BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1090
                                                                  Page  1

          SENATE THIRD READING
          SB 1090 (Fuller)
          As Amended  August 18, 2014
          Majority vote

           SENATE VOTE  :37-0  
           
           UTILITIES & COMMERCE               14-0              
          APPROPRIATIONS      17-0        
           
           ----------------------------------------------------------------- 
          |Ayes:|Patterson, Bonilla,       |Ayes:|Gatto, Bigelow,           |
          |     |Buchanan, Chávez, Dahle,  |     |Bocanegra, Bradford, Ian  |
          |     |Fong, Beth Gaines,        |     |Calderon, Campos,         |
          |     |Garcia, Roger Hernández,  |     |Donnelly, Eggman, Gomez,  |
          |     |Jones, Mullin, Quirk,     |     |Holden, Jones, Linder,    |
          |     |Rendon, Skinner           |     |Pan, Quirk,               |
          |     |                          |     |Ridley-Thomas, Wagner,    |
          |     |                          |     |Weber                     |
           ----------------------------------------------------------------- 
           
          SUMMARY  :  Requires the California Public Utilities Commission  
          (PUC) to explicitly consider whether hardship will be caused to  
          customers living in hot, inland areas before imposing default  
          time-of-use (TOU) rates.  Specifically,  this bill  :   

          1)States the PUC shall not require or authorize an electrical  
            corporation to employ default TOU pricing for residential  
            customers unless it has explicitly considered whether hardship  
            will be caused on the following:

             a)   Customers located in hot, inland areas, assuming no  
               changes in overall usage by those customers during peak  
               periods.

             b)   Residential customers living in areas with hot summer  
               weather, as a result of seasonal bill volatility, assuming  
               no change in summertime usage or in usage during peak  
               periods.


           EXISTING LAW  :

          1)Requires that all rates for any service or product charged by  
            an electrical corporation be just and reasonable.  (Public  








                                                                  SB 1090
                                                                  Page  2

            Utilities Code Section 451)

          2)Permits the PUC to authorize an electrical corporation to  
            offer residential customers the option of receiving service  
            pursuant to time-variant pricing, as defined, and to  
            participate in other demand reduction response programs, but  
            prohibits the PUC from authorizing an electrical corporation  
            to employ mandatory or default time-variant pricing for any  
            residential customer, except that beginning January 1, 2018,  
            the PUC may require or authorize an electrical corporation to  
            employ default time-of-use pricing for residential customers,  
            subject to specified limitations and conditions.  (Public  
            Utilities Code Section 745)

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, absorbable costs to the PUC.
           
          COMMENTS  :  The author notes "while we are hopeful that rate  
          reform will help my constituents and others in the inland areas  
          of the state with regard to heavy air-conditioning bills, we are  
          still very concerned about the potential hardships of default  
          time-of-use rates on very hot climates in which there may be  
          little ability to adjust electricity usage.  This bill continues  
          and is consistent with the rate reform process, which stemmed in  
          part from the concerns of the Central Valley over high summer  
          electricity bills.  SB 1090 extends rate reform to require the  
          PUC to do a more thorough examination of the impact of one part  
          of that reform, the potential for default time-of-use rates, in  
          terms of the hardships which may be caused in hot climates."   

          Impact of TOU rates on residential customers.  The  
          investor-owned utilities (IOUs) currently offer TOU rates as a  
          voluntary option for residential customers.  As previously  
          mentioned, the PUC may order the IOUs to establish default TOU  
          rates for residential customers after January 2018.  Once  
          default TOUs are implemented, residential customers would be  
          automatically switched to these rates unless they take action to  
          affirmatively notify the utility company to opt-out.  
           
          This bill requires the PUC to explicitly consider whether  
          hardship will be caused on customers located in hot, inland  
          areas, assuming no changes in overall usage by those customers  
          in peak periods.  This bill also requires the PUC to consider  
          residential customers living in areas with hot summer weather,  
          as a result of seasonal bill volatility, assuming no change in  








                                                                  SB 1090
                                                                  Page  3

          summertime usage or in usage during peak periods.  


           Analysis Prepared by  :    DaVina Flemings / U. & C. / (916)  
          319-2083 


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