Bill Text: CA AB1457 | 2011-2012 | Regular Session | Amended
Bill Title: Electricity Oversight Board.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-04-18 - In committee: Hearing postponed by committee. [AB1457 Detail]
Download: California-2011-AB1457-Amended.html
BILL NUMBER: AB 1457 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 9, 2012
INTRODUCED BY Assembly Member Huber
JANUARY 9, 2012
An act to amend Sections 25301, 25302, and 25334 of the Public
Resources Code, and to amend Sections 372
343, 372, and 464 of, and to repeal Article 2
(commencing with Section 334) of Chapter 2.3 of Part 1 of Division 1
Sections 334, 335, 336, 337, 338, 339, 340, 341,
341.1, 341.2, 341.3, 341.4, and 341.5 of, the Public Utilities
Code, relating to state government
electricity .
LEGISLATIVE COUNSEL'S DIGEST
AB 1457, as amended, Huber. Electricity Oversight Board.
Existing law establishes the Electricity Oversight Board to
oversee the Independent System Operator and the Power Exchange in
order to ensure the success of electric industry restructuring and to
ensure a reliable supply of electricity in the transition to a new
market structure.
This bill would repeal those provisions, and make various
conforming changes.
Existing law, until January 1, 2013, requires the Attorney General
to represent the Department of Finance and to succeed to all rights,
claims, powers, and entitlements of the Electricity Oversight Board
in any litigation or settlement to obtain ratepayer recovery for the
effects of the 2000-02 energy crisis. Existing law additionally
prohibits the Attorney General from expending the proceeds of any
settlements of those claims, except as specified.
This bill would delete the repeal date of January 1, 2013, thereby
making these provisions operative indefinitely.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 25301 of the Public Resources Code is amended
to read:
25301. (a) At least every two years, the commission shall conduct
assessments and forecasts of all aspects of energy industry supply,
production, transportation, delivery and distribution, demand, and
prices. The commission shall use these assessments and forecasts to
develop energy policies that conserve resources, protect the
environment, ensure energy reliability, enhance the state's economy,
and protect public health and safety. To perform these assessments
and forecasts, the commission may require submission of demand
forecasts, resource plans, market assessments, and related outlooks
from electric and natural gas utilities, transportation fuel and
technology suppliers, and other market participants. These
assessments and forecasts shall be done in consultation with the
appropriate state and federal agencies including, but not limited to,
the Public Utilities Commission, the Office of Ratepayer Advocates,
the Air Resources Board, the Independent System Operator, the
Department of Water Resources, the California Consumer Power and
Conservation Financing Authority, the Department of Transportation,
and the Department of Motor Vehicles.
(b) In developing the assessments and forecasts prepared pursuant
to subdivision (a), the commission shall do all of the following:
(1) Provide information about the performance of energy
industries.
(2) Develop and maintain the analytical capability sufficient to
answer inquiries about energy issues from government, market
participants, and the public.
(3) Analyze and develop energy policies.
(4) Provide an analytical foundation for regulatory and policy
decisionmaking.
(5) Facilitate efficient and reliable energy markets.
SEC. 2. Section 25302 of the Public Resources Code is amended to
read:
25302. (a) Beginning November 1, 2003, and every two years
thereafter, the commission shall adopt an integrated energy policy
report. This integrated report shall contain an overview of major
energy trends and issues facing the state, including, but not limited
to, supply, demand, pricing, reliability, efficiency, and impacts on
public health and safety, the economy, resources, and the
environment. Energy markets and systems shall be grouped and assessed
in three subsidiary volumes:
(1) Electricity and natural gas markets.
(2) Transportation fuels, technologies, and infrastructure.
(3) Public interest energy strategies.
(b) The commission shall compile the integrated energy policy
report prepared pursuant to subdivision (a) by consolidating the
analyses and findings of the subsidiary volumes in paragraphs (1),
(2), and (3) of subdivision (a). The integrated energy policy report
shall present policy recommendations based on an indepth and
integrated analysis of the most current and pressing energy issues
facing the state. The analyses supporting this integrated energy
policy report shall explicitly address interfuel and intermarket
effects to provide a more informed evaluation of potential tradeoffs
when developing energy policy across different markets and systems.
(c) The integrated energy policy report shall include an
assessment and forecast of system reliability and the need for
resource additions, efficiency, and conservation that considers all
aspects of energy industries and markets that are essential for the
state economy, general welfare, public health and safety, energy
diversity, and protection of the environment. This assessment shall
be based on determinations made pursuant to this chapter.
(d) Beginning November 1, 2004, and every two years thereafter,
the commission shall prepare an energy policy review to update
analyses from the integrated energy policy report prepared pursuant
to subdivisions (a), (b), and (c), or to raise energy issues that
have emerged since the release of the integrated energy policy
report. The commission may also periodically prepare and release
technical analyses and assessments of energy issues and concerns to
provide timely and relevant information for the Governor, the
Legislature, market participants, and the public.
(e) In preparation of the report, the commission shall consult
with the following entities: the Public Utilities Commission, the
Office of Ratepayer Advocates, the State Air Resources Board, the
Independent System Operator, the Department of Water Resources, the
California Consumer Power and Conservation Financing Authority, the
Department of Transportation, and the Department of Motor Vehicles,
and any federal, state, and local agencies it deems necessary in
preparation of the integrated energy policy report. To assure
collaborative development of state energy policies, these agencies
shall make a good faith effort to provide data, assessment, and
proposed recommendations for review by the commission.
(f) The commission shall provide the report to the Public
Utilities Commission, the Office of Ratepayer Advocates, the State
Air Resources Board, the Independent System Operator, the Department
of Water Resources, the California Consumer Power and Conservation
Financing Authority, and the Department of Transportation. For the
purpose of ensuring consistency in the underlying information that
forms the foundation of energy policies and decisions affecting the
state, those entities shall carry out their energy-related duties and
responsibilities based upon the information and analyses contained
in the report. If an entity listed in this subdivision objects to
information contained in the report, and has a reasonable basis for
that objection, the entity shall not be required to consider that
information in carrying out its energy-related duties.
(g) The commission shall make the report accessible to state,
local, and federal entities and to the general public.
SEC. 3. Section 25334 of the Public Resources Code is amended to
read:
25334. (a) Upon receipt of an application or upon its own motion
for designation of a transmission corridor zone, the commission shall
arrange for the publication of a summary of the application in a
newspaper of general circulation in each county where the proposed
transmission corridor zone would be located, and shall notify all
property owners within, or adjacent to, the transmission corridor
zone. The commission shall transmit a copy of the application for
designation to all cities, counties, and state and federal agencies
having an interest in the proposed transmission corridor zone. The
commission shall publish the application for designation on its
Internet Web site, and notify members of the public that the
application is available on the commission's Internet Web site.
(b) As soon as practicable after the receipt of an application or
upon its own motion for designation of a transmission corridor zone,
the commission shall notify cities, counties, state and federal
agencies, and California Native American tribes in whose
jurisdictions the proposed transmission corridor zone would be
located regarding the proposed transmission corridor zone and the
objectives of the most recent strategic plan for the state's electric
transmission grid. The commission's notice shall solicit information
from, and the commission shall confer with, all interested cities,
counties, state and federal agencies, and California Native American
tribes regarding their land use plans, existing land uses, and other
factors in which they have expertise or interest with respect to the
proposed transmission corridor zone. The commission shall provide any
interested city, county, state or federal agency, California Native
American tribe, or member of the public, including any property owner
within the proposed transmission corridor zone, ample opportunity to
participate in the commission's review of a proposed transmission
corridor zone.
(c) The commission shall request affected cities, counties, state
and federal agencies, the Independent System Operator, interested
California Native American tribes, and members of the public,
including any property owner within the proposed transmission
corridor zone, to provide comments on the suitability of the proposed
transmission corridor zone with respect to environmental, public
health and safety, land use, economic, and transmission-system
impacts or other factors on which they may have expertise.
(d) The commission shall require a person who files an application
for the designation of a transmission corridor zone to pay a fee
sufficient to reimburse the commission for all costs associated with
reviewing the application. If the commission initiates the
designation of a transmission corridor zone on its own motion, the
commission shall fix the surcharge imposed pursuant to subdivision
(b) of Section 40016 of the Revenue and Taxation Code, at a level
sufficient to cover the commission's added costs.
(e) Upon receiving the commission's request for review of a
proposed transmission corridor zone, a city or county may request a
fee pursuant to Section 25538 to cover for the actual and added costs
of this review and the commission shall pay this amount to the city
or county.
SEC. 4. Article 2 (commencing with Section 334)
of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code
is repealed.
SEC. 4. Section 334 of the Public
Utilities Code is repealed.
334. The Legislature finds and declares that in order to ensure
the success of electric industry restructuring, in the transition to
a new market structure it is important to ensure a reliable supply of
electricity. Reliable electric service is of paramount importance to
the safety, health, and comfort of the people of California.
Transmission connections between electric utilities allow them to
share generation resources and reduce the number of powerplants
necessary to maintain a reliable system. The connections between
utilities also create exposure to events that can cause widespread
and extended transmission and service outages that reach far beyond
the originating utility service area. California utilities and those
in the western United States voluntarily adhere to reliability
standards developed by the Western Electricity Coordinating Council.
The economic cost of extended electricity outages, such as those that
occurred in California and throughout the Western Electricity
Coordinating Council on July 2, 1996, and August 10, 1996, to
California's residential, commercial, agricultural, and industrial
customers is significant. The proposed restructuring of the
electricity industry would transfer responsibility for ensuring
short- and long-term reliability away from electric utilities and
regulatory bodies to the Independent System Operator and various
market-based mechanisms. The Legislature has an interest in ensuring
that the change in the locus of responsibility for reliability does
not expose California citizens to undue economic risk in connection
with system reliability.
SEC. 5. Section 335 of the Public
Utilities Code is repealed.
335. In order to ensure that the interests of the people of
California are served, a five-member Electricity Oversight Board is
hereby created as provided in Section 336. For purposes of this
chapter, any reference to the Oversight Board shall mean the
Electricity Oversight Board. Its functions shall be all of the
following:
(a) To oversee the Independent System Operator and the Power
Exchange.
(b) To determine the composition and terms of service and to
exercise the exclusive right to decline to confirm the appointments
of specific members of the governing board of the Power Exchange.
(c) To serve as an appeal board for majority decisions of the
Independent System Operator governing board, as they relate to
matters subject to exclusive state jurisdiction, as specified in
Section 339.
(d) Those members of the Power Exchange governing board whose
appointments the Oversight Board has the exclusive right to decline
to confirm include proposed governing board members representing
agricultural end users, industrial end users, commercial end users,
residential end users, end users at large, nonmarket participants,
and public interest groups.
(e) To investigate any matter related to the wholesale market for
electricity to ensure that the interests of California's citizens and
consumers are served, protected, and represented in relation to the
availability of electric transmission and generation and related
costs, during periods of peak demand.
SEC. 6. Section 336 of the Public
Utilities Code is repealed.
336. (a) The five-member Oversight Board shall be comprised as
follows:
(1) Three members, who are California residents and electricity
ratepayers, appointed by the Governor from a list jointly provided by
the California Energy Resources Conservation and Development
Commission and the Public Utilities Commission, and subject to
confirmation by the Senate.
(2) One member of the Assembly appointed by the Speaker of the
Assembly.
(3) One member of the Senate appointed by the Senate Committee on
Rules.
(b) Legislative members shall be nonvoting members, however, they
are otherwise full members of the board with all rights and
privileges pertaining thereto.
(c) Oversight Board members shall serve three-year terms with no
limit on reappointment. For purposes of the initial appointments set
forth in paragraph (1), the Governor shall appoint one member to a
one-year term, one to a two-year term, and one to a three-year term.
(d) The Governor shall designate one of the voting members as the
chairperson of the Oversight Board who shall preside over meetings
and direct the executive director in the routine administration of
the Oversight Board's business. The chairperson may designate one of
the other voting members to preside over meetings in the absence of
the chairperson.
(e) Two voting members shall constitute a quorum. Any decision or
action of the Oversight Board shall be by majority vote of the voting
members.
(f) The members of the Oversight Board shall serve without
compensation, but shall be reimbursed for all necessary expenses
incurred in the performance of their duties.
SEC. 7. Section 337 of the Public
Utilities Code is repealed.
337. (a) The Independent System Operator governing board shall be
composed of a five-member independent governing board of directors
appointed by the Governor and subject to confirmation by the Senate.
Any reference in this chapter or in any other provision of law to the
Independent System Operator governing board means the independent
governing board appointed under this subdivision.
(b) A member of the independent governing board appointed under
subdivision (a) may not be affiliated with any actual or potential
participant in any market administered by the Independent System
Operator.
(c) (1) All appointments shall be for three-year terms.
(2) There is no limit on the number of terms that may be served by
any member.
(d) The Oversight Board shall require the articles of
incorporation and bylaws of the Independent System Operator to be
revised in accordance with this section, and shall make filings with
the Federal Energy Regulatory Commission as the Oversight Board
determines to be necessary.
(e) For the purposes of the initial appointments to the
Independent System Operator governing board, as provided in
subdivision (a), the Governor shall appoint one member to a one-year
term, two members to a two-year term, and two members to a three-year
term.
SEC. 8. Section 338 of the Public
Utilities Code is repealed.
338. The Oversight Board shall have the exclusive right to
approve procedures and the qualifications for Power Exchange
governing board members specified in subdivision (d) of Section 335,
all of whom shall be required to be electricity customers in the area
served by the Power Exchange. The Power Exchange governing board
shall include, but not be limited to, representatives of
investor-owned electric distribution companies, publicly owned
electric distribution companies, nonutility generators, public buyers
and sellers, private buyers and sellers, industrial end-users,
commercial end-users, residential end-users, agricultural end-users,
public interest groups, and nonmarket participant representatives.
The structural composition of the Power Exchange governing board
existing on July 1, 1999, shall remain in effect until an agreement
with a participating state is legally in effect. However, prior to
such an agreement, California shall retain the right to change the
Power Exchange governing board into a nonstakeholder board. In the
event of such a legislative change, revised bylaws shall be filed
with the Federal Energy Regulatory Commission under Section 205 of
the Federal Power Act (16 U.S.C.A. Sec. 824d).
SEC. 9. Section 339 of the Public
Utilities Code is repealed.
339. (a) The Oversight Board is the appeal board for majority
decisions of the Independent System Operator governing board relating
to matters that are identified in subdivision (b) as they pertain to
the Independent System Operator.
(b) The following matters are subject to California's exclusive
jurisdiction:
(1) Selections by California of governing board members, as
described in Sections 335, 337, and 338.
(2) Matters pertaining to retail electric service or retail sales
of electric energy.
(3) Ensuring that the purposes and functions of the Independent
System Operator and Power Exchange are consistent with the purposes
and functions of California nonprofit public benefit corporations,
including duties of care and conflict of interest standards for
directors of the corporations.
(4) State functions assigned to the Independent System Operator
and Power Exchange under state law.
(5) Open meeting standards and meeting notice requirements.
(6) Appointment of advisory representatives representing state
interests.
(7) Public access to corporate records.
(8) The amendment of bylaws relevant to these matters.
(c) Only members of the Independent System Operator governing
board may appeal a majority decision of the Independent System
Operator related to any of the matters specified in subdivision (b)
to the Oversight Board.
SEC. 10. Section 340 of the Public
Utilities Code is repealed.
340. The Oversight Board shall take the steps that are necessary
to ensure the earliest possible incorporation of the Independent
System Operator and the Power Exchange as separately incorporated
public benefit, nonprofit corporations under the Corporations Code.
SEC. 11. Section 341 of the Public
Utilities Code is repealed.
341. The Oversight Board may do all of the following:
(a) Meet at the times and places it may deem proper.
(b) Accept appropriations, grants, or contributions from any
public source, private foundation, or individual.
(c) Sue and be sued.
(d) Contract with state, local, or federal agencies for services
or work required by the Oversight Board.
(e) Contract for or employ any services or work required by the
Oversight Board that in its opinion cannot satisfactorily be
performed by its staff or by other state agencies.
(f) Appoint advisory committees from members of other public
agencies and private groups or individuals.
(g) As a body, or on the authorization of the Oversight Board, as
a subcommittee composed of one or more members, hold hearings at the
times and places it may deem proper.
(h) Issue subpoenas to compel the production of books, records,
papers, accounts, reports, and documents and the attendance of
witnesses.
(i) Administer oaths.
(j) Adopt or amend rules and regulations to carry out the purposes
and provisions of this chapter, and to govern the procedures of the
Oversight Board.
(k) Exercise any authority consistent with this chapter delegated
to it by a federal agency or authorized to it by federal law.
( l ) Make recommendations to the Governor and
the Legislature at the time or times the Oversight Board deems
necessary.
(m) Participate in proceedings relevant to the purposes of this
chapter or to the purposes of Division 4.9 (commencing with Section
9600) or, as part of any coordinated effort by the state, participate
in activities to promote the formation of interstate agreements to
enhance the reliability and function of the electricity system and
the electricity market.
(n) Do any and all other things necessary to carry out the
purposes of this chapter.
SEC. 12. Section 341.1 of the Public
Utilities Code is repealed.
341.1. Regulations adopted within 120 days of the effective date
of this section may be adopted as emergency regulations in accordance
with Chapter 3.5 (commencing with Section 11340) of the Government
Code, and for the purposes of that chapter, including Section 11349.6
of the Government Code, the adoption of the regulations shall be
considered by the Office of Administrative Law to be necessary for
the immediate preservation of the public peace, health, safety, and
general welfare.
SEC. 13. Section 341.2 of the Public
Utilities Code is repealed.
341.2. The Bagley-Keene Open Meeting Act (Article 9 (commencing
with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2
of the Government Code) applies to meetings of the Oversight Board.
In addition to the allowances of that act, the Oversight Board may
hold a closed session to consider the appointment of one or more
candidates to the governing board of the Power Exchange, deliberate
on matters involving the removal of a member of the governing board
of the Power Exchange, or to consider a matter based on information
that has received a grant of confidential status pursuant to
regulations of the Oversight Board, provided that any action taken on
such a matter shall be taken by vote in an open session.
SEC. 14. Section 341.3 of the Public
Utilities Code is repealed.
341.3. Voting members of the Oversight Board shall be required to
file financial disclosure statements with the Fair Political
Practices Commission. The appointing authority for voting members
shall avoid appointing persons with conflicts of interest.
SEC. 15. Section 341.4 of the Public
Utilities Code is repealed.
341.4. The Oversight Board shall appoint, and fix the salary of,
an executive director who shall have charge of administering the
affairs of the Oversight Board, including entering into contracts,
subject to the direction and policies of the Oversight Board.
Notwithstanding Sections 11042 and 11043 of the Government Code, the
Oversight Board shall appoint an attorney who shall advise the
Oversight Board and each member and represent the Oversight Board as
a party in any state or federal action or proceeding related to the
purposes of this chapter or to an action of the Oversight Board and
who shall perform generally all the duties of attorney to the
Oversight Board. For purposes of this section, the Oversight Board
may appoint a person exempt pursuant to subdivision (e) of Section 4
of Article VII of the California Constitution. The executive director
shall, in accordance with Article VII of the California Constitution
and subject to the approval of the Oversight Board, appoint
employees as may be necessary to carry out the Oversight Board's
duties and responsibilities.
SEC. 16. Section 341.5 of the Public
Utilities Code is repealed.
341.5. (a) The Independent System Operator and Power Exchange
bylaws shall contain provisions that identify those matters specified
in subdivision (b) of Section 339 as matters within state
jurisdiction. The bylaws shall also contain provisions which state
that California's bylaws approval function with respect to the
matters specified in subdivision (b) of Section 339 shall not
preclude the Federal Energy Regulatory Commission from taking any
action necessary to address undue discrimination or other violations
of the Federal Power Act (16 U.S.C.A. Sec. 791a et seq.) or to
exercise any other commission responsibility under the Federal Power
Act. In taking any such action, the Federal Energy Regulatory
Commission shall give due respect to California's jurisdictional
interests in the functions of the Independent System Operator and
Power Exchange and to attempt to accommodate state interests to the
extent those interests are not inconsistent with the Federal Energy
Regulatory Commission's statutory responsibilities. The bylaws
shall state that any future
agreement regarding the apportionment of the Independent System
Operator and Power Exchange board appointment function among
participating states associated with the expansion of the Independent
System Operator and Power Exchange into multistate entities shall be
filed with the Federal Energy Regulatory Commission pursuant to
Section 205 of the Federal Power Act (16 U.S.C.A. Sec. 824d).
(b) Any necessary bylaw changes to implement the provisions of
Section 335, 337, 338, 339, or subdivision (a) of this section, or
changes required pursuant to an agreement as contemplated by
subdivision (a) of this section with a participating state for a
regional organization, shall be effective upon approval of the
respective governing boards and the Oversight Board and acceptance
for filing by the Federal Energy Regulatory Commission.
SEC. 17. Section 343 of the Public
Utilities Code is amended to read:
343. (a) The Attorney General shall represent the Department of
Finance and shall succeed to, and may exercise, all rights, claims,
powers, and entitlements of the Electricity Oversight Board in any
litigation or settlement to obtain ratepayer recovery for the effects
of the 2000-02 energy crisis. This section does not require the
Attorney General to litigate any claim, or take any other action, as
successor to the Electricity Oversight Board.
(b) The Attorney General shall not distribute or expend the
proceeds of any settlements of claims described in subdivision (a),
except in accordance with Article 9.5 (commencing with Section
16428.1) of Chapter 2 of Part 2 of Division 4 of Title 2 of the
Government Code and Division 27 (commencing with Section 80000) of
the Water Code.
(c) The Attorney General shall not distribute or expend the
proceeds of any settlements of claims allocated to the Electricity
Oversight Board.
(d) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
SEC. 5. SEC. 18. Section 372 of the
Public Utilities Code is amended to read:
372. (a) It is the policy of the state to encourage and support
the development of cogeneration as an efficient, environmentally
beneficial, competitive energy resource that will enhance the
reliability of local generation supply, and promote local business
growth. Subject to the specific conditions provided in this section,
the commission shall determine the applicability to customers of
uneconomic costs as specified in Sections 367, 368, 375, and 376.
Consistent with this state policy, the commission shall provide that
these costs shall not apply to any of the following:
(1) To load served onsite or under an over the fence arrangement
by a nonmobile self-cogeneration or cogeneration facility that was
operational on or before December 20, 1995, or by increases in the
capacity of a facility to the extent that the increased capacity was
constructed by an entity holding an ownership interest in or
operating the facility and does not exceed 120 percent of the
installed capacity as of December 20, 1995, provided that prior to
June 30, 2000, the costs shall apply to over the fence arrangements
entered into after December 20, 1995, between unaffiliated parties.
For the purposes of this subdivision, "affiliated" means any person
or entity that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common
control with another specified entity. "Control" means either of the
following:
(A) The possession, directly or indirectly, of the power to direct
or to cause the direction of the management or policies of a person
or entity, whether through an ownership, beneficial, contractual, or
equitable interest.
(B) Direct or indirect ownership of at least 25 percent of an
entity, whether through an ownership, beneficial, or equitable
interest.
(2) To load served by onsite or under an over the fence
arrangement by a nonmobile self-cogeneration or cogeneration facility
for which the customer was committed to construction as of December
20, 1995, provided that the facility was substantially operational on
or before January 1, 1998, or by increases in the capacity of a
facility to the extent that the increased capacity was constructed by
an entity holding an ownership interest in or operating the facility
and does not exceed 120 percent of the installed capacity as of
January 1, 1998, provided that prior to June 30, 2000, the costs
shall apply to over the fence arrangements entered into after
December 20, 1995, between unaffiliated parties.
(3) To load served by existing, new, or portable emergency
generation equipment used to serve the customer's load requirements
during periods when utility service is unavailable, provided the
emergency generation is not operated in parallel with the integrated
electric grid, except on a momentary parallel basis.
(4) After June 30, 2000, to any load served onsite or under an
over the fence arrangement by any nonmobile self-cogeneration or
cogeneration facility.
(b) Further, consistent with state policy, with respect to
self-cogeneration or cogeneration deferral agreements, the commission
shall do the following:
(1) Provide that a utility shall execute a final self-cogeneration
or cogeneration deferral agreement with any customer that, on or
before December 20, 1995, had executed a letter of intent (or similar
documentation) to enter into the agreement with the utility,
provided that the final agreement shall be consistent with the terms
and conditions set forth in the letter of intent and the commission
shall review and approve the final agreement.
(2) Provide that a customer that holds a self-cogeneration or
cogeneration deferral agreement that was in place on or before
December 20, 1995, or that was executed pursuant to paragraph (1) in
the event the agreement expires, or is terminated, may do any of the
following:
(A) Continue through December 31, 2001, to receive utility service
at the rate and under terms and conditions applicable to the
customer under the deferral agreement that, as executed, includes an
allocation of uneconomic costs consistent with subdivision (e) of
Section 367.
(B) Engage in a direct transaction for the purchase of electricity
and pay uneconomic costs consistent with Sections 367, 368, 375, and
376.
(C) Construct a self-cogeneration or cogeneration facility of
approximately the same capacity as the facility previously deferred,
provided that the costs provided in Sections 367, 368, 375, and 376
shall apply consistent with subdivision (e) of Section 367, unless
otherwise authorized by the commission pursuant to subdivision (c).
(3) Subject to the firewall described in subdivision (e) of
Section 367, provide that the ratemaking treatment for
self-cogeneration or cogeneration deferral agreements executed prior
to December 20, 1995, or executed pursuant to paragraph (1) shall be
consistent with the ratemaking treatment for the contracts approved
before January 1995.
(c) The commission shall authorize, within 60 days of the receipt
of a joint application from the serving utility and one or more
interested parties, applicability conditions as follows:
(1) The costs identified in Sections 367, 368, 375, and 376 shall
not, prior to June 30, 2000, apply to load served onsite by a
nonmobile self-cogeneration or cogeneration facility that became
operational on or after December 20, 1995.
(2) The costs identified in Sections 367, 368, 375, and 376 shall
not, prior to June 30, 2000, apply to any load served under over the
fence arrangements entered into after December 20, 1995, between
unaffiliated entities.
(d) For the purposes of this subdivision, all onsite or over the
fence arrangements shall be consistent with Section 218 as it existed
on December 20, 1995.
(e) To facilitate the development of new microcogeneration
applications, electrical corporations may apply to the commission for
a financing order to finance the transition costs to be recovered
from customers employing the applications.
(f) To encourage the continued development, installation, and
interconnection of clean and efficient self-generation and
cogeneration resources, to improve system reliability for consumers
by retaining existing generation and encouraging new generation to
connect to the electric grid, and to increase self-sufficiency of
consumers of electricity through the deployment of self-generation
and cogeneration, both of the following shall occur:
(1) The commission shall determine if any policy or action
undertaken by the Independent System Operator, directly or
indirectly, unreasonably discourages the connection of existing
self-generation or cogeneration or new self-generation or
cogeneration to the grid.
(2) If the commission finds that any policy or action of the
Independent System Operator unreasonably discourages the connection
of existing self-generation or cogeneration or new self-generation or
cogeneration to the grid, the commission shall undertake all
necessary efforts to revise, mitigate, or eliminate that policy or
action of the Independent System Operator.
SEC. 6. SEC. 19. Section 464 of the
Public Utilities Code is amended to read:
464. (a) Reasonable expenditures by transmission owners that are
electrical corporations to plan, design, and engineer
reconfiguration, replacement, or expansion of transmission facilities
are in the public interest and are deemed prudent if made for the
purpose of facilitating competition in electric generation markets,
ensuring open access and comparable service, or maintaining or
enhancing reliability, whether or not these expenditures are for
transmission facilities that become operational.
(b) The commission shall jointly facilitate the
efforts of the state's transmission owning electrical corporations
to obtain authorization from the Federal Energy Regulatory Commission
to recover reasonable expenditures made for the purposes stated in
subdivision (a).
(c) Nothing in this section alters or affects the recovery of the
reasonable costs of other electric facilities in rates pursuant to
the commission's existing ratemaking authority under this code or
pursuant to the Federal Power Act (41 Stat. 1063; 16 U.S.C. Secs.
791a, et seq.). The commission may periodically review and adjust
depreciation schedules and rates authorized for an electric plant
that is under the jurisdiction of the commission and owned by an
electrical corporation and periodically review and adjust
depreciation schedules and rates authorized for a gas plant that is
under the jurisdiction of the commission and owned by a gas
corporation, consistent with this code.
