AB 1525, as introduced, Committee on Utilities and Commerce. Electrical restructuring.
Existing law, enacted as part of electrical restructuring, required the Public Utilities Commission to authorize an electrical corporation meeting specified conditions to implement a rate cap mechanism that included a fuel price index mechanism to ensure the continued safe and reliable provision of electric service during the transition to competition and to limit the effect of fuel price volatility in electric rates paid by consumers. This requirement became inoperative on December 31, 2001.
This bill would repeal the above-described requirement.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 397 of the Public Utilities Code is
2repealed.
(a) Notwithstanding subdivision (a) of Section 368, to
2ensure the continued safe and reliable provision of electric service
3during the transition to competition, and to limit the effect of fuel
4price volatility in electric rates paid by California consumers, it is
5in the public interest to allow an electrical corporation which is
6also a gas corporation and served fewer than four million customers
7as of December 20, 1995, to file with the commission a rate cap
8mechanism which shall include a Fuel Price Index Mechanism
9requiring limited adjustments in an electrical corporation’s
10authorized System Average Rate in effect on June 10, 1996, to
11reflect price changes in the fuel market. The commission shall
12authorize an electrical corporation to implement a rate cap
13mechanism which includes a Fuel Price Index Mechanism provided
14the following criteria are met:
15(1) The Fuel Price Index Mechanism shall be based on the
16Southern California Border Index price for natural gas as published
17periodically in Natural Gas Intelligence Magazine. The “Starting
18Point” of the Fuel Price Index Mechanism shall be defined as the
19California Border Index price as published in Natural Gas
20Intelligence for January 1, 1996.
21(2) The Fuel Price Index Mechanism shall include a “deadband”
22defined as a price range for natural gas that is any price up to 10
23percent higher, or lower, than the Starting Point.
24(3) The electrical corporation shall not file for a change in its
25authorized System Average Rate unless the California Border
26Index price, on a 12-month, rolling average basis, is outside the
27deadband. If the published California Border Index is outside of
28the deadband, the electrical corporation shall increase, or decrease,
29its authorized System Average Rate by an amount equal to the
30product of 25 percent multiplied by the percentage by which the
3112-month rolling average natural gas price is higher, or lower, than
32the deadband.
33(4) In no case shall an electrical corporation’s authorized System
34Average Rate under the Fuel Price Index Mechanism exceed the
35average of the authorized system average rates for the two largest
36electrical corporations as of June 10, 1996.
37(5) This section shall become inoperative on December 31,
382001.
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