BILL NUMBER: AB 923	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Bigelow

                        FEBRUARY 22, 2013

   An act to amend Section 368 of the Public Utilities Code, relating
to electrical rates.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 923, as introduced, Bigelow. Electrical rates.
   Under existing law, the restructuring of the electrical services
industry provides for a rate reduction of not less than 10% for
residential and small commercial customers of electrical
corporations, to remain in effect until the earlier of March 31,
2002, or the date on which specified costs have been fully recovered.

   This bill would make technical, nonsubstansive changes to that
provision.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 368 of the Public Utilities Code is amended to
read:
   368.  Each electrical corporation shall propose a cost recovery
plan to the commission for the recovery of the uneconomic costs of an
electrical corporation's generation-related assets and obligations
identified in Section 367. The commission shall authorize the
electrical corporation to recover the costs pursuant to the plan if
the plan meets the following criteria:
   (a) The cost recovery plan shall set rates for each customer
class, rate schedule, contract, or tariff option, at levels equal to
the level as shown on electric rate schedules as of June 10, 1996,
 provided that   if  rates for residential
and small commercial customers  shall be   are
 reduced so that these customers  shall 
receive rate reductions of no less than 10 percent for 1998
continuing through 2002. These rate levels for each customer class,
rate schedule, contract, or tariff option shall remain in effect
until the earlier of March 31, 2002, or the date on which the
commission-authorized costs for utility generation-related assets and
obligations have been fully recovered. The electrical corporation
shall be at risk for those costs not recovered during that time
period. Each utility shall amortize its total uneconomic costs, to
the extent possible, such that for each year during the transition
period its recorded rate of return on the remaining uneconomic assets
does not exceed its authorized rate of return for those assets. For
purposes of determining the extent to which the costs have been
recovered, any over-collections recorded in Energy Costs Adjustment
Clause and Electric Revenue Adjustment Mechanism balancing accounts,
as of December 31, 1996, shall be credited to the recovery of the
costs.
   (b) The cost recovery plan shall provide for identification and
separation of individual rate components  ,  such as charges
for energy, transmission, distribution, public benefit programs, and
recovery of uneconomic costs. The separation of rate components
required by this subdivision shall be used to ensure that customers
of the electrical corporation who become eligible to purchase
electricity from suppliers other than the electrical corporation pay
the same unbundled component charges, other than energy, that a
bundled service customer pays.  No cost   Cost
 shifting among customer classes, rate schedules, contract, or
tariff options shall  not  result from the separation
required by this subdivision. Nothing in this provision is intended
to affect the rates, terms, and conditions or to limit the use of any
Federal Energy Regulatory Commission-approved contract entered into
by the electrical corporation prior to the effective date of this
provision.
   (c) In consideration of the risk that the uneconomic costs
identified in Section 367 may not be recoverable within the period
identified in subdivision (a) of Section 367, an electrical
corporation that, as of December 20, 1995, served more than four
million customers, and was also a gas corporation that served less
than four thousand customers, shall have the flexibility to employ
risk management tools, such as forward hedges, to manage the market
price volatility associated with unexpected fluctuations in natural
gas prices, and the out-of-pocket costs of acquiring the risk
management tools shall be considered reasonable and collectible
within the transition freeze period. This subdivision applies only to
the transaction costs associated with the risk management tools and
shall not include any losses from changes in market prices.
   (d) In order to ensure implementation of the cost recovery plan,
the limitation on the maximum amount of cost recovery for nuclear
facilities that may be collected in any year adopted by the
commission in Decision 96-01-011 and Decision 96-04-059 shall be
eliminated to allow the maximum opportunity to collect the nuclear
costs within the transition cap period.
   (e) As to an electrical corporation that is also a gas corporation
serving more than four million California customers, so long as any
cost recovery plan adopted in accordance with this section satisfies
subdivision (a), it shall also provide for annual increases in base
revenues, effective January 1, 1997, and January 1, 1998, equal to
the inflation rate for the prior year plus two percentage points, as
measured by the consumer price index. The increase shall do both of
the following:
   (1) Remain in effect pending the next general rate case review,
which shall be filed not later than December 31, 1997, for rates that
would become effective in January 1999. For purposes of any
commission-approved performance-based ratemaking mechanism or general
rate case review, the increases in base revenue authorized by this
subdivision shall create no presumption that the level of base
revenue reflecting those increases constitute the appropriate
starting point for subsequent revenues.
   (2) Be used by the utility for the purposes of enhancing its
transmission and distribution system safety and reliability,
including, but not limited to, vegetation management and emergency
response. To the extent the revenues are not expended for system
safety and reliability, they shall be credited against subsequent
safety and reliability base revenue requirements. Any excess revenues
carried over shall not be used to pay any monetary sanctions imposed
by the commission.
   (f) The cost recovery plan shall provide the electrical
corporation with the flexibility to manage the renegotiation,
buy-out, or buy-down of the electrical corporation's power purchase
obligations, consistent with review by the commission to assure that
the terms provide net benefits to ratepayers and are otherwise
reasonable in protecting the interests of both ratepayers and
shareholders.
   (g) An example of a plan authorized by this section is the
document entitled "Restructuring Rate Settlement" transmitted to the
commission by Pacific Gas and Electric Company on June 12, 1996.