HomeMy WebLinkAbout32-Council Office
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Council Office
Subject: Resolution supporting AS
2006 (Nunez) - the Reliable Electric
Service Act of 2004
Dept:
Date: June 4, fJ{(\G\N~L
MICC Meeting Date: 6/21/04
Synopsis of Previous Council Action:
March 16,2004 - The Legislative Review Committee recommends the Mayor and
Common Council support AS 2006.
Recommended motion:
Adopt Resolution.
~ A. t"%
Signature
Contact person:
Lori Sassoon
Phone:
5122
Supporting data attached: Staff Report & other documents Ward:
FUNDING REQUIREMENTS: Amount: None
Source: (Ace!. No.)
(Ace!. Description)
Finance:
Council Notes:
\A-..()~ ~Z.Oy.
Agenda Item No. 3~
Gj:lllo'{
STAFF REPORT
Sublect:
Resolution supporting AB 2006 (Nunez) - the Reliable Electric Service Act of 2004
Backl!round:
At the March 17 meeting of the Legislative Review Committee, Ray Gonzalez of
Southern California Edison (SCE) presented an overview of AB 2006 and requested the
City's support for this legislation.
AB 2006 would make a number of changes to state regulations related to the production
of electricity. According to its author, the goal is to ensure that an adequate, stable
supply of electricity is generated in California to meet the state's growing electricity
demands. A copy of the bill, analysis regarding the bill and other information provided
by SCE are attached.
Most significantly, the bill would provide the framework for investor-owned utilities,
such as SCE, to re-enter the field electricity generation. In exchange, the ability of
businesses or other entities to contract with independent power suppliers would be
subject to a number oflimitations, including a 5-year notice requirement.
The League of California Cities is supporting the measure, along with many other
business and consumer groups. AB 2006 is opposed by other energy producers.
Following Mr. Gonzalez' presentation, the Legislative Review Committee recommended
that the Mayor and Council approve the issuance of a letter of support for AB 2006.
Financial Impact:
There is no financial impact associated with this action.
Recommendation:
Adopt resolution
05/05/04 10:12 AM
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO SUPPORTING AB 2006 (NUNEZ) . THE RELIABLE
ELECTRIC SERVICE ACT OF 2004
WHEREAS, California residents and businesses all depend upon reliable electricity at
a reasonable price; and
WHEREAS, local governments and residents of local commUnItIes were all
detrimentally impacted by the power supply crisis of 2000-2002, and the uncertainty in energy
pricing and reliability that resulted; and
WHEREAS, the uncertainty of the state's regulatory enviromnent has discouraged
investlnents necessary to complete much needed power plants in the state; and
WHEREAS, iflegislative action is not taken soon, California residents, businesses, and
our state's economy could once again be threatened with rolling blackouts and significant
power price increases by the year 2006; and
WHEREAS, AB 2006 would protect California electricity customers from future
blackouts and power price spikes by encouraging the development of additional electricity
generating capacity in the state; and
WHEREAS, AB 2006 will require utilities to demonstrate to the CPUC that their
investlnents in power contracts, renewable energy, energy efficiency, direct investlnents, and
other investments provide cost-effective, efficient value for customers; and
WHEREAS, AB 2006 is good for our enviromnent because it will accelerate the date
by which utilities must demonstrate that 20 percent of their power comes from renewable
resources;
NOW, THEREFORE, IT IS RESOLVED by the Mayor and Common Council of the
City of San Bernardino, California, as follows:
1. The City of San Bernardino supports AB 2006, and asks its legislative
representatives to join in support of the bill.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO SUPPORTING AB 2006 (NUNEZ) - THE RELIABLE
ELECTRIC SERVICE ACT OF 2004
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
and Cornmon Council of the City of San Bernardino at a
meeting thereof, held on the
_ day of
, 2004, by the following vote, to wit:
Council Members:
AYES
NAYS
ABSTAIN ABSENT
ESTRADA
LONGVILLE
MCGINNIS
DERRY
KELLEY
JOHNSON
MCCAMMACK
City Clerk
The foregoing resolution is hereby approved this
day of
2004.
Judith Valles, Mayor
City of San Bernardino
Approved as to
Form and legal content:
JAMES F. PENMAN,
City Attorney
CALIFORNIA LEGISLATURE-2003-{)4 REGULAR SESSION
ASSEMBLY BILL
No. 2006
Introduced by Assembly Member Nunez
February 13, 2004
An act to add Article 17 (commencing with Section 400) to Chapter
2.3 of Part I of Division I of the Public Utilities Code, relating to
electricity.
LEGISLATIVE COUNSEL"S DIGEST
AS 2006, as introduced, Nunez. Electrical restructuring: Reliable
Electric Service Act of 2004.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations, and
authorizes the commission to fix just and reasonable rates and charges.
Under existing law, a public utility has a duty to serve, including
furnishing and maintaining adequate, efficient, just and reasonable
service, instrumentalities, equipment, and facilities as are necessary to
promote the safety, health, comfort, and convenience of its patrons and
the public. The existing Public Utilities Act requires the commission,
pursuant to electrical restructuring, to authorize direct transactions
between electricity suppliers and retail end-use customers. However,
other existing law suspends the right of retail end-use customers to
acquire service from certain electricity suppliers after a period of time
to be determined by the commission, until the Department of Water
Resources no longer supplies electricity under that law.
This bill would establish a core and noncore model under which the
utility's duty to serve would extend to core customers and those noncore
customers that elect to receive bundled electric service from the
electrical corporation. The utility's duty to serve noncore customers
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that elect to purchase electricity through a direct transaction would exist
for transmission and distribution electric service. The bill would require
electrical corporations to file, and for the commission to approve, an
integrated resource investment plan, as specified, sufficient to fulfill the
utility's duty to serve. The bill would provide for the recovery of costs
and investments made pursuant to an approved integrated resource
investment plan. The bill would require that a utility's bundled service
customers be indifferent to the election by noncore customers to
purchase electricity through direct transactions. The bill would require
the commission, in consultation with the Independent System Operator,
to establish resource adequacy requirements to ensure adequate
reserves of physical generating capacity are available to reliably serve
all customers and would require the Independent System Operator,
consistent with federal law, to implement and enforce these resource
adequacy and reserve requirements in a nondiscriminatory manner on
all load serving entities. The bill would require the commission to adopt
implementing rules and regulations.
A violation of the Public Utilities Act or an order of the commission
is a crime under existing law.
Because a violation of the bill's provisions would be a violation of
the act, the bill would impose a state-mandated local program by
creating a new crime.
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 asfollows:
I SECTION I. The Legislature finds and declares all of the
2 following:
3 (a) An adequate and reliable supply of electricity is essential to
4 the health, safety, and welfare of all California consumers.
5 (b) Safe, reliable, and affordable, electric service that is
6 environmentally sustainable, is of utmost importance to the
7 consumers of this state and its economy.
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AB 2006
1 (c) Electrical corporations have an obligation to serve their
2 customers with reliable electric service at just and reasonable rates.
3 (d) In order to provide safe, reliable, and affordable electric
4 service to consumers, electrical corporations must invest in needed
5 resources, including utility-owned and procured generation, new
6 and repowered generation, high-efficiency cogeneration,
7 renewable generation, transmission, distribution, and energy
8 efficiency and other demand reduction measures, in a manner that
9 produces the best value for ratepayers.
10 (e) In order to ensure that investments in resources are made in
11 a manner that produces the best value for ratepayers, electrical
12 corporations should prepare an integrated resource investment
13 plan for commission review and approval, that achieves a
14 diversified, reliable, and environmentally sustainable portfolio of
15 efficient, cost-effective supply and demand resources.
16 (t) In order to ensure that an integrated resource investment
17 plan will result in investments in resources sufficient to provide
18 reliable electric service to customers of an electrical corporation
19 without stranding costs or shifting costs, a stable and predictable
20 customer base is necessary and essential.
21 (g) In order to attract sufficient capital to make investments in
22 needed resources, there must be assurance that reasonable costs
23 and investments, including a return of and on direct investments,
24 and investments made by third parties under contract with an
25 electrical corporation, are recovered in rates.
26 (h) California consumers will not receive reliable and
27 affordable electric service, nor will consumers avoid repetition of
28 past problems with volatile wholesale electricity prices, rolling
29 blackouts, and long-term supply contracts that threaten consumers
30 with billions of dollars in above-market electricity costs, unless a
31 durable framework is enacted to support investment in needed
32 resources, as soon as possible.
33 SEC. 2. Article 17 (commencing with Section 400) is added
34 to Chapter 2.3 of Part 1 of Division I of the Public Utilities Code,
35 to read:
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40
Article 17. Reliable Electric Service Act of 2004
400. This article shall be known, and may be cited, as the
Reliable Electric Service Act of 2004.
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1 400.1. (a) An electrical corporation has an obligation to serve
2 the utility's bundled customers with reliable electric service at just
3 and reasonable rates, pursuant to Section 451. For purposes of this
4 article, the utility's "bundled customers" means core customers
5 and those noncore customers that commit to bundled service
6 pursuant to this article.
7 (b) The obligation to serve the utility's bundled customers
8 includes the obligation to plan for, invest in, and provide adequate,
9 efficient, and environmentally sustainable resources, including
10 utility-owned and procured generation resources, new and
11 repowered generation resources, high-efficiency cogeneration,
12 renewable generation resources, transmission and distribution
13 resources, energy efficiency and demand response resources, and
14 to employ an adequately sized, well trained utility workforce to
15 provide these resources.
16 (c) An electrical corporation has an obligation to serve noncore
17 customers that elect to enter into direct transactions, with electric
18 transmission and distribution service at just and reasonable rates,
19 pursuant to Section 451. No costs incurred by the electrical
20 corporation to serve noncore customers with electric transmission
21 and distribution service, shall be shifted to the utility's bundled
22 customers.
23 400.5. (a) To ensure that adequate investments are made in
24 resources necessary to provide consumers with reliable electric
25 service, the commission shall authorize an electrical corporation
26 to make investments in efficient, cost-effective resources,
27 including utility-owned and procured generation resources, new
28 and repowered generation resources, high-efficiency
29 cogeneration, renewable generation resources, transmission
30 resources, and cost-effective energy efficiency and demand
31 response resources, consistent with the electrical corporation's
32 approved integrated resource investment plan.
33 (b) The commission shall, after public hearing, approve and
34 thereafter maintain just and reasonable rates sufficient to ensure
35 that reasonable investments in the resources necessary to provide
36 consumers with reliable electric service, including a reasonable
37 return of and on investment, are fully recovered over the life of the
38 resource, and that costs reasonably incurred to operate and
39 maintain those resources are fully recovered on a timely basis.
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AB 2006
1 (c) The cost recovery assurance for investments in resources
2 applies to both of the following:
3 (1) Direct investments made by an electrical corporation.
4 (2) The electrical corporation's full costs of contracting with
5 another entity, including the cost of any collateral requirements
6 and debt equivalence.
7 400.10. (a) To ensure that adequate investments necessary to
8 meet the electrical corporation's obligation to serve bundled
9 customers are made, each electrical corporation shall, no later than
10 July 1,2005, and at least every three years thereafter, prepare an
11 integrated resource investment plan to achieve a diversified,
12 environmentally sustainable portfolio of efficient cost-effective
13 supply and demand resources to serve the utility's bundled
14 customers. The integrated resource investment plan shall include
15 demand and supply forecasts for 5-,10-, and l5-year periods, and
16 shall ensure that adequate resources are available to reliably serve
17 the utility's bundled customers. The process for utility selection
18 and commission approval of these resources shall be designed to
19 achieve best value for the utility's bundled customers, by
20 considering reliability, efficiency, cost-effectiveness, system
21 impacts, resource diversity, and risk. The commission shall review
22 and approve, with such revisions as the commission deems
23 necessary to implement the provisions of this article, an electrical
24 corporation's integrated resource investment plan within 120 days
25 of receipt.
26 (b) The integrated resource investment plan shall provide for
27 investments in all practicable and cost-effective energy efficiency
28 and demand response resources, including load management, that
29 offer equivalent or better system reliability, equivalent or better
30 environmental improvements, and equivalent or lower costs to
31 ratepayers than supply alternatives.
32 (c) The integrated resource investment plan shall provide for
33 investments in renewable generation consistent with Article 16
34 (commencing with Section 399.11), provided that investments in
35 renewable generation are made in furtherance of the goal of
36 supplying 20 percent of an electrical corporation's retail sales from
37 eligible renewable energy resources, no later than December 31,
38 2010.
39 (d) (1) The integrated resource investment plan shall provide
40 for investments, including extensions, renewals, or renegotiations
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1 of existing contracts, in new or repowered generation and
2 high-efficiency cogeneration projects. These resources may be
3 obtained through investment by independent generators under
4 contract with the electrical corporation, through a competitive
5 procurement process or other process approved by the
6 commission, consistent with Section 454.5, or from direct utility
7 investment. To the maximum extent permissible under law,
8 repowering and high-efficiency cogeneration projects that offer
9 equivalent or better system reliability, equivalent or better
10 environmental benefits, and equivalent or lower costs to
11 ratepayers than new generation, shall be given first consideration.
12 (2) For purposes of this chapter, "high-efficiency cogeneration
13 projects" means a cogeneration project that can achieve thermal
14 efficiencies greater than 75 percent and are used to meet the
15 thermal requirements of continuous industrial or commercial
16 processes.
17 (3) For purposes of this chapter, "repowered generation"
18 means a project for the modification of an existing generation unit
19 of a thermal powerplant that meets all of the following criteria:
20 (A) The project complies with all applicable requirements of
21 federal, state, and local laws.
22 (B) The project is located on the site of, and within the existing
23 boundaries of, an existing thermal facility.
24 (C) The project will not require significant additional
25 rights-of-way for electrical or fuel-related transmission facilities.
26 (D) The project will result in significant and substantial
27 increases in the efficiency of the production of electricity,
28 induding, but not limited to, reducing the heat rate, reducing the
29 use of natural gas, reducing the use and discharge of water, and
30 reducing air pollutants emitted by the project, as measured on a per
31 kilowatthour basis.
32 (e) The integrated resource investment plan shall provide for
33 investments in new or expanded transmission facilities and control
34 systems that are needed to ensure efficient use and reliable
35 operation of the electric grid for core and noncore customers, to
36 facilitate the development of new, repowered, or renewable
37 generation facilities, or to accommodate load growth. With respect
38 to any new or expanded electrical transmission facility for which
39 the Independent System Operator has made a determination that
40 the project is needed to meet applicable reliability standards or to
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AB 2006
I promote economic efficiency, that determination shall be
2 conclusive for purposes of determining whether to issue a
3 certificate of public convenience and necessity pursuant to
4 Chapter 5 (commencing with Section 1001), and shall be included
5 in the approved integrated resource investment plan.
6 (f) (1) The integrated resource investment plan may provide
7 for investments in distributed generation to improve system
8 reliability, thereby deferring or eliminating investments in
9 distribution facilities that are otherwise needed to improve system
10 reliability, by either direct investment by the electrical corporation
II or under contract with a third party, provided the electrical
12 corporation finds that the investment in distributed generation
13 would accomplish each of the following:
14 (A) Result in overall cost savings due to deferral or elimination
15 of electric distribution projects.
16 (B) Provide the required reliability and operational
17 characteristics to support adequate service reliability to customers
18 in the affected area.
19 (2) In cases where the distributed generation is provided under
20 contract with a third party to reduce distribution system loads, the
21 third party must maintain physical assurance that the contracted
22 load reduction will be available during all required time periods.
23 (g) The integrated resource investment plan shall provide for
24 the continuation of the self-generation incentive program
25 authorized pursuant to Section 379.5 for ultraclean distributed
26 generation, as defined in Section 353.2.
27 (h) The integrated resource investment plan shall provide that
28 an electrical corporation shall meet the resource adequacy
29 requirements, owning or procuring sufficient electric generating
30 capacity to meet 100 percent of annual peak demand, plus requisite
31 operating and planning reserve margins as determined by the
32 commission, for the electric load served by the electrical
33 corporation.
34 400.20. (a) The Legislature finds and declares all of the
35 following:
36 (I) To ensure that an electrical corporation can properly plan
37 for and invest in resources to reliably serve its customers without
38 stranding costs or shifting costs among customers, a stable and
39 predictable customer base is necessary and essential.
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I (2) A core and noncore electric service model, under which an
2 electrical corporation is required to provide bundled electric
3 service to all core customers on a cost-of-service basis, while
4 noncore customers with a maximum peak demand of at least 500
5 kilowatts, can elect to enter into a direct transaction to purchase
6 electricity from a nonutility electric service provider, will, if
7 properly structured, provide this stability.
8 (3) Under a properly structured core and noncore electric
9 service model, a utility's bundled service customers are indifferent
10 to whether or not a noncore customer elects to purchase electricity
II from an electrical corporation or through a direct transaction.
12 (4) To ensure indifference, the commission is required to
13 prevent any shifting of costs to a utility's customers receiving
14 bundled service, from noncore customers that elect to purchase
IS electricity through direct transactions.
16 (5) It is in the public interest to allow noncore customers that
17 elect to purchase electricity through direct transactions, a safe
18 harbor of limited duration during which they can receive
19 electricity from an electrical corporation, provided the utility's
20 bundled service customers are indifferent to whether a noncore
21 customer purchases electricity from an electrical corporation
22 during the safe harbor period. To ensure indifference, a noncore
23 customer should pay the higher of the incremental costs of
24 additional short-term spot electricity procured or generated to
25 serve them or the otherwise applicable tariff rate.
26 400.21. On or before December 31, 2005, the commission
27 shall adopt rules and regulations to implement a core and noncore
28 model that accomplish all of the following:
29 (a) An electrical corporation shall remain obligated to provide
30 reliable bundled electric service to core customers that have a
31 maximum peak demand of less than 500 kilowatts on a
32 cost-of-service basis.
33 (b) Noncore customers with a maximum peak demand of at
34 least 500 kilowatts may elect to enter into a direct transaction with
35 a nonutility electric service provider. The electric service provider
36 shall be fully responsible for the resource adequacy requirements
37 of the electricity load of the customers it serves, and the integrated
38 resource investment plan of the electrical corporation shall
39 exclude the resource adequacy requirements of the electricity load
40 serviced by an electric service provider.
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AB 2006
1 (c) A noncore customer that elect to take bundled service from
2 the electrical corporation shall be subject to a five-year rolling
3 commitment to the electrical corporation.
4 (d) A noncore customer that elects to purchase electricity
5 through a direct transaction may thereafter receive default electric
6 commodity service from the electrical corporation under terms
7 established by the commission to ensure that the utility's bundled
8 service customers are indifferent to whether the noncore customer
9 purchases electricity from the electrical corporation during this
10 safe harbor period. To ensure indifference, a noncore customer
11 shall pay the higher of the incremental costs of additional
12 short-term spot electricity procured or generated to serve the
13 noncore customer or the otherwise applicable tariff rate.
14 (e) To ensure indifference, the commission shall adopt rules
15 sufficient to avoid a shifting of costs to the utility's bundled
16 customers that would result from noncore customers electing to
17 purchase electricity through direct transactions. Noncore
18 customers shall continue to pay those costs recoverable pursuant
19 to subdivisions (d), (e), (t), and (g) of Section 366.2.
20 (t) The commission shall adopt rules that defer new elections
21 to enter into direct transactions for the purchase of electricity by
22 noncore customers until the commission has approved a cost
23 recovery mechanism that ensures that new elections by noncore
24 customers to purchase electricity through direct transactions will
25 not result in the under recovery of any costs attributable to those
26 noncore customers.
27 (g) Customers that are purchasing electricity pursuant to a
28 direct transaction as of January I, 2005, including customers that
29 qualify as core customers, pursuant to rules adopted by the
30 commission, may choose to continue to purchase electricity
31 pursuant to direct transaction or to return to bundled service
32 provided by the electrical corporation.
33 (h) In designating the earliest possible date for implementation
34 of a community choice aggregation program, the commission
35 shall ensure that there will be no cost-shifting or stranding of
36 investments made pursuant to an integrated resource investment
37 plan of the electrical corporation that has been approved by the
38 commission.
39 400.22. (a) All electrical load serving entities, including
40 nonutility electric service providers and community choice
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I aggregators, shall be subject to the same requirements for resource
2 adequacy, resource diversity, the renewable portfolio standard,
3 and demand response resources applicable to electrical
4 corporations.
5 (b) The commission, in consultation with the Independent
6 System Operator, shall establish resource adequacy requirements
7 to ensure adequate reserves of physical generating capacity are
8 available to serve all customers reliably. Consistent with federal
9 law, the Independent System Operator shall implement and
10 enforce these resource adequacy and reserve requirements in a
II nondiscriminatory manner on all load serving entities.
12 400.30. To ensure that the utility's obligation to serve bundled
13 customers with reliable electric service at just and reasonable rates
14 is met by an electrical corporation, the commission shall adopt
15 rules and regulations consistent with the policies and provisions of
16 this article. Subject to judicial review as provided in this act, those
17 actions undertaken by the commission pursuant to the provisions
18 of this article are binding upon the commission, and modify,
19 amend and supercede any other provisions of law, including
20 Section 1708.
21 400.40. Nothing in this chapter shall alter or affect any
22 outcome of a competitive procurement process conducted by an
23 electrical corporation pursuant to any other law, including Section
24 454.5, prior to January 1,2005.
25 SEC. 3. No reimbursement is required by this act pursuant to
26 Section 6 of Article XIII B of the California Constitution because
27 the only costs that may be incurred by a local agency or school
28 district will be incurred because this act creates a new crime or
29 infraction, eliminates a crime or infraction, or changes the penalty
30 for a crime or infraction, within the meaning of Section 17556 of
3 I the Government Code, or changes the defmition of a crime within
32 the meaning of Section 6 of Article XIII B of the California
33 Constitution.
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AB 2006 Assembly Bill - Bill Analysis
Page 1 of 26
AB 2006
Page 1
Date of Hearing: April 19, 2004
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Sarah Reyes, Chair
AB 2006 (Nu?ez) - AS Amended: April 12, 2004
SUBJECT Electrical restructuring: Reliable Electric Service
Act of 2004.
SUMMARY Establishes the Reliable Electric Services Act of
2004. This bill sets up requirements for establishing a core
and noncore model of electric service, cost recovery of
investments made by a utility or the utilities full costs of
contracting, utilities obligation to file an integrated resource
investment plan, generation resource selection, resource
adequacy for all load serving entities, and transmission
investment. Specifically, this bill
Finds that:
l)An adequate and reliable supply of electricity is essential to
the health, safety, and welfare of all California consumers.
That safe, reliable, and affordable electric service is of
utmost importance to the consumers of this state and its
economy and that electrical corporations have an obligation to
provide their customers with reliable electric service at just
and reasonable rates.
2)California consumers will not receive reliable and affordable
electric service, nor will consumers avoid repetition of past
problems with excessive wholesale electricity prices; rolling
blackouts; and long term supply contracts that threaten
consumers with billions of dollars in above market electricity
costs, unless a durable framework is enacted to support
investment in needed resources.
Declares that:
l)In order to provide safe, reliable, and affordable electric
service to consumers, electrical corporations must provide
needed resources. Which includes cost effective energy
efficiency and demand reduction measures, utility procured
generation, new and repowered generation, co-generation,
renewable generation, transmission and distribution and an
adequately sized and well trained workforce in a manner that
AB 2006
Page 2
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AB 2006 Assembly Bill - Bill Analysis
Page 2 of26
produces the best value for ratepayers.
2)10 order to ensure that investments in resources are made in a
manner that produces the best value for ratepayers, electrical
corporations should prepare a long term resource plan for
California Public Utilities Commission (CPUC) review and
approval, that achieves a diversified portfolio of efficient,
cost effective supply and demand resources.
3)10 order to ensure that the long term resource plan achieves a
diversified portfolio of efficient, cost effective supply and
demand resources, resource adequacy requirements shall be met
first through effective energy efficiency and other demand
reduction measures.
4)10 order to ensure that a long term resource plan will result
in investments in resources sufficient to provide reliable
electric service to customers of an electrical corporation
without stranding costs or shifting costs, a stable and
predictable customer base is necessary and essential.
5)In order to attract sufficient capital to make investments in
needed resources, there must be assurance that reasonable
costs and investments, including a return of and on direct
investments, and payments made to third parties under contract
with an electrical corporation for non utility owned
generation, are recovered in rates.
6)Nothing in this bill alters or affects the outcome of
competitive procurement process conducted by an electrical
corporation pursuant to exiting law prior to January 1, 2005.
Definitions in this bill:
1) Electric service as defined in this bill includes providing
adequate, efficient resources, including cost effective energy
efficiency and demand response resources, utility owned and
procured generation, new and repowered generation,
co-generation, renewable generation, transmission and
distribution resources, billing and metering and employing an
adequately sized, well trained utility workforce.
2)Non utility generation as defined in this bill means
facilities for generation of electricity owned and operated by
an entity other than an electrical corporation or an affiliate
AB 2006
Page 3
of an electrical corporation.
Obliqation to Serve:
1) Specifies an electrical corporation has an obligation to
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AB 2006 Assembly Bill - Bill Analysis
Page 3 of26
provide the utility.s customers with reliable electric service
at just and reasonable rates.
2)Specifies an electrical corporation has no obliqation to
procure electricity or meet resource adequacy requirements for
any customer who elects to enter a direct transaction.
3)Specifies that no costs shall be incurred by the electrical
corporation as a result of it serving direct access (DA)
customers.
Cost Recovery:
l)Requires CPUC to authorize an electrical corporation to
provide efficient, cost effective resources, including cost
effective energy efficiency and demand response resouces,
utility owned and procured generation resources, new and
repowered resources, co-generation, and renewable generation
resources consistent with long term plans adopted by CPUC.
2)Requires CPUC after a public hearing to approve and maintain
just and reasonable rates sufficient to ensure that the
electrical corporation fully recovers the cost of investments
found reasonable by CPUC over the life of the resource.
Including costs reasonably incurred to operate and maintain
those resources on a timely basis.
3)Specifies cost recovery assurance for investment in resources
applies to 1) direct investment made by an electrical
corporation and 2) an electrical corporations full costs of
contracting for generation resources, including the cost of
collateral requirements and debt equivalence.
Lonq Term Resource Plan:
l)Requires an electrical corporation to prepare a long term
resource plan (LTRP) consistent with existing law to achieve a
diversified portfolio of efficient cost effective supply and
AB 2006
Page 4
demand resources. LTRP is to include demand and supply
forecasts for 5, 10, 15 year periods and is to reflect energy
efficiency programs approved by CPUC.
2)Requires CPUC, after a public hearing, to review and approve
an electrical corporations LTRP consistent with existing law,
including changes to LTRP that CPUC determines are necessary.
3)Specifies LTRP must provide for investments in practicable
cost effective energy efficiency and demand response
resources, including load management, that offer equivalent or
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better system reliability, equivalent
improvements, and equivalent or lower
supply alternatives.
or better environmental
costs to ratepayers than
4)Specifies LTRP provide for investments in necessary generating
resources, which may include extensions, renewals or
renegotiations of contracts for existing generation resources
that may be new or repowered or co-generation projects.
5)Specifies LTRP may provide for investments in distributed
generation that would improve system reliability thereby
reducing or eliminating investments by the electrical
corporation in distribution facilities. The investments in
distributed generation can come from the electrical
corporation or third party and would result in:
a) Cost savings to ratepayers as a result of deferring or
eliminating utility distribution projects.
b) Reliability and operational characteristics to support
adequate service reliability to customers in the affected
area of the distributed generation.
c) A guarantee from third party distributed generation
operators that contract load reduction will be available
during all required time periods.
6}Requires the continuation of the self generation incentive
program to be administered for ultraclean distributed
generation as it existed on January I, 2004.
7)Requires an electrical corporations LTRP to meet resource
adequacy needs through owning or contracting for sufficient
physical generation capacity to meet 100% of annual peak
AB 2006
Page 5
demand of electric load serviced by the electrical
corporation, including operating and planning reserve margins
as determined by CPUC. This does not include electrical load
of customers who entered DA.
Generation Resource Selection:
l)Specifies an electrical corporations approved procurement plan
achieve best value for ratepayers by considering price,
reliability, stability, efficiency, cost effectiveness, system
impacts, resource diversity, and risk.
2)Requires an electrical corporation to manage a diversified
portfolio of non utility generation under contract with the
utility, and utility owned generation, combining the potential
benefits of a competitive wholesale market including operating
efficiencies and lower prices, with the stability of cost of
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service regulation resources.
3)Requires an electrical corporation to recommend to CPUC
approval of generation resources necessary to meet resource
adequacy requirements consistent with the following:
a) Non utility generation selected through a competitive
solicitation consistent with an electrical corporation
approved procurement plan.
b) Bilateral contracts, determined to be reasonably priced
relative to a CPUC developed market based benchmark, with
non utility generation consistent with an electrical
corporation approved procurement plan.
c) Utility owned generation filed by an electrical
corporation for a certificate of public convenience and
necessity consistent with its approved procurement plan and
determined by CPUC to be reasonably priced relative to a
CPUC developed market based benchmark.
Transmission:
1) Requires an electrical corporation to invest in new or
expanded transmission facilities and control systems that are
needed to ensure efficient use and reliable operation of the
grid.
AS 2006
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2)Specifies that California Independent System Operator (ISO)
determination of the need for transmission projects to meet
reliability standards shall be conclusive for the purposes of
CPUC's need determination.
Core/Noncore:
l)Establishes a core and none ore electric service model, under
which an electrical corporation is required to provide
electric service to all core customers with a maximum peak
demand of less than 500 kilowatts (kW) on a cost of service
basis, while noncore customers with a maximum peak demand of
at least 500 kW can elect to enter into direct transactions
with a nonutility electric service provider (ESP).
2)Specifies that under a properly constructed core and noncore
structure customers in the core portfolio should be
indifferent to whether a noncore customer purchases
electricity through DA.
3)Requires CPUC to prevent any cost shifting by noncore
customers purchasing electricity through DA to core customers.
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4)Establishes a safe harbor of limited duration for noncore
customers to purchase electricity from an electrical
corporation through either paying the higher of incremental
costs of additional short term electricity procured or
generated to serve them or an applicable tariff rate.
5)Requires CPUC on or before December 31, 2005 to adopt rules
and regulations to implement a core and noncore model to
accomplish the following:
a) Core customers and none ore customers not electing direct
transactions to receive electric service from an electrical
corporation on a cost of service basis.
b) Process to allow noncore customers to elect to enter
into a direct transaction and requiring ESPs to be
responsible for meeting CPUC approved resource adequacy
requirements (RARs).
c) Requirement for none ore customers not electing direct
transactions to be subject to a five year rolling
commitment to an electrical corporation.
AB 2006
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d) Requirement for noncore customers to continue paying
historical costs associated with deregulation, long term
contracts signed by the Department of Water Resources
(DWR) , and any utility undercollections.
6)Requires CPUC to defer new elections for direct transactions
subject to approval of a cost recovery mechanism that ensures
that new elections for direct transactions by noncore
customers will not result in the under recovery of any costs
attributable to those noncore customers.
7)Allows customers purchasing electricity through direct
transactions as of January 1, 2005 including customers with a
maximum peak demand of less than 500 kW to elect to continue
purchasing electricity through direct transactions or return
to service provided by an electrical corporation.
8)Specifies CPUC to ensure that no cost shifting or stranded
investments of long term electrical corporation resources
approved by CPUC are made as a result of implementation of
community choice aggregation.
Resource Adequacy:
l)Specifies that all load serving entities, including nonutility
ESPs and community choice aggregators are subject to the same
requirements for resource adequacy, resource diversity, the
renewable portfolio standard (RPS) as an electrical
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corporation.
2)Specifies that ISO in consultation with CPUC to establish RARs
to ensure adequate physical generating capacity to meet peak
demand and planning and operating reserves. ISO shall
implement and enforce the requirements in a nondiscriminatory
manner.
3)Allows load serving entities to procure physical generating
capacity through a market based mechanism in order to meet
RARs in this bill.
4)Exempts local publicly owned electrical utilities from this
bill's RARs.
AB 2006
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EXISTING LAW:
l)Establishes that CEC has the exclusive power to certify all
thermal powerplant sites over 50 MW and related facilities in
the state, whether a new site and related facility or a change
or addition to an existing facility.
2)Establishes that CPUC is responsible to ensure that all
utility customers receive reliable service at just and
reasonable rates and giving CPUC the power to undertake all
necessary actions to properly regulate and supervise
California's investor-owned utilities (IOUs).
3)Establishes that the collection of rates for an IOU be deemed
reasonable and prudent. CPUC is responsible for determining
the inclusion of IOU assets into the rate base as long as they
are deemed used and useful.
4)Establishes a process to allow CPUC to make disallowances to
an IOU project as specified.
5)Requires CEC to develop an Integrated Energy Policy Report at
least every two years, to assess and forecast all aspects of
energy industry supply, production, transportation, delivery
and distribution, demand and prices.
6)Establishes a process whereby CPUC can approve long term
procurement plans filed by the IOUs. The plans are to include
price risk assessments, definition of electricity product,
duration of plan, and a competitive procurement process, an
incentive mechanism if one is proposed and upfront standards
and criteria to be known by the utility prior to execution of
any contract. Power purchase agreements pursuant to this
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section are not subject to after the fact reasonableness
review by CPUC.
7)Specifies that the electrical corporations will create or
maintain a diversified procurement portfolio consisting of
both short and long-term electricity and electricity related
and demand reduction programs.
8)Establishes in statute specified charges for a 10Us historical
costs as a result of deregulation, undercollections, and DWR
AB 2006
Page 9
bond and power charges.
9)Suspends direct transactions until the state no longer
procures power and prohibits CPUC from raising rates for
customers below 130 percent of baseline.
FISCAL EFFECT
Unknown.
COMMENTS
Pre Enerqy Crisis and Deregulation: Californians before the
energy crisis and the passage of
AB 1890 (Brulte) Chapter 854, Statutes of 1996 had received
stable and predictable electricity service through electrical
corporations under a cost of service regulatory system for
nearly a century. Energy policies at both the federal and state
level, including environmental laws, public policy and
regulatory decisions as well as growing concerns regarding the
efficiency of cost of service regulation prompted the march
toward deregulation and customer choice by the mid 1990s.
Federal policies requiring electrical corporations to purchase
electricity from Qualifying Facilities (QFs) using cogeneration
or renewable technology came about through the Public Utility
Regulatory policies Act (PURPA) of 1978. Under PURPA the
utilities were required to interconnect with QFs and rates for
electricity purchases from QFs were not to exceed utility
"avoided costs". The purpose of this was to ensure that
ratepayers should be indifferent, from a costs standpoint, to
the use of QF power or utility generation since both should cost
the same. Over time for the utilities in California QF
contracts were cited as a principle reason for the higher than
average cost of electricity in the state.
The next major federal policy to affect California was the
passage of the Energy Policy Act of 1992 (EPAct92). The major
components of EPAct92 was to amend the Federal Power Act (FPA)
to give the Federal Energy Regulatory Commission (FERC)
authority to order utilities to provide interstate transmission
service to any jurisdictional supplier requesting such service.
The EPAct92 also amended the Public Utilities Holding Company
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Act (PUCHA) to exempt independent power producers from most of
the provisions of PUCHA and to allow U.S. utility holding
companies to own interest in foreign utilities and vice versa.
AB 2006
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In California the events that led up to the passage of AB 1890
reflected the policies enacted by the federal government through
PURPA and EPAct92 but there were some key issues unique to
California that accelerated the push for electricity
deregulation. Leading up to deregulation California consumers
and businesses saw the costs of energy increase dramatically as
a result of costs associated with QF contracts, cost overruns in
constructing nuclear generation and newly enacted environmental
laws, which applied to utility generation construction during
the 1970s. Also by the 1980s the rates of all three utilities
were above the national average primarily as a result of
electric utilities heavy reliance on oil fired electric
generation during a time when the price of fossil fuels
skyrocketed.
By 1993 the Division of Strategic Planning in CPUC issued a
report titled California's Electric Service Industry:
Perspectives on the Past, Strategies for the Future ,which laid
the foundation for the later CPUC decisions adopting the
wholesale restructuring of the electric industry in California.
The passage of EPAct92 and the growing clamor over cheaper
electricity through consumer choice prompted both regulators and
policymakers to throw caution to the winds and dive headlong
into a comprehensive market reform proposal with the belief that
cheaper power in abundant supply would be available. FERC did
their part in setting the stage with their passage of Order 888
and Order 889 in 1996. Both of these orders were the backstop
for the primary federal foundation for providing transmission
service, ancillary network support services and information
about the availability of these services to support both
wholesale and retail competition in the supply of generating
resources.
Declaring the energy regulation system "fragmented, outdated,
arcane, and unjustifiably complex," CPUC voted in December 1995
to open the state's electricity industry to competition. After
passing unanimously in both houses of the California
legislature, the final legislation was signed into law in 1996
by Republican Governor Pete Wilson, making California the first
state to deregulate electricity.
At the outset, deregulation in California worked well.
Wholesale prices were low, consumer rates were steady and the
new structure appeared to be working. But then, in the spring
and summer of 2000, a kind of lIperfect storm" hit the energy
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AB 2006
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market in California.
The Enerqy Crisis: The passage of AB 1890 and CPUCs Decision
95-12-063 adopting the restructuring of the state's electric
services industry ushered in a new of era of competition
regarding electricity service. All customers under this new
structure would be allowed to choose an electric service
provider other than an IOU for electric service. Electric rates
were cut by 10% via a rate reduction bond and frozen until 2002.
In 2000 San Diego Gas and Electric (SDG&E) had earned
sufficient profits to cover all of its stranded costs and no
longer was subject to the retail price caps set by AB 1890,
which were still kept in place for the other two uti
The passage of AB 1890 also authorized the creation of the
California Power Exchange (PX) to operate a statewide short term
market, and required utilities to obtain all their power from
it. PX developed a day ahead and a same day market where PX
accepted bids to sell electricity hour by hour and bids to
purchase hour by hour. Prices for each hour were determined on
a market clearing basis, with all buyers for a given hour paying
the same market clearing price and all sellers receiving the
same market clearing price. The market clearing price was the
lowest price that would provide enough electricity from accepted
sales bids to satisfy all the accepted purchase bids.
Under this system the utilities were allowed to recover costs
that were deemed stranded through the difference between the
price for the frozen utility rates and the price the utilities
purchased electricity in the PX. For the first two years, low
PX prices allowed utilities to collect their stranded costs
ahead of schedule.
AB 1890 also established ISO to control the prices and terms
under which electricity generators could move power across the
grid.
But in the summer of 2000, everything happened at once to start
the energy crisis.
Unusually hot weather during the summer of 2000 in conjunction
with low water levels in the Northwest cut importable
electricity to California. The price of wholesale electricity
sold in the PX started to escalate in 2000 reaching
unprecedented levels over the remainder of the year. In 2000
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from June to July wholesale electricity prices increased on
average 270 percent over the same period in 1999. Furthermore,
ISOs Stage 3 emergency notifications signaling rotating
blackouts during this time period increased from 1 in 2000 to 38
through May of 2001. During that time most of the notifications
by ISO regarding Stage 3 alerts occurred during the off peak
periods in California, where the state should have had an enough
power to meet system reliability.
The problems IOUs faced during this period was that high
wholesale power prices and the imposition of retail price caps
restricted recovery of these costs, which created severe
financial distress for them. In Pacific Gas and Electric's
(PG&Es) case the utility filed for Chapter 11 bankruptcy
protection on April 2001 because in their estimation they had
spent over $9 billion for wholesale power to service its
customers without any rate recovery from CPUC. Southern
California Edison (SCE) estimated that its unrecovered power
purchase costs during that time period amounted to $2.6 billion
and SDG&E said estimates for them was $447 million.
With the credit lines of the two largest utilities exhausted,
suppliers refused to sell electricity to creditless utilities,
which forced the state to step in with its line of credit and
assume responsibility for buying electricity in the spot market
to keep the lights on for utility customers.
As the crisis worsened into 2001, the state acted urgently to
negotiate long-term contracts (valued at $43 billion) with
generators and suppliers. Meanwhile-after intense media and
political pressure- FERC finally set a wholesale price cap and
must-offer obligations. These and other factors brought price
stability to the market.
Market Manipulation: During and after the energy cr1S1S
regulators and policymakers firmly believed that the market was
being manipulated. Only later did it become known that
companies like Enron had used megawatt laundering schemes to
evade ISO price caps to sell back electricity at much higher
prices to California. Most recently a federal grand jury in San
Francisco charged Reliant Energy Services Inc. for plotting to
hide a multi-million dollar trading loss in June 2000 by
shutting off four of the company's five California power plants,
causing energy prices to rise, then bringing some of the plants
AS 2006
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online to take advantage of the higher hourly price rates. For
Reliant the scheme resulted in California ratepayers paying up
to $32 million more for electricity during the energy crisis.
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Currently the California Attorney General along with the other
agencies are asking FERC to refund billions of dollars back to
California ratepayers for unjust and unreasonable prices charged
for electricity during the energy crisis. ISO estimates that
California ratepayers were overcharged nearly $6 billion during
this time period.
Post Enerqy Crisis:
Collapse of Deregulation and the State's Entry Into Power
Procurement: To avoid the dysfunctional spot market that
financially decimated IOUs and threatened catastrophic rate
increases, AS Xl 1 (Keeley), Chapter 4, Statutes of 2001,
established a structure to permit the DWR to buy needed
electricity for IOU customers under long-term contracts. To
ensure the predictable revenue stream necessary for long-term
contracts, the issuance of ratepayer-backed revenue bonds, and
prevent cost-shifting from DA to bundled service customers, CPUC
was directed to suspend DA to prevent additional migration of
IOU customers.
After a seven-month delay, CPUC suspended DA on September 20,
2001. Between January and June 2001, the vast majority of
customers previously served by DA providers returned to IOU
service, benefiting from retail rates, which were lower and more
stable than market prices.
During the same time period many of those customers who came
back to bundled service as the wholesale market collapsed left
within months to go back to direct transactions as market
conditions improved and the state had procured $43 billion in
power on behalf of IOU customers resulting in a massive cost
shift to bundled ratepayers. An example of this was that from
July 1 to September 20 period, DA increased from approximately
2% to approximately 13% of the total IOU load.
The Consequences for IOU Customers Due to the Energy Crisis:
Since early 2001, the electricity rates set by CPUC for the
customers of the state's major rous have exceeded 10Us' ongoing
cost of service, far exceeding the rates of in-state municipal
utilities or any neighboring state, and ranking among the
AS 2006
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highest in the nation. In January, and again in March, 2001,
CPUC increased rates for the customers of SCE and PG&E a
combined average of 4 cents per kw hour. High-usage residential
customers and the vast majority of business customers who take
bundled service were hit especially hard. Also, the recent PG&E
bankruptcy settlement agreement between CPUC will saddle
ratepayers in PG&E with rates significantly higher than the
national average for the next 9 years.
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Furthermore, CPUC in Decision 02-11-022 dedicated a share of IOU
rates to a loan program to defer DA customers' payment of DWR
and IOU procurement costs. In that decision CPUC capped the
payment for these costs applicable to DA customers at 2.7 cents
per kWh. CPUC majority reasoned such a cap was necessary to
maintain the viability of existing DA contracts and prevent jobs
and businesses from leaving the state. It was understood by
parties at that time the 2.7 cents wouldn't pay back what DA
customers owed for DWR power already delivered, or for DWR
operating costs, so a revenue shortfall or "under-collection"
resulted and a tracking account was established to monitor the
amount owed by DA customers. This amortization of DA costs
essentially resulted in a forced loan to be carried by bundled
ratepayers until such time that DA customers payed off the total
amount owed minus changes in the revenue requirement determined
annually by DWR.
Rate Reductions After the Enerqy Crisis: CPUC Energy Division
released a report on a core/noncore structure showing that
ratepayer costs associated with the energy crisis have gone down
due to the rate reduction for SCE and PG&E bankruptcy settlement
(another reduction may occur for PG&E if the dedicated rate
component is adopted) for the short term. Still even with these
current round of rate reductions over the long run rates will
not begin to decrease again until the end of DWR bond charges,
costs associated with PG&Es bankruptcy, long term DWR contracts,
and on going QF contract obligations.
Furthermore, existing law in AB xl 1 (Keeley) prohibits cost
shifting of any kind to customers below a 130 percent of
baseline, which means over the mid and long term absent any
legislative changes customers using more than 130 percent,
commercial, agricultural and large industrial customers will
bear a disproportionate share of the costs associated with the
energy crisis.
AB 2006
Page 15
Stabilizinq Investor Owned Utilities: As a result of the state
utilizing its credit capacity to purchase electricity on behalf
of IOUs through the spot market and through long term power
contracts IOUs have an excess capacity of electricity until
2011. This excess capacity has resulted in IOUs at times
becoming net sellers of electricity to the market versus buyers.
Furthermore, CPUC has approved numerous decisions since the
energy crisis in order to stabilize the utilities through the
following decisions:
D. 02-08-071: Gave the utilities transitional procurement
authority to procure their forecasted on peak residual net
short (RNS) needs (under a low case scenerio) using multi
year contracts.
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D. 02-08-071 (renewables): Approved 600 MW of renewable
energy resources under contracts ranging from 1 to 15 years
to assist the utilities in meeting their Renewable Portfolio
Standard (RPS) targets.
D. 02-10-062: Approved the utilities 2003 short term
procurement plans (though the actual power bought or
contracted may cover the utilities needs for up to five
years, which means as late as 2008).
[The above decisions implemented the provisions of AB 57
(Wright), Chapter 835, Statutes of 2002 to prohibit after
the fact reasonableness reviews for IOU power purchase
agreements, require utilities to file long term plans to
CPUC and establish a process to 10Us and CPUC to evaluate
and approve non utility power purchase agreements]
D. 03-08-066: Approved PG&E request to solicit offers to
procure up to 50% of its non base load needs for 2004.
D. 03-12-059: Approved SCE's request to enter into a long
term Purchased Power Agreeement for the 1,054 MW
Mountainview project.
D. 03-12-062: Authorized the utilities to enter into
contracts with terms up to five years for transactions to
meet 2004 needs with delivery beginning 2004.
D. 04-01-050: Requires utilities to offer a new five year
AB 2006
Page 16
standard offer (SO) one contracts to pre-existing QFs whose
existing contract has either expired or will expire prior to
January 1, 2006.
What This Bill Seeks To Do: According to the author, "AB 2006
seeks to establish a solid framework for the state's power
industry, which should help encourage investment in new power
plants. Such investment has dried up in recent years, in part
due to regulatory uncertainty. We must replace the current
uncertainty in the regulatory environment in California with a
clear energy policy to make sure that we secure power when we
need it at prices we can affordll.
Generation Resource Selection: Currently, in California more
than 6,500 MW of power plants have been permitted but not
constructed, because credit fundamentals of independent power
producers are weak. In fact most of the generators are seeking
to enter into long term contracts with an IOU because the
financial markets will only provide capital to projects that
have a clearly defined revenue stream over a longer period of
time (estimate is a minimum of 10 years) .
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Also, from a financial standpoint credit rating agencies like
Fitch point out that the pendulum is swinging back toward
utility self build or acquisition of power production assets as
a reaction by utilities and state regulators against weak credit
fundamentals of independent power producers and fears of
revocation of physical power supply contracts by bankrupt
generators.
On the issue of the viability of the independent generation
market the Energy Division at CPUC highlights the findings of a
2004 Standard & Poor's study which noted that:
"In less than 10 years, U.S. energy merchant companies have
gone from the cradle to the graveside, if not the grave
itself. In the past two years well over $100 billion of
energy merchant market capitalization has disappeared as
almost everything that could have gone wrong with the
nascent energy merchant industry did?Credit ratings for 12
companies owning more than 200,000 MW of generation
worldwide have fallen from investment grade (in most cases)
to low non investment grade levels."
This bill seeks to provide independent power producers (IPPs) an
AB 2006
Page 17
opportunity to compete for IOU capacity requirements.
Currently, numerous IPPs have generation that has been approved
by CEC that will not be constructed without a long term power
procurement agreement with an IOU. Some of IPPs and ESPs argue
that generation can be constructed through short term retail
contracts but this is contrary to the financial realities of the
market and information from credit rating agencies.
This bill specifies that each IOU in order to meet RARs shall
recommend to CPUC approval for generation through a competitive
solicitation process, bilateral contracts or utility
constructed. If IOU recommends to CPUC generation projects
through either a bilateral or utility constructed process then
CPUC must find that either the bilateral contract or the
Certificate of Public Convenience and Necessity (CPCN) for the
utility constructed generation facility be reasonably priced
relative to a market based benchmark that CPUC has already
adopted in the AB 57 process. This ensures that IOU and CPUC
are indifferent to the approval of generation through contracts
or a utility constructed process but only approve them if they
represent the IIbest value" for ratepayers.
Opponents argue that the language does not provide the assurance
necessary for IPPs to believe that the process for selecting
generation resources will not be biased toward utility
generation. They cite the inconsistencies in current regulatory
and utility practices like seE's Mountainview project as reasons
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why independent generators may not be have any incentives to
continue to invest in generation in the state.
Intrinsic value of utility owned qeneration. Some of the
arguments around this issue have been that regulators should
ignore the intrinsic value of utility generation and the
assumption that utility generation is better than non utilty
generation. Specifically, IPPs point out that the state should
compare each of these resources solely on the basis of cost and
value to the ratepayer.
There is clearly an intrinsic value from a policy perspective
and from a ratepayer perspective regarding utility generation.
The costs borne by ratepayers as a direct result of the energy
crisis is clear reminder that we should never place our
electricity dependency in the arms of the market. Only utility
generation is obligated to provide service through
cost-of-service rates for the life of the facility dedicated to
AB 2006
Page 18
ratepayers in the state. Furthermore, the intrinsic value of
utility generation over power purchase contracts is that legally
contracts can be broken as we saw during the energy crisis. As
a result of a contract being broken either intentionally or
unintentionally rous, being under an obligation to serve, must
continue providing electricity under cost based rates to those
customers regardless of where they came from.
Some IPPs point out that recent decisions made regarding
Mountainview and SDG&E grid reliability proposal were not fair
and open. Also, some of IPPs support the current AB 57 process
for 3rd party resource selection and say that any further
statutory changes are unnecessary. Furthermore, in recent
discussions a few IPPs supported a process for a guarantee of
each 10Us capacity needs (baseload or reserve) or a 3rd party
decision making entity to decide what an IOU will procure and
how they will procure for it.
The latter proposals to either set aside an 10Us capacity for
IPPs or to have a 3rd party decision maker determine resource
selection is counter to the century old regulatory compact
between regulated utilities and state public utilities
commissions. Under that compact an investor owned public
utility in California is granted 1) an exclusive retail
franchise to serve a specific geographic region; 2) an
opportunity to recover prudently incurred expenses; 3) an
opportunity to earn a reasonable return on investment; and 4)
powers of eminent domain. In return for these privileges, the
utility is subject to cost and price regulation by CPUC, and
required to provide safe and reliable service to all customers
in its service area on a nondiscriminatory basis.
Should CPUC be allowed to adiust an 10Us cost recovery subiect
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AB 2006 Assembly Bill - Bill Analysis
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to the amount of risk is involved in power contracts? This bill
requires that the utilities full costs of either direct
investments or procured generation be approved by CPUC after
public hearing in which the costs are found reasonable,
including the costs associated with debt equivalence or
collateral requirements. The cost recovery is further spelled
out to say that it include a reasonable opportunity to fully
recover a reasonable return on investment over the life of the
resource.
The Utility Reform Network (TURN) points out that regarding the
construction of the cost recovery language in this bill should
AB 2006
Page 19
allow CPUC to take into account differing types of risk as it
relates to debt equivalence when approving an authorized return
on equity (ROE) for a PPA. From TURN's perspective this ensures
that CPUC continues to have the regulatory authority to adjust
ROE's depending on the circumstances of how PPA1s are viewed by
the financial community and rating agencies as it applies to
each utility.
The dilemma over repowerinq continues to exist even thouqh the
issue of prioritization is no lonqer in this bill: California
has over 15,000 MW of generation that was constructed prior to
1980. Some of this generation has been currently repowered but
most are still operating under ISO administered Reliability Must
Run (RMR) contracts which pay the full costs of the generators
(fixed costs plus fuel costs) in exchange for the generators
providing power when called upon. The costs to keep these
contracts serviced are directly passed down to ratepayers in
each IOU service territory amounting to millions of dollars each
year.
Prior to the energy crisis CPUC issued Decision 95-12-063 that
allowed IOUs to voluntarily divest at least 50% of their fossil
generation assets and provided them with incentives in the form
of granting an increase in the rate of return for their equity
component of up to 10 basis points for each 10% of fossil
generating capacity divested. AS a result of this decision 10Us
divested a combined 20,187 MW and recouped $3.174 billion for
the sale of their assets. This was over $1 billion above the
book value for these generation facilities. Companies like
Dynegy, Reliant, Calpine, Mirant, Duke and others purchased the
generation divested. Afterwards, most if not all of the
divested generation purchased were eligible for RMR contracts
due to their location and local reliability requirements
established by ISO.
ISO and CEC concerned about the potential retirement of older
qeneration and its affect on qrid reliability. Since the energy
crisis CEC and CPUC have been highlighting the need to have a
comprehensive review of thermal powerplants that need to be
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Page 18 of26
redeveloped (i.e., repowered). In July 2003 CEC issued a staff
paper on Aqinq Natural Gas Power Plants in California In the
paper the concerns were raised that a significant number of
older facilities may lack the reliability to be available when
needed as a result of age of the facility and or the need to
retrofit the facility with selective catalytic reduction (SCR)
AB 2006
Page 20
emission control equipment. Furthermore, about 30,000 MW of
dependable capacity is provided by in state natural gas power
plants with a capacity of 50 MW or greater. These facilities
play an important role in the operation of the electric system
by providing needed capacity to meet peak demand, and providing
swing capacity to meet annual electricity needs when imports or
hydroelectric resources are low. OVer half of these facilities
were built before the 1960's and have high heat rates making
them 25-50 percent less efficient than plants coming on line.
How important should repowerinq be in an enerqy policy debate?
There is a growing concern by ISO that generators are going to
retire their older power plants due to difficulties in getting
financing or for other business reasons. If a growing number of
older facilities begin to be retired this will affect system
reliability because more than 15,000 MW of generation are
supplied by facilities constructed prior to 1980. Other options
that are available to reduce our exposure to the retirement of
older generation are through transmission infrastructure
improvements, clean distributed generatio
reduction and energy efficiency programs. The combination of
these actions would greatly reduce the costs IOUs and ratepayers
pay to keep mostly inefficient generation operating solely for
reliability reasons.
Generation resource selection proposed under the AB 57 process.
Currently, SDG&E has a grid reliability request proposal pending
at CPUC that includes a power purchase agreement with a 585 MW
gas-fired combined-cycle power plant under construction by
Calpine, in SDG&E's service area, that will interconnect with
SDG&E's electric system at the Miguel substation. SDG&E's is
also seeking approval of a 500 MW/base, 555 MW/peak combined
cycle natural gas-fired generation plant to be built by Sempra
Energy Resources and then turned over to SDG&E as a
utility-owned generation project.
The core/noncore model under this bill has five-year rollinq
commitment requirement for noncore customers that may be too
lonq. As this bill is structured a noncore customer is required
to notify an IOU five years before it actually leaves the core
portfolio. There are few companies that would be able to
predict where they want to receive electrical service from that
far in advance. Is there a more realistic time frame that would
work with the realities of how businesses make decisions? Also,
if CPUC establishes an ongoing cost recovery mechanism won't
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AB 2006
Page 21
this allow for potentially stranded costs to be recovered by the
core thereby eliminating the need to have such a long rolling
commitment to IOU?
Should there be time frame set for noncore customers seekinq
safe harbor in the core portfolio? Under this bill there is no
time frame to leave other than the 5 year rolling commitment for
noncore customers who choose to go to IOU as a default provider.
This bill partially mitigates this question by specifying that
noncore customers under this scenario would be required to pay
the higher of spot or utility generation to service the noncore
or tariff rate.
Still even with the requirement that IOUs charge a different
rate to noncore customers there should be a timeframe
established to require them to make a choice between being a
core or none ore customer.
Any future payment of costs associated to provide electrical
service to noncore customers should not be amortized. As noted
in the background CPUC in 2002 amortized the costs of
electricity procured on behalf of customers who went to direct
transactions after taking safe harbor with an IOU. This "forced
loan" to ratepayers resulted in a customer responsibility
surcharge (CRS) that was set at 2.7 cents/kWh at a total
estimated cost of around $600 million to be paid off over a
number of years. This action to amortize eRS over number years
results in bundled ratepayers having to defer a potential rate
reduction until the payment of CRS is complete. To prevent this
in the future, this bill should prohibit the amortization of
payment costs as a result of procuring electricity on behalf of
noncore customers.
Opponents of the measure want the ability to aqqreqate lower
than the 500 kW threshold. Electric service providers and some
customer groups support aggregation lower than 500 kW, which
includes aggregation of multiple meters. The concerns regarding
adopting a structure of DA that supports aggregation below 500
kW would result in tremendous uncertainties regarding resource
planning as highlighted by CPUC Energy Division in there
core/noncore report. The report showed that if an uncapped
core/noncore structure were proposed for customers above 500 kW
it would result in a potential forecasting uncertainty of almost
25% of the utilities total load.
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AB 2006 Assembly Bill - Bill Analysis
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AS 2006
Page 22
This bill requires that an IOU either own or contract for
sufficient physical qeneratinq capacity to meet 100% of annual
peak demand. This requirement for 100% of peak demand is
similar to the position that ISO proposed in CPUC Long Term
Procurement Proceeding but the utilities argue that this super
reliability is not needed and would result in "insurance" costs
being borne by ratepayers. Some utilities like PG&E have
supported a more modest 90% threshold in the Long Term
Procurement Proceedings.
This bill should specify whether this capacity to meet resource
adequacy should be firm and whether ISO should schedule a day
ahead or month ahead and whether IOUs can utilize market
mechanisms to buy and trade resource capacity.
Should municipal utilities be subiect to a resource adequacy
requirement? This bill exempts all local publicly owned
utilities (MUNls) from having to meet the same RAR that an IOU
has to meet. This bill requires that ISO implement and enforce
resource adequacy for all load serving entities (LSE's) but
exempting MUNls may cause a free rider problem due to the
possibility that some MUNls may not have enough reserve capacity
to meet their needs and will lean on everyone else. Currently,
there are major transmission paths that cross the service
territories of MUNIs, which can result in those MUNIs drawing
electricity (without paying) from the grid and leaning on the
rest of the LSE's who procured the necessary resources to meet
their obligations.
Similar bill introduced on the issue of requ1r1nq MUNls to meet
resource adequacy requirements. AS 2499 (Horton) as introduced
requires newly formed municipal utilities after 2001 to meet the
same resource adequacy requirements that apply to electrical
corporations. This bill is currently set to be heard on April
19th in the Assembly Utilities and Commerce Committee.
REGISTERED SUPPORT / OPPOSITION
Support
Coalition of California utilities Employees
Southern California Edison
Planning and Conversation League
Consumer Coalition of California
Congress of California Seniors
AS 2006
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California Labor Federation
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AB 2006 Assembly Bill - Bill Analysis
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California Farm Bureau
Sempra Energy (support if amended)
COMMUNITY ORGANIZATIONS
Access California Services
Asian American Resource Center
California Veterans Stand Down Foundation
Carson African American Empowerment Coalition
CEAC Veterans Employment committee
Central City Association
CEARO Community Development Group
Community Financial Resource Center
Corona-Norco Family YMCA
Embracing Latina Leadership Alliances
Gateway Chambers Alliance
Human Services Association
Huntington Library, Art Collections and Botanical Gardens
Korean American Coalition, Orange County Chapter
Korean Youth & Community Center
Korean-American Federation of LA
La Cas a de San Gabriel Community Center
La Puente Valley Regional Occupational Program
Los Angeles Eye Institute
Los Angeles Urban League, Pasadena Foothill Branch
Los Cerritos YMCA
Meals on Wheels West
Mojave Valley United Way
Mojave Valley United Way
National Coalition of Hispanic Organizations
National Council of Negro Women, Inc.,
North San Diego County NAACP
Orange County Chinese-American Chamber of Commerce
Pasadena NAACP
Pat Brown Institute of Public Affairs
Rubidoux Community Services District
Search To Involve Pilipino Americans
Southeast Community Development Corporation, Pasadena
Tavis Smiley Foundation
United Way of Corona-Morco
Ventura County Taxpayers Association, visalia
Victor Valley Community Services Council
Victory Community Church, Pomona
AB 2006
Page 24
Wattsjwillowbrook Boys & Girls Club
Westlake Village Homeowners Assoc.,
WRAP Family Services
Zona Seca, Lompoc
CONSUMER
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AB 2006 Assembly Bill - Bill Analysis
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Consumer Coalition of California Consumers First
ENVIRONMENTAL
Planning and Conservation League
San Gabriel Mountains Regional Conservancy
LABOR
California Labor Federation, AFL-CIO
Coalition of California Utility Employees
SENIORS
California Senior Action Network Congress of California Seniors
Congress of California Seniors
LOCAL GOVERNMENT
Cheryl Brothers, Fountain Valley City Council Member
City of Agoura Hills
City of Avalon
City of Compton
City of Fillmore
City of Lancaster
City of Port Hueneme
City of Thousand Oaks
City of Tulare
Frank C. Roberts, Mayor of the City of Lancaster
Las Virgenes Water District
San Gabriel Mountains Regional Conservancy
EDUCATION
Compton Community College District
Tulare Joint Union High School District
AB 2006
Page 25
BUSINESS ORGANIZATIONS
Allied Perceptions LLC
American Indian Chamber of Commerce of California
Antelope Valley Board of Trade
Antelope Valley Chamber of Commerce
Artesia Chamber of Commerce
Asian Business Assoc. of Orange County
Asian Business Association
Asian Business League of Southern California
Asian Pacific Islander Small Business Program
Barstow Area Chamber of Commerce
Bell Gardens Association of Merchants and Commerce
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Bellflower Chamber of Commerce
Black Business and Professional Association, Inc.
Black Business Association
Black Chamber of Commerce of Orange County
California Black Chamber of Commerce
California City Economic Development Corporation
California DVBE Alliance
California Small Business Association
Carpinteria Valley Chamber of Commerce
Carson Chamber of Commerce
Carson Dominguez Business Council
Central City Association
Cerritos Chamber of Commerce
Chinese American Chamber of Commerce of Orange County
Chinese American construction Professionals
Costa Mesa Chamber of Commerce
Cudahy Chamber of Commerce
East Los Angeles Chamber of Commerce
Elite Disabled Veterans Bus. Enterprise Network
ExPert, Inc.
Food Industry and Business Roundtable
Future America
Gateway Chambers Alliance
Greater Antelope Valley Economic Alliance
Greater Corona Hispanic Chamber of Commerce
Harbor Association of Industry and Commerce
Highland Area Chamber of Commerce
Inglewood/Airport Area Chamber of Commerce
Inland Valley Economic Development Corporation
Irvine Chamber of Commerce
Laguna Beach Chamber of Commerce
Lakewood Chamber of Commerce
AS 2006
Page 26
Latin Business Association
Lomita Chamber of Commerce
Long Beach Area Chamber of Commerce
Mammoth Lakes Chamber of Commerce
Maywood Chamber of Commerce
Monterey Park Chamber of Commerce
Moreno Valley Chamber of Commerce
Moreno Valley Hispanic Chamber of Commerce
National Center for American Indian Enterprise Development
National Korean American Grocers Association
Natl. Spa and Pool Institute, Region Nine
Orange County Chinese American Chamber of Commerce
Palos Verdes Peninsula Chamber of Commerce
Pomona Chamber of Commerce
Premiere Staffing Service, San Diego
Recycling Black Dollars
Rosemead Chamber of Commerce
San Bernardino Downtown Business Association
San Bernardino Downtown Business Association, Inc.
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South Orange County Regional Chambers of Commerce
Southland Better Business Bureau
The Greater Hunting Park Area Chamber of Commerce
The Greater Tulare Chamber of Commerce
Tulare Improvement Program
Tulare Redevelopment Agency
Tulare-Kings Hispanic Chamber of
Turning Point of Central California
Valley Realty
West Covina Chamber of Commerce
Whittier Area Chamber of Commerce
INDEPENDENT BUSINESSES
Affaitati LLC, San Bernardino
African Village Weekend Cultural & Performing Arts Inc.
African Village Weekend Inc., Montclair
Alta Med Health Services, Los Angeles
Apex Computer Systems Inc., Cerritos
Arab American Business Magazine
Armijo Newspapers
Berryman & Henigar, Santa Ana
Cantamor Property Management, Inc., Downey
Central City Company, San Bernardino
Central Courier, Inc., Ventura
Chamber Business Services, Simi Valley
Chapman Communications, palmdale
criss Air Inc.
Daley Enterprises, Tulare
Davels Automotive & Eager's Karting, Visalia
Dickerson Employee Benefits, Los Angeles
Doctors Ambulance Services
Doty Bros., Norwalk
Farmdale Creamery
Fer Management Consultants, Commerce
Fleming Associates, Corona
Garcia Architects, Inc.
Gary L. McGavin, AlA, Redlands
Glaab & Associates, San Clemente
Goldmark Gallery & Portraiture, Corona
Graphic Press, City of Commerce
Hendry Telephone Products, Goleta
Herman Weissker, Inc., Bloomington
High Desert Industrial Security Services, Apple Valley
Holistic Healing for Youth, Redlands
Icon Design & Planning Studio, Los Angeles
Ikerd Company, Newport Beach
IMI Data Search, Inc., Thousand Oaks
Inland Action Inc., San Bernardino
Inland Valley Daily News
Inland Valley News
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Page 24 of 26
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IW Group, Inc., Los Angeles
Jamco & Winnex, Inc., El Monte
Lane Engineers, Tulare
LT Real Estate, Development
McIntosh & Associations, Visalia
Merona Enterprises, Downey
Monte Vista Building Sites, Lancaster
Morris Communications, Los Angeles
Nakatomi & Associates
National Gypsum
One Source Distributors
Perera Construction & Design, Inc., Ontario
Premier Staffing Services
Quality Upholstering, Visalia
RBD Communications
Red Tipi, Hacienda Heights
Res Com Pest Control
Rockview Farms, Downey
Rockwell Scientific, Thousand Oaks
Seaside Graphics & Printing, Fountain Valley
AB 2006
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Sharon's Bookkeeping Service, Visalia
sierra Wholesale Hardware, Inc., San Bernardino
Southwest Power, Inc., Santa Fe Springs
Sullivan International, Inc., Long Beach
The Korea Daily
The Korea Daily
Tidwell Excavating, Inc., Saticoy
Truline Golf, Visalia
Tyla Diesel Air & Electric, Tulare
US Battery Manufacturing Co.
USAA Realty
Waste Resources Inc., Gardena
Waters & Faubel Inc., Lake Forest
Wayne Card Insurance, Fountain Valley
Opposition
Independent Energy Producers
The Foundation for Taxpayer and Consumer Rights
California Wind Energy Association
La Paloma Generating Company
California Biomass Energy Alliance (oppose unless amended)
California Manufacturers and Technology Association (oppose
unless amended)
Duke Energy (oppose unless amended)
Western States Petroleum Association (oppose unless amended)
Alliance for Retail Energy Markets (oppose unless amended)
Strategic Energy (oppose unless amended)
The Utility Reform Network (oppose unless amended)
Silicon Valley Manufacturers Group (oppose unless amended)
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APS Energy Services (oppose unless amended)
Calpine (oppose unless amended)
Economic Sciences Corp. (oppose unless amended)
Constellation Energy Group (oppose unless amended)
California Cogeneration Council (oppose unless amended)
Analysis Prepared by
Daniel Kim / u. & C. / (916) 319-2083
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.
March 09, 2004
TO: City of San Bernardino Legislative Review Committee
Subject: AS 2006 "Reliable Electric Service Act of 2004"
Attached for your review is background and support information regarding
AB 2006 introduced by Assemblyman Fabian Nunez.
Southern California Edison requests that the City of San Bernardino send a
letter of SUPPORT for AS 2006 to the members of the State's Utilities &
Commerce Committee.
Please call me at (909) 307-6726 if you have any questions. Thank you in
advance for your consideration and support.
t4;f~
Ray R. Gonzalez
Attachment
.
AB 2006
"Reliable Electric Service Act of 2004"
The Problem:
Iflegislative action is not taken soon, California residents, businesses and our state's economy
could once again be threatened with blackouts and significant power price increases by the year
2006.
A byproduct of the 2000-2002 energy crisis is significant regulatory uncertainty that has
paralyzed investment in virtually all new power plant construction.
. Of the 10,000 MW of generating capacity that has been licensed and approved by the
California Energy Commission, only 3,000 MW are currently under construction and on
schedule.
. Of the 20,000 MW of generating capacity that utilities were forced to divest, less than
5,000 MW are currently under contract for California consumers. Several generating
plants may be mothballed in the coming months and years.
While regulated utilities (SCE, PG&E and SDG&E) still maintain an "obligation to serve," there
is' no clear planning process to ensure all Californians will have the power they need, when they
need it. Nor are there guidelines to ensure the most cost-effective, environmentally responsible
investments are made on behalf of consumers.
The Solution:
AB 2006 will stimulate immediate investment in much-needed power plants by bringing an end
to regulatory uncertainty in this state and enact a clear energy policy into state law to govern our
system of electric service. If approved, the new law - AB 2006 - would:
o Protect California residents, families and small businesses by ensuring they will
receive reliable power at predictable, regulated rates.
o Allow larger businesses the opportunity to shop for energy from non-utility
energy providers as long as their purchasing decisions don't result in costs being
shifted to other utility customers.
o Reaffirm independent power generators' ability to compete to offer long-term
power contracts to regulated utilities to help meet the energy needs of utilities'
core customers.
o Reaffirm utilities' ability to build new power plants to supplement power received
under contract from independent power generators.
o Require utilities to demonstrate to the CPUC that their investments (in power
contracts, renewable energy, energy efficiency, direct investments, etc.) provide
cost-effective, efficient value for its customers.
o Accelerate the date by which utilities must demonstrate that 20 percent of their
power comes from renewable resources.
Why AB 2006 is Good For
Residents, Businesses, Our Economy & Our Environment
California residents and businesses depend upon reliable electricity at a reasonable price.
Unfortunately, if legislative action is not taken soon, the state could once again be threatened
with blackouts and price spikes by the year 2006. The uncertainty of the state's regulatory
environment has discouraged investments necessary to complete much-needed power plants. Of
the 10,000 megawatts of new generation approved by the California Energy Commission since
the energy crisis, only 3,000 are currently under construction or on schedule. California needs a
clear energy policy enacted into state law in order to stimulate investment in much-needed new
power and to ensure we are not forced once again to buy power "at any price" just to keep the
lights on. Passage of AB 2006 would benefit:
California Residents and Families
Under AB 2006, California residential customers would be protected from future blackouts and
power price spikes because utilities would be required by law to have ample energy to meet their
customers' needs, and to charge customers predictable, regulated rates for electricity. Electricity
customers will also benefit by being assured they are getting the "best value" for their electricity
dollars. Under AB 2006, before being assured reimbursement for its investments, a utility must
demonstrate to the CPUC that its proposed mix of energy resources -- from third-party power
contracts, new power plants, energy efficiency and renewable power -- provides the "best value"
to customers.
California Businesses
California small businesses need to know they will have the power they need, when they need it
at predictable prices. Under AB 2006, small businesses, like residential customers, would
benefit from predictable, regulated electricity rates. Larger businesses that have the ability to
assume some financial risk may want to shop for electricity on the open market and would be
free to do so under AB 2006, as long as they give ample notice to the utility and their purchasing
decisions do not result in costs being shifted to smaller electricity customers.
Our Economv
California's uncertain regulatory environment for energy has contributed to the overall cloud
over the state's economy for the past few years. Not only has the regulatory uncertainty
discouraged investment in much-needed power plants, but businesses -- and all electricity
consumers __ have been forced to pay higher rates for over-priced contracts signed during the
energy crisis. AB 2006 will remove the cloud of uncertainty, establish a clear energy policy to
govern our system of electric service and significantly reduce the likelihood of another costly
energy crisis.
Our Environment
The most visible and memorable byproducts of the energy crisis were blackouts, price spikes and
high-priced energy contracts. A less visible, but equally damaging, result was the need to bring
on-line some of the highest polluting, least efficient power - just to keep the lights on. Under
AB 2006, utilities will be required to forecast their power needs several years in advance and
demonstrate how those needs will be met with a mix of energy efficiency, renewable power and
new and repowered energy plants. Proper planning will prevent the need for utilities and their
customers to be forced to pay the highest prices for the least efficient, most polluting power. AB
2006 also accelerates the date by which utilities are required to demonstrate that 20 percent of
. their power comes from renewable resources.
AB 2006:Q&A
Q: Why do we need legislation?
A: California needs to enact clear energy policy into state law in order to stimulate investment
in much-needed new power and to ensure we are not forced once again to buy power "at any
price" just to keep the lights on. It is common knowledge that the uncertainty of California's
regulatory environment has paralyzed investment by both independent power generators and
regulated utilities in virtually all new power construction. If legislative action is not taken soon,
California residents and businesses could once again be threatened with blackouts and price
spikes by the year 2006.
Q: Is there consensus regarding the need for more power?
Both the California Energy Commission and the Independent System Operator (operator of the
state transmission grid) have concluded that the state could experience significant energy
shortages by 2006. There are even some reports that shortages could occur as early as this
summer. But, even if you accept the most conservative estimates that shortages won't occur
until 2008 or later - power plants cannot be built overnight. The construction of new power
plants must begin today to help meet our future energy needs!
Q: How will AB 2006 help stimulate investment in new power plants?
In the aftermath of the energy crisis, California had no clear rules regarding who is responsible
for meeting customers' needs, how those needs will be met and who will pay for meeting them.
AB 2006 establishes the clear rules necessary to provide would-be investors the confidence that
California's regulatory environment is stable and will not fluctuate.
Q: How will AB 2006 help ensure customers are getting the best value for
their investments?
AB 2006 recognizes that it is in electricity customers' best interest to have future energy needs
met with a mix of power from both independent generators and regulated utilities. Contracts
with independent generators will be selected and approved based on a competitive procurement
process and direct utility investments will undergo rigorous regulatory scrutiny prior to receiving
approval for reimbursement. The healthy competition between regulated cost-of-service rates
charged by utilities and market rates charged by independent generators will help keep costs
down for consumers. In addition, AB 2006 will require utilities to demonstrate how investments
in third-party contracts, new power plants, renewable power and energy conservation efforts are
efficient and cost -effective before being approved for reimbursement by the CPUc.
Q: How would passage of AB 2006 help the environment?
By stimulating investment in much-needed power now, AB 2006 will prevent a severe energy
shortage that would force Californians to rely upon the highest cost, highest polluting power to
keep the lights on. In addition, recognizing the value of a diverse and clean energy portfolio, AB
2006 accelerates the goal from 2017 to 2010 to achieve 20 percent of the energy mix from
renewable power sources.
Yes, I Want Reliable Electric Service at a Reasonable
Price!
I Support AS 2006
o
Please list me/my organization as a supporter of AS 2006, a bill to enact a clear
energy policy into state law to prevent another energy crisis in California.
Please select from the following. May we list your endorsement as a(n):
o Organization
o Company
o Individual
o Local Government
o Elected official
Please complete the following information:
Company or Organization Name/Employer
Name
Title/Occupation
Mailing address
City
State
Zip
County
Phone number
E-mail Address
Fax number
Signature (Required)
Date
o Please E-mail me updates
Please fax this completed form to:
(916) 442-3510
Or mail to: 1121 L Street, Suite 803
Sacramento, CA 95814
For more information, please call (916) 443-0872
'/)-
,-::;1 ,_.?.A I~
AB 2006 I;ETTERS OF SUPPORT RECEIVED
1. Consumers First
2. California Small Business Association
3. California State Black Chamber of Commerce
4. California Coalition of Hispanic Organizations
5. Community Financial Resource Center
6. Asian Pacific Islander Small Business Program
7. Pasadena NAACP
8. Cerritos Chamber of Commerce
9. Artesia Chamber of Commerce
10. Lakewood Chamber of Commerce
11. Los Cerritos YMCA
12. Los Angeles Urban League
13. Bellflower Chamber of Commerce
14. Icon Planning & Design Studio, Inc.
15. Lomita Chamber of Commerce
# 1/;/of
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February 18, 2004
The Honorable Fabian Nunez
320 West 4th Street, #1050
Los Angeles, CA 90012
(p) 213.620.4646
(f) 213.620.6319
Dear Speaker Nunez:
On behalf ofthe members oflhe California Small Business Association, we are
eager to sponsor the Reliable Electric Service Act of 2004 (AB 2006). We
bdieve the current systrn! for energy production needs to be modernized in
order to ensure fair prices for consumers at all levels for personal and
commercial use. reasonable profits for investors and less likelihood of energy
shortages. We feel that this bill is a sensible and logical solution to our state'.
energy problem and will ensure that this state will have enough energy
generated for all consumers.
The California Small Business Association is a non-pro lit, grass roots
organization that represents over 203,000 small businesses in California.
Utility deregulation is a major issue of concern this year for small business
owners as it is necessary for all businesses to operate efficiently.
We thank you for your leadership on this important issue and look forward to
working together to makc it happen. Please know that we arc committed to
helping achieve this goal. Let us know how wc can help.
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CONSUMERS
~FIRSrINC.
.aDI betweell Consumers. Commerce
February 12, 2004
The Honorable Fabian Nunez
Speaker of the Assembly
State Capitol Building
Sacramento, CA 95814
Dear Speaker Nunez:
When it comes to electricity, California coosumers just want reliable power at reasonable
. rates. Unfortunately, as you are well aware, without immediate legislative action, the
. state could soon suffer from price spikes and rolling blackouts: CODSUmIlfll First
appreciat:es your efforts to prevent another energy crisis and we support AB 2006.
As you are well aware, despite the flurry of activity immediately following the energy
crisis, constrUction on new plants has stalled due to lack ofiuvest:ment resulting from the
state's regulatory uncertainty.
AB 2006 would not only help enSure much needed plants will be built, but alsO that small
customers can depend upon predictable cost based rates, rather than unpredictable mliiket
based rates.
We appreciate your leadership on this issue and look forward to worl<ing with you to .
eliminate the threat of blackouts and bring stability to California's energy marl<:et.
~
Cc: Senator Feinstein
P.O. BOX 2346 . Orinda, CA 94563 . 925.253.1937 · 925.253.1359 (Fax)
.
CALIFORNIA BLACK
CHAMBER OF COMMERCE
Dedicated To Economic Empowerment
A ReNAIssANCE 21sT CENTUU PROJECT
February 12, 2004
Re: Support AB 2006
The Honorable Fabian NWlez
Speaker of the Assombly
Stale Capitol Building
Sacramento, CA 95814
Dear Speaker Nunez:
California busin~ appreci~ the leadenhip role you are lBkiDs to Improve our SlllIIl'.
business climale, inoludlng your desire to fix problems resulting from the laclc: of clear mergy
policy in this state. The California Black Chamber of Commerce supports AB 2006.
An affordable and reliable electric system is critical to the survival of small bnoln_~s and to
the health of our entire economy. Yet the ouneot uncertainty suaounding the state's energy
marlcet continues ro be a cloud over the _'s economy. .
If there is anything we l""",cd from the energy crisis, it is that CallfOmia businesses and
consumers can't afford to be held hostage to an out of cootrol energy market. We dqlend or.
reliable electric service at predictable and reasonable rates.
We ClUI't afford to sit bacIC and let the "market tBkc shape". We must ta1cc cootrol of the
state's energy futute by reafflnning the responsibility of utilities to plan ror and meetlhe
needs of their customers, while also CSUlblishing clear ndes for larger customers that want the
freedom to shop for their electricity.
With your leadenhip Illld that of Senator Diane Feinstein, and hopefUlly others, WIl can
protect !be state's consumers and businesses from more black-oUlS end skyrocketing energy
prices.
Si~ ~f/2.
~~sidCDi s:"X /..cr-
9851 Ham Road, Suite 160 . SacrammtD, CaJifumu. 95827 . Voice: 916-364.2400 . Fax: 9J6-364-2404
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Hispanic Organizations
P.O. Eo:< 1026 s.._. CoIiforni. 95812 Telophone(916)441-3G26 r->lX(916)44li-9221
February 13, 2004
The Hooortlble F~ Nuiie2
Speakllr of the Assembly
State Capitol Building
Sa=eoto, CA 95814
Dear Speaker Nunez:
The National Coalition of.Hisp8nie Orgl'ni71lli0llll is pleased to support AB
2006. California COIIS\IIIlD, aDd pu1iaJIarly low-income consumers, rely on
8ffordabIe and reliable electric power lIS the oornmtone to their daily Jivea aDd
"',oi,,-~~. unfortunately, California's lack of regulatory certainly when it
comes to our energy fUture conI:inues to put 1hst affurdable and reliable po~
injeopardy.
EneI&Y experts hfie ~ warned that, without action, CaIifurnia CQUI.d
soon face pow<< shonages and resuhiug service tre8lS and unpredictable power
costa.
We C81lIlot affurd to re-visit the mistakes of the past S1me lawmakrn and
rcguIators must take action .and' soon- to lay out a cIe8r vision that will
reaffirm the respoDSibiIity of utilities to plan fur 8Dd meet the needs of their
c:ustomelll.
We lIpJlTeciale your leadership on this issue and look forwanI to working to
protect those coJ1$Ulllel:5 Il10st in n!lllli by acting quickly to reshape our enagy
future.
Respectfully
\~~.\)~~
Mario G. <>bIedo,
PresidCllt
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FABIAN NUNEZ
SP~AKER .,. ASSEMB L.V
February 20. 2004
The Honorable Arnold Schwarzenegger
Governor, State of California
State Capitol, First Floor
Sacramento, ~Iifom~a^ _~rs14
Dear Govern~WJlnegger:
There is a matter of urgency 12c1n9 electricity consumers of this state that warrants
your attention and action. Just three short years ago, an energy crisis crippled our state.
Rolling blackouts and price spikes threatened the economic well being of California
consumers and businesses. At the heIght of the crisis, the state stepped in to sign long
term contracts. California's energy future is uncertain. There Is a continuing and critical
need for new generating capacity In this stat~. However, adequate neW generating
capacity is not being built, and existing generating capacity is being taken out of service.
Callfomia consumers and businesses depend on safe, reliable, and affordable
electric service. To meet customer needs reliably, California must now invest in new
generating capacity, Regulatory uncertainty continues to stifle new Investment In much
needed generating capacity.
The key to new Investment will be a clear, durable regulatory framework which
includes workable competitive wholesale and retail markets. The financial markets will
not today, or in the foreseeable future, support new power plant construction in the
absence of either long-term regulatory commitments or long-term power purchase
contracts. To successfully attract Investment, long-term commitments must be either
made or backed by strong, creditworthy entities.
I have introduced AS 2006, the "Reliable Electric Service Act" to create a claar,
durable framework to stimulate much needed investment in efficient, cost-effective,
environmentally sustainable supply and demand resources. AS 2006 would affirm the
utility obligation to provide reliable, reasonably priced electric service, provide for the
recovery of reasonable investments. provide choice to large customers, and would
create workable competitive wholesale and retail markets. Specifically,
c....mll. Cl"1'lCEI ST...n: C...PJ1(ll... RooM 2,UiI . ~. CA ~S814 . PHONE (916) 319~2046' FA:( tQ18} 319_2.148
mSTalCTC'FFIa: 3ZOW5T4n1S1HEET. ROOM 1050' LoSAl<<iELE5. CA 90019' PI-lONi:t2131S;D-4546' FI\X.(213)fiZ~6~19
\
\
The Honorable Arnold Schwarzenegger
February 20, 2094
Page Two
Wholesale Market Structure: AS 2006 provides for a wholesale market structure
In which Independent generators could participate in a CPUC authorized competltlva
procurement process to provide electricity under contract with the utility for the
utility's core customers (small customers < 5DOkW served by the utility~ The CPUC
would approve needed investmen1s that provide the best value to consumers.
Retail Market Structure: AS 2005 provides for a retail market structure In which
independent generators could participate in a market based competitive
procurement process to provide electricity to non-core customers (large customers
> 500 kW). Large customers, or their non-utllity electric service providers, would
enter into agreements dIrectly with independent generators.
The California Energy Commission (CEC) forecasts a need for new generation
capacity to be on-line by summer of 2005 to ensure electric system rellabHIty. The
Independent System Operator (ISO) believes that the state could experience reserve
capacity shortages as early as summer of 2004. We must replace the currant uncertain
regulatory framework with a clear, dureble framework so that efIlclent, cost-effBctlve
supply and demand resources are acquired when we need them. at prlces California
consumers and'businesses can afford.
We have an opportunity to prevent another energy crisis in this state by acting now
with a balanced and bl-partisan approach. The consequences of inaction are well
known ~nd deeply felt volatile energy prices. rolling blackouts and the signIng of long
term contracts under duress, resulting in bDlions of excess energy costs for consumers
and businesses.
It is In the interest of CalifornIa consumers to act expeditiously and delibereUvely to
ensure adequate investments are made to reliably meet the needs of California
consumers. I have attached a summary of AS 2005 for your review. I would be pleased
to meet wlth you at your ear1lest convenience to discuss hoW we can work together to '
secure California's energy future.
Attachment
....
AS .2006 (Nufiez) \"Rellable Electric Service Act of 2D04"
Seeking to l;lnsure that all of Califomia's consumers and businesses receive safe, reliable, affordable electric
service, Assembly Speaker Fabian Niifiez has introduced AB 2006, The "Reliable Bectric Service Act. of
2004'. The goal of the legIslation Is to create a "clear, durable regulatory framework to stimulate much
needed investment in neW power resources." According to Nufiez, in order to avoid another round of
blackouts and huge price spikes, ''we must secure Califomia's energy future through investments in efficient,
cost-effective environmentally sustainable resources..
Specific provisIons of the bill Include:
Section 400.1 Obligation to Serve
In order to ensure that customers reoeive reliable, reasonably priced electric service, AB 2006 affirms the
utility obfigation to plan and provide adequate. efficient, environmentally sustainable resources, including
utility owned and procured generation resources, new and repowered generation rasources. hlgtM:lfliciency
cogeneration. renewable generation resources, transmission resources, energy efficiency and demand
response resources.
Section 400.5 Cost Recovery Assurance for Needed Investments
In order to attract sufficient capital to make investments in needed resoUrces to serve utility customers, AS
2006 requires the CPUC to establish and thereafter maintain rates that ensure the full recovery of reasonable
investments, both direct Investments by utilities and the full cost of contracting with third parties, including
debt equiValence and collateral.
Section 4D0.21 stable Customer Base Core I Non-Core
In order to ensure that investments are made without creaUng stranded costs cr shifting costs, AS 2006
creates a 'core I nOfH;ore" model whereby utilities are obligated to provide service to smaD customers with
maximum peak demand less than 500kW ("core") on a cost-of-servlce basis wt]lIe large customers wlth
maximum peak demand higher than 5DOk.W C'non-eore") could eleel DIrect Access from a non-utillty electric
service provider.
Section 400.22 Resource Adequacy I Public Polley Preferences Apply Equally
In order to ensure that all energy customers contribute equitably to investments In resources needed to serve
them, AB 2006 requires allload-servlng entities, including non-utility electric service providers and
community choIce aggregators. to meet the same requirements for resource adequacy, resource diversity,
renewable portfolio standard, and demand-response resources as electrical corporatlons. Requires the
CPUC to establlsh resource adequacy requirements, and for the ISO to implement and enforce the
requirements In a nondiscriminatory manner on an load serving entities.
SectIon 400.10 Integrated Resource Investment Plan
In order to ensure that adequate investments are made to reliably serve utility customers at reasonable costs,
AS 2006 requires utilities to prepare an integrated resource investment plan to achieve a diversified,
environmentally sustainable porlfol1o of utility-owned and procured efficient, cost-effective supply and
demand resources. AS 2006 also provides that the ISO determination of need for transmission facilities Is
conclusive for purposes of a CPCN need determination.
Section 400.10 Resource Selection Process to Achieve "Best Value" for Consumers
1n order to optimIze Investment on behalf of utility customers, AS 2006 provides that investments in
generation may be obtained through investment by independent generators under contract with a utility
through a competitive procurement process or otherwise authorized by the commission, or from direct. utility
investment. Additionally, AB 2006 provides that the process for utility selection and CPUC approval of these
resources must be designed to achieve best value for consumers, considering efficiency, cost effectiveness,
system impacts, resource diversity. and risk..
....
Sarah Reyes
Oem - 31 Assemblvmember.sarah.reves@assemblv.ca.aov
Fresno District Office Capitol Office
2550 Maripasa Mall State CapRol
Suite 5031 Sacramento, CA 94249
Fresno, CA 93721 Phone: (916) 319-2031
Phone: (559) 445-5532 Fax: (916) 319-2131
Fax: (559) 445-6006
Fabian Nunez
Oem - 46 Assemblvmember.nunez@assemblv.ca.aov
District Office Capitol Office
320 West 4th Street, #1 050 State CapRol
Los Angeles, CA 90012 Sacramento, CA 94249-0046
Phone: (213) 620-4646 Phone: (916) 319-2046
Fax: (213) 620-6319 Fax: (916) 319-2146
California State Assembly
Committee on Utilities and Commerce
Sarah Reyes, Chair
Dem - 31 Assemblvmember.sarah.reveslillassemblv.ca.aov
District Office Capitol Office
2550 Mariposa Mall State Capitol
Suite 5031 Sacramento, CA 94249
Fresno, CA 93721 Phone: (916) 319-2031
Phone: (559) 445-5532 Fax: (916) 319-2131
Fax: (559) 445-6006
Fresno, Reedley, Sanger, Selma, Dinuba, Parlier, Kerman, Mendota, Firebaugh, Fowler, San Joaquin,
Biola, Bowles, Calwa, Cantua Creek, Caruthers, Cutler, Del Rey, East Orosi, Easton, Malaga, Orosi,
Raisin City, Rolinda, Suitana, and Tranquillity
Keith Richman, Vice Chair
Rep - 38
Assemblvmember.Richman@assemblv.ca.aov
District Office Capitol Office
10727 White Oak Ave., State Capitol Room 5128
Suite #124 Sacramento, CA 94249-0038
Granada Hills, CA 91344 Phone: 916-319-2038
Phone: (818) 368-3838 Fax: 916-319-2138
Fax: (818) 885-3307
Los Angeles, Santa Clarita, Slmi Valley, Glendale
Doug LaMalfa
Rep - 2
Assemblvmember.lamalfa@assemblv.ca.aov
Redding District Office Yuba City District Office Capitol Office
2865 Chum Creek Rd, Suite B 1527 Starr Drive, 5te. U State Capitol, Room 4177
Redding, CA 96002 Yuba City, CA 95993 Sacramento, CA 94249-0002
Phone: (530) 223-6300 Phone: (530) 751-8351 Phone: (916) 319-2002
Fax: (530) 223-6737 Fax: (530) 751-8379 Fax: (916) 319-2102
Redding, Yuba City, Red Bluff, Anderson, Shasta Lake, Yreka, Coming, Orland, Live Oak, Willows
Ken Maddox
Rep - 68
District Office Capitol Office
1503 South Coast Drive, #205 State Capitol, Room 4167
Costa Mesa, CA 92626 Sacramento, CA 94249-0068
Phone: 714-668-2100 Phone: (916) 319-2068
Fax: 714-668-2104 Fax: (91in 319-2168
Costa Mesa, Garden Grove, Westminster, Fountain Valley, Anaheim, Stanton, Newport Beach
Jay La Suer
Rep - 77
Assemblvmember.Lasuer@assemblv.ca.aov
District Office Capitol Office
5360 Jackson Drive, Suite 120 State Capitol, Room 2016
La Mesa, CA 91942 Sacramento, CA 94249-0077
Phone: (619) 465-7723 Phone: (916) 319-2077
Fax: (619) 465-7765 Fax: (916) 319-2177
El Cajon, La Mesa, Santee, San Diego
John Campbell
Rep - 70
Assemblvmember. Joh n. Campbelll1ilassemblv. ca. oov
District Office Capitol Office
18952 MacArthur Blvd, State Capitol, Room 4102
Suite 220 Sacramento, CA 94249-0070
Irvine, CA 92612 Phone: (916) 319-2070
Phone: (949) 863-7070 Fax: (916) 319-2170
Fax: (949) 863-9337
Irvine, Newport Beach, Tustin, Lake Forest, Aliso Viejo, Laguna Beach, Laguna Woods
Joseph Canciamilla
Dem -11
Assemblvmember. Canciamillalillassemblv. ca. oov
District Office Capitol Office
815 Estudillo Street State Capitol, Room 2149
Martinez, CA 94553 Sacramento, CA 94249-0048
Phone: (925) 372-7990 Phone: (916) 319-2011
Fax: (925) 372-0934 Fax: (916) 319-2111
Antioch, Bay Point, Bayview Mountain, Clayton, Clyde, Concord, Crockett, EI Sobrante, Hercules,
Martinez, Mountain View, Pacheco, Pinole, Pittsburg, Port Costa, Rodeo, Tara Hills, Vine Hill
Mark Ridley-Thomas
Dem - 48 Assemblvmember.ridlev-lhomasl1ilassemblv.ca.oov
District Office Capitol Office
Administrative Offices East State Capitol
700 State Drive Sacramento, CA 94249-0048
Los Angeles, CA 90037 Phone: (916) 319-2048
Phone: (213) 745-6656 Fax: (916) 319-2148
Fax: (213) 745-6722
Athens, Los Angeles (Hancock Park, Koreatown, South Central, Wilshire Blvd)
Lois Wolk
Dem-8
Assemblvmember.wolki1nassemblv.ca.aov
District Office Capitol Office
555 Mason Street, Suite 275 State Capitol
Vacaville, CA 95688 Sacramento, CA 94249-0008
Phone: (707) 455-8025 Phone: (916) 319-2008
Fax: (707) 455-0490 Fax: (916) 319-2108
Fairfield, Vacaville, Davis, Woodland, West Sacramento, Benicia, Dixon, Suisun, Winters
03/10/2004
Ron Calderon
Dem - 58 Assemblvmembeuon.calderon@assemblv.ca.qov
District Office Capitol Office
400 N. Montebello Blvd. State Capitol
Suite 100 Sacramento, CA 94249-0058
Montebello, CA 90640 Phone: (916) 319-2058
Phone: (323) 838-5858 Fax: (916) 319-2158
Fax: 1323\ 838-0677
Downey, East Los Angeles, Hacienda Heights, Lll Puente, Montebello, Pico Rivera, South Whittier,
Whittier
Manny Diaz
Dem - 23 Assemblvmember.Diaz@assemblv.ca.qoV
District Office Capitol Office
100 Paseo De San Antonio State Capitol
Suite 319 Sacramento, CA 94249-0023
San Jose, CA 95113 Phone: (916) 319-2023
Phone: (408) 277-1220 Fax: (916) 319-2123
Fax: (408) 277-1 036
East Foothills, Alum Rock, San Jose, Seven Trees
Jerome Horton
Dem - 51
AssemblvmembeLJerome. Horton@assembIV.ca.qov
District Office Capitol Office
One Manchester Boulevard State Capitol
P.O. Box 6500 Sacramento, CA 94249-0051
Inglewood, CA 90306 Phone: (916) 319-2051
Phone: (310) 412-6400 Fax: (916) 319-2151
Fax: (310) 412-6354
Inglewood, Hawthorne, Los Angeles, Gardena, Lawndale
Lloyd E. Levine
Dem - 40 Assemblvmember.levine@assemblv.ca.qov
District Office Capitol Office
Van Nuys State Building State Capitol
6150 Van Nuys Blvd., Suite 300 Sacramento, CA 94249-0040
Van Nuys, CA 91401 Phone: (916) 319-2040
Phone: (818) 904-3840 Fax: (916) 319-2140
Fax: (818) 902-0764
Los Angeles, mcludmg Van Nuys, Northndge, Canoga Park, West Hills
01/1 0/2004
California State Assembly
Committee on Appropriations
Judy Chu, Chair
Dem - 49
District Office EI Monte District Office Capitol Office
1255 Corporate Center Drive, 10505 Valley Blvd #306 State Capitol
#PH9 EI Monte, CA 91731 Sacramento, CA 94249-0049
Monterey Park, CA 91754 Phone: (626) 450-6116 Phone: (916) 319-2049
Phone: (323) 981-3426 Fax: (626) 450-6119 Fax: (916) 319-2149
Fax: (323) 981-3436
San Marino, East San Gabriel, Alhambra, San Gabriel, Rosemead, North EI Monte, EI Monte, Monterey
Park, South San Gabriel, South EI Monte
Sharon Runner, Vice Chair
Rep - 36
Assemblvwoman.Runnerl1l!assemblv.ca.oov
Lancaster District Office Victorville District Office Capitol Office
747 W. Lancaster Blvd. 14343 Civic Dr., State Capitol, Room 6031
Lancaster, CA 93534 First Floor Sacramento, CA 94249-0036
Phone: (661) 723-3368 Viclorville, CA 92392 Phone: (916) 319-2036
Fax: (661) 723-6307 Phone: (760) 843-8045 Fax: (916) 319-2136
Fax: (76(l) 843-8396
Lancaster, Palmdale, Viclorville, Adelanto
Lynn Daucher
Rep - 72
Assemblvmember.Daucherl1l!assemblv.ca.oov
District Office Capitol Office
210 W. Birch Street, Suite 202 State Capitol, Room 2158
Brea, CA 92821 Sacramento, CA 94249-0072
Phone: (714) 672-4734 Phone: (916) 319-2072
Fax: (714) 672-4737 Fax: (916) 319-2172
Fullerton, Anaheim, Placentia, Orange, Brea, Yorba Linda, La Habra
Robert Pacheco
Rep - 60
Assemblvmember.havnesl1l!assemblv.ca .oov
District Office Capitol Office
17800 Castleton Street State Capitol, Room 5164
Suite 125 Sacramento, CA 94249-0060
City of Industry, CA 91748 Phone: (916) 319-2060
Phone: (626) 839-2000 Fax: (916) 319-2160
Fax: (626) 839-2005
Chino Hills, Diamond Bar, Anaheim, La Mirada, Orange, La Habra, Yorba Linda, Walnut, Whittier, Villa
Park, La Habra Heights, San Dimas, Industry
" _.__~__.-:_...:___ ..1~n
03/1012004
Steven N. Samuelian
Rep - 29
assemblvmember.samueliantBlassemblv.ca.aov
District Office Capitol Office
83 East Shaw Ave., Suite 202 State Capitol, Room 4153
Fresno, CA 93710 Sacramento, CA 94249-0029
Phone: (559) 243-4192 Phone: (916) 319-2029
Fax: (55!!) 243-4196 Fax: (916) 319-2129
Fresno, Clovis, Madera, Orange Cove
Ray Haynes
Rep - 66
Assemblvmember.havnes@assemblv.ca.aov
District Office Capitol Office
27555 Ynez Road State Capitol, Room 4158
Suite 205 Sacramento, CA 94249-0066
Temecula, CA 92591 Phone: (916) 319-2066
Phone: (909) 699-1113 Fax: (916) 319-2166
Fax: (909) 694-1039
Riverside, Temecula, Munieta, Lake Elsinore
Abel Maldonado
Rep - 33 Assemblvmember.maldonadotBlassemblv.ca.aov
District Office Capitol Office
1302 Marsh street State Capitol, Room 4015
San Luis Obispo, CA 93401 Sacramento, CA 95814
Phone: (805) 549-3381 Phone: (916) 319-2033
Fax: (805) 549-3400 Fax: (916) 319-2133
Santa Maria, San Luis Obispo, Lompoc, Atascadero, Paso Robles, Arroyo Grande, Grover Beach, Morro
Bay, Pismo Beach, Guadalupe
Patricia C. Bates
Rep - 73
Laguna Niguel District Office Oceanside District Office Capitol Office
30012 Ivy Glenn Dr., Suite 120 302 N. Coast Highway State Capitol, Room 4116
Laguna Niguel, CA 92677 Oceanside, CA 92054 Sacramento, CA 95814
Phone: (949) 495-0730 Phone: (760) 757-8084 Phone: (916) 319-2073
Fax: (949) 363-2630 Fax: (760) 757-8087 Fax: (916) 319-2173
Oceanside, Laguna Niguel, San Clemente, Dana Point, San Juan Capistrano, Laguna Hills, Aliso Viejo
Lou Correa
Oem - 69 Assemblvmember.CorreatBlassemblv.ca.aov
District Office Capitol Office
Rancho Santiago Community State Capitol
College Sacramento, CA 94249-0069
2323 North Broadway, Suite 225 Phone: (916) 319-2069
Santa Ana, CA 92706
Phone: (714) 285-0355
Anaheim, Garden Grove, Santa Ana, Orange County
03/10/2004
Ellen M. Corbett
Oem -18 AssemblvmemberCorbeltCltassemblv.ca.QoV
District Office Capitol Office
317 Juana Avenue State Capitol
San Leandro, CA 94577-4871 Sacramento, CA 94249-0018
Phone: (510) 614-0180 Phone: (916) 319-2018
Fax: (510) 614-2038 Fax: (916) 319-2118
San Leandro, Hayward, Dublin, Pleasanton, San Lorenzo, Castro Valley, Bay area
Jackie Goldberg
Oem - 45 AssemblvmemberGoldberoCltassemblv.ca.QoV
District Office Capitol Office
106 North Avenue 56 State Capitol
Los Angeles, 90042 Sacramento, CA 94249-0045
Phone: (323) 258-0450 Phon~: (916) 319-2045
Fax: (323)258-3807 Fax: 916) 319-2145
City Terrace, Echo Park, Los Angeles (Atwater Village, Chinatown, Civic Center, Downtown Los Angeles,
EI Sereno, Highland Park Hollywood, Montecito Heights, Monterey Hills, Silvenake)
Gloria Negrete McLeod
Oem - 61
Assemblvrnember.McLeodcBlassemblv.ca.QoV
District Office Capitol Office
4959 Palo Verde st., Suite 100B State Capitol
Montclair, CA 91763 Sacramento, CA 94249-0061
Phone: (909) 621-2783 Phone: (916) 319-2061
Fax: (909) 621-7483 Fax: (916) 319-2161
Ontario, Pomona, Chino, Montclair
Fran Pavley
Dem-41
Assemblvmember.PavlevcBlassemblv.ca.aov
District Office Capitol Office
6355 Topanga Canyon Blvd, State Capitol
Suite 205 Sacramento, CA 94249-0041
Woodland Hills, CA 91367 Phone: (916) 319-2041
Phone: (818) 596-4141 Fax: (916) 319-2141
Phone: (805) 644-4141
Phone: (310) 395-3414
Fax: (818) 596-4150
Agoura, Agoura Hills, Calabasas, Hidden Hills, Los Angeles (Castellemare, Encino, Pacific Highlands,
Tarzana, Woodland Hills), Malibu, Oak Park, Santa Monica, Topanga, Westlake Village
Mark Leno
Oem -13 Assemblvmember.lenoCltassemblv.ca.QoV
District Office Capitol Office
455 Golden Gate Avenue State Capitol
Suite 14300 Sacramento, CA 94249-0013
San Francisco, CA 94102 Fax: (916) 319-2113
Fax: (415) 557-3015 Phone: (916) 319-2013
Phone: '(415) 557-3013
Eastern portion of San Francisco
. _.L~ ___ -1__
03/1012004
Mark Ridley-Thomas
Oem - 48 Assemblvmember.ridlev-thomas@assemblv.ca.aov
District Office Capitol Office
Administrative Offices East State Capitol
700 State Drive Sacramento, CA 94249-0048
Los Angeles, CA 90037 Phone: (916) 319-2048
Phone: (213) 745-6656 Fax: (916) 319-2148
Fax: (213) 745-6722
Athens, Los Angeles (Hancock Park, Koreatown, South Central, Wilshire Blvd)
Ronald Calderon
Oem - 58 Assemblvmember.ron.calderontlllassemblv.ca.Qov
District Office Capitol Office
400 N. Montebello Blvd.,Suite 100 State Capitol
MontebellO, CA 90640 Sacramento, CA 94249-0058
Phone: (323) 838-5858 Phone: (916) 319-2058
Fax: (323) 838-0677 Fax: (916) 319-2158
. .
Downey, East Los Angeles, Hacienda Heights, La Puente, Montebello, PICO Rivera, South Whittier,
Whittier
Leland Yee
Oem -12 Assemblvmember.veetlllassemblv.ca.aov
District Office Capitol Office
455 Golden Gate, Suite 14600 State Capitol
San Francisco, CA 94102 Sacramento, CA 94249-0012
Phone: (415) 557-2312 Phone: (916) 319-2012
Fax: (415) 557-1178 Fax: (916) 319-2112
San Francisco, Daly City, Broadmoor, Colma
S. Joseph Simitian
Oem - 21
Assemblvmember.Simitiantlllassemblv.ca.aov
District Office Capitol Office
160 Town & Country Village State Ca pitol
Palo Alto, CA 94301 Sacramento, CA 94249-0021
Phone: (650) 688-6330 Phone: (916) 319-2021
Fax: (650) 688-6336 Fax: (916) 319-2121
San Carlos, Redwood City, Atherton, Portola Valley, Woodside, Menlo Park, East Palo Alto, Palo Alto,
Los Alios, Los Alios Hills, Los Gatos, Monte Sereno, Almaden Valley of San Jose, Stanford University
Manny Oiaz
Oem - 23 Assemblvmember.Diaztlllassemblv.ca.aov
District Office Capitol Office
100 Paseo De San Antonio State Capitol
Suite 319 Sacramento, CA 94249-0023
San Jose, CA 95113 Phone: (916) 319-2023
Phone: (408) 277-1220 Fax: (916) 319-2123
Fax: (408) 277-1036
East Foothills, Alum Rock, San Jose, Seven Trees
03/1 012004
Joe Nation
Oem - 6
Joe.Nation@asm.ca.aov
Sonoma County District Office Marin County District Office Capitol Office
50 D Street, Suite 305 3501 Civic Center Dr., Room 412 State Capitol
Santa Rosa, CA 95404 San Rafael, CA 94903 Sacramento, CA 94249-0006
Phone: [T07) 576-2631 Phone: (415) 479-4920 Phone: (916) 319-2006
Fax: 170n 576-2735 Fax: (415) 479-2123 Fax: (916) 319-2106
Marin County and southem Sonoma County, including Petaluma, Rohnert Park and south Santa Rosa
Patty Berg
Oem-1
District Offices Mendocino & Lake Capitol Office
104 W. Church Street State Capitol
Humboldt Office Ukiah, CA 95482 Sacramento, CA 94249-0001
235 Fourth Street, Suite C Phone: [T07) 463-5770 Phone: (916) 319-2001
Eureka, CA 95501 Fax: (707) 463-5773 Fax: (916) 319-2101
Phone: (707) 445-7014
Fax: [T07) 455-6607 Sonoma
50 "D" Street, Suite 450
Santa Rosa, CA 95404
Phone: [T07) 576-2526
Fax: 17071576-2297
Crescent City North, Klamath, Trinidad, Blue Lake, Eureka, Willow Creek, Weaverville, Humboldt Hill,
Femdale, Rio Dell, Hayfork, Covelo, Laytonville, Fort Bragg, Willits, Mendocino, Ukjah, Nice, Lakeport,
Kelseyville, Point Arena, C1overdale, Healdsburg, Windsor, Monte Rio, Bodega Bay
Patricia Wiggins
Oem-7
Patricia.Wiaains@asm.ca.aov
District Offices Santa Rosa District Office Capitol Office
Napa District Office 50 'D' Street State Capitol
1040 Main Street, Suite 101-A Suite 301 Sacramento, CA 94249-0007
Napa, CA 94559 Santa Rosa, CA 95404 Phone: (916) 319-2007
Phone: (707) 258-8007 Phone: [T07) 546-4500 Fax: (916) 319-2107
Fax: (707) 546-9031
Vallejo District Office
640 Tuolumne Street, Suite B
VallejO, CA 94590
Phone: [T07) 649-2307
Fax: [T07) 649-2311
Santa Rosa, Vallejo, Napa, Yountville, Green Valley, St Lenena, Angwin, Calistoga
Marco Antonio Firebaugh
Oem - 50 Assemblvmember.Firebauah@assemblv.ca.aov
District Office Capitol Office
8724 Garfield Avenue, Suite 104 State Capitol
South Gate, CA 90280 Sacramento, CA 94249-0050
Phone: (562) 927-1200 Phone: (916) 319-2050
Fax: (562) 927-6670 Fax: (916) 319-2150
Bell, Bell Gardens, Bellflower, City of Commerce, Cudahy, Downey, Florence, Los Angeles (South
Central), Lynwood, South Gate
.. ______.....:_..;___ .:I~~
03/1 0/2004
John Laird
Oem - 27 Assemblvmember.laird(1l)assemblv.ca.QOV
Santa Cruz County District Monterey/Santa Clara County Capitol Office
Office District Office State Capitol
701 Ocean Street, 318-B 99 Pacific street, Suite 5550 Sacramento, CA 98249-0027
Santa Cruz, CA 95060 Monterey, Ca 93940 Phone: (916) 319-2027
Phone: (831) 425-1503 Phone: 831-649-2832 Fax: (916) 319-2127
Fax: (831) 425-2570 Fax: 831-649-2935
Monterey, Santa Clara, and Santa Cruz Counties and the cities of Morgan Hill, Scotts Valley, Santa Cruz,
Capitola, Monterey, Marina, Seaside, Pacific Grove, and Cannel.
Cindy Montanez
Oem - 39 Assemblvmember.montanez(1l)assernblv.ca.QOV
District Office Capitol Office
11541 Laurel Canyon Blvd., Sle C State Capitol
Mission Hills, California 91345 . Sacramento, CA 94249-0039
Phone: (818) 838-3939 Phone: (916) 319-2039
Fax: 181!!) 838-3931 Fax: (916) 319-2139
Sylmar, San Femando, Mission Hills, Lake View Terrace, Pacoima, Arleta, Panorama City, Sun Valley
LoniHancock
Oem -14 Assemblvmember.hancock(1l)assemblv.ca.QoV
District Office Capitol Office
712 EI Cerrito Plaza State Capitol
EI Cerrito, CA 94530 Sacramento, CA 94249-0014
Phone: (510) 559-1406 Phone: (916) 319-2014
Fax: (51()) 559-1478 Fax: (916) 319-2114
Albany, Berkeley, Canyon, EI Cerrito, EI Sobrante, Emeryville, Lafayette. Moraga, Orinda, Pleasant Hill,
Richmond, San Pablo and parts of Martinez, Oakland and Walnut Creek.
Paul Koretz
Oem - 42 Assemblvmember.koretzl1llassernblv.ca.QOV
District Office Capitol Office
9200 Sunset Blvd. , PH-15 West State Capitol
Hollywood, CA 90069 Sacramento, CA 94249-0042
Phone: (310) 285-5490 Phone: (916) 319-2042
Fax: 131 ()) 285-5499 Fax: (916) 319-2142
West Hollywood, Beverly Hills, Los Angeles, Century City, Westwood, Bel Air, Brentwood, Hollywood,
Hancock Park, Las Feliz, North Hollywood, Valley Village, Teluca Lake, Universal City, Studio City,
Shennan Oaks
03/10/2004
California State Assembly
Committee on Natural Resources
Hannah-Beth Jackson, Chair
Oem - 35 Assemblvmember.Jackson<alassemblv.ca.aov
Santa Barbara District Office Ventura District Office Capitol Office
101 West Anapamu St., Sutte A 701 East Santa Clara Street State Capttol
Santa Barbara, CA 93101 Suite 25 Sacramento, CA 94249-0035
Phone: (805) 564-1649 Ventura, CA 93001 Phone: (916) 319-2035
Fax: (805) 564-1651 Phone: (805) 648-9943 Fax: (916) 319-2135
Fax: (805) 648-9946
Los Alamos, Buellton, Solvang, Isla Vista, Goleta, Santa Barbara, Montecito, Carpinteria, Ventura, EI Rio,
Oxnard, Port Hueneme
Doug LaMalfa, Vice Chair
Rep-2
Assemblvmember.lamalfa<alassemblv.ca.aov
Redding District Office Yuba City District Office Capitol Office
2865 Chum Creek Rd, Sutte B 1527 Starr Drive, Ste. U State Capttol, Room 4177
Redding, CA 96002 Yuba City, CA 95993 Sacramento, CA 94249-0002
Phone: (530) 223-6300 Phone: (530) 751-8351 Phone: (916) 319-2002
Fax: (530) 223-6737 Fax: (53!)) 751-8379 Fax: (916) 319-2102
Redding, Yuba Ctty, Red Bluff. Anderson, Shasta Lake, Yreka, Coming, Ortand, Uve Oak, Willows
Tom Harman
Rep - 67
Assemblvmember.Harrnan<alassemblv.ca.aov
District Office Capitol Office
17011 Beach Blvd., Suite 570 State Capttol
Huntington Beach, CA 92647 Sacramento, CA 94249-0067
Phone: (714) 843-4966 Phone: (916) 319-2067
Fax: (714) 843-6375 Fax: (916) 319-2167
Huntington Beach, Anaheim, Cypress, Westminster, Seal Beach, Garden Grove, La Palma, Los Alamitos,
Stanton
Ray Haynes
Rep - 66
Assemblvmember.havnes<alassemblv.ca.aov
District Office Capitol Office
27555 Ynez Rd., Suite 205 State Capttol, Room 4158
Temecula, CA 92591 Sacramento, CA 94249-0066
Phone: (909) 699-1113 Phone: (916) 319-2066
Fax: (909) 694-1039 Fax: (916) 319-2166
Riverside, Temecula, Murrieta, Lake Elsinore
03/1 012004
Rick Keene
Rep - 3
Assemblvmember.Keene(B>.assemblv.ca.aov
District Office Capitol Office
1550 Humboldt Road, Suite 4 State Capitol, Room 6027
Chico, CA 95928 Sacramento, CA 94249-0003
Phone: (530) 895-4217 Phone: (916) 319-2003
Fax: (530\ 895-4219 Fax: (916) 319-2103
Chico, Paradise, Truckee, Susanville, Oroville, Marysville, Grass Valley, Gridley, Nevada City,
Wheatland, Portola
Alan Lowenthal
Dem - 54 Alan.Lowenthal@assemblv.ca.aov
Long Beach District Office San Pedro District Office Capitol Office
115 Pine Avenue, Ste. 430 388 W. 7th Street State Capitol
Long Beach, CA 90802 San Pedro, CA 90731 Sacramento, CA 94249-0054
Phone: (562) 495-4766 Phone: (310) 548-6420 Phone: (916) 319-2054
Fax: (562) 495-1876 Fax: (310) 548-4160 Fax: (916) 319-2154
San Pedro, Avalon, Signal Hill, Palos Verdes Estates, Rancho Palos Verdes, Rolling Hills Estates, and
sixty percent ofthe City of Long Beach.
Sally J. Lieber
Dem - 22 Assemblvwoman.lieber(B>.assemblv.ca.aov
District Office Capitol Office
100 Paseo de San Antonio State Capitol
Room 300 Sacramento, CA 94249-0022
San Jose, CA 95113 Phone: (916) 319-2022
Phone: (408) 277-2003 Fax: (916) 319-2122
Fax: (408) 277-2084
San Jose, Mountam View, Santa Clara, Cupertino, Los Altos
Lois Wolk
Dem -8
Assemblvmember.wolk@assemblv.ca.aov
District Office Capitol Office
555 Mason Street, Suite 275 State Capitol
Vacaville, CA 95688 Sacramento, CA 94249-0008
Phone: (707) 455-8025 Phone: (916) 319-2008
Fax: (707) 455-0490 Fax: (916) 319-2108
Fairfield, Vacaville, DaVIS, Woodland, West Sacramento, Bemcia, Dixon, Suisun, Winters
03/1012004