Bill Text: CA AB687 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Electricity.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2014-02-04 - From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on APPR. [AB687 Detail]

Download: California-2013-AB687-Amended.html

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BILL NUMBER: AB 687	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 10, 2013
	AMENDED IN ASSEMBLY  MAY 24, 2013
	AMENDED IN ASSEMBLY  APRIL 10, 2013

INTRODUCED BY   Assembly Member Roger Hernández

                        FEBRUARY 21, 2013

   An act to amend Section 365.1 of the Public Utilities Code,
relating to electricity.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 687, as amended, Roger Hernández. Electricity.
   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. Statutes 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.
   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.
   This bill would additionally require the commission, when
authorizing additional direct transactions for retail nonresidential
end-use customers, to provide the highest priority to acquire
electric services from other providers to entities treating and
remediating groundwater that a federal, state, or local agency
identifies as contaminated if either the treatment or remediation is
on a site listed as a Superfund site by the United States
Environmental Protection Agency  and is located in a
disadvantaged community or severely disadvantaged community, as
defined,  or the entity is a public drinking water system
serving a disadvantaged or severely disadvantaged community. The bill
would require the entity treating and remediating contaminated
groundwater to use moneys saved as a result of the direct transaction
for activities related to the treatment and remediation of the
groundwater. Because a violation of this requirement is a crime, this
bill would impose a state-mandated local program.
   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) 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. 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 the effective date of this section. Within six
months of the effective date of this section, or by July 1, 2010,
whichever is sooner, the commission shall adopt and implement a
reopening schedule that commences immediately 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 the
effective date of this section, 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 phase-in schedule.
   (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) In authorizing additional direct transactions pursuant to
subdivision (b), the commission shall ensure that entities that are
currently treating and remediating groundwater that a federal, state,
or local agency previously identified as contaminated have the
highest priority in acquiring electric service by direct transactions
if either of the following apply:
   (A) The treatment or remediation is at a site that is listed by
the United States Environmental Protection Agency on the National
Priorities List pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. Sec. 9601 et
seq.)  and is located in a disadvantaged community or severely
disadvantaged community as those terms are defined in subdivision (g)
of Section 75005 of the Public Resources Code  .
   (B) The entity is a public drinking water system serving a
disadvantaged  community  or severely disadvantaged
community  as those terms are defined   in subdivision
(g) of Section 75005 of the Public Resources Code  .
   (2) An entity that is authorized to engage in a direct transaction
pursuant to this subdivision and subdivision (b) shall use moneys
saved as a result of the direct transaction for activities related to
treating or remediating contaminated groundwater at the site.
   (3) An entity that is authorized to engage in a direct transaction
pursuant to this subdivision and subdivision (b) shall
electronically report to the Energy Division of the commission the
total yearly savings resulting from the direct transaction and the
expenditure of those savings. The commission may include this
information in the annual report required pursuant to Section 316.
   (e) (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) This subdivision does not supplant the resource adequacy
requirements of Section 380 or the resource procurement procedures
established in Section 454.5.
   (f) 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.