BILL NUMBER: AB 1407	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 10, 2013
	AMENDED IN ASSEMBLY  APRIL 16, 2013

INTRODUCED BY    Committee on Utilities and Commerce
  (   Bradford (Chair), Bonilla,
Fong, Garcia, Quirk, Rendon, Skinner, and Williams  
)   Assembly Member   Bradford 

                        MARCH 13, 2013

   An act to amend  Section 380 of   Sections
871.5 and 873 of, to repeal Sections 871.7, 878, 879, 879.5, 880,
882, and 883 of, and to repeal and add Sections 872, 874, 875, 876,
and 877 of,  the Public Utilities Code, relating to public
 utilities   communications  .


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1407, as amended,  Committee on Utilities and Commerce
  Bradford  . Public utilities:  resource
adequacy requirement.   voice communications service:
lifeline program.  
   Existing law, the federal Telecommunications Act of 1996,
establishes a program of cooperative federalism for the regulation of
telecommunications to attain the goal of local competition, while
implementing specific, predictable, and sufficient federal and state
mechanisms to preserve and advance universal service, consistent with
certain universal service principles. Under the act, universal
service is an evolving level of telecommunications services that the
Federal Communications Commission is required to establish
periodically, taking into account advances in telecommunications and
information technologies and services. Pursuant to the act, the
Federal Communications Commission has established and revised a
lifeline program that is available for qualifying low-income
consumers.  
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including telephone corporations.
The Moore Universal Telephone Service Act establishes the Universal
Lifeline Telephone Service program in order to provide low-income
households with access to affordable basic residential telephone
service. Existing law establishes the Universal Lifeline Telephone
Service Trust Administrative Committee Fund in the State Treasury.
 
   This bill would recast the Moore Universal Telephone Service Act
so that it would provide a household, as defined, having an eligible
customer, as defined, with high-quality voice communications service
at affordable rates. The bill would state the intent of the
Legislature to ensure that California residents have access to
technologies and services and to promote technological neutrality by
giving lifeline customers the ability to choose the communications
provider and service that best meet their unique needs, while
encouraging providers to participate in the lifeline program. 

   The Moore Universal Telephone Service Act requires the Public
Utilities Commission to annually designate a class of lifeline
service necessary to meet minimum residential, as defined,
communications needs, to set the rates and charges for that service,
to develop eligibility criteria for that service, and to assess the
degree of achievement of universal service, including telephone
penetration rates by income, ethnicity, and geography.  
   The bill would instead require the Public Utilities Commission to
annually develop eligibility criteria for customers to participate in
the program, assess the penetration rates for lifeline service by
income, ethnicity, and geography, and to prepare and submit a report
to the Legislature on the fiscal status of the lifeline program that
includes a statement of the lifeline program surcharge level and
revenues produced by the surcharge, the size of the Universal
Lifeline Telephone Service Trust Administrative Committee Fund, the
reason for a decline or increase in the size of the fund, if
applicable, an accounting of program expenses, and an evaluation of
options for controlling those expenses and increasing program
efficiency.  
   The Moore Universal Telephone Service Act requires that the
Universal Lifeline Telephone Service rates be set at no more than 50%
of either the basic rate for measured residential telephone service
or the basic flat residential telephone rate service, as applicable,
exclusive of federally mandated end user access charges that are
available to the residential subscriber. Existing law requires that
the lifeline telephone service installation or connection charge, or
both, be not more than 50% of the charge for basic residential
service installation or connection.  
   The bill would repeal these requirements and instead require that
through and including December 31, 2014, the nonrecurring service
charge for commencing voice service for a single voice connection for
a lifeline customer be no greater than $10. Until and including
December 31, 2014, the lifeline provider would be eligible for
reimbursement from the fund for the difference between the
nonrecurring charge paid by a lifeline subscriber and the
nonrecurring charge the lifeline provider charges for identical
services in the ordinary course of business to subscribers that are
not eligible customers, subject to the limitation that the
reimbursement can be no more than $40 per connection. Beginning
January 1, 2015, the Public Utilities Commission would be authorized
to annually increase the nonrecurring service charge incurred by
eligible customers, and the lifeline provider connection
reimbursement, by an amount in proportion to the increase, if any, to
the Consumer Price Index for All Urban Consumers (CPI-U). The bill
would require that every eligible customer be given a discount of
$11.85 per month, in addition to any federally supported lifeline
discount provided to customers of an eligible telecommunications
carrier, and would, beginning January 1, 2015, authorize the
commission to annually adjust the support amount in proportion to the
increase, if any, in the CPI-U. The bill would provide that an
eligible customer is not entitled to any combined monthly federal and
state lifeline support in excess of the customer's monthly rate. The
bill would require that state lifeline support be provided only
after federal lifeline support, if any, is received by an eligible
customer.  
   Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the
commission is a crime.  
   Because the provisions of this bill would be a part of the act and
would require action by the Public Utilities Commission to implement
its requirements, and because the bill would expand the class of
lifeline providers, the bill would impose a state-mandated local
program by expanding the scope of a crime.  
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason.  
   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 additionally require the Public Utilities
Commission to consult with the State Energy Resources Conservation
and Development Commission to establish the resource adequacy
requirements. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  no   yes .



THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    The Legislature finds and declares all
of the following:  
   (a) Technological advances in Internet and mobile communications
have resulted in a variety of new voice communications offerings
beyond traditional wireline telephone service, such as mobile
telephony service, commonly known as cellular telephone service, and
Voice over Internet Protocol service.  
   (b) California consumers are increasingly choosing these new voice
communications services, while conversely, traditional telephone
subscriptions are decreasing.  
   (c) The Moore Universal Telephone Service Act should be modernized
in order to maintain the vitality of its original policy goals by
acknowledging that technologies, services, and business models other
than traditional telephone service can be used to offer low-income
citizens access to affordable, reliable, and high-quality
communications service.  
   (d) In enacting this act, it is the intent of the Legislature to
ensure that California residents have access to technologies and
services and to promote technological neutrality by giving lifeline
customers the ability to choose the voice communications service
provider and service that best meets their unique needs, while
encouraging mobile telephony service and other nontraditional
providers to participate in the lifeline program. 
   SEC. 2.    Section 871.5 of the   Public
Utilities Code  is amended to read: 
   871.5.  The Legislature finds and declares all of the following:
   (a) The offering of high-quality  basic telephone
  voice communications  service at affordable rates
to the greatest number of citizens has been a longstanding goal of
the state.
   (b) The Moore Universal Telephone Service Act  has been,
and continues to be,   is  an important means for
achieving universal service by making  basic telephone
  voice communications  service affordable to
low-income households through the  creation of a 
lifeline  class of service   program  .

   (c) The Federal Communications Commission has recently reformed
and modernized the federal universal service fund's lifeline program
by, among other things, adopting a technology neutral approach to
lifeline.  
   (c) 
    (d)  Every means should be employed by the commission
 and telephone corporations  to ensure that every
household qualified to receive lifeline  telephone service
  support  is informed of and is afforded the
opportunity to  subscribe to that service  
obtain that support. Nothing in this section effects an eligible
telecommunications carrier's obligations to advertise the
availability of its offerings and charges for those offerings using
media of general distribution under Section 54.201(d)(2) of Title 47
of the Code of Federal Regulations. The commission shall not impose
any additional advertising obligations on lifeline providers  .

   (d) 
    (e)  The furnishing of lifeline  telephone
service   support  is in the public 
interest and should be supported fairly and equitably by every
telephone corporation, and the   interest. The 
commission, in administering the lifeline  telephone service
 program, should implement the program in a way that is
equitable, nondiscriminatory, and without competitive consequences
for the telecommunications industry in California.
   SEC. 3.    Section 871.7 of the   Public
Utilities Code   is repealed.  
   871.7.  The Legislature finds and declares all of the following:
   (a) The Moore Universal Telephone Service Act, enacted in 1987,
was intended to offer high quality basic telephone service at
affordable rates to the greatest number of California residents, and
has become an important means of achieving universal service by
making residential service affordable to low-income citizens through
the creation of a lifeline class of service.
   (b) Factors such as competition and technological innovation are
resulting in the convergence of a variety of telecommunications
technologies offering an expanded range of telecommunications
services to users that incorporate voice, video, and data. These
technologies have differing regulatory regimes and jurisdictions.
   (c) It is the intent of the Legislature that the commission
initiate a proceeding investigating the feasibility of redefining
universal telephone service by incorporating two-way voice, video,
and data service as components of basic service. It is the
Legislature's further intent that, to the extent that the
incorporation is feasible, that it promote equity of access to
high-speed communications networks, the Internet, and other services
to the extent that those services provide social benefits that
include all of the following:
   (1) Improving the quality of life among the residents of
California.
   (2) Expanding access to public and private resources for
education, training, and commerce.
   (3) Increasing access to public resources enhancing public health
and safety.
   (4) Assisting in bridging the "digital divide" through expanded
access to new technologies by low-income, disabled, or otherwise
disadvantaged Californians.
   (5) Shifting traffic patterns by enabling telecommuting, thereby
helping to improve air quality in all areas of the state and
mitigating the need for highway expansion.
   (d) For purposes of this section, the term "feasibility" means
consistency with all of the following:
   (1) Technological and competitive neutrality.
   (2) Equitable distribution of the funding burden for redefined
universal service as described in subdivision (c), among all affected
consumers and industries, thereby ensuring that regulated utilities'
ratepayers do not bear a disproportionate share of funding
responsibility.
   (3) Benefits that justify the costs. 
   SEC. 4.    Section 872 of the   Public
Utilities Code   is repealed.  
   872.  As used in this article, "household" means a residential
dwelling that is the principal place of residence of the lifeline
telephone service subscriber, and excludes any industrial,
commercial, or other nonresidential building. 
   SEC. 5.   Section 872 is added to the  
Public Utilities Code   , to read:  
   872.  As used in this article, the following terms have the
following meanings:
   (a) "Eligible customer" means any person who has, after providing
adequate supporting documentation, been determined to be eligible to
receive lifeline support by a third-party lifeline administrator. A
lifeline provider shall not be obligated to provide, nor shall any
person be entitled to receive, any lifeline support until that person
has been determined to be an eligible customer by a third-party
lifeline administrator. A customer applying to become an eligible
customer shall not be required to first establish service as a
condition for lifeline eligibility.
   (b) "Household" means any individual or group of individuals who
are living together at the same address as one economic unit. A
household may include related and unrelated persons. An "economic
unit" consists of all adult individuals contributing to and sharing
in the income and expenses of a household. An adult is any person 18
years of age or older. If an adult has no or minimal income, and
lives with someone who provides financial support to him or her, both
people shall be considered part of the same household. Children
under 18 years of age living with their parents or guardians are
considered to be part of the same household as their parents or
guardians.
   (c) (1) "Lifeline provider" means any telephone corporation or
alternative provider that meets all of the following requirements:
   (A) Provides voice communications services that are eligible for
federal universal service support pursuant to Section 54.101 (a) of
Title 47 of the Code of Federal Regulations.
   (B) Collects and remits surcharges for the lifeline program.
   (C) Voluntarily chooses to participate in the lifeline program or
is otherwise mandated to offer basic service as of January 1, 2013.
   (D) Agrees to comply with, and be held liable for any violations
of, this article and any commission rules implementing this article,
as enforced by the commission.
   (2) Any "lifeline provider," including a local exchange carrier,
may use any technology, or multiple technologies, within the provider'
s service territory. 
   SEC. 6.    Section 873 of the   Public
Utilities Code   is amended to read: 
   873.   (a)     (1)
   The commission shall annually do all of
the following: 
   (A) Designate a class of lifeline service necessary to meet
minimum communications needs.  
   (B) Set the rates and charges for that service.  

   (C) 
    (a)  Develop eligibility criteria for  that
service   eligible customers to participate in the
lifeline program. The commission shall not increase lifeline income
limits from those in effect on January 1, 2013, except for an annual
adjustment to reflect inflation based on changes to the United States
Consumer Price Index for All Urban Consumers (CPI-U)  .

   (D) 
    (b)  Assess the  degree of achievement of
universal service, including telephone  penetration rates
 for the lifeline program  by income, ethnicity, and
geography.  This information shall be annually reported to the
Legislature by the commission in a document that can be made public.
 
   (2) This information shall be annually reported to the Legislature
by the commission in a document which can be made public. 

   (c) Not withstanding Section 10231.5 of the Government Code, not
later than March 31 of each year, prepare and submit a report to the
Legislature on the fiscal status of the lifeline program. The report
shall be submitted in compliance with Section 9795 of the Government
Code. The report shall include a statement of the lifeline program
surcharge level and revenues produced by the surcharge, the size of
the Universal Lifeline Telephone Service Trust Administrative
Committee Fund, the reason for a decline or increase in the size of
the fund, if applicable, an accounting of program expenses, and an
evaluation of options for controlling those expenses and increasing
program efficiency. 
   SEC. 7.    Section 874 of the   Public
Utilities Code  is repealed.  
   874.  The lifeline telephone service rates and charges shall be as
follows:
   (a) In a residential subscriber's service area where measured
service is not available, the lifeline telephone service rates shall
not be more than 50 percent of the rates for basic flat rate service,
exclusive of federally mandated end user access charges, available
to the residential subscriber.
   (b) In a residential subscriber's service area where measured
service is available, the subscriber may elect either of the
following:
   (1) A lifeline telephone service measured rate of not more than 50
percent of the basic rate for measured service, exclusive of
federally mandated end user access charges, available to the
residential subscriber.
   (2) A lifeline flat rate of not more than 50 percent of the rates
for basic flat rate service, exclusive of federally mandated end user
access charges, available to the residential subscriber.
   (c) The lifeline telephone service installation or connection
charge, or both, shall not be more than 50 percent of the charge for
basic residential service installation or connection, or both. The
commission may limit the number of installation and connection
charges, or both, that may be incurred at the reduced rate in any
given period.
   (d) There shall be no charge to the residential customer who has
filed a valid eligibility statement for changing out of lifeline
service.
   (e) The commission shall assess whether there is a problem with
customers who fraudulently obtain lifeline telephone service. If the
commission determines that there is a problem, it shall recommend and
promulgate appropriate solutions. This assessment and the solutions
determined by the commission shall not, in and of themselves, change
the procedures developed pursuant to Section 876. 
   SEC. 8.    Section 874 is added to the  
Public Utilities Code   , to read:  
   874.  (a) Until and including December 31, 2014, the nonrecurring
service charge for commencing voice service for a single voice
connection for a lifeline customer shall be no more than ten dollars
($10). Until and including December 31, 2014, a lifeline provider
shall be eligible for reimbursement from the Universal Lifeline
Telephone Service Trust Administrative Committee Fund for the
difference between the nonrecurring charge paid by a lifeline
subscriber and the nonrecurring charge the lifeline provider charges
for identical service in the ordinary course of business to
subscribers that are not eligible customers, subject to the
limitation that the reimbursement to the lifeline provider shall be
no more than forty dollars ($40) per connection.
   (b) Beginning January 1, 2015, the commission may annually
increase the nonrecurring service charge incurred by eligible
customers by an amount in proportion to the increase, if any, to the
Consumer Price Index for All Urban Consumers (CPI-U). If the
commission exercises this authority, then it also shall increase the
lifeline provider connection reimbursement by a proportionate amount.

   SEC. 9.    Section 875 of the   Public
Utilities Code  is repealed.  
   875.  (a) In addition to Section 874, every lifeline telephone
service subscriber shall be given an allowance, reduced by the amount
of any credit or allowance authorized by the Federal Communications
Commission, equal to the then current or announced federally mandated
residential end user access charges.
   (b) The commission may, in a separate proceeding, establish
procedures necessary to ensure that the lifeline telephone service
program qualifies for any federal funds available for the support of
those programs. 
   SEC. 10.    Section 875 is added to the  
Public Utilities Code   , to read:  
   875.  (a) Except as provided in subdivision (b), every eligible
customer shall be given a discount of eleven dollars and eighty-five
cents ($11.85) per month, in addition to any federally supported
lifeline discount provided to customers of an eligible
telecommunications carrier. Beginning January 1, 2015, the commission
may annually adjust the support amount in proportion to the
increase, if any, in the Consumer Price Index for All Urban Consumers
(CPI-U).
   (b) An eligible customer shall not be entitled to any combined
monthly federal and state lifeline support in excess of the eligible
customer's monthly rate. State lifeline support shall be provided
only after federal lifeline support, if any, is received by an
eligible customer. Lifeline providers shall be eligible for
reimbursement from the Universal Lifeline Telephone Service Trust
Administrative Committee Fund in an amount not to exceed the amount
of state lifeline support that is actually received by an eligible
customer.
   (c) To the extent necessary to support the lifeline program, the
commission may assess a lifeline surcharge in an amount not to exceed
3.3 percent of the subscriber's charges for intrastate telephone
communications services or interconnected Voice over Internet
Protocol (VoIP) service. The methodology for applying the lifeline
surcharge to interconnected VoIP service shall be that set forth in
subdivision (e) of Section 285. 
   SEC. 11.    Section 876 of the   Public
Utilities Code   is repealed.  
   876.  The commission shall require every telephone corporation
providing telephone service within a service area to file a schedule
of rates and charges providing a class of lifeline telephone service.
Every telephone corporation providing service within a service area
shall inform all eligible subscribers of the availability of lifeline
telephone service, and how they may qualify for and obtain service,
and shall accept applications for lifeline telephone service
according to procedures specified by the commission. 
   SEC. 12.    Section 876 is added to the  
Public Utilities Code   , to read:  
   876.  (a) The commission shall, upon a request of a provider,
designate as lifeline providers a telephone corporation or
alternative provider that meets the requirements of subdivision (c)
of Section 872. The commission shall, upon a request of a provider,
designate the lifeline provider as an eligible telecommunications
carrier. The commission shall not, as a condition for either
designation, impose any obligation that exceeds the obligations
imposed on state-designated eligible telecommunications carriers in
Subpart E (commencing with Section 54.400) of Part 54 of Title 47 of
the Code of Federal Regulations.
   (b) The commission shall require a lifeline provider to offer only
the minimum service elements to eligible lifeline customers set
forth in Section 54.101 (a) of Title 47 of the Code of Federal
Regulations. Lifeline support may be applied to any bundle or package
that includes voice service. 
   SEC. 13.    Section 877 of the   Public
Utilities Code   is repealed.  
   877.  Nothing in this article precludes the commission from
changing any rate established pursuant to Section 873, either
specifically or pursuant to any general restructuring of all
telephone rates, charges, and classifications. 
   SEC. 14.    Section 877 is added to the  
Public Utilities Code   , to read:  
   877.  (a) Lifeline discounts shall be limited to one per
household. Nothing in this section effects the ability of a member of
a household to obtain an additional lifeline discount if that member
is medically certified as deaf or hard of hearing and has continuous
access to teletypewriter equipment, or its functional equivalent,
pursuant to Section 2881, and has been determined to be an eligible
customer by a third-party lifeline administrator.
   (b) An applicant for lifeline support may report only one address
in the state as a principal place of residence. 
   SEC. 15.    Section 878 of the   Public
Utilities Code   is repealed.  
   878.  A lifeline telephone service subscriber shall be provided
with one lifeline subscription, as defined by the commission, at his
or her principal place of residence, and no other member of that
subscriber's family or household who maintains residence at that
place is eligible for lifeline telephone service.
   An applicant for lifeline telephone service may report only one
address in this state as the principal place of residence. 
   SEC. 16.    Section 879 of the   Public
Utilities Code   is repealed.  
   879.  (a) The commission shall, at least annually, initiate a
proceeding to set rates for lifeline telephone service. All telephone
corporations providing lifeline telephone service shall annually
file, on a date set by the commission, proposed lifeline telephone
service rates and a statement of projected revenue needs to meet the
funding requirements to provide lifeline telephone service to
qualified subscribers, together with proposed funding methods to
provide the necessary funding. These funding methods shall include
identification of those services whose rates shall be adjusted to
provide the necessary funding.
   (b) The commission shall commence a proceeding within 30 days
after the date set for the filings required in subdivision (a),
giving interested parties an opportunity to comment on the proposed
rates and funding requirements and the proposed funding methods. The
commission may change the rates, funding requirements, and funding
methods proposed by the telephone corporations in any manner
necessary, including reasonably spreading the funding among the
services offered by the telephone corporations, to meet the public
interest. Within 60 days of the annual filing, the commission shall
issue an order setting lifeline telephone service rates and funding
methods for each telephone corporation making a filing as required in
subdivision (a). The commission may establish a lifeline service
pool composed of the rate adjustments and surcharges imposed by the
commission pursuant to this section for the purpose of funding
lifeline telephone service.
   (c) Any order issued by the commission pursuant to this section
shall require telephone corporations providing lifeline telephone
service to apply the funding requirement in the form of a surcharge
to service rates which may be separately identified on the bills of
customers using those services. The commission shall not allow any
surcharge under this section on the rates charged by those telephone
corporations for lifeline telephone service.
   (d) The commission shall permit telephone corporations operating
between service areas to adjust the rates of any service which may be
affected by any surcharge imposed by this section. 
   SEC. 17.    Section 879.5 of the   Public
Utilities Code   is repealed.  
   879.5.  Notwithstanding Section 879, the commission shall issue
its initial order adopting required rates and funding requirements
not later than October 31, 1987, and prior to the issuance of that
order, may fund lifeline telephone service through the use of an
interim surcharge on service rates for telephone service provided by
telephone corporations operating between service areas. The interim
surcharge shall not exceed 4 percent of the service rates. 
   SEC. 18.    Section 880 of the   Public
Utilities Code   is repealed.  
   880.  The commission may determine any question of fact in its
administration of this article. 
   SEC. 19.    Section 882 of the   Public
Utilities Code   is repealed.  
   882.  (a) The Public Utilities Commission shall, as soon as
practicable, open a proceeding or proceedings to, or as part of
existing proceedings shall, consider ways to ensure that advanced
telecommunications services are made available as ubiquitously and
economically as possible, in a timely fashion, to California's
citizens, institutions, and businesses. The proceeding or proceedings
should be completed within one year of commencement.
   (b) The proceeding or proceedings shall develop rules, procedures,
orders, or strategies, or all of these, that seek to achieve the
following goals:
   (1) To provide all citizens and businesses with access to the
widest possible array of advanced communications services.
   (2) To provide the state's educational and health care
institutions with access to advanced communications services.
   (3) To ensure cost-effective deployment of technology so as to
protect ratepayers' interests and the affordability of
telecommunications services.
   (c) In the proceeding or proceedings, the commission should also
consider, but need not limit its consideration to, all of the
following:
   (1) Whether the definition of universal service should be
broadened.
   (2) How to encourage the timely and economic development of an
advanced public communications infrastructure, which may include a
variety of competitive providers. 
   SEC. 20.    Section 883 of the   Public
Utilities Code   is repealed.  
   883.  (a) The commission shall, on or before February 1, 2001,
issue an order initiating an investigation and opening a proceeding
to examine the current and future definitions of universal service.
That proceeding shall include public hearings that encourage
participation by a broad and diverse range of interests from all
areas of the state, including, but not limited to, all of the
following:
   (1) Consumer groups.
   (2) Communication service providers, including all providers of
high-speed access services.
   (3) Facilities-based telephone providers.

         (4) Information service providers and Internet access
providers.
   (5) Rural and urban users.
   (6) Public interest groups.
   (7) Representatives of small and large businesses and industry.
   (8) Local agencies.
   (9) State agencies, including, but not limited to, all of the
following:
   (A) The Business, Transportation and Housing Agency.
   (B) The State and Consumer Services Agency.
   (C) The State Department of Education.
   (D) The State Department of Health Services.
   (E) The California State Library.
   (10) Colleges and universities.
   (b) The objectives of the proceeding set forth in subdivision (a)
shall include all of the following:
   (1) To investigate the feasibility of redefining universal service
in light of current trends toward accelerated convergence of voice,
video, and data, with an emphasis on the role of basic
telecommunications and Internet services in the workplace, in
education and workforce training, access to health care, and
increased public safety.
   (2) To evaluate the extent to which technological changes have
reduced the relevance of existing regulatory regimes given their
current segmentation based upon technology.
   (3) To receive broad-based input from a cross section of
interested parties and make recommendations on whether video, data,
and Internet service providers should be incorporated into an
enhanced Universal Lifeline Service program, as specified, including
relevant policy recommendations regarding regulatory and statutory
changes and funding options that are consistent with the principles
set forth in subdivision (c) of Section 871.7.
   (4) To reevaluate prior definitions of basic service in a manner
that will, to the extent feasible, effectively incorporate the latest
technologies to provide all California residents with all of the
following:
   (A) Improved quality of life.
   (B) Expanded access to public and private resources for education,
training, and commerce.
   (C) Increased access to public resources enhancing public health
and safety.
   (D) Assistance in bridging the "digital divide" through expanded
access to new technologies by low income, disabled, or otherwise
disadvantaged Californians.
   (5) To assess projected costs of providing enhanced universal
lifeline service in accordance with the intent of this article, and
to delineate the subsidy support needed to maintain the redefined
scope of universal service in a competitive market.
   (6) To design and recommend an equitable and broad-based subsidy
support mechanism for universal service in competitive markets in a
manner that conforms with subdivision (c) of Section 871.7.
   (7) To develop a process to periodically review and revise the
definition of universal service to reflect new technologies and
markets consistent with subdivision (c) of Section 871.7.
   (8) To consider whether similar regulatory treatment for the
provision of similar services is appropriate and feasible.
   (c) In conducting its investigation, the commission shall take
into account the role played by a number of diverse but convergent
industries and providers, even though many of these entities are not
subject to economic regulation by the commission or any other
government entity.
   (d) The recommendations of the commission shall be consistent with
state policies for telecommunications as set forth in Section 709,
and with all of the following principles:
   (1) Universal service shall, to the extent feasible, be provided
at affordable prices regardless of linguistic, cultural, ethnic,
physical, financial, and geographic considerations.
   (2) Consumers shall be provided access to all information needed
to allow timely and informed choices about telecommunications
products and services that are part of the universal service program
and how best to use them.
   (3) Education, health care, community, and government institutions
shall be positioned as early recipients of new and emerging
technologies so as to maximize the economic and social benefits of
these services.
   (e) The commission shall complete its investigation and report to
the Legislature its findings and recommendations on or before January
1, 2002. 
   SEC. 21.    By May 1, 2014, the Public Utilities
Commission shall revise General Order 153 to bring the lifeline
program into compliance with the changes made b   y this
act. The commission shall allow a lifeline provider a reasonable
period of time, as determined by the commission, to implement the
requirements or obligations of the Moore Universal Telephone Service
Act as amended by this act. The commission shall not adopt any
obligations, rules, or standards that exceed, or otherwise add to,
those that are expressly required by this act. 
   SEC. 22.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.  
  SECTION 1.    Section 380 of the Public Utilities
Code is amended to read:
   380.  (a) The commission, in consultation with the Independent
System Operator and the Energy Commission, 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) Allocate equitably the cost of generating capacity and prevent
the 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.