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 Page 2 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). SB 790 Page 3 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 FN: 0002289