2. Background

Assembly Bill 1284 (Leslie) became effective immediately as an urgency statute on August 11, 2003, when it was signed by Governor Davis. The statute adds Section 367.3 to the Public Utilities Code.

Under Section 367.3, a "qualifying direct transaction customer" (as defined by the statute) may submit an application to the Commission within seven days of the operative date of the statute accompanied by a declaration from an officer, director, or owner "stating that unless relieved of the expense of the direct access cost responsibility surcharge, the plant or facility that purchases electric service under the direct transaction contract, faces certain and imminent closure."

If such an application is filed, Section 367.3 directs this Commission as follows:

If the commission finds it is in the public interest and there is no feasible alternative, the commission may defer or waive the collection of a portion of the cost responsibility surcharge otherwise applicable to a qualifying direct transaction customer, to the extent necessary to mitigate [the certain and imminent closure]. That deferral or waiver may not result in any shifting of costs to bundled service customers, either immediately or over time, or delay the full and timely recovery of costs from direct access customers as a group. (Pub. Util. Code § 367.3(b).)

The Commission is required to act on an application filed under Section 367.3 on or before September 4, 2003, and the statute waives the requirements of Pub. Util. Code §§ 311(d) and (g) to permit a decision to issue in less than 30 days following filing and service of the proposed decision.

In order to be a "qualifying direct transaction customer" under Section 367.3, an electricity customer must meet each of eight requirements. These requirements are:

· The customer entered into a direct transaction with an electric service provider (ESP) for electric service for a California plant or facility by executing a contract prior to January 1, 2000, that extended through at least February 1, 2001.

· The plant or facility was, after February 1, 2001, returned to a public electrical utility because the ESP terminated service under the direct transaction contract.

· The plant or facility entered into a new direct transaction with an ESP and a direct access service request (DASR) was submitted within 90 days from the date the most recent direct transaction contract was involuntarily terminated.

· The plant or facility continuously participated in an interruptible or curtailable service program.

· The plant or facility had an average total cost of electric service, as a percentage of sales, in excess of 8% for the five years beginning January 1, 1996, to December 31, 2000.

· The plant or facility had an average net profit margin as a percentage of sales of greater than 2%, for the five years beginning January 1, 1996, and continuing to December 31, 2000.

· The average total electric service cost as a percentage of sales exceeded the average net profit margin as a percentage of sales for the five years beginning January 1, 1996, to December 31, 2000.

· The customer submits an application to the Commission within seven days of the operative date of Section 367.3 with a declaration that unless relieved of the direct access cost responsibility surcharge, the plant or facility faces certain and imminent closure.