BILL NUMBER: SB 142 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 14, 2011
INTRODUCED BY Senator Rubio
JANUARY 31, 2011
An act relating to energy to amend Section
739.1 of, and to repeal and add Section 739.9 of, the Public
Utilities Code, relating to electricity .
LEGISLATIVE COUNSEL'S DIGEST
SB 142, as amended, Rubio. Energy.
Electrical rates.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical corporations
and gas 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 for 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 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 state the intent of the Legislature to
enact legislation to address the lack of interregional parity of
single rate structures when applied to differing climate regions
repeal the existing authority of 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. The bill would
require that the commission, by June 1, 2012, adjust the rates
currently charged customers for electricity usage in order to, over
an appropriate transition period, eliminate by no later
than January 1, 2015, the current tiered residential electricity
rates and adopt new rates pursuant certain ratepayer fairness and
equity principles. The bill would authorize the commission to
increase the rates in effect for CARE program participants 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, to be phased in as determined by
the commission, in order to moderate the impact on CARE program
participants .
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
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)
(3) "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), 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 .
(c) The commission shall work with the public utility
electrical corporations 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
commission- supervised utility programs for providing
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 repealed.
739.9. (a) The commission may, subject to the limitation in
subdivision (b), 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 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) 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 739.9 is added to the
Public Utilities Code , to read:
739.9. (a) By June 1, 2012, the commission shall adjust the rates
currently charged customers for electricity usage in order to, over
an appropriate transition period, eliminate by no later than January
1, 2015, the current tiered residential electricity rates pursuant to
the following ratepayer fairness and equity principles:
(1) The current tiers of electric rates charged customers, and the
baseline usage and other factors used to set those rates, are unfair
and inequitable and must be revised to fairly and equitably reflect
the actual cost of serving those customers.
(2) The current tiers of electric rates charged customers, and the
baseline usage and other factors used to set those rates, are unfair
and inequitable and must be revised to fairly and equitably reflect
differences in climate and other factors that are outside the control
of a customer.
(3) The current tiers of electric rates charged customers, and the
baseline usage and other factors used to set those rates, are unfair
and inequitable and must be revised to fairly and equitably provide
appropriate and effective incentives to all customers to conserve and
manage their energy usage and demand equally within a given class.
(b) The commission may, pursuant to Section 1701.1, determine the
appropriate type of proceeding to utilize in implementing subdivision
(a), and determine whether to open a new proceeding or expand the
scope of an existing proceeding. The proceeding shall require a
hearing.
(c) Upon the adoption of a decision, the commission shall report
its determination and the change to rates pursuant to subdivision (a)
to the Legislature. The report shall be submitted in compliance with
Section 9795 of the Government Code. Pursuant to Section 10231.5 of
the Government Code, this subdivision is inoperative on January 1,
2016.
SECTION 1. It is the intent of the Legislature
to enact legislation to address the lack of interregional parity of
single rate structures when applied to differing climate regions.