BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1879|
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CONSENT
Bill No: AB 1879
Author: Beall (D)
Amended: 8/4/10 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 10-0, 6/29/10
AYES: Padilla, Dutton, Corbett, Florez, Kehoe, Lowenthal,
DeSaulnier, Simitian, Strickland, Wright
NO VOTE RECORDED: Cox
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 67-8, 6/1/10 - See last page for vote
SUBJECT : Electrical and gas corporations: collection of
charges
SOURCE : The Utility Reform Network
DIGEST : This bill provides that if the Public Utilities
Commission (PUC) has not reconsidered Decision 86-06-035 it
made in 1986, in a proceeding on or before January 1, 2011,
the PUC is to open a proceeding to examine whether the
three-year limit on billing adjustments for meter and
billing errors is an appropriate timeframe for small
commercial customers of gas and electrical corporations.
ANALYSIS : Current decisions of the PUC authorize gas and
electrical corporations to backbill any amount undercharged
due to a meter or billing error that was incurred for up to
CONTINUED
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three previous years for commercial customers and up to
three previous months for residential customers.
This bill requires the PUC 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 PUC issued Decision 86-06-035 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
Purpose of the bill . According to the author's office,
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's
office 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.
PUC Proceeding . On May 12, 2010, the PUC opened a
proceeding nearly identical to that required by this bill
(OIR [Order Instituting Rulemaking] 10-05-005). The
question in this OIR is whether utility tariffs should be
revised to treat small business customers the same as
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residential customers for purposes of billing adjustments.
The PUC 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 PUC's scoping memo sets
October 28, 2010, as the target date for a final decision.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/2/10)
The Utility Reform Network (source)
Consumer Federation of California
Division of Ratepayer Advocates
Pacific Gas and Electric Company
Public Utilities Commission
San Diego Gas and Electric Company
Sempra Energy
Southern California Edison
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Bass, Beall, Bill
Berryhill, Blakeslee, Block, Blumenfield, Bradford,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
Emmerson, Eng, Evans, Feuer, Fletcher, Fong, Fuentes,
Fuller, Furutani, Galgiani, Gilmore, Hall, Hayashi,
Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight,
Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Monning,
Nava, Nielsen, V. Manuel Perez, Portantino, Ruskin,
Salas, Saldana, Silva, Skinner, Smyth, Solorio, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Yamada, John
A. Perez
NOES: Anderson, DeVore, Gaines, Hagman, Harkey, Miller,
Niello, Norby
NO VOTE RECORDED: Tom Berryhill, Garrick, Nestande, Audra
Strickland, Vacancy
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DLW:mw 8/4/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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