2008Legislative Wrap Up Pamela C. Loomis Director, Office of Governmental Affairs September 4, 2008 C ALIFORNIA P UBLIC U TILITIES C OMMISSION

2008 Legislative Wrap Up CPUC Sponsored Legislation CPUC Sponsored Legislation Assembly Bill 2578 (Lieu) – Collections process Assembly Bill 2578 (Lieu) – Collections process Gives Commission judgment creditor status until 2014 Gives Commission judgment creditor status until 2014 Allows the Commission to use the Fraudulent Transfer Act to recover unpaid penalties and fines until 2014 Allows the Commission to use the Fraudulent Transfer Act to recover unpaid penalties and fines until 2014 Requires the Commission to report to the Legislature on whether these legal tools improved the collections process prior to 2014 Requires the Commission to report to the Legislature on whether these legal tools improved the collections process prior to 2014 On the Governor’s desk On the Governor’s desk Assembly Bill 2985 (Duvall) – Charter Party Carriers (TCP) Assembly Bill 2985 (Duvall) – Charter Party Carriers (TCP) Would have eliminated the renewal process for TCP permits Would have eliminated the renewal process for TCP permits Was amended by Asm U&C to be a study bill because the committee did not understand the Commission’s TCP licensing and oversight process Was amended by Asm U&C to be a study bill because the committee did not understand the Commission’s TCP licensing and oversight process Abandoned by the author Abandoned by the author

2008 Legislative Wrap Up CPUC Sponsored Legislation CPUC Sponsored Legislation Senate Bill 1149 (Wiggins) Rural Telco Infrastructure Grants Senate Bill 1149 (Wiggins) Rural Telco Infrastructure Grants Extends the program’s sunset date until January 1, 2013 Extends the program’s sunset date until January 1, 2013 Provides that no more than $40 million be encumbered from the fund during the four year period ending on December 31, 2012 Provides that no more than $40 million be encumbered from the fund during the four year period ending on December 31, 2012 Increases single grants from $2.5 million max to $5 million max Increases single grants from $2.5 million max to $5 million max On the Governor’s desk On the Governor’s desk Senate Bill 1193 (Padilla) – CA Advanced Services Fund Senate Bill 1193 (Padilla) – CA Advanced Services Fund Creates the CASF in the State Treasury and requires progress reports to the Legislature Creates the CASF in the State Treasury and requires progress reports to the Legislature Will allow 40% infrastructure grants to bring broadband service to unserved and underserved areas Will allow 40% infrastructure grants to bring broadband service to unserved and underserved areas On the Governor’s desk On the Governor’s desk

2008 Legislative Wrap Up ENERGY BILLS Senate Bill 380 (Kehoe) and Senate Bill 1714 (Negrete McLeod) Small renewables Feed in Tariff (FiT)--expand and codify CPUC implementation of AB 1969(Yee, 2006) Small renewables Feed in Tariff (FiT)--expand and codify CPUC implementation of AB 1969(Yee, 2006) SB 1714 would have allowed the CPUC to adjust the payment rate to reflect “attributes of renewable generation” SB 1714 would have allowed the CPUC to adjust the payment rate to reflect “attributes of renewable generation” SB 1714 final bill language would have allowed rate-payer funded incentive programs (CSI/SGIP) to be taken in conjunction with a feed in tariff SB 1714 final bill language would have allowed rate-payer funded incentive programs (CSI/SGIP) to be taken in conjunction with a feed in tariff SB 380 expands and codifies CPUC implementation of the small renewables feed in tariff to ensure that SDGE is required to offer FiT SB 380 expands and codifies CPUC implementation of the small renewables feed in tariff to ensure that SDGE is required to offer FiT The author moved SB 1714 to inactive file due to opposition from the committee of jurisdiction (Sen EUC) The author moved SB 1714 to inactive file due to opposition from the committee of jurisdiction (Sen EUC) SB 380 is on the Governor’s desk SB 380 is on the Governor’s desk

2008 Legislative Wrap Up ENERGY BILLS Senate Bill 1012 (Kehoe) and Assembly Bill 1064 (Lieber) Self-Generation Incentive Program Self-Generation Incentive Program Would have restored clean gas-fired DG back to the SGIP Would have restored clean gas-fired DG back to the SGIP AB 1064 would have allowed CPUC to determine eligible technologies but would not have allowed cost recovery from residential ratepayers AB 1064 would have allowed CPUC to determine eligible technologies but would not have allowed cost recovery from residential ratepayers AB 1064 was held on appropriations suspense file AB 1064 was held on appropriations suspense file SB 1012 was on Asm Third Reading when the Senate adjourned SB 1012 was on Asm Third Reading when the Senate adjourned Senate Bill 1438 (Padilla) Smart Grid Technology Smart Grid Technology Would have required the commission, in consultation with the ISO, CEC and IOUs, to determine smart grid technology requirements by July 1, 2010 Would have required the commission, in consultation with the ISO, CEC and IOUs, to determine smart grid technology requirements by July 1, 2010 Would have required electrical corporations, by July 1, 2011, to develop and submit a smart grid deployment plan to the commission for approval Would have required electrical corporations, by July 1, 2011, to develop and submit a smart grid deployment plan to the commission for approval Held on suspense in the Assembly Appropriations Committee Held on suspense in the Assembly Appropriations Committee

2008 Legislative Wrap Up ENERGY BILLS Senate Bill 1460 (Wiggins) Solar and energy efficiency projects for multi-unit commercial and residential properties Solar and energy efficiency projects for multi-unit commercial and residential properties Required the commission, by July 1, 2010, to develop and implement a strategy to expand the participation rates of multi-unit residential and commercial rental properties in utility energy efficiency and solar energy programs Required the commission, by July 1, 2010, to develop and implement a strategy to expand the participation rates of multi-unit residential and commercial rental properties in utility energy efficiency and solar energy programs The commission would be required to prepare and submit a report on the program to the Legislature by July 1, 2010 The commission would be required to prepare and submit a report on the program to the Legislature by July 1, 2010 Held on suspense in the Assembly Appropriations Committee Held on suspense in the Assembly Appropriations Committee Assembly Bill 811 (Levine) Energy efficiency improvements Energy efficiency improvements Authorizes all cities and counties in California to designate areas within which city officials and willing property owners may enter into contractual assessments to finance the installation of distributed renewable generation renewable energy sources and energy efficiency improvements Authorizes all cities and counties in California to designate areas within which city officials and willing property owners may enter into contractual assessments to finance the installation of distributed renewable generation renewable energy sources and energy efficiency improvements Chaptered by Secretary of State, Ch. 159, Statutes of 2008 Chaptered by Secretary of State, Ch. 159, Statutes of 2008

2008 Legislative Wrap Up ENERGY BILLS Assembly Bill 1763 (Blakeslee) Energy billing information Energy billing information Requires each electrical corporation and gas corporation to disclose information on usage and cost on the residential customer’s billing statement Requires each electrical corporation and gas corporation to disclose information on usage and cost on the residential customer’s billing statement Authorizes the Commission to adjust, modify or add to the requirements if merited Authorizes the Commission to adjust, modify or add to the requirements if merited On the Governor’s desk On the Governor’s desk Assembly Bill 1920 (Huffman) Would mandate compensation for net surplus generation under net energy metering Would mandate compensation for net surplus generation under net energy metering Would have required electrical corporations to offer a contract or tariff for surplus generation exceeding on site load or allow the surplus credit to be applied to the following 12-month period Would have required electrical corporations to offer a contract or tariff for surplus generation exceeding on site load or allow the surplus credit to be applied to the following 12-month period Bill was removed from Senate Appropriations suspense file, but Senate adjourned before this bill was approved Bill was removed from Senate Appropriations suspense file, but Senate adjourned before this bill was approved

2008 Legislative Wrap Up ENERGY BILLS Assembly Bill 2267 (Fuentes) Additional incentive for CA based entities in SGIP Additional incentive for CA based entities in SGIP Requires CPUC to provide an additional incentive of 20% for the installation of eligible technologies from a California supplier Requires CPUC to provide an additional incentive of 20% for the installation of eligible technologies from a California supplier On the Governor’s desk On the Governor’s desk Assembly Bill 2269 (Fuentes) Allows CSI funds to be used for muni-owned solar generation Allows CSI funds to be used for muni-owned solar generation Would allow LADWP to use CSI funds for utility owned solar generation Would allow LADWP to use CSI funds for utility owned solar generation If this bill is signed into law, surely other POUs and the IOUs will seek the same treatment If this bill is signed into law, surely other POUs and the IOUs will seek the same treatment On the Governor’s desk On the Governor’s desk Assembly Bill 2404 (Salas) Water-Energy Efficiency programs Water-Energy Efficiency programs Requires the commission to report to the Legislature the results of our utility pilot programs, provide conclusions and make recommendations by March 31,2010 Requires the commission to report to the Legislature the results of our utility pilot programs, provide conclusions and make recommendations by March 31,2010 Chaptered by Secretary of State, Ch. 240, Statutes 2008 Chaptered by Secretary of State, Ch. 240, Statutes 2008

2008 Legislative Wrap Up ENERGY BILLS Assembly Bill 2466 (Laird) Local government renewable energy self-generation program Local government renewable energy self-generation program Authorizes a local government to receive a bill credit to a designated benefitting account for electricity exported to the grid by an eligible renewable generating facility Authorizes a local government to receive a bill credit to a designated benefitting account for electricity exported to the grid by an eligible renewable generating facility Requires the commission to adopt a rate tariff for the benefitting account Requires the commission to adopt a rate tariff for the benefitting account On the Governor’s Desk On the Governor’s Desk Assembly Bill 2678 (Nunez) and Assembly Bill 2309 (DeSaulnier) Energy Efficiency Audits Energy Efficiency Audits AB 2678 would have required the CEC to hold a regulatory proceeding to develop a comprehensive energy efficiency program and the CPUC to take actions to implement the CEC’s plan AB 2678 would have required the CEC to hold a regulatory proceeding to develop a comprehensive energy efficiency program and the CPUC to take actions to implement the CEC’s plan AB 2309 would require the PUC to determine whether or not to require IOUs to hold in-home owner-requested EE audits; and then determine which EE audit measures were taken and to report the EE savings to the legislature AB 2309 would require the PUC to determine whether or not to require IOUs to hold in-home owner-requested EE audits; and then determine which EE audit measures were taken and to report the EE savings to the legislature AB 2678 was held in Senate Appropriations AB 2678 was held in Senate Appropriations AB 2309 is on the Governor’s desk AB 2309 is on the Governor’s desk

2008 Legislative Wrap Up ENERGY BILLS Assembly Bill 2768 (Levine) CSI time-of-use rates CSI time-of-use rates Eliminates mandated time-of-use rates for CSI systems and grants the CPUC discretion to mandate TOU rates as long as they create the maximum incentive for ratepayers to install solar systems Eliminates mandated time-of-use rates for CSI systems and grants the CPUC discretion to mandate TOU rates as long as they create the maximum incentive for ratepayers to install solar systems On the Governor’s desk On the Governor’s desk Assembly Bill 2791 (Blakeslee) Waste Heat and Carbon Emissions Reduction Act Waste Heat and Carbon Emissions Reduction Act Extends the pilot program for the on-bill financing of combined heat and power (CHP) generation systems as enacted by AB 1613 Extends the pilot program for the on-bill financing of combined heat and power (CHP) generation systems as enacted by AB 1613 Widens the scope of customer-generators to include federal, state, and local government facilities Widens the scope of customer-generators to include federal, state, and local government facilities Chaptered by Secretary of State, Ch. 253, Statutes 2008 Chaptered by Secretary of State, Ch. 253, Statutes 2008 Assembly Bill 2857 (Lieber) California Alternative Rates for Energy (CARE) California Alternative Rates for Energy (CARE) Adds clarifying language regarding eligibility for the CARE program for customers who live in mobile home parks with both sub-metering and master-metering Adds clarifying language regarding eligibility for the CARE program for customers who live in mobile home parks with both sub-metering and master-metering On the Governor’s desk On the Governor’s desk

2008 Legislative Wrap up ENERGY BILLS Assembly Bill 2863 (Leno) Third party solar generators Third party solar generators Exempts independent solar energy producers (PPA or third party generators) from the definition of “electrical corporation” Exempts independent solar energy producers (PPA or third party generators) from the definition of “electrical corporation” Requires independent solar energy producers to provide certain disclosures at the sale or lease to a residential customer; requires all contracts for residential systems be made available at the request of the CPUC; imposes civil liabilities for violation of such contracts Requires independent solar energy producers to provide certain disclosures at the sale or lease to a residential customer; requires all contracts for residential systems be made available at the request of the CPUC; imposes civil liabilities for violation of such contracts On the Governor’s desk On the Governor’s desk Assembly Bill 3058 (Asm U&C) DWR electricity contracts DWR electricity contracts Would require DWR to provide the Commission a written report justifying proposed modifications to existing contracts; the Commission would have to review the report and recommend for or against the modification within 60 days Would require DWR to provide the Commission a written report justifying proposed modifications to existing contracts; the Commission would have to review the report and recommend for or against the modification within 60 days DWR would not be allowed to modify the contract if the Commission recommends against it DWR would not be allowed to modify the contract if the Commission recommends against it On the Governor’s desk On the Governor’s desk

2008 Legislative Wrap up TELCO BILLS Senate Bill 780 (Wiggins) High Cost Funds A and B High Cost Funds A and B Extends the sunset dates for both HCF A and B Extends the sunset dates for both HCF A and B Requires the Commission to conduct an affordability study of basic phone service in the areas subsidized by HCF B and report to the Legislature by July 1, 2010 Requires the Commission to conduct an affordability study of basic phone service in the areas subsidized by HCF B and report to the Legislature by July 1, 2010 On the Governor’s desk On the Governor’s desk Assembly Bill 2885 (De La Torre) Prepaid calling cards Prepaid calling cards Authorizes the Commission to enforce the standards and requirements of the Business & Professions Code for consumer disclosure and services applicable to sellers of prepaid calling cards and services Authorizes the Commission to enforce the standards and requirements of the Business & Professions Code for consumer disclosure and services applicable to sellers of prepaid calling cards and services On the Governor’s desk On the Governor’s desk

2008 Legislative Wrap up MISC BILLS Senate Bill 53 (Ducheny) Department of Railroads Department of Railroads Would have stripped the Commission and Caltrans of their railroad oversight authority and transferred it to a newly created Department of Railroads Would have stripped the Commission and Caltrans of their railroad oversight authority and transferred it to a newly created Department of Railroads Instead, requires the CA Research Bureau to study the feasibility and desirability of taking such action, and report its findings to the Legislature by May 1, 2009 Instead, requires the CA Research Bureau to study the feasibility and desirability of taking such action, and report its findings to the Legislature by May 1, 2009 On the Governor’s desk On the Governor’s desk Senate Bill 1762 (Perata) CA Climate Change Institute CA Climate Change Institute Creates the Institute within the UC system, with legislative oversight through annual budget appropriations, and specifies a leadership council of which the President of the PUC is a member Creates the Institute within the UC system, with legislative oversight through annual budget appropriations, and specifies a leadership council of which the President of the PUC is a member Funding for the Institute is $49 million annually - $30M through a CPUC- imposed surcharge, $7M from muni ratepayers, and $12M from the natural gas PIER funds Funding for the Institute is $49 million annually - $30M through a CPUC- imposed surcharge, $7M from muni ratepayers, and $12M from the natural gas PIER funds On the Governor’s desk On the Governor’s desk

2008 Legislative Wrap up MISC BILLS Senate Bill 1772 (Senate Rules) Behested Payments Behested Payments Would require CPUC commissioners to report payments made at their behest for $5,000 or more in the aggregate from the same source in the same calendar year to the Fair Political Practices Commission Would require CPUC commissioners to report payments made at their behest for $5,000 or more in the aggregate from the same source in the same calendar year to the Fair Political Practices Commission The amount or frequency of behested payments, or a Commissioner’s ability to solicit them, is not limited The amount or frequency of behested payments, or a Commissioner’s ability to solicit them, is not limited On the Governor’s desk On the Governor’s desk Assembly Bill 1973 (Ruskin) CPUC governance CPUC governance Would require the Governor’s appointment of CPUC president to be confirmed by the Senate and the direction of the Commission’s Executive Director and General Counsel to be from the Commission as a whole Would require the Governor’s appointment of CPUC president to be confirmed by the Senate and the direction of the Commission’s Executive Director and General Counsel to be from the Commission as a whole Would make quasi-legislative decisions subject to the Administrative Procedures Act and to review by the Office of Administrative Law Would make quasi-legislative decisions subject to the Administrative Procedures Act and to review by the Office of Administrative Law On the Assembly Floor, and may be voted upon until Nov. 30th On the Assembly Floor, and may be voted upon until Nov. 30th