BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 790
                                                                  Page  1


          SENATE THIRD READING
          SB 790 (Leno)
          As Amended  August 30, 2011
          Majority vote 

           SENATE VOTE  :24-12  
           
           UTILITIES & COMMERCE           10-1                 
          APPROPRIATIONS      17-0        
           
           ----------------------------------------------------------------- 
          |Ayes:|Bradford, Fong, Furutani, |Ayes:|Fuentes, Harkey,          |
          |     |                          |     |Blumenfield, Bradford,    |
          |     |Beth Gaines, Roger        |     |Charles Calderon, Campos, |
          |     |Hernández, Huffman,       |     |Davis, Donnelly, Gatto,   |
          |     |Knight, Nestande,         |     |Hall, Hill, Lara,         |
          |     |Skinner, Valadao          |     |Mitchell, Nielsen, Norby, |
          |     |                          |     |Solorio, Wagner           |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Fletcher                  |     |                          |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :   This bill will revise and expand the definition of 
          Community Choice Aggregation (CCA), require the California 
          Public Utilities Commission (PUC) to initiate a Code of Conduct 
          rulemaking, and allow CCAs to receive Public Purpose funds to 
          administer energy efficiency programs. Specifically,  this bill  :  
           

          1)Memorializes a late-County Supervisor by naming this act.

          2)Expands the entities defined as CCAs to include the Kings 
            River Conservation District, the Sonoma County Water Agency, 
            and any California public agency possessing statutory 
            authority to generate and deliver electricity at retail within 
            its designated jurisdiction.

          3)Requires PUC to consider the impact if it finds that an 
            electrical corporation has violated the requirement to 
            cooperate fully with a community choice aggregator.

          4)Establishes a time period by which the PUC must resolve 
            complaints against an electric utility which allege a 
            violation of statutes and rules governing electric utilities 








                                                                  SB 790
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            that require the utility to cooperate with CCAs.

          5)Affirms that the PUC shall not allow cost shifting of 
            nonbypassable charges from CCA customers to utility ratepayers 
            and specifies that a CCA is solely responsible for all 
            generation procurement activities on behalf of its customers, 
            except where other generation procurement arrangements are 
            expressly authorized by statute.

          6)Modifies the PUC's current authority to establish procurement 
            requirements from its current requirement in proportion to the 
            costs recovered from ratepayers to instead require fair and 
            equitable distribution of costs.

          7)Requires PUC, by March 2012 to establish a code of conduct to 
            ensure that an electrical corporation does not market against 
            a CCA except through an independent marketing division.

           

          EXISTING LAW  

          1)Allows cities and counties to procure and sell electricity 
            within their community via a direct access arrangement called 
            for community choice aggregation (CCA).

          2)Requires electric utilities to cooperate fully with CCAs that 
            investigate, pursue, or implement CCA programs.

           FISCAL EFFECT  :   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).  








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

          According to the author this bill affirms CCA procurement 
          autonomy, protects both bundled service and CCA ratepayers, and 
          corrects abuses of market power by 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. 

          In 2002, AB 117 (Migden), Chapter 838, Statutes of 2002, 
          established a local government's right to implement Community 
          Choice Aggregation (CCA), a program that allows communities to 
          pool, or aggregate, the electric load of their residents, 
          businesses and other institutions in order to procure and 
          generate electricity on their behalf.  In the nine years since 
          local governments were given the right to establish CCAs, only 
          one CCA program has been successfully launched despite numerous 
          community efforts to do so.


           Analysis Prepared by  :    Susan Kateley / U. & C. / (916) 
          319-2083 


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