BILL NUMBER: AB 2395 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 17, 2016
INTRODUCED BY Assembly Member Low
FEBRUARY 18, 2016
An act to amend Section 372 of add Section
711 to the Public Utilities Code, relating to
electrical restructuring. telecommunications.
LEGISLATIVE COUNSEL'S DIGEST
AB 2395, as amended, Low. Electrical restructuring:
cogeneration. Telecommunications: replacement of
public switched telephone network.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including telephone corporations.
Existing law, until January 1, 2020, prohibits the commission from
regulating Voice over Internet Protocol and Internet Protocol enabled
service (IP enabled service), as defined, except as required or
delegated by federal law or expressly provided otherwise in statute.
This bill would require a telephone corporation that is
transitioning to IP enabled services and networks to complete a
customer education and outreach program explaining the transition
from legacy public switched telephone network services regulated by
the commission to IP enabled services, the benefits and advantages of
IP enabled services, a description of the advanced services
available to consumers, and information regarding the projected
timeframes for the transition, including that withdrawal of any voice
grade single-line telephone service will not take place prior to
January 1, 2020. The bill would prohibit a telephone corporation from
withdrawing any voice grade single-line telephone services without
first giving prior notice to the commission certifying (1) that the
telephone corporation has completed the education and outreach
program, and (2) that an alternative voice service is available for
the affected customers in the affected area. The bill would require
the commission to conduct a technical review to confirm that the
replacement service has specified elements. Upon completion of these
steps, but no sooner than January 1, 2020, the bill would authorize a
telephone corporation to elect to discontinue legacy telephone
service upon providing not less than 90-days' notice to the affected
customers and to the commission, as specified. The bill would
authorize a customer of the telephone corporation, within 30 days
after receipt of the notice of withdrawal of legacy voice service to
petition the commission to review the availability of the alternative
service at the customer's location. The bill would require the
commission to issue an order disposing of the petition not later than
60 days after its filing. The bill would authorize the commission,
if it determines after investigation that no alternative service is
available to that customer at the customer's location, to attempt to
identify a willing provider of voice service to serve the customer,
and if no willing provider is identified, to order the withdrawing
telephone corporation to provide voice service to the customer for a
period no longer than 12 months after withdrawal. The bill would
require the commission to establish a universal connectivity program
by September 1, 2019, to ensure that those customers for whom the
commission has ordered the withdrawing telephone corporation to
provide voice services for the 12-month period will continue to have
voice service available after that period.
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 are within the act and require
action by the commission to implement its requirements, a violation
of these provisions would impose a state-mandated local program by
creating a new 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.
Provisions of the Public Utilities Act restructuring the electrical
services industry state the policy of the state to encourage and
support the development of cogeneration as an efficient,
environmentally beneficial, competitive energy resource that will
enhance the reliability of local generation supply, and promote local
business growth.
This bill would make nonsubstantive changes to the policy of the
state relative to cogeneration.
Vote: majority. Appropriation: no. Fiscal committee: no
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) California continues to be the world's advanced technology
leader, the center of the innovation economy, and a pioneer in clean
and sustainable technology. The state must adopt a strategy to build
our digital infrastructure while retiring outdated technology. The
transition from 20th century traditional circuit-switched and other
legacy telephone services to 21st century next-generation Internet
Protocol (IP) networks and services is taking place at an
extraordinary pace. A significant majority of Californians have
already transitioned to upgraded communications services such as
high-speed Internet, Voice over Internet Protocol (VoIP), and mobile
telephony services.
(b) Between 1999 and 2015, California witnessed an estimated 85
percent decline in landlines providing legacy telephone services and
relying on dated technology. At the same time, consumer adoption of
advanced services over IP-based networks has continued to grow.
Californians have quickly adopted new technologies to communicate.
More than 9 out of 10 Californians use a smartphone or other mobile
devices, 86 percent use the Internet, and there are over 5.7 million
VoIP subscriptions. As of 2014, approximately 6 percent of
Californians resided in households with only a landline, a 44 percent
decline from 2010.
(c) So many California consumers have made this transition so
quickly because IP-based services offer greater functionality than
legacy phone service. The gap will only widen with the continuing
integration of IP networks with cloud computing and the Internet of
Things. The policy of the state is to help all Californians
transition to advanced and clean technologies and services so that
everyone, including low-income, senior, and rural communities, can
benefit from and participate fully in 21st century modern life.
(d) The legacy telephone network is outdated, underutilized, and
carbon-unfriendly when compared to the IP network. Vital economic,
educational, health, and civic opportunities, including online
learning, telemedicine, remote working, e-government services, and
public safety, are not optimized on the outdated network. The
transition from older, dated technologies to newer, more advanced
technologies is nearly complete, and at some point in the
not-too-distant future it will no longer be economically viable or
environmentally sound to maintain legacy networks and services. The
consumer demand will not be there, the economics will not support it,
and the associated environmental burden will be disproportionate to
its long past benefits.
(e) Recent studies show that transitioning from a legacy switched
network to an all IP network can reduce energy costs by as much as 70
percent, reduce water use for cooling by as much as 70 percent, and
reduce emissions of greenhouse gases by as much as 40 percent. IP
services themselves provide even further benefits, including reduced
fuel and electricity use through smart logistics and telematics for
efficient traffic and route management, and automated monitoring of
energy use related to lighting and climate control. IP-based
technologies, including remote water leakage detection and control
and smart irrigation solutions for agriculture, may also serve to
enable efficient use of water by consumers.
(f) (1) This act will provide a path for the telecommunications
industry to make significant contributions toward the state's goals
for energy use and emissions of greenhouse gases, as set forth in the
California Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code) and
the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of
the Statutes of 2015).
(2) This act will establish state policy for a clearly
communicated, planned, and orderly transition from outdated
technology to cleaner advanced technologies, so that continuity of
service for consumers and businesses is ensured, while maintaining
safeguards to preserve universal connectivity.
(3) This act will ensure that the advanced services replacing
legacy services provide quality voice service and access to emergency
communications as part of a 21st century policy framework.
(4) This act will ensure that advanced services are available to
replace legacy services before the transition, so that all
Californians are able to benefit from the opportunities presented by
advanced technologies and services.
SEC. 2. Section 711 is added to the
Public Utilities Code , to read:
711. (a) A telephone corporation transitioning to IP-enabled
services and networks shall complete a customer education and
outreach program explaining the IP transition, its benefits and
advantages, including the environmental benefits and advantages, and
a description of the advanced services available to consumers. The
customer education and outreach program shall also include
information regarding the projected timeframes for the transition,
including the fact that the withdrawal of any voice grade single-line
telephone service will not take place prior to January 1, 2020.
(b) A telephone corporation planning to discontinue any voice
grade single-line telephone service shall first give prior notice to
the commission certifying both of the following:
(1) The telephone corporation has completed the education and
outreach program prescribed in subdivision (a).
(2) An alternative voice service is available for the affected
customers in the affected area.
(c) Upon receipt of the notice to withdraw, the commission shall
conduct a technical review to confirm that the alternative service
has all of the following elements:
(1) Voice grade access to the public switched telephone network or
its successor.
(2) Real-time, two-way voice communications.
(3) Access for end users of those services to the local emergency
telephone systems described in the Warren-911-Emergency Assistance
Act (Article 6 (commencing with Section 53100) of Chapter 1 of Part 1
of Division 2 of Title 5 of the Government Code), and where
available, enhanced 911 access.
(4) Alternative services that require a residential power supply
to operate shall also provide backup-battery capability consistent
with the standard established by the Federal Communications
Commission.
(d) The commission's technical review shall be limited to the
determination of whether the alternative service has the elements set
forth in subdivision (c) and shall be completed within 120 days from
receipt of notice from the telephone corporation pursuant to
subdivision (b). If the commission fails to complete its technical
review within 120 days from receipt of notice, the telephone
corporation will be conclusively presumed to have complied with the
requirements of subdivisions (b) and (c).
(e) Upon completion of the requirements of subdivisions (b), (c),
and (d) for voice grade single-line services, but no sooner than
January 1, 2020, a telephone corporation may elect to discontinue any
legacy telephone service, upon giving no less than 90-days' prior
notice to the affected customers and to the commission. If the
discontinuance of legacy telephone service includes voice grade
single-line services, the notice shall include information regarding
the availability of an alternative service as verified by the
commission in the technical review, how to petition the commission
for review of the availability of the alternative service at the
customer's location, and any environmental benefit that will come
with the discontinuance of legacy services and the migration to
alternative services. During the notice period, the telephone
corporation shall continue to provide the legacy telephone service to
the affected customers, except a customer that disconnects or
changes the features of the service, but shall have no obligation to
provide the legacy telephone service to any new customers in the
affected area.
(f) Notwithstanding Section 710, within 30 days after receipt of a
telephone corporation's notice of withdrawal of legacy voice
service, a customer may petition the commission to review the
availability of the alternative service at the customer's location.
The commission shall issue an order disposing of the petition not
later than 60 days after the filing of the petition. If the
commission determines after an investigation that no alternative
service is available to the customer at the customer's location, the
commission shall attempt to identify a willing provider of voice
service to serve the customer. If no willing provider is identified,
the commission may order the withdrawing telephone corporation to
provide voice service to the customer at the customer's location for
a period no longer than 12 months after withdrawal. The willing
provider or the withdrawing telephone corporation may utilize any
technology or service arrangement to provide the voice services as
long as it meets the requirements of subdivision (c).
(g) By September 1, 2019, the commission shall establish a
universal connectivity program to ensure that those customers for
whom the commission has ordered the withdrawing telephone corporation
to provide voice services for the 12-month period in subdivision (f)
will continue to receive voice service.
(h) Nothing in this section grants the commission jurisdiction or
control over an alternative service except as specifically set forth
in this section.
(i) Nothing in this section affects a telephone corporation's
ability to withdraw services under any other law.
SEC. 3. 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 372 of the Public Utilities
Code is amended to read:
372. (a) It is the policy of the state to encourage and support
the development of cogeneration as an efficient, environmentally
beneficial, competitive energy resource that will enhance the
reliability of local generation supply, and promote local business
growth. Subject to the specific conditions provided in this section,
the commission shall determine the applicability to customers of
uneconomic costs as specified in Sections 367, 368, 375, and 376.
Consistent with this state policy, the commission shall provide that
these costs shall not apply to any of the following:
(1) To load served onsite or under an over-the-fence arrangement
by a nonmobile self-cogeneration or cogeneration facility that was
operational on or before December 20, 1995, or by increases in the
capacity of a facility to the extent that the increased capacity was
constructed by an entity holding an ownership interest in or
operating the facility and does not exceed 120 percent of the
installed capacity as of December 20, 1995, provided that before June
30, 2000, the costs shall apply to over-the-fence arrangements
entered into after December 20, 1995, between unaffiliated parties.
For the purposes of this subdivision, "affiliated" means a person or
entity that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common
control with another specified entity. "Control" means either of the
following:
(A) The possession, directly or indirectly, of the power to direct
or to cause the direction of the management or policies of a person
or entity, whether through an ownership, beneficial, contractual, or
equitable interest.
(B) Direct or indirect ownership of at least 25 percent of an
entity, whether through an ownership, beneficial, or equitable
interest.
(2) To load served by onsite or under an over-the-fence
arrangement by a nonmobile self-cogeneration or cogeneration facility
for which the customer was committed to construction as of December
20, 1995, provided that the facility was substantially operational on
or before January 1, 1998, or by increases in the capacity of a
facility to the extent that the increased capacity was constructed by
an entity holding an ownership interest in or operating the facility
and does not exceed 120 percent of the installed capacity as of
January 1, 1998, provided that before June 30, 2000, the costs shall
apply to over-the-fence arrangements entered into after December 20,
1995, between unaffiliated parties.
(3) To load served by existing, new, or portable emergency
generation equipment used to serve the customer's load requirements
during periods when utility service is unavailable, provided the
emergency generation is not operated in parallel with the integrated
electric grid, except on a momentary parallel basis.
(4) After June 30, 2000, to a load served onsite or under an
over-the-fence arrangement by a nonmobile self-cogeneration or
cogeneration facility.
(b) Further, consistent with state policy, with respect to
self-cogeneration or cogeneration deferral agreements, the commission
shall do the following:
(1) Provide that a utility shall execute a final self-cogeneration
or cogeneration deferral agreement with a customer that, on or
before December 20, 1995, had executed a letter of intent (or similar
documentation) to enter into the agreement with the utility,
provided that the final agreement shall be consistent with the terms
and conditions set forth in the letter of intent and the commission
shall review and approve the final agreement.
(2) Provide that a customer that holds a self-cogeneration or
cogeneration deferral agreement that was in place on or before
December 20, 1995, or that was executed pursuant to paragraph (1) in
the event the agreement expires, or is terminated, may do any of the
following:
(A) Continue through December 31, 2001, to receive utility service
at the rate and under terms and conditions applicable to the
customer under the deferral agreement that, as executed, includes an
allocation of uneconomic costs consistent with subdivision (e) of
Section 367.
(B) Engage in a direct transaction for the purchase of electricity
and pay uneconomic costs consistent with Sections 367, 368, 375, and
376.
(C) Construct a self-cogeneration or cogeneration facility of
approximately the same capacity as the facility previously deferred,
provided that the costs provided in Sections 367, 368, 375, and 376
shall apply consistent with subdivision (e) of Section 367, unless
otherwise authorized by the commission pursuant to subdivision (c).
(3) Subject to the firewall described in subdivision (e) of
Section 367, provide that the ratemaking treatment for
self-cogeneration or cogeneration deferral agreements executed before
December 20, 1995, or executed pursuant to paragraph (1) shall be
consistent with the ratemaking treatment for the contracts approved
before January 1995.
(c) The commission shall authorize, within 60 days of the receipt
of a joint application from the serving utility and one or more
interested parties, applicability conditions as follows:
(1) The costs identified in Sections 367, 368, 375, and 376 shall
not, before June 30, 2000, apply to load served onsite by a nonmobile
self-cogeneration or cogeneration facility that became operational
on or after December 20, 1995.
(2) The costs identified in Sections 367, 368, 375, and 376 shall
not, before June 30, 2000, apply to a load served under
over-the-fence arrangements entered into after December 20, 1995,
between unaffiliated entities.
(d) For the purposes of this subdivision, all onsite or
over-the-fence arrangements shall be consistent with Section 218 as
it existed on December 20, 1995.
(e) To facilitate the development of new microcogeneration
applications, electrical corporations may apply to the commission for
a financing order to finance the transition costs to be recovered
from customers employing the applications.
(f) To encourage the continued development, installation, and
interconnection of clean and efficient self-generation and
cogeneration resources, to improve system reliability for consumers
by retaining existing generation and encouraging new generation to
connect to the electric grid, and to increase self-sufficiency of
consumers of electricity through the deployment of self-generation
and cogeneration, both of the following shall occur:
(1) The commission and the Electricity Oversight Board shall
determine if a policy or action undertaken by the Independent System
Operator, directly or indirectly, unreasonably discourages the
connection of existing self-generation or cogeneration or new
self-generation or cogeneration to the grid.
(2) If the commission and the Electricity Oversight Board find
that a policy or action of the Independent System Operator
unreasonably discourages the connection of existing self-generation
or cogeneration or new self-generation or cogeneration to the grid,
the commission and the Electricity Oversight Board shall undertake
all necessary efforts to revise, mitigate, or eliminate that policy
or action of the Independent System Operator.