BILL ANALYSIS �
AB 2159
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Date of Hearing: April 30, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 2159 (Ammiano) - As Amended: March 28, 2014
SUBJECT : Electrical corporations: community choice
aggregation: Joint Exercise of Powers Act.
SUMMARY : Allows the San Francisco City and County Board of
Supervisors to elect to enter into a joint powers agreement
(JPA) to implement a community choice aggregation (CCA) program,
allows another public agency to be the community choice
aggregator for San Francisco, expands over-the-fence
transactions, and requires 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 (San
Francisco), by ordinance adopted pursuant to specified
provisions of CCA law, to elect to enter into a JPA pursuant
to existing JPA law 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)Allows San Francisco, by resolution adopted pursuant to CCA
law, to elect to request another public agency that has
elected to implement a CCA program to be the community choice
aggregator for San Francisco.
3)Expands over-the-fence transactions by eliminating the cap on
such transactions, which is currently limited to not more than
two other corporations or persons.
4)Requires an electrical corporation to provide customer data to
a community choice aggregator pursuant to CCA law, subject to
any reasonable security procedures and practices to protect
the personal information from unauthorized access,
destruction, use, modification, or disclosure, as specified.
EXISTING LAW :
1)Allows, pursuant to the Joint Exercise of Powers Act, two or
more public agencies by agreement to jointly exercise any
power common to the contracting parties, as specified,
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if authorized by their legislative or other governing bodies.
2)Allows electricity customers to aggregate their electric loads
as members of their local community with CCAs, and allows CCAs
to procure electricity for customers who are customers of the
CCA.
3)Allows two or more entities authorized to be a community
choice aggregator to participate as a group in a CCA program
through a joint powers agency, as specified.
4)Requires an electrical corporation to cooperate fully with any
community choice aggregators that investigate, pursue, or
implement community choice aggregation programs, including
providing appropriate billing and electrical load data, as
specified.
5)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 (commonly called "over-the-fence
transactions").
6)Prohibits an electrical corporation or gas corporation from
sharing, disclosing, or otherwise making 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.
7)Allows cities that adopt charters to control their own
"municipal affairs," pursuant to the California Constitution.
FISCAL EFFECT : This bill is keyed fiscal.
COMMENTS :
1)Purpose of this bill . This bill contains four provisions: it
allows the San Francisco Board of Supervisors to enter into a
joint powers agreement to implement a community choice
aggregation program for San Francisco; it allows another
public agency to be the community choice aggregator for San
Francisco; it expands over-the-fence transactions; and, it
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requires an electrical corporation to provide electrical
consumption data to community choice aggregators. This bill
is author-sponsored.
2)Local government provisions of this bill . The provisions of
this bill expanding over-the-fence transactions and requiring
electrical corporations to provide electrical consumption data
to community choice aggregators have been addressed in the
Assembly Utilities and Commerce Committee's analysis of this
bill, which passed that committee on a 8-4 vote on April 21,
2014. This analysis will focus on the first two provisions of
this bill: allowing the San Francisco Board of Supervisors to
enter into a joint powers agreement to implement a community
choice aggregation program for San Francisco; and, allowing
another public agency to be the community choice aggregator
for San Francisco.
3)Author's statement . According to the author, "Under the
leadership of Governor Brown and his administration,
California's reputation has grown as a clean energy success
story. Our state has capitalized on our skilled workforce and
renewable energy resources, putting us first for solar energy
generation and second for wind-related jobs. This continued
growth is contingent on smart policies from state lawmakers.
"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,
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
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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 attempts to
allow San Francisco to follow through on those goals through
the use of clean energy in the Bay Area. AB 2159 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. AB 2159 will help us break through those
barriers.
"Community Choice Energy Programs are the future of
California. AB 2159 will allow an 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."
4)Background . In 2002, the California Legislature passed AB 117
(Migden), Chapter 838, Statutes of 2002, enabling local
communities to form CCAs and create alternatives to
investor-owned utilities. CCAs are governmental entities
formed by cities and counties to serve the energy requirements
of their local residents and businesses. Cities and counties
have become increasingly involved in implementing energy
efficiency programs, advocating for their communities in power
plant and transmission line siting cases, and developing
distributed generation and renewable resource energy supplies.
The CCA program takes these efforts one step further by
enabling communities to purchase power on behalf of the
community.
In California, a number of municipalities are exploring the
formation of community choice aggregation programs. The
first, and currently only, operating CCA in California is in
Marin County.
5)CleanPowerSF . San Francisco approved its program,
CleanPowerSF, in September of 2012. According to its website,
"CleanPowerSF is the City's clean power program that will
provide San Francisco with a 100%, California-certified
renewable energy alternative. CleanPowerSF will give
residential electricity consumers a choice by allowing
residents to choose between two energy providers (CleanPowerSF
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or PG&E). When residents choose CleanPowerSF, not only will
they reduce their personal carbon footprint, but they'll also
decrease San Francisco's greenhouse gas emission and help
combat global climate change."
CleanPowerSF is administered by the San Francisco Public
Utilities Commission (SFPUC), the City's water, sewer and
municipal power utility, and monitored by the San Francisco
Local Agency Formation Commission. 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." The SFPUC Commissioners
are appointed by the Mayor and confirmed by the Board of
Supervisors.
In August of 2013, the SFPUC Commissioners voted 3-2 to not
set rates for CleanPowerSF. According to an April 25, 2014,
article in the San Francisco Examiner, "Critics of the
proposal seized on several factors, such as the lack of a
detailed job-creation plan and associated infrastructure
projects; the contract with Shell Energy North America to buy
the power; and complaints about the rates, which had a maximum
rate of 11.5 cents per kilowatt hour compared to PG&E's
roughly 9 cents per kilowatt hour. For the PG&E customer
paying $36.22 a month, under CleanPowerSF, that bill would be
$41.52. Yet CleanPowerSF supporters said the objections were
not genuine and instead merely used as excuses for stalling."
6)Previous legislation . SB 790 (Leno), Chapter 599, Statutes of
2011, revised and expanded the definition of CCAs, required
the California Public Utilities Commission to initiate a code
of conduct rulemaking, and allowed CCAs to receive public
purpose funds to administer energy efficiency programs.
AB 117 (Migden), Chapter 838, Statutes of 2002, authorized the
creation of CCAs, described essential CCA program elements,
required the state's investor-owned utilities (IOUs) to
provide certain services, and established methods to protect
existing utility customers from liabilities that they might
otherwise incur when a portion of the IOU's customers transfer
their energy services to a CCA.
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7)Policy considerations . The Committee may wish to consider the
following:
a) Is legislation necessary ? Current law, pursuant to the
Joint Exercise of Powers Act, already allows San Francisco
to enter a JPA to jointly exercise any power common to the
contracting parties. Existing law, pursuant to statutes
governing the formation and operation of CCAs, also allows
two or more entities authorized to be a community choice
aggregator to participate as a group in a CCA program
through a joint powers agency. It is not clear why the
provisions of this bill authorizing San Francisco to form a
JPA for the purposes of administering its CCA, and
authorizing San Francisco to request another public agency
that has elected to implement a CCA program to be the
community choice aggregator for San Francisco, are
necessary. If these provisions are being sought because
San Francisco's charter provides the SFPUC with exclusive
authority over these activities, this bill would not remedy
that condition.
b) Charter Cities . The California Constitution allows
cities that adopt charters to control their own "municipal
affairs." In all other matters, charter cities must follow
general, statewide laws. This bill applies to San
Francisco, which is a charter city (and county). The
subject matters of this bill are not of statewide concern,
but are municipal affairs.
As such, if state law and San Francisco's charter conflict on
these matters, San Francisco's charter would prevail.
The Committee may wish to consider whether the provisions of
this bill pertaining to San Francisco's ability to form a JPA
for the purpose of running its CCA and to San
Francisco's ability to allow another public agency to be the
City's community choice aggregator are necessary and/or
whether these provisions would remedy the problem presented by
the author.
8)Arguments in support . The San Francisco Clean Energy
Advocates, in support, state, "The proposed legislation would
strengthen the ability of California communities to more
easily and rapidly form Community Choice Aggregation programs,
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in order to compete with investor owned utilities to deliver
cleaner and more price competitive electricity to local
consumers. In addition, AB 2159 eliminates archaic 20th
Century legal barriers that prevent owners of solar panels and
other clean energy generation installations from selling or
sharing their clean power with other customers. This will in
turn spur far more local projects to build and install local
clean electricity generation, and thereby help generate badly
needed local green jobs in California cities."
9)Arguments in opposition . Pacific Gas and Electric Company, in
opposition, states, "AB 2159 also seeks to overturn the San
Francisco City Charter, which provides exclusive authority for
the operation and provision of energy supplies in San
Francisco to the San Francisco Public Utilities Commission
(SFPUC)?AB 2159 seeks to overturn the will of the voters and
is nothing more than a political maneuver to circumvent the
open public process at the local level to determine the course
of action to be taken by the SFPUC relative to the development
of a Community Choice Aggregation system in San Francisco."
10)Double-referral . This bill was heard by the Utilities and
Commerce Committee on April 21, 2014, and passed with a 8-4
vote.
REGISTERED SUPPORT / OPPOSITION :
Support
350 San Francisco
Commonwealth Energy Consortium
Haight Ashbury Neighborhood Council
Local Clean Energy Alliance
Local Power, Inc.
Our City San Francisco
San Francisco Clean Energy Advocates
San Francisco Green Party
Sierra Club
U.S. Green Building Council
Individual letters (2)
Opposition
Coalition of California Utility Employees
Pacific Gas and Electric Company
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Southern California Edison
Analysis Prepared by : Angela Mapp / L. GOV. / (916) 319-3958