BILL NUMBER: AB 1890	AMENDED
	BILL TEXT

	AMENDED IN SENATE   JUNE 19, 1996
	AMENDED IN SENATE   APRIL 8, 1996
	AMENDED IN ASSEMBLY   JULY 19, 1995
	AMENDED IN ASSEMBLY   JULY 11, 1995
	AMENDED IN ASSEMBLY   JUNE 19, 1995
	AMENDED IN ASSEMBLY   APRIL 25, 1995

INTRODUCED BY  Assembly Members Brulte, Conroy, and Martinez

                        FEBRUARY 24, 1995

    An act to amend Sections 216 and 218 of, and to add
Section 702.1 to, the Public Utilities Code,   An act
 relating to public utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1890, as amended, Brulte.  Public utilities:  restructuring
 of the electric industry  .
   Under existing law, the Public Utilities Commission is vested with
regulatory authority over public utilities.  
   This bill would amend the Public Utilities Act to require that the
commission undertake various actions, including the facilitation of
the efforts of the state's electrical corporations to develop and
obtain authorization of the federal Energy Regulatory Commission for
the creation and operation of an independent system operator and an
independent power exchange, and the authorization of direct
transactions between electricity suppliers and end use customers,
subject to implementation of a nonbypassable charge.
   Since a violation of the Public Utilities Act is a misdemeanor,
the bill would impose additional duties upon local law enforcement
agencies, thereby constituting 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.  
   This bill would state the intent of the Legislature with respect
to the restructuring of the electric industry.
   The bill would become operative only if AB 3153 is enacted. 
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  
yes   no  . State-mandated local program:
 yes   no  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  
  SECTION 1.  The Legislature finds and declares all of 

  SECTION 1.  It is the intent of the Legislature to restructure the
electric utility industry now regulated by the State of California
into a more competitive and efficient system that will bring lower
electrical rates to all consumers at the earliest possible time, and
simplify the regulation of the industry, while preserving system
safety, reliability, and environmental protection.  In pursuit of
these reforms, it is the intent of the Legislature that the following
policy issues shall be addressed as a part of the restructuring
process:
   (a) The future structure of the generation of electricity,
including all of the following:
   (1) The design of the new model for providing increased
competition in the generation of electricity, specifically
addressing, but not limited to, issues such as whether the model
should be one of direct access with voluntary, market driven power
pools, a system of mandatory power pools regulated by the state and
federal government, or a system of community level access to
generation, and how the transition to the new model will be
implemented.
   (2) Market power, antitrust and divestiture of generation assets
irrespective of what model is adopted.
   (3) How generation services would be regulated, if at all, and how
consumers will be protected.
   (b) Transition cost calculation, including but not limited to:
   (1) Definition of transition costs to be considered.
   (2) Methodology for determining value of noneconomic and economic
assets.
   (3) An appropriate sharing of costs.
   (4) The amortization period for recovery of costs.
   (5) The cost recovery mechanism.
   (c) Future structure of the transmission and distribution system,
including all of the following:
   (1) Access to the transmission and distribution system based on
the generation or market model policy issues addressed pursuant to
subdivision (a).
   (2) The role of the independent system or grid operator in
assuring smooth, efficient, and reliable system operation.
   (3) The nature of the future role of regulation of these
continuing monopoly functions to ensure that cost-effectiveness,
safety, and reliability are maximized in the future with appropriate
regulation.
   (d) State policy issues, including all of the following:
   (1) The future of all state-mandated policies that are related to
electrical energy and the manner in which they will be continued as a
part of a restructured electrical industry, including programs
dealing with low-income customers, renewable and fuel diversity
acquisition, demand side management, electrical energy research and
development, biomass energy production, low- or zero-emission
vehicles, minority, women, disabled, and veteran business
enterprises, and economic development.
   (2) The manner in which the costs of the programs to be continued
will be recovered.
   (e) Financial integrity and viability of the investor-owned
utilities that is inherent in any electric industry restructuring.
   (f) State and federal jurisdictional issues, including both of the
following:
   (1) A cognizance of current and proposed federal law and
regulations regarding interstate transmission of electricity and
other issues.
   (2) Changes in state policy to be coordinated with federal
government policy to minimize, to the extent possible, jurisdictional
problems.
  SEC. 2.  This act shall become operative only if Assembly Bill 3153
of the 1995-96 Regular Session is enacted. 
_____________________________________  All matter omitted in this
version  of the bill appears in the bill as  amended in the Senate,
April 8, 1996  (JR 11)  _____________________________________