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SB-520 Electrical service: provider of last resort.(2019-2020)

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Date Published: 04/11/2019 09:00 PM
SB520:v98#DOCUMENT

Amended  IN  Senate  April 11, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill No. 520


Introduced by Senator Hertzberg

February 21, 2019


An act to add Article 13 (commencing with Section 397) to, and to repeal the heading of Article 13 of, Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


SB 520, as amended, Hertzberg. Electrical service: provider of last resort.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. Under existing law, a public utility has a duty to serve, including furnishing and maintaining adequate, efficient, just, and reasonable service, instrumentalities, equipment, and facilities as are necessary to promote the safety, health, comfort, and convenience of its patrons and the public.
This bill would authorize the commission to develop threshold attributes, as specified, for a load-serving entity to serve as a provider of last resort to provide electrical service to retail end users in California. The bill would authorize the commission to establish a structure, such as an auction, to determine which load-serving entity should serve as the provider of last resort and what benefits a load-serving entity would receive if selected to serve as the provider of last resort. provide that an incumbent electrical corporation, as defined, is the provider of last resort, as defined, unless provided otherwise in a service territory boundary agreement approved by the commission pursuant to existing law or as designated by the commission pursuant to the bill. The bill would authorize the commission to designate a load-serving entity, as defined, other than the incumbent electrical corporation to become the provider of last resort for all or a portion of the service territory of the electrical corporation by approving an application jointly filed by the incumbent electrical corporation and the load-serving entity that proposes to become the provider of last resort. The bill would establish requirements for the application and for a load-serving entity other then the incumbent electrical corporation to serve as the provider of last resort. The bill would require the commission to supervise and regulate each provider of last resort to ensure the provision of electrical service to customers without disruption.
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 the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new 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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NOYES  

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


SECTION 1.

 The heading of Article 13 (commencing with Section 397) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code is repealed.

SEC. 2.

 Article 13 (commencing with Section 397) is added to Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code, to read:
Article  13. Provider of Last Resort

397.
 (a) For purposes of this article, the following terms have the following meanings:
(1) “Carbon-free electrical resource” means a source of electrical generation that emits no greenhouse gases when generating electricity that is deliverable to retail end use customers in California.
(2) “Incumbent electrical corporation” means the electrical corporation providing distribution service within a particular service territory as determined by its certificate of public convenience and necessity.
(3) “Load-serving entity” has the same meaning as defined in Section 380.
(4) “Provider of last resort” means a load-serving entity that meets the minimum requirements of this section relating to its ability to provide electrical service to customers without disruption if another load-serving entity fails to provide, or denies, service to any retail end-use customer in California and that the commission may require to provide that service under those circumstances.
(b) The provider of last resort shall be an incumbent electrical corporation unless provided otherwise in a service territory boundary agreement entered into pursuant to Article 1 (commencing with Section 8101) of Chapter 6 of Division 4, or as otherwise designated by the commission pursuant to subdivision (c).
(c) The commission may designate a load-serving entity other than an incumbent electrical corporation to serve as a provider of last resort. The commission may approve of the designation upon the filing of a joint application by the incumbent electrical corporation and the load-serving entity that proposes to become the provider of last resort. The application may request a transfer of the responsibilities of the provider of last resort for the entire service territory of the incumbent electrical corporation or for a portion of that service territory. The application shall include all of the following:
(1) A demonstrated ability by the load-serving entity seeking to become the provider of last resort to post a bond sufficient to meet the minimum threshold established pursuant to subdivision (d).
(2) A demonstrated history of contracting for electricity and access to carbon-free electrical resources by the load-serving entity seeking to become provider of last resort.
(3) A plan for meeting the resource adequacy requirements established pursuant to subdivision (d).
(4) A history of the load-serving entity seeking to become the provider of last resort participating in the integrated resource planning process pursuant to Sections 454.51, 454.52, and 454.54, if applicable.
(5) The full disclosure by the load-serving entity seeking to become the provider of last resort of any fines or penalties imposed by, or violations of law found by, any regulatory body of any state or territory, or the federal government.
(6) A detailed history of the safety record of the load-serving entity seeking to become the provider of last resort.
(d) The commission shall develop additional threshold attributes for a load-serving entity other than an incumbent electrical corporation to serve as a provider of last resort to retail end-use customers in California that include all of the following:
(1) Minimum insurance requirements.
(2) Minimum financial requirements necessary to provide electricity to retail end-use customers in each service territory.
(3) Minimum resource adequacy requirements pursuant to Section 380.
(4) Any additional minimum requirements that the commission determines are needed to ensure that the provider of last resort will perform its obligation to serve.
(e) The commission shall ensure that the provider of last resort for each service territory receives benefits and compensation for accepting the responsibilities of serving as a provider of last resort.
(f) The commission shall supervise and regulate each provider of last resort to ensure the provision of electrical service to customers without disruption if a load-serving entity fails to provide, or denies, service to any retail end-use customer in California for any reason. The commission may do all things that are necessary and convenient in the exercise of this power.

SEC. 3.

 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.
SEC. 2.Article 13 (commencing with Section 397) is added to Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code, to read:
13.The Obligation to Serve
397.

(a)The commission may develop threshold attributes for a load-serving entity to serve as a provider of last resort to provide electrical service to retail end users in California that shall include at least the following:

(1)Resource adequacy requirements.

(2)Requirements for access to carbon-free sources of electricity.

(3)Compliance with financial conditions.

(4)The ability to provide electrical service to customers without disruption if a load-serving entity fails or denies service to a customer.

(b)The commission may establish a structure, such as an auction, to determine which load-serving entity should serve as the provider of last resort and what benefits a load-serving entity would receive if selected to serve as the provider of last resort.