Today's Law As Amended


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AB-428 Public Utilities Commission: direct transactions.(2003-2004)



As Amends the Law Today


SECTION 1.

 Article 17 (commencing with Section 400) is added to Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code, to read:

Article  17. Direct Transactions
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.
Section 80110 of the Water Code is amended to read:

80110.
 (a) The department shall retain title to all electricity 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.
(b) The 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.
(c) (1) For the 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. Prior to the execution of any modification of any contract for the purchase of electricity by the department pursuant to this division, on or after the effective date of this section, the department or the commission, as applicable, shall do the following:
(A) The department shall notify the public of its intent to modify a contract and the opportunity to comment on the proposed modification.
(B) At least 21 days after providing public notice, the department shall make a determination as to whether the proposed modifications are just and reasonable. The determination shall include responses to any public comments.
(C) No later than 70 days before the date of execution of the contract modification, the department shall provide a written report to the commission setting forth the justification for the determination that the proposed modification is just and reasonable, including documents, analysis, response to public comments, and other information relating to the determination.
(D) Within 60 days of the date of receipt of the department’s written report, the commission shall review the report and make public its comments. If the commission in its comments recommends against the proposed modification, the department shall not execute the proposed contract modification.
(2) This subdivision does not apply to the modification of a contract modified to settle litigation to which the commission is a party.
(3) This subdivision does not apply to the modification of a contract for the purchase of electricity that is generated from a facility owned by a public agency if the contract requires the public agency to sell electricity to the department at or below the public agency’s cost of that electricity.
(4) This subdivision does not apply to the modification of a contract to address issues relating to billing, scheduling, delivery of electricity, and related contract matters arising out of the implementation by the Independent System Operator of its market redesign and technology upgrade program.
(5) (A) For purposes of this subdivision, the department proposes to “modify” a contract if there is any material change proposed in the terms of the contract.
(B) A change to a contract is not material if it is only administrative in nature or the change in ratepayer value results in ratepayer savings, not to exceed twenty-five million dollars ($25,000,000) per year. For the purpose of making a determination that a change is only administrative in nature or results in ratepayer savings of twenty-five million dollars ($25,000,000) or less per year, the executive director of the commission shall concur in writing with each of those determinations by the department.
(d)  The commission may  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. The 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 Utilities 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. The commission shall not 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 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. After the passage of a period of time after February 1, 2001, as shall be determined by the commission, the right of retail end-use customers pursuant to Article 6 (commencing with Section 360) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code to acquire service from other providers shall be suspended until January 1, 2006. On and after January 1, 2006, the acquisition of service from other providers shall be in accordance with Article 17 (commencing with Section 400) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code. 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 those customers. 
(e) The department shall have the same rights with respect to the payment by retail end-use customers for electricity sold by the department as do providers of electricity to the customers.
SEC. 2.
 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.