BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 2218 (Bradford) - Electricity and natural gas rates. Amended: April 24, 2014 Policy Vote: EU&C 9-1 Urgency: No Mandate: Yes (see staff comment) Hearing Date: August 14, 2014 Consultant: Marie Liu SUSPENSE. AS AMENDED. Bill Summary: AB 2218 would require that electrical and gas corporations develop and implement a program of rate assistance to eligible food banks. Fiscal Impact (as approved on August 14, 2014): Onetime costs of $150,000 for one year from the Public Utilities Reimbursement Account (special) for the creation of a rate assistance program. Potential and unknown costs, but likely minor, to the General Fund and various special funds to the state as an electricity and gas ratepayer. Background: The California Public Utilities Commission (CPUC) is required under current law to establish a program to discount rates for low-income gas and electric customers. This program is known as the California Alternative Rates for Energy, or CARE, program. The state and federal governments have over the decades had many programs to assist low income customers with discounts on their utility bills and energy efficiency assistance. Proposed Law: This bill would require an electrical and gas corporation to develop and implement a program for rate assistance to food banks that participate in The Emergency Food Assistance Program administered by the United States Department of Agriculture. The CPUC would be permitted to identify the funding source for the rate assistance program and would be allowed to direct and supervise the electrical and gas corporations' programs. Staff Comments: The CPUC would incur additional onetime workload of approximately $150,000 to develop and provide guidance to the AB 2218 (Bradford) Page 1 electrical and gas corporations on the required program and identify funding. Ongoing costs of approximately $115,000 would be needed to provide oversight and to assist with rebalancing rates for other customer classes to create funding for food bank discounts. This bill allows the CPUC to determine the funding source for rate assistance. Staff notes that many of the rate assistance programs are paid by ratepayers. Should ratepayer funds be chosen as the funding source for these programs, the state as a gas and electricity customer will be responsible for a proportionate share of the program costs. Staff notes that the state accounts for approximately 1% of the state's electricity usage and 3.8% of the state's natural gas usage. If the rate assistance provided in the programs developed pursuant to this bill result in millions of dollars in ratepayer costs, the state would see increased costs in the tens of thousands of dollars. This bill is a state-mandated local program as the bill would add a requirement under the Public Utilities Act and violations of that act are crimes. However, under the state California Constitution, this mandate is not reimbursable. Author Amendments: Restrict eligibility to food banks that have an agreement with the State Department of Social Services. There are 41 food banks that would meet this requirement.