AB 1088

Bill Subjects

Abstract

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. The California Constitution authorizes the commission to fix the rates and establish rules for all public utilities, subject to control by the Legislature. The California Constitution provides that the Legislature has plenary authority, unlimited by the other provisions of the constitution, to confer additional authority upon the commission that is cognate and germane to the regulation of public utilities. Existing law requires the commission, in consultation with the Independent System Operator, to establish resource adequacy requirements for all load-serving entities, defined to include electrical corporations, community choice aggregators, and electric service providers. That law requires each load-serving entity to maintain physical generating capacity and electrical demand response adequate to meet its electrical demand requirements. In establishing resource adequacy requirements, the commission is required to ensure the reliability of electrical service while advancing, to the extent possible, the state's goals for clean energy, reducing air pollution, and reducing emissions of greenhouse gases. Existing law requires that the resource adequacy program achieve specified objectives. Existing law requires the commission to adopt a process for each load-serving entity to file an integrated resource plan and a schedule for periodic updates to the plan to ensure that load-serving entities accomplish specified objectives. Existing law requires each load-serving entity to prepare and file an integrated resource plan consistent with those objectives on a time schedule directed by the commission and subject to commission review. Existing law provides that an 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 or unless the commission designates a load-serving entity 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. Existing law establishes requirements for a load-serving entity other than the electrical corporation to serve as the provider of last resort. Existing law requires 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 provides that each provider of last resort is a public utility subject to the jurisdiction, control, and regulation of the commission, as specified. This bill would establish the California Procurement Authority as a central procurement entity to ensure that load-serving entities collectively have adequate electrical resources, both in the short run and long run, as are necessary to ensure resource adequacy and to achieve the purposes of the integrated resource planning process. The bill would require the commission, in consultation with the Independent System Operator and the Office of the Ratepayer Advocate, to develop an implementing framework for the authority through a public process by January 1, 2023, and would require the commission to ensure that the authority is operational by January 1, 2024. The bill would require the authority to procure electrical resources to meet the collective procurement needs identified by the commission pursuant to the resource adequacy and integrated resource planning statutes that are not fulfilled by self-procurement by load-serving entities whether because a load-serving entity elected to not procure their proportionate share of those resource requirements identified by the commission or because they are unable to procure sufficient resources to meet their proportionate share of those requirements. If an electrical corporation voluntarily elects to cease procuring electricity to serve the bundled service customers in its service territory, or otherwise is unable to serve its bundled service customers, the bill would require the authority to serve those customers. The bill would require the authority to serve as the provider of last resort for all customers in an electrical corporation's distribution service territory, except where the electrical corporation serves as the provider of last resort or where a load-serving entity has been approved by the commission to serve as the provider of last resort. If an electrical corporation voluntarily elects to cease providing electricity to retail customers in its service territory, for any customer not served by a community choice aggregator or an electric service provider, the bill would require that the authority serve as the provider of last resort, except where another load-serving entity is designated by the commission to serve as the provider of last resort. This bill would require the commission to ensure that the authority complies with its responsibilities as the provider of last resort. The bill would require that an electrical corporation be exclusively responsible for planning, making necessary investments in, and operating the electrical distribution grid in its distribution service territory and, if a distributed energy resource provides distribution grid operations or services on the utility side of the meter, the bill would provide that the distributed energy resource is a part of the electrical distribution grid for these purposes. This bill would, beginning one year from the establishment of the authority, require the commission, in consultation with the authority, the Independent System Operator, and the State Energy Resources Conservation and Development Commission, to annually submit to the Legislature a report on the effectiveness of the authority's procurement activities and the cost-effectiveness of those activities. 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 an order or decision of the commission implementing its requirements would be a crime, 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.