BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 790
                                                                  Page  1

          Date of Hearing:   August 17, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    SB 790 (Leno) - As Amended:  August 15, 2011 

          Policy Committee:                              
          UtilitiesVote:10-1

          Urgency:     No                   State Mandated Local Program: 
          Yes    Reimbursable:              No

           SUMMARY  

          This bill makes several changes regarding the formation and 
          administration of community choice aggregators (CCAs). 
          Specifically, this bill:

          1)Authorizes any public agency with authority to generate and 
            deliver retail electricity within its jurisdiction to become a 
            CCA for those cities and counties within or contiguous to its 
            jurisdiction that have requested the agency to implement a 
            CCA.

          2)Requires the Public Utilities Commission (PUC), within 180 
            days of a filing, to resolve complaints alleging that an 
            electrical corporation violated its obligation to cooperate 
            with an entity seeking to implement a CCA. The deadline may be 
            extended by (a) mutual agreement of the parties or (b) by the 
            PUC, for up to 60 days, upon written determination by the 
            commission of the need for an extension.

          3)Requires a CCA to have an operating service agreement with the 
            electrical corporation and requires the PUC to ensure that 
            such agreements include equitable responsibilities and 
            remedies for all parties.

          4)Requires that, to the extent that costs paid by CCA customers 
            reimburse an electrical corporation for its costs to comply 
            with resource adequacy provisions, renewable portfolio 
            standards (RPS) requirements, or AB 32 compliance, the CCA 
            customers be provided a comparable credit.

          5)Requires that, to the extent an electrical corporation 








                                                                  SB 790
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            receives benefits on behalf of CCA customers regarding AB 32 
            compliance, those benefits be transferred or credited to the 
            CCA.

          6)Stipulates that, with specified exceptions, CCA customers are 
            not required to pay nonbypassable charges for services or 
            programs that do not benefit either the CCA and/or its 
            customers.

          7)Requires the PUC to establish a process to determine whether a 
            third-party, including a CCA, may administer those energy 
            efficiency and conservation programs not intended for 
            statewide or regional benefit, and prohibits the PUC from 
            delegating authority for such a determination to an electrical 
            corporation.

          8)Requires a CCA electing to become an administrator per 7), 
            above, to submit a plan to the PUC, which shall certify that 
            the plan includes specified elements.

          9)Requires the PUC, by March 1, 2012, to commence a rulemaking, 
            to be implemented by January 1, 2013, to adopt a code of 
            conduct, associated rules, and enforcement procedures, as 
            specified, governing the conduct of electrical corporations 
            with respect to the consideration, formation, and 
            implementation of CCA programs.

           FISCAL EFFECT  

          The PUC estimates additional workload demands of about $430,000. 
           These costs include two regulatory analysts, one administrative 
          law judge and one legal analyst, to implement the bill, which 
          will include reviewing and certifying CCAs as administrators of 
          energy efficiency and conservation programs; implementing the 
          new stricter rules related to utility marketing with regard to a 
          CCA formation; conducting the complaint review process regarding 
          CCA formation, conducting proceedings to implement the new rules 
          for determining direct and indirect benefits to CCA customers 
          when the utilities are directed to procure generation resources 
          for system and for local area reliability; and addressing issues 
          that may arise if CCAs are no longer local community load 
          aggregators but expand beyond the local communities into other 
          jurisdictions, (Public Utilities Reimbursement Account).

          A portion of this workload will be one-time in nature and the 








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          ongoing workload will in part depend on the volume of new CCA 
          formation, thus some of the positions identified above may only 
          be required for a limited term.

           COMMENTS  

           1)Purpose  . According to the author, this bill is intended to 
            affirm CCA procurement autonomy, protect both bundled service 
            and CCA ratepayers, and correct abuses of market power by the 
            investor-owned utilities (IOUs) regarding the launch and 
            operation of CCA programs. SB 790 would help level the playing 
            field for local governments seeking to establish a CCA 
            program.

           2)Background  . In 2002, AB 117 (Migden) established a local 
            government's right to implement CCAs, a program allowing 
            communities pool the electric load of their residents, 
            businesses and other institutions in order to procure and 
            generate electricity on their behalf. The CCA mechanism allows 
            local governments to procure electricity on behalf of their 
            residents and businesses, while the utility continues to 
            provide distribution, transmission and billing services. 

            In the nine years since local governments were given the right 
            to establish CCAs, and despite numerous community efforts to 
            do so, only one region has been successful in implementing a 
            CCA.  Several cities joined together in Marin County and 
            formed, under a joint powers authority, "Marin Clean Energy." 

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081