California Senate Bill SB855 Latest Draft

 BILL NUMBER: SB 855AMENDED BILL TEXT AMENDED IN ASSEMBLY JUNE 22, 2011 AMENDED IN SENATE MAY 5, 2011 INTRODUCED BY Senator Kehoe FEBRUARY 18, 2011  An act to amend Section 4351 of the Food and Agricultural Code, relating to race tracks.   An act to amend Section 365.1 of the Public Utilities Code, relating to electricity.  LEGISLATIVE COUNSEL'S DIGEST SB 855, as amended, Kehoe.  State Race Track Leasing Commission.   Electric service: direct transactions.   Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations and gas corporations, as defined. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable.   Existing law, relative to electrical restructuring, requires the commission to authorize and facilitate direct transactions between electricity suppliers and retail end-use customers. Existing law, enacted during the energy crisis of 2000-01, authorized the Department of Water Resources, until January 1, 2003, to enter into contracts for the purchase of electricity, and to sell electricity to retail end-use customers at not more than the department's acquisition costs and to recover those costs through the issuance of bonds to be repaid by ratepayers. That law suspended the right of retail end-use customers, other than community choice aggregators and a qualifying direct transaction customer, as defined, to acquire service through a direct transaction until the Department of Water Resources no longer supplies electricity under that law. Existing law continues the suspension of direct transactions except as expressly authorized, until the Legislature, by statute, repeals the suspension or otherwise authorizes direct transactions. Existing law requires the commission to authorize direct transactions for nonresidential end-use customers subject to a reopening schedule adopted and implemented by July 1, 2010, that will phase in over a period of not less than 3 years and not more than 5 years, and subject to an annual maximum allowable total kilowatthour limit established for each electrical corporation. The annual maximum allowable total kilowatthour limit is required to be established for each electrical corporation at the maximum total kilowatthours supplied by all other providers to distribution customers of that electrical corporation during any sequential 12-month period between April 1, 1998, and October 11, 2009.   This bill would modify the annual maximum allowable total kilowatthour limit for each electrical corporation to include the total kilowatthours of new load previously authorized and implemented by the commission pursuant to a specified statute. The bill would require the commission to adopt a specified schedule to phase in the allowable amount of increased kilowatthours by July 1, 2012, instead of July 1, 2010. The bill would change an existing requirement that the commission review and modify its currently effective rules governing direct transactions to instead authorize the commission to perform such review and modification.   Existing law establishes, until January 1, 2013, the State Race Track Leasing Commission which is composed of the Secretary of Food and Agriculture, the Director of Finance, and the Director of General Services, and 3 other individuals, as specified, who are appointed by the Governor. The commission is authorized to enter into leases and agreements for the use of specified property owned or controlled by the 22nd District Agricultural Association.   This bill would extend the operative date of the provision establishing the commission until January 1, 2018.  Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Section 365.1 of the   Public Utilities Code   is amended to read:  365.1. (a) Except as expressly authorized by this section, and subject to the limitations in subdivisions (b) and (c), the right of retail end-use customers pursuant to this chapter to acquire service from other providers is suspended until the Legislature, by statute, lifts the suspension or otherwise authorizes direct transactions. For purposes of this section, "other provider" means any person, corporation, or other entity that is authorized to provide electric service within the service territory of an electrical corporation pursuant to this chapter, and includes an aggregator, broker, or marketer, as defined in Section 331, and an electric service provider, as defined in Section 218.3. "Other provider" does not include a community choice aggregator, as defined in Section 331.1, and the limitations in this section do not apply to the sale of electricity by "other providers" to a community choice aggregator for resale to community choice aggregation electricity consumers pursuant to Section 366.2. (b) The commission shall allow individual retail nonresidential end-use customers to acquire electric service from other providers in each electrical corporation's distribution service territory, up to a maximum allowable total kilowatthours annual limit. The maximum allowable annual limit shall be established by the commission for each electrical corporation at the maximum total kilowatthours supplied by all other providers to distribution customers of that electrical corporation during any sequential 12-month period between April 1, 1998, and  the effective date of this section. Within six months of the effective date of this section, or by July 1, 2010, whichever is sooner,   October 11, 2009, plus the total kilowatthours of new load previously authorized by statute and implemented by the commission pursuant to Chapter 337 of the Statutes of 2009. By July 1, 2012,  the commission shall adopt and implement a  reopening  schedule that commences immediately and will phase in the allowable amount of increased kilowatthours over a period of not less than three years, and not more than five years, raising the allowable limit of kilowatthours supplied by other providers in each electrical corporation's distribution service territory from the number of kilowatthours provided by other providers as of the effective date of this section, to the maximum allowable annual limit for that electrical corporation's distribution service territory. The commission  shall   may  review and, if appropriate, modify its currently effective rules governing direct transactions, but  that   any such  review shall not delay the start of the phase-in schedule. (c) Once the commission has authorized additional direct transactions pursuant to subdivision (b), it shall do both of the following: (1) Ensure that other providers are subject to the same requirements that are applicable to the state's three largest electrical corporations under any programs or rules adopted by the commission to implement the resource adequacy provisions of Section 380, the renewables portfolio standard provisions of Article 16 (commencing with Section 399.11), and the requirements for the electricity sector adopted by the State Air Resources Board pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code). This requirement applies notwithstanding any prior decision of the commission to the contrary. (2) (A) Ensure that, in the event that the commission authorizes, in the situation of a contract with a third party, or orders, in the situation of utility-owned generation, an electrical corporation to obtain generation resources that the commission determines are needed to meet system or local area reliability needs for the benefit of all customers in the electrical corporation's distribution service territory, the net capacity costs of those generation resources are allocated on a fully nonbypassable basis consistent with departing load provisions as determined by the commission, to all of the following: (i) Bundled service customers of the electrical corporation. (ii) Customers that purchase electricity through a direct transaction with other providers. (iii) Customers of community choice aggregators. (B) The resource adequacy benefits of generation resources acquired by an electrical corporation pursuant to subparagraph (A) shall be allocated to all customers who pay their net capacity costs. Net capacity costs shall be determined by subtracting the energy and ancillary services value of the resource from the total costs paid by the electrical corporation pursuant to a contract with a third party or the annual revenue requirement for the resource if the electrical corporation directly owns the resource. An energy auction shall not be required as a condition for applying this allocation, but may be allowed as a means to establish the energy and ancillary services value of the resource for purposes of determining the net costs of capacity to be recovered from customers pursuant to this paragraph, and the allocation of the net capacity costs of contracts with third parties shall be allowed for the terms of those contracts. (C) It is the intent of the Legislature, in enacting this paragraph, to provide additional guidance to the commission with respect to the implementation of subdivision (g) of Section 380, as well as to ensure that the customers to whom the net costs and benefits of capacity are allocated are not required to pay for the cost of electricity they do not consume. (d) (1) If the commission approves a centralized resource adequacy mechanism pursuant to subdivisions (h) and (i) of Section 380, upon the implementation of the centralized resource adequacy mechanism the requirements of paragraph (2) of subdivision (c) shall be suspended. If the commission later orders that electrical corporations cease procuring capacity through a centralized resource adequacy mechanism, the requirements of paragraph (2) of subdivision (c) shall again apply. (2) If the use of a centralized resource adequacy mechanism is authorized by the commission and has been implemented as set forth in paragraph (1), the net capacity costs of generation resources that the commission determines are required to meet urgent system or urgent local grid reliability needs, and that the commission authorizes to be procured outside of the Section 380 or Section 454.5 processes, shall be recovered according to the provisions of paragraph (2) of subdivision (c). (3) Nothing in this   This  subdivision  supplants   does not supplant  the resource adequacy requirements of Section 380 or the resource procurement procedures established in Section 454.5. (e) The commission may report to the Legislature on the efficacy of authorizing individual retail end-use residential customers to enter into direct transactions, including appropriate consumer protections.  SECTION 1.   Section 4351 of the Food and Agricultural Code is amended to read: 4351. (a) There is hereby created the State Race Track Leasing Commission which shall be composed of the Secretary of Food and Agriculture, the Director of Finance, and the Director of General Services, and three individuals, appointed by the Governor, who are members of the Board of Directors of the 22nd District Agricultural Association. The Director of Finance shall serve as chairperson of the commission. All meetings of the commission shall be open and public. (b) This section shall remain in effect only until January 1, 2018, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2018, deletes or extends that date.