BILL NUMBER: AB 265 CHAPTERED
BILL TEXT
CHAPTER 328
FILED WITH SECRETARY OF STATE SEPTEMBER 7, 2000
APPROVED BY GOVERNOR SEPTEMBER 6, 2000
PASSED THE ASSEMBLY AUGUST 30, 2000
PASSED THE SENATE AUGUST 29, 2000
AMENDED IN SENATE AUGUST 29, 2000
INTRODUCED BY Assembly Member Davis
(Principal coauthor: Senator Alpert)
(Coauthors: Assembly Members Ducheny and Wayne)
FEBRUARY 3, 1999
An act to add Section 332.1 to the Public Utilities Code, relating
to public utilities, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 265, Davis. Electrical restructuring: electric bills: bill
stabilization.
(1) Existing law restructuring the electrical industry establishes
a process for the recovery by specified electrical corporations of
certain uneconomic costs during a transition period that began on
January 1, 1998, and ends for an electrical corporation on the
earlier of March 31, 2002, or the date that the electrical
corporation fully recovers its uneconomic costs. Existing law
imposes during the transition period a rate freeze and a rate
reduction, as prescribed, to remain in effect until March 31, 2002,
unless the electrical corporation fully recovers its uneconomic costs
at an earlier date. The San Diego Gas and Electric Company has
recovered all uneconomic costs subject to existing law, and, pursuant
to a decision of the Public Utilities Commission, is no longer
subject to the rate freeze and rate reduction. An existing order of
the commission adopts a bill stabilization plan for certain customers
of the company.
This bill would require the commission to establish a ceiling of
6.5
per kilowatt hour on the energy component of electric bills for
residential, small commercial, and lighting customers of the San
Diego Gas and Electric Company, through December 31, 2002,
retroactive to June 1, 2000, as prescribed. The bill would require
the commission to establish an accounting procedure to track and
recover reasonable and prudent costs of providing electric energy to
retail customers unrecovered through retail bills due to the
application of that ceiling. The bill would require the commission
to establish a voluntary program for large commercial, agricultural,
and industrial customers who buy energy from the San Diego Gas and
Electric Company to set the energy component of their bills at 6.5
per kilowatt hour with a true-up after a year. The bill would
require the commission to institute a proceeding to examine the
prudence and reasonableness of the San Diego Gas and Electric Company
in the procurement of wholesale energy on behalf of its customers,
and to issue orders it determines to be appropriate affecting the
retail rates of San Diego Gas and Electric Company customers if it
makes a specified finding. Since a violation of a decision or order
of the commission is a crime, this bill would impose a state-mandated
local program by creating new crimes. w The bill would declare
that, due to the special circumstances surrounding the San Diego Gas
and Electric Company, a general statute cannot be made applicable
within the meaning of Section 16 of Article IV of the California
Constitution, and the enactment of a special statute is therefore
necessary.
(2) 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.
This bill would provide that no reimbursement is required by this
act for a specified reason.
(3) The bill would become operative only if AB 970 of the
1999-2000 Regular Session is enacted and becomes operative on or
before January 1, 2001.
(4) The bill would declare that it is to take immediate effect as
an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares that the San
Diego Gas and Electric Company is the only electrical corporation in
this state whose customers are no longer protected by a statutorily
imposed rate freeze, and that those customers alone are therefore
subject to severe economic hardship because of unprecedented bill
volatility and extraordinarily high rate levels.
(b) It is the intent of the Legislature to protect against a
simple deferral of payment by future customers by establishing
incentives for prudent procurement by the San Diego Gas and Electric
Company, encouraging appropriate action by federal and state
oversight agencies, and offsetting any undercollection in the
balancing accounts with revenues associated with sales of energy from
utility owned or managed generation assets.
SEC. 2. Section 332.1 is added to the Public Utilities Code, to
read:
332.1. (a) (1) It is the intent of the Legislature to enact Item
1 (revised) on the commission's August 21, 2000 agenda, entitled
"Opinion Modifying Decision (D.) D.00-06-034 and D.00-08-021 to
Regarding Interim Rate Caps for San Diego Gas and Electric Company,"
as modified below.
(2) It is also the intent of the Legislature that to the extent
that the Federal Energy Regulatory Commission orders refunds to
electrical corporations pursuant to their findings, the commission
shall ensure that any refunds are returned to customers.
(b) The commission shall establish a ceiling of six and five-tenth
cents ($.065) per kilowatt hour on the energy component of electric
bills for residential, small commercial, and street lighting
customers of the San Diego Gas and Electric Company, through December
31, 2002, retroactive to June 1, 2000. If the commission finds it
in the public interest, this ceiling may be extended through December
2003 and may be adjusted as provided in subdivision (d).
(c) The commission shall establish an accounting procedure to
track and recover reasonable and prudent costs of providing electric
energy to retail customers unrecovered through retail bills due to
the application of the ceiling provided for in subdivision (b). The
accounting procedure shall utilize revenues associated with sales of
energy from utility-owned or managed generation assets to offset an
undercollection, if undercollection occurs. The accounting procedure
shall be reviewed periodically by the commission, but not less
frequently than semiannually. The commission may utilize an existing
proceeding to perform the review. The accounting procedure and
review shall provide a reasonable opportunity for San Diego Gas and
Electric Company to recover its reasonable and prudent costs of
service over a reasonable period of time.
(d) If the commission determines that it is in the public interest
to do so, the commission, after the date of the completion of the
proceeding described in subdivision (g), may adjust the ceiling from
the level specified in subdivision (b), consistent with the
Legislature's intent to provide substantial protections for customers
of the San Diego Gas and Electric Company and their interest in just
and reasonable rates and adequate service.
(e) For purposes of this section, "small commercial customer"
includes, but is not limited to, all San Diego Gas and Electric
Company accounts on Rate Schedule A of the San Diego Gas and Electric
Company, all accounts of customers who are "general acute care
hospitals," as defined in Section 1250 of the Health and Safety Code,
all San Diego Gas and Electric Company accounts of customers who are
public or private schools for pupils in kindergarten or any of
grades 1 to 12, inclusive, and all accounts on Rate Schedule AL-TOU
under 100 kilowatts.
(f) The commission shall establish a program for large commercial,
agricultural, and industrial customers who buy energy from the San
Diego Gas and Electric Company, on a voluntary basis, at the election
of the customer, to set the energy component of their bills at six
and five-tenths cents ($.065) per kilowatt hour with a true-up after
a year.
(g) The commission shall institute a proceeding to examine the
prudence and reasonableness of the San Diego Gas and Electric Company
in the procurement of wholesale energy on behalf of its customers,
for a period beginning at the latest on June 1, 2000. If the
commission finds that San Diego Gas and Electric Company acted
imprudently or unreasonably, the commission shall issue orders that
it determines to be appropriate affecting the retail rates of San
Diego Gas and Electric Company customers including, but not limited
to, refunds.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only 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 XIIIB of the California Constitution.
SEC. 4. The Legislature finds and declares that, due to the
special circumstances surrounding the San Diego Gas and Electric
Company, a general statute cannot be made applicable within the
meaning of Section 16 of Article IV of the California Constitution,
and the enactment of a special statute is therefore necessary.
SEC. 5. Sections 1 to 4, inclusive, of this act shall become
operative only if AB 970 of the 1999-2000 Regular Session is enacted
and becomes operative on or before January 1, 2001.
SEC. 6. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to provide timely relief to ratepayers in the service
territory of the San Diego Gas and Electric Company suffering from a
rapid increase in retail energy rates due to spiraling wholesale
energy costs, thereby endangering the public peace, health, and
safety, it is necessary that this act take immediate effect.