Amended in Assembly August 2, 2016

Amended in Senate April 7, 2016

Senate Bill No. 1041

Introduced by Senator Hueso

February 12, 2016

An act to add Section 749.5 begin delete to, and to add Part 3 (commencing with Section 9525) to Division 4.8 of, end delete begin insert to end insert the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

SB 1041, as amended, Hueso. Energy: electric begin delete and gas end delete rates: public elementary and secondary schools.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical begin delete corporations and gas corporations, while local publicly owned electric utilities are under the direction of their governing board. end delete begin insert corporations. end insert Existing law authorizes the commission to fix the rates and charges for electrical begin delete corporations and gas corporations, end delete begin insert corporations end insert and requires that those rates and charges be just and reasonable. Existing law requires public utilities to develop programs in cooperation with local school districts in reducing their electricity and gas bills through conservation and improvements in begin delete efficiency and end delete begin insert efficiency. Existing law end insert authorizes public utilities to offer school districts on a priority begin delete basis end delete begin insert basis, and authorizes school districts to utilize, any end insert programs or incentives for commercial customers developed by the utility and approved by the commission, including rebates, loan programs, and incentives for the installation of efficient lighting, heating, or cooling systems.

This bill would require begin delete each electrical corporation and gas corporation to develop and submit to the commission for its approval a rate for service applicable to public elementary and secondary schools that is just and reasonable and reflects the costs of providing service to those schools. Because this requirement is part of the Public Utilities Act and would require an act by the commission for its implementation and because a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime, the bill would impose a state-mandated local program by creating a new crime. end delete begin insert the commission to consider the effects of establishing a rate for electric service specific to public elementary and secondary schools, including consideration of the extent to which the average electrical bills paid by public elementary and secondary schools will increase or decrease and the consistency between establishing the rate and other statutory obligations and state policies. The bill would require the commission to report its findings and conclusions to the relevant policy committees of the Legislature by January 1, 2018 end insert begin insert . end insert

begin delete

This bill would require a local publicly owned electric utility to develop and submit to its governing board for its approval a rate for service applicable to public elementary and secondary schools that is just and reasonable and reflects the costs of providing service to those schools. By imposing additional duties upon local publicly owned electric utilities, the bill would impose a state-mandated local program.

end delete begin delete

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end delete begin delete

This bill would provide that no reimbursement is required by this act for specified reasons.

end delete

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete yes end delete begin insert no end insert .

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

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) The California Constitution authorizes the Public Utilities
Commission to fix the rates of public utilities in the state and the
Public Utilities Act requires that all charges of a public utility be
just and reasonable.

(b) The cost-causation principle, that rates should reflect the
cost of providing service, guides the commission’s ratemaking
decisions involving electrical corporations and gas corporations.

(c) The state funds public elementary and secondary schools to
provide for the education of the state’s children and young people.

(d) The state’s public elementary and secondary schools
represent a category of energy users that differs from commercial
categories of energy users.

(e) The state has enacted numerous measures to directly and
indirectly reduce the amount of money that public elementary and
secondary schools spend on utility bills so that they may focus
their limited resources on begin delete education. end delete begin insert education, including, but not
limited to, numerous programs to reduce utility bills available
through the State Energy Resources Conservation and
Development Commission, the Department of Education, and the
Public Utilities Commission. end insert

(f) Recently, many public elementary and secondary schools in
the state have experienced dramatic increases in the rates they pay
for electricity, thereby increasing their overall utility bills and
decreasing the moneys available for education.

begin delete

(g) For example, in the San Diego region, the bills for electric
service paid by some public elementary and secondary schools
have increased considerably, despite no change in those schools’
energy usage.

end delete begin delete

(h)

end delete

begin insert (g) end insert  It is the intent of the Legislature that the begin delete commission, end delete begin insert Public
Utilities Commission, end insert in reviewing and approving an electrical or
gas corporation’s rates that are applicable to public elementary
and secondary schools, act according to the cost-causation
principle.

begin delete

SEC. 2.  

Section 749.5 is added to the Public Utilities Code, to
read:

749.5.  

Each electrical corporation and gas corporation shall
develop and submit to the commission for its approval a rate for
service applicable to public elementary and secondary schools that
is just and reasonable and reflects the costs of providing service
to those schools.

SEC. 3.  

Part 3 (commencing with Section 9525) is added to
Division 4.8 of the Public Utilities Code, to read:

 

PART 3.  RATES

 

9525.  

A local publicly owned electric utility shall develop and
submit to its governing board for its approval a rate for service
applicable to public elementary and secondary schools that is just
and reasonable and reflects the costs of providing service to those
schools.

SEC. 4.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
a local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act or because costs that may be
incurred by a local agency or school district will be incurred
because this act creates a new crime or infraction, eliminates a
crime or infraction, or changes the penalty for a crime or infraction,
within the meaning of Section 17556 of the Government Code, or
changes the definition of a crime within the meaning of Section 6
of Article XIII B of the California Constitution.

end delete

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 749.5 is added to the end insert begin insert Public Utilities Code end insert begin insert , to
read: end insert

begin insert

begin insert 749.5. end insert   

(a) The commission shall consider the effects of
establishing a rate for electric service specific to public elementary
and secondary schools.

(b) In implementing subdivision (a), the commission shall
consider the extent to which the average electrical bills paid by
public elementary and secondary schools will increase or decrease
and the consistency between establishing the rate and other
statutory obligations and state policies.

(c) (1) The commission shall report to the relevant policy
committees of the Legislature on its findings and conclusions by
January 1, 2018.

(2) A report to be submitted pursuant to this subdivision shall
be submitted in compliance with Section 9795 of the Government
Code.

(3) Pursuant to Section 10231.5 of the Government Code, the
requirements of this subdivision are inoperative on January 1,
2022.

end insert