BILL ANALYSIS �
AB 2159
Page 1
Date of Hearing: April 21, 2014
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 2159 (Ammiano) - As Amended: March 28, 2014
SUBJECT : Electrical corporations: community choice
aggregation: Joint Exercise of Powers Act, "over the fence"
transactions, and access to customer data
SUMMARY : This bill would authorize the board of supervisors of
a city and county to elect to enter into an agreement to
implement a community choice aggregation (CCA) program, allow
over-the-fence transactions, and require an electrical
corporation to provide electrical consumption data to community
choice aggregators. Specifically, this bill :
1)Allows the board of supervisors of a city and county to enter
an agreement to implement a CCA program with one or more
public agencies through a public entity that is separate from
the parties to the agreement.
2)Excludes from the definition of an electrical corporation a
transaction involving the transfer of electricity for use or
sale between two adjacent properties.
3)Requires an electrical corporation to provide customer data to
a community choice aggregator subject to orders of the
California Public Utilities Commission (PUC) or as agreed upon
between the electrical corporation and the CCA to protect
unauthorized access, destruction, use, modification, or
disclosure.
EXISTING LAW
a)Allows electricity customers to aggregate their electric loads
as members of their local community with CCAs. (Public
Utilities Code 366.2 (a)(1))
b)Allows CCAs to procure electricity for customers who are
customers of the CCA. (Public Utilities Code 366.2 (a)(5))
c)Requires an electrical corporation to cooperate fully with any
community choice aggregators that investigate, pursue, or
implement community choice aggregation programs. (Public
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Utilities Code 366.2 (9))
d)Allows two or more entities to participate as a group in
forming a CCA through a Joint Powers Agreement (JPA). (Public
Utilities Code 366.2 (12)(B))
e)Excludes the owner of an electric plant that is used for
direct transactions from the definition of a public utility.
(Public Utilities Code 216 (h))
f)Excludes from the definition of an electrical corporation a
transaction using cogeneration technologies that is between
not more than two corporations that are on adjacent properties
not under common control unless the properties are divided by
an intervening street or if the seller is an independent solar
energy producer. (Public Utilities Code 218 (b) and (e))
g)Prohibits an electrical corporation or gas corporation from
sharing, disclosing, or otherwise make accessible to any third
party a customer's electrical or gas consumption data, except
customer aggregate electrical or gas consumption data for
analysis, reporting, or program management if all information
has been removed regarding the individual identity of a
customer or upon the consent of the customer. (Public
Utilities Code 8380)
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's Statement. "Numerous state departments and
organizations from across the country have released reports
detailing the methods of success and obstacles causing
failures in the implementing of Community Choice Aggregation
(CCA) programs. How California responds to the challenges to
clean power has implications beyond the Golden State.
California has long been an exporter of smart energy policy
and innovation in the energy field.
"Moving forward, the state is counting on the legislature and
Governor Brown to ensure clean energy succeeds by allowing a
fair and competitive process in California. Assembly Bill 2159
will foster a free market by giving governing boards of
jurisdictions options to implement community choice programs
and expand limitations on neighboring properties' connections,
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also referred to as over-the-fence connections.
"California's community choice aggregation effort became law
in 2002, and San Francisco's own CCA push began two years
later. San Francisco has long had a central city policy to
reduce emissions to 25 percent below 1990 levels by 2017, and
80 percent below those levels by 2050. Unfortunately, politics
has overshadowed good policy, thwarting attempted to allow San
Francisco to follow through on those goals through the use of
clean energy in the Bay Area. AB2159 will enable San Francisco
and other regions to establish clean energy programs, reduce
costs, and increase efficiencies for energy users. States like
Ohio and Illinois have seen success after removing barriers,
similar to the ones plaguing California's clean energy future,
AB2159 will help us break through those barriers.
"Community Choice Energy Programs are the future of
California. AB2159 will allow a clear help established path
for future areas to have more options for clean energy
programs. Lifting obstacles that impede efforts to establish
community choice energy programs is not simply to pursue more
clean power, but also to promote greater consumer choice."
2)City and County of San Francisco and the San Francisco Public
Utilities Commission . San Francisco is the only City and
County in California. Thus, Section 1 of AB 2159 is directed
at issues related to the formation of a CCA in San Francisco.
AB 2159 would allow the San Francisco Board of Supervisors to
enter into a JPA to form a CCA with other organizations.
According to the San Francisco City and County Charter, the
authority to enter into a JPA is currently vested with the San
Francisco Public Utilities Commission (SFPUC). The SFPUC
Commissioners are appointed by the Mayor and confirmed by the
Board of Supervisors.
Section VIII, B, 120 of the City's Charter provides that the
SFPUC "has exclusive control of water, clean water and power
assets owned or maintained by the City and County of San
Francisco" and Section VIII, B, 121 provides that "The [San
Francisco] Public Utilities Commission may enter into Joint
Powers Agreements with other public entities in furtherance of
the responsibilities of the Commission."
In 2010, PG&E sponsored a failed ballot initiative that would
have made the formation of CCAs more difficult.
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In August 2013, the SFPUC Commissioners voted (3-2) to not set
rates for a proposed CCA. The decision to not set rates
effectively delayed attempts to move toward San Francisco's
participation in a CCA.
According to the San Francisco Controller's estimate in August
2013 of the proposed electricity supply contract for its CCA,
"a price premium of 77% over PG&E's (PG&E is the local
electrical corporation) electricity generation rates would be
required to break even in Phase 1, or approximately $18 per
month or a 23% increase to a typical combined gas and
electricity bill for a customer in San Francisco."
Section 1 of AB 2159 would override the City and County of San
Francisco's Charter and override the SFPUC's exclusive control
of water, clean water, and power assets under its control.
3)Over the fence transactions . Section 2 of AB 2159 would allow
sale of electricity among two or more corporations to be
excluded from the definition of an electrical corporation. The
intent of this provision "is to remove the disincentive
stopping buildings from installing solar panels. For example,
condominiums can't make use of solar resources because they
cannot support multiple units from one solar system. This is a
significant disincentive for condominiums to install solar
panels. The ability to do a combined solar PV and solar
thermal will maximize the use of the suns energy to help meet
AB 32 greenhouse gas goals."
Generally, when generators sell to more than two customers,
they fall within the definition of regulated utility (defined
as either a public utility or an electrical corporation) and
would be subject to the same requirements of other regulated
utilities with respect to safety, reliability, affordability,
and collection of nonbypassable charges. Several exclusions
from the definitions of a public utility and an electrical
corporation exist in current law for direct access providers,
certain cogeneration transactions, independent solar energy
producers, and community choice aggregators.
Over the fence transactions are generally direct access
arrangements between a generator and an electricity user with
a contractual arrangement with the generator. The electricity
is transferred between the generator and the user via the
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transmission and distribution system (the "grid") operated by
an electrical corporation. The transfer is generally known as
"wheeling" and most generators are required to pay for the use
of the electrical corporation's grid.
If these fees are not remitted by the generator to the
electrical corporation the cost of maintaining and operating
the grid will be collected from all other ratepayers. This
amounts to a cost shift. The extent of the cost shift is
unknown as it would depend upon how many customers take
electricity directly from generators.
In order to control the cost impacts on ratepayers the
Legislature has established limits on direct access
transactions. AB 2159 offers no similar limitations.
Similarly, AB 2159 does not provide any provisions to ensure
that the rates charged in these transactions are fair and
reasonable or that the generator meets safety and reliability
standards.
Further, it is unclear whether the generator is obliged to
provide all or part of the electricity needs of the customers
it sells to. Thus the language in AB 2159 is unclear whether
the local electrical corporation would be required to purchase
standby power to provide electricity in the event that the
generator is unable to meet the needs of their customers.
Further, it is unclear whether the generator or the customer
would be required to pay standby charges to the electrical
corporation.
Additionally, this provision may create a loophole which
allows CCA's to avoid the current requirement for CCAs to pay
for electricity transmission services by creating a network
within a CCA of over the fence transactions.
Finally, the Legislature has approved a number of
ratepayer-funded programs to assist low income customers and
to advance the use of self-generation technologies such as
solar and energy storage. It is unclear whether these
arrangements would require the customer or the generator would
be required to contribute to these programs.
Allowing private transactions between any number of adjoining
properties allows transfer of electricity using the electric
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grid (also called "wheeling") without paying for that use,
creates a new form of direct access between sophisticated
energy sellers and potentially less informed electricity
customers; creates potential safety issues with regard to
preventing over-generation on a distribution circuit; and
could create a hazard to workers who may or may not be aware
of the presence of an local generation facility that is
providing electricity to several locations.
4)Customer energy data. Section 3 of AB 2159 would require an
electrical corporation to provide customer data to a community
choice aggregator subject to orders of the Public Utilities
Commission or as agreed upon between the electrical
corporation and the CCA to protect unauthorized access,
destruction, use, modification, or disclosure.
The PUC began investigating access to customer energy data
under a current proceeding beginning in August 2012. Through a
public process the PUC developed a proposed decision on how
customer energy data would be made available in a manner that
protects customer privacy. The decision was scheduled for PUC
to adopt on April 10, 2014 but was pulled by staff. The
decision is likely to be heard at the next PUC hearing on May
1, 2014. The PUC's decision will create a "one stop process
for obtaining customer data." Within the decision the PUC
provides that local governments will be able to receive
granular (hourly or quarter-hourly) aggregated and anonymous
data on an yearly, quarterly, and monthly level and allows for
requests for other energy usage data needed due to specific
state or federal statutes which require this data. If even
further information is needed by a local government it can
seek consent from the individual customer.
It is unclear why this section of AB 2159 is necessary in
light of the decision pending at the PUC which will make
energy usage data accessible, in a manner that maintains
customer privacy, to communities who seek data on energy
usage.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
AB 2159
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Opposition
San Diego Gas and Electric (SDG&E)
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083