BILL ANALYSIS Ó 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 2218 - Bradford Hearing Date:
June 23, 2014 A
As Amended: April 24, 2014 FISCAL B
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DESCRIPTION
Current law requires the California Public Utilities Commission
(CPUC) to establish the California Alternate Rates for Energy
(CARE) program to discount rates for low-income gas and electric
customers whom are defined as those with incomes no greater than
200 percent of the federal poverty level. The average effective
CARE discount is limited to a range of 30 to 35 percent of the
revenues that would have been produced for the same billed usage
by non-CARE customers. (Public Utilities Code § 739.1)
Current federal law creates the Emergency Food Assistance Program
(EFAP), administered by the United States Department of
Agriculture (USDA), and, at the state level, by the state
Department of Social Services (CDSS), to provide low-income
individuals and households with surplus commodities donated by
USDA.
This bill would require electrical and gas corporations to
provide rate assistance to food banks that participate in the
EFAP administered by the Food and Nutrition Service of USDA.
BACKGROUND
California Alternate Rates for Energy (CARE) - The CARE program
was designed to provide a 20% discount on monthly gas and
electric bills to income-qualified customers at their primary
residence and is funded through a rate surcharge paid by all
other utility customers. The income cap on CARE eligibility is up
to 200% above Federal Poverty Guidelines, which are updated
annually in June. Electric rates for tier 1 and 2 investor-owned
utilities (IOU) customers were frozen in 2001 as a result of the
electricity crisis. Consequently the effective CARE discount
increased two to three times what was intended. In a 2013 rate
reform bill the discount was re-set to 30 to 35 percent. The
CPUC has a proceeding underway to implement the legislation.
CARE programs are reviewed and modified by the CPUC every three
years for the subsequent three-year cycle. The CPUC completed
its last review of the program in August 2012 and at that time
approved a $3.8 billion program budget for the four IOUs for the
2012-2014 cycle.
Other Ratepayer Assistance Programs - For decades, the state and
federal governments have overseen low income programs to provide
low income customers discounts on their utility bills and energy
efficiency assistance to the extent the customer meets the
program eligibility requirements. The following is a breakdown of
select programs:
The Family Electric Rate Assistance Families 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;
The Energy Savings Assistance Program 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; and
The Department of Community Services and Development
administers Federal low-income home energy assistance,
energy crisis intervention, and low-income weatherization
programs. These programs are funded by federal grants to
provide weatherization services and financial assistance to
help low-income customers pay their energy bills.
Emergency Food Assistance Program (EFAP) - The EFAP provides
low-income individuals and households with surplus commodities
donated by the USDA. The CDSS is responsible for overseeing EFAP
and ensures that USDA commodities are provided and distributed to
eligible individuals and households in all 58 California
counties. Program-eligible recipients may receive commodities
through congregate feeding sites which serve meals, or through
distribution sites, which distribute food for household
consumption. There are 48 food banks that coordinate
distribution to more than 2,300 food banks in their regions.
The Department of Social Services defines an EFAP eligible food
bank, to which this bill applies, as:
A public or charitable institution that maintains an
established operation involving the provision of food or
edible commodities, or the products of food or edible
commodities, to food pantries, soup kitchens, hunger relief
centers, or other food or feeding centers that, as an
integral part of their normal activities, provide meals or
food to feed needy persons on a regular basis.
COMMENTS
1. Author's Purpose . Electricity costs to house perishables
such as fruits, vegetables, and dairy products is a common
concern for food banks across the state. More so now as a
number of food banks are anticipating an increase in
assistance due to the impact our water crisis will have on
the farming community.
Ultimately, energy costs will limit a food banks ability to
provide fresh and healthy food to our struggling California
families.
California's food banks stabilize our most underserved and
economically challenged families from all across the state.
However, many find it costly to maintain their refrigeration
units to house perishables such as fruits, vegetables, and
dairy products. In recent years, food banks have steadily
seen an increase in families seeking out assistance due to
the economic crisis and the subsequent home foreclosure.
California's drought crisis, with no end in sight, will only
further strain existing resources. Smaller operations such
as Trinity County Food Assistance Program, average an annual
energy bill of approximately $18,000; while the San
Francisco Food Bank averages around $144,000 per year.
2. Ratepayer Impact . Food banks provide a very critical
service to the communities they serve. The CDSS reports
that there are more than 2,300 organizations eligible for
the EFAP program. Electric and gas ratepayers currently
current provide more $1 billion a year for the CARE program
alone and much more when the weatherization, solar and other
programs are included. The committee may wish to consider
the impacts on ratepayers of additional support for
community-based programs and whether this is affordable at
this time.
ASSEMBLY VOTES
Assembly Floor (66-1)
Assembly Appropriations Committee (13-0)
Assembly Utilities and Commerce Committee
(10-0)
POSITIONS
Sponsor:
Author
Support:
Alameda County Community Food Bank
California Emergency FoodLink
Community Action Partnership of Kern
Community Action Partnership of Orange County
California Association of Food Banks
Food Bank of El Dorado County
Food for People
Food Share, Inc.
FoodLink for Tulare County
Independent Energy Producers Association
Los Angeles Regional Food Bank
Redwood Empire Food Bank
Second Harvest Food Bank of Santa Clara & San Mateo Counties
SF-Marin Food Bank
Oppose:
None on file
Kellie Smith
AB 2218 Analysis
Hearing Date: June 23, 2014