BILL NUMBER: SB 1063 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 7, 1999
INTRODUCED BY Senator Bowen
FEBRUARY 26, 1999
An act to amend Section 377 of Sections
216 and 377 of, and to add Sections 367.5 and 851.5 to, the
Public Utilities Code, relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 1063, as amended, Bowen. Electric restructuring :
hydroelectric generation .
(1) Existing law requires generation assets owned by any public
utility prior to June 1, 1997, and subject to rate regulation by the
Public Utilities Commission, to continue to be subject to regulation
by the commission until those assets have undergone market valuation,
as specified.
This bill, in addition, would require those assets to continue to
be subject to that regulation until the commission has authorized the
disposition of those assets pursuant to prescribed provisions of
law.
(2) Existing law requires the commission to continue to regulate
the nonnuclear generation assets owned by any public utility prior to
January 1, 1997, that are subject to regulation by the commission
until those assets have been subject to market valuation, as
prescribed.
This bill, in addition, would require those assets to continue to
be subject to that regulation until the commission has authorized the
disposition of those assets pursuant to prescribed provisions of
law.
Because, under existing law, a violation of the above provisions
with regard to regulations by the commission would be a crime, this
bill would impose a state-mandated local program by creating a new
crime.
(3) The bill would require the commission to assign an unspecified
interim value to any hydroelectric generation asset whose value has
not otherwise been determined on or before March 31, 2000. The bill
would require the commission to make specified determinations prior
to authorizing a public utility to sell, lease, assign, mortgage or
otherwise dispose of any hydroelectric facility.
(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.
(1) The Public Utilities Act requires the Public Utilities
Commission to continue to regulate the nonnuclear generation assets
owned by any public utility prior to January 1, 1997, that are
subject to commission regulation until those assets have been subject
to market valuation in accordance with procedures established by the
commission. The act requires a public utility, if, after market
valuation, the public utility wishes to retain ownership of
nonnuclear generation assets in the same corporation as the
distribution utility, to demonstrate to the satisfaction of the
commission, through a public hearing, that it would be consistent
with the public interest and would not confer undue competitive
advantage on the public utility to retain that ownership in the same
corporation as the distribution utility.
This bill would amend the act to require that, notwithstanding the
above provisions, or any other provision of law, the ownership of
hydroelectric generation facilities owned and operated by a public
utility regulated by the commission as of January 1, 2000, be
retained, and would require those facilities to continue to be
operated by that public utility, subject to the regulation of the
commission. Because a violation of the act is a crime, this bill
would impose a state-mandated local program by creating a new crime.
The bill would make a legislative finding and declaration relating
to the ownership and operation of hydroelectric generation resources.
(2) 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 377 of the Public Utilities Code
SECTION 1. Section 216 of the Public Utilities Code is amended to
read:
216. (a) "Public utility" includes every common carrier, toll
bridge corporation, pipeline corporation, gas corporation, electrical
corporation, telephone corporation, telegraph corporation, water
corporation, sewer system corporation, and heat corporation, where
the service is performed for, or the commodity is delivered to, the
public or any portion thereof.
(b) Whenever any common carrier, toll bridge corporation, pipeline
corporation, gas corporation, electrical corporation, telephone
corporation, telegraph corporation, water corporation, sewer system
corporation, or heat corporation performs a service for, or delivers
a commodity to, the public or any portion thereof for which any
compensation or payment whatsoever is received, that common carrier,
toll bridge corporation, pipeline corporation, gas corporation,
electrical corporation, telephone corporation, telegraph corporation,
water corporation, sewer system corporation, or heat corporation, is
a public utility subject to the jurisdiction, control, and
regulation of the commission and the provisions of this part.
(c) When any person or corporation performs any service for, or
delivers any commodity to, any person, private corporation,
municipality, or other political subdivision of the state, that in
turn either directly or indirectly, mediately or immediately,
performs that service for, or delivers that commodity to, the public
or any portion thereof, that person or corporation is a public
utility subject to the jurisdiction, control, and regulation of the
commission and the provisions of this part.
(d) Ownership or operation of a facility that employs cogeneration
technology or produces power from other than a conventional power
source or the ownership or operation of a facility which employs
landfill gas technology does not make a corporation or person a
public utility within the meaning of this section solely because of
the ownership or operation of such a facility.
(e) Any corporation or person engaged directly or indirectly in
developing, producing, transmitting, distributing, delivering, or
selling any form of heat derived from geothermal or solar resources
or from cogeneration technology to any privately owned or publicly
owned public utility, or to the public or any portion thereof, is not
a public utility within the meaning of this section solely by reason
of engaging in any of those activities.
(f) The ownership or operation of a facility that sells compressed
natural gas at retail to the public for use only as a motor vehicle
fuel, and the selling of compressed natural gas at retail from such a
facility to the public for use only as a motor vehicle fuel, does
not make the corporation or person a public utility within the
meaning of this section solely because of that ownership, operation,
or sale.
(g) Ownership or operation of a facility that has been certified
by the Federal Energy Regulatory Commission as an exempt wholesale
generator pursuant to Section 32 of the Public Utility Holding
Company Act of 1935 (Chapter 2C (commencing with Section 79) of Title
15 of the United States Code) does not make a corporation or person
a public utility within the meaning of this section, solely due to
the ownership or operation of that facility.
(h) Generation assets owned by any public utility prior to January
1, 1997, and subject to rate regulation by the commission, shall
continue to be subject to regulation by the commission until those
assets have undergone market valuation in accordance with procedures
established by the commission and the commission has authorized
the disposition of those assets pursuant to Section 851 .
(i) The ownership, control, operation, or management of an
electric plant used for direct transactions or participation directly
or indirectly in direct transactions, as permitted by subdivision
(b) of Section 365, sales into the Power Exchange referred to in
Section 365, or the use or sale as permitted under subdivisions (b)
to (d), inclusive, of Section 218, shall not make a corporation or
person a public utility within the meaning of this section solely
because of that ownership, participation, or sale.
SEC. 2. Section 367.5 is added to the Public Utilities Code, to
read:
367.5. Notwithstanding subdivision (b) of Section 367, the
commission shall assign an interim value equal to ____ to any
hydroelectric generation asset whose value has not otherwise been
determined on or before March 31, 2000.
SEC. 3. Section 377 of the Public Utilities Code is amended to
read:
377. The commission shall continue to regulate the nonnuclear
generation assets owned by any public utility prior to January 1,
1997, that are subject to commission regulation until those assets
have been subject to market valuation in accordance with procedures
established by the commission and the commission has authorized
the disposition of those assets pursuant to Section 851 . If,
after market valuation, the public utility wishes to retain ownership
of nonnuclear generation assets in the same corporation as the
distribution utility, the public utility shall demonstrate to the
satisfaction of the commission, through a public hearing, that it
would be consistent with the public interest and would not confer
undue competitive advantage on the public utility to retain that
ownership in the same corporation as the distribution utility.
SEC. 4. Section 851.5 is added to the Public Utilities Code, to
read:
851.5. Prior to authorizing a public utility to sell, lease,
assign, mortgage, or otherwise dispose of any hydroelectric facility,
the commission shall determine all of the following:
(a) For any hydroelectric facility that does not comply with state
water quality standards, as determined by the State Water Resources
Control Board, an enforceable agreement to achieve and maintain
compliance with state water quality standards by December 31, 2001,
has been entered into by the public utility, any prospective new
owner, and the State Water Resources Control Board.
(b) Any owner of a hydroelectric facility who controls more than
__ percent of the existing hydroelectric generation portfolio, or a
comparable index when any non-hydroelectric generation portfolio is
factored in, will be subject to market power mitigation measures,
including withholding and bidding restrictions to be administered by
the Independent System Operator, when that owner is a pivotal
supplier of energy or ancillary services, as determined by the
Independent System Operator.
(c) Hydroelectric facilities located on the same river will not be
divided among different owners.
(d) The new operator of any hydroelectric facility shall continue
to honor any existing rights, contracts, licenses, and permits
associated with that facility according to their existing terms.
SEC. 5. 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.
is amended to read:
377. (a) Except as specified in subdivision (b), the commission
shall continue to regulate the nonnuclear generation assets owned by
any public utility prior to January 1, 1997, that are subject to
commission regulation until those assets have been subject to market
valuation in accordance with procedures established by the
commission. If, after market valuation, the public utility wishes to
retain ownership of nonnuclear generation assets in the same
corporation as the distribution utility, the public utility shall
demonstrate to the satisfaction of the commission, through a public
hearing, that it would be consistent with the public interest and
would not confer undue competitive advantage on the public utility to
retain that ownership in the same corporation as the distribution
utility.
(b) (1) The Legislature finds and declares that the ownership and
operation of hydroelectric generation resources by public utilities
regulated by the commission is in the public interest, for reasons
including, but not limited to, environmental, water, and market power
concerns.
(2) Notwithstanding subdivision (a), or any other provision of
law, the ownership of hydroelectric generation facilities owned and
operated by a public utility regulated by the commission as of
January 1, 2000, shall be retained, and those facilities shall
continue to be operated, by that public utility, subject to the
regulation of the commission.
SEC. 2. 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.