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