BILL ANALYSIS �
SB 656
Page 1
Date of Hearing: July 1, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
SB 656 (Wright) - As Amended: June 26, 2013
SENATE VOTE : 37-0
SUBJECT : Direct Transactions: information reports
SUMMARY : This bill will suspend a requirement for the
California Public Utilities Commission (PUC) to maintain
consumer information program regarding choosing an electricity
provider and establish requirements for core transport agents.
Specifically, this bill :
a)Makes inoperative, until competitive residential electricity
service is made available, a requirement for the California
Public Utilities Commission (PUC) compile, update, and
maintain the names of registered electricity service
providers, require entities to file their standard service
plans with the PUC, and for the PUC to issue public alerts
about entities providing electrical service in an unauthorized
or fraudulent manner.
b)Repeals a requirement for the PUC to direct the Division of
Ratepayer Advocates (DRA) to publish informational guides or
other tools to help residential and small commercial customers
evaluate competing electric service options.
c)Establishes a requirement applicable to competitive natural
gas service providers who market to residential and small
commercial customers, to register with the PUC, meet specified
registration requirements, and specify a requirement that the
PUC act on consumer complaints.
d)Provides gas customers may seek remedies through the PUC or
the judicial system to resolve complaints.
e)Requires the PUC to issue public alerts about entities
providing natural gas service in an unauthorized or fraudulent
manner.
EXISTING LAW:
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1)Requires the PUC to require gas corporations to provide
service to natural gas customers unless the customer chooses
or contracts to have natural gas purchased and supplied by
another entity.(Public Utilities Code (PUC) 382.2)
2)Suspends direct access transactions for all customers of an
electrical corporation except for a specified amount according
to a specified schedule for nonresidential customers. (Public
Utilities Code (PUC) 365.1)
3)Requires the PUC to compile and update the names of registered
electricity service providers and the number of complaints
against those providers in relation to the number of customers
served. (Public Utilities Code (PUC) 392.1(a))
4)Requires registered entities to file the terms and conditions
of their service plans for residential and small commercial
customers in a standard format. (Public Utilities Code (PUC)
392.1(a))
5)Requires the PUC to make a list available of registered
providers and providers who are not required to be registered
available at no charge. (Public Utilities Code (PUC) 392.1(a))
6)Requires the PUC to issue public alerts about companies
attempting to provide electric service in an unauthorized or
fraudulent manner. (Public Utilities Code (PUC) 392.1(b))
7)Requires the PUC to direct the Division of Ratepayer Advocates
to publish informational guides or other tools to help
residential and small commercial customers evaluate competing
electric service options. (Public Utilities Code (PUC)
392.1(c))
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's Statement . "SB 656 is a simple bill that deletes a
requirement that the Public Utilities Commission compile data
on Direct Access and the Office of Ratepayer Advocates use
that information to prepare informational guides for
residential and small commercial customers. The Direct Access
(DA) program was suspended as a result of the energy crisis in
2001.
SB 656
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"The data collection and informational guide the PUC and DRA
are required to provide is unnecessary. Utilities are not
competing for DA customers. Currently less than 0.1% of
residential customers are DA and that number is decreasing.
"This bill simply removes unnecessary work from the PUC and
DRA workload."
2)What are Direct Access and Core Aggregation Service?
Electricity: Direct access refers to a system that allows
customers of an electrical corporation to purchase electricity
directly from wholesale sellers and use the electrical
corporation only for distribution and transmission services.
The electricity crisis of 2001 resulted in a suspension of the
program but any customer enrolled at the time was permitted to
remain with their electricity provider. In 2009, the cap on
enrollment in Direct Access was increased for non-residential
customers. Direct access customers are obligated to pay all
nonbypassable charges (public purpose programs and electricity
restructuring charges, etc.)
Natural gas: Core Gas Aggregation Service is an optional
program that allows residential or business customers to
purchase gas from third-party gas suppliers, also known as
Core Transport Agents (CTAs). Through this program, the gas
corporation continues to read the meter and deliver gas to the
customer.
Since the 1970s a number of steps were taken by the Federal
government to create competition in natural gas markets. The
Federal Energy Regulatory Commission (FERC) adopted Rule 636
in 1992, which created rules that allow increased access to
the natural gas pipeline system for sellers and buyers.
According to the Department of Energy's Energy Information
Administration, California has had a customer choice program
for all residential and small commercial natural gas customers
since 1995 through its core aggregation transportation program
(CAT).
In 1999, AB 1421 (Wright, Chapter 909, Statutes of 2000)
authorized customers to choose to have their natural gas
supplied by an entity other than a gas corporation.
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Non-utility natural gas suppliers are not regulated by the
PUC, and the PUC does not in any way approve, license, or
endorse any natural gas suppliers. The PUC does not approve
the gas prices that a non-utility supplier offers. If a
customer has a complaint against a non-utility natural gas
supplier, it may not be possible for the PUC to resolve the
complaint with the non-utility supplier.
The PUC requires, but does not enforce, core gas aggregators
to follow utility gas rules, available in the tariff book of
the utilities.
3)Residential and Small Commercial Customers using Direct Access
and Core Aggregation Service .
As of March 15, 2013 utility reports indicate that statewide
there are currently 11,120 residential and 17,307 small
commercial (non-residential) customers subscribed to direct
access electricity contracts.
According to the most recent Energy Information Administration
data, 34,391 residential customers in California purchase gas
from marketers, representing about 0.7 percent of deliveries
to residential consumers statewide in 2008.
4)Core Transport Agents Actively Selling in California. PG&E
reports that it has investigated approximately 1,200 Core
Transport Agents (CTA) related complaints from customers in
the last 15 months, an average of 99 per month. The majority
of the cases were received from November 2012 to April 2013
(157 per month on average. PGE provided a summary of the
nature of the complaints:
Customer Requests Cancellation of CTA service = 720
cases;
Customer Complaints re. Unauthorized Switches by CTA =
240 cases; and
Customer Complaints re. CTAs' Deceptive and Misleading
Marketing Activities = 240 cases
In some cases customers have received calls from telemarketers
who use a script that is confusing and does not provide a
clear statement that the gas provider is not associated with
the gas corporation.
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This bill proposes that the PUC, instead of gas corporations,
be responsible for investigating and resolving these types of
complaints.
1) Proposed amendments. Technical amendments will address
the following issues:
a) Clarify the definition of a small commercial customer
and provide flexibility to the PUC to update this
definition in the future, as necessary.
b) Provide a 90-day opportunity, after the commission
approves the program, for core transportation agents to
register.
c) Remove reference to registrations filings that occur
prior to January 1, 2014 because registrations will not
occur until sometime after June 30, 2014.
d) Allows the commission to adjust the registration fee as
it deems necessary to recover the cost of administering the
program.
980. (c) "Small commercial customer" means a customer that has
a maximum peak demand of less than 20,800 therms.
981. (a) A core transport agent shall register with the
commission within 90 days after the commission has adopted
standards for financial viability, technical, and operational
capacity. As a precondition to registration, the core
transport agent shall provide, under oath, declaration, or
affidavit, all of the following information to the commission:
981. (b) A registration filing approved by the commission
prior to January 1, 2014, that does not comply in all respects
with the requirements of subdivision (a) shall nevertheless
continue in force and effect as long as before July 1, 2014,
the core transport agent undertakes to supplement its
registration filing to the satisfaction of the commission. A
registration that is not supplemented by the required
information within the time set forth in this subdivision
shall be suspended by the commission and shall not be
reinstated until the commission has found the registration to
be in full compliance with subdivision (a).
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(a) A registration fee of one hundred dollars ($100) shall be
collected from a core transport agent required to register
under this chapter and the fee proceeds shall be deposited in
the Public Utilities Reimbursement Account established under
Section 402. The commission may adjust the fee as necessary to
recover the cost of administering the program.
REGISTERED SUPPORT / OPPOSITION :
Support
Division of Ratepayer Advocates (DRA)
Opposition
None on file
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083