BILL NUMBER: AB 2638 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 25, 2000
AMENDED IN ASSEMBLY MAY 15, 2000
AMENDED IN ASSEMBLY MAY 8, 2000
AMENDED IN ASSEMBLY MAY 1, 2000
INTRODUCED BY Assembly Member Calderon
FEBRUARY 25, 2000
An act to amend Section 374 of, and to add Sections 454.5
and 9607 to, add Section 454.5 to the Public
Utilities Code, relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 2638, as amended, Calderon. Public utilities: electrical
power.
(1) Existing law relating to electrical restructuring
exempts specified entities from the obligation to pay certain
uneconomic costs of that restructuring.
This bill would provide that the exemption does not apply to any
irrigation district providing firm electrical service to customers
representing load participating in an electrical corporation's
nonfirm electrical service program as of May 1, 2000.
(2) Existing law prohibits a public utility from changing any rate
or altering any classification, contract, practice, or rule so as to
result in any new rate, except upon a showing before the commission
and a finding by the Public Utilities Commission that the new rate is
justified.
This bill would authorize an electrical corporation or a local
publicly owned utility to continue to recover the cost incurred to
provide electric distribution service to each retail customer from
existing and future retail customers, within the service territory of
the utility as of a specified date when the customers take electric
distribution service from an irrigation district at the same location
after a specified date.
(3) The
The Irrigation District Law authorizes an irrigation
district that is governed under that law to sell, dispose of, and
distribute electric power for use outside its boundaries.
This bill would require the commission to approve the
sale of electricity by an irrigation district in the service
territory of specified entities. Prior to granting approval, the
commission would be required to make findings, as prescribed.
Because this bill would increase the duties of local entities by
requiring them to obtain commission approval in order to sell
electricity, it would impose a state-mandated local program
make certain declarations concerning the need for a state energy
policy relating to electric distribution or transmission by an
irrigation district .
(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, including the creation of a State Mandates Claims Fund
to pay the costs of mandates that do not exceed $1,000,000 statewide
and other procedures for claims whose statewide costs exceed
$1,000,000.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee:
yes no . State-mandated local program:
yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 374 of the Public Utilities Code is
Section 454.5 is added to the Public Utilities Code,
to read:
454.5. (a) The Legislature finds and declares that it is
essential that California have a rational state energy policy
relating to electric distribution or transmission service provided by
an irrigation district or districts within the service territory of
an electrical corporation or local publicly owned utility on or after
May 1, 2000.
(b) In furtherance of establishing a rational state energy policy,
it is the intent of the Legislature that a statutory framework be
adopted during the 1999-2000 Regular Session that will provide the
commission with guidance and the necessary authority to resolve all
of the following issues:
(1) Stranded distribution and transmission costs and how they
occur and their effects on both utility companies and irrigation
districts and the customers that they serve.
(2) Cost-shifting issues relating to electric distribution and
transmission service by irrigation districts and utility companies.
(3) Criteria for providing electric distribution and transmission
service to customers within and between utility and irrigation
district territories, including, but not limited to, a review of
agreements between electric service providers.
(4) Shareholder versus ratepayer impacts, relative to the effects
of irrigation district operations within utility company service
territories.
(5) The nature and application of "universal service" requirements
for irrigation districts serving customers within utility company
service territories.
(6) The issue of condemnation powers available to irrigation
districts in pursuing electric transmission and transmission projects
within utility company service territories.
(7) California Environmental Quality Act (Division 13 (commencing
with Section 21000) of the Public Resources Code) issues relating to
irrigation district provision of electric transmission and
distribution service.
(8) Local Agency Formation Commission issues relating to
irrigation district provision of electric transmission and
distribution service.
(9) Independent System Operator and Independent System Operator
system reliability issues relating to differences between irrigation
districts and utility electric companies. amended to
read:
374. (a) In recognition of statutory authority and past
investments existing as of December 20, 1995, and subject to the fire
wall specified subdivision (e) of Section 367, the obligation to pay
the uneconomic costs identified in Sections 367, 368, 375, and 376
do not apply to any of the following:
(1) One hundred ten megawatts of load served by irrigation
districts, as hereafter allocated by this paragraph:
(A) The 110 megawatts of load shall be allocated among the service
territories of the three largest electrical corporations in the
ratio of the number of irrigation districts in the service territory
of each utility to the total number of irrigation districts in the
service territories of all three utilities.
(B) The total amount of load allocated to each utility service
area shall be phased in over five years beginning January 1, 1997, so
that one-fifth of the allocation is allocated in each of the five
years. Any allocation which remains unused at the end of any year
shall be carried over to the succeeding year and added to the
allocation for that year.
(C) The load allocated to each utility service territory pursuant
to subparagraph (A) shall be further allocated among the respective
irrigation districts within that service territory by the California
Energy Resources Conservation and Development Commission. An
individual irrigation district requesting such an allocation shall
submit to the commission by January 31, 1997, detailed plans that
show the load that it serves or will serve and for which it intends
to utilize the allocation within the timeframe requested. These
plans shall include specific information on the irrigation districts'
organization for electric distribution, contracts, financing and
engineering plans for capital facilities, as well as detailed
information about the loads to be served, and shall not be less than
eight megawatts or more than 40 megawatts. Provided, however, any
portion of the 110 megawatts that remains unallocated may be
reallocated to projects without regard to the 40 megawatts
limitation. In making such an allocation among irrigation districts,
the Energy Resources Conservation and Development Commission shall
assess the viability of each submission and whether it can be
accomplished in the timeframe proposed. The Energy Resources
Conservation and Development Commission shall have the discretion to
allocate the load covered by this section in a manner that best
ensures its usage within the allocation period.
(D) At least 50 percent of each year's allocation to a district
shall be applied to that portion of load that is used to power pumps
for agricultural purposes.
(E) Any load pursuant to this subdivision shall be served by
distribution facilities owned by, or leased to, the district in
question.
(F) Any load allocated pursuant to paragraph (1) shall be located
within the boundaries of the affected irrigation district, or within
the boundaries specified in an applicable service territory boundary
agreement between an electrical corporation and the affected
irrigation district; additionally, the provisions of subparagraph (C)
of paragraph (1) shall be applicable to any load within the Counties
of Stanislaus or San Joaquin, or both, served by any irrigation
district that is currently serving or will be serving retail
customers.
(2) Seventy-five megawatts of load served by the Merced Irrigation
District hereafter prescribed in this paragraph:
(A) The total allocation provided by this paragraph shall be
phased in over five years beginning January 1, 1997, so that
one-fifth of the allocation is received in each of the five years.
Any allocation which remains unused at the end of any year shall be
carried over to the succeeding year and added to the allocation for
that year.
(B) Any load to which the provision of this paragraph is
applicable shall be served by distribution facilities owned by, or
leased to, Merced Irrigation District.
(C) A load to which the provisions of this paragraph are
applicable shall be located within the boundaries of Merced
Irrigation District as those boundaries existed on December 20, 1995,
together with the territory of Castle Air Force Base which was
located outside of the district on that date.
(D) The total allocation provided by this paragraph shall be
phased in over five years beginning January 1, 1997, with the
exception of load already being served by the district as of June 1,
1996, which shall be deducted from the total allocation and shall not
be subject to the costs provided in Sections 367, 368, 375, and 376.
(3) To loads served by irrigation districts, water districts,
water storage districts, municipal utility districts, and other water
agencies which, on December 20, 1995, were members of the Southern
San Joaquin Valley Power Authority, or the Eastside Power Authority;
provided, however, that this paragraph shall be applicable only to
that portion of each district or agency's load that is used to power
pumps which are owned by that district or agency as of December 20,
1995, or replacements thereof, and is being used to pump water for
district purposes. The rates applicable to these districts and
agencies shall be adjusted as of January 1, 1997.
(4) The provisions of this subdivision shall no longer be
operative after March 31, 2002.
(5) The provisions of paragraph (1) shall not be applicable to any
irrigation district, water district or water agency described in
paragraph (2) or (3).
(6) Transmission services provided to any irrigation district
described in paragraph (1) or (2) shall be provided pursuant to
otherwise applicable tariffs.
(7) Nothing in this chapter shall be deemed to grant the
commission any jurisdiction over irrigation districts not already
granted to the commission by existing law.
(8) Notwithstanding any other provision of law, this subdivision
does not apply to any irrigation district providing firm electrical
service to customers representing load participating in an electrical
corporation's nonfirm electrical service program as of May 1, 2000.
(b) To give the full effect to the legislative intent in enacting
Section 701.8, the costs provided in Sections 367, 368, 375, and 376
shall not apply to the load served by preference power purchased from
a federal power marketing agency, or its successor, pursuant to
Section 701.8 as it existed on January 1, 1996, provided the power is
used solely for the customer's own systems load and not for sale.
The costs of this provision shall be borne by all ratepayers in the
affected service territory, notwithstanding the fire wall established
in subdivision (e) of Section 367.
(c) To give effect to an existing relationship, the obligation to
pay the uneconomic costs specified in Sections 367, 368, 375, and 376
shall not apply to that portion of the load of the University of
California campus situated in Yolo County that was being served as of
May 31, 1996, by preference power purchased from a federal marketing
agency, or its successor, provided the power is used solely for the
facility load of that campus and not, directly or indirectly, for
sale.
SEC. 3. Section 454.5 is added to the Public Utilities Code, to
read:
454.5. (a) In order to avoid cost shifting and to ensure that
each retail customer of an electrical corporation or local publicly
owned utility pays their proportionate share of costs incurred by the
electrical corporation or local publicly owned utility to provide
electric distribution service to each retail customer, these costs
shall continue to be recoverable from existing and future retail
customers within the service territory of the electrical corporation
or local publicly owned utility as of May 1, 2000, who take electric
distribution service from an irrigation district at the same location
after May 1, 2000.
(b) Recovery of the costs by an electrical corporation shall be in
a nonbypassable charge or any other manner determined by the
commission. Recovery of the costs by a local publicly owned utility
shall be in a nonbypassable charge or any other manner approved by
its governing body consistent with this section, existing contracts,
and relevant state law.
SEC. 4. Section 9607 is added to the Public Utilities Code, to
read:
9607. (a) For purposes of this section, "district" means an
irrigation district furnishing electric services formed pursuant to
the Irrigation District Law as set forth in Division 11 (commencing
with Section 20500) of the Water Code.
(b) Notwithstanding any other provision of law, a district may
not, without the approval of the commission, construct, lease,
acquire, or operate facilities for the distribution or transmission
of electricity to retail customers located in the service territory
of an electrical corporation providing electric distribution services
as that territory existed on May 1, 2000, or in the service
territory of a local publicly owned electric utility providing
electric distribution services as of May 1, 2000.
(c) The commission may not approve the request of a district to
provide distribution or transmission of electricity to retail
customers located in the service territory of an entity as set forth
in subdivision (a) unless the commission determines all of the
following:
(1) Construction of duplicative facilities by the district within
the service territory will not have an unnecessary adverse impact on
the environment or property values.
(2) Service by the district within the service territory is in the
public interest.
(3) Service by the district within the service territory is
consistent with the policies of the state to prevent or eliminate
economic waste as set forth in Section 8101.
(4) Service by the district within the service territory does not
adversely impact the ability of the electrical corporation or local
publicly owned electric utility to provide adequate service at
reasonable rates within the remainder of its service territory.
(5) Service by the district within the service territory does not
reduce in value or render useless any facilities previously
constructed by the electrical corporation or local publicly owned
electric utility.
SEC. 5. Notwithstanding Section 17610 of the Government Code, if
the Commission on State Mandates determines that this act contains
costs mandated by the state, reimbursement to local agencies and
school districts for those costs shall be made pursuant to Part 7
(commencing with Section 17500) of Division 4 of Title 2 of the
Government Code. If the statewide cost of the claim for
reimbursement does not exceed one million dollars ($1,000,000),
reimbursement shall be made from the State Mandates Claims Fund.