BILL ANALYSIS Ó
SB 1041
Page 1
Date of Hearing: August 10, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1041
(Hueso) - As Amended August 2, 2016
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill requires the California Public Utilities Commission
(CPUC) to consider the effects of establishing a rate for
electric service for public elementary and secondary schools.
Specifically, this bill:
1)Requires the CPUC to consider the extent to which the average
electrical bills paid by elementary and secondary schools will
increase or decrease and the consistency between establishing
the rate and other statutory obligations and state policies.
SB 1041
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2)Requires the CPUC to report findings and conclusions to the
Legislature by January 1, 2018 and repeals these reporting
requirements on January 1, 2022.
FISCAL EFFECT:
Minor/absorbable costs to the CPUC.
COMMENTS:
1)Purpose. Current law requires the CPUC to set just and
reasonable rates charged by the state's utilities, including
electrical and gas corporations (investor-owned utilities or
IOUs). IOUs divide their customers into rate classes that
recognize that different general categories of customers place
different costs upon the electrical system. Generally, IOUs
divide their customers into residential and nonresidential
classes. In addition, pursuant to legislative requirements,
the IOUs have established special rate classes, such as rate
classes for agricultural customers. Public elementary and
secondary school customers are generally placed in one of the
nonresidential or commercial class rates.
According to the author, schools have electricity use patterns
that may differ from the use patterns of most of the other
electricity users in their rate class. The author contends
that schools typically experience a significant reduction in
demand for electricity in the mid-afternoon that is sustained
until early the next morning, and that schools may also
dramatically reduce their electricity use during hot summer
months.
SB 1041
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According to the Association of California School
Administrators, electricity rates increased 39% in a one-year
period for school districts in San Diego County, while usage
rose only 6%. These rate increases, in the form of "demand
charges," have been placed upon most or all commercial class
customers to reflect the costs to this class of customers.
Proponents contend however, in the case of schools, these
demand charges are unreflective of the costs to provide
service.
This bill will require the CPUC to consider the effects of
establishing a specific rate for electrical service for
schools to reflect schools electricity use and report to the
Legislature findings on whether the rate would likely result
in rate increases or decreases.
2)Related legislation. AB 2120 (Weber), pending in the Senate
Appropriations Committee, also seeks to address the issue of
escalating energy costs imposed on schools. This bill takes a
different approach by allowing local education agencies to
participate in the CPUC intervenor compensation proceedings.
Analysis Prepared by:Misty Feusahrens / APPR. / (916)
319-2081