BILL NUMBER: SB 790	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 14, 2011

INTRODUCED BY   Senator Leno

                        FEBRUARY 18, 2011

   An act to amend Sections 331.1, 365.1, 366.2, 380, 381.1, 395.5,
1802, and 8380 of, and to add Section 707 to, the Public Utilities
Code, relating to electricity.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 790, as amended, Leno. Electricity: community choice
aggregation.
   (1) The federal Public Utility Regulatory Policies Act of 1978
(PURPA) requires every state regulatory authority with respect to
each electric utility, as defined, for which it has ratemaking
authority, to determine whether to adopt certain federal standards if
consistent with otherwise applicable state law. The federal
standards include that no electric utility may recover from any
person other than the shareholders or other owners of the utility,
any direct or indirect expenditure by the electric utility for
promotional or political advertising, as defined.
   This bill would require the commission to institute a rulemaking
proceeding by March 1, 2012, for the purpose of considering and
adopting a code of conduct, associated rules, and enforcement
procedures, to govern the conduct of an electrical corporations
relative to the consideration, formation, and implementation of
community choice aggregation programs and to implement the code of
conduct, associated rules, and enforcement procedures by January 1,
2013. The bill would require the code of conduct, associated rules,
and enforcement procedures to do the following: (A) ensure that an
electrical corporation does not market against a community choice
aggregation program, except through an independent marketing division
that is funded exclusively by the electrical corporation's
shareholders, (B) limit the electrical corporation's independent
marketing division's use of support services from the electrical
corporation's ratepayer funded divisions, (C) ensure that the
electrical corporation's independent marketing division does not have
access to competitively sensitive information,  (D) incorporates
rules that the commission finds to be necessary or convenient in
order to promote the development of community choice aggregation
programs, to foster fair   competition, or to protect
against cross-subsidization paid by ratepayers,  and 
(D)   (E)  other matters that the commission
determines to be necessary or advisable to protect a ratepayer's
right to be free from forced speech or to implement that portion of
PURPA that establishes the federal standard that no electric utility
may recover from any person other than the shareholders or other
owners of the utility, any direct or indirect expenditure by the
electric utility for promotional or political advertising.
   (2) Existing law authorizes a community choice aggregator to
aggregate the electrical load of interested electricity consumers
within its boundaries and requires a community choice aggregator to
file an implementation plan with the commission. Existing law
requires an electrical corporation to cooperate fully with any
community choice aggregator that investigates, pursues, or implements
community choice aggregation programs, including providing
appropriate billing and electrical load data.
   This bill would expand the entities that are permitted to
undertake community choice aggregation. The bill would require that
the electrical load data to be supplied by an electrical corporation
as part of its duty to cooperate fully with any community choice
aggregator, include electrical consumption data, as defined. The bill
would, if  it finds that a community choice aggregation
program has been financially damaged by the uncooperative or
anticompetitive behavior of the incumbent electrical corporation,
require the commission   the   commission finds
that an electrical corporation has violated the requirement to
cooperate fully with a community choice aggregator, require that the
commission consider the impact of the violation upon community choice
aggregators and   would authorize the commission  to
allocate  to the community choice aggregator,  all
or a portion of any fine collected from the electrical company
 , as damages to compensate the aggrieved   to
an affected  community choice aggregation program. The bill
would revise certain resource adequacy and cost responsibility
requirements as they relate to community choice aggregators. The bill
would require that certain energy efficiency, renewable energy
resource, and energy research programs financed through a
nonbypassable system benefits charge authorized pursuant to the
Reliable Electric Service Investments Act be administered on a
nondiscriminatory basis so that the electric service customers of a
community choice aggregator may participate in the program on an
equal basis with the customers of an electrical corporation. The bill
would  require the commission to  authorize a community
choice aggregator to elect to become a 3rd-party administrator for
the energy efficiency programs financed through the nonbypassable
system benefits charge, for its electric service customers. The bill
would authorize a community choice aggregator that has expressly been
authorized by its enabling ordinance to represent the interests of
residential and small commercial customers for whom the aggregator
supplies  or proposes to   supply  electric
service, to seek intervenor compensation through the commission's
procedures for awarding such compensation.
   (3) Under existing law, a violation of the Public Utilities Act or
any order, decision, rule, direction, demand, or requirement of the
commission is a crime.
   Because this bill would expand the duties owed bu an electrical
corporation pursuant to the act, the bill would impose a
state-mandated local program by creating a new crime or expanding the
definition of an existing crime.
   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.  The Legislature finds and declares all of the
following:
   (a)  It is the policy of the state to provide for the
consideration, formation, and implementation of community choice
aggregation programs authorized in Section 366.2 of the Public
Utilities Code.
   (b) Since community choice aggregation programs were first
authorized in 2002, only one community choice aggregation program has
been implemented.
   (c) Electrical corporations have inherent market power derived
from, among other things, name recognition among customers,
longstanding relationships with customers, joint control over
regulated operations and competitive generation services, access to
competitive customer information, and the potential to
cross-subsidize competitive generation services.
   (d) The Public Utilities Commission has found that conduct by
electrical corporations to oppose community choice aggregation
programs has had the effect of causing community choice aggregation
programs to be abandoned. 
   (e) The Public Utilities Commission has made considerable progress
in identifying and addressing the conduct that has hindered the
creation of community choice aggregation programs, and it is now
appropriate to further address these issues in statute. 

   (e) 
    (f)  The exercise of market power by electrical
corporations is a deterrent to the consideration, development, and
implementation of community choice aggregation programs. 
   (f) 
    (g)  California has a substantial governmental interest
in ensuring that conduct by electrical corporations does not threaten
the consideration, development, and implementation of community
choice aggregation programs. 
   (g) 
    (h)  It is therefore necessary to establish a code of
conduct, associated rules, and enforcement procedures, applicable to
electrical corporations in order to promote the consideration,
development, and implementation of community choice aggregation
programs, to foster fair competition, and to protect against
cross-subsidization by ratepayers.
  SEC. 2.  Section 331.1 of the Public Utilities Code is amended 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.
   (c) Any California public agency possessing powers authorizing it
to generate  and   or  deliver electricity
within its designated jurisdiction, provided the agency may only
combine the loads of residences, businesses, and governmental
facilities of cities and counties within its jurisdiction that have,
by resolution exercised pursuant to paragraph (11) of subdivision (c)
of Section 366.2, requested the agency to implement a community
choice aggregation program.
  SEC. 3.  Section 365.1 of the Public Utilities Code is amended to
read:
   365.1.  (a) Except as expressly authorized by this section, and
subject to the limitations in subdivisions (b) and (c), the right of
retail end-use customers pursuant to this chapter to acquire service
from other providers is suspended until the Legislature, by statute,
lifts the suspension or otherwise authorizes direct transactions. For
purposes of this section, "other provider" means any person,
corporation, or other entity that is authorized to provide electric
service within the service territory of an electrical corporation
pursuant to this chapter, and includes an aggregator, broker, or
marketer, as defined in Section 331, and an electric service
provider, as defined in Section 218.3. "Other provider" does not
include a community choice aggregator, as defined in Section 331.1,
and the limitations in this section do not apply to the sale of
electricity by "other providers" to a community choice aggregator for
resale to community choice aggregation electricity consumers
pursuant to Section 366.2.
   (b) The commission shall allow individual retail nonresidential
end-use customers to acquire electric service from other providers in
each electrical corporation's distribution service territory, up to
a maximum allowable total kilowatthours annual limit. The maximum
allowable annual limit shall be established by the commission for
each electrical corporation at the maximum total kilowatthours
supplied by all other providers to distribution customers of that
electrical corporation during any sequential 12-month period between
April 1, 1998, and the effective date of this section. Within six
months of the effective date of this section, or by July 1, 2010,
whichever is sooner, the commission shall adopt and implement a
reopening schedule that commences immediately and will phase in the
allowable amount of increased kilowatthours over a period of not less
than three years, and not more than five years, raising the
allowable limit of kilowatthours supplied by other providers in each
electrical corporation's distribution service territory from the
number of kilowatthours provided by other providers as of the
effective date of this section, to the maximum allowable annual limit
for that electrical corporation's distribution service territory.
The commission shall review and, if appropriate, modify its currently
effective rules governing direct transactions, but that review shall
not delay the start of the phase-in schedule.
   (c) Once the commission has authorized additional direct
transactions pursuant to subdivision (b), it shall do both of the
following:
   (1) Ensure that other providers are subject to the same
requirements that are applicable to the state's three largest
electrical corporations under any programs or rules adopted by the
commission to implement the resource adequacy provisions of Section
380, the renewables portfolio standard provisions of Article 16
(commencing with Section 399.11), and the requirements for the
electricity sector adopted by the State Air Resources Board pursuant
to the California Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code). This
requirement applies notwithstanding any prior decision of the
commission to the contrary.
   (2) (A) Ensure that, in the event that the commission authorizes,
in the situation of a contract with a third party, or orders, in the
situation of utility-owned generation, an electrical corporation to
obtain generation resources that the commission determines are needed
to meet system or local area reliability needs for the benefit of
all customers in the electrical corporation's distribution service
territory, the net capacity costs of those generation resources are
allocated on a fully nonbypassable basis consistent with departing
load provisions as determined by the commission, to all of the
following:
   (i) Bundled service customers of the electrical corporation.
   (ii) Customers that purchase electricity through a direct
transaction with other providers.
   (iii) Customers of community choice aggregators.
   (B) The commission shall not  authorize or  order an
electrical corporation to obtain generation resources pursuant to
subparagraph (A), unless the commission finds, after adequate notice
and an opportunity for public hearing, that a load serving entity has
failed to meet the resource adequacy requirements of Section 380,
and that this failure has caused a serious threat to system or local
reliability that is not remedied by the Independent System Operator
or other load serving entity. If the commission  authorizes or
 orders an electrical corporation to obtain generation
resources, the commission shall ensure that those resources meet a
system or local reliability need in a manner that benefits all
customers of the electrical corporation in proportion to the costs
recovered from those ratepayers.
   (C) The resource adequacy benefits of generation resources
acquired by an electrical corporation pursuant to subparagraph (A)
shall be allocated to all customers who pay their net capacity costs.
Net capacity costs shall be determined by subtracting the energy and
ancillary services value of the resource from the total costs paid
by the electrical corporation pursuant to a contract with a third
party or the annual revenue requirement for the resource if the
electrical corporation directly owns the resource. An energy auction
shall not be required as a condition for applying this allocation,
but may be allowed as a means to establish the energy and ancillary
services value of the resource for purposes of determining the net
costs of capacity to be recovered from customers pursuant to this
paragraph, and the allocation of the net capacity costs of contracts
with third parties shall be allowed for the terms of those contracts.

   (D) It is the intent of the Legislature, in enacting this
paragraph, to provide additional guidance to the commission with
respect to the implementation of subdivision (g) of Section 380, as
well as to ensure that the customers to whom the net costs and
benefits of capacity are allocated are not required to pay for the
cost of electricity they do not consume.
   (d) (1) If the commission approves a centralized resource adequacy
mechanism pursuant to subdivisions (h) and (i) of Section 380, upon
the implementation of the centralized resource adequacy mechanism the
requirements of paragraph (2) of subdivision (c) shall be suspended.
If the commission later orders that electrical corporations cease
procuring capacity through a centralized resource adequacy mechanism,
the requirements of paragraph (2) of subdivision (c) shall again
apply.
   (2) If the use of a centralized resource adequacy mechanism is
authorized by the commission and has been implemented as set forth in
paragraph (1), the net capacity costs of generation resources that
the commission determines are required to meet urgent system or
urgent local grid reliability needs, and that the commission
authorizes to be procured outside of the Section 380 or Section 454.5
processes, shall be recovered according to the provisions of
paragraph (2) of subdivision (c).
   (3) Nothing in this subdivision supplants the resource adequacy
requirements of Section 380 or the resource procurement procedures
established in Section 454.5.
   (e) The commission may report to the Legislature on the efficacy
of authorizing individual retail end-use residential customers to
enter into direct transactions, including appropriate consumer
protections.
  SEC. 4.  Section 366.2 of the Public Utilities Code is amended 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. 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. If an existing customer moves the location of
their electric service within the jurisdiction of the community
choice aggregator, the customer shall retain the same subscriber
status as prior to the move, unless the customer affirmatively
changes their subscriber status. If the customer is moving from
outside to inside the jurisdiction of the community choice
aggregator, the customer shall become a customer of the community
choice aggregator, unless the customer affirmatively opts out after
having received the community choice aggregator's terms and
conditions of service.
   (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  , including those rules adopted
by the commission pursuant to paragraph (3) of subdivision (b) of
Section 8341 for the application of the greenhouse gases emission
performance standard to community choice aggregators  .
   (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, electrical consumption data as
defined in Section 8380 and other data detailing electricity needs
and patterns of usage, as determined by the commission, and in
accordance with procedures established by the commission, and
pursuant to the procedures established by the commission. Those
procedures shall not require electrical corporations to obtain a
customer's consent for the provision of billing and electrical load
data if the community choice aggregator agrees to reasonable
safeguards appropriate to the nature of the data to prevent the
disclosure of the data to third parties. The commission shall
exercise its authority pursuant to Chapter 11 (commencing with
Section 2100) to enforce the requirements of this paragraph when it
finds that the requirements of this paragraph have been 
knowingly  violated. 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) If the commission finds that  a community choice
aggregation program has been financially damaged by the uncooperative
or anticompetitive behavior of the incumbent electrical corporation,
the commission shall   an electrical corporation has
violated this section, the commission shall consider the impact of
the violation upon community choice aggregators and may 
allocate all or a portion of any fine collected pursuant to Chapter
11 (commencing with Section 2100)  as damages to compensate
the aggrieved  to an affected  community choice
aggregation program. Any allocation shall be subject to the condition
that the moneys collected from a fine may only be used for the
direct benefit of the customers of the community choice aggregation
program to procure eligible renewable energy resources pursuant to
Article 16 (commencing with Section 399.11).  The 
    (11)     The  commission shall
proactively expedite the complaint process for disputes regarding an
electrical corporation's violation of its obligations pursuant to
this section in order to provide for timely resolution of complaints
made by community choice aggregation programs, so that all complaints
are resolved in no more than 180 days following the filing of a
complaint by a community choice aggregation program concerning the
actions of the incumbent electrical corporation. This deadline may
only be extended upon the agreement of all parties to the complaint.

   (11) 
    (12)  (A) An entity authorized to be a community choice
aggregator, as defined in Section 331.1, that elects to implement a
community choice aggregation program within its jurisdiction pursuant
to this chapter, shall do so by ordinance. A city or county may
request, by affirmative resolution of its governing council or board,
that another entity authorized to be a community choice aggregator
act as the community choice aggregator on its behalf. If a city or
county, by resolution, requests another authorized entity be the
community choice aggregator for the city or county, that authorized
entity shall be responsible for adopting the ordinance to implement
the community choice aggregation program on behalf of the city or
county.
   (B) Two or more entities authorized to be a community choice
aggregator, as defined in Section 331.1, 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).
Pursuant to Section 6508.1 of the Government Code, members of a joint
powers agency that is a community choice aggregator may specify in
their joint powers agreement that, unless otherwise agreed by the
members of the agency, the debts, liabilities, and obligations of the
agency shall not be the debts, liabilities, and obligations, either
jointly or severally, of the members of the agency. The commission
shall not, as a condition of registration or otherwise, require an
agency's members to voluntarily assume the debts, liabilities, and
obligations of the agency to the electrical corporation unless the
commission finds that the agreement by the agency's members is the
only reasonable means by which the agency may establish its
creditworthiness under the electrical corporation's tariff to pay
charges to the electrical corporation under the tariff. 
   (12) 
    (13)  Following adoption of aggregation through the
ordinance described in paragraph  (11)   (12)
 , 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 no more than a six-month stay requirement with the
electrical corporation. 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. 
   (13) 
    (14)  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. 
   (14) 
    (15)  (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. 
   (15) 
    (16)  A community choice aggregator shall have an
operating service agreement with the electrical corporation prior to
furnishing electric service to consumers within its jurisdiction. The
service agreement shall include performance standards that govern
the business and operational relationship between the community
choice aggregator and the electrical corporation. The commission
shall ensure that any service agreement between the community choice
aggregator and the electrical corporation
                includes equitable responsibilities and remedies for
all parties. The parties may negotiate specific terms of the service
agreement, provided the service agreement is consistent with this
chapter. 
   (16) 
    (17)  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. 
   (17) 
    (18)  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. 
   (18) 
    (19)  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. 
   (19) 
    (20)  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. 
   (20) 
    (2   1)  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 borne 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, provided that the costs
shall not continue for a period in excess of 36 months. In
establishing the share of net unavoidable electricity purchase
contract costs attributable to customers of a community choice
aggregator, the commission shall exclude electricity purchase
contracts, or other resource commitments, made after adoption of the
community choice aggregator's implementation plan for all customers
served by the community choice aggregator within five years of its
adoption.
   (g) To the extent that the estimated net unavoidable electricity
costs paid by the customers of a community choice aggregator
reimburse an electrical corporation for its costs to comply with the
resource adequacy provisions of Section 380, the renewables portfolio
standard requirements of Article 16 (commencing with Section
399.11), or the requirements for the electricity sector adopted by
the State Air Resources Board pursuant to the California Global
Warming Solutions Act of 2006 (Division 25.5 (commencing with Section
38500) of the Health and Safety Code), or for any other electrical
or environmental attribute of the electric utility's resources, the
community choice aggregator shall annually be given commensurate
credit towards its own obligations to comply with the resource
adequacy, renewables portfolio standard, and global warming
requirements.
   (h) (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. 
   (i) Notwithstanding Section 80110 of the Water Code, the 

    (i)     The  commission shall
authorize community choice aggregation only if the commission imposes
a cost-recovery mechanism pursuant to subdivisions (d), (e), (f),
and (h). 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
  365.1  .
   (j) (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 has adopted rules for implementing community
choice aggregation.
   (k) Except for programs funded through the nonbypassable system
benefits charge authorized pursuant to the Reliable Electric Service
Investments Act (Article 15 (commencing with Section 399)), electric
service customers of a community choice aggregator shall not be
required to pay nonbypassable charges for goods, services, or
programs that do not directly benefit either, or where applicable,
both, the customer and the community choice aggregator serving the
customer. The commission, Energy Commission, electrical corporation,
or third-party administrator shall administer those programs funded
through the nonbypassable system benefits charge on a
nondiscriminatory basis so that the electric service customers of a
community choice aggregator may participate in the program on an
equal basis with the customers of an electrical corporation.
   (l)  (1)    An electrical corporation shall not
terminate the services of a community choice aggregator unless
authorized by a vote of the full commission. The commission shall
ensure that prior to authorizing a termination of service, that the
community choice aggregator has been provided adequate notice and a
reasonable opportunity to be heard regarding any electrical
corporation contentions in support of termination. If the contentions
made by the electrical corporation in favor of termination include
factual claims, the community choice aggregator shall be afforded an
opportunity to address those claims in an evidentiary hearing. 
   (2) Notwithstanding paragraph (1), if the independent system
operator has transferred the community choice aggregator's scheduling
coordination responsibilities to the incumbent electrical
corporation, an administrative law judge or assigned commissioner,
after providing the aggregator with notice and an opportunity to
respond, may suspend the aggregator's service to customers pending a
full vote of the commission.  
   (m) Any meeting of an entity authorized to be a community choice
aggregator, as defined in Section 331.1, for the purpose of
developing, implementing, or administering a program of community
choice aggregation shall be conducted in the manner prescribed by the
Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of
Part 1 of Division 2 of Title 5 of the Government Code). 
  SEC. 5.  Section 380 of the Public Utilities Code is amended to
read:
   380.  (a) The commission, in consultation with the Independent
System Operator, shall establish resource adequacy requirements for
all load-serving entities.
   (b) In establishing resource adequacy requirements, the commission
shall achieve all of the following objectives:
   (1) Facilitate development of new generating capacity and
retention of existing generating capacity that is economic and
needed.
   (2) Equitably allocate the cost of generating capacity and prevent
shifting of costs between customer classes.
   (3) Minimize enforcement requirements and costs.
   (4) Maximize the ability of community choice aggregators 
and electric service providers  to determine the generation
resources used to serve their customers.
   (c) Each load-serving entity shall maintain physical generating
capacity adequate to meet its load requirements, including, but not
limited to, peak demand and planning and operating reserves. The
generating capacity shall be deliverable to locations and at times as
may be necessary to provide reliable electric service.
   (d) Each load-serving entity shall, at a minimum, meet the most
recent minimum planning reserve and reliability criteria approved by
the Board of Trustees of the Western Systems Coordinating Council or
the Western Electricity Coordinating Council.
   (e) The commission shall implement and enforce the resource
adequacy requirements established in accordance with this section in
a nondiscriminatory manner. Each load-serving entity shall be subject
to the same requirements for resource adequacy and the renewables
portfolio standard program that are applicable to electrical
corporations pursuant to this section, or otherwise required by law,
or by order or decision of the commission. The commission shall
exercise its enforcement powers to ensure compliance by all
load-serving entities. Except for the commission's authority to
enforce resource adequacy requirements pursuant to this section, the
renewables portfolio standard procurement requirements pursuant to
Article 16 (commencing with Section 399.11), and providing for system
and local reliability pursuant to paragraph (2) of subdivision (c)
of Section 365.1, the commission has no authority or jurisdiction
with respect to the generation procurement activities of community
choice aggregators and shall not authorize an electrical corporation
to procure generation resources on behalf of customers of a community
choice aggregator.
   (f) The commission shall require sufficient information,
including, but not limited to, anticipated load, actual load, and
measures undertaken by a load-serving entity to ensure resource
adequacy, to be reported to enable the commission to determine
compliance with the resource adequacy requirements established by the
commission.
   (g) An electrical corporation's costs of meeting resource adequacy
requirements, including, but not limited to, the costs associated
with system reliability and local area reliability, that are
determined to be reasonable by the commission, or are otherwise
recoverable under a procurement plan approved by the commission
pursuant to Section 454.5, shall be fully recoverable from those
customers on whose behalf the costs are incurred, as determined by
the commission, at the time the commitment to incur the cost is made,
on a fully nonbypassable basis, as determined by the commission. The
commission shall exclude any amounts authorized to be recovered
pursuant to Section 366.2 when authorizing the amount of costs to be
recovered from customers of a community choice aggregator or from
customers that purchase electricity through a direct transaction
pursuant to this subdivision.
   (h) The commission shall determine and authorize the most
efficient and equitable means for achieving all of the following:
   (1) Meeting the objectives of this section.
   (2) Ensuring that investment is made in new generating capacity.
   (3) Ensuring that existing generating capacity that is economic is
retained.
   (4) Ensuring that the cost of generating capacity is allocated
equitably.
   (5) Ensuring that community choice aggregators  and
electric service providers  can determine the generation
resources used to serve their customers.
   (i) In making the determination pursuant to subdivision (h), the
commission may consider a centralized resource adequacy mechanism
among other options.
   (j) For purposes of this section, "load-serving entity" means an
electrical corporation, electric service provider, or community
choice aggregator. "Load-serving entity" does not include any of the
following:
   (1) A local publicly owned electric utility.
   (2) The State Water Resources Development System commonly known as
the State Water Project.
   (3)  Customer generation located on the customer's site or
providing electric service through arrangements authorized by Section
218, if the customer generation, or the load it serves, meets one of
the following criteria:
   (A) It takes standby service from the electrical corporation on a
commission-approved rate schedule that provides for adequate backup
planning and operating reserves for the standby customer class.
   (B) It is not physically interconnected to the electric
transmission or distribution grid, so that, if the customer
generation fails, backup electricity is not supplied from the
electricity grid.
   (C) There is physical assurance that the load served by the
customer generation will be curtailed concurrently and commensurately
with an outage of the customer generation.
  SEC. 6.  Section 381.1 of the Public Utilities Code is amended 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 or the Reliable Electric Service
Investments Act (Article 15 (commencing with Section 399)). In
determining whether to approve an application to become
administrators  and subject to an aggregator's right to elect to
become an administrator pursuant to subdivision (f)  , 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 or the Reliable Electric Service
Investments Act (Article 15 (commencing with Section 399)).
   (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 or the Reliable Electric Service
Investments Act (Article 15 (commencing with Section 399)), 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.
   (d) The commission shall establish an impartial process for making
the determination of whether a third party, including a community
choice aggregator, may become administrators for cost-effective
energy efficiency and conservation programs pursuant to  this
section   subdivision (a)  , and shall not
delegate or otherwise transfer  this authority  
the commission's authority to make this determination  to an
electrical corporation. 
   (e) A registered community choice aggregator may elect, on an
annual date determined by the commission, 
    (e)     The impartial process established
by the commission shall allow a registered community choice
aggregator to elect  to become the administrator of funds
collected from the aggregator's electric service customers and
collected through a nonbypassable system benefits charge authorized
pursuant to the Reliable Electric Service Investments Act (Article 15
(commencing with Section 399)), or other nonbypassable charge
authorized by the commission, for cost-effective energy efficiency
and conservation programs  or resources   ,
including nonbypassable charges for  procurement-related energy
efficiency and conservation  programs. A  
programs of the incumbent electrical corporation. 
    (f)     A  community choice aggregator
electing to become an administrator shall  administer
  submit a plan to the commission for the administration
of  cost-effective energy efficiency and conservation programs
for the aggregator's electric service customers that  meet
the following objectives   includes funding
requirements, a program description, and the duration of the program.
The program shall do all of the following  :
   (1) Be consistent with the goals of programs established pursuant
to Section 381 and the Reliable Electric Service Investments Act
(Article 15 (commencing with Section 399)).
   (2) Advances the public interest in maximizing cost-effective
electricity savings and related benefits. 
   (3) Coordinates with broader statewide or regional programs.
 
   (3) Accommodates the need for broader statewide or regional
programs.  
   (4) Includes audit and reporting requirements consistent with the
audit and reporting requirements established by the commission
pursuant to Section 381 or the Reliable Electric Service Investments
Act (Article 15 (commencing with Section 399)).  
   (5) Includes evaluation, measurement, and verification protocols
established by the community choice aggregator. 
  SEC. 7.  Section 395.5 of the Public Utilities Code is amended to
read:
   395.5.  (a) For purposes of this section, the following terms have
the following meanings:
   (1) "Nonprofit charitable organization" means any charitable
organization described in Section 501(c)(3) of the federal Internal
Revenue Code that has as its primary purpose serving the needs of the
poor or elderly.
   (2) "Electric commodity" means electricity used by the customer or
a supply of electricity available for use by the customer, and does
not include services associated with the transmission and
distribution of electricity.
   (b) Notwithstanding Section 80110 of the Water Code, a nonprofit
charitable organization may acquire electric commodity service
through a direct transaction with an electric service provider if
electric commodity service is donated free of charge without
compensation.
   (c) A nonprofit charitable organization that acquires donated
electric commodity service through a direct transaction pursuant to
this section shall be responsible for paying all of the following:
   (1) Those charges and surcharges that would be imposed upon a
retail end-use customer of a community aggregator pursuant to
subdivisions (d), (e), (f), and (h) of Section 366.2.
   (2) The transmission and distribution charges of an electrical
corporation or a local publicly owned electric utility.
   (3) A nonbypassable charge imposed pursuant to Article 7
(commencing with Section 381), Article 8 (commencing with Section
385), or Article 15 (commencing with Section 399).
   (4) Costs imposed upon a load-serving entity pursuant to Section
380.
   (d) Existing direct access rules and all service obligations
otherwise applicable to electric service providers shall govern
transactions under this section.
   (e) This section shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
  SEC. 8.  Section 707 is added to the Public Utilities Code, to
read:
   707.  (a) Not later than March 1, 2012, the commission shall
institute a rulemaking proceeding for the purpose of considering and
adopting a code of conduct, associated rules, and enforcement
procedures, to govern the conduct of the electrical corporations
relative to the consideration, formation, and implementation of
community choice aggregation programs authorized in Section 366.2.
The code of conduct, associated rules, and enforcement procedures,
shall do all of the following:
   (1) Ensure that an electrical corporation does not market against
a community choice aggregation program, except through an independent
marketing division that is funded exclusively by the electrical
corporation's shareholders and that is functionally and physically
separate from the electrical corporation's ratepayer-funded
divisions.
   (2) Limit the electrical corporation's independent marketing
division's use of support services from the electrical corporation's
ratepayer-funded divisions, and ensure that the electrical
corporation's independent marketing division has allocated costs of
any permissible support services from the electrical corporation's
ratepayer-funded divisions on a fully allocated embedded cost basis,
providing detailed public reports of such use.
   (3) Ensure that the electrical corporation's independent marketing
division does not have access to competitively sensitive
information.
   (4)  (A)    Incorporate rules that the
commission  has determined are necessary in newly competitive
markets upon a finding by the commission that those rules are
  finds to be  necessary or convenient in order to
promote the development of community choice aggregation programs, to
foster fair competition, or to protect against cross-subsidization
paid by ratepayers.  It 
    (B)     It  is the intent of the
Legislature that the rules include  , in whole or in part, 
the rules approved by the commission in Decision 97-12-088 and
Decision 08-06-016.  This 
    (C)     This  paragraph does not limit
the authority of the commission to adopt  additional
 rules that it determines are necessary or convenient in
addition to those adopted in Decision 97-12-088 and Decision
08-06-016  or to modify any rule adopted in those decisions 
.
                                                                 (5)
Provide for any other matter that the commission determines to be
necessary or advisable to protect a ratepayer's right to be free from
forced speech or to implement that portion of the federal Public
Utility Regulatory Policies Act of 1978 that establishes the federal
standard that no electric utility may recover from any person other
than the shareholders or other owners of the utility, any direct or
indirect expenditure by the electric utility for promotional or
political advertising (16 U.S.C. Sec. 2623(b)(5)).
   (b) The commission shall ensure that the code of conduct,
associated rules, and enforcement procedures are implemented by no
later than January 1, 2013.
   (c) This section does not limit the authority of the commission to
require that any marketing against a community choice aggregation
plan shall be conducted by an affiliate of the electrical
corporation, or to require that marketing against a community choice
aggregator not be conducted by a marketing division of the electrical
corporation, subject to affiliate transaction rules to be developed
by the commission.
  SEC. 9.  Section 1802 of the Public Utilities Code is amended to
read:
   1802.  As used in this article:
   (a) "Compensation" means payment for all or part, as determined by
the commission, of reasonable advocate's fees, reasonable expert
witness fees, and other reasonable costs of preparation for and
participation in a proceeding, and includes the fees and costs of
obtaining an award under this article and of obtaining judicial
review, if any.
   (b) (1) "Customer" means any of the following:
   (A) A participant representing consumers, customers, or
subscribers of any electrical, gas, telephone, telegraph, or water
corporation that is subject to the jurisdiction of the commission.
   (B) A representative who has been authorized by a 
customer, including a community choice aggregator that has expressly
been authorized by its enabling ordinance to represent the interests
of residential and small commercial customers for whom the aggregator
supplies electric service.   customer. 
   (C) A representative of a group or organization authorized
pursuant to its articles of incorporation or bylaws to represent the
interests of residential customers, or to represent small commercial
customers who receive bundled electric service from an electrical
corporation. 
   (D) A community choice aggregator or an entity seeking to
establish a community choice aggregation program, prior to its
commencement of service to customers, that has been expressly
authorized by its enabling ordinance to represent the interests of
residential and small commercial customers for whom the aggregator
supplies or proposes to supply electric service. 
   (2) Except for a community choice aggregator meeting the
requirements of subparagraph (B) of paragraph (1), "customer" does
not include any state, federal, or local government agency, any
publicly owned public utility, or any entity that, in the commission'
s opinion, was established or formed by a local government entity for
the purpose of participating in a commission proceeding.
   (c) "Expert witness fees" means recorded or billed costs incurred
by a customer for an expert witness.
   (d) "Other reasonable costs" means reasonable out-of-pocket
expenses directly incurred by a customer that are directly related to
the contentions or recommendations made by the customer that
resulted in a substantial contribution.
   (e) "Party" means any interested party, respondent public utility,
or commission staff in a hearing or proceeding.
   (f) "Proceeding" means an application, complaint, or
investigation, rulemaking, alternative dispute resolution procedures
in lieu of formal proceedings as may be sponsored or endorsed by the
commission, or other formal proceeding before the commission.
   (g) "Significant financial hardship" means either that the
customer cannot afford, without undue hardship, to pay the costs of
effective participation, including advocate's fees, expert witness
fees, and other reasonable costs of participation, or that, in the
case of a group or organization, the economic interest of the
individual members of the group or organization is small in
comparison to the costs of effective participation in the proceeding.

   (h) "Small commercial customer" means any nonresidential customer
with a maximum peak demand of less than 50 kilowatts. The commission
may establish rules to modify or change the definition of "small
commercial customer," including use of criteria other than a peak
demand threshold, if the commission determines that the modification
or change will promote participation in proceedings at the commission
by organizations representing small businesses, without
incorporating large commercial and industrial customers.
   (i) "Substantial contribution" means that, in the judgment of the
commission, the customer's presentation has substantially assisted
the commission in the making of its order or decision because the
order or decision has adopted in whole or in part one or more factual
contentions, legal contentions, or specific policy or procedural
recommendations presented by the customer. Where the customer's
participation has resulted in a substantial contribution, even if the
decision adopts that customer's contention or recommendations only
in part, the commission may award the customer compensation for all
reasonable advocate's fees, reasonable expert fees, and other
reasonable costs incurred by the customer in preparing or presenting
that contention or recommendation.
  SEC. 10.  Section 8380 of the Public Utilities Code is amended to
read:
   8380.  (a) For purposes of this section, "electrical or gas
consumption data" means data about a customer's electrical or natural
gas usage that is made available as part of an advanced metering
infrastructure, and includes the name, account number, or residence
of the customer.
   (b) (1) An electrical corporation or gas corporation shall not
share, disclose, or otherwise make accessible to any third party a
customer's electrical or gas consumption data, except as provided in
subdivision (e) or upon the consent of the customer.
   (2) An electrical corporation or gas corporation shall not sell a
customer's electrical or gas consumption data or any other personally
identifiable information for any purpose.
   (3) The electrical corporation or gas corporation or its
contractors shall not provide an incentive or discount to the
customer for accessing the customer's electrical or gas consumption
data without the prior consent of the customer.
   (4) An electrical or gas corporation that utilizes an advanced
metering infrastructure that allows a customer to access the customer'
s electrical and gas consumption data shall ensure that the customer
has an option to access that data without being required to agree to
the sharing of his or her personally identifiable information,
including electrical or gas consumption data, with a third party.
   (c) If an electrical corporation or gas corporation contracts with
a third party for a service that allows a customer to monitor his or
her electricity or gas usage, and that third party uses the data for
a secondary commercial purpose, the contract between the electrical
corporation or gas corporation and the third party shall provide that
the third party prominently discloses that secondary commercial
purpose to the customer.
   (d) An electrical corporation or gas corporation shall use
reasonable security procedures and practices to protect a customer's
unencrypted electrical or gas consumption data from unauthorized
access, destruction, use, modification, or disclosure.
   (e)  (1) Nothing in this section shall preclude an electrical
corporation or gas corporation from using customer aggregate
electrical or gas consumption data for analysis, reporting, or
program management if all information has been removed regarding the
individual identity of a customer.
   (2) Nothing in this section shall preclude an electrical
corporation or gas corporation from disclosing a customer's
electrical or gas consumption data to a third party for system, grid,
or operational needs, or the implementation of demand response,
energy management, energy efficiency, or community choice aggregation
programs, provided that, for contracts entered into after January 1,
2011, the utility has required by contract that the third party
implement and maintain reasonable security procedures and practices
appropriate to the nature of the information, to protect the personal
information from unauthorized access, destruction, use,
modification, or disclosure, and prohibits the use of the data for a
secondary commercial purpose not related to the primary purpose of
the contract without the customer's consent.
   (3) Nothing in this section shall preclude an electrical
corporation or gas corporation from disclosing electrical or gas
consumption data as required or permitted under state or federal law
or by an order of the commission.
   (f) If a customer chooses to disclose his or her electrical or gas
consumption data to a third party that is unaffiliated with, and has
no other business relationship with, the electrical or gas
corporation, the electrical or gas corporation shall not be
responsible for the security of that data, or its use or misuse.
  SEC. 11.  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.