Bill Text: CA AB1755 | 2011-2012 | Regular Session | Amended
Bill Title: Electricity: rates.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2012-08-30 - Ordered to inactive file pursuant to Senate Rule 29. Ordered to inactive file at the request of Senator Dutton. [AB1755 Detail]
Download: California-2011-AB1755-Amended.html
BILL NUMBER: AB 1755 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 6, 2012
AMENDED IN ASSEMBLY APRIL 23, 2012
INTRODUCED BY Assembly Member Perea
FEBRUARY 17, 2012
An act to amend Sections 739.1 and 739.9 of, and to add Section
739.11 to, the Public Utilities Code, relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
AB 1755, as amended, Perea. Electricity: rates.
(1) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations, as defined. Existing law authorizes the commission to
fix the rates and charges for every public utility, and requires that
those rates and charges be just and reasonable. Existing law
requires the commission to designate a baseline quantity of
electricity and gas necessary to supply a significant portion of the
reasonable energy needs of the average residential customer and
requires that electrical and gas corporations file rates and charges,
to be approved by the commission, providing baseline rates. Existing
law requires the commission, in establishing the baseline rates, to
avoid excessive rate increases for residential customers. Existing
law requires the commission to establish a program of assistance to
specified low-income electric and gas customers, referred to as the
California Alternate Rates for Energy (CARE) program.
Existing law revises certain prohibitions upon raising residential
electrical rates adopted during the energy crisis of 2000-01, to
authorize the commission to increase the rates charged residential
customers for electricity usage up to 130% of the baseline quantities
by the annual percentage change in the Consumer Price Index from the
prior year plus 1%, but not less than 3% and not more than 5% per
year. Existing law additionally authorizes the commission to increase
the rates in effect for CARE program participants for electricity
usage up to 130% of baseline quantities by the annual percentage
increase in benefits under the CalWORKs program, as defined, not to
exceed 3%, and subject to the limitation that the CARE rates not
exceed 80% of the corresponding rates charged to residential
customers not participating in the CARE program.
This bill would authorize the commission to approve a fixed
per-customer charge not based upon usage that applies to all
residential customers of an electrical corporation, including CARE
program participants, to recover fixed costs of providing service, if
the commission finds that the charge is just and reasonable
and is necessary to provide rate relief to upper tier residential
customers of the electrical corporation . The bill
would state the intent of the Legislature that any fixed per-customer
charge be used to decrease the rates paid by residential customers
for usage in excess of 130% of baseline amounts. The bill would
require the commission to ensure that electricity rates are
affordable for qualified low-income ratepayers and would require
electrical corporations to offer discounts or other ratepayer
subsidies to ensure safe, reliable, and affordable electricity to
these customers so that these customers are not at risk of service
disconnections that would cause them to sacrifice electricity
service.
(2) 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.
(3) 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 a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 739.1 of the Public Utilities Code is amended
to read:
739.1. (a) As used in this section, the following terms have the
following meanings:
(1) "Baseline quantity" has the same meaning as defined in Section
739.
(2) "California Solar Initiative" means the program providing
ratepayer funded incentives for eligible solar energy systems adopted
by the commission in Decision 05-12-044 and Decision 06-01-024, as
modified by Article 1 (commencing with Section 2851) of Chapter 9 of
Part 2 and Chapter 8.8 (commencing with Section 25780) of Division 15
of the Public Resources Code.
(3) "CalWORKs program" means the program established pursuant to
the California Work Opportunity and Responsibility to Kids Act
(Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of
the Welfare and Institutions Code).
(4) "Public goods charge" means the nonbypassable separate rate
component imposed pursuant to Article 7 (commencing with Section 381)
of Chapter 2.3 and the nonbypassable system benefits charge imposed
pursuant to the Reliable Electric Service Investments Act (Article 15
(commencing with Section 399) of Chapter 2.3).
(b) (1) The commission shall establish a program of assistance to
low-income electric and gas customers with annual household incomes
that are no greater than 200 percent of the federal poverty guideline
levels, the cost of which shall not be borne solely by any single
class of customer. The program shall be referred to as the California
Alternate Rates for Energy or CARE program. The commission shall
ensure that the level of discount for low-income electric and gas
customers correctly reflects the level of need.
(2) The commission may, subject to the limitation in paragraph (4)
and the exception in paragraph (6), increase the rates in effect for
CARE program participants for electricity usage up to 130 percent of
baseline quantities by the annual percentage increase in benefits
under the CalWORKs program as authorized by the Legislature for the
fiscal year in which the rate increase would take effect, but not to
exceed 3 percent per year.
(3) Beginning January 1, 2019, the commission may, subject to the
limitation in paragraph (4), establish rates for CARE program
participants pursuant to this section and Sections 739 and 739.9,
subject to both of the following:
(A) The requirements of subdivision (b) of Section 382 that the
commission ensure that low-income ratepayers are not jeopardized or
overburdened by monthly energy expenditures.
(B) The requirement that the level of the discount for low-income
electricity and gas ratepayers correctly reflects the level of need
as determined by the needs assessment conducted pursuant to
subdivision (d) of Section 382.
(4) Tier 1, tier 2, and tier 3 CARE rates shall not exceed 80
percent of the corresponding tier 1, tier 2, and tier 3 rates charged
to residential customers not participating in the CARE program,
excluding any Department of Water Resources bond charge imposed
pursuant to Division 27 (commencing with Section 80000) of the Water
Code, the CARE surcharge portion of the public goods charge, any
charge imposed pursuant to the California Solar Initiative, and any
charge imposed to fund any other program that exempts CARE
participants from paying the charge.
(5) Rates charged to CARE program participants shall not have more
than three tiers. An electrical corporation that does not have a
tier 3 CARE rate may introduce a tier 3 CARE rate that, in order to
moderate the impact on program participants whose usage exceeds 130
percent of baseline quantities, shall be phased in to 80 percent of
the corresponding rates charged to residential customers not
participating in the CARE program, excluding any Department of Water
Resources bond charge imposed pursuant to Division 27 (commencing
with Section 80000) of the Water Code, the CARE surcharge portion of
the public goods charge, any charge imposed pursuant to the
California Solar Initiative, and any other charge imposed to fund a
program that exempts CARE participants from paying the charge. For an
electrical corporation that does not have a tier 3 CARE rate that
introduces a tier 3 CARE rate, the initial rate shall be no more than
150 percent of the CARE baseline rate. Any additional revenues
collected by an electrical corporation resulting from the adoption of
a tier 3 CARE rate shall, until the utility's next periodic general
rate case review of cost allocation and rate design, be credited to
reduce rates of residential ratepayers not participating in the CARE
program with usage above 130 percent of baseline quantities.
(6) The commission may approve a fixed per-customer charge not
based on usage that applies to all residential customers of an
electrical corporation, including CARE program participants, to
recover fixed costs of providing service, if the commission finds
that the charge is just and reasonable and is necessary to
provide rate relief to upper tier residential customers of the
electrical corporation . It is the intent of the
Legislature that any fixed per-customer charge on usage authorized
pursuant to this paragraph be used to decrease the rates paid by
residential customers for usage in excess of 130 percent of baseline
amounts.
(c) The commission shall work with the public utility electrical
and gas corporations to establish penetration goals. The commission
shall authorize recovery of all administrative costs associated with
the implementation of the CARE program that the commission determines
to be reasonable, through a balancing account mechanism.
Administrative costs shall include, but are not limited to, outreach,
marketing, regulatory compliance, certification and verification,
billing, measurement and evaluation, and capital improvements and
upgrades to communications and processing equipment.
(d) The commission shall examine methods to improve CARE
enrollment and participation. This examination shall include, but
need not be limited to, comparing information from CARE and the
Universal Lifeline Telephone Service (ULTS) to determine the most
effective means of utilizing that information to increase CARE
enrollment, automatic enrollment of ULTS customers who are eligible
for the CARE program, customer privacy issues, and alternative
mechanisms for outreach to potential enrollees. The commission shall
ensure that a customer consents prior to enrollment. The commission
shall consult with interested parties, including ULTS providers, to
develop the best methods of informing ULTS customers about other
available low-income programs, as well as the best mechanism for
telephone providers to recover reasonable costs incurred pursuant to
this section.
(e) (1) The commission shall improve the CARE application process
by cooperating with other entities and representatives of California
government, including the California Health and Human Services Agency
and the Secretary of California Health and Human Services, to ensure
that all gas and electric customers eligible for public assistance
programs in California that reside within the service territory of an
electrical corporation or gas corporation, are enrolled in the CARE
program. To the extent practicable, the commission shall develop a
CARE application process using the existing ULTS application process
as a model. The commission shall work with public utility electrical
and gas corporations and the Low-Income Oversight Board established
in Section 382.1 to meet the low-income objectives in this section.
(2) The commission shall ensure that an electrical corporation or
gas corporation with a commission-approved program to provide
discounts based upon economic need in addition to the CARE program,
including a Family Electric Rate Assistance program, utilize a single
application form, to enable an applicant to alternatively apply for
any assistance program for which the applicant may be eligible. It is
the intent of the Legislature to allow applicants under one program,
that may not be eligible under that program, but that may be
eligible under an alternative assistance program based upon economic
need, to complete a single application for any commission-approved
assistance program offered by the public utility.
(f) The commission's program of assistance to low-income electric
and gas customers shall, as soon as practicable, include nonprofit
group living facilities specified by the commission, if the
commission finds that the residents in these facilities substantially
meet the commission's low-income eligibility requirements and there
is a feasible process for certifying that the assistance shall be
used for the direct benefit, such as improved quality of care or
improved food service, of the low-income residents in the facilities.
The commission shall authorize utilities to offer discounts to
eligible facilities licensed or permitted by appropriate state or
local agencies, and to facilities, including women's shelters,
hospices, and homeless shelters, that may not have a license or
permit but provide other proof satisfactory to the utility that they
are eligible to participate in the program.
(g) It is the intent of the Legislature that the commission ensure
CARE program participants are afforded the lowest possible electric
and gas rates and, to the extent possible, are exempt from additional
surcharges attributable to the energy crisis of 2000-01.
SEC. 2. Section 739.9 of the Public Utilities Code is amended to
read:
739.9. (a) The commission may, subject to the limitation in
subdivision (b) and the exception in subdivision (c), increase the
rates charged residential customers for electricity usage up to 130
percent of the baseline quantities, as defined in Section 739, by the
annual percentage change in the Consumer Price Index from the prior
year plus 1 percent, but not less than 3 percent and not more than 5
percent per year. For purposes of this subdivision, the annual
percentage change in the Consumer Price Index shall be calculated
using the same formula that was used to determine the annual Social
Security Cost of Living Adjustment on January 1, 2008. This
subdivision shall become inoperative on January 1, 2019, unless a
later enacted statute deletes or extends that date.
(b) The rates charged residential customers for electricity usage
up to the baseline quantities, including any customer
excluding any fixed per-customer charge
revenues, shall not exceed 90 percent of the system average rate
prior to January 1, 2019, and may not exceed 92.5 percent after that
date. For purposes of this subdivision, the system average rate shall
be determined by dividing the electrical corporation's total revenue
requirements for bundled service customers by the adopted forecast
of total bundled service sales.
(c) The commission may approve a fixed per-customer charge not
based on usage that applies to all residential customers of an
electrical corporation to recover fixed costs of providing service,
if the commission finds that the charge is just and reasonable
and is necessary to provide rate relief to upper tier
residential customers of the electrical corporation .
It is the intent of the Legislature that any fixed per-customer
charge on usage authorized pursuant to this paragraph be used to
decrease the rates paid by residential customers for usage in excess
of 130 percent of baseline amounts.
(d) This section does not require the commission to increase any
residential rate or place any restriction upon, or otherwise limit,
the authority of the commission to reduce any residential rate.
SEC. 3. Section 739.11 is added to the Public Utilities Code, to
read:
739.11. The commission shall ensure that electricity rates are
affordable for qualified low-income residential ratepayers and shall
require electrical corporations to offer discounts or other ratepayer
subsidies to ensure safe, reliable, and affordable electricity to
these residential customers so that these residential customers are
not at risk of service disconnections that would cause them to
sacrifice electricity service.
SEC. 4. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
