BILL NUMBER: AB 2638 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 7, 2000
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 add Section 454.5 to the Public Utilities Code,
An act to amend Section 8104 of, and to add Sections
454.1, 454.5, 9607, 9607.1, and 9607.2 to, the Public Utilities Code,
relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 2638, as amended, Calderon. Public utilities: electrical
power.
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. Other existing
law authorizes the Public Utilities Commission to establish rates for
public utilities regulated by the commission.
This bill would make certain declarations concerning the need for
a state energy policy relating to electric distribution or
transmission by an irrigation district.
The bill would authorize an electrical corporation to discount its
rate to its marginal cost if a customer receives a bona fide offer
for electric distribution service from an irrigation district or a
joint powers authority as specified. The bill would require an
irrigation district, as defined, that provides electric transmission
or distribution service to retail customers, to comply with certain
requirements, including a requirement that the irrigation district
offer distribution service to its customers at published tariff rates
and on a just, reasonable, and nondiscriminatory basis.
The bill, except as specified, would prohibit an irrigation
district from providing electric transmission or distribution service
to any retail customer located outside the boundaries of the
irrigation district unless it complies with specified conditions.
The bill would prohibit an irrigation district from exercising the
right of eminent domain to take property owned by an electrical
corporation if the irrigation district intends to put the property to
the same or similar use.
Vote: majority. Appropriation: no. Fiscal committee:
no yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 454.1 is added to the Public Utilities
Code, to read:
454.1. If a customer located within the service territory of an
electrical corporation receives a bona fide offer for electric
distribution service from an irrigation district or a joint powers
authority that includes an irrigation district at rates less than the
electrical corporation's tariffed rates, the electrical corporation
may discount its rate to its marginal cost of serving that customer.
The electrical corporation may recover any difference between its
tariffed and discounted service from its remaining customers,
allocated as determined by the commission, but may not increase rates
to its remaining customers by any greater amount than the rates
would be increased had the customer taken electric distribution
service from the irrigation district or the joint powers authority.
SEC. 2. 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
(8) Issues with regard to a local agency formation commission, as
described in the Cortese-Knox Local Government Reorganization Act of
1985 (Division 3 (commencing with Section 56000) of Title 5 of the
Government Code), 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.
SEC. 3. Section 8104 of the Public Utilities Code is amended to
read:
8104. If Unless the commission
finds that it is for not in the best
interests of the State and of the utility, and not
or finds it is incompatible with any public interest that
the petition be granted, it the commission
shall make and issue its order limiting the area or areas
within which the utility shall have the right and authority to sell
or distribute electric power or energy, directly or indirectly, or
define the area or areas within which the utility shall not have the
right or authority to sell or distribute electric power or energy,
directly or indirectly. The commission may, in its order, approve
and thereby authorize the contract or conditions, if any, in
connection therewith. No limitation or definition of area or areas
or statement of conditions shall be included in the order except as
contained in the petition and contract.
SEC. 4. Section 9607 is added to the Public Utilities Code, to
read:
9607. (a) Notwithstanding any other provision of law, an
irrigation district that provides electric transmission or
distribution service to retail customers shall comply with all of the
following conditions:
(1) The irrigation district shall offer electric distribution
service to customers within the district's boundaries at published
tariff rates and on a just, reasonable, and nondiscriminatory basis.
(2) In order to avoid increasing costs to customers of electrical
corporations, if a retail customer is electrically connected to an
electrical corporation, the irrigation district may not electrically
connect the customer unless the irrigation district first pays the
electrical corporation a charge established by the commission to
reimburse the electrical corporation for the fair and reasonable
costs incurred by the electrical corporation to provide electric
transmission and distribution service to the retail customer. If the
commission established an ongoing charge, the irrigation district
shall agree in writing to pay the ongoing charge. If the commission
has not established either a charge or a formula for calculation of a
charge as of the date an irrigation district has designated to
electrically connect a retail customer, the irrigation district shall
agree in writing to pay the charge for that retail customer before
electrically connecting the customer.
(3) If the irrigation district offers commercial or industrial
customers a rate below the rate offered to commercial or industrial
customers by an electrical corporation with an obligation to serve in
that area, the irrigation district shall offer agricultural and
residential customers a rate reduced below the rate offered by the
electrical corporation to agricultural and residential ratepayers by
no less than the same percentage reduction.
(4) Service by the irrigation district will not adversely affect
the reliability of an existing service by the irrigation district or
by the electrical corporation.
(b) Notwithstanding any other provision of law, an irrigation
district may not provide electric transmission or distribution
service to any retail customer located outside the boundaries of the
irrigation district unless, in addition to complying with all of the
conditions in subdivision (a), the irrigation district complies with
both of the following:
(1) The irrigation district is providing electric distribution
service to no less than 50 percent of the residential and
agricultural customers within the district's boundaries.
(2) No less than one-third of the electricity consumption
delivered by an irrigation district outside its boundaries are
associated with residential and agricultural customers. If by the
end of a calendar year an irrigation district is not in compliance
with this section, the irrigation district may not electrically
connect any commercial or industrial customers outside of its
boundaries until it brings itself into compliance and files a report
with the commission documenting its compliance.
(c) An irrigation district providing electric transmission or
distribution service to retail customers outside of its boundaries
shall prepare an annual report available to the public on the total
load and number of accounts of residential, low-income, agricultural,
commercial, and industrial customers served by the irrigation
district outside of its boundaries.
(d) (1) No electric transmission or distribution facilities may be
constructed or installed by an irrigation district outside the
irrigation district's boundaries in order to serve retail customers
outside the irrigation district's boundaries without the prior
approval, after review under the California Environmental Quality Act
(Division 13 of the Public Resources Code), by the appropriate lead
agency as set forth in paragraph (2) below.
(2) For any project involving construction or installation of
electric transmission or distribution facilities outside the
boundaries of the irrigation district, the board of supervisors of
the county in which the construction or installation is to occur
shall act as the lead agency. If a project involves the construction
or installation of electric transmission or distribution facilities
in more than one county, the board of supervisors of the county where
the majority of the construction is anticipated to occur shall act
as the lead agency.
(e) The commission shall have jurisdiction to resolve and
adjudicate complaint cases brought against an irrigation district by
an interested party located outside an irrigation district's
boundaries involving violations of the provisions of this section.
(f) For purposes of this section, "irrigation district" means an
irrigation district formed pursuant to the Irrigation District Law as
set forth in Division 11 (commencing with Section 20500) of the
Water Code or a joint powers authority that includes an irrigation
district.
SEC. 5. Section 9607.1 is added to the Public Utilities Code, to
read:
9607.1. The provisions of Section 454.1 and 9607 do not apply to
an irrigation district with respect to an area to be served by the
irrigation district, if all of the following occur:
(a) The irrigation district acquires substantially all the
electric distribution facilities and related subtransmission
facilities of any electrical corporation that has an obligation to
provide electric distribution service within the area to be served by
the irrigation district.
(b) The commission approves a service area agreement between the
irrigation district and the electrical corporation pursuant to
Sections 8101 to 8108, inclusive, which service area agreement
provides that the electrical corporation may not provide electric
distribution service in the area to be served by the irrigation
district and that the irrigation district may not provide electric
distribution service in the remainder of the electrical corporation's
service territory.
(c) The commission relieves the electrical corporation of its
obligation to serve within the area to be served by the irrigation
district.
SEC. 6. Section 9607.2 is added to the Public Utilities Code, to
read:
9607.2. Notwithstanding any other provision of law, an irrigation
district may not exercise the right of eminent domain to take
property owned by an electrical corporation if the irrigation
district intends to put the property to the same or similar use.