BILL NUMBER: AB 117	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 5, 2002
	AMENDED IN SENATE  JUNE 19, 2002
	AMENDED IN SENATE  JUNE 5, 2002
	AMENDED IN ASSEMBLY  JANUARY 9, 2002

INTRODUCED BY   Assembly Member Migden

                        JANUARY 22, 2001

   An act to amend Sections 331, 366, 394, and 394.25 of, and to add
Section 381.1 to, the Public Utilities Code, relating to public
utilities.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 117, as amended, Migden.  Electrical restructuring:
aggregation.
   (1) Existing law, relating to transactions between electricity
suppliers and end-use customers, authorizes various entities to
aggregate electrical loads, and defines an "aggregator" as one of
those entities that provides power supply services, including
combining the loads of multiple end-use customers and facilitating
the sale and purchase of electrical energy, transmission, and other
services on behalf of the end-use customers.
   This bill would, instead, authorize customers to aggregate their
electrical loads as individual consumers with private aggregators, as
defined, or as members of their local community with community
choice aggregators, as defined.  The bill would authorize a community
choice aggregator to aggregate the electrical load of interested
electricity consumers within its boundaries. The bill would require a
community choice aggregator to file an implementation plan with the
Public Utilities Commission in order for the commission to determine
whether a  cost recovery   cost-recovery 
mechanism shall be imposed on the community choice aggregator.  The
bill would require a retail end-use customer electing to purchase
power from a community choice aggregator to pay specified amounts for
Department of Water Resources costs and electrical corporation
costs, as described.  Because a violation of an order or decision of
the commission is a crime, this bill would impose a state-mandated
local program.
   (2) Existing law requires the Public Utilities Commission to order
certain electrical corporations to collect and spend certain funds
for public benefit programs, including cost-effective energy
efficiency and conservation programs.
   The bill would require the commission to require the administrator
of cost-effective energy efficiency and conservation programs to
direct a proportional share of its approved energy efficiency program
activities for which the community choice aggregator's customers are
eligible, to the community choice aggregator's territory without
regard to customer class.   Under the bill the commission would
be authorized to order an adjustment to the share of energy
efficiency program activities directed to a community aggregator's
territory if necessary for an equitable and cost-effective allocation
of program activities. 
   (3) Existing law defines "electric service provider" as an entity
that offers electrical service to residential and small commercial
customers, but not including an electrical corporation and requires
these providers to register with the commission.
   This bill would  instead define "electric service provider" as an
entity that offers electrical service to customers within the service
territory of an electrical corporation, but not including an
electrical corporation.
   This bill would provide that if a customer of an electric service
provider is involuntarily returned to service provided by an
electrical corporation, any reentry fees imposed on that customer are
to be the obligation of the electric service provider, except as
specified.  The bill would require the electric service provider, as
a condition to its registration, to post a bond or demonstrate
insurance sufficient to cover paying those reentry fees.
  (4) 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.
State-mandated local program:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 331 of the Public Utilities Code is amended to
read:
   331.  The definitions set forth in this section shall govern the
construction of this chapter.
   (a) "Broker" means an entity that arranges the sale and purchase
of electric energy, transmission, and other services between buyers
and sellers, but does not take title to any of the power sold.
   (b) "Community choice aggregator" means any of the following
entities, if that entity is not within the jurisdiction of a
municipal utility district that provided electrical service as of the
effective date of amendments to this section made by Assembly Bill
117 of the 2001-02 Regular Session of the Legislature:
   (1) Any city, county, or city and county whose governing board
elects to combine the loads of its residents, businesses, and
municipal facilities in a communitywide electricity buyers' program.

   (2) Any group of cities, counties, or cities and counties whose
governing boards have elected to combine the loads of their programs,
through the formation of a joint powers authority established under
Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of
the Government Code.
   (c) "Direct transaction" means a contract between any one or more
electric generators, marketers, or brokers of electric power and one
or more retail customers providing for the purchase and sale of
electric power or any ancillary services.
   (d) "Fire wall" means the line of demarcation separating
residential and small commercial customers from all other customers
as described in subdivision (e) of Section 367.
   (e) "Marketer" means any entity that buys electric energy,
transmission, and other services from traditional utilities and other
suppliers, and then resells those services at wholesale or to an
end-use customer.
   (f) "Microcogeneration facility" means a cogeneration facility of
less than one megawatt.
   (g) "Private aggregator" means any marketer, broker, or public
agency not qualifying as a community choice aggregator that combines
the loads of multiple end-use customers in facilitating the sale and
purchase of electric energy, transmission, and other services on
behalf of these customers.
   (h) "Restructuring trusts" means the two tax-exempt public benefit
trusts established by Decision 96-08-038 of the commission to
provide for design and development of the hardware and software
systems for the Power Exchange and the Independent System Operator,
respectively, and that may undertake other activities, as needed, as
ordered by the commission.
   (i) "Small commercial customer" means a customer that has a
maximum peak demand of less than 20 kilowatts.
  SEC. 2.  Section 366 of the Public Utilities Code is amended to
read:
   366.  (a) (1) The commission shall take actions as needed to
facilitate direct transactions between electricity suppliers and
end-use customers.  Customers shall be entitled to aggregate their
electric loads as individual consumers with private aggregators, or
as members of their local community with community choice
aggregators.
   (2) Customers may aggregate their loads with private aggregators
on a voluntary basis, if each customer does so by a positive written
declaration.
   (3) Customers may aggregate their loads through a public process
with community choice aggregators, if each customer is given an
opportunity to opt out of their community's aggregation program.
   (4) If a customer makes no positive declaration to aggregate with
a private aggregator, opts out of a community choice aggregator's
program, or has no community choice program available, that customer
shall continue to be served by the existing electrical corporation or
its successor in interest.
   (b) Private aggregation of customer electrical load shall be
authorized by the commission for all customer classes, including, but
not limited to, small commercial or residential customers.  Private
aggregation may be accomplished by private market aggregators,
special districts, and public agencies not qualifying as community
choice aggregators, or on any other basis made available by market
opportunities and agreeable by positive written declaration by
individual consumers.
   (c) If a public agency seeks to serve as a community choice
aggregator on behalf of residential customers, it shall be obligated
to offer the opportunity to purchase electricity to all residential
customers within its jurisdiction.
   (d) (1) A community choice aggregator is hereby authorized to
aggregate the electrical load of interested electricity consumers
within its boundaries to reduce transaction costs to consumers,
provide consumer protections, and leverage the negotiation of
contracts.  However, the community choice aggregator may not
aggregate electrical load if that load is served by a local publicly
owned electric utility, as defined in subdivision (d) of Section
9604.  A community choice aggregator may group retail electricity
customers to solicit bids, broker, and contract for electric power
and energy services for those customers.  The community choice
aggregator may enter into agreements for services to facilitate the
sale and purchase of electric energy and other related services.
Those service agreements may be entered into by a single city or
county, a city and county, or by a group of cities, cities and
counties, or counties.
   (2) Under community choice aggregation, customer participation may
not require a positive written declaration, but all customers shall
be informed of their right to opt out of the community choice
aggregation program. If no negative declaration is made by a
customer, that customer shall be served through the community choice
aggregation program.
   (3) A community choice aggregator establishing load aggregation
pursuant to this section shall develop an implementation plan
detailing the process and consequences of aggregation.  The
implementation plan, and any subsequent changes to it, shall be
considered and adopted at a duly noticed public hearing. The
implementation plan shall contain all of the following:
   (A) An organizational structure of the program, its operations,
and its funding.
   (B) Ratesetting and other costs to participants.
   (C) Provisions for disclosure and due process in setting rates and
allocating costs among participants.
   (D) The methods for entering and terminating agreements with other
entities.
   (E) The rights and responsibilities of program participants.
   (F) Termination of the program.
   (4) A community choice aggregator establishing load aggregation
shall prepare a statement of intent with the implementation plan.
Any community choice load aggregation established pursuant to this
section shall provide for the following:
   (A) Universal access.
   (B) Reliability.
   (C) Equitable treatment of all classes of customers.
   (D) Any requirements established by state law or by the commission
concerning aggregated service.
   (5) In order to determine the cost-recovery mechanism to be
imposed on the community choice aggregator pursuant to subdivisions
(e), (f), and (g) that shall be paid by the customers of the
community choice aggregator to prevent shifting of costs, the
community choice aggregator shall file the implementation plan with
the commission, and any other information requested by the commission
that the commission determines is necessary to develop the 
cost recovery   cost-recovery  mechanism in
subdivisions (e), (f), and (g).
   (6) The commission shall notify any electrical corporation serving
the customers proposed for aggregation that an implementation plan
initiating community choice aggregation has been filed within 10 days
of the filing.
   (7) Within 90 days after the community choice aggregator
establishing load aggregation files its implementation plan, the
commission shall certify that it has received the implementation
plan, including any additional information necessary to determine a
cost-recovery mechanism.  Upon certification, the commission shall
then provide the community choice aggregator with its findings on
whether or not cost-recovery must be paid by customers of the
community choice aggregator to prevent a shifting of costs as
provided for in subdivisions (e), (f), and (g).
   (8) No entity specified in subdivision (b) of Section 331
proposing community choice aggregation shall act to furnish
electricity to electricity consumers within its boundaries until the
commission has determined whether cost-recovery must be paid by the
customers of that proposed community choice aggregation program.  The
commission shall designate the earliest possible effective date for
implementation of a community choice aggregation program, taking into
consideration the impact on any annual procurement plan of the
electrical corporation that has been approved by the commission.
   (9) All electrical corporations shall cooperate fully with any of
the entities specified in subdivision (b) of Section 331 that
investigate, pursue, or implement community choice aggregation
programs.  Cooperation shall include providing the entities with
appropriate billing and load data, including, but not limited to,
data detailing energy needs and patterns of usage, as determined by
the commission, and in accordance with procedures established by the
commission.  Electrical corporations shall continue to provide all
metering, billing, collection, and customer service to retail
customers that participate in community choice aggregation programs.
Bills sent by the electrical corporation to retail customers shall
identify the community choice aggregator as providing the energy
component of the bill.  The commission shall determine the terms and
conditions under which the electrical corporation provides services
to community choice aggregators and retail customers.
   (10) (A) A city, county, or city and county that elects to
implement a community choice aggregation program within its
jurisdiction pursuant to this chapter shall do so by ordinance.
   (B) Two or more cities, counties, or cities and counties may
participate as a group in a community choice aggregation pursuant to
this chapter, through a joint powers authority established pursuant
to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1
of the Government Code, if each entity adopts an ordinance pursuant
to subparagraph (A).
   (11) Following adoption of aggregation through the ordinance
described in paragraph (10), the program shall allow any retail
customer to opt out and choose any supplier or provider as provided
by applicable commission policies. Delivery services shall be
provided at the same rates, terms, and conditions, as approved by the
commission, for community choice aggregation customers and customers
who have entered into a direct transaction where applicable, as
determined by the commission.  Once enrolled in the aggregated
entity, any ratepayer that chooses to opt out within 60 days or two
billing cycles of the date of enrollment may do so without penalty
and shall be entitled to receive default service pursuant to
paragraph (4) of subdivision (a).  Customers who return to the
electrical corporation for procurement services shall be subject to
the same terms and conditions as are applicable to other returning
direct access customers from the same class, as determined by the
commission, as authorized by the commission pursuant to this code or
any other provision of law.  Any reentry fees to be imposed after the
opt-out period specified in this paragraph shall be approved by the
commission and shall reflect the cost of reentry.  The commission
shall exclude any amounts previously determined and paid pursuant to
subdivisions (e), (f), and (g) from the cost of reentry.
   (12) Nothing in this section shall be construed as authorizing any
city or any community choice retail load aggregator to restrict the
ability of retail electric customers to obtain or receive service
from any authorized service provider in a manner consistent with law.

   (13) (A) The aggregated entity shall fully inform participating
customers 30 days in advance of the date of commencing automatic
enrollment, and for not less than three consecutive billing cycles
following enrollment. Notification may include, but is not limited
to, direct mailings to customers, or inserts in water, sewer, or
other utility bills.  Any notification shall inform customers of both
of the following:
   (i) That they are to be automatically enrolled and that the
customer has the right to opt out of the aggregated entity without
penalty.
   (ii) The terms and conditions of the services offered.
   (B) The community choice aggregator may contract with the
electrical corporation for the notification required in subparagraph
(A).  If the aggregated entity elects to send one or more of the
notifications required pursuant to subparagraph (A) in the electrical
corporation's normally scheduled monthly billing process, the
electrical corporation shall be entitled to recover from the
aggregator all reasonable incremental costs it incurs related to the
notification or notifications.  The electrical corporation shall
fully cooperate with the aggregated entity in determining the
feasibility and costs associated with using the electrical
corporation's normally scheduled monthly billing process to provide
one or more of the notifications required pursuant to subparagraph
(A).
   (C) Each notification shall also include a mechanism by which a
ratepayer may opt out of community choice aggregated service.  The
opt out may take the form of a self-addressed return postcard
indicating the customer's election to remain with, or return to,
service provided by the electrical corporation, or another
straightforward means by which the customer may elect to derive
electrical service through the electrical corporation providing
service in the area.
   (14) The aggregated entity shall register with the commission,
which may require additional information to ensure compliance with
basic consumer protection rules and other procedural matters.
   (15) Once the community choice aggregator's contract is signed,
the community choice aggregator shall notify the applicable
electrical corporation that community choice service will commence
within 30 days.
   (16) Once notified of a community choice aggregator program, the
electrical corporation shall transfer all applicable accounts to the
new supplier within a 30-day period from the date of the close of
their normally scheduled monthly metering and billing process.
   (17) An electrical corporation may recover from ratepayers all
reasonable costs, as determined by the commission, of implementing
Assembly Bill 117 of the 2001-02 Regular Session, including, but not
limited to, all business and information system changes, except for
transaction-based costs as described in this paragraph.  All
reasonable transaction-based costs of notices, billing, metering,
collections, and customer communications or other services provided
by an aggregator or its customers shall be recovered from the
aggregator or its customers on terms and at rates to be approved by
the commission.
   (e) (1) It is the intent of the Legislature that each retail
end-use customer that has purchased power from an electrical
corporation on or after February 1, 2001, regardless of whether the
customer thereafter takes service from an alternate provider,
including a community choice aggregator, should bear a pro rata share
of the Department of Water Resources' power purchase costs, as well
as power purchase contract obligations incurred as of the effective
date of the act adding this subdivision, that are recoverable from
electrical corporation customers in commission-approved rates.  It is
further the intent of the Legislature to prevent any shifting of
recoverable costs from customers who take service from an alternate
provider, including a community choice aggregator, to electrical
corporation customers.
   (2) To the extent that any shifting of recoverable costs would
occur, in the determination of the commission, those costs shall be
recovered from each customer class in proportion to the load of each
class that is served by alternate providers, including community
choice aggregators.
   (3) The Legislature finds that this subdivision is consistent with
the requirements of Chapter 4 of the Statutes of 2001, First
Extraordinary Session, and is therefore declaratory of existing law.

   (f) A retail end-use customer that purchases power from a
community choice aggregator pursuant to this section shall pay the
Department of Water Resources both of the following:
   (1) A charge equivalent to the charges that would otherwise be
imposed on the customer by the commission to recover bond related
costs pursuant to any agreement between the commission and the
Department of Water Resources pursuant to Section 80110 of the Water
Code, which charge shall be payable until any obligations of the
Department of Water Resources pursuant to Division 27 (commencing
with Section 80000) of the Water Code are fully paid or otherwise
discharged.
   (2) Any additional costs of the Department of Water Resources,
equal to the customer's proportionate share of the Department of
Water Resources' estimated net unavoidable power purchase contract
costs as determined by the commission, for the period commencing with
the customer's purchases of electricity from the community choice
aggregator, through the expiration of all then existing power
purchase contracts entered into by the Department of Water Resources.

   (g) A retail end-use customer purchasing power from a community
choice aggregator pursuant to this section shall reimburse the
electrical corporation that previously served the customer for all of
the following:
   (1) The electrical corporation's unrecovered past
undercollections, including any financing costs, attributable to that
customer, that the commission lawfully determines may be recovered
in rates.
   (2) Any additional costs of the electrical corporation recoverable
in commission-approved rates, equal to the share of the electrical
corporation's estimated net unavoidable power purchase contract costs
attributable to the customer, as determined by the commission, for
the period commencing with the customer's purchases of electricity
from the community choice aggregator, through the expiration of all
then existing power purchase contracts entered into by the electrical
corporation.
   (h) (1) Any charges imposed pursuant to subdivision (f) shall be
the property of the Department of Water Resources.  Any charges
imposed pursuant to subdivision (g) shall be the property of the
electrical corporation.  The commission shall establish mechanisms,
including agreements with, or orders with respect to, electrical
corporations necessary to assure that charges payable pursuant to
this section shall be promptly remitted to the party entitled to
payment.
   (2) Charges imposed pursuant to this section shall be
nonbypassable.
   (i) Notwithstanding Section 80110 of the Water Code, the
commission shall authorize community choice aggregation only if a
cost recovery mechanism is imposed, as the commission determines
necessary pursuant to subdivisions (e), (f), and (g).  Except as
provided by this subdivision, the provisions of Assembly Bill 117 of
the 2001-02 Regular Session shall not be construed to alter the
suspension by the commission of direct purchases of power from
alternate providers pursuant to Section 80110 of the Water Code.
   (j) (1) The commission shall not authorize community choice
aggregation until it implements a cost recovery mechanism, consistent
with subdivisions (e), (f), and (g) that is applicable to customers
that elected to purchase electricity from an alternate provider
between February 1, 2001, and the effective date of the act adding
this subdivision.
   (2) The commission shall not authorize community choice
aggregation until it submits a report certifying compliance with
paragraph (1) to the Senate Energy, Utilities and Communications
Committee, or its successor, and the Assembly Committee on Utilities
and Commerce, or its successor.
  SEC. 3.  Section 381.1 is added to the Public Utilities Code, to
read:
   381.1.  The commission shall require the administrator of
cost-effective energy efficiency and conservation programs to direct
a proportional share of its approved energy efficiency program
activities for which the community choice aggregator's customers are
eligible, to the community choice aggregator's territory without
regard to customer class.  To the extent that energy efficiency and
conservation programs are targeted to specific locations to avoid or
defer transmission or distribution system upgrades, the targeted
expenditures shall continue irrespective of whether the loads in
those locations are served by an aggregator or by an electrical
corporation.  The commission shall also direct the administrator to
work with the community choice aggregator, to provide advance
information where appropriate about the likely impacts of energy
efficiency programs and to accommodate any unique community program
needs by placing more, or less, emphasis on particular approved
programs to the extent that these special shifts in emphasis in no
way diminish the effectiveness of broader statewide or regional
programs.  If the community choice aggregator proposes energy
efficiency programs other than programs already approved for
implementation in its territory, it shall do so under established
commission policies and procedures.   The commission may order an
adjustment to the share of energy efficiency program activities
directed to a community aggregator's territory if necessary to ensure
an equitable and cost-effective allocation of energy efficiency
program activities. 
  SEC. 4.  Section 394 of the Public Utilities Code is amended to
read:
   394.  (a) As used in this section, "electric service provider"
means an entity that offers electrical service to customers within
the service territory of an electrical corporation, but does not
include an electrical corporation, as defined in Section 218, or a
public agency that offers electrical service to residential and small
commercial customers within its jurisdiction, or within the service
territory of a local publicly owned electric utility.  "Electric
service provider" includes the unregulated affiliates and
subsidiaries of an electrical corporation, as defined in Section 218.

   (b) Each electric service provider shall register with the
commission. As a precondition to registration, the electric service
provider shall provide, under oath, declaration, or affidavit, all of
the following information to the commission:
   (1) Legal name and any other names under which the electric
service provider is doing business in California.
   (2) Current telephone number.
   (3) Current address.
   (4) Agent for service of process.
   (5) State and date of incorporation, if any.
   (6) Number for a customer contact representative, or other
personnel for receiving customer inquiries.
   (7) Brief description of the nature of the service being provided.

   (8) Disclosure of any civil, criminal, or regulatory sanctions or
penalties imposed within the 10 years immediately prior to
registration, against the company or any owner, partner, officer, or
director of the company pursuant to any state or federal consumer
protection law or regulation, and of any felony convictions of any
kind against the company or any owner, partner, officer, or director
of the company.  In addition, each electric service provider shall
furnish the commission with fingerprints for  those owners, partners,
officers, and managers of the electric service provider specified by
any commission decision applicable to all electric service
providers.  The commission shall submit completed fingerprint cards
to the Department of Justice.  Those fingerprints shall be available
for use by the Department of Justice and the Department of Justice
may transmit the fingerprints to the Federal Bureau of Investigation
for a national criminal history record check. The commission may use
information obtained from a national criminal history record check
conducted pursuant to this section to determine an electric service
provider's eligibility for registration.
   (9) Proof of financial viability.  The commission shall develop
uniform standards for determining financial viability and shall
publish those standards for public comment no later than March 31,
1998.  In determining the financial viability of the electric service
provider, the commission shall take into account the number of
customers the potential registrant expects to serve, the number of
kilowatthours of electricity it expects to provide, and any other
appropriate criteria to ensure that residential and small commercial
customers have adequate recourse in the event of fraud or
nonperformance.
   (10) Proof of technical and operational ability.  The commission
shall develop uniform standards for determining technical and
operational capacity and shall publish those standards for public
comment no later than March 31, 1998.
   (c) Any registration filing approved by the commission prior to
the effective date of this section which does not comply in all
respects with the requirements of subdivision (a) of Section 394
shall nevertheless continue in force and effect so long as within 90
days of the effective date of this section the electric service
provider undertakes to supplement its registration filing to the
satisfaction of the commission.  Any registration that is not
supplemented by the required information within the time set forth in
this subdivision shall be suspended by the commission and shall not
be reinstated until the commission has found the registration to be
in full compliance with subdivision (a) of Section 394.
   (d) Any public agency offering aggregation services as provided
for in Section 366 solely to retail electric customers within its
jurisdiction that has registered with the commission prior to the
enactment of this section may voluntarily withdraw its registration
to the extent that it is exempted from registration under this
chapter.
   (e) Before reentering the market, electric service providers whose
registration has been revoked shall file a formal application with
the commission that satisfies the requirements set forth in Section
394.1 and demonstrates the fitness and ability of the electric
service provider to comply with all applicable rules of the
commission.

      (f) Registration with the commission is an exercise of the
licensing function of the commission, and does not constitute
regulation of the rates or terms and conditions of service offered by
electric service providers.  Nothing in this part authorizes the
commission to regulate the rates or terms and conditions of service
offered by electric service providers.
  SEC. 5.  Section 394.25 of the Public Utilities Code is amended to
read:
   394.25.  (a) The commission may enforce the provisions of Sections
2102, 2103, 2104, 2105, 2107, 2108, and 2114 against electric
service providers as if those electric service providers were public
utilities as defined in these code sections.  Notwithstanding the
above, nothing in this section grants the commission jurisdiction to
regulate electric service providers other than as specifically set
forth in this part.  Electric service providers shall continue to be
subject to the provisions of Sections 2111 and 2112.  Upon a finding
by the commission's executive director that there is evidence to
support a finding that the electric service provider has committed an
act constituting grounds for suspension or revocation of
registration as set forth in subdivision (b) of Section 394.25, the
commission shall notify the electric service provider in writing and
notice an expedited hearing on the suspension or revocation of the
electric service provider's registration to be held within 30 days of
the notification to the electric service provider of the executive
director's finding of evidence to support suspension or revocation of
registration.  The commission shall, within 45 days after holding
the hearing, issue a decision on the suspension or revocation of
registration, which shall be based on findings of fact and
conclusions of law based on the evidence presented at the hearing.
The decision shall include the findings of fact and the conclusions
of law relied upon.
   (b) An electric service provider may have its registration
suspended or revoked, immediately or prospectively, in whole or in
part, for any of the following acts:
   (1) Making material misrepresentations in the course of soliciting
customers, entering into service agreements with those customers, or
administering those service agreements.
   (2) Dishonesty, fraud, or deceit with the intent to substantially
benefit the electric service provider or its employees, agents, or
representatives, or to disadvantage retail electric customers.
   (3) Where the commission finds that there is evidence that the
electric service provider is not financially or operationally capable
of providing the offered electric service.
   (4) The misrepresentation of a material fact by an applicant in
obtaining a registration pursuant to Section 394.
   (c) Pursuant to its authority to revoke or suspend registration,
the commission may suspend a registration for a specified period or
revoke the registration, or in lieu of suspension or revocation,
impose a moratorium on adding or soliciting additional customers.
Any suspension or revocation of a registration shall require the
electric service provider to cease serving customers within the
boundaries of investor-owned electric corporations, and the affected
customers shall be served by the electrical corporation until the
time when they may select service from another service provider.
Customers shall not be liable for the payment of any early
termination fees or other penalties to any electric service provider
under the service agreement if the serving electric service provider'
s registration is suspended or revoked.
   (d) The commission shall require any electric service provider
whose registration is revoked pursuant to paragraph (4) of
subdivision (b) to refund all of the customer credit funds that the
electric service provider received from the State Energy Resources
Conservation and Development Commission pursuant to paragraph (1) of
subdivision (e) of Section 383.5.  The repayment of these funds shall
be in addition to all other penalties and fines appropriately
assessed the electric service provider for committing those acts
under other provisions of law.  All customer credit funds refunded
under this subdivision shall be deposited in the Renewable Resource
Trust Fund for redistribution by the State Energy Resources
Conservation and Development Commission pursuant to Section 383.5.
This subdivision may not be construed to apply retroactively.
   (e) If a customer of an electric service provider is involuntarily
returned to service provided by an electrical corporation, any
reentry fee imposed on that customer that the commission deems is
necessary to avoid imposing costs on other customers of the electric
corporation shall be the obligation of the electric service provider,
except in the case of a customer returned due to default in payment
or other contractual obligations or because the customer's contract
has expired.  As a condition of its registration pursuant to Section
394, an electric service provider shall post a bond or demonstrate
insurance sufficient to cover those reentry fees.  In the event that
an electric provider becomes insolvent and is unable to discharge its
obligation to pay reentry fees, the fees shall be allocated to the
returning customers.
  SEC. 6.  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.