AB 198

This bill allows the Public Service Commission to modify or terminate contracts

for public utilities to lease electric generating facilities from their affiliates if the

modification or termination protects and promotes the public interest. Current law

imposes requirements on the PSC's approval of such contracts, which are called

leased generation contracts. Under current law, the PSC may modify or terminate

a leased generation contract which the PSC has approved only as specified in the

contract or the PSC's order approving the contract. That limitation on the PSC's

authority is an exception to the PSC's general authority to revise and amend public

utility contracts in order to protect and promote the public interest.

The bill eliminates the above limitation on the PSC's authority. Under the bill,

as with other public utility contracts, the PSC may revise and amend leased

generation contracts, including those approved by the PSC before the bill's effective

date, to protect and promote the public interest. In addition, if a leased generation

contract has a term of ten years or more, the PSC must, every ten years after

approving the contract, determine whether to modify or terminate the contract to

protect and promote the public interest. Also, if the PSC approved, more than ten

years before the bill's effective date, a leased generation contract with a term of ten

years or more, the PSC must, as soon as practicable after the bill's effective date,

determine whether to modify or terminate the contract to protect and promote the

public interest.