Bill Text: CA SB520 | 2019-2020 | Regular Session | Chaptered
Bill Title: Electrical service: provider of last resort.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2019-10-02 - Chaptered by Secretary of State. Chapter 408, Statutes of 2019. [SB520 Detail]
Download: California-2019-SB520-Chaptered.html
Senate Bill
No. 520
CHAPTER 408
An act to amend Section 216 of, and to add Article 8.5 (commencing with Section 387) to Chapter 2.3 of Part 1 of Division 1 of, the Public Utilities Code, relating to electricity.
[
Approved by
Governor
October 02, 2019.
Filed with
Secretary of State
October 02, 2019.
]
LEGISLATIVE COUNSEL'S DIGEST
SB 520, Hertzberg.
Electrical service: provider of last resort.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. 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.
This bill would provide that the electrical corporation is the provider of last resort, as defined, in its service territory unless provided otherwise in a service territory boundary agreement approved by the commission pursuant to existing law or unless the commission designates a load-serving entity, as defined, other than the electrical corporation to serve as the provider of last resort for all or a portion of that
service territory pursuant to a joint application of the electrical corporation and the load-serving entity. The bill would establish requirements for the application and for a load-serving entity other than the electrical corporation to serve as the provider of last resort. The bill would require the commission to ensure that each provider of last resort receives reasonable cost recovery for being designated and serving as the provider of last resort. The bill would require the commission to supervise and regulate each provider of last resort, as necessary, as a public utility for the services it provides as a provider of last resort to ensure the provision of electrical service to customers without disruption, and would provide that each provider of last resort is a public utility subject to the jurisdiction, control, and regulation of the commission, as specified. The bill would require the commission to develop a process that facilitates a joint application from load-serving entities that are not
electrical corporations to request to transfer the responsibilities of the provider of last resort, in instances when one load-serving entity that is not an electrical corporation has already been designated as a provider of last resort.
Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because the provisions of this bill would be a part of the act and because a violation of a commission action implementing its requirements would be a crime, the bill would impose a state-mandated local program.
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.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 216 of the Public Utilities Code is amended to read:216.
(a) (1) “Public utility” includes every common carrier, toll bridge corporation, pipeline corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, sewer system corporation, and heat corporation, where the service is performed for, or the commodity is delivered to, the public or any portion thereof.(2) A provider of last resort, as defined in Section 397, that is providing service pursuant to Article 13 (commencing with Section 397) of Chapter 2.3 is a public utility subject to the jurisdiction, control, and regulation of the commission and the provisions of this part regarding providing that service.
(b) Whenever any common carrier, toll bridge corporation, pipeline corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, sewer system corporation, or heat corporation performs a service for, or delivers a commodity to, the public or any portion thereof for which any compensation or payment whatsoever is received, that common carrier, toll bridge corporation, pipeline corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, sewer system corporation, or heat corporation, is a public utility subject to the jurisdiction, control, and regulation of the commission and the provisions of this part.
(c) When any person or corporation performs any service for, or
delivers any commodity to, any person, private corporation, municipality, or other political subdivision of the state, that in turn either directly or indirectly, mediately or immediately, performs that service for, or delivers that commodity to, the public or any portion thereof, that person or corporation is a public utility subject to the jurisdiction, control, and regulation of the commission and the provisions of this part.
(d) Ownership or operation of a facility that employs cogeneration technology or produces power from other than a conventional power source or the ownership or operation of a facility which employs landfill gas technology does not make a corporation or person a public utility within the meaning of this section solely because of the ownership or operation of that facility.
(e) Any corporation or person engaged directly or indirectly in developing, producing, transmitting, distributing, delivering, or selling any form of heat derived from geothermal or solar resources or from cogeneration technology to any privately owned or publicly owned public utility, or to the public or any portion thereof, is not a public utility within the meaning of this section solely by reason of engaging in any of those activities.
(f) The ownership or operation of a facility that sells compressed natural gas or hydrogen at retail to the public for use only as a motor vehicle fuel, and the selling of compressed natural gas or hydrogen at retail from that facility to the public for use only as a motor vehicle fuel, does not make the corporation or person a public utility within the meaning of this section solely because of that
ownership, operation, or sale.
(g) Ownership or operation of a facility that is an exempt wholesale generator, as defined in the Public Utility Holding Company Act of 2005 (42 U.S.C. Sec. 16451(6)), does not make a corporation or person a public utility within the meaning of this section, solely due to the ownership or operation of that facility.
(h) The ownership, control, operation, or management of an electric plant used for direct transactions or participation directly or indirectly in direct transactions, as permitted by subdivision (b) of Section 365, sales into a market established and operated by the Independent System Operator or any other wholesale electricity market, or the use or sale as permitted under subdivisions (b) to (d), inclusive, of Section 218, shall not make a
corporation or person a public utility within the meaning of this section solely because of that ownership, participation, or sale.
(i) The ownership, control, operation, or management of a facility that supplies electricity to the public only for use to charge light duty plug-in electric vehicles does not make the corporation or person a public utility within the meaning of this section solely because of that ownership, control, operation, or management. For purposes of this subdivision, “light duty plug-in electric vehicles” includes light duty battery electric and plug-in hybrid electric vehicles. This subdivision does not affect the commission’s authority under Section 454 or 740.2 or any other applicable statute.
SEC. 2.
Article 8.5 (commencing with Section 387) is added to Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code, to read:Article 8.5 Provider of Last Resort
387.
(a) For purposes of this article, the following terms have the following meanings:(1) “Carbon-free electrical resource” means a source of electrical generation that emits no greenhouse gases when generating electricity that is deliverable to retail end-use customers in California.
(2) “Load-serving entity” has the same meaning as defined in Section 380.
(3) “Provider of
last resort” means a load-serving entity that the commission determines meets the minimum requirements of this
article and designates to provide electrical service to any retail customer whose service is transferred to the designated load-serving entity because the customer’s load-serving entity failed to provide, or denied, service to the customer or otherwise failed to meet its obligations.
(b) The provider of last resort shall be the electrical corporation in its service territory unless provided otherwise in a service territory boundary agreement entered into pursuant to Article 1 (commencing with Section 8101) of Chapter 6 of Division 4, or unless another load-serving entity is designated by the commission pursuant to subdivision (c).
(c) The commission may designate a load-serving entity other than the electrical corporation to serve as a provider of last resort in
the electrical corporation’s service territory by approving a joint application by the electrical corporation and the load-serving entity that proposes to become the new provider of last resort in the electrical corporation’s service territory. The application may request a transfer of the responsibilities of the provider of last resort for the entire service territory of the electrical corporation or for a portion of that service territory. The application shall include all of the following:
(1) A demonstrated ability by the load-serving entity seeking to become the new provider of last resort to post a bond sufficient to meet the minimum threshold established pursuant to subdivision (e).
(2) A demonstrated history of contracting for electricity and access to carbon-free
electrical resources by the load-serving entity seeking to become provider of last resort.
(3) A viable plan for meeting the resource adequacy requirements established pursuant to Section 380, the requirements of the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11)), and all other load-serving entity procurement requirements.
(4) A history of the load-serving entity seeking to become the provider of last resort participating in, and complying with the requirements of, the integrated resource planning process pursuant to Sections 454.51, 454.52, and 454.54, and all other load-serving entity procurement requirements.
(5) The full disclosure by the load-serving entity seeking to become
the provider of last resort of any fines or penalties imposed by, or violations of law found by, any regulatory body of any state or territory, or the federal government.
(6) A detailed history of the safety record of the load-serving entity seeking to become the provider of last resort.
(7) An implementation plan to provide for universal access, equitable treatment of all classes of customers, and other customer protections including electric service disconnection procedures consistent with Sections 718 and 779.3.
(d) The commission shall develop a process to facilitate a joint application from load-serving entities that are not electrical
corporations to request to transfer the responsibilities of the provider of last resort. This process shall apply when one load-serving entity that is not an electrical corporation has already been designated as a provider of last resort, as described in subdivision (c). The commission may approve a joint application by the designated provider of last resort and the load-serving entity that proposes to become the new provider of last resort in the service territory. The application may request a transfer of responsibilities of the provider of last resort for the entire service territory or for a portion of that service territory. The application shall include all of the elements described in subdivision (c). All of the requirements of this article are applicable to the load-serving entity that proposes to become the new provider of last resort in the applicable service territory.
(e) While a load-serving entity is serving as the new provider of last resort pursuant to subdivision (c), the commission shall not enforce the provider of last resort requirements on the former provider of last resort.
(f) The commission shall develop additional threshold attributes for a load-serving entity other than an electrical corporation to serve as a provider of last resort to retail end-use customers in California that include all of the following:
(1) Minimum insurance requirements.
(2) Minimum financial requirements necessary to provide electricity to retail end-use customers in each service territory.
(3) Compliance with resource adequacy requirements pursuant to Section 380, requirements of the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11)), integrated resource planning requirements pursuant to Sections 454.51, 454.52, and 454.54, and all other state-mandated procurement requirements.
(4) Electric service disconnection rules pursuant to Sections 718 and 779.3.
(5) Any additional minimum requirements that the commission determines are needed to ensure that the provider of last resort will perform its obligation to serve.
(g) The commission shall ensure that the provider of last resort for each service territory receives reasonable cost recovery for being
designated and serving as a provider of last resort.
(h) To ensure continued achievement of California’s greenhouse gas emission reduction and air quality goals, and continued accounting of emissions of greenhouse gases for California pursuant to Part 2 (commencing with Section 38530)
of Division 25.5 of the Health and Safety Code and other emissions reporting programs, in preparation for an unplanned customer migration to a provider of last resort, the commission, in consultation with the Energy Commission, may do both of the following:
(1) Establish rules for all load-serving entities in preparation of any potentially large and unplanned customer migration.
(2) Recommend to agencies modifications to relevant regulations.
(i) Notwithstanding any other law, electrical corporations shall continue to provide all metering, billing, and collection to retail customers served by the provider of last resort. Bills sent by an electrical corporation to retail customers shall identify the designated provider of last resort. The commission shall determine the terms and conditions under which the electrical corporation provides these services to the provider of last resort.
(j) The commission shall supervise and regulate each provider of last resort, as necessary, as a public utility for the services provided by the provider of last resort pursuant to this article to ensure the provision of electrical service to customers without disruption if a load-serving entity fails to provide, or denies, service to any
retail end-use customer in California for any reason. The commission may do all things that are necessary and convenient in the exercise of this power.
(k) Nothing in this section limits the authority of the commission to regulate the terms of service or establish requirements for provider of last resort service by an electrical corporation or any new provider of last resort.
