BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 1879 - Beall Hearing Date: June
29, 2010 A
As Amended: April 8, 2010 FISCAL B
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DESCRIPTION
Current decisions of the California Public Utilities Commission
(CPUC) authorize gas and electrical corporations to backbill any
amount undercharged due to a meter or billing error that was
incurred for up to three previous years for commercial customers
and up to three previous months for residential customers.
This bill requires the CPUC to open a proceeding to reconsider
that decision and examine whether the three-year limit on
billing undercharged amounts due to meter and billing errors is
an appropriate timeframe for small commercial customers of gas
and electrical corporations.
BACKGROUND
In 1986 the CPUC issued a decision establishing procedures for
retroactive billing by gas and electric utilities to correct
underbillings due to meter or billing errors. Pursuant to this
decision, tariff provisions allow residential customers to be
backbilled only for three months worth of undercharges, but
commercial and industrial customers may be backbilled for up to
three years worth of undercharges. Justifying this distinction
is the utilities' assertion that three months is an appropriate
time for residential ratepayers because utilities have
procedures to detect billing and meter errors more promptly,
while billing commercial customers is more complex and involves
larger amounts of money.
COMMENTS
1) Author's Purpose . According to the author, this bill
responds to a restaurant owner in his district who claims
it was unfair to be backbilled by Pacific Gas and Electric
(PG&E) for three years worth of undercharges due to a
faulty meter when a residential customer would be charged
only three months of undercharges. The author asserts that
it is unfair to treat all commercial customers the same and
that a small business is more like a residential ratepayer
in not having sufficient cash flow to absorb large,
unexpected costs such as three years worth of utility
undercharges.
2) CPUC Proceeding . On May 12, 2010, the CPUC opened a
proceeding nearly identical to that required by this bill
(OIR 10-05-005). The question in this OIR is whether
utility tariffs should be revised to treat small business
customers the same as residential customers for purposes of
billing adjustments. The CPUC proposes to apply the
three-month rule for residential customers to any
"micro-business," defined to be a small business that,
together with affiliates, has average annual gross receipts
of $2,750,000 or less over the previous three years or is a
manufacturer with 25 or fewer employees. Parties filed
comments on this proposal June 7 and reply comments on June
21. A workshop is scheduled for July 6, and the CPUC's
scoping memo sets October 28, 2010, as the target date for
a final decision.
ASSEMBLY VOTES
Assembly Utilities & Commerce 14-0
Assembly Appropriations 12-5
Assembly Floor 67-8
POSITIONS
Sponsor:
The Utility Reform Network
Support:
California Public Utilities Commission
Consumer Federation of California
Division of Ratepayer Advocates
Pacific Gas and Electric Company
San Diego Gas and Electric Company
Southern California Edison
Oppose:
None on file.
Jackie Kinney
AB 1879 Analysis
Hearing Date: June 29, 2010