BILL NUMBER: AB 380 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 6, 2005
AMENDED IN SENATE SEPTEMBER 2, 2005
AMENDED IN SENATE AUGUST 24, 2005
AMENDED IN SENATE AUGUST 16, 2005
AMENDED IN SENATE JUNE 28, 2005
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.
(1) 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 (ISO), to establish resource adequacy
requirements for all load-serving entities, as defined, in accordance
with specified objectives. The bill would require each load-serving
entity to maintain physical generating capacity adequate to meet its
load requirements, including, but not limited to, peak demand and
planning and operating reserves, deliverable to locations and at
times as may be necessary to provide reliable electric service. The
bill would require each load-serving entity to meet, at a minimum,
the most recent minimum planning reserve and reliability criteria
approved by the Board of Trustees of the Western Systems Coordinating
Council or the Western Electricity Coordinating Council. The bill
would require the commission to implement and enforce the resource
adequacy requirements established pursuant to the bill in a
nondiscriminatory manner. The bill would subject each load-serving
entity to the same requirements for resource adequacy and the
renewables portfolio standard program that are applicable to
electrical corporations, or otherwise required by law, or by order or
decision of the commission. The bill would require that the costs of
an electrical corporation in meeting resource adequacy requirements,
as specified, 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, as determined by the commission. The bill would require the
commission to determine the most efficient and equitable means for
achieving prescribed objectives. The bill would exclude from the
definition of a "load-serving entity" a local publicly owned electric
utility, as defined, the State Water Resources Development System
commonly known as the State Water Project, or certain customer
generation.
(2) 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 ISO.
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 that each local publicly owned electric
utility serving end-use customers prudently plan for and procure
resources that are adequate to meet its planning reserve margin and
peak demand and operating reserves, sufficient to provide reliable
electric service to its customers. The bill would exempt certain
customer generation from these requirements. The bill would require
that each local publicly owned electric utility serving end-use
customers, at a minimum, meet the most recent minimum planning
reserve and reliability criteria approved by the Board of Trustees of
the Western Systems Coordinating Council or the Western Electricity
Coordinating Council. The bill would require a local publicly owned
electric utility serving end-use customers, upon request, to provide
the Energy Commission with any information the Energy Commission
determines is necessary to evaluate the progress made by the local
publicly owned electric utility in meeting these requirements, and
would require the Energy Commission to report the progress made by
each utility to the Legislature, to be included in the integrated
energy policy reports.
Because this bill would establish various requirements to be met
by local publicly owned utilities, this bill would impose 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.
(3) 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 resource adequacy requirements for
all load-serving entities.
(b) In establishing resource adequacy requirements, the commission
shall achieve all of the following objectives:
(1) Facilitate development of new generating capacity and
retention of existing generating capacity that is economic and
needed.
(2) Equitably allocate the cost of generating capacity and prevent
shifting of costs between customer classes.
(3) Minimize enforcement requirements and costs.
(c) Each load-serving entity shall maintain physical generating
capacity adequate to meet its load requirements, including, but not
limited to, peak demand and planning and operating reserves. The
generating capacity shall be deliverable to locations and at times as
may be necessary to provide reliable electric service.
(d) Each load-serving entity shall, at a minimum, meet the most
recent minimum planning reserve and reliability criteria approved by
the Board of Trustees of the Western Systems Coordinating Council or
the Western Electricity Coordinating Council.
(e) The commission shall implement and enforce the resource
adequacy requirements established in accordance with this section in
a nondiscriminatory manner. Each load-serving entity shall be subject
to the same requirements for resource adequacy and the renewables
portfolio standard program that are applicable to electrical
corporations pursuant to this section, or otherwise required by law,
or by order or decision of the commission. The commission shall
exercise its enforcement powers to ensure compliance by all
load-serving entities.
(f) The commission shall require sufficient information,
including, but not limited to, anticipated load, actual load, and
measures undertaken by a load-serving entity to ensure resource
adequacy, to be reported to enable the commission to determine
compliance with the resource adequacy requirements established by the
commission.
(g) An electrical corporation's costs of meeting resource adequacy
requirements, including, but not limited to, the costs associated
with system reliability and local area reliability, that are
determined to be reasonable by the commission, or are otherwise
recoverable under a procurement plan approved by the commission
pursuant to Section 454.5, shall be fully recoverable from those
customers on whose behalf the costs are incurred, as determined by
the commission, at the time the commitment to incur the cost is made
or thereafter, on a fully nonbypassable basis, as determined by the
commission. The commission shall exclude any amounts authorized to be
recovered pursuant to Section 366.2 when authorizing the amount of
costs to be recovered from customers of a community choice aggregator
or from customers that purchase electricity through a direct
transaction pursuant to this subdivision.
(h) The commission shall determine and authorize the most
efficient and equitable means for achieving all of the following:
(1) Meeting the objectives of this section.
(2) Ensuring that investment is made in new generating capacity.
(3) Ensuring that existing generating capacity that is economic is
retained.
(4) Ensuring that the cost of generating capacity is allocated
equitably.
(i) In making the determination pursuant to subdivision (h), the
commission may consider a centralized resource adequacy mechanism
among other options.
(j) For purposes of this section, "load-serving entity" means an
electrical corporation, electric service provider, or community
choice aggregator. "Load-serving entity" does not include any of the
following:
(1) A local publicly owned electric utility as defined in Section
9604.
(2) The State Water Resources Development System commonly known as
the State Water Project.
(3) Customer-owned Customer
generation located on the customer's site or providing electric
service through arrangements authorized by Section 218, if the
customer generation, or the load it serves, meets one of the
following criteria:
(A) It takes standby service from the electrical corporation on a
commission-approved rate schedule that provides for adequate backup
planning and operating reserves for the standbly customer class.
(B) It is not physically interconnected to the electric
transmission or distribution grid, so that, if the customer
generation fails, backup electricity is not supplied from the
electricity grid.
(C) There is physical assurance that the load served by the
customer generation will be curtailed concurrently and commensurately
with an outage of the customer generation.
SEC. 2. Section 9620 is added to the Public Utilities Code, to
read:
9620. (a) Each local publicly owned electric utility serving
end-use customers, shall prudently plan for and procure resources
that are adequate to meet its planning reserve margin and peak demand
and operating reserves, sufficient to provide reliable electric
service to its customers. Customer generation located on the customer'
s site or providing electric service through arrangements authorized
by Section 218, shall not be subject to these requirements if the
customer generation, or the load it serves, meets one of the
following criteria:
(1) It takes standby service from the local publicly owned
electric utility on a rate schedule that provides for adequate backup
planning and operating reserves for the standby customer class.
(2) It is not physically interconnected to the electric
transmission or distribution grid, so that, if the customer
generation fails, backup power is not supplied from the electricity
grid.
(3) There is physical assurance that the load served by the
customer generation will be curtailed concurrently and commensurately
with an outage of the customer generation.
(b) Each local publicly owned electric utility serving end-use
customers shall, at a minimum, meet the most recent minimum planning
reserve and reliability criteria approved by the Board of Trustees of
the Western Systems Coordinating Council or the Western Electricity
Coordinating Council.
(c) A local publicly owned electric utility serving end-use
customers shall, upon request, provide the State Energy Resources
Conservation and Development Commission with any information the
State Energy Resources Conservation and Development Commission
determines is necessary to evaluate the progress made by the local
publicly owned electric utility in meeting the requirements of this
section.
(d) The State Energy Resources Conservation and Development
Commission shall report to the Legislature, to be included in each
integrated energy policy report prepared pursuant to Section 25302 of
the Public Resources Code, regarding the progress made by each local
publicly owned electric utility serving end-use customers in meeting
the requirements of this section.
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.