California Legislature—2013–14 Regular Session

Assembly Bill No. 2145

Introduced by Assembly Member Bradford

February 20, 2014

An act to amend Section 366.2 of the Public Utilities Code, relating to electricity.

LEGISLATIVE COUNSEL’S DIGEST

AB 2145, as introduced, Bradford. Electricity: community choice aggregation.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as defined. Existing law authorizes a community choice aggregator, as defined, to aggregate the electrical load of interested electricity consumers within its boundaries and requires a community choice aggregator to file an implementation plan with the commission and requires that the plan include disclosures of certain information and describe other matter. Existing law requires an electrical corporation to cooperate fully with any community choice aggregator that investigates, pursues, or implements community choice aggregation programs, including providing appropriate billing and electrical load data. Existing law requires an electrical corporation, when requested by, and at the expense of, a community choice aggregator, to install, maintain, and calibrate metering devices at mutually agreeable locations within or adjacent to the community choice aggregator’s political boundaries. Existing law requires a community choice aggregator to register with the commission, which may require additional information to ensure compliance with basic consumer protection rules and other procedural matters.

This bill would require that the implementation plan filed by a community choice aggregator make full disclosure of certain information and completely describe other matter. The bill would authorize the commission to require that a community choice aggregator, when registering with the commission, provide additional information to ensure compliance with basic consumer protection and other rules and other procedural matters. The bill would make other technical, nonsubstantive revisions to the community choice aggregator provisions.

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

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

SECTION 1.  

Section 366.2 of the Public Utilities Code is
amended to read:

366.2.  

(a) (1) Customers shall be entitled to aggregate their
electric loads as members of their local community with
community choice aggregators.

(2) Customers may aggregate their loads through a public
process with community choice aggregators, if each customer is
given an opportunity to opt out of his or her community’s
aggregation program.

(3) If a customer opts out of a community choice aggregator’s
program, or has no community choice aggregation program
available, that customer shall have the right to continue to be served
by the existing electrical corporation or its successor in interest.

(4) The implementation of a community choice aggregation
program shall not result in a shifting of costs between the customers
of the community choice aggregator and the bundled service
customers of an electrical corporation.

(5) A community choice aggregator shall be solely responsible
for all generation procurement activities on behalf of the
community choice aggregator’s customers, except where other
generation procurement arrangements are expressly authorized by
statute.

(b) If a public agency seeks to serve as a community choice
aggregator, it shall offer the opportunity to purchase electricity to
all residential customers within its jurisdiction.

(c) (1) Notwithstanding Section 366, a community choice
aggregator is hereby authorized to aggregate the electrical load of
interested electricity consumers within its boundaries to reduce
transaction costs to consumers, provide consumer begin delete protections end delete
begin insert protection end insert , and leverage the negotiation of contracts. However,
the community choice aggregator may not aggregate electrical
load if that load is served by a local publicly owned electric utility.
A community choice aggregator may group retail electricity
customers to solicit bids, broker, and contract for electricity and
energy services for those customers. The community choice
aggregator may enter into agreements for services to facilitate the
sale and purchase of electricity and other related services. Those
service agreements may be entered into by an entity authorized to
be a community choice aggregator, as defined in Section 331.1.

(2) Under community choice aggregation, customer participation
may not require a positive written declaration, but each customer
shall be informed of his or her right to opt out of the community
choice aggregation program. If no negative declaration is made
by a customer, that customer shall be served through the
community choice aggregation program. If an existing customer
moves the location of his or her electric service within the
jurisdiction of the community choice aggregator, the customer
shall retain the same subscriber status as prior to the move, unless
the customer affirmatively changes his or her subscriber status. If
the customer is moving from outside to inside the jurisdiction of
the community choice aggregator, customer participation shall not
require a positive written declaration, but the customer shall be
informed of his or her right to elect not to receive service through
the community choice aggregator.

(3) A community choice aggregator establishing electrical load
aggregation pursuant to this section shall develop an
implementation plan detailing the process and consequences of
aggregation. The implementation plan, and any subsequent changes
to it, shall be considered and adopted at a duly noticed public
hearing. The implementation plan shall contain all of the following:

(A) An organizational structure of the program, its operations,
and its funding.

(B) Ratesetting and other costs to participants.

(C) Provisions for begin insert full end insert disclosure and due process in setting rates
and allocating costs among participants.

(D) The methods for entering and terminating agreements with
other entities.

(E) The rights and responsibilities of program participants,
including, but not limited to, consumer protection procedures,
credit issues, and shutoff procedures.

(F) Termination of the program.

(G) A description of the third parties that will be supplying
electricity under the program, including, but not limited to,
begin insert complete end insert information about financial, technical, and operational
capabilities.

(4) A community choice aggregator establishing electrical load
aggregation shall prepare a statement of intent with the
implementation plan. Any community choice load aggregation
established pursuant to this section shall provide for the following:

(A) Universal access.

(B) Reliability.

(C) Equitable treatment of all classes of customers.

(D) Any requirements established by state law or by the
commission concerning aggregated service, including begin insert , but not
limited to, end insert those rules adopted by the commission pursuant to
paragraph (3) of subdivision (b) of Section 8341 for the application
of the greenhouse gases emission performance standard to
community choice aggregators.

(5) In order to determine the cost-recovery mechanism to be
imposed on the community choice aggregator pursuant to
subdivisions (d), (e), and (f) that shall be paid by the customers of
the community choice aggregator to prevent shifting of costs, the
community choice aggregator shall file the implementation plan
with the commission, and any other information requested by the
commission that the commission determines is necessary to develop
the cost-recovery mechanism in subdivisions (d), (e), and (f).

(6) The commission shall notify any electrical corporation
serving the customers proposed for aggregation that an
implementation plan initiating community choice aggregation has
been filed, within 10 days of the filing.

(7) Within 90 days after the community choice aggregator
establishing load aggregation files its implementation plan, the
commission shall certify that it has received the implementation
plan, including any additional information necessary to determine
a cost-recovery mechanism. After certification of receipt of the
implementation plan and any additional information requested,
the commission shall then provide the community choice
aggregator with its findings regarding any cost recovery that must
be paid by customers of the community choice aggregator to
prevent a shifting of costs as provided for in subdivisions (d), (e),
and (f).

(8) No entity proposing community choice aggregation shall
act to furnish electricity to electricity consumers within its
boundaries until the commission determines the cost recovery that
must be paid by the customers of that proposed community choice
aggregation program, as provided for in subdivisions (d), (e), and
(f). The commission shall designate the earliest possible effective
date for implementation of a community choice aggregation
program, taking into consideration the impact on any annual
procurement plan of the electrical corporation that has been
approved by the commission.

(9)  begin delete All end delete begin insert An end insert electrical begin delete corporations end delete begin insert corporation end insert shall cooperate
fully with any community choice aggregators that investigate,
pursue, or implement community choice aggregation programs.
Cooperation shall include providing the entities with appropriate
billing and electrical load data, including, but not limited to,
electrical consumption data as defined in Section 8380 and other
data detailing electricity needs and patterns of usage, as determined
by the commission, and in accordance with procedures established
by the commission. The commission shall exercise its authority
pursuant to Chapter 11 (commencing with Section 2100) to enforce
the requirements of this paragraph when it finds that the
requirements of this paragraph have been violated. Electrical
corporations shall continue to provide all metering, billing,
collection, and customer service to retail customers that participate
in community choice aggregation programs. Bills sent by the
electrical corporation to retail customers shall identify the
community choice aggregator as providing the electrical energy
component of the bill. The commission shall determine the terms
and conditions under which the electrical corporation provides
services to community choice aggregators and retail customers.

(10) If the commission finds that an electrical corporation has
violated this section, the commission shall consider the impact of
the violation upon community choice aggregators.

(11) The commission shall proactively expedite the complaint
process for disputes regarding an electrical corporation’s violation
of its obligations pursuant to this section in order to provide for
timely resolution of complaints made by community choice
aggregation programs, so that all complaints are resolved in no
more than 180 days following the filing of a complaint by a
community choice aggregation program concerning the actions of
the incumbent electrical corporation. This deadline may only be
extended under either of the following circumstances:

(A) Upon agreement of all of the parties to the complaint.

(B) The commission makes a written determination that the
deadline cannot be met, including findings for the reason for this
determination, and issues an order extending the deadline. A single
order pursuant to this subparagraph shall not extend the deadline
for more than 60 days.

(12) (A) An entity authorized to be a community choice
aggregator, as defined in Section 331.1, that elects to implement
a community choice aggregation program within its jurisdiction
pursuant to this chapter, shall do so by ordinance. A city, county,
or city and county may request, by affirmative resolution of its
governing council or board, that another entity authorized to be a
community choice aggregator act as the community choice
aggregator on its behalf. If a city, county, or city and county, by
resolution, requests another authorized entity be the community
choice aggregator for the city, county, or city and county, that
authorized entity shall be responsible for adopting the ordinance
to implement the community choice aggregation program on behalf
of the city, county, or city and county.

(B) Two or more entities authorized to be a community choice
aggregator, as defined in Section 331.1, may participate as a group
in a community choice aggregation program pursuant to this
chapter, through a joint powers agency established pursuant to
Chapter 5 (commencing with Section 6500) of Division 7 of Title
1 of the Government Code, if each entity adopts an ordinance
pursuant to subparagraph (A). Pursuant to Section 6508.1 of the
Government Code, members of a joint powers agency that is a
community choice aggregator may specify in their joint powers
agreement that, unless otherwise agreed by the members of the
agency, the debts, liabilities, and obligations of the agency shall
not be the debts, liabilities, and obligations, either jointly or
severally, of the members of the agency. The commission shall
not, as a condition of registration or otherwise, require an agency’s
members to voluntarily assume the debts, liabilities, and obligations
of the agency to the electrical corporation unless the commission
finds that the agreement by the agency’s members is the only
reasonable means by which the agency may establish its
creditworthiness under the electrical corporation’s tariff to pay
charges to the electrical corporation under the tariff.

(13) Following adoption of aggregation through the ordinance
described in paragraph (12), the program shall allow any retail
customer to opt out and to continue to be served as a bundled
service customer by the existing electrical corporation, or its
successor in interest. Delivery services shall be provided at the
same rates, terms, and conditions, as approved by the commission,
for community choice aggregation customers and customers that
have entered into a direct transaction where applicable, as
determined by the commission. Once enrolled in the aggregated
entity, any ratepayer that chooses to opt out within 60 days or two
billing cycles of the date of enrollment may do so without penalty
and shall be entitled to receive default service pursuant to paragraph
(3) of subdivision (a). Customers that return to the electrical
corporation for procurement services shall be subject to the same
terms and conditions as are applicable to other returning direct
access customers from the same class, as determined by the
commission, as authorized by the commission pursuant to this
code or any other provision of law, except that those customers
shall be subject to no more than a 12-month stay requirement with
the electrical corporation. Any reentry fees to be imposed after the
opt-out period specified in this paragraph, shall be approved by
the commission and shall reflect the cost of reentry. The
commission shall exclude any amounts previously determined and
paid pursuant to subdivisions (d), (e), and (f) from the cost of
reentry.

(14) Nothing in this section shall be construed as authorizing
any city or any community choice retail load aggregator to restrict
the ability of retail electricity customers to obtain or receive service
from any authorized electric service provider in a manner consistent
with law.

(15) (A) The community choice aggregator shall fully inform
participating customers at least twice within two calendar months,
or 60 days, in advance of the date of commencing automatic
enrollment. Notifications may occur concurrently with billing
cycles. Following enrollment, the aggregated entity shall fully
inform participating customers for not less than two consecutive
billing cycles. Notification may include, but is not limited to, direct
mailings to customers, or inserts in water, sewer, or other utility
bills. Any notification shall begin insert fully end insert inform customers of both of the
following:

(i) That they are to be automatically enrolled and that the
customer has the right to opt out of the community choice
aggregator without penalty.

(ii)  begin delete The end delete begin insert All end insert terms and conditions of the services offered.

(B) The community choice aggregator may request the
commission to approve and order the electrical corporation to
provide the notification required in subparagraph (A). If the
commission orders the electrical corporation to send one or more
of the notifications required pursuant to subparagraph (A) in the
electrical corporation’s normally scheduled monthly billing
process, the electrical corporation shall be entitled to recover from
the community choice aggregator all reasonable incremental costs
it incurs related to the notification or notifications. The electrical
corporation shall fully cooperate with the community choice
aggregator in determining the feasibility and costs associated with
using the electrical corporation’s normally scheduled monthly
billing process to provide one or more of the notifications required
pursuant to subparagraph (A).

(C) Each notification shall also include a mechanism by which
a ratepayer may opt out of community choice aggregated service.
The opt out may take the form of a self-addressed return postcard
indicating the customer’s election to remain with, or return to,
electrical energy service provided by the electrical corporation, or
another straightforward means by which the customer may elect
to derive electrical energy service through the electrical corporation
providing service in the area.

(16) A community choice aggregator shall have an operating
service agreement with the electrical corporation prior to furnishing
electric service to consumers within its jurisdiction. The service
agreement shall include performance standards that govern the
business and operational relationship between the community
choice aggregator and the electrical corporation. The commission
shall ensure that any service agreement between the community
choice aggregator and the electrical corporation includes equitable
responsibilities and remedies for all parties. The parties may
negotiate specific terms of the service agreement, provided that
the service agreement is consistent with this chapter.

(17) The community choice aggregator shall register with the
commission, which may require additional information to ensure
compliance with basic consumer protection begin insert and other end insert rules and
other procedural matters.

(18) Once the community choice aggregator’s contract is signed,
the community choice aggregator shall notify the applicable
electrical corporation that community choice service will
commence within 30 days.

(19) Once notified of a community choice aggregator program,
the electrical corporation shall transfer all applicable accounts to
the new supplier within a 30-day period from the date of the close
of the electrical corporation’s normally scheduled monthly
metering and billing process.

(20) An electrical corporation shall recover from the community
choice aggregator any costs reasonably attributable to the
community choice aggregator, as determined by the commission,
of implementing this section, including, but not limited to, all
business and information system changes, except for
transaction-based costs as described in this paragraph. Any costs
not reasonably attributable to a community choice aggregator shall
be recovered from ratepayers, as determined by the commission.
All reasonable transaction-based costs of notices, billing, metering,
collections, and customer communications or other services
provided to an aggregator or its customers shall be recovered from
the aggregator or its customers on terms and at rates to be approved
by the commission.

(21) At the request and expense of any community choice
aggregator, begin insert an end insert electrical begin delete corporations end delete begin insert corporation end insert shall install,
maintain, and calibrate metering devices at mutually agreeable
locations within or adjacent to the community choice aggregator’s
political boundaries. The electrical corporation shall read the
metering devices and provide the data collected to the community
choice aggregator at the aggregator’s expense. To the extent that
the community choice aggregator requests a metering location that
would require alteration or modification of a circuit, the electrical
corporation shall only be required to alter or modify a circuit if
begin delete such end delete begin insert that end insert alteration or modification does not compromise the safety,
reliability, or operational flexibility of the electrical corporation’s
facilities. All costs incurred to modify circuits pursuant to this
paragraph, shall be borne by the community choice aggregator.

(d) (1) It is the intent of the Legislature that each retail end-use
customer that has purchased power from an electrical corporation
on or after February 1, 2001, should bear a fair share of the
Department of Water Resources’ electricity purchase costs, as well
as electricity purchase contract obligations incurred as of the
effective date of the act adding this section, that are recoverable
from electrical corporation customers in commission-approved
rates. It is further the intent of the Legislature to prevent any
shifting of recoverable costs between customers.

(2) The Legislature finds and declares that this subdivision is
consistent with the requirements of Division 27 (commencing with
Section 80000) of the Water Code and Section 360.5 of this code,
and is therefore declaratory of existing law.

(e) A retail end-use customer that purchases electricity from a
community choice aggregator pursuant to this section shall pay
both of the following:

(1) A charge equivalent to the charges that would otherwise be
imposed on the customer by the commission to recover
bond-related costs pursuant to any agreement between the
commission and the Department of Water Resources pursuant to
Section 80110 of the Water Code, which charge shall be payable
until any obligations of the Department of Water Resources
pursuant to Division 27 (commencing with Section 80000) of the
Water Code are fully paid or otherwise discharged.

(2) Any additional costs of the Department of Water Resources,
equal to the customer’s proportionate share of the Department of
Water Resources’ estimated net unavoidable electricity purchase
contract costs as determined by the commission, for the period
commencing with the customer’s purchases of electricity from the
community choice aggregator, through the expiration of all then
existing electricity purchase contracts entered into by the
Department of Water Resources.

(f) A retail end-use customer purchasing electricity from a
community choice aggregator pursuant to this section shall
reimburse the electrical corporation that previously served the
customer for all of the following:

(1) The electrical corporation’s unrecovered past
undercollections for electricity purchases, including any financing
costs, attributable to that customer, that the commission lawfully
determines may be recovered in rates.

(2) Any additional costs of the electrical corporation recoverable
in commission-approved rates, equal to the share of the electrical
corporation’s estimated net unavoidable electricity purchase
contract costs attributable to the customer, as determined by the
commission, for the period commencing with the customer’s
purchases of electricity from the community choice aggregator,
through the expiration of all then existing electricity purchase
contracts entered into by the electrical corporation.

(g) Estimated net unavoidable electricity costs paid by the
customers of a community choice aggregator shall be reduced by
the value of any benefits that remain with bundled service
customers, unless the customers of the community choice
aggregator are allocated a fair and equitable share of those benefits.

(h) (1) Any charges imposed pursuant to subdivision (e) shall
be the property of the Department of Water Resources. Any charges
imposed pursuant to subdivision (f) shall be the property of the
electrical corporation. The commission shall establish mechanisms,
including agreements with, or orders with respect to, electrical
corporations necessary to ensure that charges payable pursuant to
this section shall be promptly remitted to the party entitled to
payment.

(2) Charges imposed pursuant to subdivisions (d), (e), and (f)
shall be nonbypassable.

(i) The commission shall authorize community choice
aggregation only if the commission imposes a cost-recovery
mechanism pursuant to subdivisions (d), (e), (f), and (h). Except
as provided by this subdivision, this section shall not alter the
suspension by the commission of direct purchases of electricity
from alternate providers other than by community choice
aggregators, pursuant to Section 365.1.

(j) (1) The commission shall not authorize community choice
aggregation until it implements a cost-recovery mechanism,
consistent with subdivisions (d), (e), and (f), that is applicable to
customers that elected to purchase electricity from an alternate
provider between February 1, 2001, and January 1, 2003.

(2) The commission shall not authorize community choice
aggregation until it has adopted rules for implementing community
choice aggregation.

(k) (1) Except for nonbypassable charges imposed by the
commission pursuant to subdivisions (d), (e), (f), and (h), and
programs authorized by the commission to provide broader
statewide or regional benefits to all customers, electric service
customers of a community choice aggregator shall not be required
to pay nonbypassable charges for goods, services, or programs
that do not benefit either, or where applicable, both, the customer
and the community choice aggregator serving the customer.

(2) The commission, Energy Commission, electrical corporation,
or third-party administrator shall administer any program funded
through a nonbypassable charge on a nondiscriminatory basis so
that the electric service customers of a community choice
aggregator may participate in the program on an equal basis with
the customers of an electrical corporation.

(3) Nothing in this subdivision is intended to modify, or prohibit
the use of, charges funding programs for the benefit of low-income
customers.

(l) (1) An electrical corporation shall not terminate the services
of a community choice aggregator unless authorized by a vote of
the full commission. The commission shall ensure that prior to
authorizing a termination of service, that the community choice
aggregator has been provided adequate notice and a reasonable
opportunity to be heard regarding any electrical corporation
contentions in support of termination. If the contentions made by
the electrical corporation in favor of termination include factual
claims, the community choice aggregator shall be afforded an
opportunity to address those claims in an evidentiary hearing.

(2) Notwithstanding paragraph (1), if the Independent System
Operator has transferred the community choice aggregator’s
scheduling coordination responsibilities to the incumbent electrical
corporation, an administrative law judge or assigned commissioner,
after providing the aggregator with notice and an opportunity to
respond, may suspend the aggregator’s service to customers
pending a full vote of the commission.

(m) Any meeting of an entity authorized to be a community
choice aggregator, as defined in Section 331.1, for the purpose of
developing, implementing, or administering a program of
community choice aggregation shall be conducted in the manner
prescribed by the Ralph M. Brown Act (Chapter 9 (commencing
with Section 54950) of Part 1 of Division 2 of Title 5 of the
Government Code).