BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2218
                                                                  Page  1

          Date of Hearing:   May 7, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                  AB 2218 (Bradford) - As Amended:  April 24, 2014 

          Policy Committee:                              Utilities and  
          Commerce     Vote:                            10-0

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable: No

           SUMMARY  

          This bill requires each electrical and gas corporation to  
          develop and implement a rate assistance program for eligible  
          foods banks, subject to direction and supervision by the Public  
          Utilities Commission (PUC).  Specifically, this bill: 

          1)Requires the funding source for the program to be approved by  
            the PUC.

          2)Defines "eligible food bank" as a public or charitable  
            institution that participates in the federal Emergency Food  
            Assistance Program. 

           FISCAL EFFECT  

          1)Increased costs for the PUC to direct and oversee the program  
            in the $250,000 range. 

          2)Minor cost shifts and the resulting rate increases for all  
            other ratepayers to provide federally registered food banks  
            (currently 48 statewide) with energy discounts. 

           COMMENTS  

           1)Rationale.   According to the author, California's food banks  
            stabilize our most underserved and economically challenged  
            families. However, many food banks find it costly to maintain  
            their refrigeration units to house perishables such as fruits,  
            vegetables, and dairy products.  For these reasons, food banks  
            are uniquely deserving of energy discounts.









                                                                  AB 2218
                                                                  Page  2

            Electricity costs are a common concern for food banks across  
            the state.  Currently, the Fresno Community Food Bank, which  
            serves four counties, sees a summer cost of approximately  
            $9,000 - $11,000 per month and a winter cost of approximately  
            $5,000-$6,000 per month to provide assistance to the most in  
            need in the Central Valley.

            This bill directs electrical and gas corporations to develop  
            and implement a program of rate assistance for certified food  
            banks subject to direction and supervision by the PUC.

           2)Background.   The Department of Social Services operates the  
            Emergency Food Assistance Program that contracts with 48 food  
            banks servicing 58 counties in California.  Each contracted  
            food bank distributes commodities received from United States  
            Department of Agriculture (USDA). These food banks must follow  
            federal guidelines. 

           3)California Ratepayer Assistance Programs.    For decades, state  
            and federal governments have overseen low income programs to  
            provide low income customers discounts on their utility bills  
            to the extent customers meet program eligibility requirements,  
            including the following programs:
             
             a)   The California Alternative Rates for Energy (CARE)  
               Program offers eligible customers a 20% discount on their  
               electricity and natural gas bill. 


              b)   The Family Electric Rate Assistance (FERA)  offers  
               assistance to families whose household income slightly  
               exceeds the low-income energy program allowances by billing  
               some of their electricity usage at a lower rate.  

              c)   The Energy Savings Assistance Program (ESAP)  provides  
               no-cost weatherization services to low-income households  
               who meet the CARE income guidelines. Services provided  
               include attic insulation, energy efficient refrigerators,  
               energy efficient furnaces, weather stripping, caulking,  
               low-flow showerheads, water heater blankets, and door and  
               building envelope repairs which reduce air infiltration.

              d)   Other Programs.   The Department of Community Services  
               and Development administers Federal low-income home energy  
               assistance, energy crisis intervention, and low-income  








                                                                  AB 2218
                                                                  Page  3

               weatherization programs (LIHEAP). These programs are funded  
               by federal grants to provide weatherization services and  
               financial assistance to help low-income customers pay their  
               energy bills.
           
          1)Funding.   Currently, most of California's ratepayer assistance  
            programs are included in the rate base of regulated utility  
            companies.  This bill requires the regulated utilities to  
            develop a program but defers the determination of the funding  
            source to the PUC.  

           

          Analysis Prepared by  :    Jennifer Galehouse / APPR. / (916)  
          319-2081