Amended in Senate August 22, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2443

Introduced by Assembly Member Rendon

(Coauthor: Assembly Member Nestande)

February 21, 2014

An act to amend Section 1506 of the Public Utilities Code begin insert , and to amend Sections end insert begin insert 13580, 13580.5, and 13580.7 of the Water Code end insert , relating to water.

LEGISLATIVE COUNSEL’S DIGEST

AB 2443, as amended, Rendon. begin delete Duplication of service: mutual water companies. end delete begin insert Water Recycling Act of 1991: mutual water companies: duplication of service. end insert

begin insert

(1) The Water Recycling Act of 1991 establishes a statewide goal to recycle a total of 1,000,000 acre-feet of water per year by the year 2010. In order to achieve this goal, the act requires retail water suppliers to identify potential uses for recycled water within their service areas, potential customers for recycled water service within their service areas, and, within a reasonable time, potential sources of recycled water. The act authorizes a retail water supplier that has identified a potential use or customer to apply to a recycled water producer or wholesaler for a recycled water supply and authorizes a recycled water producer or wholesaler that has identified a potential use or customer to request, in writing, a retail water supplier to enter into an agreement to provide recycled water to the potential customer.

end insert begin insert

This bill would authorize a recycled water producer or wholesaler that has identified a potential use or customer within the service area or jurisdiction of the retail water supplier, to request, in writing, a retail water supplier to enter into an agreement to provide recycled water to the potential customer consistent with specified requirements of the act.

end insert begin insert

The Water Recycling Act of 1991 includes specific requirements that are applicable only to a retail water supplier that is a public agency.

end insert begin insert

This bill would extend those provisions to a mutual water company formed and operating pursuant to specified provisions of the Corporations Code.

end insert begin delete

Existing

end delete

begin insert (2) end insert begin insert   end insert begin insert Existing end insert law states that the Legislature finds and declares that whenever a political subdivision, as defined, constructs facilities to provide or extend water service, or provides or extends water service, to any service area of a private utility, as defined, with the same type of service, this act constitutes a taking of the property of the private utility for a public purpose to the extent that the private utility is injured by reason of any of its property employed in providing the water service being made inoperative, reduced in value, or rendered useless to the private utility for the purpose of providing water service to the service area. Existing law requires that a political subdivision that makes such a taking of the property of a private water utility pay just compensation for the property taken for a public purpose. A mutual water company is a private utility for these purposes to the extent that its property is employed by the company in providing water service in or for a territory that is actually being provided with water service when the political subdivision constructs facilities to provide, or extends water service to, the territory serviced by the mutual water company. Existing law establishes an exception that is applicable only to Los Angeles County with respect to the use of reclaimed water.

This bill would make inapplicable the provision that a mutual water company is a private utility entitled to just compensation for a taking in a territory it services at the time of the taking when a political subdivision constructs facilities to provide or extend recycled water service to the territory of the mutual water begin delete company. end delete begin insert company, if the political subdivision complies with the Water Recycling Act of 1991. This exception would not apply to those customers and their properties to which the mutual water company was providing recycled water service, or for whom the mutual water company has identified and developed specific plans to provide recycled water service, as of December 31, 2014. end insert

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 1506 of the Public Utilities Code is
amended to read:

1506.  

begin insert (a) end insert begin insert   end insert As used in this chapter, “private utility” includes a
mutual water company. In its application to mutual water
companies, this chapter affects and relates only to the property, or
portion of any property, of a mutual water company that is
employed by the company in providing water service in or for a
territory that is actually being provided with water service by the
company when a political subdivision constructs facilities to
provide or extend water service or provides or extends the service
to the territory, and that territory shall constitute the “service area”
of a mutual water company as used in Section 1502. begin delete This end delete

begin insert (b) end insert begin insert   end insert begin insert Subject to the preservation of rights of a mutual water
company in subdivision (c), this end insert section does not apply to a political
subdivision that constructs facilities to provide or extend recycled
water service to the territory of the mutual water begin delete company. end delete
begin insert company, if the political subdivision complies with the Water
Recycling Act of 1991 (Chapter 7.5 (commencing with Section
13575) of Division 7 of the Water Code). end insert

begin insert

(c) The exception in subdivision (b), for a political subdivision
that constructs facilities to provide or extend recycled water service
to the territory of the mutual water company, does not apply to
those customers and their properties to which the mutual water
company was providing recycled water service, or for whom the
mutual water company has identified and developed specific plans
to provide recycled water service, as of December 31, 2014.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 13580 of the end insert begin insert Water Code end insert begin insert is amended to read: end insert

13580.  

(a) A retail water supplier that has identified a potential
use or customer pursuant to Section 13579 may apply to a recycled
water producer or recycled water wholesaler for a recycled water
supply.

(b) A recycled water producer or recycled water wholesaler that
has identified a potential use or customer pursuant to Section begin delete 13579 end delete
begin insert 13579, that is within the service territory or jurisdiction of a retail
water supplier, end insert may, in writing, request a retail water supplier to
enter into an agreement to provide recycled water to the potential
customer.

(c) A customer may request, in writing, a retailer to enter into
an agreement to provide recycled water to the customer.

(d) (1) An entity responsible for groundwater replenishment
that is a customer of a retail water supplier and that has identified
the potential use of recycled water for groundwater replenishment
purposes may, in writing, request that retail water supplier to enter
into an agreement to provide recycled water for that begin delete purpose. end delete
begin insert purpose consistent with Sections 13580.5, 13580.7, and 13580.8,
as applicable. end insert That entity may not obtain recycled water for that
purpose from a recycled water producer, a recycled water
wholesaler, or another retail water supplier without the agreement
of the entity’s retail water supplier.

(2) An entity responsible for groundwater replenishment that
is not a customer of a retail water supplier and that has identified
the potential use of recycled water for groundwater replenishment
purposes may, in writing, request a retail water supplier, a recycled
water producer, or a recycled water wholesaler to enter into an
agreement to provide recycled water for that purpose.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 13580.5 of the end insert begin insert Water Code end insert begin insert is amended to read: end insert

13580.5.  

(a) (1) Subject to subdivision (e) of Section 13580.7,
a retail water supplier that receives a request from a customer
pursuant to subdivision (c) of Section 13580 shall enter into an
agreement to provide recycled water, if recycled water is available,
or can be made available, to the retail water supplier for sale to
the customer.

(2) Notwithstanding paragraph (1), in accordance with a written
agreement between a recycled water producer or a recycled water
wholesaler and a retail water supplier, the retail water supplier
may delegate to a recycled water producer or a recycled water
wholesaler its responsibility under this section to provide recycled
water.

(b) A customer may not obtain recycled water from a recycled
water producer, a recycled water wholesaler, or a retail water
supplier that is not the retailer without the agreement of the retailer.

(c) If either a recycled water producer or a recycled water
wholesaler provides a customer of a retail water supplier with a
written statement that it can and will provide recycled water to the
retailer, the retail water supplier shall, not later than 120 days from
the date on which the retail water supplier receives the written
statement from the customer, by certified mail, return receipt
requested, submit a written offer to the begin delete customer. end delete begin insert customer that
includes the items listed in subdivision (f) of Section 13580.7. end insert A
determination of availability pursuant to Section 13550 is not
required.

(d) If the state board pursuant to Section 13550 makes a
determination that there is available recycled water to serve a
customer of a retail water supplier, the retail water supplier, not
later than 120 days from the date on which the retail water supplier
receives a copy of that determination from the customer, by
certified mail, return receipt requested, shall submit a written offer
to the customer.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 13580.7 of the end insert begin insert Water Code end insert begin insert is amended to read: end insert

13580.7.  

(a) This section applies only to a retail water supplier
that is begin insert either a mutual water company, formed and operating
pursuant to Part 7 (commencing with Section 14300) of Division
3 of Title 1 of the Corporations Code, or end insert a public agency.

(b) A customer may request, in writing, a retail water supplier
to enter into an agreement or adopt recycled water rates in order
to provide recycled water service to the customer. The retail water
supplier, by certified mail return receipt requested, shall submit a
written offer to the customer not later than 120 days from the date
on which the retail water supplier receives the written request from
the begin delete customer. end delete begin insert customer that complies with subdivision (f). end insert

(c) If no rate is in effect for recycled water service within the
service area of a retail water supplier, the rate and conditions for
recycled water service shall be established by contract between
the retail water supplier and the customer, not later than 120 days
from the date on which the customer requests a contract, or, by
resolution or ordinance by the retail water begin delete supplier, end delete begin insert supplier if it
is a public agency, or by resolution if the retail water supplier is
a mutual water company, end insert not later than 120 days from the date on
which the retail water supplier receives the customer’s written
request for an ordinance or resolution.

(d) A rate for recycled water service established by contract,
ordinance, or resolution, shall reflect a reasonable relationship
between the amount of the rate and the retail cost of obtaining or
producing the recycled water, the cost of conveying the recycled
water, and overhead expenses for providing begin insert and administering the
use of end insert recycled water service. Capital costs of facilities required
to serve the customer shall be amortized over the economic life of
the facility, or the length of time the customer agrees to purchase
recycled water, whichever is less. The rate shall not exceed the
estimated reasonable cost of providing the service, and any
additional costs agreed to by the customer for recycled water
supplemental treatment.

(e)  begin delete The end delete begin insert To the extent feasible, the end insert rate for recycled water shall
be comparable to, or less than, the retail water supplier’s rate for
potable water. If recycled water service cannot be provided at a
rate comparable to, or less than, the rate for potable water, the
retail water supplier is not required to provide the recycled water
service, unless the customer agrees to pay a rate that reimburses
the retail water supplier for the costs described in subdivision (c).

(f) The offer required by begin insert subdivision (b) and end insert subdivisions (c)
and (d) of Section 13580.5 shall identify all of the following:

(1) The source for the recycled water.

(2) The method of conveying the recycled water.

(3) A schedule for delivery of the recycled water.

(4) The terms of service.

(5) The rate for the recycled water, including the per-unit cost
for that water.

(6) The costs necessary to provide service and the basis for
determining those costs.

(g) This section does not apply to recycled water service rates
established before January 1, 1999, or any amendments to those
rates.