BILL NUMBER: AB 2638 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 23, 2000
AMENDED IN SENATE AUGUST 18, 2000
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 Sections 454.1, 744.6, 9607,
9608, and 9609 to the Public Utilities Code, and to amend Sections
20804 and 20805 of the Water Code, relating to services.
LEGISLATIVE COUNSEL'S DIGEST
AB 2638, as amended, Calderon. Public utilities: electrical
power: irrigation districts.
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.
The bill would, with specified exceptions, 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, as specified. The bill would prohibit an
irrigation district from distributing or transmitting electricity to
retail customers without the approval of the commission, and would
require a district to comply with certain requirements. The
commission would be required to make a determination as to various
matters before granting approval. The bill would provide specific
exemptions from these requirements.
The bill would prohibit an irrigation district, without the
agreement of an electrical corporation and with a specified
exception, 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.
The bill would provide that, notwithstanding any other provision
of law, as soon as practicable after the end of the rate freeze,
every electrical corporation, as described, shall consolidate the
corporation's agricultural and commercial rate schedules, as
prescribed.
Vote: majority. Appropriation: no. Fiscal committee: 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. (a) Except as provided in subdivision (b), if a customer
with a maximum peak electrical demand in excess of 20 kilowatts
located or planning to locate within the service territory of an
electrical corporation receives a bona fide offer for electric
distribution service from 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. However, the
reallocation may not increase rates to its remaining customers by any
greater amount than the rates would be increased if the customer had
taken electric distribution service from the irrigation district and
the irrigation district had paid the charge established in
subdivision (e) of Section 9607 , and if .
Further, there is a firewall preventing the reallocation of
such differences resulting from discounting to residential customers
or to commercial customers with maximum peak demands not in excess of
20 kilowatts.
(b) Subdivision (a) does not apply to a cumulative 75 megawatts of
load served by the Merced Irrigation District, determined as
follows:
(1) The load is 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 the district on that date.
(2) For purposes of this section, a megawatt of load shall be
calculated in accordance with the methodology established by the
California Energy Resource Conservation and Development Commission in
its Docket No. 96-IRR-1890.
(c) Subdivision (a) applies to the load of customers that move to
the areas described in paragraph (1) of subdivision (b)
after December 31, 2000, and such load shall be excluded from the
calculation of the 75 megawatts in subdivision (b).
SEC. 2. Section 744.6 is added to the Public Utilities Code, to
read:
744.6. Notwithstanding any other provision of law, the commission
shall, as soon as practicable after the end of the rate freeze,
require every electrical corporation serving more than four million
California electric customers which is also a gas corporation serving
more than three million five hundred thousand California gas
customers to consolidate the electrical corporation's agricultural
and commercial rate schedules for all customers with electrical
demands not exceeding 100 kilowatts.
SEC. 3.
SEC. 2. Section 9607 is added to the Public Utilities Code,
to read:
9607. (a) Except as otherwise provided in this section and
Section 9608, and notwithstanding any other provision of law, an
irrigation district may not, without the approval of the commission,
construct, lease, acquire, install, 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. The commission may approve
the request of a district to provide distribution or transmission of
electricity to retail customers located in the service territory of
an electrical corporation providing electric distribution service if,
after notice and hearing, the commission first determines all of the
following:
(1) The district will provide universal service
to all retail customers who request service within the area to be
served, at published tariff rates and on a just, reasonable, and
nondiscriminatory basis, comparable to that provided by the current
retail service provider. The area to be served shall include at
least 10 percent residential and small commercial customers, based
on load, and those customers shall be offered rates comparable to the
district's other residential and small commercial customers.
(2) Construction of electric facilities by the district within the
service territory will not have a significant adverse impact on the
environment.
(3) Service by the district is consistent with the policies of the
state to prevent or eliminate economic waste set forth in Section
8101.
(4) Service by the district will not adversely affect the
reliability of an existing service by the district or by the
electrical corporation.
(5) Service by the district within the service territory will not
adversely impact the ability of the electrical corporation to provide
adequate service at reasonable rates within its service territory.
(6) The district has established, funded, and is carrying out
public purpose and low-income programs in accordance with Section
385.
(7) That district's tariffed electric rates, exclusive of
commodity costs, will be at least 15 percent below the tariffed
electric rates, exclusive of commodity costs and nonbypassable
charges under Sections 367, 368, 375, 376, and 379, of the electrical
corporation for comparable services.
(7) The district's tariffed electric rates are reasonable,
considering the differences in taxes and the other differences
resulting from the different corporate structures of the district and
the electric corporation.
(8) Service by the district is in the public interest.
(b) An irrigation district that obtains the approval of the
commission under this section to serve an area 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 in the
approved service area.
(c) The commission shall have jurisdiction to resolve and
adjudicate complaint cases brought against an irrigation district by
an interested party for failure to comply with this section
or involving violations of commission decisions or orders involving
the provisions of this section. where the complaint
concerns service outside the service territory of the district.
(d) No electric transmission or distribution facilities may be
constructed or installed by an irrigation district to serve retail
customers located in the service territory of an electrical
corporation providing electric distribution services
outside the service territory of the district without the prior
approval after review under the California Environmental Quality
Act, (Division 13 (commencing with Section 21000) of the Public
Resources Code) by the appropriate lead agency. For any
project involving construction or installation of electric
transmission or distribution facilities for which the irrigation
district needs the approval of the commission under subdivision (a),
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.
California Public Utilities Commission.
(e) In order to avoid increasing costs to customers of electrical
corporations, if a retail customer is electrically connected to an
electrical corporation, an 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 establishes 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.
(f) The provisions of this section do not apply to a cumulative 90
megawatts of load served by the Merced Irrigation District,
determined as follows:
(1) The load is 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 the district on that date. customer. As soon
as practicable, the commission shall establish the charge or formula
for the calculation of the charge described in this subdivision. In
establishing the charge or formula, the commission shall do so in a
way that provides interested parties with predictability as to the
level of the charge.
(f) An irrigation district may not offer service to customers
outside of its service territory before offering service to all
customers within its service territory.
(g) The provisions of this section shall not apply to (1) a
cumulative 90 megawatts of load served by the Merced Irrigation
District that is 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
the District on that date, or (2) electric load served by the
District which was not previously served by an electric corporation
that is 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 the
District on that date.
(2)
(h) For purposes of this section, a megawatt of load shall
be calculated in accordance with the methodology established by the
California Energy Resource Conservation and Development Commission in
its Docket No. 96-IRR-1890, but the 90 megawatts shall not include
electrical usage by customers that move to the areas described in
paragraph (1) after December 31, 2000.
(i) Subdivision (a) of this section shall not apply to the
construction, modification, lease, acquisition, installation, or
operation of facilities for the distribution or transmission of
electricity to customers electrically connected to a district as of
December 31, 2000, or to other customers who subsequently locate at
the same premises.
SEC. 4.
SEC. 3. Section 9608 is added to the Public Utilities Code,
to read:
9608. The provisions of Sections 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. 5.
SEC. 4. Section 9609 is added to the Public Utilities Code,
to read:
9609. Notwithstanding any other provision of law, an irrigation
district may not, without the electrical corporation's agreement,
exercise the right of eminent domain to take electric facilities or
real property necessary to the operation of those facilities owned by
an electrical corporation if the irrigation district intends to put
the facilities or real property to the same or similar use. This
section shall not apply to condemnation of easements required by an
irrigation district reasonably necessary to cross an electrical
corporation's distribution or transmission system and which would not
interfere with the operation and maintenance of the electrical
corporation's system.
SEC. 6.
SEC. 5. Section 20804 of the Water Code is amended to read:
20804. At the hearing the board of supervisors shall determine by
resolution whether or not the petition and notice comply with
Chapter 1 of this part. Notwithstanding Section 22116 or any other
provision of law, the board shall also determine whether the petition
has been presented and the district is proposed to be formed for the
primary purpose of providing irrigation services.
SEC. 7.
SEC. 6. Section 20805 of the Water Code is amended to read:
20805. (a) If the board of supervisors determines that any of the
requirements for the formation petition or notice were not complied
with, the petition shall be dismissed without prejudice to the right
of the proper number of persons to present a new petition covering
the same matter or to present the same petition with additional
signatures if additional signatures are necessary to comply with the
requirements of Chapter 1 of this part.
(b) If the board of supervisors determines that the district is
being formed for a primary purpose other than providing irrigation
services, the petition shall be dismissed without prejudice to the
right of the proper number of persons to present a new petition for
the primary purpose of providing irrigation services.