BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 656
Author: Wright (D)
Amended: 9/6/13
Vote: 21
SENATE ENERGY, UTILITIES & COMMUNICATIONS COM. : 11-0, 4/30/13
AYES: Padilla, Fuller, Cannella, Corbett, De León, DeSaulnier,
Hill, Knight, Pavley, Wolk, Wright
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 37-0, 5/16/13
AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella,
Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Fuller,
Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff,
Jackson, Knight, Lara, Leno, Lieu, Liu, Monning, Nielsen,
Padilla, Pavley, Roth, Steinberg, Walters, Wolk, Wright,
Wyland, Yee
NO VOTE RECORDED: Price, Vacancy, Vacancy
ASSEMBLY FLOOR : 75-0, 9/11/13 - See last page for vote
SUBJECT : Electrical restructuring: natural gas
restructuring: information
practices
SOURCE : Author
DIGEST : This bill requires the Public Utilities Commission
(PUC) to provide information only during certain periods when
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enrollment in the Direct Access (DA) program grows by five
percent each month and establishes a regulatory framework for
core transport agents (CTAs) at the PUC. This bill also extends
various consumer protection provisions currently established for
electric service providers (ESP) customers to customers of CTAs.
Assembly Amendments (1) repeal specified provisions relating to
provider informational guides for consumers, (2) extend
specified consumer protection provisions, including the
requirement to register with, and provide specified information
to the commission, to a core transport agent, as defined,
offering gas service to residential and small commercial
customers within the service territory of a gas corporation, (3)
adds new disclosure statement requirement for core transport
agents, (4) expands customer protection provisions to aspects of
natural gas restructuring, and (5) makes various technical and
conforming changes.
ANALYSIS : Existing law authorizes some retail end-use
customers of an electrical corporation (IOU) to purchase
electric service directly from non-utility providers (energy
service providers or ESPs), a program commonly referred to as
Direct Access (DA). Participation is capped as a percentage of
total electric load based on a specified formula.
Existing law requires ESPs to register with the PUC which is
required to make specified information regarding DA service
available to the public.
This bill:
1.Delays various PUC direct access requirements until
competitive residential electricity service becomes available,
including a requirement to issue public alerts about entities
providing electrical service in an unauthorized or fraudulent
manner.
2.Repeals a requirement for PUC to direct the Division and
Office of Ratepayer Advocates to publish informational guides
or other tools to help residential and small commercial
customers evaluate competing electric service options.
3.Establishes a requirement for competitive natural gas service
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providers who market to residential and small commercial
customers to register with PUC and meet specified
requirements.
4.Provides gas customers may seek remedies through PUC or the
judicial system to resolve complaints.
5.Requires PUC to issue public alerts about entities providing
natural gas service in an unauthorized or fraudulent manner
and act on customer complaints.
6.Requires PUC to direct the Division and Office of Ratepayer
Advocates to publish informational guides or other tools to
help customers evaluate competing natural gas service options.
7.Specifies that a service is "core gas procurement" in
reference to the definition of "core transport agent;
specifies that the regulations do not apply when the core
account is part of a large commercial account; and streamlines
requirements for informational guides to be produced for
customers considering core service.
Background
Deregulation. In 1996 the California State Legislature led the
nation by deregulating the sale of electricity to
non-residential customers and a few residential customers
through a program commonly referred to as DA. The reform was
historic and intended to transition the state to a more
competitive electricity market structure that allowed its
citizens and businesses to achieve the economic benefits of
industry restructuring, create a new market structure that
provided competitive, low cost and reliable electric service,
provide assurances that electricity customers in the new market
would have sufficient information and protection, and preserve
California's commitment to developing diverse, environmentally
sensitive electricity resources. Those goals were not achieved.
The practical effect of the program was that non-residential
customers could buy electricity direct from private sector
wholesale sellers and use the IOU only for distribution and
transmission services. As consequence the vertical monopoly of
electricity delivery provided by heavily regulated electric
utilities was upended and those utilities were largely required
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to sell off power plants and transfer management of their
transmission systems to the newly created California Independent
System Operator. Within a few years the state suffered
electricity shortages which resulted in rolling blackouts,
skyrocketing prices, and bankrupt or nearly bankrupt utilities.
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 ESP. In 2009, the cap on DA enrollment was
increased but only for non-residential customers.
Core Transport Agents . CTAs are analogous to ESPs, but provide
gas for customers instead of electricity. In order to provide
gas through the utility's distribution lines, the CTAs must
enter into a contract with the local utility subject to certain
requirements. Through their own rules, the utilities require
the CTA to be technically capable and financially viable. PG&E
reports that the conditions placed on CTAs include a basic
service agreement, credit worthiness, and the ability to share
data for billing purposes. The utility reserves the right to
terminate service if the CTA is found to be in violation of the
utility's policies. PG&E reports that there are 20 active CTAs
within the PG&E territory, and it has received 1,200 customer
complaints about CTA service between May 2012 and April 2013.
These complaints include requests for cancellation of CTA
service, unauthorized switches by CTAs, and claims of deceptive
and misleading marketing activities. However, the IOUs do not
have the authority to investigate complaints of service on
behalf of the customers. Therefore, the IOUs typically recommend
to customers that they pursue legal action in court.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 9/12/13)
Division of Ratepayer Advocates
Pacific Gas & Electric
Public Utilities Commission
ASSEMBLY FLOOR : 75-0, 09/11/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
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Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier, Beth
Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hernández, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel
Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,
Ting, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams,
Yamada, John A. Pérez
NO VOTE RECORDED: Bigelow, Donnelly, Mansoor, Vacancy, Vacancy
JG:AL:nl:k 9/12/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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