BILL ANALYSIS Ó
AB 401
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CONCURRENCE IN SENATE AMENDMENTS
AB
401 (Dodd)
As Amended September 2, 2015
Majority vote
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|ASSEMBLY: | | (June 2, |SENATE: | | (September 8, |
| |55-22 |2015) | |28-12 |2015) |
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Original Committee Reference: U. & C.
SUMMARY: Requires the State Water Resources Control Board
(SWRCB), in collaboration with the State Board of Equalization
and stakeholders, to develop a plan for funding and implementing
the Low-Income Water Rate Assistance Program, as specified.
The Senate amendments do the following:
1)Requires SWRCB instead of the Department of Community Services
to develop the plan for funding and implementing the
Low-Income Water Rate Assistance Program.
2)Allows SWRCB to consider existing rate assistance programs
authorized by the California Public Utilities Commission
(CPUC) for investor-owned water utilities and to include
recommendations for other cost-effective methods of offering
assistance to low-income water customers.
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3)Moves the deadline required to develop a plan for the funding
and implementation of the Low-Income Water Rate Assistance
Program from January 1, 2017, to January 1, 2018.
4)Moves the deadline required to report to the Legislature from
January 1, 2017, to February 1, 2018.
5)Requires a set of recommendations and best practices of
cost-savings measures to ensure water utilities are
demonstrating whether and how they are keeping rates low.
6)Clarifies the role of CPUC and the agencies in determining and
verifying customer eligibility.
7)Ensures the report includes recommendations regarding the
structure of the program, particularly whether it will be
state run or locally run.
8)Sunsets the reporting requirement on February 1, 2022.
EXISTING LAW:
1)Establishes the California Alternate Rates for Energy Program
to assist low-income electric and gas customers with annual
household incomes that are no greater than 200% of the federal
poverty guideline levels. (Public Utilities Code Section
739.1)
2)Requires the CPUC to consider and implement programs to
provide water rate relief for low-income ratepayers. (Public
Utilities Code Section 739.8)
3)Provides that a fee encompasses any levy, other than an ad
valorem tax, a special tax, or an assessment, imposed by an
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agency upon a parcel or upon a person as an incident of
property ownership, including a user fee or charge for a
property-related service. (California Constitution, Article
XIII D)
4)Requires the SWRCB to administer provisions relating to the
regulation of drinking water to protect public health,
including, but not limited to, conducting research, studies,
and demonstration programs relating to the provision of a
dependable, safe supply of drinking water, enforcing the
Federal Safe Drinking Water Act, adoption of enforcement
regulations, and conducting studies and investigations to
assess the quality of water in domestic water supplies.
(Water Code Section 174, et seq)
FISCAL EFFECT: According to the Senate Appropriations
Committee, this bill would have one-time costs of approximately
$331,000 to the General Fund over two years for the development
of a feasibility plan, and cost pressures, possibly in the
millions of dollars, to the General Fund or unknown special fund
for the implementation of the feasibility plan.
COMMENTS:
1)Author's Statement: "Water affordability is a central element
to water access. When water costs make water unaffordable, it
can pose a health and safety issue and a myriad of
administrative and political problems. Households paying an
amount for water that exceeds an affordability threshold are
considered to be paying a cost that is unaffordable and a
'high burden.' A commitment to water affordability is rooted
in both human rights and public welfare."
2)Background: The CPUC is charged with ensuring California's
115 investor-owned water utilities and 14 investor-owned
wastewater utilities provide safe and reliable water to
customers at reasonable rates. Water utilities regulated by
the CPUC deliver water service to about 16% of the state's
population. The remaining water customers in California are
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served by publicly-owned utilities (POU) which are
self-regulated and not under CPUC jurisdiction. POUs must
restrict water rates to the cost of service.
3)Lucerne, Lake County: In July 2012, Cal Water filed a request
with the CPUC for a water rate increase of 77% over three
years to ratepayers in Lucerne, one of Lake County's most
disadvantaged communities. The average resident's water bill,
according to local news accounts, would have doubled from
$62.85 to $124.22 per month. Lucerne is an area with a median
annual household income of approximately $25,000.
The United States Environmental Protection Agency and the
California Department of Public Health use a "water
affordability threshold" to factor in variable costs of living
across California. Households with water bills exceeding this
threshold are considered to be paying a cost that is
unaffordable and a "high burden." In the case of Lucerne, it
is estimated an affordable monthly bill would be $32.50 or
less. In reality, the average bill is $85, which is about 2.5
times the affordable amount.
This bill requires SWRCB, in collaboration with the State
Board of Equalization and stakeholders, to develop a plan for
funding and implementing the Low-Income Water Rate Assistance
Program, as specified, by January 1, 2018. In addition, the
bill requires SWRCB to report its findings to the Legislature
by February 1, 2018, as specified, and sunsets the reporting
requirement on February 1, 2022.
Analysis Prepared by: Edmond Cheung / U. & C. / (916) 319-2083
FN: 0002234
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