Bill Text: CA SB790 | 2011-2012 | Regular Session | Chaptered
Bill Title: Electricity: community choice aggregation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2011-10-08 - Chaptered by Secretary of State. Chapter 599, Statutes of 2011. [SB790 Detail]
Download: California-2011-SB790-Chaptered.html
BILL NUMBER: SB 790 CHAPTERED
BILL TEXT
CHAPTER 599
FILED WITH SECRETARY OF STATE OCTOBER 8, 2011
APPROVED BY GOVERNOR OCTOBER 8, 2011
PASSED THE SENATE SEPTEMBER 9, 2011
PASSED THE ASSEMBLY SEPTEMBER 8, 2011
AMENDED IN ASSEMBLY AUGUST 30, 2011
AMENDED IN ASSEMBLY AUGUST 15, 2011
AMENDED IN ASSEMBLY JULY 12, 2011
AMENDED IN ASSEMBLY JUNE 22, 2011
AMENDED IN SENATE MAY 31, 2011
AMENDED IN SENATE MAY 11, 2011
AMENDED IN SENATE APRIL 14, 2011
INTRODUCED BY Senator Leno
FEBRUARY 18, 2011
An act to amend Sections 331.1, 365.1, 366.2, 380, 381.1, and
395.5 of, to add Sections 396.5 and 707 to, and to add Part 5
(commencing with Section 3260) to Division 1 of, the Public Utilities
Code, relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
SB 790, Leno. Electricity: community choice aggregation.
(1) The federal Public Utility Regulatory Policies Act of 1978
(PURPA) requires every state regulatory authority with respect to
each electric utility, as defined, for which it has ratemaking
authority, to determine whether to adopt certain federal standards if
consistent with otherwise applicable state law. The federal
standards include that no electric utility may recover from any
person other than the shareholders or other owners of the utility,
any direct or indirect expenditure by the electric utility for
promotional or political advertising, as defined.
This bill would require the commission to institute a rulemaking
proceeding by March 1, 2012, for the purpose of considering and
adopting a code of conduct, associated rules, and enforcement
procedures, to govern the conduct of an electrical corporation
relative to the consideration, formation, and implementation of
community choice aggregation programs and to implement the code of
conduct, associated rules, and enforcement procedures by January 1,
2013. The bill would require the code of conduct, associated rules,
and enforcement procedures to do the following: (A) ensure that an
electrical corporation does not market against a community choice
aggregation program, except through an independent marketing division
that is funded exclusively by the electrical corporation's
shareholders, (B) limit the electrical corporation's independent
marketing division's use of support services from the electrical
corporation's ratepayer funded divisions, (C) ensure that the
electrical corporation's independent marketing division does not have
access to competitively sensitive information, (D) incorporate rules
that the commission finds to be necessary or convenient in order to
facilitate the development of community choice aggregation programs,
to foster fair competition, and to protect against
cross-subsidization paid by ratepayers, and (E) provide for other
matters that the commission determines to be necessary or advisable
to protect a ratepayer's right to be free from forced speech or to
implement that portion of PURPA that establishes the federal standard
that no electric utility may recover from any person other than the
shareholders or other owners of the utility, any direct or indirect
expenditure by the electric utility for promotional or political
advertising.
(2) Existing law authorizes a community choice aggregator to
aggregate the electrical load of interested electricity consumers
within its boundaries and requires a community choice aggregator to
file an implementation plan with the commission. Existing law
requires an electrical corporation to cooperate fully with any
community choice aggregator that investigates, pursues, or implements
community choice aggregation programs, including providing
appropriate billing and electrical load data.
This bill would expand the entities that are permitted to
undertake community choice aggregation. The bill would require that
the electrical load data to be supplied by an electrical corporation
as part of its duty to cooperate fully with any community choice
aggregator, include electrical consumption data, as defined. The bill
would, if the commission finds that an electrical corporation has
violated the requirement to cooperate fully with a community choice
aggregator, require that the commission consider the impact of the
violation upon community choice aggregators. The bill would revise
certain resource adequacy requirements as they relate to community
choice aggregators. The bill would require that any program funded
through a nonbypassable charge be administered on a nondiscriminatory
basis so that the electric service customers of a community choice
aggregator may participate in the program on an equal basis with the
customers of an electrical corporation. The bill would require the
commission to authorize a community choice aggregator to elect to
become a 3rd-party administrator of funds collected from the
aggregator's electric service customer and collected through a
nonbypassable charge authorized by the commission for cost-effective
energy efficiency and conservation programs, except those funds
collected for broader statewide and regional programs authorized by
the commission. The bill would require the governing body of a
community choice aggregator to adopt a policy that expressly
prohibits the dissemination by the community choice aggregator of any
statement relating to the community choice aggregator's rates or
terms and conditions of service that is untrue or misleading, and
that is known, or that, by the exercise of reasonable care, should be
known, to be untrue or misleading.
(3) The bill would provide that nothing in Division 1 of the
Public Utilities Code, which includes the Public Utilities Act,
prohibits payment pursuant to an agreement authorized by the National
Labor Relations Act or federal Labor Management Cooperation Act of
1978 or restricts the use permitted by federal law of money paid
pursuant to those acts.
(4) 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 this bill would expand the duties owed by an electrical
corporation pursuant to the act, the bill would impose a
state-mandated local program by creating a new crime or expanding the
definition of an existing 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.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known, and may be cited, as the
Charles McGlashan Community Choice Aggregation Act.
SEC. 2. The Legislature finds and declares all of the following:
(a) It is the policy of the state to provide for the
consideration, formation, and implementation of community choice
aggregation programs authorized in Section 366.2 of the Public
Utilities Code.
(b) Since community choice aggregation programs were first
authorized in 2002, only one community choice aggregation program has
been implemented.
(c) Electrical corporations have inherent market power derived
from, among other things, name recognition among customers,
longstanding relationships with customers, joint control over
regulated operations and competitive generation services, access to
competitive customer information, and the potential to
cross-subsidize competitive generation services.
(d) The Public Utilities Commission has found that conduct by
electrical corporations to oppose community choice aggregation
programs has had the effect of causing community choice aggregation
programs to be abandoned.
(e) The Public Utilities Commission has made considerable progress
in identifying and addressing the conduct that has hindered the
creation of community choice aggregation programs, and it is now
appropriate to further address these issues in statute.
(f) The exercise of market power by electrical corporations is a
deterrent to the consideration, development, and implementation of
community choice aggregation programs.
(g) California has a substantial governmental interest in ensuring
that conduct by electrical corporations does not threaten the
consideration, development, and implementation of community choice
aggregation programs.
(h) It is therefore necessary to establish a code of conduct,
associated rules, and enforcement procedures, applicable to
electrical corporations in order to facilitate the consideration,
development, and implementation of community choice aggregation
programs, to foster fair competition, and to protect against
cross-subsidization by ratepayers.
(i) On March 27, 2011, Marin County Supervisor Charles McGlashan
passed away at 49 years of age, leaving many life accomplishments,
including the formation of the Sonoma Marin Area Rail Transit
(SMART), the creation of the Marin Economic Forum, and the founding
of the Marin Energy Authority, which launched California's first
community choice aggregation program, Marin Clean Energy.
(j) In naming this act, it is the intent of the Legislature to
honor Supervisor Charles McGlashan for championing the right of local
governments to aggregate their electricity loads for the purpose of
procuring and generating more renewable energy, expanding consumer
choice, and greatly accelerating regional efforts to address global
climate change.
SEC. 3. Section 331.1 of the Public Utilities Code is amended to
read:
331.1. For purposes of this chapter, "community choice aggregator"
means any of the following entities, if that entity is not within
the jurisdiction of a local publicly owned electric utility that
provided electrical service as of January 1, 2003:
(a) Any city, county, or city and county whose governing board
elects to combine the loads of its residents, businesses, and
municipal facilities in a communitywide electricity buyers' program.
(b) Any group of cities, counties, or cities and counties whose
governing boards have elected to combine the loads of their programs,
through the formation of a joint powers agency established under
Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of
the Government Code.
(c) The Kings River Conservation District, the Sonoma County Water
Agency, and any California public agency possessing statutory
authority to generate and deliver electricity at retail within its
designated jurisdiction, provided the entity may only combine the
loads of residences, businesses, and governmental facilities of
cities and counties within, or contiguous to, its jurisdiction that
have, by resolution exercised pursuant to paragraph (12) of
subdivision (c) of Section 366.2, requested the agency to implement a
community choice aggregation program.
SEC. 4. 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) 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. 5. Section 366.2 of the Public Utilities Code is amended to
read:
366.2. (a) (1) Customers shall be entitled to aggregate their
electric loads as members of their local community with community
choice aggregators.
(2) Customers may aggregate their loads through a public process
with community choice aggregators, if each customer is given an
opportunity to opt out of their community's aggregation program.
(3) If a customer opts out of a community choice aggregator's
program, or has no community choice aggregation program available,
that customer shall have the right to continue to be served by the
existing electrical corporation or its successor in interest.
(4) The implementation of a community choice aggregation program
shall not result in a shifting of costs between the customers of the
community choice aggregator and the bundled service customers of an
electrical corporation.
(5) A community choice aggregator shall be solely responsible for
all generation procurement activities on behalf of the community
choice aggregator's customers, except where other generation
procurement arrangements are expressly authorized by statute.
(b) If a public agency seeks to serve as a community choice
aggregator, it shall offer the opportunity to purchase electricity to
all residential customers within its jurisdiction.
(c) (1) Notwithstanding Section 366, a community choice aggregator
is hereby authorized to aggregate the electrical load of interested
electricity consumers within its boundaries to reduce transaction
costs to consumers, provide consumer protections, and leverage the
negotiation of contracts. However, the community choice aggregator
may not aggregate electrical load if that load is served by a local
publicly owned electric utility. A community choice aggregator may
group retail electricity customers to solicit bids, broker, and
contract for electricity and energy services for those customers. The
community choice aggregator may enter into agreements for services
to facilitate the sale and purchase of electricity and other related
services. Those service agreements may be entered into by an entity
authorized to be a community choice aggregator, as defined in Section
331.1.
(2) Under community choice aggregation, customer participation may
not require a positive written declaration, but all customers shall
be informed of their right to opt out of the community choice
aggregation program. If no negative declaration is made by a
customer, that customer shall be served through the community choice
aggregation program. If an existing customer moves the location of
their electric service within the jurisdiction of the community
choice aggregator, the customer shall retain the same subscriber
status as prior to the move, unless the customer affirmatively
changes their subscriber status. If the customer is moving from
outside to inside the jurisdiction of the community choice
aggregator, customer participation shall not require a positive
written declaration, but the customer shall be informed of their
right to elect not to receive service through the community choice
aggregator.
(3) A community choice aggregator establishing electrical load
aggregation pursuant to this section shall develop an implementation
plan detailing the process and consequences of aggregation. The
implementation plan, and any subsequent changes to it, shall be
considered and adopted at a duly noticed public hearing. The
implementation plan shall contain all of the following:
(A) An organizational structure of the program, its operations,
and its funding.
(B) Ratesetting and other costs to participants.
(C) Provisions for disclosure and due process in setting rates and
allocating costs among participants.
(D) The methods for entering and terminating agreements with other
entities.
(E) The rights and responsibilities of program participants,
including, but not limited to, consumer protection procedures, credit
issues, and shutoff procedures.
(F) Termination of the program.
(G) A description of the third parties that will be supplying
electricity under the program, including, but not limited to,
information about financial, technical, and operational capabilities.
(4) A community choice aggregator establishing electrical load
aggregation shall prepare a statement of intent with the
implementation plan. Any community choice load aggregation
established pursuant to this section shall provide for the following:
(A) Universal access.
(B) Reliability.
(C) Equitable treatment of all classes of customers.
(D) Any requirements established by state law or by the commission
concerning aggregated service, including those rules adopted by the
commission pursuant to paragraph (3) of subdivision (b) of Section
8341 for the application of the greenhouse gases emission performance
standard to community choice aggregators.
(5) In order to determine the cost-recovery mechanism to be
imposed on the community choice aggregator pursuant to subdivisions
(d), (e), and (f) that shall be paid by the customers of the
community choice aggregator to prevent shifting of costs, the
community choice aggregator shall file the implementation plan with
the commission, and any other information requested by the commission
that the commission determines is necessary to develop the
cost-recovery mechanism in subdivisions (d), (e), and (f).
(6) The commission shall notify any electrical corporation serving
the customers proposed for aggregation that an implementation plan
initiating community choice aggregation has been filed, within 10
days of the filing.
(7) Within 90 days after the community choice aggregator
establishing load aggregation files its implementation plan, the
commission shall certify that it has received the implementation
plan, including any additional information necessary to determine a
cost-recovery mechanism. After certification of receipt of the
implementation plan and any additional information requested, the
commission shall then provide the community choice aggregator with
its findings regarding any cost recovery that must be paid by
customers of the community choice aggregator to prevent a shifting of
costs as provided for in subdivisions (d), (e), and (f).
(8) No entity proposing community choice aggregation shall act to
furnish electricity to electricity consumers within its boundaries
until the commission determines the cost-recovery that must be paid
by the customers of that proposed community choice aggregation
program, as provided for in subdivisions (d), (e), and (f). The
commission shall designate the earliest possible effective date for
implementation of a community choice aggregation program, taking into
consideration the impact on any annual procurement plan of the
electrical corporation that has been approved by the commission.
(9) All electrical corporations shall cooperate fully with any
community choice aggregators that investigate, pursue, or implement
community choice aggregation programs. Cooperation shall include
providing the entities with appropriate billing and electrical load
data, including, but not limited to, electrical consumption data as
defined in Section 8380 and other data detailing electricity needs
and patterns of usage, as determined by the commission, and in
accordance with procedures established by the commission. The
commission shall exercise its authority pursuant to Chapter 11
(commencing with Section 2100) to enforce the requirements of this
paragraph when it finds that the requirements of this paragraph have
been violated. Electrical corporations shall continue to provide all
metering, billing, collection, and customer service to retail
customers that participate in community choice aggregation programs.
Bills sent by the electrical corporation to retail customers shall
identify the community choice aggregator as providing the electrical
energy component of the bill. The commission shall determine the
terms and conditions under which the electrical corporation provides
services to community choice aggregators and retail customers.
(10) If the commission finds that an electrical corporation has
violated this section, the commission shall consider the impact of
the violation upon community choice aggregators.
(11) The commission shall proactively expedite the complaint
process for disputes regarding an electrical corporation's violation
of its obligations pursuant to this section in order to provide for
timely resolution of complaints made by community choice aggregation
programs, so that all complaints are resolved in no more than 180
days following the filing of a complaint by a community choice
aggregation program concerning the actions of the incumbent
electrical corporation. This deadline may only be extended under
either of the following circumstances:
(A) Upon agreement of all of the parties to the complaint.
(B) The commission makes a written determination that the deadline
cannot be met, including findings for the reason for this
determination, and issues an order extending the deadline. A single
order pursuant to this subparagraph shall not extend the deadline for
more than 60 days.
(12) (A) An entity authorized to be a community choice aggregator,
as defined in Section 331.1, that elects to implement a community
choice aggregation program within its jurisdiction pursuant to this
chapter, shall do so by ordinance. A city, county, or city and county
may request, by affirmative resolution of its governing council or
board, that another entity authorized to be a community choice
aggregator act as the community choice aggregator on its behalf. If a
city, county, or city and county, by resolution, requests another
authorized entity be the community choice aggregator for the city,
county, or city and county, that authorized entity shall be
responsible for adopting the ordinance to implement the community
choice aggregation program on behalf of the city, county, or city and
county.
(B) Two or more entities authorized to be a community choice
aggregator, as defined in Section 331.1, may participate as a group
in a community choice aggregation program pursuant to this chapter,
through a joint powers agency established pursuant to Chapter 5
(commencing with Section 6500) of Division 7 of Title 1 of the
Government Code, if each entity adopts an ordinance pursuant to
subparagraph (A). Pursuant to Section 6508.1 of the Government Code,
members of a joint powers agency that is a community choice
aggregator may specify in their joint powers agreement that, unless
otherwise agreed by the members of the agency, the debts,
liabilities, and obligations of the agency shall not be the debts,
liabilities, and obligations, either jointly or severally, of the
members of the agency. The commission shall not, as a condition of
registration or otherwise, require an agency's members to voluntarily
assume the debts, liabilities, and obligations of the agency to the
electrical corporation unless the commission finds that the agreement
by the agency's members is the only reasonable means by which the
agency may establish its creditworthiness under the electrical
corporation's tariff to pay charges to the electrical corporation
under the tariff.
(13) Following adoption of aggregation through the ordinance
described in paragraph (12), the program shall allow any retail
customer to opt out and to continue to be served as a bundled service
customer by the existing electrical corporation, or its successor in
interest. Delivery services shall be provided at the same rates,
terms, and conditions, as approved by the commission, for community
choice aggregation customers and customers that have entered into a
direct transaction where applicable, as determined by the commission.
Once enrolled in the aggregated entity, any ratepayer that chooses
to opt out within 60 days or two billing cycles of the date of
enrollment may do so without penalty and shall be entitled to receive
default service pursuant to paragraph (3) of subdivision (a).
Customers that return to the electrical corporation for procurement
services shall be subject to the same terms and conditions as are
applicable to other returning direct access customers from the same
class, as determined by the commission, as authorized by the
commission pursuant to this code or any other provision of law,
except that those customers shall be subject to no more than a
12-month stay requirement with the electrical corporation. Any
reentry fees to be imposed after the opt-out period specified in this
paragraph, shall be approved by the commission and shall reflect the
cost of reentry. The commission shall exclude any amounts previously
determined and paid pursuant to subdivisions (d), (e), and (f) from
the cost of reentry.
(14) Nothing in this section shall be construed as authorizing any
city or any community choice retail load aggregator to restrict the
ability of retail electricity customers to obtain or receive service
from any authorized electric service provider in a manner consistent
with law.
(15) (A) The community choice aggregator shall fully inform
participating customers at least twice within two calendar months, or
60 days, in advance of the date of commencing automatic enrollment.
Notifications may occur concurrently with billing cycles. Following
enrollment, the aggregated entity shall fully inform participating
customers for not less than two consecutive billing cycles.
Notification may include, but is not limited to, direct mailings to
customers, or inserts in water, sewer, or other utility bills. Any
notification shall inform customers of both of the following:
(i) That they are to be automatically enrolled and that the
customer has the right to opt out of the community choice aggregator
without penalty.
(ii) The terms and conditions of the services offered.
(B) The community choice aggregator may request the commission to
approve and order the electrical corporation to provide the
notification required in subparagraph (A). If the commission orders
the electrical corporation to send one or more of the notifications
required pursuant to subparagraph (A) in the electrical corporation's
normally scheduled monthly billing process, the electrical
corporation shall be entitled to recover from the community choice
aggregator all reasonable incremental costs it incurs related to the
notification or notifications. The electrical corporation shall fully
cooperate with the community choice aggregator in determining the
feasibility and costs associated with using the electrical
corporation's normally scheduled monthly billing process to provide
one or more of the notifications required pursuant to subparagraph
(A).
(C) Each notification shall also include a mechanism by which a
ratepayer may opt out of community choice aggregated service. The opt
out may take the form of a self-addressed return postcard indicating
the customer's election to remain with, or return to, electrical
energy service provided by the electrical corporation, or another
straightforward means by which the customer may elect to derive
electrical energy service
through the electrical corporation providing service in the area.
(16) A community choice aggregator shall have an operating service
agreement with the electrical corporation prior to furnishing
electric service to consumers within its jurisdiction. The service
agreement shall include performance standards that govern the
business and operational relationship between the community choice
aggregator and the electrical corporation. The commission shall
ensure that any service agreement between the community choice
aggregator and the electrical corporation includes equitable
responsibilities and remedies for all parties. The parties may
negotiate specific terms of the service agreement, provided the
service agreement is consistent with this chapter.
(17) The community choice aggregator shall register with the
commission, which may require additional information to ensure
compliance with basic consumer protection rules and other procedural
matters.
(18) Once the community choice aggregator's contract is signed,
the community choice aggregator shall notify the applicable
electrical corporation that community choice service will commence
within 30 days.
(19) Once notified of a community choice aggregator program, the
electrical corporation shall transfer all applicable accounts to the
new supplier within a 30-day period from the date of the close of
their normally scheduled monthly metering and billing process.
(20) An electrical corporation shall recover from the community
choice aggregator any costs reasonably attributable to the community
choice aggregator, as determined by the commission, of implementing
this section, including, but not limited to, all business and
information system changes, except for transaction-based costs as
described in this paragraph. Any costs not reasonably attributable to
a community choice aggregator shall be recovered from ratepayers, as
determined by the commission. All reasonable transaction-based costs
of notices, billing, metering, collections, and customer
communications or other services provided to an aggregator or its
customers shall be recovered from the aggregator or its customers on
terms and at rates to be approved by the commission.
(21) At the request and expense of any community choice
aggregator, electrical corporations shall install, maintain, and
calibrate metering devices at mutually agreeable locations within or
adjacent to the community aggregator's political boundaries. The
electrical corporation shall read the metering devices and provide
the data collected to the community aggregator at the aggregator's
expense. To the extent that the community aggregator requests a
metering location that would require alteration or modification of a
circuit, the electrical corporation shall only be required to alter
or modify a circuit if such alteration or modification does not
compromise the safety, reliability, or operational flexibility of the
electrical corporation's facilities. All costs incurred to modify
circuits pursuant to this paragraph, shall be borne by the community
aggregator.
(d) (1) It is the intent of the Legislature that each retail
end-use customer that has purchased power from an electrical
corporation on or after February 1, 2001, should bear a fair share of
the Department of Water Resources' electricity purchase costs, as
well as electricity purchase contract obligations incurred as of the
effective date of the act adding this section, that are recoverable
from electrical corporation customers in commission-approved rates.
It is further the intent of the Legislature to prevent any shifting
of recoverable costs between customers.
(2) The Legislature finds and declares that this subdivision is
consistent with the requirements of Division 27 (commencing with
Section 80000) of the Water Code and Section 360.5, and is therefore
declaratory of existing law.
(e) A retail end-use customer that purchases electricity from a
community choice aggregator pursuant to this section shall pay both
of the following:
(1) A charge equivalent to the charges that would otherwise be
imposed on the customer by the commission to recover bond related
costs pursuant to any agreement between the commission and the
Department of Water Resources pursuant to Section 80110 of the Water
Code, which charge shall be payable until any obligations of the
Department of Water Resources pursuant to Division 27 (commencing
with Section 80000) of the Water Code are fully paid or otherwise
discharged.
(2) Any additional costs of the Department of Water Resources,
equal to the customer's proportionate share of the Department of
Water Resources' estimated net unavoidable electricity purchase
contract costs as determined by the commission, for the period
commencing with the customer's purchases of electricity from the
community choice aggregator, through the expiration of all then
existing electricity purchase contracts entered into by the
Department of Water Resources.
(f) A retail end-use customer purchasing electricity from a
community choice aggregator pursuant to this section shall reimburse
the electrical corporation that previously served the customer for
all of the following:
(1) The electrical corporation's unrecovered past undercollections
for electricity purchases, including any financing costs,
attributable to that customer, that the commission lawfully
determines may be recovered in rates.
(2) Any additional costs of the electrical corporation recoverable
in commission-approved rates, equal to the share of the electrical
corporation's estimated net unavoidable electricity purchase contract
costs attributable to the customer, as determined by the commission,
for the period commencing with the customer's purchases of
electricity from the community choice aggregator, through the
expiration of all then existing electricity purchase contracts
entered into by the electrical corporation.
(g) Estimated net unavoidable electricity costs paid by the
customers of a community choice aggregator shall be reduced by the
value of any benefits that remain with bundled service customers,
unless the customers of the community choice aggregator are allocated
a fair and equitable share of those benefits.
(h) (1) Any charges imposed pursuant to subdivision (e) shall be
the property of the Department of Water Resources. Any charges
imposed pursuant to subdivision (f) shall be the property of the
electrical corporation. The commission shall establish mechanisms,
including agreements with, or orders with respect to, electrical
corporations necessary to ensure that charges payable pursuant to
this section shall be promptly remitted to the party entitled to
payment.
(2) Charges imposed pursuant to subdivisions (d), (e), and (f)
shall be nonbypassable.
(i) The commission shall authorize community choice aggregation
only if the commission imposes a cost-recovery mechanism pursuant to
subdivisions (d), (e), (f), and (h). Except as provided by this
subdivision, this section shall not alter the suspension by the
commission of direct purchases of electricity from alternate
providers other than by community choice aggregators, pursuant to
Section 365.1.
(j) (1) The commission shall not authorize community choice
aggregation until it implements a cost-recovery mechanism, consistent
with subdivisions (d), (e), and (f), that is applicable to customers
that elected to purchase electricity from an alternate provider
between February 1, 2001, and January 1, 2003.
(2) The commission shall not authorize community choice
aggregation until it has adopted rules for implementing community
choice aggregation.
(k) (1) Except for nonbypassable charges imposed by the commission
pursuant to subdivisions (d), (e), (f), and (h), and programs
authorized by the commission to provide broader statewide or regional
benefits to all customers, electric service customers of a community
choice aggregator shall not be required to pay nonbypassable charges
for goods, services, or programs that do not benefit either, or
where applicable, both, the customer and the community choice
aggregator serving the customer.
(2) The commission, Energy Commission, electrical corporation, or
third-party administrator shall administer any program funded through
a nonbypassable charge on a nondiscriminatory basis so that the
electric service customers of a community choice aggregator may
participate in the program on an equal basis with the customers of an
electrical corporation.
(3) Nothing in this subdivision is intended to modify, or prohibit
the use of, charges funding programs for the benefit of low-income
customers.
(l) (1) An electrical corporation shall not terminate the services
of a community choice aggregator unless authorized by a vote of the
full commission. The commission shall ensure that prior to
authorizing a termination of service, that the community choice
aggregator has been provided adequate notice and a reasonable
opportunity to be heard regarding any electrical corporation
contentions in support of termination. If the contentions made by the
electrical corporation in favor of termination include factual
claims, the community choice aggregator shall be afforded an
opportunity to address those claims in an evidentiary hearing.
(2) Notwithstanding paragraph (1), if the Independent System
Operator has transferred the community choice aggregator's scheduling
coordination responsibilities to the incumbent electrical
corporation, an administrative law judge or assigned commissioner,
after providing the aggregator with notice and an opportunity to
respond, may suspend the aggregator's service to customers pending a
full vote of the commission.
(m) Any meeting of an entity authorized to be a community choice
aggregator, as defined in Section 331.1, for the purpose of
developing, implementing, or administering a program of community
choice aggregation shall be conducted in the manner prescribed by the
Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of
Part 1 of Division 2 of Title 5 of the Government Code).
SEC. 6. Section 380 of the Public Utilities Code is amended to
read:
380. (a) The commission, in consultation with the Independent
System Operator, shall establish resource adequacy requirements for
all load-serving entities.
(b) In establishing resource adequacy requirements, the commission
shall achieve all of the following objectives:
(1) Facilitate development of new generating capacity and
retention of existing generating capacity that is economic and
needed.
(2) Equitably allocate the cost of generating capacity and prevent
shifting of costs between customer classes.
(3) Minimize enforcement requirements and costs.
(4) Maximize the ability of community choice aggregators to
determine the generation resources used to serve their customers.
(c) Each load-serving entity shall maintain physical generating
capacity adequate to meet its load requirements, including, but not
limited to, peak demand and planning and operating reserves. The
generating capacity shall be deliverable to locations and at times as
may be necessary to provide reliable electric service.
(d) Each load-serving entity shall, at a minimum, meet the most
recent minimum planning reserve and reliability criteria approved by
the Board of Trustees of the Western Systems Coordinating Council or
the Western Electricity Coordinating Council.
(e) The commission shall implement and enforce the resource
adequacy requirements established in accordance with this section in
a nondiscriminatory manner. Each load-serving entity shall be subject
to the same requirements for resource adequacy and the renewables
portfolio standard program that are applicable to electrical
corporations pursuant to this section, or otherwise required by law,
or by order or decision of the commission. The commission shall
exercise its enforcement powers to ensure compliance by all
load-serving entities.
(f) The commission shall require sufficient information,
including, but not limited to, anticipated load, actual load, and
measures undertaken by a load-serving entity to ensure resource
adequacy, to be reported to enable the commission to determine
compliance with the resource adequacy requirements established by the
commission.
(g) An electrical corporation's costs of meeting resource adequacy
requirements, including, but not limited to, the costs associated
with system reliability and local area reliability, that are
determined to be reasonable by the commission, or are otherwise
recoverable under a procurement plan approved by the commission
pursuant to Section 454.5, shall be fully recoverable from those
customers on whose behalf the costs are incurred, as determined by
the commission, at the time the commitment to incur the cost is made,
on a fully nonbypassable basis, as determined by the commission. The
commission shall exclude any amounts authorized to be recovered
pursuant to Section 366.2 when authorizing the amount of costs to be
recovered from customers of a community choice aggregator or from
customers that purchase electricity through a direct transaction
pursuant to this subdivision.
(h) The commission shall determine and authorize the most
efficient and equitable means for achieving all of the following:
(1) Meeting the objectives of this section.
(2) Ensuring that investment is made in new generating capacity.
(3) Ensuring that existing generating capacity that is economic is
retained.
(4) Ensuring that the cost of generating capacity is allocated
equitably.
(5) Ensuring that community choice aggregators can determine the
generation resources used to serve their customers.
(i) In making the determination pursuant to subdivision (h), the
commission may consider a centralized resource adequacy mechanism
among other options.
(j) For purposes of this section, "load-serving entity" means an
electrical corporation, electric service provider, or community
choice aggregator. "Load-serving entity" does not include any of the
following:
(1) A local publicly owned electric utility.
(2) The State Water Resources Development System commonly known as
the State Water Project.
(3) Customer generation located on the customer's site or
providing electric service through arrangements authorized by Section
218, if the customer generation, or the load it serves, meets one of
the following criteria:
(A) It takes standby service from the electrical corporation on a
commission-approved rate schedule that provides for adequate backup
planning and operating reserves for the standby customer class.
(B) It is not physically interconnected to the electric
transmission or distribution grid, so that, if the customer
generation fails, backup electricity is not supplied from the
electricity grid.
(C) There is physical assurance that the load served by the
customer generation will be curtailed concurrently and commensurately
with an outage of the customer generation.
SEC. 7. Section 381.1 of the Public Utilities Code is amended to
read:
381.1. (a) No later than July 15, 2003, the commission shall
establish policies and procedures by which any party, including, but
not limited to, a local entity that establishes a community choice
aggregation program, may apply to become administrators for
cost-effective energy efficiency and conservation programs
established pursuant to Section 381. In determining whether to
approve an application to become administrators and subject to an
aggregator's right to elect to become an administrator pursuant to
subdivision (f), the commission shall consider the value of program
continuity and planning certainty and the value of allowing
competitive opportunities for potentially new administrators. The
commission shall weigh the benefits of the party's proposed program
to ensure that the program meets the following objectives:
(1) Is consistent with the goals of the existing programs
established pursuant to Section 381.
(2) Advances the public interest in maximizing cost-effective
electricity savings and related benefits.
(3) Accommodates the need for broader statewide or regional
programs.
(b) All audit and reporting requirements established by the
commission pursuant to Section 381 and other statutes shall apply to
the parties chosen as administrators under this section.
(c) If a community choice aggregator is not the administrator of
energy efficiency and conservation programs for which its customers
are eligible, the commission shall require the administrator of
cost-effective energy efficiency and conservation programs to direct
a proportional share of its approved energy efficiency program
activities for which the community choice aggregator's customers are
eligible, to the community choice aggregator's territory without
regard to customer class. To the extent that energy efficiency and
conservation programs are targeted to specific locations to avoid or
defer transmission or distribution system upgrades, the targeted
expenditures shall continue irrespective of whether the loads in
those locations are served by an aggregator or by an electrical
corporation. The commission shall also direct the administrator to
work with the community choice aggregator, to provide advance
information where appropriate about the likely impacts of energy
efficiency programs and to accommodate any unique community program
needs by placing more, or less, emphasis on particular approved
programs to the extent that these special shifts in emphasis in no
way diminish the effectiveness of broader statewide or regional
programs. If the community choice aggregator proposes energy
efficiency programs other than programs already approved for
implementation in its territory, it shall do so under established
commission policies and procedures. The commission may order an
adjustment to the share of energy efficiency program activities
directed to a community aggregator's territory if necessary to ensure
an equitable and cost-effective allocation of energy efficiency
program activities.
(d) The commission shall establish an impartial process for making
the determination of whether a third party, including a community
choice aggregator, may become administrators for cost-effective
energy efficiency and conservation programs pursuant to subdivision
(a), and shall not delegate or otherwise transfer the commission's
authority to make this determination for a community choice
aggregator to an electrical corporation.
(e) The impartial process established by the commission shall
allow a registered community choice aggregator to elect to become the
administrator of funds collected from the aggregator's electric
service customers and collected through a nonbypassable charge
authorized by the commission, for cost-effective energy efficiency
and conservation programs, except those funds collected for broader
statewide and regional programs authorized by the commission.
(f) A community choice aggregator electing to become an
administrator shall submit a plan, approved by its governing board,
to the commission for the administration of cost-effective energy
efficiency and conservation programs for the aggregator's electric
service customers that includes funding requirements, a program
description, a cost-effectiveness analysis, and the duration of the
program. The commission shall certify that the plan submitted does
all of the following:
(1) Is consistent with the goals of the programs established
pursuant to this section and Section 399.4.
(2) Advances the public interest in maximizing cost-effective
electricity savings and related benefits.
(3) Accommodates the need for broader statewide or regional
programs.
(4) Includes audit and reporting requirements consistent with the
audit and reporting requirements established by the commission
pursuant to this section.
(5) Includes evaluation, measurement, and verification protocols
established by the community choice aggregator.
(6) Includes performance metrics regarding the community choice
aggregator's achievement of the objectives listed in paragraphs (1)
to (5), inclusive, and in any previous plan.
(g) If the commission does not certify the plan for the
administration of cost-effective energy efficiency and conservation
programs submitted by a community choice aggregator pursuant to
subdivision (f), the community choice aggregator electing to
administer these programs may submit an amended plan to the
commission for certification. No moneys may be released to a
community choice aggregator unless the commission certifies the plan
pursuant to subdivision (f).
SEC. 8. Section 395.5 of the Public Utilities Code is amended to
read:
395.5. (a) For purposes of this section, the following terms have
the following meanings:
(1) "Nonprofit charitable organization" means any charitable
organization described in Section 501(c)(3) of the federal Internal
Revenue Code that has as its primary purpose serving the needs of the
poor or elderly.
(2) "Electric commodity" means electricity used by the customer or
a supply of electricity available for use by the customer, and does
not include services associated with the transmission and
distribution of electricity.
(b) Notwithstanding Section 80110 of the Water Code, a nonprofit
charitable organization may acquire electric commodity service
through a direct transaction with an electric service provider if
electric commodity service is donated free of charge without
compensation.
(c) A nonprofit charitable organization that acquires donated
electric commodity service through a direct transaction pursuant to
this section shall be responsible for paying all of the following:
(1) Those charges and surcharges that would be imposed upon a
retail end-use customer of a community aggregator pursuant to
subdivisions (d), (e), (f), and (h) of Section 366.2.
(2) The transmission and distribution charges of an electrical
corporation or a local publicly owned electric utility.
(3) A nonbypassable charge imposed pursuant to Article 7
(commencing with Section 381), Article 8 (commencing with Section
385), or Article 15 (commencing with Section 399).
(4) Costs imposed upon a load-serving entity pursuant to Section
380.
(d) Existing direct access rules and all service obligations
otherwise applicable to electric service providers shall govern
transactions under this section.
(e) This section shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
SEC. 9. Section 396.5 is added to the Public Utilities Code, to
read:
396.5. The governing body of a community choice aggregator shall
adopt a policy that expressly prohibits the dissemination by the
community choice aggregator of any statement relating to the
community choice aggregator's rates or terms and conditions of
service that is untrue or misleading, and that is known, or that, by
the exercise of reasonable care, should be known, to be untrue or
misleading.
SEC. 10. Section 707 is added to the Public Utilities Code, to
read:
707. (a) Not later than March 1, 2012, the commission shall
institute a rulemaking proceeding for the purpose of considering and
adopting a code of conduct, associated rules, and enforcement
procedures, to govern the conduct of the electrical corporations
relative to the consideration, formation, and implementation of
community choice aggregation programs authorized in Section 366.2.
The code of conduct, associated rules, and enforcement procedures,
shall do all of the following:
(1) Ensure that an electrical corporation does not market against
a community choice aggregation program, except through an independent
marketing division that is funded exclusively by the electrical
corporation's shareholders and that is functionally and physically
separate from the electrical corporation's ratepayer-funded
divisions.
(2) Limit the electrical corporation's independent marketing
division's use of support services from the electrical corporation's
ratepayer-funded divisions, and ensure that the electrical
corporation's independent marketing division is allocated costs of
any permissible support services from the electrical corporation's
ratepayer-funded divisions on a fully allocated embedded cost basis,
providing detailed public reports of such use.
(3) Ensure that the electrical corporation's independent marketing
division does not have access to competitively sensitive
information.
(4) (A) Incorporate rules that the commission finds to be
necessary or convenient in order to facilitate the development of
community choice aggregation programs, to foster fair competition,
and to protect against cross-subsidization paid by ratepayers.
(B) It is the intent of the Legislature that the rules include, in
whole or in part, the rules approved by the commission in Decision
97-12-088 and Decision 08-06-016.
(C) This paragraph does not limit the authority of the commission
to adopt rules that it determines are necessary or convenient in
addition to those adopted in Decision 97-12-088 and Decision
08-06-016 or to modify any rule adopted in those decisions.
(5) Provide for any other matter that the commission determines to
be necessary or advisable to protect a ratepayer's right to be free
from forced speech or to implement that portion of the federal Public
Utility Regulatory Policies Act of 1978 that establishes the federal
standard that no electric utility may recover from any person other
than the shareholders or other owners of the utility, any direct or
indirect expenditure by the electric utility for promotional or
political advertising (16 U.S.C. Sec. 2623(b)(5)).
(b) The commission shall ensure that the code of conduct,
associated rules, and enforcement procedures are implemented by no
later than January 1, 2013.
(c) This section does not limit the authority of the commission to
require that any marketing against a community choice aggregation
plan shall be conducted by an affiliate of the electrical
corporation, or to require that marketing against a community choice
aggregator not be conducted by a marketing division of the electrical
corporation, subject to affiliate transaction rules to be developed
by the commission.
SEC. 11. Part 5 (commencing with Section 3260) is added to
Division 1 of the Public Utilities Code, to read:
PART 5. GENERAL PROVISIONS
3260. Nothing in this division prohibits payments pursuant to an
agreement authorized by the National Labor Relations Act (29 U.S.C.
Sec. 151 et seq.), or payments permitted by the federal Labor
Management Cooperation Act
of 1978 (29 U.S.C. Secs. 173, 175a, and 186). Nothing in this
division restricts any use permitted by federal law of money paid
pursuant to these acts.
SEC. 12. 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.
