Bill Text: CA AB1350 | 2013-2014 | Regular Session | Amended
Bill Title: Electricity: direct transactions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-02-03 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB1350 Detail]
Download: California-2013-AB1350-Amended.html
BILL NUMBER: AB 1350 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 15, 2013
AMENDED IN ASSEMBLY APRIL 1, 2013
INTRODUCED BY Assembly Member Roger Hernández
FEBRUARY 22, 2013
An act to amend Section 365.1 of the Public Utilities Code,
relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
AB 1350, as amended, Roger Hernández. Electricity: direct
transactions.
The Public Utilities Act requires the Public Utilities Commission,
pursuant to electrical restructuring, to authorize and facilitate
direct transactions between electricity suppliers and retail end-use
customers. Existing law, enacted during the energy crisis of 2000-01,
authorized the Department of Water Resources, until January 1, 2003,
to enter into contracts for the purchase of electricity, and to sell
electricity to retail end-use customers at not more than the
department's acquisition costs and to recover those costs through the
issuance of bonds to be repaid by ratepayers. That law suspended the
right of retail end-use customers, other than community choice
aggregators and a qualifying direct transaction customer, as defined,
to acquire service through a direct transaction until the Department
of Water Resources no longer supplies electricity under that law.
Existing law continues the suspension of direct transactions except
as expressly authorized, until the Legislature, by statute, repeals
the suspension or otherwise authorizes direct transactions. Existing
law requires the commission to authorize direct transactions for
nonresidential end-use customers subject to a reopening schedule that
will phase in over a period of not less than 3 years and not more
than 5 years, and is subject to an annual maximum allowable total
kilowatthour limit established, as specified, for each electrical
corporation.
This bill would require the commission to adopt and implement a
schedule that implements a second phase-in period for expanding
direct transactions, as specified, over a reasonable time commencing
not later than July 1, 2014. The bill would require the
commission to ensure that nonprofit and government customers, as
defined, are given priority to acquire electric service through
direct transactions and to ensure that not less than 25% of the
allowable kilowatthours in any phase-in period are reserved for
nonprofit and governmental customers. The bill would
establish as a condition precedent to the second phase-in of the
expansion of direct transactions that the commission find that other
providers supplying electricity through a direct transaction are
procuring eligible renewable energy resources sufficient to meet
their procurement requirements pursuant to the California Renewables
Portfolio Standard Program.
Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the
commission is a crime.
Because the provisions of this bill would be a part of the act and
because a violation of an order or decision of the commission
implementing its requirements would be a crime, the bill would impose
a state-mandated local program by creating a new crime.
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 365.1 of the Public Utilities Code is amended
to read:
365.1. (a) Except as expressly authorized by this section, and
subject to the limitations in subdivisions (b) and (c), the right of
retail end-use customers pursuant to this chapter to acquire service
from other providers is suspended until the Legislature, by statute,
lifts the suspension or otherwise authorizes direct transactions. For
purposes of this section, "other provider" means any person,
corporation, or other entity that is authorized to provide electric
service within the service territory of an electrical corporation
pursuant to this chapter, and includes an aggregator, broker, or
marketer, as defined in Section 331, and an electric service
provider, as defined in Section 218.3. "Other provider" does not
include a community choice aggregator, as defined in Section 331.1,
and the limitations in this section do not apply to the sale of
electricity by "other providers" to a community choice aggregator for
resale to community choice aggregation electricity consumers
pursuant to Section 366.2.
(b) (1) The commission shall allow individual retail
nonresidential end-use customers to acquire electric service from
other providers in each electrical corporation's distribution service
territory, up to a maximum allowable total kilowatthours annual
limit.
(2) During the first phase-in period for expanding access to
direct transactions, the maximum allowable annual limit shall be
established by the commission for each electrical corporation at the
maximum total kilowatthours supplied by all other providers to
distribution customers of that electrical corporation during any
sequential 12-month period between April 1, 1998, and October 11,
2009. The commission shall adopt and implement the first direct
transactions reopening schedule commencing April 11, 2010, and will
phase in the allowable amount of increased kilowatthours over a
period of not less than three years, and not more than five years,
raising the allowable limit of kilowatthours supplied by other
providers in each electrical corporation's distribution service
territory from the number of kilowatthours provided by other
providers as of October 11, 2009, to the maximum allowable annual
limit for that electrical corporation's distribution service
territory. The commission shall review and, if appropriate, modify
its currently effective rules governing direct transactions, but that
review shall not delay the start of the first phase-in schedule.
(3) The commission shall adopt and implement a schedule that
implements a second phase-in period for expanding access to direct
transactions over a reasonable time, commencing not later than July
1, 2014. During the second phase-in period, the allowable amount of
kilowatthours supplied by other providers in each electrical
corporation's distribution service territory, in addition to the
amounts authorized pursuant to paragraph (2), shall be increased by
the following amounts: for Pacific Gas and Electric Company, 3,946
gigawatthours; for Southern California Edison Company, 3,946
gigawatthours; and for San Diego Gas and Electric Company, 462
gigawatt hours. The commission shall ensure that nonprofit
and government customers are given priority to acquire electric
service through direct transactions and shall ensure that not less
than 25 percent of the allowable kilowatthours in any phase-in period
are reserved for nonprofit and governmental customers. Should
nonprofit and governmental customers not acquire service through
direct transactions up to 25 percent, the commission shall make
direct transactions available to other customers up to the limits
established by the commission for each period. As a
condition precedent to the authorization of additional direct
transactions pursuant to this paragraph, the commission shall find
that other providers are procuring eligible renewable energy
resources sufficient to meet their procurement requirements pursuant
to the renewables portfolio standard established pursuant to Article
16 (commencing with Section 399.11). The commission may review and,
if appropriate, modify its then effective rules governing direct
transactions, but that review shall not delay the start of the second
phase-in schedule. For purposes of this paragraph, the
following terms have the following meanings:
(A) "Governmental customers" means a city, county, whether general
law or chartered, a city and county, special district, school
district, political subdivision, or other local public agency, but
shall not mean a joint powers authority, the state or any agency or
department of the state other than an individual campus of the
University of California, the California State University, or a
community college.
(B) "Nonprofit customer" means any customer that is a nonprofit
organization described in Section 501(c)(3) of the Internal Revenue
Code (26 U.S.C. Sec. 501(c)(3)), that is exempt from taxation under
Section 501(a) of the Internal Revenue Code (26 U.S.C. Sec. 501(a)).
(c) Once the commission has authorized additional direct
transactions pursuant to subdivision (b), it shall do both of the
following:
(1) Ensure that other providers are subject to the same
requirements that are applicable to the state's three largest
electrical corporations under any programs or rules adopted by the
commission to implement the resource adequacy provisions of Section
380, the renewables portfolio standard provisions of Article 16
(commencing with Section 399.11), and the requirements for the
electricity sector adopted by the State Air Resources Board pursuant
to the California Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code). This
requirement applies notwithstanding any prior decision of the
commission to the contrary.
(2) (A) Ensure that, in the event that the commission authorizes,
in the situation of a contract with a third party, or orders, in the
situation of utility-owned generation, an electrical corporation to
obtain generation resources that the commission determines are needed
to meet system or local area reliability needs for the benefit of
all customers in the electrical corporation's distribution service
territory, the net capacity costs of those generation resources are
allocated on a fully nonbypassable basis consistent with departing
load provisions as determined by the commission, to all of the
following:
(i) Bundled service customers of the electrical corporation.
(ii) Customers that purchase electricity through a direct
transaction with other providers.
(iii) Customers of community choice aggregators.
(B) If the commission authorizes or orders an electrical
corporation to obtain generation resources pursuant to subparagraph
(A), the commission shall ensure that those resources meet a system
or local reliability need in a manner that benefits all customers of
the electrical corporation. The commission shall allocate the costs
of those generation resources to ratepayers in a manner that is fair
and equitable to all customers, whether they receive electric service
from the electrical corporation, a community choice aggregator, or
an electric service provider.
(C) The resource adequacy benefits of generation resources
acquired by an electrical corporation pursuant to subparagraph (A)
shall be allocated to all customers who pay their net capacity costs.
Net capacity costs shall be determined by subtracting the energy and
ancillary services value of the resource from the total costs paid
by the electrical corporation pursuant to a contract with a third
party or the annual revenue requirement for the resource if the
electrical corporation directly owns the resource. An energy auction
shall not be required as a condition for applying this allocation,
but may be allowed as a means to establish the energy and ancillary
services value of the resource for purposes of determining the net
costs of capacity to be recovered from customers pursuant to this
paragraph, and the allocation of the net capacity costs of contracts
with third parties shall be allowed for the terms of those contracts.
(D) It is the intent of the Legislature, in enacting this
paragraph, to provide additional guidance to the commission with
respect to the implementation of subdivision (g) of Section 380, as
well as to ensure that the customers to whom the net costs and
benefits of capacity are allocated are not required to pay for the
cost of electricity they do not consume.
(d) (1) If the commission approves a centralized resource adequacy
mechanism pursuant to subdivisions (h) and (i) of Section 380, upon
the implementation of the centralized resource adequacy mechanism the
requirements of paragraph (2) of subdivision (c) shall be suspended.
If the commission later orders that electrical corporations cease
procuring capacity through a centralized resource adequacy mechanism,
the requirements of paragraph (2) of subdivision (c) shall again
apply.
(2) If the use of a centralized resource adequacy mechanism is
authorized by the commission and has been implemented as set forth in
paragraph (1), the net capacity costs of generation resources that
the commission determines are required to meet urgent system or
urgent local grid reliability needs, and that the commission
authorizes to be procured outside of the Section 380 or Section 454.5
processes, shall be recovered according to the provisions of
paragraph (2) of subdivision (c).
(3) Nothing in this subdivision supplants the resource adequacy
requirements of Section 380 or the resource procurement procedures
established in Section 454.5.
(e) The commission may report to the Legislature on the efficacy
of authorizing individual retail end-use residential customers to
enter into direct transactions, including appropriate consumer
protections.
SEC. 2. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B 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 XIII B of the California
Constitution.
