Electric service providers and community choice aggregators: financial security requirements.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. Existing law obligates an electric service provider or a community choice aggregator to pay any reentry fee imposed on a customer that is involuntarily returned to service provided by an electrical corporation designated as the provider of last resort, except as specified. Existing law requires an electric service provider or a community choice aggregator to meet a financial security requirement as a condition of registration by posting a bond or demonstrating insurance in an amount deemed sufficient by the commission to cover the costs of those reentry fees. Existing law, commission Decision 18-05-022, creates a formula for calculating the financial security requirement, which adds a per-customer administrative cost for returning customers to service by the electrical corporation to the costs for 6 months of incremental procurement, multiplied by the number of returning customers. Existing law obligates customers to pay the reentry fees if the electric service provider or community choice aggregator becomes insolvent, as provided. This bill would require the posted bond amount, or demonstrated insurance amount, at the time of registration by an electric service provider or a community choice aggregator to be no less than $500,000. The bill would also require the commission to update the financial security requirements for electric service providers and community choice aggregators to instead include costs for no less than 12 months of incremental procurement incurred by the provider of last resort, upon the customers' involuntary return. By requiring the commission to increase the financial security amount required to be paid by community choice aggregators to cover the cost of customer reentry fees upon the customer's involuntary return to service provided by an electrical corporation, the bill would impose a state-mandated local program. 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 specified reasons.