Nunez Energy Bill to be Amended Prior to August Hearing

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, July 9, 2004 Share this on FacebookTweet thisEmail this to a friend

AB 2006 (Fabian Nunez, D-Los Angeles), recently amended to reflect changes agreed to in the Senate Energy, Utilities and Communications Committee, will be amended again prior to being heard in the Senate Appropriations Committee sometime next month.

Nunez’s staff and Southern California Edison, a strong supporter of AB 2006, have been in discussions recently with the Alliance for Retail Energy Markets (AReM), regarding possible amendments to the bill. No bill language is available but according to informed sources the amendments deal with aggregation of direct access (DA) load and the grandfathering of existing DA prior to implementation of a new core/noncore system.

AB 2006, which CMTA opposes, deals with an array of issues, including utility procurement and cost recovery, retail direct access (DA) and resource adequacy.

The bill undermines the existing utility procurement process by providing increased cost recovery assurances for projects that were not necessarily chosen through a competitive solicitation.

The bill establishes overly restrictive rules for noncore service (for large energy users), including a one-time election to remain with the utility or to purchase electricity from a nonutility energy service provider.

Current DA customers would also be adversely impacted by the bill's provisions requiring the "full recovery of existing direct access customers’ energy cost obligations on a schedule comparable to the recovery of comparable costs from core customers." This would substantially increase the DA cost responsibility surcharge from the current capped rate of 2.7 cents per kilowatt-hour and would make DA uneconomic, thereby eliminating an essential cost-controlling tool for DA customers.
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