BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Tom Torlakson, Chairman
413 (Fuentes)
Hearing Date: 08/17/2009 Amended: 08/17/2009
Consultant: Brendan McCarthy Policy Vote: EU&C 11-0
AB 413 (Fuentes)
Page 2
_________________________________________________________________
____
BILL SUMMARY: AB 413 makes several changes to the state's
regulation of electricity, allowing for increases in some
residential electricity rates, increasing the ability of retail
customers to purchase electricity directly from generators,
prohibiting mandatory time-variant pricing, and making changes
to existing energy efficiency programs.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
PUC implementation Minor and absorbable Special
*
UC energy savings About $400 in savings per year, General
beginning sometime after 2013
CSU energy savings $1,000 to $3,000 per year,
beginningGeneral
sometime after 2013
* PUC Utilities Reimbursement Account.
_________________________________________________________________
____
STAFF COMMENTS:
Current law freezes electricity rates for most residential
customers of the investor-owned utilities and freezes
participation of retail electricity customers in the direct
access program until the Department of Water Resources has
recovered all costs of supplying power. (Direct access allows
retail electricity customers to buy electricity directly from
energy generators, instead of getting power from their local
utility.)
This bill replaces the existing freeze on electricity rates with
one index for most residential customers and a second index for
low-income residential customers. The bill generally prohibits
the Public Utilities Commission from reopening direct access
without further legislative action. However, it would allow
existing direct access customers to increase the amount of
AB 413 (Fuentes)
Page 2
electricity under direct access contracts to return to highest
historic level of direct access service (approximately a 50
percent increase in total potential direct access power
purchases). The bill prohibits mandatory use of time-variant
pricing for electricity until 2014 and thereafter allows
consumers to opt out.
The bill also requires the Public Utilities Commission to target
existing energy efficiency and solar energy programs to heavy
users of electricity and to multi-family housing users. It also
requires electric utilities to target energy efficiency funds to
affordable housing developments.
The regulatory costs associated with changes to electricity
rates and regulations can be accommodated within existing
resources at the Public Utilities Commission.
The University of California is an existing direct access
customer. By increasing the amount of electricity that can be
purchased through direct access contracts, the bill would allow
the UC system to acquire electricity at lower cost. UC estimates
that the potential annual savings would be about $400,000 per
year based on the proposed increase in direct access
availability. The California State University System is also a
direct access customer. CSU estimates that the potential savings
from additional direct access energy purchases could be $1
million to $3 million per year.
This bill is substantially similar to SB 695 (Kehoe), which is
in the Assembly Appropriations Committee.
This bill is substantially similar to SB 1536 (Kehoe) from last
year which was not heard in the Assembly.