BILL ANALYSIS
AB 2441
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Date of Hearing: May 19, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2441 (Tom Berryhill) - As Amended: April 27, 2010
Policy Committee:
UtilitiesVote:14-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
The bill requires the Public Utilities Commission (PUC) to open
a ratemaking to reexamine the allocation among ratepayer classes
of the surcharge (Public Goods Charge (PGC)) on natural gas
customers, and in doing so consider job creation, job retention,
and job training. If the commission revises the allocation for a
gas utility that is not both an electrical and gas utility, two
years after such a revision, the PUC must report to the
Legislature on whether the change affected job creation, job
retention, and job training.
FISCAL EFFECT
Cost to conduct a rulemaking reexamining a previous commission
decision would be absorbable. If a rulemaking leads to a revised
PGC allocation, the commission would incur one-time special fund
costs of up to $100,000 in contracts to report the impacts on
job creation, job retention, and job training. [Public Utilities
Reimbursement Account]
COMMENTS
1)Background . AB 1002 (Wright)/Chapter 932 of 2000, required
the PUC to impose a surcharge on all natural gas consumed in
the state to fund the public purpose programs. Moneys
collected from this PGC fund energy efficiency and
conservation activities, public interest research and
development, assistance to low-income ratepayer through the
California Alternative Rates for Energy (CARE) program. For
2009, PGC collections from gas ratepayers totaled about $531
million (about 7% of total gas utility costs): $167.5 million
AB 2441
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for energy efficiency programs, $101.7 million for low-income
energy efficiency, $24.7 million for public interest research
and development, and $237.6 million for the CARE program.
2)Purpose . Large industrial ratepayers are concerned that costs
for the CARE program are escalating. CARE costs increased 37%
between 2007 and 2009. The prior version of AB 2441, which is
sponsored by the California League of Food Processors,
required the PUC to set the PCG rate for large commercial and
industrial non-core customers at 25% of the rate for other
customers. (Non-core customers arrange for procurement and
transportation of their own gas supplies.) The author is
concerned about the economic burden that the PCG places on a
limited number of firms, particularly industrial businesses
that provide this subsidy for programs from which they do not
directly benefit. The most recent amendments deleted the
mandatory reallocation and instead direct the PUC to open a
proceeding to reexamine this issue.
In a prior proceeding to determine the appropriate allocation
of costs for the PGC, the PUC concluded that for electrical
corporations and for public utilities that are both electrical
corporations and gas corporations, costs of the CARE program
would be assessed on an equal cents per kilowatthour or equal
cents per therm basis to all classes of customers that were
subject to the surcharge. This was codified by SB 695
(Kehoe)/Chapter 337 of 2009. As such, this codified formula
applies to PG&E and San Diego Gas and Electric ratepayers.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081