BILL NUMBER: AB 1421	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY   APRIL 15, 1999
	AMENDED IN ASSEMBLY   APRIL 8, 1999

INTRODUCED BY   Assembly Member Wright

                        FEBRUARY 26, 1999

   An act to amend Section 331 of, to add Sections 328.1 and 328.2
to, and to repeal and add Sections 328 and 365.5 of, the Public
Utilities Code, relating to public utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1421, as amended, R. Wright.  Gas and electric service.
   (1) Existing law permits the Public Utility Commission to
investigate the restructuring of natural gas services, as specified,
but prohibits the commission, prior to January 1, 2000, from enacting
any gas industry restructuring decisions and from enforcing any
natural gas restructuring decisions for core customers as considered
in Rulemaking 98-01-011 enacted after July 1, 1998, but prior to
August 25, 1998.
   This bill would repeal that provision, and, instead, would require
the commission to require each gas corporation to provide bundled
basic gas service, as defined, to all core customers in its service
territory unless the customer chooses or contracts to have natural
gas purchased and supplied by another entity.  The bill would specify
that a public utility gas corporation shall continue to be the
exclusive provider of revenue cycle services, as defined, in its
service territory, except as specified, and would require the
commission to require the distribution rate to continue to include
after-meter services, as defined.  The bill would require the
commission to authorize a gas corporation to purchase natural gas
commodity from any source and to set the natural gas commodity
portion of the bundled rate equal to the weighted average cost of
gas.  The bill would require the commission to authorize gas
corporations to offer optional competitive rate schedules and
tariffs.  The bill would make related legislative findings and
declarations.
   (2) Existing law relating to electrical restructuring states that
nothing in those provisions prevents the commission from exercising
its authority to investigate a process for the certification and
regulation of the rates, charges, terms, and conditions of default
service, and if the commission determines that a process for the
certification and regulation of default service is in the public
interest, existing law requires the commission to submit its findings
and recommendations to the Legislature for approval.
   This bill would repeal that provision, and, instead, require the
commission to require each electrical corporation to provide bundled
basic electric service, as defined, to all customers in its service
territory unless the customer makes a positive declaration in
accordance with specified existing law to receive electric power
through a direct transaction with another electric service provider.
The bill would authorize an electric power supplier, if a customer
makes a positive declaration to receive electric power through a
direct transaction with an electric power supplier, to also provide
metering, billing, and collection service for that customer, but if a
positive declaration is not made, would require metering, billing,
and collection service to be provided by the existing public utility
electrical corporation. The bill would require the commission to set
the electric energy commodity portion of the bundled rate, as
specified, and to authorize an electrical corporation to purchase
energy and associated services from specified sources.  The bill
would require the commission to authorize each electrical corporation
to offer all customers  unbundled electric energy at
  rate alternatives to purchasing energy as part of
basic electric service, such as  time-of-use based rates
 ,  and  to also authorize an electrical
corporation to offer  other optional competitive rates
 and services  .
   (3) Because a violation by a public utility of a requirement of
the commission is a crime, this bill would impose a state-mandated
local program by creating new crimes.
  (4) 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.
   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 328 of the Public Utilities Code is repealed.

  SEC. 2.  Section 328 is added to the Public Utilities Code, to
read:
   328.  The Legislature finds and declares both of the following:
   (a) In order to ensure that all core customers of a gas
corporation continue to receive safe basic gas service in a
competitive market, each existing gas corporation should continue to
provide this essential service.
   (b) No customer should have to pay separate fees for utilizing
services that protect public or customer safety.
  SEC. 3.  Section 328.1 is added to the Public Utilities Code, to
read:
   328.1.  As used in this section, the following terms have the
following meanings:
   (a) "Basic gas service" includes transmission, storage for
reliability of service, and distribution of natural gas, purchasing
natural gas on behalf of a customer, revenue cycle services, and
after-meter services.
   (b) "Revenue cycle services" means metering services, billing the
customer, collection, and related customer services.
   (c) "After-meter services" includes, but is not limited to, leak
investigation, inspecting customer piping and appliances, carbon
monoxide investigation, pilot relighting, and high bill
investigation.
   (d) "Metering services" includes, but is not limited to, gas meter
installation,  maintenance testing   meter
maintenance, meter testing  , collecting and processing
consumption data, and all related services associated with the meter.

  SEC. 4.  Section 328.2 is added to the Public Utilities Code, to
read:
   328.2.  (a) The commission shall require each gas corporation to
provide bundled basic gas service to all core customers in its
service territory unless the customer chooses or contracts  to have
natural gas purchased and supplied by another entity.  A public
utility gas corporation shall continue to be the exclusive provider
of revenue cycle services to all customers in its service territory,
except that an entity purchasing and supplying natural gas under the
commission's core aggregation program may perform billing and
collection services for its customers.  The commission shall require
the distribution rate to continue to include after-meter services.
   (b) For bundled basic gas service, the commission shall set the
natural gas commodity portion of the bundled rate at an amount equal
to the weighted average cost of gas.  So that customers will have the
lowest rate for natural gas, the commission shall authorize the gas
corporation to purchase natural gas commodity from any source.  Any
difference between the cost of purchases by the gas corporation and
the cost of gas as measured by appropriate market indices shall be
shared by the gas corporation and bundled service customers in a
manner determined by the commission.  All costs of procurement, other
than the purchases of natural gas commodity, shall be included as
part of the basic distribution rate paid by all distribution
customers.
   (c) The commission shall authorize gas corporations to offer
optional competitive rate schedules and tariffs.
  SEC. 5.  Section 331 of the Public Utilities Code is amended to
read:
   331.  The definitions set forth in this section shall govern the
construction of this chapter.
   (a) "Aggregator" means any marketer, broker, public agency, city,
county, or special district, that combines the loads of multiple
end-use customers in facilitating the sale and purchase of electric
energy, transmission, and other services on behalf of these
customers.
   (b) "Basic electric service" includes transmission and
distribution of electric power, purchasing electric power on behalf
of a customer,  and  revenue cycle services such as
metering customer usage, billing the customer, and  related
 customer services.
   (c) "Broker" means an entity that arranges the sale and purchase
of electric energy, transmission, and other services between buyers
and sellers, but does not take title to any of the power sold.
   (d) "Direct transaction" means a contract between any one or more
electric generators, marketers, or brokers of electric power and one
or more retail customers providing for the purchase and sale of
electric power or any ancillary services.
   (e) "Fire wall" means the line of demarcation separating
residential and small commercial customers from all other customers
as described in subdivision (e) of Section 367.
   (f) "Marketer" means any entity that buys electric energy,
transmission, and other services from traditional utilities and other
suppliers, and then resells those services at wholesale or to an
end-use customer.
   (g) "Microcogeneration facility" means a cogeneration facility of
less than one megawatt.
   (h) "Restructuring trusts" means the two tax-exempt public benefit
trusts established by Decision D. 96-08-038 of the Public Utilities
Commission to provide for design and development of the hardware and
software systems for the Power Exchange and the Independent System
Operator, respectively, and that may undertake other activities, as
needed, as ordered by the commission.
   (i) "Small commercial customer" means a customer that has a
maximum peak demand of less than 20 kilowatts.
  SEC. 6.  Section 365.5 of the Public Utilities Code is repealed.
  SEC. 7.  Section 365.5 is added to the Public Utilities Code, to
read:
   365.5.  (a) The Legislature finds and declares that in order to
ensure that all customers of an electrical corporation continue to
receive basic electric service in a competitive market, and to
protect good California jobs, each electrical corporation should
continue to provide this essential service utilizing employees of the
corporation.
   (b) The commission shall require each electrical corporation to
provide bundled basic electric service to all customers in its
service territory unless the customer makes a positive declaration in
accordance with Section 366 to receive electric power through a
direct transaction with another electric service provider.  If a
customer makes a positive declaration to receive electric power
through a direct transaction with an electric power supplier, the
electric power supplier may also provide metering, billing, and
collection service for that customer.  If a positive declaration is
not made, metering, billing, and collection service shall be provided
by the existing public utility electrical corporation.
   (c) Commencing on the date on which the commission-authorized
costs for utility generation related assets and obligations have been
fully recovered or March 31, 2002, whichever is earlier, the
commission shall set the electric energy commodity portion of the
bundled rate at an amount equal to the price of electric energy
purchased or settled through the Power Exchange.  So that customers
will have the lowest possible rate for electric power, the commission
shall authorize the electrical corporation to purchase energy and
associated ancillary services from the Power Exchange and from other
sources. Any difference between the cost of purchases from other
sources and the cost of purchases from the Power Exchange shall be
shared by the electrical corporation and bundled service customers in
a manner determined by the commission.  All costs of 
procurement   providing basic electric service  ,
other than the purchases of energy and ancillary services  and
transmission  , shall be included as part of the basic
distribution rate paid by all distribution customers.
   (d) The commission shall authorize each electrical corporation to
offer all customers  unbundled electric energy at time-of-use
based rates, and shall also authorize an electrical corporation to
offer other optional competitive rates and services.  
rate alternatives to purchasing energy as part of basic electric
service, such as time-of-use based rates and other optional
competitive rates. 
  SEC. 8.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only 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 XIIIB of the California Constitution.