BILL ANALYSIS Ó
SB 286
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Date of Hearing: August 26, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 286
(Hertzberg) - As Amended August 18, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill requires the Public Utilities Commission (PUC) to
allow individual retail nonresidential end-use customers to
contract directly for their electricity supplies, also known as
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direct access (DA). Specifically, this bill:
1)Expands the existing direct access program to allow 8,000
gigawatt-hours (GWh) of new direct access customers over a
period of three years.
2)Allocates the 8,000 GWh proportionally among electrical
corporation service areas.
3)Requires the electricity provided under this program to meet
the definition of renewable energy as defined in the
California Renewable Portfolio Standard (RPS), including
procurement in excess of the RPS requirement.
4)Requires nonresidential retail end-use DA customers to pay for
their proportionate share of specified costs for efficiency,
low-income, research and other programs.
5)Requires electrical corporations to continue to: 1) construct,
own, and operate distribution system equipment; and 2) provide
distribution system support directly with their own employees.
Sunsets this requirement January 1, 2021
6)Requires electrical corporations to continue to provide
services on behalf of direct access customers, including
billing, customer service, call centers, support services, and
line clearance tree trimming through its own employees.
7)Allows construction of distribution system equipment and line
clearance tree trimming to be performed pursuant to contracts
between the electrical corporation and another entity.
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FISCAL EFFECT:
Increased one-time PUC costs of $600,000 for the first year and
a half and on-going annual costs of $250,000 for increased
oversight and management of the expanded DA program (Public
Utilities Reimbursement Account).
COMMENTS:
1)Purpose. According to the author, this bill will allow
commercial and industrial customers to choose alternative
electricity service with 100% renewable energy, and sign
contracts for delivery of electricity separate from the local
utility company. The author further states that this bill
will encourage competition and reduce prices for electricity.
2)Background. In the past, pursuant to AB 1890 (Brulte) Chapter
854, Statutes of 1996, Investor - owned utilities (IOU)
customers were allowed to elect to receive electric service
from a provider other than the IOU, a service known as DA, in
an effort to provide more competition. The other providers of
electrical service are known as Electric Service Providers
(ESPs). In reaction to the California electricity crisis in
2000 and 2001, the Legislature suspended DA, though existing
DA contracts were allowed to continue.
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In 2009, the Legislature passed SB 695 (Kehoe, Chapter 337,
Statutes of 2009), which reopened DA. More
specifically, SB 695 directed the PUC to allow nonresidential
end-use customers to acquire
electric service from ESPs in each IOUs service territory, up to
a specified limit. SB 695 set the limit for each IOU equal to
the maximum total KWh supplied by all ESPs to DA customers
of the IOU during any sequential 12-month period between
April 1, 1998, and October 11, 2009. After accounting for
existing DA contracts, SB 695 opened up an additional
8,354 gigawatt hours (GWh) of DA service.
Currently, no new customer may contract with an ESP for DA
service unless an existing customer
drops out. As of 2014, there was a waiting list for DA service
by 845 customers
for a load totaling 6,131 GWh.
Existing law subjects ESPs to the same requirements that are
applicable to the state's three largest
IOUs for resource adequacy, the renewables portfolio standard
(RPS), and the
requirements for the electricity sector adopted by the
California Air Resources Board
pursuant to the California Global Warming Solutions Act of 2006
(AB 32, Chapter 488,
Statutes of 2006).
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081
SB 286
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