California Legislature—2015–16 Regular Session

Assembly BillNo. 2903


Introduced by Committee on Utilities and Commerce

March 3, 2016


An act to amend Sections 25301, 25302, 25417.5, and 25534 of the Public Resources Code, and to amend Section 343 of, to repeal Sections 619 and 623 of, and to repeal Division 1.5 (commencing with Section 3300) of, the Public Utilities Code, relating to public utilities.

LEGISLATIVE COUNSEL’S DIGEST

AB 2903, as introduced, Committee on Utilities and Commerce. Wharfingers: warehouseman: California Consumer Power and Conservation Financing Authority: energy crisis litigation.

Existing law, until January 1, 2018, requires the Attorney General to represent the Department of Finance and to succeed to all rights, claims, powers, and entitlements of the Electricity Oversight Board in any litigation or settlement to obtain ratepayer recovery for the effects of the 2000-02 energy crisis. Existing law additionally prohibits the Attorney General from expending the proceeds of any settlements of those claims, except as specified.

This bill would additionally require the Attorney General to represent the Department of Finance and to succeed to all rights, claims, powers, and entitlements of the California Consumer Power and Conservation Financing Authority in any litigation or settlement to obtain ratepayer recovery for the effects of the 2000-02 energy crisis and prohibit the Attorney General from expending the proceeds of any settlements of those claims, except as specified.

Existing law authorizes the Public Utilities Commission to supervise and regulate every public utility in the state. Chapter 1063 of the Statutes of 1980 deleted warehouseman as a category of public utility under the Public Utilities Act, but did not delete the stated authority granted a warehouseman under the act to condemn property necessary for the construction and maintenance of facilities for storing property. Chapter 369 of the Statutes of 1987 deleted wharfingers as a category of public utilities under the Public Utilities Act, but did not delete the stated authority granted to a wharfinger under the act to condemn property necessary for the construction and maintenance of facilities for the receipt or discharge of freight or passengers. However, the authority to condemn property under the act is applicable only to a corporation that is a public utility.

This bill would repeal the stated authority of a wharfinger or warehouseman to condemn property.

Existing law enacted during the 2000-02 energy crisis creates the California Consumer Power and Conservation Financing Authority, with prescribed powers and responsibilities, including the power to issue revenue bonds, for the purposes of augmenting electrical generating facilities to ensure a sufficient and reliable supply of electricity, financing incentives for investment in cost-effective, energy-efficient appliances and energy demand reduction, achieving a specified energy capacity reserve level, providing financing for the retrofit of inefficient electrical powerplants, renewable energy and conservation, and, where appropriate, developing strategies for the authority to facilitate a dependable supply of natural gas at reasonable prices to the public. Existing law prohibits the authority from approving any new program, enterprise, or project, on or after January 1, 2007, unless authority to approve such an activity is granted by statute enacted on or before January 1, 2007.

This bill would repeal the act establishing the authority and make other conforming changes.

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

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

P2    1

SECTION 1.  

Section 25301 of the Public Resources Code is
2amended to read:

3

25301.  

(a) At least every two years, the commission shall
4conduct assessments and forecasts of all aspects of energy industry
5supply, production, transportation, delivery and distribution,
P3    1demand, and prices. The commission shall use these assessments
2and forecasts to develop and evaluate energy policies and programs
3that conserve resources, protect the environment, ensure energy
4reliability, enhance the state’s economy, and protect public health
5and safety. To perform these assessments and forecasts, the
6commission may require submission of demand forecasts, resource
7plans, market assessments, related outlooks, individual customer
8historic electric or gas service usage, or both, and individual
9customer historic billing data, in a format and level of granularity
10specified by the commission from electric and natural gas utilities,
11 transportation fuel and technology suppliers, and other market
12participants. These assessments and forecasts shall be done in
13consultation with the appropriate state and federal agencies
14including, but not limited to, the Public Utilities Commission, the
15Office of Ratepayer Advocates, the Air Resources Board, the
16Electricity Oversight Board, the Independent System Operator,
17the Department of Water Resources,begin delete the California Consumer
18Power and Conservation Financing Authority,end delete
the Department of
19Transportation, and the Department of Motor Vehicles. The
20commission shall maintain reasonable policies and procedures to
21protect customer information from unauthorized disclosure.

22(b) In developing the assessments and forecasts prepared
23pursuant to subdivision (a), the commission shall do all of the
24following:

25(1) Provide information about the performance of energy
26industries.

27(2) Develop and maintain the analytical capability sufficient to
28answer inquiries about energy issues from government, market
29participants, and the public.

30(3) Analyze, develop, and evaluate energy policies and
31programs.

32(4) Provide an analytical foundation for regulatory and policy
33decisionmaking.

34(5) Facilitate efficient and reliable energy markets.

35

SEC. 2.  

Section 25302 of the Public Resources Code is
36amended to read:

37

25302.  

(a) Beginning November 1, 2003, and every two years
38thereafter, the commission shall adopt an integrated energy policy
39report. This integrated report shall contain an overview of major
40energy trends and issues facing the state, including, but not limited
P4    1to, supply, demand, pricing, reliability, efficiency, and impacts on
2public health and safety, the economy, resources, and the
3environment. Energy markets and systems shall be grouped and
4assessed in three subsidiary volumes:

5(1) Electricity and natural gas markets.

6(2) Transportation fuels, technologies, and infrastructure.

7(3) Public interest energy strategies.

8(b) The commission shall compile the integrated energy policy
9report prepared pursuant to subdivision (a) by consolidating the
10analyses and findings of the subsidiary volumes in paragraphs (1),
11(2), and (3) of subdivision (a). The integrated energy policy report
12shall present policy recommendations based on an indepth and
13integrated analysis of the most current and pressing energy issues
14facing the state. The analyses supporting this integrated energy
15policy report shall explicitly address interfuel and intermarket
16effects to provide a more informed evaluation of potential tradeoffs
17when developing energy policy across different markets and
18systems.

19(c) The integrated energy policy report shall include an
20assessment and forecast of system reliability and the need for
21resource additions, efficiency, and conservation that considers all
22aspects of energy industries and markets that are essential for the
23state economy, general welfare, public health and safety, energy
24diversity, and protection of the environment. This assessment shall
25be based on determinations made pursuant to this chapter.

26(d) Beginning November 1, 2004, and every two years thereafter,
27the commission shall prepare an energy policy review to update
28analyses from the integrated energy policy report prepared pursuant
29to subdivisions (a), (b), and (c), or to raise energy issues that have
30emerged since the release of the integrated energy policy report.
31The commission may also periodically prepare and release
32technical analyses and assessments of energy issues and concerns
33to provide timely and relevant information for the Governor, the
34Legislature, market participants, and the public.

35(e) In preparation of the report, the commission shall consult
36with the following entities: the Public Utilities Commission, the
37Office of Ratepayer Advocates, the State Air Resources Board,
38the Electricity Oversight Board, the Independent System Operator,
39the Department of Water Resources,begin delete the California Consumer
40Power and Conservation Financing Authority,end delete
the Department of
P5    1Transportation, and the Department of Motor Vehicles, and any
2federal, state, and local agencies it deems necessary in preparation
3of the integrated energy policy report. To assure collaborative
4development of state energy policies, these agencies shall make a
5good faith effort to provide data, assessment, and proposed
6recommendations for review by the commission.

7(f) The commission shall provide the report to the Public
8Utilities Commission, the Office of Ratepayer Advocates, the State
9Air Resources Board, the Electricity Oversight Board, the
10Independent System Operator, the Department of Water Resources,
11begin delete the California Consumer Power and Conservation Financing
12Authority,end delete
and the Department of Transportation. For the purpose
13of ensuring consistency in the underlying information that forms
14the foundation of energy policies and decisions affecting the state,
15those entities shall carry out their energy-related duties and
16responsibilities based upon the information and analyses contained
17in the report. If an entity listed in this subdivision objects to
18information contained in the report, and has a reasonable basis for
19that objection, the entity shall not be required to consider that
20information in carrying out its energy-related duties.

21(g) The commission shall make the report accessible to state,
22local, and federal entities and to the general public.

23

SEC. 3.  

Section 25417.5 of the Public Resources Code is
24amended to read:

25

25417.5.  

(a) In furtherance of the purposes of the commission
26as set forth in this chapter, the commission has the power and
27authority to do all of the following:

28(1) Borrow money, for the purpose of obtaining funds to make
29loans pursuant to this chapter, from the California Economic
30Development Financingbegin delete Authority,end deletebegin insert Authority andend insert the California
31Infrastructure and Economic Developmentbegin delete Bank, and the California
32Consumer Power and Conservation Financing Authorityend delete
begin insert Bankend insert
33 from the proceeds of revenue bonds issued bybegin delete anyend deletebegin insert eitherend insert of those
34agencies.

35(2) Pledge, to provide collateral in connection with the
36borrowing of money pursuant to paragraph (1), loans made
37pursuant to this chapter or Chapter 5.4 (commencing with Section
3825440), or the principal and interest payments on loans made
39pursuant to this chapter or Chapter 5.4 (commencing with Section
4025440).

P6    1(3) Sell loans made pursuant to this chapter or Chapter 5.4
2(commencing with Section 25440), at prices determined in the
3sole discretion of the commission, to the California Economic
4Development Financingbegin delete Authority,end deletebegin insert Authority andend insert the California
5Infrastructure and Economic Developmentbegin delete Bank, and the California
6Consumer Power and Conservation Financing Authorityend delete
begin insert Bankend insert to
7raise funds to enable the commission to make loans to eligible
8institutions.

9(4) Enter into loan agreements or other contracts necessary or
10appropriate in connection with the pledge or sale of loans pursuant
11to paragraph (2) or (3), or the borrowing of money as provided in
12paragraph (1), containing any provisions that may be required by
13the California Economic Development Financingbegin delete Authority,end delete
14begin insert Authority orend insert the California Infrastructure and Economic
15Developmentbegin delete Bank, or the California Consumer Power and
16Conservation Financing Authorityend delete
begin insert Bankend insert as conditions of issuing
17bonds to fund loans to, or the purchase of loans from, the
18commission.

19(b) In connection with the pledging of loans, or of the principal
20and interest payment on loans, pursuant to paragraph (2) of
21subdivision (a), the commission may enter into pledge agreements
22setting forth the terms and conditions pursuant to which the
23commission is pledging loans or the principal and interest payment
24on loans, and may also agree to have the loans held by bond
25trustees or by independent collateral or escrow agents and to direct
26that payments received on those loans be paid to those trustee,
27collateral, or escrow agents.

28(c) The commission may employ financial consultants, legal
29advisers, accountants, and other service providers, as may be
30necessary in its judgment, in connection with activities pursuant
31to this chapter.

32(d) Notwithstanding any other provision of law, this chapter
33provides a complete, separate, additional, and alternative method
34for implementing the measures authorized by this chapter,
35including the authority of the eligible institutions or local
36jurisdictions to have borrowed and to borrow in the future pursuant
37to loans made pursuant to this chapter or Chapter 5.4 (commencing
38with Section 25440), and is supplemental and additional to powers
39conferred by other laws.

P7    1

SEC. 4.  

Section 25534 of the Public Resources Code is
2amended to read:

3

25534.  

(a) The commission may, after one or more hearings,
4amend the conditions of, or revoke the certification for, any facility
5for any of the following reasons:

6(1) Any material false statement set forth in the application,
7presented in proceedings of the commission, or included in
8supplemental documentation provided by the applicant.

9(2) Any significant failure to comply with the terms or
10conditions of approval of the application, as specified by the
11commission in its written decision.

12(3) A violation of this division or any regulation or order issued
13by the commission under this division.

14(4) The owner of a project does not start construction of the
15project within 12 months after the date all permits necessary for
16the project become final and all administrative and judicial appeals
17have beenbegin delete resolved provided the California Consumer Power and
18Conservation Financing Authority notifies the commission that it
19is willing and able to construct the project pursuant to subdivision
20(g).end delete
begin insert resolved.end insert The project owner may extend the 12-month period
21by 24 additional months pursuant to subdivision (f). This paragraph
22applies only to projects with a project permit application deemed
23complete by the commission after January 1, 2003.

24(b) The commission may also administratively impose a civil
25 penalty for a violation of paragraph (1) or (2) of subdivision (a).
26Any civil penalty shall be imposed in accordance with Section
2725534.1 and may not exceed seventy-five thousand dollars
28($75,000) per violation, except that the civil penalty may be
29increased by an amount not to exceed one thousand five hundred
30dollars ($1,500) per day for each day in which the violation occurs
31or persists, but the total of the per day penalties may not exceed
32fifty thousand dollars ($50,000).

33(c) A project owner shall commence construction of a project
34subject to the start-of-construction deadline provided by paragraph
35(4) of subdivision (a) within 12 months after the project has been
36certified by the commission and after all accompanying project
37permits are final and administrative and judicial appeals have been
38completed. The project owner shall submit construction and
39commercial operation milestones to the commission within 30
40days after project certification. Construction milestones shall
P8    1require the start of construction within the 12-month period
2established by this subdivision. The commission shall approve
3milestones within 60 days after project certification. If the 30-day
4deadline to submit construction milestones to the commission is
5not met, the commission shall establish milestones for the project.

6(d) The failure of the owner of a project subject to the
7start-of-construction deadline provided by paragraph (4) of
8subdivision (a) to meet construction or commercial operation
9milestones, without a finding by the commission of good cause,
10shall be cause for revocation of certification or the imposition of
11other penalties by the commission.

12(e) A finding by the commission that there is good cause for
13failure to meet the start-of-construction deadline required by
14paragraph (4) of subdivision (a) or any subsequent milestones of
15subdivision (c) shall be made if the commission determines that
16any of the following criteria are met:

17(1) The change in any deadline or milestone does not change
18the established deadline or milestone for the start of commercial
19operation.

20(2) The deadline or milestone is changed due to circumstances
21beyond the project owner’s control, including, but not limited to,
22administrative and legal appeals.

23(3) The deadline or milestone will be missed but the project
24owner demonstrates a good faith effort to meet the project deadline
25or milestone.

26(4) The deadline or milestone will be missed due to unforeseen
27natural disasters or acts of God that prevent timely completion of
28the project deadline or milestone.

29(5) The deadline or milestone will be missed for any other reason
30determined reasonable by the commission.

31(f) The commission shall extend the start-of-construction
32deadline required by paragraph (4) of subdivision (a) by an
33additional 24 months, if the owner reimburses the commission’s
34actual cost of licensing the project, less the amount paid pursuant
35to subdivision (a) of Section 25806. For the purposes of this
36section, the commission’s actual cost of licensing the project shall
37be based on a certified audit report filed by the commission staff
38within 180 days of the commission’s certification of the project.
39The certified audit shall be filed and served on all parties to the
40proceeding, is subject to public review and comment, and is subject
P9    1to at least one public hearing if requested by the project owner.
2Any reimbursement received by the commission pursuant to this
3subdivision shall be deposited in the General Fund.

begin delete

4(g) If the owner of a project subject to the start-of-construction
5deadline provided by paragraph (4) of subdivision (a) fails to
6commence construction, without good cause, within 12 months
7after the project has been certified by the commission and has not
8received an extension pursuant to subdivision (f), the commission
9shall provide immediate notice to the California Consumer Power
10and Conservation Financing Authority. The authority shall evaluate
11whether to pursue the project independently or in conjunction with
12any other public or private entity, including the original certificate
13holder. If the authority demonstrates to the commission that it is
14willing and able to construct the project either independently or
15in conjunction with any other public or private entity, including
16the original certificate holder, the commission may revoke the
17original certification and issue a new certification for the project
18to the authority, unless the authority’s statutory authorization to
19finance or approve new programs, enterprises, or projects has
20expired. If the authority declines to pursue the project, the permit
21shall remain with the current project owner until it expires pursuant
22to the regulations adopted by the commission.

23(h) If the commission issues a new certification for a project
24subject to the start-of-construction deadline provided by paragraph
25(4) of subdivision (a) to the authority, the commission shall adopt
26new milestones for the project that allow the authority up to 24
27months to start construction of the project or to start to meet the
28applicable deadlines or milestones. If the authority fails to begin
29construction in conformity with the deadlines or milestones adopted
30by the commission, without good cause, the certification may be
31revoked.

32(i) (1) If the commission issues a new certification for a project
33subject to the start-of-construction deadline provided by paragraph
34(4) of subdivision (a) to the authority and the authority pursues
35the project without participation of the original certificate holder,
36the authority shall offer to reimburse the original certificate holder
37for the actual costs the original certificate holder incurred in
38permitting the project and in procuring assets associated with the
39license, including, but not limited to, major equipment and the
40emission offsets. In order to receive reimbursement, the original
P10   1certificate holder shall provide to the commission documentation
2of the actual costs incurred in permitting the project. The
3commission shall validate those costs. The certificate holder may
4refuse to accept the offer of reimbursement for any asset associated
5with the license and retain the asset. To the extent the certificate
6holder chooses to accept the offer for an asset, it shall provide the
7authority with the asset.

8(2) If the authority reimburses the original certificate holder for
9the costs described in paragraph (1), the original certificate holder
10shall provide the authority with all of the assets for which the
11original certificate holder received reimbursement.

12(j)

end delete

13begin insert(g)end insert This section does not prevent a certificate holder from selling
14its license to construct and operate a project prior to its revocation
15by the commission. In the event of a sale to an entity that is not
16an affiliate of the certificate holder, the commission shall adopt
17new deadlines or milestones for the project that allow the new
18 certificate holder up to 12 months to start construction of the
19project or to start to meet the applicable deadlines or milestones.

begin delete

20(k)

end delete

21begin insert(h)end insert Paragraph (4) of subdivision (a) and subdivisions (c) tobegin delete (j),end delete
22begin insert (g),end insert inclusive, do not apply to licenses issued for the modernization,
23repowering, replacement, or refurbishment of existing facilities or
24to a qualifying small power production facility or a qualifying
25cogeneration facility within the meaning of Sections 201 and 210
26of Title II of the federal Public Utility Regulatory Policies Act of
271978 (16 U.S.C. Secs. 796(17), 796(18), and 824a-3), and the
28regulations adopted pursuant to those sections by the Federal
29Energy Regulatory Commission (18 C.F.R. Parts 292.101 to
30292.602, inclusive), nor shall those provisions apply to any other
31generation units installed, operated, and maintained at a customer
32site exclusively to serve that facility’s load. For the purposes of
33this subdivision, “replacement” of an existing facility includes,
34but is not limited to, a comparable project at a location different
35than the facility being replaced, provided that the commission
36certifies that the new project will result in the decommissioning
37of the existing facility.

begin delete

38(l)

end delete

39begin insert(i)end insert Paragraph (4) of subdivision (a) and subdivisions (c) tobegin delete (j),end delete
40begin insert (g),end insert inclusive, do not apply to licenses issued to “local publicly
P11   1owned electric utilities,” as defined in Section 224.3 of the Public
2Utilities Code, whose governing bodies certify to the commission
3that the project is needed to meet the projected native load of the
4local publicly owned utility.

begin delete

5(m)

end delete

6begin insert(j)end insert To implement this section, the commissionbegin delete and the California
7Consumer Power and Conservation Financing Authority may, in
8consultation with each other,end delete
begin insert mayend insert adopt emergency regulations in
9accordance with Chapter 3.5 (commencing with Section 11340)
10of Part 1 of Division 3 of Title 2 of the Government Code. For
11purposes of that chapter, including, without limitation, Section
1211349.6 of the Government Code, the adoption of the regulations
13shall be considered by the Office of Administrative Law to be
14necessary for the immediate preservation of the public peace, health
15and safety, or general welfare.

16

SEC. 5.  

Section 343 of the Public Utilities Code is amended
17to read:

18

343.  

(a) The Attorney General shall represent the Department
19of Finance and shall succeed to, and may exercise, all rights,
20claims, powers, and entitlements of the Electricity Oversight Board
21begin insert and the California Consumer Power and Conservation Financing
22Authorityend insert
in any litigation or settlement to obtain ratepayer
23recovery for the effects of the 2000-02 energy crisis. This section
24does not require the Attorney General to litigate any claim, or take
25any other action, as successor to the Electricity Oversightbegin delete Board.end delete
26begin insert Board or the California Consumer Power and Conservation
27Financing Authority.end insert

28(b) The Attorney General shall not distribute or expend the
29proceeds of any settlements of claims described in subdivision (a),
30except in accordance with Article 9.5 (commencing with Section
3116428.1) of Chapter 2 of Part 2 of Division 4 of Title 2 of the
32Government Code and Division 27 (commencing with Section
3380000) of the Water Code.

34(c) The Attorney General shall not distribute or expend the
35proceeds of any settlements of claims allocated to the Electricity
36Oversightbegin delete Board.end deletebegin insert Board or the California Consumer Power and
37Conservation Financing Authority.end insert

38(d) This section shall remain in effect only until January 1, 2018,
39and as of that date is repealed, unless a later enacted statute, that
40is enacted before January 1, 2018, deletes or extends that date.

P12   1

SEC. 6.  

Section 619 of the Public Utilities Code is repealed.

begin delete
2

619.  

A wharfinger may condemn any property necessary for
3the construction and maintenance of facilities for the receipt or
4discharge of freight or passengers.

end delete
5

SEC. 7.  

Section 623 of the Public Utilities Code is repealed.

begin delete
6

623.  

A warehouseman may condemn any property necessary
7for the construction and maintenance of its facilities for storing
8property.

end delete
9

SEC. 8.  

Division 1.5 (commencing with Section 3300) of the 10Public Utilities Code is repealed.



O

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