USA – CALIFORNIA Law and Practice Contributed by: Nora Sheriff, Gwenneth O’Hara, Samir Hafez, Antonio Carrejo and Elisa Rivas, Buchalter
equipment for microgrids, and storage charg- ing/discharging constraints; • reporting and monitoring; • financial – financial guarantees, insurance requirements, decommissioning plans and cost responsibilities; and • local permitting. The ability to obtain an amendment or relaxation of a term or condition of approval depends on the approving entity (see 4.3 Terms and Condi- tions Imposed on Approvals to Construct and Operate a Transmission Line and Associated Facilities ). 5.4 Eminent Domain, Condemnation or Expropriation Rights to Construct and Operate Electricity Distribution Facilities In California, a proponent for the construction and operation of electric distribution facilities may exercise eminent domain powers to obtain surface rights for a project. However, these pow- ers are not automatic. Pursuant to California Public Utilities Code Sec- tion 610, IOUs must seek CPUC approval to exercise the power of eminent domain to acquire property necessary to carry out their functions. The IOU must demonstrate that the taking of the property is: • in compliance with relevant CPUC approvals. Further, the IOUs must comply with California eminent domain law, pursuant to the Code of Civil Procedure Sections 1230.010 et seq, which requires: • providing adequate notice; • for a public use; • necessary; and
• making a good faith offer of compensation; and • following court proceedings if the property owners do not agree to sell. POUs generally have eminent domain authority under their own charters or statutes. Private developers or joint power authorities must either act under contract with a utility or agency that has eminent domain authority, or must receive special authorisation through leg- islation, which is rare. 5.5 Monopoly Rights for Electricity Distribution Entities In California, electric distribution entities gener- ally operate as regulated monopolies with exclu- sive rights to provide distribution service within specified geographical territories. The founda- tion for these exclusive rights and the regulation of utilities is primarily established in the Califor- nia Public Utilities Code. For IOUs, the CPUC is the primary state agency that grants and oversees these exclusive distri- bution service territories. A CPCN effectively defines the utility’s author- ised service area. An electrical corporation must obtain a CPCN from the CPUC before beginning the construction of a new line, plant or system, or any extension thereof. The IOUs are subject to comprehensive regula- tion by the CPUC, including oversight of their rates, service standards, safety and infrastruc- ture investments. California also has numerous POUs (eg, munici- pal utilities such as LADWP or SMUD). POUs derive their authority to provide service within
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