Governor Davis Signs Series of Energy Bills
Governor Gray Davis signed legislation designed to strengthen California’s
over-all energy system and ensure that renewable power remains a
critical component of California’s energy future.
AB 57, by Assemblymember Roderick Wright (D-South Central
Los Angeles), allows investor-owned utilities to enter into long-term
contracts and other procurement arrangements with greater financial
certainty. The bill will accelerate the utilities’ return to
creditworthiness, significantly decrease their exposure to the volatile
spot market, and provide stable rates for consumers.
“AB 57 lays the groundwork for putting the investor-owned
utilities back in the business they know best, buying power for
California’s consumers and businesses,” said Gov. Davis.
“It will return the utilities to creditworthiness, decrease
their exposure to the volatile sport market, and ensure rate stability
for consumers and businesses. It will also get the State out of
the power-buying business, which has always been our endgame goal.”
AB 58, by Assemblymember Fred Keeley (D-Boulder Creek),
allows the Net Metering Program, initiated last year, to continue
indefinitely. The program, which was set to expire on January 1,
2003, requires electrical utilities to credit all electricity generated
by a customer-owned solar or wind system against the customer’s
usage of electricity sold by the utility. This practice is known
as “net metering.”
Combined with the solar-energy tax credit, which Governor Davis
sponsored and signed last year, and the enhanced the California
Energy Commission’s solar rebate program, the continuation
of net metering is critical to the expansion of solar and renewable
energy industries in California.
“California has a long and proud history of being the nation’s
leader in renewable energy,” Gov. Davis said. “This legislation
will ensure that incentives to Californians who use renewable energy
will continue and that solar and wind power remain a critical part
of our energy future. Importantly, it ensures that consumers are
rewarded, instead of penalized, for using solar or wind power to
augment their overall power usage.”
Gov. Davis also signed 10 other energy bills.
AB 80, by Assemblymember Sally Havice (D-Cerritos), allows
any city with rights and obligations to the Magnolia Power Project
to serve as a power aggregator on behalf of all retail end-use customers
within its jurisdiction. The bill also establishes a mechanism to
ensure that any costs of the Department of Water Resources or an
affected investor-owned utility associated with such aggregation
would be recoverable.
AB 117, by Assemblymember Carole Migden (D-San Francisco),
facilitates the ability of communities to procure electricity directly
from electricity suppliers. The bill contains cost recovery provisions
to ensure that the Department of Water Resources is reimbursed for
its energy expenditures without shifting costs to other customers.
AB 1234, by Assemblymember Anthony Pescetti (R-Rancho Cordova),
extends to a private natural gas producer, the ability to acquire
an easement from a public utility, if the Public Utility Commission
(PUC) deems the intended use of the easement to be in the public
interest. The bill also provides for the notification to the owners
of the real property affected by the easement within 10 days of
an application to the PUC.
AB 1235, by Assemblymember Tim Leslie (R-Tahoe City), exempts
Sierra Pacific Power’s four hydroelectric plants located in
Nevada and California as well as Pacific-Corp’s two hydroelectric
plants located in Washington from Section 377 of the Public Utilities
Code, which prohibits further divestment of additional public utility-owned
electric generation assets before January 1, 2006.
AB 1968, by Assemblymember Joe Nation (D-San Rafael), excludes
solar, wind, and fuel cell rebates paid by the Energy Commission,
Public Utilities Commission, or a municipal utility from being considered
as part of a taxpayer’s gross income for the purposes of state
income tax.
AB 2228, by Assemblymember Gloria Negrete-Mcleod (D-Chino),
provides that biogas electrical customer-generator facilities up
to 1 MW are eligible for net energy metering until January 1, 2006,
under a pilot program. Current law limits participation in net metering
to solar and wind electric generating facilities. This bill limits
biogas digester generation load to 5 MW per energy service provider
service territory and also provides for retail cost recovery.
AB 2706, by Assemblymember Dennis Cardoza (D-Merced), authorizes
irrigation districts to enter into hedging contracts for energy-related
products.
SB 1753, by Senator Debra Bowen (D-Marina del Ray), requires
the Independent System Operator (ISO) to conduct its operations
consistent with applicable state and federal laws and consistent
with the interests of the people of California.
The bill requires the ISO to make the most efficient use of available
resources in its management of the transmission grid and related
energy markets, ensure that the purposes and functions of the ISO
are consistent with a nonprofit public benefit corporation in terms
of open meetings and records that are available to the public, and
consult with the appropriate state and local agencies in the furtherance
of consumer and environmental protection.
SB 1755, by Senator Nell Soto (D-Pomona), authorizes municipal
water districts and county water districts to acquire facilities
for the production and distribution of electricity to be used “by
the district for its own purposes or [by] any public or private
entity that is engaged in the distribution or sale of electricity.”
SB 1976, by Senator Tom Torlakson (D-Antioch), requires
the Energy Commission, in consultation with the Public Utilities
Commission, to report to the Legislature and Governor by March 31,
2003, on the feasibility of implementing real-time pricing tariffs
for electricity in California; establishes a procurement process
at the PUC that would grant investor-owned utility procurement contracts
“per se” reasonableness; and requires investor-owned utilities
to procure at least an additional 1% of their sales per year from
renewable resources.
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