BILL NUMBER: AB 117	ENROLLED
	BILL TEXT

	PASSED THE ASSEMBLY  AUGUST 29, 2002
	PASSED THE SENATE  AUGUST 28, 2002
	AMENDED IN SENATE  AUGUST 27, 2002
	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 218.3, 366, 394, and 394.25 of, and to
add Sections 331.1, 366.2, and 381.1 to, the Public Utilities Code,
relating to public utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 117, 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 authorize customers to aggregate their electrical
loads 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
a cost-recovery mechanism to be imposed on the community choice
aggregator to prevent a shifting of costs to an electrical
corporation's bundled customers.  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.  The bill
would require the commission to prepare and submit to the
Legislature, on or before January 1, 2006, a report on community
choice aggregation.  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, not later than July 15,
2003, to establish policies and procedures by which any party,
including, but not limited to, a local entity that establishes a
community choice aggregation program, may apply to become
administrators for cost-effective energy efficiency and conservation
programs.  The bill would require the commission, if a community
choice aggregator is not the administrator, 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 or a person employing cogeneration technology
or producing electricity from other than conventional power sources,
for its own use or the use of its tenants or an adjacent property and
not for sale or transmission to others.
   This bill would provide that, if a customer of an electric service
provider or community choice aggregator 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 or community choice aggregator, except as specified.
  The bill would require the electric service provider or community
choice aggregator, 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.


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


  SECTION 1.  Section 218.3 of the Public Utilities Code is amended
to read:
   218.3.  "Electric service provider" means an entity that offers
electrical service to customers within the service territory of an
electrical corporation, as defined in Section 218, but does not
include an entity that offers electrical service solely to service
customer load consistent with subdivision (b) of Section 218, and
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.

  SEC. 2.  Section 331.1 is added to the Public Utilities Code, to
read:
   331.1.  For purposes of this chapter, "community choice aggregator"
means any of the following entities, if that entity is not within
the jurisdiction of a local publicly owned electric utility that
provided electrical service as of January 1, 2003:
   (a) 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.

   (b) 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 agency established under
Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of
the Government Code.
  SEC. 3.  Section 366 of the Public Utilities Code is amended to
read:
   366.  (a) 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
electrical loads on a voluntary basis, provided that each customer
does so by a positive written declaration.  If no positive
declaration is made by a customer, that customer shall continue to be
served by the existing electrical corporation or its successor in
interest, except aggregation by community choice aggregators,
accomplished pursuant to Section 366.2.
   (b) 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.  Aggregation may be
accomplished by private market aggregators, special districts, or on
any other basis made available by market opportunities and agreeable
by positive written declaration by individual consumers, except
aggregation by community choice aggregators, which shall be
accomplished pursuant to Section 366.2.
  SEC. 4.  Section 366.2 is added to the Public Utilities Code, to
read:
   366.2.  (a) (1) Customers shall be entitled to aggregate their
electric loads as members of their local community with community
choice aggregators.
   (2) 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.
   (3) If a customer opts out of a community choice aggregator's
program, or has no community choice program available, that customer
shall have the right to  continue to be served by the existing
electrical corporation or its successor in interest.
   (b) If a public agency seeks to serve as a community choice
aggregator, it shall offer the opportunity to purchase electricity to
all residential customers within its jurisdiction.
   (c) (1) Notwithstanding Section 366, 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
electricity and energy services for those customers.  The community
choice aggregator may enter into agreements for services to
facilitate the sale and purchase of electricity 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 electrical 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,
including, but not limited to, consumer protection procedures, credit
issues, and shutoff procedures.
   (F) Termination of the program.
   (G) A description of the third parties that will be supplying
electricity under the program, including, but not limited to,
information about financial, technical, and operational capabilities.

   (4) A community choice aggregator establishing electrical 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
(d), (e), and (f) 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 mechanism in subdivisions (d), (e), and (f).
   (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.  After certification of receipt of the
implementation plan and any additional information requested, the
commission shall then provide the community choice aggregator with
its findings regarding any cost recovery that must be paid by
customers of the community choice aggregator to prevent a shifting of
costs as provided for in subdivisions (d), (e), and (f).
   (8) No entity proposing community choice aggregation shall act to
furnish electricity to electricity consumers within its boundaries
until the commission determines the cost-recovery that must be paid
by the customers of that proposed community choice aggregation
program, as provided for in subdivisions (d), (e), and (f).  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
community choice aggregators that investigate, pursue, or implement
community choice aggregation programs.  Cooperation shall include
providing the entities with appropriate billing and electrical load
data, including, but not limited to, data detailing electricity 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 electrical 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 agency 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 to continue to be served as a bundled service
customer by the existing electrical corporation, or its successor in
interest.  Delivery services shall be provided at the same rates,
terms, and conditions, as approved by the commission, for community
choice aggregation customers and customers that 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 (3) of subdivision (a).
Customers that 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 (d), (e), and
(f) 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 electricity customers to obtain or receive service
from any authorized electric service provider in a manner consistent
with law.
   (13) (A) The community choice aggregator shall fully inform
participating customers at least twice within two calendar months, or
60 days, in advance of the date of commencing automatic enrollment.
Notifications may occur concurrently with billing cycles.  Following
enrollment, the aggregated entity shall fully inform participating
customers for not less than two consecutive billing cycles.
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 community choice aggregator
without penalty.
   (ii) The terms and conditions of the services offered.
   (B) The community choice aggregator may request the commission to
approve and order the electrical corporation to provide the
notification required in subparagraph (A).  If the commission orders
the electrical corporation 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 community choice
aggregator all reasonable incremental costs it incurs related to the
notification or notifications.  The electrical corporation shall
fully cooperate with the community choice aggregator 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,
electrical energy service provided by the electrical corporation, or
another straightforward means by which the customer may elect to
derive electrical energy service through the electrical corporation
providing service in the area.
   (14) The community choice aggregator 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 shall recover from the community
choice aggregator any costs reasonably attributable to the community
choice aggregator, as determined by the commission, of implementing
this section, including, but not limited to, all business and
information system changes, except for transaction-based costs as
described in this paragraph.  Any costs not reasonably attributable
to a community choice aggregator shall be recovered from ratepayers,
as determined by the commission.  All reasonable transaction-based
costs of notices, billing, metering, collections, and customer
communications or other services provided to 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.
   (18) At the request and expense of any community choice
aggregator, electrical corporations shall install, maintain and
calibrate metering devices at mutually agreeable locations within or
adjacent to the community aggregator's political boundaries.  The
electrical corporation shall read the metering devices and provide
the data collected to the community aggregator at the aggregator's
expense.  To the extent that the community aggregator requests a
metering location that would require alteration or modification of a
circuit, the electrical corporation shall only be required to alter
or modify a circuit if such alteration or modification does not
compromise the safety, reliability or operational flexibility of the
electrical corporation's facilities.  All costs incurred to modify
circuits pursuant to this paragraph, shall be born by the community
aggregator.
   (d) (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, should bear a fair share of
the Department of Water Resources' electricity purchase costs, as
well as electricity purchase contract obligations incurred as of the
effective date of the act adding this section, 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 between customers.
   (2) The Legislature finds and declares that this subdivision is
consistent with the requirements of Division 27 (commencing with
Section 80000) of the Water Code and Section 360.5, and is therefore
declaratory of existing law.
   (e) A retail end-use customer that purchases electricity from a
community choice aggregator pursuant to this section shall pay 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 electricity 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 electricity purchase contracts entered into by the
Department of Water Resources.
   (f) A retail end-use customer purchasing electricity 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
for electricity purchases, 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 electricity 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 electricity purchase contracts
entered into by the electrical corporation.
   (g) (1) Any charges imposed pursuant to subdivision (e) shall be
the property of the Department of Water Resources.  Any charges
imposed pursuant to subdivision (f) 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 ensure that charges payable pursuant to
this section shall be promptly remitted to the party entitled to
payment.
   (2) Charges imposed pursuant to subdivisions (d), (e), and (f)
shall be nonbypassable.
   (h) Notwithstanding Section 80110 of the Water Code, the
commission shall authorize community choice aggregation only if the
commission imposes a cost-recovery mechanism pursuant to subdivisions
(d), (e), (f), and (g).  Except as provided by this subdivision,
this section shall not alter the suspension by the commission of
direct purchases of electricity from alternate providers other than
by community choice aggregators, pursuant to Section 80110 of the
Water Code.
   (i) (1) The commission shall not authorize community choice
aggregation until it implements a cost-recovery mechanism, consistent
with subdivisions (d), (e), and (f), that is applicable to customers
that elected to purchase electricity from an alternate provider
between February 1, 2001, and January 1, 2003.
   (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.
   (3) The commission shall not authorize community choice
aggregation until it has adopted rules for implementing community
choice aggregation.
   (j) The commission shall prepare and submit to the Legislature, on
or before January 1, 2006, a report regarding the number of
community choices aggregations, the number of customers served by
community choice aggregations, third party suppliers to community
choice aggregations, compliance with this section, and the overall
effectiveness of community choice aggregation programs.
  SEC. 5.  Section 381.1 is added to the Public Utilities Code, to
read:
   381.1.  (a) No later than July 15, 2003, the commission shall
establish policies and procedures by which any party, including, but
not limited to, a local entity that establishes a community choice
aggregation program, may apply to become administrators for
cost-effective energy efficiency and conservation programs
established pursuant to Section 381.  In determining whether to
approve an application to become administrators, the commission shall
consider the value of program continuity and planning certainty and
the value of allowing competitive opportunities for potentially new
administrators.  The commission shall weigh the benefits of the party'
s proposed program to ensure that the program meets the following
objectives:
   (1) Is consistent with the goals of the existing programs
established pursuant to Section 381.
   (2) Advances the public interest in maximizing cost-effective
electricity savings and related benefits.
   (3) Accommodates the need for broader statewide or regional
programs.
   (b) All audit and reporting requirements established by the
commission pursuant to Section 381 and other statutes shall apply to
the parties chosen as administrators under this section.
   (c) If a community choice aggregator is not the administrator of
energy efficiency and conservation programs for which its customers
are eligible, 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. 6.  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, does
not include an entity that offers electrical service solely to serve
customer load consistent with subdivision (b) of Section 218, and
does not include 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. 7.  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 or a community
choice aggregator 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 or a community choice aggregator,
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, an electric service
provider or a community choice aggregator shall post a bond or
demonstrate insurance sufficient to cover those reentry fees.  In the
event that an electric service provider becomes insolvent and is
unable to discharge its obligation to pay reentry fees, the fees
shall be allocated to the returning customers.
  SEC. 8.  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.