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AB-57 Electrical corporations: crude petroleum refineries.(2001-2002)

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AB57:v97#DOCUMENT

Amended  IN  Assembly  March 06, 2001
Amended  IN  Assembly  April 23, 2001

CALIFORNIA LEGISLATURE— 2001–2002 1st Ext.

Assembly Bill
No. 57

Introduced  by  Assembly Member Dutra
 (Coauthor(s): Assembly Member Alquist, Canciamilla, Thomson)
 (Coauthor(s): Senator Costa, Torlakson)

February 16, 2001

An act to add Section 2773.3 to the Public Utilities Code, relating to public utilities, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


AB 57, as amended, Dutra. Electrical and gas corporations: electricity and natural gas supply crude petroleum refineries.

Existing

(1) Existing law requires the Public Utilities Commission to establish priorities among the types or categories of customers of every electrical corporation and every gas corporation and among the uses of electricity or gas by those customers. Existing law requires the commission, if an electrical or gas corporation experiences any shortage of capacity or capability in the generation, production, or transmission of electricity or gas and is unable to obtain electricity or gas from any other source so that the corporation is unable to meet all demands by its customers, to order that service be temporarily reduced by an amount that reflects those priorities, for the duration of the shortage.
This bill would require electrical corporations to immediately establish a separate priority, as prescribed, for the curtailment or other mandatory reduction of firm electric supply for customers engaged in the manufacturing or transportation of critical fuels, as defined. The bill would require a gas corporation to immediately establish a separate priority, as prescribed, for the curtailment, interruption, or diversion of natural gas supply for customers engaged in the production, manufacturing, transportation, or storage of critical fuels. The bill would require an electrical corporation to provide to a customer affected by actions in accordance with those requirements at least 4 hours notice prior to any curtailment of electricity supply, unless otherwise provided in an agreement with the customer. The bill would require an electrical corporation to consult with the customer to minimize the extent and duration of any outage the curtailment or other mandatory interruption of electric service to a crude petroleum refinery to precede only the curtailment or interruption of electric supply for customers in the “essential use” category under a specified decision of the commission. The bill would require an electrical corporation to provide the maximum notice practicable to a crude petroleum refinery, as defined, prior to any curtailment of electricity service, and to consult with the refinery to minimize the extent and duration of any outage. The bill would make related legislative findings and declarations.
(2) The bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

Section 2773.3 is added to the Public Utilities

SECTION 1.

 The Legislature finds and declares all of the following:
(a) California has experienced unprecedented shortages of electric energy in the past year, which have led to instances and material threats of rolling blackouts and involuntary curtailment of firm service to utility customers.
(b) California experienced multiple and extended electricity interruptions in January 2001, which resulted in the inability of pipeline companies to deliver petroleum products and resulted in spot shortages of gasoline and diesel fuels at numerous California terminals.
(c) Electric service interruptions and resulting inability to transport petroleum products caused half of the refineries in California to reduce their operations resulting in critical shortages of jet fuel at San Francisco and Los Angeles airports.
(d) With California’s fuel infrastructure including production, pipelines, refineries, and distribution terminals in continuous operation to meet California cleaner burning gasoline specifications and other fuel supply needs, the state maintains a delicate supply and demand balance. An interruption in the continuous operation of California’s critical fuel infrastructure will have a severe impact on fuel supplies in California.
(e) Shortages of electricity are likely to continue until sufficient additional generation and transmission capacity is installed, operational, and effective, and long-term conservation measures are in place.
(f) Shortages could lead to increased curtailments of firm service customers including refineries and other sectors of California’s critical fuel infrastructure.
(g) Even a brief curtailment of certain industrial customers, including, but not limited to, refineries, may result in plant outages lasting from two days to three weeks.
(h) Curtailment and the resulting extended plant outages for utility customers engaged in the production of gasoline, diesel fuel, aviation fuels, and related products could result in serious shortages of these critical fuels, impairing the generation of electricity, air transportation, automobile transportation, commercial transportation, and other functions critical to the residents and economy of this state.
(i) Crude petroleum refineries connected directly to the transmission grid historically have not been included in rotating outages, since those outages have been effected through the interruption of distribution circuits.
(j) It is the intent of the Legislature to create a separate priority for the curtailment of electric service to crude oil refineries to minimize the potential for fuels shortages that would endanger the health, welfare, and safety of the people of this state.

SEC. 2.

 Section 2773.3 is added to the Public Utilities Code, to read:

2773.3.
 (a) As used in this section, the term “crude petroleum refinery” means all operating units associated directly with and necessary to the production of gasoline, diesel fuel, or aviation fuel that are located on or near a common industrial site, including operating units engaged in the production, manufacturing, storage, or transportation of refinery feedstocks, raw materials, transportation fuels, or byproducts.
(b) The curtailment or other mandatory interruption of electric service to a crude petroleum refinery shall precede only the curtailment or interruption of electric supply for customers in the “essential use” category under Decision No. 91548 of the commission.
(c) An electrical corporation shall provide the maximum notice practicable to a crude petroleum refinery prior to any curtailment of electricity service. An electrical corporation shall consult with the refinery to minimize the extent and duration of any outage by notifying the customer at the commencement of any curtailment period during which there is a material likelihood that the customer will be required to curtail, by estimating the time at which curtailment may be required and by advising the customer periodically of any material changes in the electrical corporation’s estimate of curtailment or curtailment time.
(d) This section does not excuse the performance by a crude petroleum refinery of any obligation under a voluntary or elective electric service interruption or demand-relief program administered by the commission or the Federal Energy Regulatory Commission.

SEC. 3.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to address the potential curtailment of electric power to critical fuels customers and to prevent the resulting shortages of critical fuels, which would endanger the health, welfare, and safety of the people of this state, it is necessary for this act to take effect immediately.

Code, to read:

2773.3.

(a)As used in this section, the term “critical fuels” includes all of the following:

(1)Products that may be used in the generation of electricity.

(2)Products that are critical to the operation of the state or federal transportation, health and safety infrastructure.

(3)Products that support federal military operations.

(4)Products that are required as feedstocks or raw materials in, or are a byproduct of, the manufacturing of other products specified in this section.

(b)All electrical and gas corporations shall immediately establish a separate priority for the curtailment or interruption of electricity and natural gas supply for customers engaged in the production, manufacturing, transportation, or storage of critical fuels, as follows:

(1)The curtailment or other mandatory reduction of firm electric supply for a customer engaged in the production, manufacturing, transportation, or storage of critical fuels shall precede only the curtailment or other mandatory reduction of firm electric supply for customers in the “essential use” category under Decision No. 91548 of the commission.

(2)Curtailment , interruption, or diversion of natural gas supply for a customer engaged in the production, manufacturing, transportation, or storage of critical fuels shall occur only if natural gas has been curtailed or diverted from all other noncore transportation or storage customers.

(c)An electrical corporation shall provide to a customer affected by actions in accordance with this section at least four hours notice prior to any curtailment of electricity supply, unless otherwise provided in an agreement with the customer. An electrical corporation shall consult with the customer to minimize the extent and duration of any outage.

(d)This section does not excuse the performance by a customer engaged in the production, manufacturing, transportation, or storage of critical fuels of any obligation under a voluntary or elective electric service interruption or demand-relief program administered by the commission or the Federal Energy Regulatory Commission.