BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 687 (R. Hernandez) - Electricity.
Amended: July 10, 2013 Policy Vote: EU&C 6-2, EQ 6-1
Urgency: No Mandate: Yes (see staff comment)
Hearing Date: August 30, 2013 Consultant:
Marie Liu
SUSPENSE FILE.
Bill Summary: This bill would give public drinking water systems
serving a disadvantaged community or a severely disadvantaged
community the highest priority in acquiring electricity through
direct access (DA) subscription for the treatment and
remediation of contaminated.
Fiscal Impact:
One-time costs of approximately $200,000 from the Public
Utilities Reimbursement Account (special) for the
development of the necessary rulemaking and to confirm
eligibility of applicants.
On-going costs of approximately $50,000 annually from the
Public Utilities Reimbursement Account for the annual review
of a DA subscriber who receives priority under this bill for
appropriate spending of the savings.
Background: Existing law allows individual retail,
non-residential, end-use customers to acquire electric service
from other providers in each electrical corporation's (IOU)
distribution service territory, up to a specified cap. The
program is commonly referred to as "direct access." (Public
Utilities Code §365 et seq.) DA customers pay a power charge
indifference amount that is designed so that other ratepayers of
that IOU are held indifferent as to the financial impacts of DA
customers.
The federal Comprehensive Environmental Cleanup, Response and
Liability Act, also referred to as the federal Superfund law,
establishes a series of programs authorizing public agencies to
order owners of contaminated property to conduct cleanups of
these properties.
AB 687 (R. Hernandez)
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Proposed Law: This bill would require the California Public
Utilities Commission (CPUC) to ensure an entity that is treating
and remediating contaminated groundwater have priority in
acquiring electricity under the DA limits provided that one of
the following apples:
The entity is a drinking water system serves a
disadvantaged community or a severely disadvantaged
community.
The entity is treating or remediating a Superfund site and
is located in a disadvantaged community or a severely
disadvantaged community.
Any savings achieved by utilizing DA must be used for further
treatment or remediation costs. The amount of savings and
expenditure of these savings shall be reported to the CPUC by
the entity for potential inclusion in the CPUC's annual report
to the Legislature.
Staff Comments: This bill would require the CPUC to open a
rulemaking to revise DA rules. The CPUC would also incur initial
one-time costs to verify the eligibility of a public drinking
water system applicant. This verification would include ensuring
that the system serves a disadvantaged or severely disadvantaged
community and that it is currently treating and remediating
contaminated groundwater.
Should a water system become a DA subscriber, the CPUC would be
required to review their annual report to ensure that any
savings resulting from subscribing to DA is being spent on
activities related to treating or remediating contaminated
groundwater.
This bill does not create a reimbursable mandate as it only
changes the definition of a crime.
Recommended Amendments: The requirement that the entity be
remediating a Superfund site and is located in a disadvantaged
community is not necessary as all entities that serve a
disadvantaged community or severely disadvantaged community is
already eligible. Staff recommends that the reference to the
remediation of a Superfund site be deleted. Also, a technical
amendment is needed to correct the code reference to the CPUC
annual report.
AB 687 (R. Hernandez)
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