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AB-42 Electric power.(2001-2002)

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AB42:v98#DOCUMENT

Amended  IN  Senate  June 12, 2001

CALIFORNIA LEGISLATURE— 2001–2002 2nd Ext.

Assembly Bill
No. 42


Introduced  by  Assembly Member Kelley, Bates
(Coauthor(s): Assembly Member Correa, Daucher, Robert Pacheco, Zettel)

May 21, 2001


An act to amend Section 80110 of, and to add Section 80111 to, the Water Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


AB 42, as amended, Kelley. Electric power.
Existing law authorizes the Department of Water Resources to enter into contract for the purchase of electric power and to sell power to retail end use customers. Existing law requires the Public Utilities Commission to suspend the right of retail end use customers to acquire service from other providers until the department no longer supplies electric power.
This bill would delete that suspension authority and would, except as specified, permit the commission to limit the right of require a retail end use customer, who purchases power from an electrical corporation, as defined, to purchase power from an alternate provider, as defined, to the extent the commission determines to be necessary to ensure satisfaction of any power purchase obligation or bond obligation incurred by the department to procure power to serve that customer pay an exit fee, and, upon returning to the service of the department, a return fee.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 80110 of the Water Code is amended to read:

80110.
 The department shall retain title to all power sold by it to the retail end use customers. The department shall be entitled to recover, as a revenue requirement, amounts and at the times necessary to enable it to comply with Section 80134, and shall advise the commission as the department determines to be appropriate. Such revenue requirements may also include any advances made to the department hereunder or hereafter for purposes of this division, or from the Department of Water Resources Electric Power Fund, and General Fund moneys expended by the department pursuant to the Governor’s Emergency Proclamation dated January 17, 2001. For purposes of this division and except as otherwise provided in this section, the Public Utility Commission’s authority as set forth in Section 451 of the Public Utilities Code shall apply, except any just and reasonable review under Section 451 shall be conducted and determined by the department. The commission may enter into an agreement with the department with respect to charges under Section 451 for purposes of this division, and that agreement shall have the force and effect of a financing order adopted in accordance with Article 5.5 (commencing with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code, as determined by the commission. In no case shall the commission increase the electricity charges in effect on the date that the act that adds this section becomes effective for residential customers for existing baseline quantities or usage by those customers of up to 130 percent of existing baseline quantities, until such time as the department has recovered the costs of power it has procured for the electrical corporation’s retail end use customers as provided in this division. The department shall have the same rights with respect to the payment by retail end use customers for power sold by the department as do providers of power to such customers.

SEC. 2.

 Section 80111 is added to the Water Code, to read:

80111.
 (a) As used in this section, the following terms have the following meanings:
(1) “Electrical corporation” means an electrical corporation, as defined in Section 218 of the Public Utilities Code, serving the customers for which the department is procuring power pursuant to this division.
(2) “Alternate provider” means an entity, other than an electrical corporation or an entity exempt from regulation as an electrical corporation under Section 218 of the Public Utilities Code, supplying electrical power within the service territory of an electrical corporation that is delivered through the transmission or distribution facilities of an electrical corporation.
(3) “Long term power purchase contract” means a contract for the purchase of electric energy or capacity with a term of one year or longer.
(b) The right of a retail end use customer who has not purchased power from an electrical corporation on or after January 17, 2001 to purchase power from an alternate provider may not be limited by this section.

(c)The right of a retail end use customer, who purchased power from an electrical corporation, to purchase power from an alternate provider for an increment of the customer’s power usage equivalent to the increment of the load served by the electrical corporation that is not procured by the department may not be limited by this section. If a customer elects to purchase this increment from an alternate provider, the customer shall continue to pay the department for the increment of power procured by the department in the manner provided in this division.

(d)Before the effective date of this section, the right of a retail end-use customer who purchases power from an electrical corporation to purchase power from an alternate provider may not be limited by this section.

(e)On and after the effective date of this section, the commission may limit the right of a retail end use customer, who purchases power from an electrical corporation, to purchase power from an alternate provider to the extent the commission determines to be necessary to ensure satisfaction of any power purchase obligation or bond obligation incurred by the department under this division to procure power to serve that customer. Any limitation imposed by the commission pursuant to this subdivision shall be consistent with all of the following:

(c) Any retail end-use customer who purchases power from an electrical corporation on or after January 17, 2001 who elects to purchase power from an alternate provider shall pay an exit fee equal to the difference, if any, between the customer’s proportionate share of total actual procurement costs incurred by the department during the customer’s term of service with the department and the revenues collected by the department from the customer during that same term of service. The exit fee imposed under this subdivision may, at the option of the customer, be paid over a length of time equal to the term of the bonds issued to finance the purchase of that power.
(d) A retail end-use customer may elect service from an alternate service provider at any time, upon payment of an exit fee equal to the department’s net unavoidable cost of power procurement for the period commencing immediately after the customer’s term of service with the department that is directly attributable to that customer, as determined by the department, except as provided in paragraphs (1) and (2).
(1) The right of a residential or small commercial customer, or multiple customers aggregated pursuant to Section 366 of the Public Utilities Code, to purchase power from an alternate provider may not be limited to the extent, nor may any exit fee be imposed on those customers to the extent that, as of the customer’s commencement of service with the alternate provider, the total residential and small commercial load served within the service territory of the electrical corporation by alternate providers is less than or equal to the cumulative load growth within the service territory of the electrical corporation on and after the effective date of this section, as determined by the commission.

(2)In addition to the load growth allowance specifically allocated to residential and small commercial customers in paragraph (1), the right of any retail end-use customer to purchase power from an alternate provider may not be limited to the extent the total load served within the service territory of the electrical corporation by alternate providers is less than or equal to the difference between the total load within the service territory of the electrical corporation and the sum of that electrical corporation’s retained generation, power purchase contracts, and long term power purchase contracts procured by the department to serve that electrical corporation’s customers, as determined by the commission. In making the determinations, the commission shall consider daily, weekly, and seasonal variations in demand and supply, including significant variations in the power purchase commitments of the department.

(f)Notwithstanding subdivision (e), a customer may elect service from an alternate provider at any time, upon payment of a fee to the department equivalent to the department’s net unavoidable cost of power procurement, including any financing cost, attributable to that customer, as determined by the department. If the alternative provider elected under this subdivision is a self-generation or cogeneration provider pursuant to Section 218 of the Public Utilities Code, then no fee shall be due from the customer if the alternative provider has given at least 180 days prior notification to the department.

(g)On and after the effective date of this section, if a retail end-use customer previously served by an alternate provider acquires service from an electrical corporation, except those involuntarily required to return to an electrical corporation, the department may impose a fee equivalent to any unavoidable costs imposed on the department’s portfolio attributable to the load of that customer, if a fee is necessary to avoid imposing costs on other customers of the electrical corporation, or on the state. The fee to 5 percent of the total residential and small commercial customer load within the service territory of the electrical corporation during 2001, which quantity of load shall be increased each succeeding year by 2 percent of the total residential and small commercial customer load for each succeeding year, as recorded by the electric corporation and reported to the department and the commission, or to the extent that a customer is a member of a consumer-owned organization that has aggregated customer loads and has acquired generation resources as assets owned by the organization or purchased energy through cost-based contracts that purchase energy from a specified generation asset.
(2) The right of a retail end-use customer, other than a residential or small commercial customer, to purchase power from an alternate provider may not be limited, nor may any exit fee be imposed on the customer to the extent that, as of the customers commencement of service with the alternate provider, the total load served within the service territory of the electrical corporation by alternate providers is less than or equal to the difference between the total load within the service territory of the electrical corporation and the sum of firm capacity represented by the electrical corporation’s retained generation, long-term power purchase contracts, and long-term power purchase contracts procured by the department to service that electrical corporation’s customers, as recorded by the electrical corporation and reported to the department and the commission. In determining the difference between the total load served by the electrical corporation and the load served by retained generation and long-term contracts, the commission shall consider daily, weekly, and seasonal variations in demand and supply and significant changes in the power purchase obligations of the department in such a manner as to maximize the amount of load eligible for direct access while securing the long-term power purchase obligations of the department.
(e) On and after the effective date of this section, if a retail end-use customer previously served by an alternate provider acquires service from an electrical corporation, the department may impose a return fee on that customer if, in order to provide service to the returning customer, the department is obligated to purchase electric energy or capacity at a cost in excess of its then-effective weighted average cost of purchased power, and the fee to be charged shall consist of the difference between the actual cost of the incremental energy purchased to serve the returning customer and the weighted average cost of department power purchased multiplied by the energy usage of the customer, plus any financing costs directly attributable to purchases made to serve the returning customer. The department may charge the return fee to a returning customer on a monthly basis for a period of 12 months or until incremental purchases are equal to, or less than, the departments’ weighted average cost of power purchases, whichever comes first. In the case of a customer who is involuntarily returned to electrical corporation service by an alternate provider, any return fee shall be the obligation of the alternate provider. The fee under this subdivision shall not apply if the customer has given the department 12 months’ advance notice of the customer’s intent to purchase from the department. If the customer has not provided the department at least 12 months advance written notice, the customer shall pay to the department the fees associated with the unavoidable costs for a period of 12 months equal to 12 months, less the period for which notice was provided. After the 12-month period the customer shall be entitled to the tariff otherwise applicable for the customer.
(f) A retail end-use customer that purchases power from an alternate provider may not pay any portion of the cost purchased by the department, or related financing costs, except as provided in subdivisions (c) to (e), inclusive.
(g) On and after the effective date of this section, the department shall provide public notice on an ongoing basis of the net short quantity of energy procured by the department under contracts of less than one year, the amount of the applicable exit fees on a per kilowatt hour basis, and shall also provide 90 days’ public notice of the expiration or termination of any long-term contract that will increase the net short quantity.
(h) The commission shall require notification of each electrical corporation customer no later than 30 days after the effective date of this section of their limited option to choose between purchasing power from the electrical corporation and purchasing power from an alternate provider. The notification shall include a description of the future conditions of purchasing power from an alternate provider imposed by this section if the customer elects to purchase power from an alternative alternate provider on or after the effective date of this section.