Amended in Senate August 19, 2014

Amended in Senate July 1, 2014

Amended in Senate June 12, 2014

Amended in Assembly April 10, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2145

Introduced by Assembly Member Bradford

February 20, 2014

An act to amend Sections 331.1 and 366.2 of the Public Utilities Code, relating to electricity.

LEGISLATIVE COUNSEL’S DIGEST

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

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as defined. The Public Utilities Act 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. The act 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. Existing law requires that a city, county, or city and county that elects to implement a community choice aggregation program within its jurisdiction do so by ordinance, but authorizes a city, county, or city and county to 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, in which case, that other entity is responsible for adopting the ordinance to implement the community choice aggregation program on behalf of the requesting city, county, or city and county.

This bill would require solicitations of customers by a community choice aggregator contain, and communication by the community choice aggregator to the public or prospective and existing customers to be consistent with, specified information and would require that the implementation plan filed by a community choice aggregator completely describe certain matter required to be disclosed under existing law. 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. If a city, county, or city and county requests another entity that is authorized to be a community choice aggregator to act as the community choice aggregator on its behalf, the bill would require that the entity that is to be the community choice aggregator be in a county that is contiguous to the requesting city, county, or city and county. The bill would provide that, beginning January 1, 2015, no entity may enact an ordinance to serve as the community choice aggregator in more than 3-contiguous-counties, but may serve as the community choice aggregator for any city, county, or city and county that is outside a 3-contiguous-county area, for which it adopted an ordinance prior to January 1, 2015. The bill would make other technical, nonsubstantive revisions to the community choice aggregator provisions.

The Joint Exercise of Powers Act authorizes the legislative or other governing bodies of 2 or more public agencies to jointly exercise by agreement any power common to the contracting parties, as specified. Existing law authorizes any group of cities, counties, or cities and counties whose governing boards have so elected to combine the loads of their programs as a community choice aggregator through the formation of a joint powers agency established pursuant to the Joint Exercise of Powers Act.

This bill would prohibit a joint powers agency formed to provide electric service as a community choice aggregator from exceeding the geographical boundaries of 3-contiguous-counties, but would provide that this limitation does not apply where an ordinance authorizing community choice aggregation outside the 3-contiguous-counties was adopted prior to January 1, 2015.

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 bill would impose requirements regarding a community choice aggregator, a violation of which would be a crime, this bill would impose a state-mandated local program.

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.

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

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

SECTION 1.  

Section 331.1 of the Public Utilities Code is
amended to read:

331.1.  

For purposes of this chapter, “community choice
aggregator” means any of the following entities, if that entity is
not within the jurisdiction of a local publicly owned electric utility
that provided electrical service as of January 1, 2003:

(a) Any city, county, or city and county whose governing board
elects to combine the loads of its residents, businesses, and
municipal facilities in a communitywide electricity buyers’
program.

(b) (1) Any group of cities, counties, or cities and counties
whose governing boards have elected to combine the loads of their
programs, through the formation of a joint powers agency
established under Chapter 5 (commencing with Section 6500) of
Division 7 of Title 1 of the Government Code.

(2) A joint powers agency formed to provide electric service as
a community choice aggregator shall not exceed the geographical
boundaries of three contiguous counties. This limitation does not
apply where an ordinance authorizing community choice
aggregation outside the three contiguous counties was adopted
prior to January 1, 2015. For purposes of this paragraph, a county
is contiguous to another county if it shares a border with that
county. A county need only share a border with one of the other
two counties.

(c) The Kings River Conservation District, the Sonoma County
Water Agency, and any California public agency possessing
statutory authority to generate and deliver electricity at retail within
its designated jurisdiction, provided the entity may only combine
the loads of residences, businesses, and governmental facilities of
cities and counties within, or contiguous to, its jurisdiction that
have, by resolution exercised pursuant to paragraph (12) of
subdivision (c) of Section 366.2, requested the agency to implement
a community choice aggregation program.

SEC. 2.  

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 protection, 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
shall not require a positive written declaration and 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 and the customer shall be
informed of his or her right to elect not to receive service through
the community choice aggregation program.

(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 full disclosure of all information specified
in paragraph (15) 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,
complete 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, but not
limited to, 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) An electrical corporation 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 or
community choice aggregator has violated this section, the
commission shall order appropriate corrective action.

(11) The commission shall proactively expedite the complaint
process for disputes regarding an electrical corporation’s or
community choice aggregator’s violation of its obligations pursuant
to this section in order to provide for timely resolution of
complaints, so that all complaints are resolved in no more than
180 days following the filing of a complaint. 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 in a contiguous
county that is 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
in a contiguous county 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. Beginning January 1, 2015, no entity may enact an
ordinance to serve as the community choice aggregator in more
than three contiguous counties, but may serve as the community
choice aggregator for any city, county, or city and county that is
outside a three contiguous county area, for which it adopted an
ordinance pursuant to this subparagraph prior to January 1, 2015.

(B) Two or more entities in contiguous counties that are
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. Except as provided in Section 331.1, a joint powers
agency that is a community choice aggregator shall not exceed the
geographical boundaries of three contiguous counties.

(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 community choice aggregator
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 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) The terms and conditions of the services offered.

(B) 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,
electric service provided by the electrical corporation, or another
straightforward means by which the customer may elect to derive
electric service through the electrical corporation providing service
in the area.

(C) Every solicitation of customers by a community choice
aggregator shall contain, and communication by the community
choice aggregator to the public or to a prospective or existing
customer shall be consistent with, the electric supply rate for the
customer if the customer remains with the electrical corporation
compared to the electric supply rate if the customer chooses to be
served by the community choice aggregator. Rates shall be specific
to the customer class of that begin delete customer and shall be provided for
the next five years of service. The electrical corporation shall
provide its projected electric supply rate to the community choice
aggregator. end delete begin insert customer. end insert

(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 and other 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, an electrical corporation 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
that 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).

(n) Amendments to this section made by Assembly Bill 2145
of the 2013-14 Regular Session do not affect the enrollment status
of a customer already enrolled in a community choice aggregation
program prior to January 1, 2015.

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.