program. 
   Under existing law, a violation of the Public Utilities Act or an
order or direction of the commission is a crime.  
   Because the 
    Certa   in  provisions of this bill would be
part of the act and an order or other action of the commission would
be required to implement certain of the provisions  ,
  . Because a violation of those provisions or an order
or other action of the commission implementing those provisions would
be a crime,  this bill would  thereby  impose a
state-mandated local program by creating new crimes.

  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for  a specified reason   specified reasons
 .
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


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


  SECTION 1.  Section 380 is added to the Public Utilities Code, to
read:
   380.  (a) The commission, in consultation with the Independent
System Operator, shall establish  a  resource adequacy
requirements  mechanism  to ensure that adequate physical
generating capacity dedicated to serving all load requirements is
available to meet peak demand and planning and operating reserves, at
or deliverable to locations and at times as may be necessary to
ensure local area reliability and system reliability, at just and
reasonable rates.
   (b) All electrical load serving entities, including nonutility
electric service providers and community choice aggregators, shall be
subject to the same requirements for resource adequacy, resource
diversity, cost-effective energy efficiency, and the renewables
portfolio standard program, that are applicable to electrical
corporations pursuant to this section, or otherwise as required by
law, or by order or decision of the commission.  The resource
adequacy requirements mechanism shall be designed to minimize
enforcement requirements and costs, to prevent shifting of costs
between utility service areas and between customer classes within
load serving entities under the ratesetting authority of the
commission, and to ensure that adequate generating capacity exists or
is brought online to timely meet identified resource adequacy needs.

   (c) The commission  , in consultation with the  
Independent System Operator,  shall implement and enforce these
resource adequacy requirements in a nondiscriminatory manner as to
all load serving entities. The electrical corporation's costs of
meeting those resource adequacy requirements, including the costs
associated with system reliability and local area reliability, that
are found reasonable by the commission, shall be fully recoverable
from those customers taking service from the electrical corporation,
at the time the commitment to incur the cost is made or thereafter,
on a fully nonbypassable basis pursuant to rates that are just and
reasonable, as determined by the commission.   The commission
shall develop mechanisms that ensure cost recovery by electrical
corporations for costs incurred in providing resource adequacy, that
avoid shifting of costs between utility service areas and between
customer classes, that avoid stranded costs, and that avoid cost
responsibility surcharges.  
   (d) For purposes of this section, "load serving entity" does not
include a local publicly owned electric utility as defined in Section
9604, the State Water Resources Development System commonly known as
the State Water Project, or customer generation, if the customer
generation (1) takes standby service from the electrical corporation
on a commission-approved rate schedule that requires the customer's
load serving entity to provide for adequate backup planning and
operating reserves for that customer generation or (2) is not
physically interconnected to the transmission grid, so that if the
customer generation fails, backup power is not supplied from the
electricity grid. 
  SEC. 2.   Section 9620 is added to the   Public
Utilities Code   , to read:  
   9620.  (a) Every local publicly owned electric utility serving
end-use customers, shall ensure that adequate physical generating
capacity dedicated to serving all of its load requirements is
available to meet peak demand and planning and operating reserves, at
or deliverable to locations and at times as may be necessary to
ensure local area reliability and system reliability, at just and
reasonable rates.
   (b) Every local publicly owned electric utility shall report to
the State Energy Resources Conservation and Development Commission,
that information required by the commission relative to the utility's
resource plan and status in meeting its resource plan. 
   SEC. 2.     SEC. 3.   No reimbursement
is required by this act pursuant to Section 6 of Article XIII B of
the California Constitution because  the only  
certain  costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.  
   As to certain other costs, no reimbursement is required by this
act pursuant to Section 6 of Article XIII B of the California
Constitution because a local agency or school district has the
authority to levy service charges, fees, or assessments sufficient to
pay for the program or level of service mandated by this act, within
the meaning of Section 17556 of the Government Code.