BILL NUMBER: AB 3058 CHAPTERED
BILL TEXT
CHAPTER 693
FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2008
APPROVED BY GOVERNOR SEPTEMBER 30, 2008
PASSED THE SENATE AUGUST 14, 2008
PASSED THE ASSEMBLY AUGUST 18, 2008
AMENDED IN SENATE AUGUST 4, 2008
AMENDED IN SENATE JULY 10, 2008
AMENDED IN SENATE JUNE 24, 2008
AMENDED IN ASSEMBLY APRIL 7, 2008
AMENDED IN ASSEMBLY MARCH 10, 2008
INTRODUCED BY Committee on Utilities and Commerce (Levine (Chair),
Keene (Vice Chair), Blakeslee, Davis, Fuentes, Furutani, Huffman,
Jones, Krekorian, Price, Smyth, and Tran)
MARCH 3, 2008
An act to amend Section 80110 of the Water Code, relating to
electricity, and declaring the urgency thereof, to take effect
immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 3058, Committee on Utilities and Commerce. Electric power
contracts: just and reasonable charges.
(1) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations. Existing law authorizes the commission to fix the rates
and charges for every public utility, and requires that those rates
and charges be just and reasonable.
Existing law authorized the Department of Water Resources, until
January 1, 2003, to enter into contracts for the purchase of
electricity, and to sell electricity to retail end-use customers and,
with specified exceptions, local publicly owned electric utilities,
at not more than the department's acquisition costs and to recover
those costs through the issuance of bonds to be repaid by ratepayers.
Existing law requires the department to retain title to all
electricity sold by it to retail end-use customers and provides that
the department is entitled to recover its costs as a revenue
requirement. Existing law requires any determination with regard to
whether the rates and charges that apply to those contracts are just
and reasonable to be made by the department and not the commission.
This bill, with certain exceptions, would require the department,
prior to the execution of any modification of a contract for the
purchase of power by the department, on or after the effective date
of the bill, to provide a written report to the commission setting
forth the justification for the determination that the proposed
modification is just and reasonable. The bill would require the
commission to review the written report and make public its comments.
The bill would prohibit the department from executing the proposed
contract modification if the commission recommends against it.
(2) This bill would declare that it is to take effect immediately
as an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 80110 of the Water Code is amended to read:
80110. (a) The department shall retain title to all power sold by
it to the retail end-use customers. The department shall be entitled
to recover, as a revenue requirement, amounts and at the times
necessary to enable it to comply with Section 80134, and shall advise
the commission as the department determines to be appropriate.
(b) The revenue requirements may also include any advances made to
the department hereunder or hereafter for purposes of this division,
or from the Department of Water Resources Electric Power Fund, and
General Fund moneys expended by the department pursuant to the
Governor's Emergency Proclamation dated January 17, 2001.
(c) (1) For the purposes of this division and except as otherwise
provided in this section, the Public Utility Commission's authority
as set forth in Section 451 of the Public Utilities Code shall apply,
except any just and reasonable review under Section 451 shall be
conducted and determined by the department. Prior to the execution of
any modification of any contract for the purchase of power by the
department pursuant to this division, on or after the effective date
of this section, the department or the commission, as applicable,
shall do the following:
(A) The department shall notify the public of its intent to
modify a contract and the opportunity to comment on the proposed
modification.
(B) At least 21 days after providing public notice, the
department shall make a determination as to whether the proposed
modifications are just and reasonable. The determination shall
include responses to any public comments.
(C) No later than 70 days before the date of execution of the
contract modification, the department shall provide a written report
to the commission setting forth the justification for the
determination that the proposed modification is just and reasonable,
including documents, analysis, response to public comments, and other
information relating to the determination.
(D) Within 60 days of the date of receipt of the department's
written report, the commission shall review the report and make
public its comments. If the commission in its comments recommends
against the proposed modification, the department shall not execute
the proposed contract modification.
(2) This subdivision does not apply to the modification of a
contract modified to settle litigation to which the commission is a
party.
(3) This subdivision does not apply to the modification of a
contract for the purchase of electricity that is generated from a
facility owned by a public agency if the contract requires the public
agency to sell electricity to the department at or below the public
agency's cost of that power.
(4) This subdivision does not apply to the modification of a
contract to address issues relating to billing, scheduling, delivery
of electricity, and related contract matters arising out of the
implementation by the Independent System Operator of its market
redesign and technology upgrade program.
(5) (A) For purposes of this subdivision, the department proposes
to "modify" a contract if there is any material change proposed in
the terms of the contract.
(B) A change to a contract is not material if it is only
administrative in nature or the change in ratepayer value results in
ratepayer savings, not to exceed twenty-five million dollars
($25,000,000) per year. For the purpose of making a determination
that a change is only administrative in nature or results in
ratepayer savings of twenty-five million dollars ($25,000,000) or
less per year, the executive director of the commission shall concur
in writing with each of those determinations by the department.
(d) The commission may enter into an agreement with the department
with respect to charges under Section 451 for purposes of this
division, and that agreement shall have the force and effect of a
financing order adopted in accordance with Article 5.5 (commencing
with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public
Utilities Code, as determined by the commission.
(e) In no case shall the commission increase the electricity
charges in effect on the date that the act that adds this section
becomes effective for residential customers for existing baseline
quantities or usage by those customers of up to 130 percent of
existing baseline quantities, until such time as the department has
recovered the costs of power it has procured for the electrical
corporation's retail end-use customers as provided in this division.
(f) After the passage of a period of time after February 1, 2001,
as shall be determined by the commission, the right of retail end-use
customers pursuant to Article 6 (commencing with Section 360) of
Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code to
acquire service from other providers shall be suspended until the
department no longer supplies power hereunder. The department shall
have the same rights with respect to the payment by retail end-use
customers for power sold by the department as do providers of power
to the customers.
SEC. 2. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to allow the Public Utilities Commission to conduct a
review of the just and reasonable review for modifications of
contracts entered into under Section 80110 of the Water Code as soon
as possible, it is necessary that this act take immediate effect.