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AB-56 Statewide central electricity procurement entity.(2019-2020)

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Date Published: 12/03/2018 09:00 PM


Assembly Bill No. 56

Introduced by Assembly Member Eduardo Garcia

December 03, 2018

An act to add Section 400.5 to the Public Utilities Commission, relating to electricity.


AB 56, as introduced, Eduardo Garcia. Statewide central electricity procurement entity.
Existing law requires the Public Utilities Commission (PUC) and the State Energy Resources Conservation and Development Commission (Energy Commission) to undertake various actions in furtherance of meeting the state’s clean energy and pollution reduction objectives.
This bill would require the PUC and the Energy Commission to provide to the Legislature, by March 31, 2020, a joint assessment, as specified, of options for establishing a central statewide entity to procure electricity for all end-use retail customers in the state.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


 Section 400.5 is added to the Public Utilities Code, to read:

 (a) By March 31, 2020, the commission and the Energy Commission shall provide to the Legislature, in compliance with Section 9795 of the Government Code, a joint assessment of options for establishing a statewide central procurement entity on behalf of retail sellers in the state. This assessment shall consider the role of any proposed central procurement entity in doing all of the following:
(1) Entering into long-term contracts for newly developed renewable energy resources, energy storage, and other preferred resources. For these purposes, “preferred resources” means those resources described in the state’s Energy Action Plan II, Implementation Roadmap for Energy Policies, a joint document adopted by the Energy Commission and the commission (September 21, 2005), as that description of preferred resources may be modified by the commission.
(2) Contracting for renewable energy resources when they are at risk of retirement, if they provide demonstrated environmental and public health benefits to the state, including, but not limited to, benefit from a reduction of toxic and criteria air emissions.
(3) Developing financing tools to minimize the cost of new generation projects.
(b) In conducting the assessment pursuant to subdivision (a), the commission and the Energy Commission shall consider the benefits, costs, and risks of assigning the procurement entity function to any of the following:
(1) A state agency or state power authority.
(2) A person or corporation, whether for-profit or nonprofit.
(3) An existing retail supplier, electrical corporation, or local publicly owned electric utility.
(c) The assessment shall evaluate the need for, and appropriate design of, the following features of a central procurement structure:
(1) The recovery of reasonable and prudent administrative and procurement costs through the retail rates of end-use customers in a fair and equitable manner.
(2) The process for advance review and up-front approval of any procurement commitments.
(3) Methods of assigning specific responsibilities to the procurement entity based on the outcome of state resource planning processes and other need determinations.
(4) Options for voluntary participation or self-provision of required resources by a retail seller, as defined in Section 399.12.
(5) A reasonable and legally defensible approach to evaluating the local environmental, reliability, air quality, and public health benefits of various resources solicited by the procurement entity. This approach shall include consideration of ways to minimize emissions of criteria pollutants, toxic air contaminants, and greenhouse gases, protect public health, and reduce environmental impacts of resources to the maximum extent feasible.
(d) The commission and the Energy Commission shall conduct a joint public process for completing the assessment and shall solicit comments from interested stakeholders.
(e) Pursuant to Section 10231.5 of the Government Code, this section becomes inoperative on March 31, 2024, and is repealed on January 1, 2025.