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 Page 2 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 SB 790 Page 3 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