Amended  IN  Senate  January 06, 2020
Amended  IN  Senate  September 06, 2019
Amended  IN  Senate  March 25, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 378

Introduced by Senator Wiener
(Principal coauthor: Assembly Member Kalra)
(Coauthors: Assembly Members Chiu, Cunningham, Eggman, Levine, and Mark Stone)

February 20, 2019

An act to amend Section 707 of, and to add Sections 592, 707.3, 707.5, 748, 776.7, 911.3, and 2111.5 to, to the Public Utilities Code, relating to electricity.


LEGISLATIVE COUNSEL'S DIGEST


SB 378, as amended, Wiener. Electrical corporations: deenergization events: procedures: allocation of costs: reports.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. Every Existing law requires every public utility is required by existing law to furnish such any reports as required by the commission may require. commission.
This bill would require an each electrical corporation with more than 2,500,000 electrical service connections in California to annually submit a report to the commission, the Office of Emergency Services, the Department of Forestry and Fire Protection, the Independent System Operator, and county governments within its service territory on that includes the age, useful life, and condition of the electrical corporation’s equipment, including the date of most recent inspection dates, and maintenance records, with records for its equipment, investments to maintain and improve the operation of its transmission and distribution facilities, and an assessment of the current and future fire and safety risk posed by the equipment, as well as of the economic, environmental, and public safety impacts of deenergization events, as defined. equipment.
Existing law requires the commission to institute a rulemaking proceeding by March 1, 2012, for the purpose of considering and adopting a code of conduct, associated rules, and enforcement procedures, as specified, to govern the conduct of an electrical corporation relative to the consideration, formation, and implementation of community choice aggregation programs and to implement the code of conduct, associated rules, and enforcement procedures by January 1, 2013.
This bill would require the commission to institute a rulemaking for the purpose of considering and adopting a code of conduct and enforcement procedures, as specified, to govern the conduct of an electrical corporation relative to the consideration, formation, and implementation of community choice aggregation programs, new or expanded local publicly owned electric utilities, microgrid or distributed resource programs and policies, or other efforts to expand electrical service options available to consumers. prohibit the commission from allowing an electrical corporation to recover in rates costs associated with the electrical corporation’s opposition to the consideration, formation, implementation, or expansion of a local publicly owned electric utility, electrical cooperative, or microgrid, self-generation, or distributed resource program or policy or to other efforts to expand the electrical service options available to consumers. The bill would require the commission to ensure that an electrical corporation does not market against those efforts, except through an affiliate that is funded exclusively by the electrical corporation’s shareholders, and would impose other related requirements on the commission.
Existing law requires each electrical corporation to annually prepare and submit a wildfire mitigation plan to the commission for review and approval, as specified. Existing law requires a wildfire mitigation plan of an electrical corporation to include, among other things, protocols for deenergizing portions of the electrical distribution system that consider the associated impacts on public safety, as well as protocols related to mitigating the public safety impacts of those protocols, including impacts on critical first responders and on health and communications infrastructure.
This bill would, on or before June 1, 2020, would require the commission, in consultation with the Department of Consumer Affairs, on or before June 1, 2021, to establish a procedure for customers, local governments, and others affected by a deenergization event to recover costs accrued during the deenergization event from an electrical corporation within 2 weeks of the end of the event. with more than 2,500,000 electrical service connections in California. The bill would require an electrical corporation with more than 2,500,000 electrical service connections in California, on or before June 1, 2021, to create a fund, of an amount to be determined by the commission, for the recovery of costs accrued by customers, local governments, and others during a deenergization event. The bill would require that money be paid into the fund exclusively by the electrical corporation’s shareholders, would prohibit expenses paid by the fund from being recovered either directly or indirectly in rates, and would require that those expenses be borne exclusively by the shareholders of the electrical corporation. The bill would prohibit an electrical corporation with more than 2,500,000 electrical service connections in California from billing customers for any nonfixed costs during a deenergization event or from charging customers increased amounts after a deenergization event, event in order to offset losses accrued during a deenergization event. The bill would require require, on or before June 1, 2021, that any profit accrued by an electrical corporation with more than 2,500,000 electrical service connections in California due to a deenergization event be remitted or credited to its ratepayers, while any loss be borne by the electrical corporation’s shareholders.

Existing law establishes an independent Public Advocate’s Office within the commission with the goal to obtain the lowest possible rate for service consistent with reliable and safe service levels. Existing law requires the director of the office to annually appear before the appropriate policy committees of the Assembly and the Senate to report on the activities of the office.

This bill would require an electrical corporation with more than 2,500,000 electrical service connections in California to provide notification of a pending deenergization event as early as possible to the cities and counties within its service territory and to other local governmental entities upon their request, and to share information relating to a deenergization event with local governmental entities, as specified.
This bill would require the office commission to biennially produce an annual a report on the economic, environmental, public health, and public safety impacts of deenergization events, using information provided by electrical corporations as well as with more than 2,500,000 electrical service connections in California and independent analysis.
Existing law provides for the imposition of fines and civil penalties for the violation of the California Constitution, statutes, or an order, decision, or requirement of the commission by a public utility.
This bill would provide that an electrical corporation is subject to an unspecified a civil penalty of not less than $500,000 per 50,000 affected customers for every hour that a deenergization event is in place. place, and would require that the penalty be borne exclusively by the electrical corporation’s shareholders.
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, when a penalty has not otherwise been provided.
Because the provisions of this bill would be a part of the act and would require action to be taken by the commission to implement its requirements, and because penalties are not provided for certain of the bill’s requirements, 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   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 592 is added to the Public Utilities Code, to read:

592.
 (a) The commission shall direct an each electrical corporation with more than 2,500,000 electrical service connections in California to submit an annual report to the commission, the Office of Emergency Services, the Department of Forestry and Fire Protection, the Independent System Operator, and county governments within its service territory on the age, that includes all of the following:
(1) The age, useful life, and condition of the electrical corporation’s equipment, including equipment.
(2) For all equipment subject to inspection, the date of the most recent inspection and inspections.
(3) The maintenance records, with an records for the electrical corporation’s equipment.
(4) A list of the electrical corporation’s investments made in the preceding year to maintain and improve the operation of its transmission and distribution facilities.
(5) An assessment of the current and future fire and safety risk posed by the equipment, as well as of the economic, environmental, and public safety impacts of deenergization events. For equipment.
(b) The commission shall post each submitted report on its internet website.
(c) For purposes of this section, “deenergization event” has the same meaning as defined in Section 748.

SEC. 2.Section 707 of the Public Utilities Code is amended to read:
707.

(a)The commission shall institute a rulemaking proceeding for the purpose of considering and adopting a code of conduct, associated rules, and enforcement procedures to govern the conduct of the electrical corporations relative to the consideration, formation, and implementation of community choice aggregation programs, new or expanded local publicly owned electric utilities, microgrid or distributed resource programs and policies, and other efforts to expand electrical service options available to consumers. The code of conduct, associated rules, and enforcement procedures, shall do all of the following:

(1)Ensure that an electrical corporation does not market against a community choice aggregation program, a new or expanded local publicly owned electric utility, microgrid or distributed resource program or policies, or other efforts to expand electrical service options available to consumers, except through an independent marketing division that is funded exclusively by the electrical corporation’s shareholders and that is functionally and physically separate from the electrical corporation’s ratepayer-funded divisions.

(2)Limit the electrical corporation’s independent marketing division’s use of support services from the electrical corporation’s ratepayer-funded divisions, and ensure that the electrical corporation’s independent marketing division is allocated costs of any permissible support services from the electrical corporation’s ratepayer-funded divisions on a fully allocated embedded cost basis, providing detailed public reports of such use.

(3)Ensure that the electrical corporation’s independent marketing division does not have access to competitively sensitive information.

(4)(A)Incorporate rules that the commission finds to be necessary or convenient in order to facilitate the development of community choice aggregation programs, a new or expanded local publicly owned electric utility, microgrid or distributed resource programs or policies, or other efforts to expand electrical service options available to consumers, to foster fair competition, and to protect against cross-subsidization paid by ratepayers.

(B)It is the intent of the Legislature that the rules include, in whole or in part, the rules approved by the commission in Decision 97-12-088 and Decision 08-06-016.

(C)This paragraph does not limit the authority of the commission to adopt rules that it determines are necessary or convenient in addition to those adopted in Decision 97-12-088 and Decision 08-06-016 or to modify any rule adopted in those decisions.

(5)Provide for any other matter that the commission determines to be necessary or advisable to protect a ratepayer’s right to be free from forced speech or to implement that portion of the federal Public Utility Regulatory Policies Act of 1978 that establishes the federal standard that no electric utility may recover from any person other than the shareholders or other owners of the utility, any direct or indirect expenditure by the electric utility for promotional or political advertising (16 U.S.C. Sec. 2623(b)(5)).

(b)The commission shall ensure that the code of conduct, associated rules, and enforcement procedures to govern the conduct of an electrical corporation relative to new or expanded local publicly owned electric utilities, microgrids, distributed resource programs and policies, and other efforts to expand electrical service options available to consumers are implemented by no later than ____.

(c)This section does not limit the authority of the commission to require that any marketing against a community choice aggregation plan, a new or expanded local publicly owned electric utility, microgrid or distributed resource programs or policies, or other efforts to expand electrical service options available to consumers, shall be conducted by an affiliate of the electrical corporation, or to require that marketing against a community choice aggregator not be conducted by a marketing division of the electrical corporation, subject to affiliate transaction rules to be developed by the commission.

SEC. 2.

 Section 707.3 is added to the Public Utilities Code, to read:

707.3.
 (a) The commission shall not allow an electrical corporation to recover in rates costs associated with the electrical corporation’s opposition either to the consideration, formation, or implementation of a new local publicly owned electric utility or electrical cooperative, or to the expansion of an existing local publicly owned electric utility or electrical cooperative.
(b) The commission shall do all of the following:
(1) Ensure that an electrical corporation does not market against the consideration, formation, implementation, or expansion of a local publicly owned electric utility or electrical cooperative, except through an affiliate that is funded exclusively by the electrical corporation’s shareholders.
(2) Require that an electrical corporation’s marketing against the consideration, formation, implementation, or expansion of a local publicly owned electric utility or electrical cooperative be conducted by an affiliate of the electrical corporation and not by a marketing division of the electrical corporation, subject to affiliate transaction rules to be developed by the commission.
(3) Limit an electrical corporation’s affiliate’s use of support services from the electrical corporation’s ratepayer-funded divisions, and ensure that an electrical corporation’s affiliate is allocated the costs of any permissible support services from the electrical corporation’s ratepayer-funded divisions on a fully allocated embedded cost basis, with the corporation providing detailed public reports of such use.
(4) Ensure that an electrical corporation’s affiliate does not have access to competitively sensitive information.

SEC. 3.

 Section 707.5 is added to the Public Utilities Code, to read:

707.5.
 (a) The commission shall not allow an electrical corporation to recover in rates costs associated with the electrical corporation’s opposition to the consideration, formation, implementation, or expansion of a microgrid, self-generation, or distributed resource program or policy or to other efforts to expand the electrical service options available to consumers.
(b) The commission shall do all of the following:
(1) Ensure that an electrical corporation does not market against the consideration, formation, implementation, or expansion of a microgrid, self-generation, or distributed resource program or policy or against other efforts to expand the electrical service options available to consumers, except through an affiliate that is funded exclusively by the electrical corporation’s shareholders.
(2) Require that an electrical corporation’s marketing against the consideration, formation, implementation, or expansion of a microgrid, self-generation, or distributed resource program or policy, or against other efforts to expand the electrical service options available to consumers, be conducted by an affiliate of the electrical corporation and not by a marketing division of the electrical corporation, subject to affiliate transaction rules to be developed by the commission.
(3) Limit an electrical corporation’s affiliate’s use of support services from the electrical corporation’s ratepayer-funded divisions, and ensure that an electrical corporation’s affiliate is allocated the costs of any permissible support services from the electrical corporation’s ratepayer-funded divisions on a fully allocated embedded cost basis, with the corporation providing detailed public reports of such use.
(4) Ensure that an electrical corporation’s affiliate does not have access to competitively sensitive information.

SEC. 3.SEC. 4.

 Section 748 is added to the Public Utilities Code, to read:

748.
 (a) For purposes of this section, “deenergization event” means an intentional, temporary termination of electrical service to an area for the purpose of reducing or eliminating the risk of wildfires resulting from the operation of the electrical grid or related facilities.
(b) (1) On or before June 1, 2020, 2021, the commission, in consultation with the Department of Consumer Affairs, shall establish a procedure for customers, local governments, to do both of the following:
(A) To enable customers and others affected by a deenergization event to recover costs accrued during the deenergization event from an electrical corporation with more than 2,500,000 electrical service connections in California within two weeks of the end of the event.
(B) To enable local governments affected by a deenergization event to recover costs accrued during the deenergization event from an electrical corporation with more than 2,500,000 electrical service connections in California within two weeks of billing the electrical corporation for those costs.
(2) Costs recoverable under this section include, but are not limited to, assets, revenue, and wages lost as a direct result of a deenergization event, medical bills, travel expenses, lodging costs, and other incidental expenses incurred as a direct result of a deenergization event, and local government planning and response activity costs directly related to a deenergization event.
(c) On or before June 1, 2020, 2021, the commission shall require an electrical corporation with more than 2,500,000 electrical service connections in California to create a fund, of an amount to be determined by the commission, to fund recovery of costs accrued by customers, local governments, and others during a deenergization event. Moneys shall be paid into the fund exclusively by the electrical corporation’s shareholders, and expenses paid by the fund shall not be recoverable either directly or indirectly in rates and shall be borne exclusively by the shareholders of the electrical corporation.
(d) An electrical corporation with more than 2,500,000 electrical service connections in California shall not bill customers for any nonfixed costs during a deenergization event, including with the intent of subsequently reimbursing the customers, and shall not charge customers increased amounts after a deenergization event in order to offset losses accrued during a deenergization event.
(e) Beginning on or before June 1, 2020, 2021, the commission shall require any profit accrued by an electrical corporation with more than 2,500,000 electrical service connections in California due to a deenergization event to be remitted or credited to its ratepayers and any loss to be borne by the electrical corporation’s shareholders.

SEC. 5.

 Section 776.7 is added to the Public Utilities Code, to read:

776.7.
 (a) An electrical corporation with more than 2,500,000 electrical service connections in California shall provide notification of a pending deenergization event as early as possible to the cities and counties within its service territory and to other local governmental entities upon their request.
(b) An electrical corporation shall share any information relating to a deenergization event, including information relating to the duration, timing, and location of the deenergization event, impacted facilities, and affected customers, with all local governmental entities within its service territory.
(c) An electrical corporation shall share any location-specific information relating to a deenergization event, including information relating to the duration, timing, and location of the deenergization event, impacted facilities, and affected customers, with all local governmental entities with jurisdiction over that location.
(d) For purposes of this section, “deenergization event” has the same meaning as defined in Section 748.

SEC. 4.SEC. 6.

 Section 911.3 is added to the Public Utilities Code, to read:

911.3.
 The Public Advocate’s Office commission shall biennially produce an annual a report on the economic, environmental, public health, and public safety impacts of deenergization events, using information provided by electrical corporations as well as with more than 2,500,000 electrical service connections in California and independent analysis. For purposes of this section, “deenergization event” has the same meaning as defined in Section 748.

SEC. 5.SEC. 7.

 Section 2111.5 is added to the Public Utilities Code, to read:

2111.5.
 An electrical corporation with more than 2,500,000 electrical service connections in California is subject to a penalty of not less than ____ five hundred thousand dollars ($____) $500,000 for every hour that a deenergization event is in place, multiplied by the sum of the number of full sets of 50,000 customers affected plus one for any remainder. Penalties remitted pursuant to this section shall be borne exclusively by the electrical corporation’s shareholders. For purposes of this section, “deenergization event” has the same meaning as defined in Section 748.

SEC. 6.SEC. 8.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.