BILL NUMBER: SB 1939 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 5, 2000
AMENDED IN SENATE MARCH 28, 2000
INTRODUCED BY Senator Alarcon
FEBRUARY 24, 2000
An act to amend Section 385 of, and to add Section 9607 to, the
Public Utilities Code, and to amend Section 22120 of the Water Code,
relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 1939, as amended, Alarcon. Public utilities: electric power.
(1) Existing law requires each local publicly owned utility to
establish a nonbypassable usage based charge to fund investments
in specified public purpose programs, including providing
services for low-income electricity customers. The charge is
required to be not less than the lowest expenditure of the 3 largest
electrical corporations in California based on a percentage of
revenue.
This bill would require that the nonbypassable usage
based charge that funds low-income electricity customers be based on
the highest expenditure level of the 3 largest electrical
corporations in California, as prescribed. The bill would require
revenues that are not used to fund specified public purpose
investments during the fiscal year in which those revenues were
collected to be transferred at the end of that fiscal year to a
subaccount of the Energy Resources Programs Account of the California
Energy Resources Conservation and Development Commission. The bill
would require revenues that are not used to fund low-income services
during the fiscal year in which those revenues were collected to be
transferred at the end of that fiscal year to a county energy
low-income programs fund in the county in which the revenues were
collected. The bill would require each county to establish and
administer an energy low-income programs fund for that purpose and to
use energy low-income program funds to provide grants for specified
low-income purposes, thereby imposing a state-mandated local program
a specified percentage of charge revenues to be
invested in programs servicing low-income electricity customers
. Because a violation of this provision would be a crime, this bill
would also impose a state-mandated local program
by creating a new crime.
This bill would result in a change in state taxes for the purpose
of increasing state revenues within the meaning of Section 3 of
Article XIIIA of the California Constitution, and thus would require
for passage the approval of 2/3 of the membership of each house of
the Legislature.
(2) The Irrigation District Law authorizes an irrigation district
to be governed by a board of directors that
is governed under that law to sell, dispose of, and distribute
electric power for use outside its boundaries .
This bill would require the Public Utilities Commission to approve
the sale of electricity by an irrigation district in the service
area territory of specified entities.
Prior to granting approval, the commission would be required to make
findings, as prescribed. The commission would also require
that the district meet specified conditions prior to the commission
granting approval of the sale of electricity, as prescribed.
The bill would prohibit a district from providing
electric service to a retail customer of an electrical corporation or
a publicly owned utility, unless the customer first confirms in
writing an obligation to pay to the electrical corporation or
publicly owned utility currently providing service, a nonpassable
public purpose charge imposed by the regulatory body for that
electrical corporation or publicly owned utility. Because this
bill would increase the duties of local entities by requiring them
to obtain commission approval and meet conditions
in order to sell electricity, it would impose a state-mandated local
program.
(3) 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 provide that any income derived by a district from
the distribution of electric power outside the boundaries of a
district, and within the service territory of specified entities
shall be subject to tax as if it were income earned as unrelated
business taxable income by an exempt organization. The bill would
also provide that any facility that is constructed or acquired
outside the boundaries of a district, for the purposes of
distributing electric power outside its boundaries, and within the
service territory of specified entities is subject to property taxes.
The bill would require the construction or acquisition of that
facility to be financed without tax exempt financing or the issuance
of bonds.
(4)
(3) 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 with regard to certain mandates no
reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
Vote: 2/3 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 385 of the Public Utilities Code is amended to
read:
385. (a) Except as provided in subdivision (b), each local
publicly owned electric utility shall establish a nonbypassable,
usage based charge on local distribution service of not less than the
lowest expenditure level of the three largest electrical
corporations in California on a percent of revenue basis, calculated
from each utility's total revenue requirement for the year ended
December 31, 1994, and each utility's total annual expenditure under
paragraphs (1), (2), and (3) of subdivision (c) of Section 381 and
Section 382, to fund investments by the utility and other parties
in the low-income programs described in subdivision (b), and
in any or all of the following:
(1) Cost-effective demand-side management services to promote
energy-efficiency and energy conservation.
(2) New investment in renewable energy resources and technologies
consistent with existing statutes and regulations which promote those
resources and technologies.
(3) Research, development and demonstration programs for the
public interest to advance science or technology which is not
adequately provided by competitive and regulated markets.
(b) (1) Each local publicly owned electric
utility shall establish a nonbypassable, usage based charge
on local distribution service of not less than the highest
expenditure level of the three largest electrical corporations in
California for low-income programs , calculated on a percent of
revenue basis, using the utility's total revenue requirement in the
highest low-income program expenditure year during the period from
1996 through 2000.
(2) The nonbypassable charge set forth in subdivision (a) shall be
used to fund services for low-income electricity customers,
including, but not limited to, targeted energy efficiency services
and rate discounts.
(c) (1) Revenues collected pursuant to subdivision (a) that are
not used to fund the investments described in subdivision (a) during
the fiscal year in which those revenues were collected, shall be
transferred at the end of that fiscal year to the subaccount of the
Energy Resources Programs Account of the California Energy Resources
Conservation and Development Commission created pursuant to
subdivision (a) of Section 383.
(2) Revenues collected pursuant to subdivision (b) that are not
used to fund the services described in subdivision (b) during the
fiscal year in which those revenues were collected, shall be
transferred at the end of that fiscal year to an energy low-income
programs fund in the county in which the revenues were collected,
which fund shall be established and administered by the county. A
county shall use energy low-income program funds to provide grants to
local agencies and nonprofit community-based organizations to
provide targeted energy efficiency programs or electricity bill
payment assistance to low-income electricity customers residing in
the county and to pay the county's administrative costs related to
the fund. establish and fund programs servicing
low-income electricity customers. Those programs shall include, but
are not limited to, targeted energy efficiency services and rate
discounts. The percentage of the nonbypassable, usage based charge
allocated to the low-income programs shall be not less than the
percentage required for investor-owned utilities in Section 382 and
shall be based on an assessment of customer need.
SEC. 2. Section 9607 is added to the Public Utilities Code, to
read:
9607. (a) Notwithstanding Section 9604, 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 prior approval of the commission,
construct, lease, acquire, or operate facilities for the distribution
of electricity in the service territory of an electrical corporation
providing electric distribution services as that territory existed
on January 1, 2000, or in the service territory of a local publicly
owned electric utility providing electric distribution services as of
January 1, 2000 , without the approval of the commission
.
(c) The commission may not approve the request of a district to
provide distribution of electricity in the service territory of an
entity as set forth in subdivision (a) unless the commission
determines all of the following:
(1) Service by the district within the service territory is in the
public interest.
(2)
(1) Service by the district within the service territory is
consistent with the policies of the state to prevent or
eliminate economic waste.
(3) 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.
(4) Service by the district within the service territory does not
shift costs to other customers, investors, or taxpayers of the entity
currently providing distribution service.
(5) , as set forth in Section 8101.
(2) The district has established and funded public purpose
and low-income programs in accordance with subdivisions (a) and (b)
of Section 385.
(d) The commission shall require, as conditions to approval for a
district to provide electric service within the service territory of
an electrical corporation or local publicly owned electric utility,
all of the following:
(1) The district shall adopt line extension rules comparable to
those in place within the territory to be served.
(2) The district shall provide universal service to all
(3) The district has provided universal service to all
customers who request service at the published tariff rates within
the territory to be served.
(3) The district shall adopt consumer protection and
(4) The district has adopted consumer protection and direct
transaction provisions comparable to those established by the Public
Utilities Commission for electrical corporations.
(4) The district shall transmit the nonbypassable public purpose
and low-income charges collected from a customer in the territory
pursuant to Section 385 to the utility that provided electric
distribution service to the customer immediately prior to approval
pursuant to this section.
(d) A district may not provide partial or full electric service to
a retail customer of an electrical corporation or a publicly owned
utility, unless the customer of that electrical corporation or
publicly owned utility first confirms in writing an obligation to
pay, through tariff or otherwise, to the electrical corporation or
publicly owned utility currently providing service, a nonbypassable
public purpose charge imposed by the regulatory body for that
electrical corporation or publicly owned utility. The charge shall
be paid directly to the electrical corporation or publicly owned
utility providing electricity in the service territory in which the
customer is located.
SEC. 3. Section 22120 of the Water Code is amended to read:
22120. (a) Except as provided in Section 9607
of the Public Utilities Code, a district may sell, dispose of, and
distribute electric power for use outside of its boundaries.
(b) Any income derived by a district from the distribution of
electric power outside the boundaries of a district, and within the
service territory of an electrical corporation as that territory
existed on January 1, 2000, shall be subject to tax as if it were
income earned as unrelated business taxable income by an exempt
organization.
(c) (1) Any facility that is constructed or acquired outside the
boundaries of a district, for the purposes of distributing electric
power outside its boundaries, and within the service territory of an
electrical corporation as that territory existed on January 1, 2000,
or within the territory of a local publicly owned electric utility
providing electric distribution services as of January 1, 2000, is
subject to property taxes.
(2) The construction or acquisition of a facility that is
described in paragraph (1) shall be financed without tax exempt
financing.
SEC. 4. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution for certain
costs that may be incurred by a local agency or school district
because in that regard 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.
However, notwithstanding Section 17610 of the Government Code, if
the Commission on State Mandates determines that this act contains
other 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.