California Legislature—2013–14 Regular Session

Assembly Bill No. 1407

Introduced by Committee on Utilities and Commerce (Bradford (Chair), Bonilla, Fong, Garcia, Quirk, Rendon, Skinner, and Williams)

March 13, 2013

An act to amend Section 380 of the Public Utilities Code, relating to public utilities.

LEGISLATIVE COUNSEL’S DIGEST

AB 1407, as introduced, Committee on Utilities and Commerce. Public utilities: resource adequacy requirement.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. Existing law requires the commission, in consultation with the Independent System Operator to establish resource adequacy requirements for all load-serving entities to achieve specified objectives.

This bill would make technical, nonsubstantive changes to that provision.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

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)  begin delete Equitably allocate end delete begin insert Allocate equitably end insert the cost of generating
capacity and prevent begin insert the end insert shifting of costs between customer classes.

(3) Minimize enforcement requirements and costs.

(4) Maximize the ability of community choice aggregators 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.

(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 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.