BILL ANALYSIS
SB 695
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ASSEMBLY THIRD READING
SB 695 (Kehoe)
As Amended August 17, 2009
2/3 vote. Urgency
SENATE VOTE : 37-0
UTILITIES & COMMERCE 14-0
APPROPRIATIONS 16-0
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|Ayes:|Fuentes, Duvall, Tom |Ayes:|De Leon, Conway, Ammiano, |
| |Berryhill, Buchanan, | | |
| |Carter, Fong, Fuller, | |Charles Calderon, Coto, |
| |Huffman, Krekorian, | |Davis, Duvall, Fuentes, |
| |Skinner, Smyth, Swanson, | |Hall, Miller, |
| |Caballero, Villines | |John A. Perez, Skinner, |
| | | |Solorio, Audra |
| | | |Strickland, Torlakson, |
| | | |Hill |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Eliminates the current rate freeze for electricity
usage for residential customers of up to 130% of the baseline
rate, lifts the current suspension and provides limited
expansion of direct-access electricity service, restricts the
deployment of mandatory time-variant pricing, and provides a
number of other measures to stabilize rates, protect low-income
customers, and address emergency measures instituted during the
2001 energy crisis.
EXISTING LAW :
1)Prohibits the California Public Utilities Commission (PUC)
from increasing electricity charges for residential customers
for usage of up to 130% of existing baseline quantities until
the Department of Water Resources (DWR) has recovered the
costs of power it has procured for the electrical
corporation's retail end-use customers.
2)Suspends the right of retail end-use customers to acquire
direct-access service for electricity from other providers
until DWR no longer supplies power.
SB 695
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FISCAL EFFECT : The PUC can absorb the workload in this bill
within existing resources, using staff currently working on the
low-income assistance program, direct access, low-income energy
efficiency programs, and rate design.
COMMENTS : This bill lifts some of the emergency measures
imposed during the energy crisis that at the time helped
stabilize rates. Some actions the Legislature imposed included
capping residential retail rates and suspending the ability for
customers to choose a direct-access electricity provider.
Energy charges for residential customers are based on the
quantity of electricity used by a customer, and each successive
block of electricity usage is billed at increased per-unit
prices. Each block is referred to as a tier. During the energy
crisis of 2001, ABX1 1 (Keeley) Chapter 4, Statutes of 2001,
capped the lowest two tiers of electricity usage: 1) baseline;
and, 2) 130% of baseline. These tiers are based on usage, and
not necessarily income levels.
Because rates in the lowest tiers are still capped, increased
costs such as rising fuel prices, and legislatively mandated and
PUC-created programs, are disproportionately borne by those
customers whose electricity usage falls in the upper tiers. For
example, in Pacific Gas & Electric's territory, the 130% of
baseline quantities cost is about $0.11 per kilowatt hour, while
the top tiers are about $0.46 per kilowatt hour. Additional
costs associated with increasing the State's renewable portfolio
standard or reliability efforts will be imposed on the
ratepayers who use more than 130% of baseline.
Interested parties have come to an agreement on the limited
expansion of direct-access service. This bill would allow the
expansion of direct-access service to individual retail
non-residential end-use customers up to the total annual
kilowatt-hours supplied by electric service providers for any
year after April 1, 1998.
Analysis Prepared by : Gina Adams / U. & C. / (916) 319-2083
FN: 0002334
SB 695
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