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AB-2775 Public utilities: plant held for future use account.(2007-2008)

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Amended  IN  Assembly  April 07, 2008

CALIFORNIA LEGISLATURE— 2007–2008 REGULAR SESSION

Assembly Bill
No. 2775

Introduced  by  Assembly Member Smyth

February 22, 2008

An act to amend Section 345 of the Public Utilities Code, relating to electrical restructuring. An act to amend Section 728.1 of the Public Utilities Code, relating to electrical corporations.


LEGISLATIVE COUNSEL'S DIGEST


AB 2775, as amended, Smyth. Public Utilities: California Independent System Operator utilities: plant held for future use account.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical and gas corporations. Existing law requires the commission to review the status of all property owned by a gas or electrical corporation and held within the “plant held for future use account,” as defined.
This bill would authorize electrical corporations to acquire property for future electrical transmission and nontransmission purposes and carry this property within the “plant held for future use account” after approval by the commission, as provided.

The Public Utilities Act provides for the establishment of an Independent System Operator (ISO) as an incorporated nonprofit public benefit corporation for the restructuring of the electrical industry. The ISO is required to ensure efficient use and reliable operation of the transmission grid consistent with achieving certain planning and operating criteria.

This bill would make a technical, nonsubstantive change to these provisions.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

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


SECTION 1.

 Section 728.1 of the Public Utilities Code is amended to read:

728.1.
 (a) For purposes of this section, “plant held for future use account” means account number 105 of the Uniform System of Accounts Prescribed for Public Utilities and Licensees, as adopted by the commission.
(b) The commission shall review the status of all property owned by a gas or electrical corporation and held within the plant held for future use account at least once every three years or during a proceeding conducted pursuant to Section 728, for the purpose of determining and fixing the rates of that gas or electrical corporation, as determined by the commission.
(c) If a gas or electrical corporation sells property which was carried within the plant held for future use account and which was included in determining the rates of the corporation, the commission shall determine what portion of any gains from the sale shall be allocated to the customers of the corporation in a manner consistent with the procedures specified in account number 105 of the Uniform System of Accounts Prescribed for Public Utilities and Licensees. The portion of the gains allocated to customers shall not be less than the amount the corporation has recovered through rates for the carrying costs and other expenses of the property during the period it was carried in the plant held for future use account, and shall not exceed the gain on the sale, net of any tax, resulting from the sale.
(d) (1) An electrical corporation may acquire property for future electrical transmission purposes and may carry this property within the plant held for future use account for up to 20 years, after approval by the commission, without being required to construct facilities on or otherwise use the property. An electrical corporation may acquire property for electrical nontransmission purposes and may carry this property within the plant held for future use account for up to 10 years, after approval by the commission, without being required to construct facilities on or otherwise use the property. The commission shall make its determination for approval based solely on whether the electrical corporation has a reasonable plan for its stated use of the property. The commission shall not otherwise limit the number of years or use or impose any other conditions for approval.
(2) An electrical corporation may apply for an extension of the authorization given pursuant to paragraph (1) beyond the time periods specified in that paragraph, which shall be approved or denied by the commission based on the same process described in paragraph (1). An electrical corporation shall be required to construct facilities on or otherwise use the property within 20 years for electrical transmission purposes, and 10 years for electrical nontransmission purposes, from the date an extension is requested. No more than one extension shall be given pursuant to this subdivision.
(3) The commission shall approve recovery in commission jurisdictional rates of the revenue requirement associated with the plant held for future use account amounts incurred by the electrical corporation pursuant to this subdivision.

SECTION 1.Section 345 of the Public Utilities Code is amended to read:
345.

The Independent System Operator shall ensure the efficient use and reliable operation of the transmission grid consistent with achievement of planning and operating reserve criteria no less stringent than those established by the Western Electricity Coordinating Council and the North American Electric Reliability Council.