BILL ANALYSIS Ó
AB 1800
Page 1
Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Mike Gatto, Chair
AB 1800
(Hadley) - As Amended April 4, 2016
SUBJECT: Utility outage compensation claims: annual posting
SUMMARY: Requires an electric utility to post specified
information relating to utility outage compensation claims on
its Internet Web site. Specifically, this bill:
1)Requires each electrical corporation and local publicly owned
electric utility to annually post all of the following
information relating to utility outage compensation claims for
the previous year on its Web site:
a) The number of claims that remain open from the previous
year.
b) The number of new claims received in the current year.
c) The total number of applicants awaiting determination or
judgment at the end of the year.
d) The median time taken to process claims once the outage
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was determined to be the fault of the utility.
e) The number of claims approved.
f) The number of claims denied.
2)Specifies that the posting requirements only apply to those
outages that the Independent System Operator (ISO), the
California Public Utilities Commission (CPUC), or the
electrical corporation or local publically owned electric
utility has determined are the fault of the utility.
EXISTING LAW:
1)Gives the CPUC regulatory authority over public utilities,
including electrical corporations and gas corporations, as
defined. (Public Utilities Code 218 and 222, et. seq.)
2)Defines an "electrical corporation" to include every
corporation or person owning, controlling, operating, or
managing any electric plant for compensation within the state,
as specified. (Public Utilities Code Section 218)
3)Defines "local publicly owned electric utility" as a
municipality or municipal corporation operating as a "public
utility" furnishing electric service, a municipal utility
district furnishing electric service, a public utility
district furnishing electric service, an irrigation district
furnishing electric service, or a joint powers authority that
includes one or more of specified agencies and that owns
generation or transmission facilities, or furnishes electric
services over its own or its member's electric distribution
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system. (Public Utilities Code Section 224.3)
4)Requires the CPUC to adopt inspection, maintenance, repair,
and replacement standards for distribution systems of
electrical corporations, as well as standards for operation,
reliability, and safety during periods of emergency and
disaster, as specified. (Public Utilities Code Section 364)
5)Requires the CPUC to establish standards for disaster and
emergency preparedness plans, as specified. (Public Utilities
Code Section 768.6)
FISCAL EFFECT: Unknown.
COMMENTS:
1)Author's Statement: "AB 1800 will give utility ratepayers the
information necessary to know if their claims for
reimbursement are being fairly and expeditiously processed,
and will inspire more confidence in the claims process."
2)Background: Power outages are not an uncommon occurrence and
can sometimes last a few hours to a few days. Such outages
not only create an inconvenience for residents and businesses,
but can also cause health and safety issues, as well as
economic damages to businesses and communities. Under current
law, the CPUC is required to adopt inspection, maintenance,
repair, and replacement standards for electric distribution
systems, as well as standards for operation, reliability, and
safety during periods of emergency and disaster. The CPUC is
also required to establish standards for disaster and
emergency preparedness plans.
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3)Major Power Outages in Southern California: There have been
several major power outages that have affected the Southern
California area, including the Southwest Power Outage and the
Southern California Windstorm Power Outages in 2011, and the
Long Beach power outages in 2015. On September 8, 2011 work
being performed on a transmission line in Arizona, caused a
power outage that affected approximately 1.4 million
electricity customers in California, Arizona, and Mexico.
Power was fully restored within 12 hours. In addition, from
November 30 to December 1, 2011, hurricane force winds caused
a power outage thought the Southern California region that
affected approximately 430,000 electric customers in Southern
California Edison's (SCE) territory. Power was not fully
restored until December 8, 2011. More recently, fires in
underground electric vaults caused two power outages that
affected thousands of residents and business in the downtown
Long Beach area. The two separate fires on July 15, 2015, and
July 30, 2015, took out power for Long Beach residents for
several days.
4)Outages and Claims: In most cases, electric utilities provide
businesses and residents reimbursements if they suffered a
loss or damage due to a service interruption as a result of
the utility. According to SCE's Web site, it states that it
evaluates each claim individually to determine if losses
occurred due to its negligence, how the incident happened, the
extent of damages, and what the law considers fair
compensation. If SCE denies a claim, they will explain the
reasons for the denial. SCE's goal is to reach a decision on
most claims within 30 days of receipt. PG&E and SDG&E also
have similar claims processes.
5)Reporting of Outage Claims: Utilities judge each claim
individually. According to SCE's website, SCE evaluates each
claim individually, and determines: a) if loses occurred due
to their negligence; b) how the incident happened; c) the
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extent of damages; and d) what is considered fair
compensation. Customers must submit proof and documentation
to verify their claims along with the application.
Depending on the situation each claim can have different
results. For example, claims involving food loss and spoilage
might result in claims of a few hundred dollars, whereas,
claims involving bodily injury or property damage could result
in claims of thousands of dollars. Hence, depending on the
detail of information available, such data could provide
different representations of a utilities claims process.
The author may wish to consider an amendment to mitigate the
risk that the report could be used as evidence in a legal
proceeding on a specific claim.
This bill requires each electric utility to post specific
information related to the utilities outage compensation
claims, that the ISO, CPUC, and the electric utility has
determined are the fault of the utility, for the previous year
on its Web site.
The author may also wish to consider an amendment to clarify
the reporting requirement for utilities that do not
differentiate between claims paid that are at the fault of the
utility or was paid without regard to fault.
6)Suggested Amendments:
Amend Sections 8390 and 8391 as follows:
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8390. The reporting requirements of this chapter apply only to
those outages that the Independent System Operator, the
commission, or the electrical corporation or local publicly
owned electric utility has determined are the fault of the
utility , or that the electrical utility has determined to pay .
8391. (d) The median time taken to process applications.
claims once the outage was determined to be the fault of the
utility , or that the electrical utility has determined to pay .
Add the following section to the Public Utilities Code (PUC).
PUC Section ---: Information relating to utility outage
compensation claims shall not be admitted as evidence in any
action for damages against the utility arising out of an
outage or outages.
7)Arguments in Support: According to the City of Rancho Palos
Verdes, "Customers may file claims for reimbursement, but
there is currently no way to know what percentage of claims
are being approved and denied, or how quickly, or the
rationale behind these decisions. Without readily accessible
claims data, many customers assume that all claims are denied.
On the Palos Verdes Peninsula, [SCE] has recently confirmed
that only 37% of claims filed over the past three years were
paid."
8)Arguments in Opposition: According to the California
Municipal Utilities Association (CMUA), "CMUA opposes AB 1800
because [Publicly Owned Utilities (POUs)] are already required
under the Tort Claims Act (Government Code 900 et seq.) to
review claims within 45 days and provide written notice to the
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claimant regarding the outcome. Creating a new Public
Utilities Code with new requirements for POUs is neither
necessary nor consistent with current applicable Government
Code sections. Additionally, each POU serves a specific
locality, where customers may raise questions regarding their
utilities services through regularly scheduled public meetings
convened by locally elected officials."
9)Related Legislation:
AB 2381 (Roger Hernández) of 2016: Requires an electrical
corporation to establish a utility service guarantee program
to provide bill credits for customer that experience power
outages for over 24 hours. Pending in the Assembly Utilities
and Commerce Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
City of Rancho Palos Verdes
The Utility Reform Network (TURN)
Opposition
California Municipal Utilities Association
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Southern California Public Power Authority
Sacramento Municipal Utility District
Analysis Prepared by:Edmond Cheung / U. & C. / (916) 319-2083