BILL NUMBER: AB 40 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 30, 2009
INTRODUCED BY Assembly Member Fuentes
DECEMBER 1, 2008
An act to amend Section 728.1 of the Public Utilities
Code, relating to electricity. An act to add Section
13552.7 to the Water Code, relating to water.
LEGISLATIVE COUNSEL'S DIGEST
AB 40, as amended, Fuentes. Electricity: rates: plant
held for future use account. Water: reasonable use:
electrical generation facilities.
The California Constitution provides that the right to water shall
be limited to that amount of water that is reasonably required for
the beneficial use to be served. Existing law declares that the use
of potable domestic water for cooling towers is a waste or an
unreasonable use of water if recycled water is available and other
requirements are met.
The existing renewables portfolio standard program requires that a
retail seller of electricity, including electrical corporations,
community choice aggregators, and electric service providers, but not
including local publicly owned electric utilities, purchase a
specified minimum percentage of electricity generated by eligible
renewable energy resources, as defined, in any given year as a
specified percentage of total kilowatthours sold to retail end-use
customers each calendar year.
This bill would declare that the use of water for cooling or any
other purpose in an eligible renewable energy resource is a
beneficial use of water and that the use of potable domestic water
for cooling towers that are part of a generating system that is an
eligible renewable energy resource is a reasonable use of water if
certain requirements are met.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations.
Existing law authorizes the commission to fix the rates and charges
for every public utility, and requires that those rates and charges
be just and reasonable. Existing law authorizes the commission to
establish rules, and prescribe a uniform system of accounts, for all
public utilities. Pursuant to this authority, the commission has
adopted a uniform system of accounts for public utilities and
licensees, including an account for plant held for future use, and
established guidelines for the account. Existing law requires the
commission to review the status of all property of a gas or
electrical corporation carried in its plant held for future use
account at least once every 3 years or during a ratemaking
proceeding, for purposes of fixing the rates of the gas or electrical
corporation, and prescribes the manner in which gain accruing from
the sale of property held in the account is to be allocated between
the utility and ratepayers.
This bill would make a nonsubstantive clarifying change to
existing law relative to how gain accruing from the sale of property
carried in the plant held for future use account is to be allocated
between the gas or electrical corporation and ratepayers.
Existing law requires the State Energy Resources Conservation and
Development Commission (Energy Commission) to adopt a strategic plan
for the state's electric transmission grid and requires that the plan
identify and recommend actions required to implement investments
needed to ensure reliability, relieve congestion, and to meet future
growth in load and generation. Existing law authorizes the Energy
Commission to designate a transmission corridor zone on its own
motion or by application of a person that plans to construct a
high-voltage electric transmission line within the state and provides
that the designation of a transmission corridor zone shall serve to
identify a feasible corridor where a future transmission line can be
built that is consistent with the state's needs and objectives as set
forth in the strategic plan adopted by the Energy Commission.
This bill would require the commission to review its guidelines
for the plant held for future use account and determine whether it
needs to open a proceeding to adjust the time period allowed for a
property to be held in the account. The bill would require the
commission to consider whether it should amend the guidelines, or add
a separate guideline to allow a distinct time period for real
property located within a transmission corridor zone designated by
the Energy Commission. The bill would require that if the commission
amends the existing guidelines, or adds a separate guideline,
pursuant to the bill's requirements, that the commission ensure that
any gains or losses from the sale or reassignment of any interest in
real property acquired by the electrical corporation that is subject
to the amended or new guideline, are allocated between customers and
shareholders proportionately to the risks involved.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 13552.7 is added to the
Water Code , to read:
13552.7. (a) The Legislature finds and declares that it is in the
interest of the state to construct generating facilities that are
eligible renewable energy resources, as described in Article 16
(commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division
1 of the Public Utilities Code.
(b) The use of water for cooling or any other purpose in an
eligible renewable energy resource is a beneficial use of water.
(c) Notwithstanding Section 13552.6, the use of potable domestic
water for cooling towers that are part of a generating facility that
is an eligible renewable energy resource is a reasonable use of water
within the meaning of Section 2 of Article X of the California
Constitution if all of the following requirements are met:
(1) The generating facility is an eligible renewable energy
resource that meets the requirements of Article 16 (commencing with
Section 399.11) of Chapter 2.3 of Part 1 of Division 1 of the Public
Utilities Code.
(2) The facility would not have a significant effect on the
environment, as defined in Section 21068 of the Public Resources
Code, to groundwater resources after mitigation measures are
implemented. For purposes of this paragraph, a significant effect on
the environment with respect to groundwater resources includes a
water use that would cause the production rate of preexisting nearby
wells to drop to a level that would not support existing land uses or
planned uses for which permits have been granted.
(3) The facility institutes a water monitoring program to measure
the impacts of the eligible renewable energy resource on nearby wells
and provides for mitigation or compensation for additional pumping
costs or to increase the depth of wells that experience a reduction
in water levels due to the use of groundwater by the eligible
renewable energy resource, such that the wells cannot be used for
their current purpose.
(4) The State Energy Resources Conservation and Development
Commission or the state board, after notice to the public and a
public hearing, determines that the use meets the requirements of
paragraphs (1), (2), and (3).
SECTION 1. Section 728.1 of the Public
Utilities Code is amended to read:
728.1. (a) For purposes of this section, "plant held for future
use account" means account number 105 of the Uniform System of
Accounts Prescribed for Public Utilities and Licensees, as adopted by
the commission.
(b) The commission shall review the status of all property owned
by a gas or electrical corporation and carried within the plant held
for future use account at least once every three years or during a
proceeding conducted pursuant to Section 728, for the purpose of
determining and fixing the rates of that gas or electrical
corporation, as determined by the commission.
(c) If a gas or electrical corporation sells property which was
carried within the plant held for future use account and which was
included in determining the rates of the corporation, the commission
shall determine what portion of any gains from the sale shall be
allocated to the customers of the corporation in a manner consistent
with the procedures specified in account number 105 of the Uniform
System of Accounts Prescribed for Public Utilities and Licensees. The
portion of the gains allocated to customers shall not be less than
the amount the corporation has recovered through rates for the
carrying costs and other expenses of the property during the period
it was carried in the plant held for future use account, and shall
not exceed the gain on the sale, net of any tax, resulting from the
sale.
SEC. 2. The commission shall review its Plant
Held for Future Use Guidelines and determine whether it needs to open
a proceeding to adjust the time period allowed for a property to be
carried in the plant held for future use account. The commission
shall consider whether it should amend the guidelines, or add a
separate guideline to allow a distinct time period for real property
located within a transmission corridor zone designated by the State
Energy Resources Conservation and Development Commission pursuant to
Chapter 4.3 (commencing with Section 25330) of Division 15 of the
Public Resources Code. If the commission amends the existing
guidelines, or adds a separate guideline, pursuant to this section,
the commission shall ensure that any gains or losses from the sale or
reassignment of any interest in real property acquired by the
electrical corporation that is subject to the amended or new
guideline, are allocated between customers and shareholders
proportionately to the risks involved.