BILL ANALYSIS 1
1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
MARTHA M. ESCUTIA, CHAIRWOMAN
AB 380 - Nunez Hearing
Date: June 30, 2005 A
As Amended: June 28, 2005 FISCAL B
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8
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DESCRIPTION
This bill establishes "resource adequacy" standards for
electric utilities and other providers of electric service,
collectively referred to as "load-serving entities" (LSEs).
Specifically, this bill :
1. Requires the California Public Utilities Commission
(CPUC) to establish resource adequacy requirements to
meet specified objectives - most importantly, ensuring
that each LSE has enough reasonably-priced power to
serve their customers reliably.
2. Requires all LSEs to be subject to the same
requirements for resource adequacy, energy efficiency,
and the renewable portfolio standard.
3. Requires LSEs to report resource adequacy
information to the CPUC.
4. Requires the CPUC to enforce resource adequacy
requirements for all LSEs.
5. Assures full recovery of utility resource adequacy
costs approved by the CPUC.
6. Exempts municipal utilities, the State Water
Project, and specified customer generation.
7. Establishes separate, self-enforced resource
adequacy requirements for municipal utilities.
BACKGROUND
The CPUC has adopted resource adequacy requirements which
require LSEs to achieve 15-17% reserve margins by June 1,
2006. In its orders on resource adequacy, the CPUC has
maintained it has authority to apply requirements to
non-utility LSEs, such as energy service providers (ESPs).
The ESPs have contested the CPUC's authority to require
ESPs to meet the CPUC's requirements, but haven't changed
the CPUC's mind or succeeded in getting a court to overturn
the CPUC's jurisdiction in this area. The CPUC is in the
process of implementing its resource adequacy requirements.
Currently, the CPUC's jurisdiction over ESPs is derived
from general registration requirements which don't specify
the ESPs' resource adequacy obligations. This bill would
make the CPUC's authority to apply and enforce resource
adequacy requirements on ESPs unambiguous. According to
the CPUC, this bill would minimize if not eliminate any
legal uncertainty over its authority to set resource
adequacy standards.
COMMENTS
1. A single, clear definition of "resource adequacy"
should be established. This bill describes various
criteria for resource adequacy in multiple different
sections. The author and the committee may wish to
consider replacing these multiple references with a
single definition of resource adequacy, drawing from
the criteria already contained in the bill.
2. Language compromising California Energy Commission
(CEC) authority to collect and disclose LSE data
should be removed. This bill appropriately authorizes
the CPUC to r equire the production of information from
all LSEs necessary to determine compliance. However,
the bill also requires the CEC to use the information
provided to the CPUC and to ensure its
confidentiality. This provision conflicts with SB
1389 (Bowen), Chapter 568, Statutes of 2002, which
gives the CEC broad authority to collect data to
fulfill its forecasting duties and prepare the
Integrated Energy Policy Report. SB 1389 further
provides a detailed process governing disclosure of
information which balances public interest in
disclosure against industry interest in
confidentiality. With respect to resource adequacy
data, this bill would short circuit SB 1389,
compromising the CEC's authority and potentially
reversing recent legislative efforts to improve public
disclosure. The author and the committee may wish to
consider removing these provisions and leaving the CEC
and CPUC data collection authorities and disclosure
standards as they are currently.
3. Overlap with pending initiative. The "Repeal of
Electricity Deregulation and Blackout Prevention Act,"
pending on the November 2005 special election ballot,
contains similar, but not identical, provisions
enacted in a different code section. If this bill and
the ballot measure are both enacted, there will be
some conflicts between the two which will need to be
reconciled.
4. Prior legislation. AB 2006 (Nunez), which was
vetoed by the Governor last year, also contained
resource adequacy provisions similar to this bill.
ASSEMBLY VOTES
Assembly Floor (74-0)
Assembly Appropriations Committee (18-0)
Assembly Utilities and Commerce Committee(11-0)
POSITIONS
Sponsor:
Author
Support:
Alliance for Retail Energy Markets (if amended)
American Federation of State, County and Municipal
Employees
California Public Utilities Commission
Coalition of California Utility Employees
Duke Energy
Pacific Gas and Electric Company (if amended)
Sempra Energy (if amended)
Southern California Edison
The Utility Reform Network
Oppose:
South San Joaquin Irrigation District
Western States Petroleum Association
Lawrence Lingbloom
AB 380 Analysis
Hearing Date: June 30, 2005