Amended in Senate June 6, 2016

Amended in Assembly January 13, 2016

Amended in Assembly January 4, 2016

Amended in Assembly April 9, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1180

Introduced by Assembly Member Cristina Garcia

February 27, 2015

An act to add and repeal begin delete Section 755.5 end delete begin insert Sections 755.5 and 915 end insert of the Public Utilities Code, relating to utility service.

LEGISLATIVE COUNSEL’S DIGEST

AB 1180, as amended, Cristina Garcia. Rates and charges for water service: payment transaction fees.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, and water corporations. Existing law authorizes the commission to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. Existing law authorizes an electrical, gas, or water corporation to offer credit card and debit card bill payment options, if approved by the commission, and, upon approval, authorizes an electrical, gas, or water corporation to recover, through an individual customer transaction fee, reasonable transaction costs incurred by the electrical, gas, or water corporation from those customers that choose those methods of payment. Existing law includes statements of legislative intent relative to electrical, gas, and water corporations offering customers the option to pay by credit card or debit card.

This bill would, until January 1, 2022, authorize a water corporation with begin delete more than 10,000 end delete begin insert 2,000 or more service end insert connections to seek commission begin delete approval end delete begin insert approval, through its general rate case application, end insert to operate a pilot program designed to evaluate customer interest in, and utilization of, bill payment options, including, but not limited to, credit begin delete card and debit end delete begin insert card, debit card, and prepaid end insert card bill payment options, begin delete for their water bills end delete and to assess the cost-effectiveness of, and begin delete public end delete begin insert customer end insert interests served by, customer access to those bill payment options. begin insert The bill would limit the duration of the pilot program to the duration of the water corporation’s rate case cycle, but would authorize the commission to extend the program upon the request of the water corporation in its subsequent rate case application. end insert The bill would require the commission to allow a water corporation to recover the reasonable expenses incurred by the water corporation in providing its customers with these bill payment options, and to allow water corporations to not impose a transaction fee on its customers for using these bill payment options. The bill would prohibit the costs of a pilot program from being collected begin delete by end delete begin insert from end insert low-income customers who participate in specified programs, and would require a water corporation that is operating a pilot program to provide certain notifications to its customers. The bill would require the commission, in consultation with the Low-Income Oversight Board, by July 1, 2020, to submit a report to specified legislative committees begin delete that includes an assessment of the use of credit cards by low-income customers to avoid service disconnections, an assessment of the impact of the use of credit cards for water bills on household debt burden, and an assessment of data regarding customer utilization and the cost-effectiveness of the bill payment options provided under the pilot program. The bill would require the report, based on these assessments and an assessment of the public interests served by these bill payment options, to evaluate end delete begin insert that, based on specified assessments, evaluates end insert the usefulness of an individual customer transaction fee and begin delete include end delete begin insert includes end insert a recommendation regarding individual customer transaction fees for credit begin delete card and debit end delete begin insert card, debit card, and prepaid end insert card bill payments accepted by water corporations.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 755.5 is added to the Public Utilities
Code, to read:

755.5.  

(a) A water corporation with begin delete more than 10,000 end delete begin insert 2,000
or more end insert service connections begin delete may seek, through its general rate
case application, commission approval end delete begin insert that seeks end insert to operate a pilot
program designed to evaluate customer interest in, and utilization
of, bill payment options, including, but not limited to, credit begin delete card
and debit end delete begin insert card, debit card, and prepaid end insert card bill payment options,
begin delete for their water bills end delete and to assess the cost-effectiveness of, and
begin delete public end delete begin insert customer end insert interests served by, customer access to those bill
payment begin delete options. end delete begin insert options, shall do so by requesting commission
approval through its general rate case application. The pilot
program shall be limited to the duration of the water corporation’s
rate case cycle, but may be extended by the commission at the
request of the water corporation in its next general rate case
application. end insert

(b) Notwithstanding Section 755, the commission shall allow
a water corporation to recover the reasonable expenses incurred
by the water corporation in providing to its customers bill payment
options pursuant to subdivision (a) and shall not require the water
corporation to impose a transaction fee on its customers.

(c) The costs of a pilot program adopted pursuant to subdivision
(a) may not be recovered from customers participating in the
California Alternate Rates for Energy (CARE) program established
pursuant to Section 739.1 or in a water rate relief program for
low-income ratepayers established pursuant to Section 739.8.

(d) The commission shall require a water corporation that is
operating a pilot program to notify its customers that the water
corporation is participating in a pilot program and that the pilot
program may not continue, pending an assessment of the costs and
benefits of the pilot program to customers.

(e) The commission shall ensure that accepting bill payment
options pursuant to subdivision (a) neither increases nor decreases
the rate of return of the water corporation.

(f) This section shall remain in effect only until January 1, 2022,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2022, deletes or extends that date.

begin delete

SEC. 2.  

By July 1, 2020, the commission, in consultation with
the Low-Income Oversight Board established pursuant to Section
382.1 of the Public Utilities Code, shall submit to the Assembly
Committee on Utilities and Commerce and the Senate Committee
on Energy, Utilities and Communications a report that includes
an assessment of the use of credit cards by low-income customers
to avoid service disconnections, an assessment of the impact of
the use of credit cards for water bills on household debt burden,
and an assessment of data, considered on an aggregated basis,
regarding customer utilization and the cost-effectiveness of the
bill payment options provided by the water corporations operating
pilot programs pursuant to Section 755.5 of the Public Utilities
Code. Based on these assessments and an assessment of the public
interests served by providing these bill payment options, the report
shall evaluate the usefulness of the individual customer transaction
fee required by Section 755 of the Public Utilities Code, and
include a recommendation regarding individual customer
transaction fees for credit card and debit card payments accepted
by water corporations.

end delete

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 915 is added to the end insert begin insert Public Utilities Code end insert begin insert , to
read: end insert

begin insert

begin insert 915. end insert   

(a) By July 1, 2020, the commission, in consultation with
the Low-Income Oversight Board established pursuant to Section
382.1, shall submit to the Assembly Committee on Utilities and
Commerce and the Senate Committee on Energy, Utilities and
Communications a report on the pilot programs operated by water
corporations pursuant to Section 755.5 that includes an assessment
of the use of credit cards by low-income customers to avoid service
disconnections, an assessment of the impact of the use of credit
cards for customer bills on household debt burden, and an
assessment of data, considered on an aggregated basis, regarding
customer utilization and the cost-effectiveness of the bill payment
options. Based on these assessments and an assessment of the
customers’ interests served by providing these bill payment options,
the report shall evaluate the usefulness of the individual customer
transaction fee required by Section 755, and include a
recommendation regarding individual customer transaction fees
for credit card, debit card, and prepaid card payments accepted
by water corporations.

(b) This section shall remain in effect only until January 1, 2024,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2024, deletes or extends that date.

end insert