BILL ANALYSIS                                                                                                                                                                                                    



                                                                           
           AB 380
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 380 (Nunez)
          As Amended September 6, 2005
          Majority vote
          
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          |ASSEMBLY:  |74-0 |(May 19, 2005)  |SENATE: |38-1 |(September 7,  |
          |           |     |                |        |     |2005)          |
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           Original Committee Reference:    U. & C.  

           SUMMARY  :  Requires the California Public Utilities Commission  
          (PUC) in consultation with the California Independent System  
          Operator (CAISO) to establish resource adequacy requirements and  
          requires PUC to implement and enforce the resource adequacy  
          requirements on all electricity providers, or load-serving  
          entities (LSEs).  

           The Senate amendments  :

          1)State that the resource adequacy requirements must meet the  
            minimum planning reserve and reliability criteria approved by  
            the Board of Trustees of the Western Systems Coordinating  
            Council or the Western Electricity Coordinating Council.

          2)Require PUC to determine the most efficient and equitable  
            means to meet the resource adequacy objectives, ensure  
            investment is made in new generating capacity while retaining  
            economic existing generating capacity, and ensuring that the  
            costs are allocated equitably. 

          3)Exempt specific customer-owned generation that is relatively  
            independent from the state's transmission grid.

           AS PASSED BY THE ASSEMBLY  , this bill required PUC to establish  
          and enforce requirements that ensure that all electricity  
          providers have adequate generating capacity to meet peak demand  
          and operating reserves.

           FISCAL EFFECT  :  Unknown 

           COMMENTS  :  According to the author, this bill would require PUC  
          to ensure that all LSEs are subject to the same resource  








                                                                           
           AB 380
                                                                  Page  2

          adequacy requirements as are California's electrical  
          corporations.  LSEs include all retail electricity providers,  
          including direct-access providers and municipal utilities.  IOUs  
          are currently required to procure 115 to 117% of projected  
          demand to ensure they have adequate resources to meet demand of  
          their customer base.  If the direct-access providers do not  
          adequately provide for the demands of its customers, the  
          customers of IOU end up paying more for electricity because the  
          direct-access customers will continue to draw electricity from  
          the grid, depleting IOU's reserves or requiring the IOU to  
          purchase last-minute expensive power on the spot market. 


           Analysis Prepared by  :    Gina Mandy / U. & C. / (916) 319-2083 


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