400.
(a) On or before April 1, 2005, the commission shall establish rules for the phased implementation of direct transactions. The commission may establish reserve requirements, energy efficiency obligations, and any other requirements the commission determines to be necessary to ensure bundled customer indifference to direct transactions. For the period commencing January 1, 2006, until January 1, 2009, in a given year, the commission shall permit direct transactions in an amount equivalent to the combined amount of load growth and any reduction in the contract obligations of the Department of Water Resources pursuant to Division 27 (commencing with Section 80000) of the Water Code.(b) On or before April 1, 2005, the commission shall establish a core/noncore model for direct transactions, to commence January 1, 2009, consistent with all of the following principles:
(1) Permits specified electrical corporation customers to purchase electricity directly from electric service providers.
(2) Provides that noncore customers forgo both the benefits and future-incurred costs of bundled electricity service from the electrical corporation.
(3) Provides that remaining core customers are served by the electrical corporation’s electricity resource portfolio.
(4) Requires each electrical corporation to maintain the value of its electricity resource portfolio for core customers.
(5) Ensures electrical corporations and core customers full and timely recovery of costs, including investments in long-term resource additions to the system, originally incurred to serve departing customers.
(6) Provides for full recovery of existing direct access customers’ energy cost obligations on a schedule comparable to the recovery of comparable costs from core customers.
(7) Provides an election process for determining which customers wish to remain core customers, and which customers opt for noncore service, administered in a manner that ensures a stable customer base for electrical corporations to support long-term integrated resource planning and investment.
(8) Requires electric service providers to comply with conditions, including resource adequacy standards, that the commission determines to be necessary and appropriate to ensure there is no adverse effect on the reliability or cost of electricity for core customers.
(9) Requires electric service providers to comply with the requirements established pursuant to Article 16 (commencing with Section 399.11).
(10) Permits core customers to purchase renewable power at cost via electrical corporation renewable service options, in addition to an electrical corporation’s obligations under Article 16 (commencing with Section 399.11).
(11) Restricts the eligibility of noncore customers to return to bundled service. The commission shall determine whether the electrical corporation service should provide service to returning noncore customers, and at what terms, or establish a default service provider. Any option shall ensure that there is no cost shifting from noncore to core customers.
(12) Shows that a core/noncore program will support, and not be detrimental to, system reliability and future investments in electricity infrastructure and the objective of acquiring all cost-effective demand reduction resources on the system.
(13) Compares the public benefits of core/noncore to other electric service options, including bundled service and community choice aggregation, as provided in Section 366.2.
(14) Protects existing contractual rights.
(c) The Independent System Operator shall enforce any resource adequacy requirements adopted by the commission pursuant to this section, subject to the oversight of the commission and the Legislature.
(d) On or before April 1, 2005, the commission shall prepare and submit to the Legislature and the Governor a report on the rules the commission has adopted pursuant to subdivisions (a) and (b), including, but not limited to, the specific actions taken by the commission to comply with the principles listed in subdivision (b).
(e) On or before October 1, 2005, the commission shall review each procurement plan prepared and submitted by an electrical corporation pursuant to Section 454.5 and shall not adopt a plan pursuant to that review unless it finds that the electrical corporation has demonstrated to the commission that its procurement plan complies with the schedule for the phased implementation of direct transactions adopted by the commission pursuant to this section. The commission shall establish transition rules that allow an electrical corporation to avoid stranding capacity through its procurement plan.