BILL ANALYSIS
AB 117
Page 1
ASSEMBLY THIRD READING
AB 117 (Migden)
As Amended January 9, 2002
Majority vote
BUSINESS & PROFESSIONS APPROPRIATIONS 20-0
(vote not relevant)
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| |Ayes:|Migden, Bates, Alquist, |
| | |Aroner, Ashburn, Cedillo, |
| | |Corbett, Correa, Daucher, |
| | |Goldberg, Robert Pacheco, |
| | |Papan, Pavley, Runner, |
| | |Simitian, Thomson, |
| | |Steinberg, Wiggins, |
| | |Wright, Wyland |
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SUMMARY : Authorizes end-use customers to aggregate their
electric loads with private aggregators as individual users, or
with community choice aggregators as members of a local
community. Specifically, this bill :
1)Defines "private aggregator" basically in a manner as all
aggregators are defined in existing law as a marketer, broker
or public entity that combines multiple end-use customer
electric load to advance buying and selling of electricity and
other services for all customer classes, including small
business and residential.
2)Requires a customer to opt-in to be served through the efforts
of a private aggregator.
3)Creates "community choice" or "municipal" aggregation, in
which community aggregators, (i.e., cities, counties, or a
group of them combined in a joint powers authority) may
aggregate the electric load of the consumers to leverage the
negotiation of contracts for electricity.
4)Does not require a positive opt-in for community aggregation,
but all customers must by notified of their right to opt-out
of the community choice aggregation program.
5)Prohibits aggregation of electric load if that load is served
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by a local publicly owned electric utility.
6)Requires a community choice aggregator establishing load
aggregation to develop an implementation plan detailing the
process and consequences of aggregation, and consider and
adopt it at a duly noticed public hearing.
7)Requires community choice load aggregation to provide for
universal access, reliability, and equitable treatment of all
classes of customers, and to meet applicable statutory or
California Public Utilities Commission (CPUC) requirements
concerning aggregated service.
8)Directs electrical corporations to cooperate fully with cities
and counties as they contemplate community choice aggregation
programs, providing appropriate billing, load data and the
like.
9)Requires the electrical corporation to continue to provide all
metering, billing, collection, and customer service to retail
customers that participate in community choice aggregation
programs, and identify the community choice aggregator in the
utility bill as providing the energy component of the bill.
10)Permits ratepayers to opt-out to default electric service
within six months of the date of enrollment without charge for
any costs paid during the time the customer was served by the
community choice aggregator.
11)Specifies that any reentry fees to be imposed after the
180-day opt-out period are to reflect the cost of reentry and
be CPUC approved.
12)Permits electrical corporations to recover from ratepayers
all reasonable costs of implementing this bill, except that
transaction-based costs of notices, billing, metering or other
services provided by an aggregator are to be recovered from
the aggregator or its customers on terms, and at rates to be
approved by CPUC.
13)Requires an end-use customer that purchases power from a
community choice aggregator to pay the Department of Water
Resources (DWR) any difference between DWR's procurement costs
and the rates collected by DWR from the customer during the
term of service, as well as DWR's net unavoidable cost of
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future power procurement that is attributable to the customer.
14)Requires DWR to provide an estimate of the above amounts to
the customer and to the Legislature within 30 days of the
request.
15)Directs CPUC to develop rules to ensure that net unavoidable
costs of power procurement by an electrical corporation are
the responsibility those being served by an aggregator, and
not shifted onto the remaining customers.
EXISTING LAW :
1)Authorizes specified entities to aggregate electrical loads,
and defines an "aggregator" as one of those specified 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.
2)Requires CPUC to order specified electrical corporations to
collect and spend certain funds for prescribed public benefit
programs, cost-effective energy efficiency, and conservation.
FISCAL EFFECT : None
COMMENTS : Community aggregation is direct access on a large
scale, similar to formation of a municipal utility, except that
a municipal utility is self-governing, must purchase power or
build plants and transmission lines, assume responsibility for
distribution, billing, and meter-reading. Under aggregation,
most of the responsibilities remain with the electrical
corporation. The aggregator procures electricity on the
wholesale market, to be delivered through the electrical
corporation's infrastructure. Under this bill the CPUC would
oversee and sanction these transactions.
This bill which was a gut and amend in Appropriations Committee,
now contains provisions identical to ABX2 9 (Migden) of 2001,
which passed the Legislature unanimously, but was vetoed by the
Governor. In his veto message, the Governor wrote that the
growth in direct access "necessitates more concise
cost-containment provisions for the remaining IOU customers than
those contained in [AB X2 9]," and that the bill "does not
clearly authorize fees to cover costs that may result when
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direct access customers return to service with an IOU?"
Some consumers regard the alternative electricity procurement
method created by this bill as a cost-effective option. This
bill protects existing municipal utilities from bypass, but
enables considerable load aggregation, in part bypassing
electrical corporations.
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083
FN: 0004136