BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 413|
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THIRD READING
Bill No: AB 413
Author: Fuentes (D)
Amended: 8/17/09 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 11-0, 7/7/09
AYES: Padilla, Benoit, Calderon, Corbett, Cox, Kehoe,
Lowenthal, Simitian, Strickland, Wiggins, Wright
SENATE APPROPRIATIONS COMMITTEE : 12-0, 8/27/09
AYES: Kehoe, Cox, Corbett, Denham, Hancock, Leno, Price,
Runner, Walters, Wolk, Wyland, Yee
NO VOTE RECORDED: Oropeza
ASSEMBLY FLOOR : 68-6, 6/2/09 - See last page for vote
SUBJECT : Energy
SOURCE : Pacific Gas and Electric Company
Sempra Energy
Southern California Edison
The Utility Reform Network
DIGEST : This bill makes several changes to the states
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.
CONTINUED
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ANALYSIS : Existing 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:
1.Requires electrical corporations to target energy
efficiency and solar programs toward upper-tier
(high-energy use) and multifamily customers to reduce
long-term energy usage.
2.Requires the Public Utilities Commission (PUC) to direct
the electrical corporations to deploy low-income energy
efficiency (LIEE) programs targeting customers occupying
apartment houses or similar multi-unit residential
structures, and to reach as many eligible customers as
practicable by December 31, 2014.
3.Requires the California Alternate Rates for Energy
(CARE) program to be offered to low-income electric and
gas customers with annual household incomes at or below
200 percent of the federal poverty levels, the costs of
which shall be recovered on an equal cent-per-kilowatt
hour or equal cent-per-therm basis for customers of
electrical and combined electric and gas corporations
and from specified customers.
4.Restricts rate increases for CARE program participants
for electricity usage up to 130 percent of baseline
quantities by the annual percentage increase in benefits
under the CalWORKs program, not to exceed three percent
per year, through January 1, 2019.
5.Caps CARE electricity rates at 80 percent of the
corresponding rates charged to residential customers not
participating in the CARE program.
6.Restricts rate increases charged to residential
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customers for electricity usage up to 130 percent of the
baseline quantities, by the annual percentage change in
the Consumer Price Index plus one percent, but not less
than three percent and not more than five percent per
year.
7.Prohibits PUC from requiring or permitting an electrical
corporation from employing mandatory or default,
time-variant pricing for residential customers prior to
January 1, 2014, and permits PUC to authorize an
electrical corporation to offer residential customers
the option of receiving service pursuant to dynamic
pricing (opt-in), and authorizes the PUC, commencing
January 1, 2014 to authorize electrical corporations to
allow customers to opt out of receiving time-variant
pricing.
8.Requires the suspension of direct access, i.e. the
ability of a customer of an electrical corporation to
instead contract for their electricity needs with
another electrical service provider, to be lifted only
by an act of the Legislature.
9.Permits the PUC, notwithstanding the above, to allow
individual retail non-residential and end-use customers
to acquire direct-access electric service subject to the
limitation that the total annual kilowatt-hours supplied
by all electric service providers to distribution
customers of an electrical corporation shall not exceed
the maximum total annual level of kilowatt-hours
supplied by all electric service providers, within that
electrical corporation's distribution service territory,
during the height of the direct-access market.
10.Requires that electric service providers of
direct-access electricity are subject to the same
resource adequacy, renewable portfolio standards (RPS),
and greenhouse gas emission reduction laws and
regulations as the investor-owned utilities.
11.Requires the PUC, in allocating the cost of new
generation resources acquired by an electrical
corporation to meet reliability needs, to ensure that
the net costs and benefits of the new capacity are
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allocated such that users are not assessed for the costs
of energy that they do not consume.
Existing law requires the PUC to prepare and submit to the
Governor and the Legislature a written report on an annual
basis before February 1, of each year on the costs of
programs and activities conducted by an electrical
corporation or gas, corporation that has more than a
specified number of customers in California.
This bill changes the submission date to April 1 of each
year, and also requires s separate report, due May 1 and
annually thereafter, to contain the PUC's recommendations
for actions that can be undertaken to limit utility costs
and rate increases, consistent with the state's energy and
goals. The bill requires the PUC to annually require
electrical and gas corporations that have more than a
specified number of customers in California to study and
report to the PUC on measures that these corporations
recommend be undertaken to limit utility costs and rate
increases.
Comments
According to the author's office, the purpose of this bill
is to lift some of the emergency measures imposed during
the energy crisis-including capping residential retail
rates and suspending the ability of customers to choose a
direct-access electricity provider-that at the time helped
stabilize rates. Maintaining current policies could
actually lead to dramatic rate changes if the rate
stabilization measures imposed during the crisis ere
suddenly released without the incremental changes proposed
in this bill.
This bill also requires the utilities' energy efficiency
programs to emphasize assisting high-energy users and those
in multi-unit dwellings. For tenants in multi-unit
dwelling, it may not be feasible for the user to invest on
their own to reduce energy use because most energy
efficiency measures stay with the dwelling, which they
might not own.
Previous/Related legislation
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SB 695 (Kehoe), is on the Assembly Third Reading File.
SB 1536 (Kehoe), of 2008, was not heard in the Assembly.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee analysis:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
PUC implementation Minor and
absorbableSpecial *
UC energy savings About $400 in
savings per year, General
beginning sometime after 2013
CSU energy savings $1,000 to
$3,000 per year, beginning General
sometime after 2013
*PUC Utilities Reimbursement Account
SUPPORT : (Verified 8/31/09)
Pacific Gas and Electric Company (co-source)
Sempra Energy (co-source)
Southern California Edison (co-source)
Utility Consumers' Action Network (co-source)
Alliance for Retail Energy Markets
California Large Energy Consumers Association (unless
amended)
California Retailers Association (if amended)
California Rural Legal Assistance Foundation
Direct Energy
Western Center on Law and Poverty
OPPOSITION : (Verified 8/31/09)
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California Manufacturing and Technology Association (unless
amended)
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Tom
Berryhill, Blumenfield, Brownley, Buchanan, Caballero,
Charles Calderon, Carter, Chesbro, Cook, Coto, Davis, De
La Torre, De Leon, Duvall, Emmerson, Eng, Evans, Feuer,
Fletcher, Fong, Fuentes, Fuller, Furutani, Galgiani,
Gilmore, Hagman, Hall, Hayashi, Hernandez, Hill, Huber,
Huffman, Jeffries, Jones, Knight, Krekorian, Lieu, Logue,
Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, Nestande,
John A. Perez, V. Manuel Perez, Portantino, Price,
Ruskin, Salas, Saldana, Skinner, Smyth, Solorio, Audra
Strickland, Swanson, Torlakson, Torres, Torrico, Tran,
Villines, Yamada, Bass
NOES: Blakeslee, Conway, Gaines, Niello, Nielsen, Silva
NO VOTE RECORDED: Bill Berryhill, Block, DeVore, Garrick,
Harkey, Miller
DLW:do 9/1/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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