BILL NUMBER: AB 380 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 2, 2005
AMENDED IN ASSEMBLY APRIL 26, 2005
AMENDED IN ASSEMBLY APRIL 12, 2005
INTRODUCED BY Assembly Member Nunez
FEBRUARY 11, 2005
An act to add 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.
The existing Warren-Alquist State Energy Resources Conservation
and Development Act establishes the State Energy Resources
Conservation and Development Commission (Energy Commission) and
requires it to undertake a continuing assessment of trends in the
consumption of electricity and other forms of energy and to analyze
the social, economic, and environmental consequences of those trends
and to collect from electric utilities, gas utilities, and fuel
producers and wholesalers and other sources, forecasts of future
supplies and consumption of all forms of energy. Existing law
requires the Energy Commission, beginning November 1, 2003, and every
2-years thereafter, to adopt an integrated energy policy report
which includes an assessment and forecast of system reliability and
the need for resource additions, efficiency, and conservation.
This bill would require the commission, in consultation with the
Independent System Operator (ISO), 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 make
specified enforcement provisions within the Public Utilities Act,
applicable to all load serving entities, with respect to these
resource adequacy requirements and would require the commission
to impose a penalty upon any load serving entity that fails to
procure adequate generational resources in violation of an order or
decision of the commission, in an amount sufficient to
deter violations . 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 prohibit an electrical corporation
from recovering from ratepayers, any cost that would have been
avoided if the electrical corporation had procured adequate
generational resources as required by an order or decision of the
commission. 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 electrical
corporations. The bill would require the commission, in consultation
with the ISO, to require all electrical load serving entities to
report information to the commission and to the Energy
Commission, on anticipated load, actual load, and measures
undertaken by the load serving entity to ensure resource adequacy.
The commission would be required to share information provided
by load serving entities with the Energy Commission. The
Energy Commission would be required to utilize the information
reported supplied by the commission in
its biennial integrated energy policy reports.
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.
Certain 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, and because the bill would make
certain violations by a load serving entity a crime, this bill would
thereby impose a state-mandated local program by creating new crimes
and by expanding the definition of existing 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 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, and to ensure
that adequate generating capacity exists or is brought online to
timely meet identified resource adequacy needs. The commission, in
consultation with the Independent System Operator, shall require all
electrical load serving entities to report information to the
commission and to the State Energy Resources Conservation
and Development Commission, on anticipated load, actual
load, and measures undertaken by the load serving entity to ensure
resource adequacy. The commission shall require sufficient
information to be reported to enable the commission to determine
compliance with the resource adequacy requirements adopted by the
commission. The commission may require a scheduling coordinator
approved by the Independent System Operator to provide information
when necessary or useful to determine compliance by lead
load serving entities with the resource adequacy
requirements adopted by the commission. The commission shall
share information provided by the load serving entities with the
State Energy Resources Conservation and Development Commission.
The State Energy Resources Conservation and Development Commission
shall utilize the information reported by lead serving
entities supplied by the commission in the
biennial integrated energy policy reports prepared pursuant to
Section 25302 of the Public Resources Code.
(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. For purposes of enforcing the resource adequacy
requirements established pursuant to this section, all electrical
load serving entities, including those entities that are not
electrical corporations, are subject to Sections 2101, 2102, 2103,
2104, 2104.5, 2105, 2106, 2107, 2107.5, 2108, 2109, 2110, 2111, 2112,
2113, and 2114. In addition to any remedy or enforcement power
that the commission may exercise pursuant to Chapter 11 (commencing
with Section 2100), the commission shall impose a penalty
upon any load serving entity that fails to procure adequate
generational resources in violation of an order or decision of the
commission made pursuant to this section, in an amount sufficient to
deter violations. 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, that avoid stranded costs, and that avoid
cost responsibility surcharges. In addition to any remedy or
enforcement power that the commission may exercise pursuant to
Chapter 11 (commencing with Section 2100), an electrical corporation
shall not recover from ratepayers, any cost that would have been
avoided if the electrical corporation had procured adequate
generational resources as required by an order or decision of the
commission made pursuant to this section.
(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. 3.
No reimbursement is required by this act pursuant to Section 6 of
Article XIII B of the California Constitution because 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.