BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 66 (Muratsuchi) - Electricity: system reliability. Amended: August 12, 2013 Policy Vote: EU&C 8-0 Urgency: No Mandate: Yes (see staff comment) Hearing Date: August 12, 2013 Consultant: Marie Liu This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 66 would require the California Public Utilities Commission (CPUC) to require investor-owned utilities (IOUs) to report specific reliability information and require the CPUC to mandate cost-effective remediation of reliability deficiencies in the same geographic region. Fiscal Impact: One-time costs of $325,000 from the Public Utilities Reimbursement Account (special) to modify reporting requirements and to develop the procedures for determining required remediation based on the annual reliability report. Ongoing costs of $100,000 from the Public Utilities Reimbursement Account for increased review of annual reliability reports, making remediation determinations, and to oversee required remediation. Background: Existing law requires the CPUC to adopt standards for quality, safe, and reliable service by IOUs. To this end, the CPUC has adopted a number of decisions that establish reliability standards and reporting requirements. Specifically, Decision 96-09-045 requires that the IOUs annually provide the CPUC with data regarding their overall service reliability including the frequency and duration of outages. The CPUC uses several metrics to evaluate system reliability. The CUPC may order remediation when a circuit behaves differently than in the past. Proposed Law: This bill would require the CPUC mandate IOUs to include in annual reliability reports that are submitted after July 1, 2014 information indicating areas with the most frequent and longest outages by geographic regions. The CPUC would be required to determine the geographic regions by July 1, 2014. AB 66 (Muratsuchi) Page 1 The CPUC would be required to use the information in the annual reliability report to require cost-effective remediation of reliability deficiencies if there are repeated deficiencies in the same geographic region. The CPUC may suspend the remediation if the costs of those actions are not justified or reasonable or if the measures are not effective at improving safety and reliability. IOUs would be required to post its annual reliability report on its website. Staff Comments: Establishing the procedure for determining the need for remediation and to determine the necessary information to be added to the annual reliability report would require the CPUC to go through the rulemaking process. Ongoing costs would be incurred for additional annual reliability report review and determination of necessary remediation. This bill does not create a reimbursable state mandate as it would change the definition of a crime.