BILL ANALYSIS
AB 975
Page 1
ASSEMBLY THIRD READING
AB 975 (Fong)
As Amended April 22, 2009
Majority vote
WATER, PARKS & WILDLIFE 10-2
APPROPRIATIONS 12-4
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|Ayes:|Huffman, Arambula, |Ayes:|De Leon, Ammiano, |
| |Blumenfield, Caballero, | |Charles Calderon, Davis, |
| |Fletcher, Krekorian, | |Duvall, Krekorian, Hall, |
| |Bonnie Lowenthal, John A. | |John A. Perez, Price, |
| |Perez, Salas, Yamada | |Skinner, Solorio, Torlakson |
| | | | |
|-----+--------------------------+-----+----------------------------|
|Nays:|Fuller, Anderson |Nays:|Nielsen, Harkey, Miller, |
| | | |Audra Strickland |
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SUMMARY : Requires certain water corporations regulated by the
Public Utilities Commission (PUC) to install water meters on new
service connections and on unmetered connections by 2020.
Specifically, this bill :
1)Repeals current law limiting PUC authority to require water
corporations to install water meters unless certain conditions
are fulfilled.
2)Requires water corporations with 500 or more service
connections and that are not subject to Water Code
requirements, to:
a) Install a meter on all new service connections after
January 1, 2010;
b) Install a water meter on all unmetered service
connection by January 1, 2020; and,
c) Charge customers for potable water based on the actual
volume of deliveries on and after January 1, 2015.
3)Requires water corporations that reach 500 or more service
connections after this year to install water meters on each
unmetered connection within 10 years of attaining 500
connections and charge its customers based on the actual
AB 975
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volume of potal water deliveries.
4)Allows water corporations to delay, for one year, volumetric
charging of customers converting from non-volumetric billing.
5)Allows water corporations to recover the costs of water meter
installation through rates, fees and charges, subject to the
approval of PUC.
6)Requires PUC to ensure compliance with metering requirements.
7)Authorizes PUC to require a water corporation with less than
500 service connections to install water meters if PUC finds
that metering:
a) Will be cost-effective within the service area;
b) Will result in a reduction of water use within the
service area; and,
c) Costs will not impose an unreasonable financial burden
on customers within the service area, unless it is found to
be necessary to ensure continued adequate water service.
8)Finds that no reimbursement of local agency costs is required
because the only local costs will arise out of creation of a
new crime or penalty.
EXISTING LAW prohibits PUC from requiring installation of water
meters unless metering will be cost effective, reduce water
consumption, and not impose an unreasonable financial burden on
customers.
FISCAL EFFECT : Assembly Appropriations Committee estimated
minor, absorbable costs to PUC, and unknown but potentially
significant costs to ratepayers required to have a water meter.
COMMENTS : This bill applies contemporary legal requirements
for water meters to the public utilities that serve water to
many Californians, replacing previous restrictions on water
meter requirements dating to the 1970's. This change reflects
the legal trend requiring water meters throughout California.
Historically, some city charters barred use of water meters. In
1992, state law required all new water connections to have a
water meter and Congress required users of water from the
federal Central Valley Project (CVP) - mostly agricultural users
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- to use some form of water measurement. The City of Fresno, a
CVP contractor, resisted that requirement but state legal
changes led to Fresno installing water meters and required
charges to residential customers by volume by 2013. A 2004 law
(AB 2572/Kehoe) required all urban water suppliers to charge for
water by volume by 2025. This bill requires public utilities to
begin charging by volume in 2015.
Current law limiting PUC's authority to require water meters
reflects an earlier time, when communities, such as Sacramento,
refused to use water metering to charge by volume. This refusal
reflected a belief that the communities in the north where water
originated (i.e. "areas of origin") should not be limited in
water use, as California was considering how to increase water
exports to Southern California through the Peripheral Canal.
Some cities had charter provisions barring water meters.
The current Public Utilities Code Section 781 bars PUC from
requiring water meters unless it can determine that water meter
installation would be cost effective, reduce water consumption,
and not impose an unreasonable financial burden. The financial
burden standard, which PUC bases on net present value of future
cost-savings, impairs PUC's ability to require meters,
particularly in areas where water costs are low. According to
the author, PUC identified this issue in determinations in Lake
Tahoe and Bakersfield. This bill eliminates and replaces these
limitations with required water meters for utilities with more
than 500 service connections and authority to require water
meters on smaller water utilities if PUC can make these
findings.
Analysis Prepared by : Alf W. Brandt / W., P. & W. / (916)
319-2096
FN: 0000778