Amended in Assembly April 25, 2016

Amended in Assembly April 4, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1937


Introduced by Assemblybegin delete Member Gomezend deletebegin insert Members Gomez and Williamsend insert

begin insert

(Coauthor: Senator Pavley)

end insert

February 12, 2016


An act to amend Sections 399.13 and 454.5 of the Public Utilities Code, relating to electricity.

LEGISLATIVE COUNSEL’S DIGEST

AB 1937, as amended, Gomez. Electricity: procurement.

The Public Utilities Act requires the Public Utilities Commission to review and accept, modify, or reject a procurement plan for each electrical corporation in accordance with specified procedures, considerations, and objectives. The act requires that electrical corporations’ proposed procurement plans include certain elements, including a showing that the electrical corporations will first meet their unmet needs through all available energy efficiency and demand reduction resources that are cost effective, reliable, and feasible.

This bill would require electrical corporations’ proposed procurement plans to also include a showing that the electrical corporations (1), in soliciting bids for gas-fired generationbegin delete resources,end deletebegin insert resources from new or repowered facilities,end insert actively seek bidsbegin insert for resourcesend insert that are notbegin insert gas-fired generation resourcesend insert located in or adjacent tobegin delete disadvantagedend delete communitiesbegin insert that suffer from cumulative pollution burdens and other environmental impactsend insert and (2), in considering bids for, or negotiating bilateral contracts for,begin insert new or repoweredend insert gas-fired generation resources, give priority to generation resources that are notbegin insert gas-fired generation resourcesend insert located in or adjacent tobegin delete disadvantagedend deletebegin insert thoseend insert communities.begin insert The bill would require the commission, before approving a contract for any new or repowered gas-fired generation resourceend insertbegin insert, to require the electrical corporation to demonstrate that it has undertaken all feasible efforts to meet any identified resource need through alternative means.end insert Because this requirement would be a part of the Public Utilities Act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime.

Existing law requires electrical corporations, in soliciting and procuring of eligible renewable energy resources for California-based projects, to give preference to renewable energy projects that provide environmental and economic benefits to communities afflicted with poverty or high unemployment or those suffering from high emission levels of toxic air contaminants, criteria air pollutants, and greenhouse gases.

This bill would specify that the above requirements apply to all procurement of eligible renewable energy resources for California-based projects whether the procurement occurs through all-source requests for offers, eligible renewable energy resources only requests for offers, or other procurement mechanisms.

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.

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

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

P2    1

SECTION 1.  

Section 399.13 of the Public Utilities Code is
2amended to read:

3

399.13.  

(a) (1) The commission shall direct each electrical
4corporation to annually prepare a renewable energy procurement
5plan that includes the matter in paragraph (5), to satisfy its
6obligations under the renewables portfolio standard. To the extent
7feasible, this procurement plan shall be proposed, reviewed, and
P3    1adopted by the commission as part of, and pursuant to, a general
2procurement plan process. The commission shall require each
3electrical corporation to review and update its renewable energy
4procurement plan as it determines to be necessary. The commission
5shall require all other retail sellers to prepare and submit renewable
6energy procurement plans that address the requirements identified
7in paragraph (5).

8(2) Every electrical corporation that owns electrical transmission
9facilities shall annually prepare, as part of the Federal Energy
10Regulatory Commission Order 890 process, and submit to the
11commission, a report identifying any electrical transmission
12facility, upgrade, or enhancement that is reasonably necessary to
13achieve the renewables portfolio standard procurement
14requirements of this article. Each report shall look forward at least
15five years and, to ensure that adequate investments are made in a
16timely manner, shall include a preliminary schedule when an
17application for a certificate of public convenience and necessity
18will be made, pursuant to Chapter 5 (commencing with Section
191001), for any electrical transmission facility identified as being
20reasonably necessary to achieve the renewable energy resources
21procurement requirements of this article. Each electrical
22corporation that owns electrical transmission facilities shall ensure
23that project-specific interconnection studies are completed in a
24timely manner.

25(3) The commission shall direct each retail seller to prepare and
26submit an annual compliance report that includes all of the
27following:

28(A) The current status and progress made during the prior year
29toward procurement of eligible renewable energy resources as a
30percentage of retail sales, including, if applicable, the status of any
31necessary siting and permitting approvals from federal, state, and
32local agencies for those eligible renewable energy resources
33procured by the retail seller, and the current status of compliance
34with the portfolio content requirements of subdivision (c) of
35Section 399.16, including procurement of eligible renewable energy
36resources located outside the state and within the WECC and
37unbundled renewable energy credits.

38(B) If the retail seller is an electrical corporation, the current
39status and progress made during the prior year toward construction
40of, and upgrades to, transmission and distribution facilities and
P4    1other electrical system components it owns to interconnect eligible
2renewable energy resources and to supply the electricity generated
3by those resources to load, including the status of planning, siting,
4and permitting transmission facilities by federal, state, and local
5agencies.

6(C) Recommendations to remove impediments to making
7progress toward achieving the renewable energy resources
8procurement requirements established pursuant to this article.

9(4) The commission shall adopt, by rulemaking, all of the
10following:

11(A) A process that provides criteria for the rank ordering and
12selection of least-cost and best-fit eligible renewable energy
13resources to comply with the California Renewables Portfolio
14Standard Program obligations on a total cost and best-fit basis.
15This process shall take into account all of the following:

16(i) Estimates of indirect costs associated with needed
17transmission investments.

18(ii) The cost impact of procuring the eligible renewable energy
19resources on the electrical corporation’s electricity portfolio.

20(iii) The viability of the project to construct and reliably operate
21the eligible renewable energy resource, including the developer’s
22experience, the feasibility of the technology used to generate
23electricity, and the risk that the facility will not be built, or that
24construction will be delayed, with the result that electricity will
25not be supplied as required by the contract.

26(iv) Workforce recruitment, training, and retention efforts,
27including the employment growth associated with the construction
28and operation of eligible renewable energy resources and goals
29for recruitment and training of women, minorities, and disabled
30veterans.

31(v) (I) Estimates of electrical corporation expenses resulting
32from integrating and operating eligible renewable energy resources,
33including, but not limited to, any additional wholesale energy and
34capacity costs associated with integrating each eligible renewable
35resource.

36(II) No later than December 31, 2015, the commission shall
37approve a methodology for determining the integration costs
38described in subclause (I).

39(vi) Consideration of any statewide greenhouse gas emissions
40limit established pursuant to the California Global Warming
P5    1Solutions Act of 2006 (Division 25.5 (commencing with Section
238500) of the Health and Safety Code).

3(vii) Consideration of capacity and system reliability of the
4eligible renewable energy resource to ensure grid reliability.

5(B) Rules permitting retail sellers to accumulate, beginning
6January 1, 2011, excess procurement in one compliance period to
7be applied to any subsequent compliance period. The rules shall
8apply equally to all retail sellers. In determining the quantity of
9excess procurement for the applicable compliance period, the
10commission shall retain the rules adopted by the commission and
11in effect as of January 1, 2015, for the compliance period specified
12in subparagraphs (A) to (C), inclusive, of paragraph (1) of
13subdivision (b) of Section 399.15. For any subsequent compliance
14period, the rules shall allow the following:

15(i) For electricity products meeting the portfolio content
16requirements of paragraph (1) of subdivision (b) of Section 399.16,
17contracts of any duration may count as excess procurement.

18(ii) Electricity products meeting the portfolio content
19requirements of paragraph (2) or (3) of subdivision (b) of Section
20399.16 shall not be counted as excess procurement. Contracts of
21any duration for electricity products meeting the portfolio content
22requirements of paragraph (2) or (3) of subdivision (b) of Section
23399.16 that are credited towards a compliance period shall not be
24deducted from a retail seller’s procurement for purposes of
25calculating excess procurement.

26(iii) If a retail seller notifies the commission that it will comply
27with the provisions of subdivision (b) for the compliance period
28beginning January 1, 2017, the provisions of clauses (i) and (ii)
29shall take effect for that retail seller for that compliance period.

30(C) Standard terms and conditions to be used by all electrical
31corporations in contracting for eligible renewable energy resources,
32including performance requirements for renewable generators. A
33contract for the purchase of electricity generated by an eligible
34renewable energy resource, at a minimum, shall include the
35renewable energy credits associated with all electricity generation
36specified under the contract. The standard terms and conditions
37shall include the requirement that, no later than six months after
38the commission’s approval of an electricity purchase agreement
39entered into pursuant to this article, the following information
P6    1about the agreement shall be disclosed by the commission: party
2names, resource type, project location, and project capacity.

3(D) An appropriate minimum margin of procurement above the
4minimum procurement level necessary to comply with the
5renewables portfolio standard to mitigate the risk that renewable
6projects planned or under contract are delayed or canceled. This
7paragraph does not preclude an electrical corporation from
8voluntarily proposing a margin of procurement above the
9appropriate minimum margin established by the commission.

10(5) Consistent with the goal of increasing California’s reliance
11on eligible renewable energy resources, the renewable energy
12procurement plan shall include all of the following:

13(A) An assessment of annual or multiyear portfolio supplies
14and demand to determine the optimal mix of eligible renewable
15energy resources with deliverability characteristics that may include
16peaking, dispatchable, baseload, firm, and as-available capacity.

17(B) Potential compliance delays related to the conditions
18 described in paragraph (5) of subdivision (b) of Section 399.15.

19(C) A bid solicitation setting forth the need for eligible
20renewable energy resources of each deliverability characteristic,
21required online dates, and locational preferences, if any.

22(D) A status update on the development schedule of all eligible
23renewable energy resources currently under contract.

24(E) Consideration of mechanisms for price adjustments
25associated with the costs of key components for eligible renewable
26energy resource projects with online dates more than 24 months
27after the date of contract execution.

28(F) An assessment of the risk that an eligible renewable energy
29resource will not be built, or that construction will be delayed,
30with the result that electricity will not be delivered as required by
31the contract.

32(6) In soliciting and procuring eligible renewable energy
33resources, each electrical corporation shall offer contracts of no
34less than 10 years duration, unless the commission approves of a
35contract of shorter duration.

36(7) (A) In soliciting and procuring eligible renewable energy
37resources for California-based projects, each electrical corporation
38shall give preference to renewable energy projects that provide
39environmental and economic benefits to communities afflicted
40with poverty or high unemployment, or that suffer from high
P7    1emission levels of toxic air contaminants, criteria air pollutants,
2and greenhouse gases.

3(B) Subparagraph (A) applies to all procurement of eligible
4renewable energy resources for California-based projects, whether
5the procurement occur through all-source requests for offers,
6eligible renewable resources only requests for offers, or other
7procurement mechanisms. This subparagraph is declaratory of
8existing law.

9(8) In soliciting and procuring eligible renewable energy
10resources, each retail seller shall consider the best-fit attributes of
11resource types that ensure a balanced resource mix to maintain the
12reliability of the electrical grid.

13(b) A retail seller may enter into a combination of long- and
14short-term contracts for electricity and associated renewable energy
15credits. Beginning January 1, 2021, at least 65 percent of the
16procurement a retail seller counts toward the renewables portfolio
17standard requirement of each compliance period shall be from its
18contracts of 10 years or more in duration or in its ownership or
19ownership agreements for eligible renewable energy resources.

20(c) The commission shall review and accept, modify, or reject
21each electrical corporation’s renewable energy resource
22procurement plan prior to the commencement of renewable energy
23procurement pursuant to this article by an electrical corporation.
24The commission shall assess adherence to the approved renewable
25energy resource procurement plans in determining compliance
26with the obligations of this article.

27(d) Unless previously preapproved by the commission, an
28electrical corporation shall submit a contract for the generation of
29an eligible renewable energy resource to the commission for review
30and approval consistent with an approved renewable energy
31resource procurement plan. If the commission determines that the
32bid prices are elevated due to a lack of effective competition among
33the bidders, the commission shall direct the electrical corporation
34to renegotiate the contracts or conduct a new solicitation.

35(e) If an electrical corporation fails to comply with a commission
36order adopting a renewable energy resource procurement plan, the
37commission shall exercise its authority to require compliance.

38(f) (1) The commission may authorize a procurement entity to
39enter into contracts on behalf of customers of a retail seller for
40electricity products from eligible renewable energy resources to
P8    1satisfy the retail seller’s renewables portfolio standard procurement
2requirements. The commission shall not require any person or
3 corporation to act as a procurement entity or require any party to
4purchase eligible renewable energy resources from a procurement
5entity.

6(2) Subject to review and approval by the commission, the
7procurement entity shall be permitted to recover reasonable
8administrative and procurement costs through the retail rates of
9end-use customers that are served by the procurement entity and
10are directly benefiting from the procurement of eligible renewable
11energy resources.

12(g) Procurement and administrative costs associated with
13contracts entered into by an electrical corporation for eligible
14renewable energy resources pursuant to this article and approved
15by the commission are reasonable and prudent and shall be
16recoverable in rates.

17(h) Construction, alteration, demolition, installation, and repair
18work on an eligible renewable energy resource that receives
19production incentives pursuant to Section 25742 of the Public
20Resources Code, including work performed to qualify, receive, or
21maintain production incentives, are “public works” for the purposes
22of Chapter 1 (commencing with Section 1720) of Part 7 of Division
232 of the Labor Code.

24

SEC. 2.  

Section 454.5 of the Public Utilities Code is amended
25to read:

26

454.5.  

(a) The commission shall specify the allocation of
27electricity, including quantity, characteristics, and duration of
28electricity delivery, that the Department of Water Resources shall
29provide under its power purchase agreements to the customers of
30each electrical corporation, which shall be reflected in the electrical
31corporation’s proposed procurement plan. Each electrical
32corporation shall file a proposed procurement plan with the
33commission not later than 60 days after the commission specifies
34the allocation of electricity. The proposed procurement plan shall
35specify the date that the electrical corporation intends to resume
36procurement of electricity for its retail customers, consistent with
37its obligation to serve. After the commission’s adoption of a
38procurement plan, the commission shall allow not less than 60
39days before the electrical corporation resumes procurement
40pursuant to this section.

P9    1(b) An electrical corporation’s proposed procurement plan shall
2include, but not be limited to, all of the following:

3(1) An assessment of the price risk associated with the electrical
4corporation’s portfolio, including any utility-retained generation,
5existing power purchase and exchange contracts, and proposed
6contracts or purchases under which an electrical corporation will
7procure electricity, electricity demand reductions, and
8electricity-related products and the remaining open position to be
9served by spot market transactions.

10(2) A definition of each electricity product, electricity-related
11product, and procurement related financial product, including
12support and justification for the product type and amount to be
13procured under the plan.

14(3) The duration of the plan.

15(4) The duration, timing, and range of quantities of each product
16to be procured.

17(5) A competitive procurement process under which the
18electrical corporation may request bids for procurement-related
19services, including the format and criteria of that procurement
20process.

21(6) An incentive mechanism, if any incentive mechanism is
22proposed, including the type of transactions to be covered by that
23mechanism, their respective procurement benchmarks, and other
24parameters needed to determine the sharing of risks and benefits.

25(7) The upfront standards and criteria by which the acceptability
26and eligibility for rate recovery of a proposed procurement
27 transaction will be known by the electrical corporation prior to
28execution of the transaction. This shall include an expedited
29approval process for the commission’s review of proposed contracts
30and subsequent approval or rejection thereof. The electrical
31corporation shall propose alternative procurement choices in the
32event a contract is rejected.

33(8) Procedures for updating the procurement plan.

34(9) A showing that the procurement plan will achieve the
35following:

36(A) The electrical corporation, in order to fulfill its unmet
37resource needs, shall procure resources from eligible renewable
38energy resources in an amount sufficient to meet its procurement
39requirements pursuant to the California Renewables Portfolio
P10   1Standard Program (Article 16 (commencing with Section 399.11)
2of Chapter 2.3).

3(B) The electrical corporation shall create or maintain a
4diversified procurement portfolio consisting of both short-term
5and long-term electricity and electricity-related and demand
6reduction products.

7(C) The electrical corporation shall first meet its unmet resource
8needs through all available energy efficiency and demand reduction
9resources that are cost effective, reliable, and feasible.

10(D) begin insert(i)end insertbegin insertend insert The electrical corporation, in soliciting bids for gas-fired
11generationbegin delete resources,end deletebegin insert resources from new or repowered facilities,end insert
12 shall actively seek bids forbegin delete generationend delete resources that are not
13begin insert gas-fired generation resourcesend insert located in or adjacent to
14
begin delete disadvantaged communities identified pursuant to Section 39711
15of the Health and Safety Code. Inend delete
begin insert communities that suffer from
16cumulative pollution burdens and other environmental impacts,
17 including, but not limited to, high emission levels of toxic air
18contaminants, criteria air pollutants, and greenhouse gases.end insert

19begin insert(ii)end insertbegin insertend insertbegin insertInend insert considering bids for, or negotiating contracts for,begin insert new or
20repoweredend insert
gas-fired generation resources, the electrical corporation
21shall provide greater priority tobegin delete gas-fired generationend delete resources that
22are notbegin insert gas-fired generation resourcesend insert located in or adjacent to
23
begin delete disadvantaged communities identified pursuant to Section 39711
24of the Health and Safety Code.end delete
begin insert communities that suffer from
25cumulative pollution burdens and other environmental impacts,
26including, but not limited to, high emission levels of toxic air
27contaminants, criteria air pollutants, and greenhouse gases.end insert

begin insert

28
(E) (i) The electrical corporation shall undertake all feasible
29efforts to meet any identified resource need through available
30renewable energy, energy storage, energy efficiency, and demand
31reduction resources that are cost effective, reliable, and feasible.

end insert
begin insert

32
(ii) Prior to approving a contract for any new or repowered
33gas-fired generation resource, the commission shall require the
34electrical corporation to demonstrate its satisfaction of clause (i).

end insert

35(10) The electrical corporation’s risk management policy,
36strategy, and practices, including specific measures of price
37stability.

38(11) A plan to achieve appropriate increases in diversity of
39ownership and diversity of fuel supply of nonutility electrical
40generation.

P11   1(12) A mechanism for recovery of reasonable administrative
2costs related to procurement in the generation component of rates.

3(c) The commission shall review and accept, modify, or reject
4each electrical corporation’s procurement plan and any amendments
5or updates to thebegin delete plan toend deletebegin insert plan. The commission shallend insert ensure that
6the plan contains the elements required pursuant to this section,
7including thebegin delete elementend deletebegin insert elementsend insert described inbegin delete subparagraph (D)end delete
8begin insert subparagraphs (D) and (E)end insert of paragraph (9) of subdivision (b).
9The commission’s review shall consider each electrical
10corporation’s individual procurement situation, and shall give
11strong consideration to that situation in determining which one or
12more of the features set forth in this subdivision shall apply to that
13electrical corporation. A procurement plan approved by the
14commission shall contain one or more of the following features,
15provided that the commission may not approve a feature or
16mechanism for an electrical corporation if it finds that the feature
17or mechanism would impair the restoration of an electrical
18corporation’s creditworthiness or would lead to a deterioration of
19an electrical corporation’s creditworthiness:

20(1) A competitive procurement process under which the
21electrical corporation may request bids for procurement-related
22services. The commission shall specify the format of that
23procurement process, as well as criteria to ensure that the auction
24process is open and adequately subscribed. Any purchases made
25in compliance with the commission-authorized process shall be
26recovered in the generation component of rates.

27(2) An incentive mechanism that establishes a procurement
28benchmark or benchmarks and authorizes the electrical corporation
29to procure from the market, subject to comparing the electrical
30corporation’s performance to the commission-authorized
31benchmark or benchmarks. The incentive mechanism shall be
32clear, achievable, and contain quantifiable objectives and standards.
33The incentive mechanism shall contain balanced risk and reward
34incentives that limit the risk and reward of an electrical corporation.

35(3) Upfront achievable standards and criteria by which the
36acceptability and eligibility for rate recovery of a proposed
37procurement transaction will be known by the electrical corporation
38prior to the execution of the bilateral contract for the transaction.
39The commission shall provide for expedited review and either
40approve or reject the individual contracts submitted by the electrical
P12   1corporation to ensure compliance with its procurement plan. To
2the extent the commission rejects a proposed contract pursuant to
3this criteria, the commission shall designate alternative procurement
4choices obtained in the procurement plan that will be recoverable
5for ratemaking purposes.

6(d) A procurement plan approved by the commission shall
7accomplish each of the following objectives:

8(1) Enable the electrical corporation to fulfill its obligation to
9serve its customers at just and reasonable rates.

10(2) Eliminate the need for after-the-fact reasonableness reviews
11of an electrical corporation’s actions in compliance with an
12approved procurement plan, including resulting electricity
13procurement contracts, practices, and related expenses. However,
14the commission may establish a regulatory process to verify and
15ensure that each contract was administered in accordance with the
16terms of the contract, and contract disputes that may arise are
17reasonably resolved.

18(3) Ensure timely recovery of prospective procurement costs
19incurred pursuant to an approved procurement plan. The
20commission shall establish rates based on forecasts of procurement
21costs adopted by the commission, actual procurement costs
22incurred, or combination thereof, as determined by the commission.
23The commission shall establish power procurement balancing
24accounts to track the differences between recorded revenues and
25costs incurred pursuant to an approved procurement plan. The
26commission shall review the power procurement balancing
27accounts, not less than semiannually, and shall adjust rates or order
28refunds, as necessary, to promptly amortize a balancing account,
29according to a schedule determined by the commission. Until
30January 1, 2006, the commission shall ensure that any
31overcollection or undercollection in the power procurement
32balancing account does not exceed 5 percent of the electrical
33corporation’s actual recorded generation revenues for the prior
34calendar year excluding revenues collected for the Department of
35Water Resources. The commission shall determine the schedule
36for amortizing the overcollection or undercollection in the
37balancing account to ensure that the 5 percent threshold is not
38exceeded. After January 1, 2006, this adjustment shall occur when
39deemed appropriate by the commission consistent with the
40objectives of this section.

P13   1(4) Moderate the price risk associated with serving its retail
2customers, including the price risk embedded in its long-term
3supply contracts, by authorizing an electrical corporation to enter
4into financial and other electricity-related product contracts.

5(5) Provide for just and reasonable rates, with an appropriate
6balancing of price stability and price level in the electrical
7corporation’s procurement plan.

8(e) The commission shall provide for the periodic review and
9prospective modification of an electrical corporation’s procurement
10plan.

11(f) The commission may engage an independent consultant or
12advisory service to evaluate risk management and strategy. The
13reasonable costs of any consultant or advisory service is a
14reimbursable expense and eligible for funding pursuant to Section
15631.

16(g) The commission shall adopt appropriate procedures to ensure
17the confidentiality of any market sensitive information submitted
18in an electrical corporation’s proposed procurement plan or
19resulting from or related to its approved procurement plan,
20including, but not limited to, proposed or executed power purchase
21agreements, data request responses, or consultant reports, or any
22combination, provided that the Office of Ratepayer Advocates and
23other consumer groups that are nonmarket participants shall be
24provided access to this information under confidentiality
25procedures authorized by the commission.

26(h) Nothing in this section alters, modifies, or amends the
27commission’s oversight of affiliate transactions under its rules and
28decisions or the commission’s existing authority to investigate and
29penalize an electrical corporation’s alleged fraudulent activities,
30or to disallow costs incurred as a result of gross incompetence,
31fraud, abuse, or similar grounds. Nothing in this section expands,
32modifies, or limits the State Energy Resources Conservation and
33Development Commission’s existing authority and responsibilities
34as set forth in Sections 25216, 25216.5, and 25323 of the Public
35Resources Code.

36(i) An electrical corporation that serves less than 500,000 electric
37retail customers within the state may file with the commission a
38request for exemption from this section, which the commission
39shall grant upon a showing of good cause.

P14   1(j) (1) Prior to its approval pursuant to Section 851 of any
2divestiture of generation assets owned by an electrical corporation
3on or after the date of enactment of the act adding this section, the
4commission shall determine the impact of the proposed divestiture
5on the electrical corporation’s procurement rates and shall approve
6a divestiture only to the extent it finds, taking into account the
7effect of the divestiture on procurement rates, that the divestiture
8is in the public interest and will result in net ratepayer benefits.

9(2) Any electrical corporation’s procurement necessitated as a
10result of the divestiture of generation assets on or after the effective
11date of the act adding this subdivision shall be subject to the
12mechanisms and procedures set forth in this section only if its
13actual cost is less than the recent historical cost of the divested
14generation assets.

15(3) Notwithstanding paragraph (2), the commission may deem
16proposed procurement eligible to use the procedures in this section
17upon its approval of asset divestiture pursuant to Section 851.

18(k) The commission shall direct electrical corporations to include
19in their proposed procurement plans the integration costs described
20and determined pursuant to clause (v) of subparagraph (A) of
21paragraph (4) of subdivision (a) of Section 399.13.

22

SEC. 3.  

No reimbursement is required by this act pursuant to
23Section 6 of Article XIII B of the California Constitution because
24the only costs that may be incurred by a local agency or school
25district will be incurred because this act creates a new crime or
26infraction, eliminates a crime or infraction, or changes the penalty
27for a crime or infraction, within the meaning of Section 17556 of
28the Government Code, or changes the definition of a crime within
29the meaning of Section 6 of Article XIII B of the California
30Constitution.



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