BILL ANALYSIS
AB 1879
Page 1
Date of Hearing: April 19, 2010
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 1879 (Beall) - As Amended: April 8, 2010
SUBJECT : Electrical and gas corporations: collection of
charges.
SUMMARY : Requires the California Public Utilities Commission
(CPUC) to open a proceeding to examine whether the 3-year limit
on billing adjustments for meter and billing errors is an
appropriate timeframe for small commercial customers of gas and
electrical corporations.
EXISTING LAW
1)Permits the CPUC to order a public utility to make due
reparation to the complainant when a complaint has been made
to the CPUC concerning any rate or service and the CPUC found
that the public utility has charged an unreasonably excessive
or discriminatory amount.
2)Requires that when a public utility seeks recovery in a court
for the collection of an unpaid utility bill, the complaint
must be filed within three years, which may be extended six
months if the public utility presents its claim or demand in
writing within that three-year period.
3)When the CPUC institutes an investigation of an unauthorized
undercharge by any public utility, requires the institution of
the investigation by the CPUC to toll the three-year period
until the CPUC has rendered its initial decision.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, this bill is the result of
a restaurant in his district that was under-billed by Pacific
Gas and Electric Company (PG&E) for a period of at least three
years due to a faulty meter. The restaurateur felt that when
PG&E backbilled for the under-collected charges going back three
years, it was unfair because residential customers are only
backbilled for three months. The CPUC uses this three-year
period that was developed back in 1986. It's about time they
revisit it and determine whether it is still fair to the
AB 1879
Page 2
customers and the utilities.
1) Background : The utilities' tariffs are authorized by the
CPUC and govern the timing of adjustment of bills for meter or
billing error (PG&E Rule 17 and 17.1, SCE Rule 17, and SDG&E
Rule 18). A current CPUC tariff, promulgated in 1986, allows
residential customers to only be backbilled for three months
worth of undercharges. However, for commercial and industrial
customers, the tariff allows the utility to backbill up to three
years worth of undercharges.
The CPUC states that the reason for the difference is because
there are larger dollar amounts involved with non-residential
customers. For example, the amount the restaurant was
backbilled was around $60,000. This equates to about $20,000
per year or $1,700 per month. A CPUC decision (D.86-06-035 in
I.84-05-046) established a three-month limitation period for
backbilling residential customers. The utilities asserted at
the CPUC public proceeding that three months is sufficient for
residential ratepayers because the utilities have procedures to
detect billing and meter errors more promptly. Since billing
for commercial customers is usually more complex and involves
larger amounts of money, the CPUC concluded that it was
appropriate to continue backbilling for commercial customers for
three years (CPUC 2d at p. 278).
2) Does the current system work : According to PG&E, the
restaurateur had contacted the CPUC Business and Community
Outreach Group, and the CPUC referred the complaint to PG&E and
asked them to resolve it. The restaurateur contacted PG&E and
PG&E eventually settled the case for substantially less.
PG&E is allowed to recover a set amount for uncollectible
amounts from other ratepayers. If the amount of uncollectible
billings exceeds the allowable amount, the cost is borne by
shareholders.
The CPUC has been experiencing increased calls from small
businesses who believe they were unfairly backbilled. The
amounts have ranged from $16,000 to $60,000 per customer. The
most recent three businesses that have contacted the CPUC in the
past two months were backbilled more than a year and their
charges were $16,000, $29,000, and $60,000.
CPUC Commissioner Bohn has been investigating the backbilling
AB 1879
Page 3
issue and has endorsed the policy of treating small businesses
the same as residential customers in terms of the duration of
allowable backbilling. Subsequently, Commissioner Bohn drafted
an Order Instituting a Rulemaking. The Order should be taken up
on the CPUC agenda within the next month or so.
3) It takes two: The utility is responsible for ensuring the
meter works accurately; however, that doesn't absolve the
customer from all responsibility. PG&E bills approximately 9.8
million meters between gas and electric through an automated
system. Because the system is automated in order to decrease its
overhead costs, PG&E does not manually bill each customer and
relies on conscientious customers to provide feedback if
abnormalities occur. The utility suggests that customers should
notify them in a timely manner if they have concerns about the
accuracy of their utility bill. PG&E believes that some level
of accountability is expected of the customer if they receive a
smaller bill than would be reasonably expected. In particular,
PG&E states that when a customer's bill is $1,700 per month less
than it should be, there should be an obvious problem.
REGISTERED SUPPORT / OPPOSITION :
Support
Pacific Gas and Electric Company (PG&E)
Sempra Energy utilities
Southern California Edison (SCE)
The Utility Reform Network (TURN)
Opposition
None on file.
Analysis Prepared by : Gina Adams / U. & C. / (916) 319-2083