Bill Text: CA AB2911 | 2021-2022 | Regular Session | Amended

---

Bill Title: Public Utilities Commission: public advisor: Independent System Operator.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2022-05-19 - In committee: Held under submission. [AB2911 Detail]

Download: California-2021-AB2911-Amended.html

---

Amended  IN  Assembly  May 02, 2022

Amended  IN  Assembly  April 18, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 2911

---

Introduced by Assembly Member Muratsuchi

February 18, 2022

---

An act to amend Sections 321, 454.5, 583, 321 and 1759 of, and to add Sections 322.6 and 345.9 to, the Public Utilities Code, relating to the Public Utilities Commission.

LEGISLATIVE COUNSEL'S DIGEST

AB 2911, as amended, Muratsuchi. Public Utilities Commission: public advisor: Independent System Operator: confidentiality. Operator.

(1) Existing law vests the Public Utilities Commission with regulatory authority over public utilities. Existing law requires the commission to appoint a public advisor and establish an office of the public advisor, both of which are required, among other things, to perform specified duties relating to public participation in commission proceedings. Existing law requires the public advisor to publicize the commission’s programs for encouraging and supporting participation in the commission’s proceedings.

This bill would require the public advisor to work with all of the divisions of the commission to ensure that the commission’s internet website provides adequate transparency in the information provided to the public and would specify that the public advisor has the responsibility for ensuring that the activities of the commission are as transparent to the public as reasonably possible and consistent with applicable law. The bill would require the commission, upon a request by the public for any public records, to follow the procedures and requirements of the California Public Records Act, as specified.

(2) Existing law provides for the establishment of an Independent System Operator (ISO) as a nonprofit public benefit corporation, and requires the ISO to ensure efficient use and reliable operation of the electrical transmission grid consistent with achieving planning and operating reserve criteria no less stringent than those established by the Western Electricity Coordinating Council and the North American Electric Reliability Council. Existing law requires the ISO to maintain open meeting standards and meeting notice requirements consistent with the general policies of the Bagley-Keene Open Meeting Act and states that specified policies adopted by the ISO meet this requirement. Existing law requires the ISO to provide corporate records consistent with the general policies of the California Public Records Act and states specified policies adopted by the ISO meet this requirement.

This bill would state it is the intent of the Legislature that greater transparency in the operation of the facilities subject to the control of the ISO and the markets administered by the ISO is in the public interest. The bill would require specified information in the possession of the ISO and the commission to be published in a timely manner on the internet website of the ISO. The bill would require the ISO to establish a formal quality control and quality assurance system for all software, as specified.

(3)The Public Utilities Act requires the commission to review and accept, modify, or reject a procurement plan for each electrical corporation in accordance with specified requirements and objectives. The act requires the commission to adopt appropriate procedures to ensure the confidentiality of any market sensitive information submitted in an electrical corporation’s proposed procurement plan or resulting from or related to the electrical corporation’s approved procurement plan, and to determine the impact of a proposed divestiture of generation assets owned by an electrical corporation on an electrical corporation’s procurement rates.

This bill would instead require the commission to adopt appropriate procedures for the timely disclosure of all contracts for the purchase of electricity by an electrical corporation and the timely publication of the above-requested information from the ISO, and to instead determine the impact of a proposed divestiture on an electrical corporation’s customers.

(4)The Public Utilities Act prohibits the commission or an officer or employee of the commission from disclosing any information furnished to the commission by a public utility, a subsidiary, an affiliate, or a corporation holding a controlling interest in a public utility, unless the information is specifically required to be open to public inspection under the act, except on order of the commission or a commissioner in the course of a hearing or proceeding.

This bill would specify the above provision does not create a presumption of confidentiality for information supplied to the commission by a public utility or other entity subject to the commission’s jurisdiction, including information relating to the safety and reliability of the operation of utility plants and information regarding costs to be recovered in retail rates.

(5)

(3) The California Constitution provides that the Legislature has plenary power to establish the manner and scope of review of commission action in a court of record. Existing law provides that only the Supreme Court and the court of appeal have jurisdiction to review, reverse, correct, or annul any order or decision of the commission or to suspend or delay the execution or operation thereof, or to enjoin, restrain, or interfere with the commission in the performance of its official duties.

This bill would authorize an action to enforce the requirements of the Bagley-Keene Open Meeting Act or the California Public Records Act to be brought against the commission in the superior court.

(6)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.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YESNO  

---

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 321 of the Public Utilities Code is amended to read:

321.

 (a) The commission shall appoint a public advisor and establish an office of the public advisor, including a separate office in the Los Angeles office of the commission. The commission may employ staff as necessary to carry out the duties of the office of the public advisor. The office of the public advisor shall assist members of the public and ratepayers who desire to testify before or present information to the commission in any hearing or proceeding of the commission. The public advisor shall advise the commission on procedural matters relating to public participation in proceedings of the commission.

(b) The public advisor and executive director shall publicize the commission’s programs for encouraging and supporting participation in the commission’s proceedings.

(c) The public advisor shall receive complaints and comments from members of the public concerning how the commission is carrying out its functions. The public advisor shall maintain the confidentiality of the identity of a member of the public who makes a complaint or comment unless the member of the public expressly indicates a desire to communicate that identity to the commission. The public advisor shall assess the nature of substantive complaints and comments from members of the public and take them into consideration when analyzing and recommending options for resolution of the matters underlying those complaints and comments.

(d) The public advisor shall work with all of the divisions of the commission to ensure that the commission’s internet website provides adequate transparency in the information provided to the public.

(e) The public advisor shall have the responsibility for ensuring that the activities of the commission are as transparent to the public as reasonably possible and consistent with applicable law.

SEC. 2.

 Section 322.6 is added to the Public Utilities Code, to read:

322.6.

 Notwithstanding any prior regulation, practice, procedure, or guideline adopted by the commission, upon a request by the public for any public records, the commission shall follow the procedures and requirements of the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), including the time limit prescribed in Section 7922.535 of the Government Code for providing the agency’s final determination.

SEC. 3.

 Section 345.9 is added to the Public Utilities Code, to read:

345.9.

 (a) It is the intent of the Legislature that greater transparency in the operation of the facilities subject to the control of the Independent System Operator and in the markets administered by the Independent System Operator is in the public interest.

(b) Notwithstanding Sections 352.7 and 583, the following information in the possession of the Independent System Operator and the commission shall be published in a timely manner in addition to information currently published as an element of the Open Access Same-Time Information System (OASIS):

(1) The identities of scheduling coordinators and their clients authorized to participate in Independent System Operator markets.

(2) The records for planned and forced outages for every five minutes by resource or generator within three days of the outage event.

(3)The operator logs for any resource identified in the Net Qualifying Capacity Report published pursuant to Independent System Operator Tariff Section 40.4.2, including reasons for planned and forced outages as required by Commission General Order 167.

(4)The identities of generators and the amount of fines for those that do not deliver capacity as committed in bilateral contracts for resources identified in the Net Qualifying Capacity Report published pursuant to Independent System Operator Tariff Section 40.4.2.

(5)The terms for all contracts identified in the Net Qualifying Capacity Report published pursuant to Independent System Operator Tariff Section 40.4.2, including pricing.

(6)The bid and settlement data within 30 days after close.

(c)The Independent System Operator shall establish a formal quality control and quality assurance system for all software that affects or influences the operation of the electrical grid and energy management systems and the market making operation of markets operated by the Independent System Operator. The quality control and quality assurance program shall be consistent with Capability Maturity Model Integration standards.

SEC. 4.Section 454.5 of the Public Utilities Code is amended to read:

454.5.

(a)The commission shall specify the allocation of electricity, including quantity, characteristics, and duration of electricity delivery, that the Department of Water Resources shall provide under its power purchase agreements to the customers of each electrical corporation, which shall be reflected in the electrical corporation’s proposed procurement plan. Each electrical corporation shall file a proposed procurement plan with the commission not later than 60 days after the commission specifies the allocation of electricity. The proposed procurement plan shall specify the date that the electrical corporation intends to resume procurement of electricity for its retail customers, consistent with its obligation to serve. After the commission’s adoption of a procurement plan, the commission shall allow not less than 60 days before the electrical corporation resumes procurement pursuant to this section.

(b)An electrical corporation’s proposed procurement plan shall include, but not be limited to, all of the following:

(1)An assessment of the price risk associated with the electrical corporation’s portfolio, including any utility-retained generation, existing power purchase and exchange contracts, and proposed contracts or purchases under which an electrical corporation will procure electricity, electricity demand reductions, and electricity-related products and the remaining open position to be served by spot market transactions.

(2)A definition of each electricity product, electricity-related product, and procurement-related financial product, including support and justification for the product type and amount to be procured under the plan.

(3)The duration of the plan.

(4)The duration, timing, and range of quantities of each product to be procured.

(5)A competitive procurement process under which the electrical corporation may request bids for procurement-related services, including the format and criteria of that procurement process.

(6)An incentive mechanism, if any incentive mechanism is proposed, including the type of transactions to be covered by that mechanism, their respective procurement benchmarks, and other parameters needed to determine the sharing of risks and benefits.

(7)The upfront standards and criteria by which the acceptability and eligibility for rate recovery of a proposed procurement transaction will be known by the electrical corporation before execution of the transaction. This shall include an expedited approval process for the commission’s review of proposed contracts and subsequent approval or rejection of a contract. The electrical corporation shall propose alternative procurement choices in the event a contract is rejected.

(8)Procedures for updating the procurement plan.

(9)A showing that the procurement plan will achieve the following:

(A)The electrical corporation, in order to fulfill its unmet resource needs, shall procure resources from eligible renewable energy resources in an amount sufficient to meet its procurement requirements pursuant to the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3).

(B)The electrical corporation shall create or maintain a diversified procurement portfolio consisting of both short-term and long-term electricity and electricity-related and demand reduction products.

(C)(i)The electrical corporation shall first meet its unmet resource needs through all available energy efficiency and demand reduction resources that are cost effective, reliable, and feasible.

(ii)In determining the availability of cost-effective, reliable, and feasible demand reduction resources, the commission shall consider the findings regarding technically and economically achievable demand reduction in the Demand Response Potential Study required pursuant to Commission Order D.14-12-024, to the extent those findings are not superseded by other demand reduction studies conducted by academic institutions or government agencies, and to the extent that any demand reduction is consistent with commission policy.

(D)(i)The electrical corporation, in soliciting bids for new gas-fired generating units, shall actively seek bids for resources that are not gas-fired generating units located in communities that suffer from cumulative pollution burdens, including, but not limited to, high emission levels of toxic air contaminants, criteria air pollutants, and greenhouse gases.

(ii)In considering bids for, or negotiating contracts for, new gas-fired generating units, the electrical corporation shall provide greater preference to resources that are not gas-fired generating units located in communities that suffer from cumulative pollution burdens, including, but not limited to, high emission levels of toxic air contaminants, criteria air pollutants, and greenhouse gases.

(iii)This subparagraph does not apply to contracts signed by an electrical corporation and approved by the commission before January 1, 2017.

(10)The electrical corporation’s risk management policy, strategy, and practices, including specific measures of price stability.

(11)A plan to achieve appropriate increases in diversity of ownership and diversity of fuel supply of nonutility electrical generation.

(12)A mechanism for recovery of reasonable administrative costs related to procurement in the generation component of rates.

(c)The commission shall review and accept, modify, or reject each electrical corporation’s procurement plan and any amendments or updates to the plan. The commission shall ensure that the plan contains the elements required by this section, including the elements described in subparagraphs (C) and (D) of paragraph (9) of subdivision (b). The commission’s review shall consider each electrical corporation’s individual procurement situation, and shall give strong consideration to that situation in determining which one or more of the features set forth in this subdivision shall apply to that electrical corporation. A procurement plan approved by the commission shall contain one or more of the following features, provided that the commission may not approve a feature or mechanism for an electrical corporation if it finds that the feature or mechanism would impair the restoration of an electrical corporation’s creditworthiness or would lead to a deterioration of an electrical corporation’s creditworthiness:

(1)A competitive procurement process under which the electrical corporation may request bids for procurement-related services. The commission shall specify the format of that procurement process, as well as criteria to ensure that the auction process is open and adequately subscribed. Any purchases made in compliance with the commission-authorized process shall be recovered in the generation component of rates.

(2)An incentive mechanism that establishes a procurement benchmark or benchmarks and authorizes the electrical corporation to procure from the market, subject to comparing the electrical corporation’s performance to the commission-authorized benchmark or benchmarks. The incentive mechanism shall be clear, achievable, and contain quantifiable objectives and standards. The incentive mechanism shall contain balanced risk and reward incentives that limit the risk and reward of an electrical corporation.

(3)Upfront achievable standards and criteria by which the acceptability and eligibility for rate recovery of a proposed procurement transaction will be known by the electrical corporation before the execution of the bilateral contract for the transaction. The commission shall provide for expedited review and either approve or reject the individual contracts submitted by the electrical corporation to ensure compliance with its procurement plan. To the extent the commission rejects a proposed contract pursuant to this criteria, the commission shall designate alternative procurement choices obtained in the procurement plan that will be recoverable for ratemaking purposes.

(d)A procurement plan approved by the commission shall accomplish each of the following objectives:

(1)Enable the electrical corporation to fulfill its obligation to serve its customers at just and reasonable rates.

(2)Eliminate the need for after-the-fact reasonableness reviews of an electrical corporation’s actions in compliance with an approved procurement plan, including resulting electricity procurement contracts, practices, and related expenses. However, the commission may establish a regulatory process to verify and ensure that each contract was administered in accordance with the terms of the contract, and contract disputes that may arise are reasonably resolved.

(3)Ensure timely recovery of prospective procurement costs incurred pursuant to an approved procurement plan. The commission shall establish rates based on forecasts of procurement costs adopted by the commission, actual procurement costs incurred, or a combination thereof, as determined by the commission. The commission shall establish power procurement balancing accounts to track the differences between recorded revenues and costs incurred pursuant to an approved procurement plan. The commission shall review the power procurement balancing accounts, not less than semiannually, and shall adjust rates or order refunds, as necessary, to promptly amortize a balancing account, according to a schedule determined by the commission. Until January 1, 2006, the commission shall ensure that any overcollection or undercollection in the power procurement balancing account does not exceed 5 percent of the electrical corporation’s actual recorded generation revenues for the prior calendar year excluding revenues collected for the Department of Water Resources. The commission shall determine the schedule for amortizing the overcollection or undercollection in the balancing account to ensure that the 5-percent threshold is not exceeded. After January 1, 2006, this adjustment shall occur when deemed appropriate by the commission consistent with the objectives of this section.

(4)Moderate the price risk associated with serving its retail customers, including the price risk embedded in its long-term supply contracts, by authorizing an electrical corporation to enter into financial and other electricity-related product contracts.

(5)Provide for just and reasonable rates, with an appropriate balancing of price stability and price level in the electrical corporation’s procurement plan.

(e)The commission shall provide for the periodic review and prospective modification of an electrical corporation’s procurement plan.

(f)The commission may engage an independent consultant or advisory service to evaluate risk management and strategy. The reasonable cost of any consultant or advisory service is a reimbursable expense and eligible for funding pursuant to Section 631.

(g)(1)The commission shall adopt appropriate procedures to ensure the timely disclosure of all contracts for the purchase of electricity by an electrical corporation.

(2)The commission shall adopt procedures for the timely publication of the information specified in Section 345.9.

(h)This section does not alter, modify, or amend the commission’s oversight of affiliate transactions under its rules and decisions or the commission’s existing authority to investigate and penalize an electrical corporation’s alleged fraudulent activities, or to disallow costs incurred as a result of gross incompetence, fraud, abuse, or similar grounds. This section does not expand, modify, or limit the Energy Commission’s existing authority and responsibilities as set forth in Sections 25216, 25216.5, and 25323 of the Public Resources Code.

(i)An electrical corporation that serves less than 500,000 electric retail customers within the state may file with the commission a request for exemption from this section, which the commission shall grant upon a showing of good cause.

(j)Before its approval pursuant to Section 851 of any divestiture of generation assets owned by an electrical corporation on or after September 24, 2002, the commission shall determine the impact of the proposed divestiture on the electrical corporation’s customers and shall approve a divestiture only to the extent it finds that the divestiture is in the public interest and will result in net ratepayer benefits.

(k)The commission shall direct electrical corporations to include in their proposed procurement plans the integration costs described and determined pursuant to clause (v) of subparagraph (A) of paragraph (5) of subdivision (a) of Section 399.13.

(l)Before approving an electrical corporation’s contract for any new gas-fired generating unit, the commission shall require the electrical corporation to demonstrate compliance with its approved procurement plan.

SEC. 5.Section 583 of the Public Utilities Code is amended to read:

583.

(a)No information furnished to the commission by a public utility, or any business which is a subsidiary or affiliate of a public utility, or a corporation which holds a controlling interest in a public utility, except those matters specifically required to be open to public inspection by this part, shall be open to public inspection or made public except on order of the commission, or by the commission or a commissioner in the course of a hearing or proceeding. Any present or former officer or employee of the commission who divulges any such information is guilty of a misdemeanor.

(b)This section does not create a presumption of confidentiality for information supplied to the commission by a public utility or other entity subject to the commission’s jurisdiction consistent with Commission Decision 20-08-031, including information relating to the safety and reliability of the operation of utility plants and information regarding costs to be recovered in retail rates.

SEC. 6.SEC. 4.

 Section 1759 of the Public Utilities Code is amended to read:

1759.

 (a) No court of this state, except the Supreme Court and the court of appeal, to the extent specified in this article, shall have jurisdiction to review, reverse, correct, or annul any order or decision of the commission or to suspend or delay the execution or operation thereof, or to enjoin, restrain, or interfere with the commission in the performance of its official duties, as provided by law and the rules of court.

(b) The writ of mandamus shall lie from the Supreme Court and from the court of appeal to the commission in all proper cases as prescribed in Section 1085 of the Code of Civil Procedure.

(c) This section shall not apply to the following actions, which may be brought in superior court:

(1) An action brought against the commission to enforce the requirements of the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).

(2) An action arising from the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), or an action to review a determination made under Section 7922.535 of the Government Code.

SEC. 7.

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.