BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 2207 - Fong Hearing Date: June
29, 2010 A
As Amended: June 16, 2010 FISCAL B
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DESCRIPTION
Current law restricts the termination of residential electrical
or gas service for nonpayment by an investor-owned utility (IOU)
unless the IOU conforms to specified notice and timeline
requirements and restricts termination of service in specified
situations.
Current orders of the California Public Utilities Commission
(CPUC) establish rules, procedures and notice requirements that
an IOU must follow before an electric or gas customer's service
can be disconnected.
This bill requires IOUs to allow a customer who is subject to
termination of service for nonpayment of a delinquent bill to
enter into a bill payment plan and to arrange a bill payment
plan extending the period for payment a minimum of 3 months and
up to 12 months depending on the particulars of the customer's
situation and ability to pay. The customer would also be
responsible for any charges that accrue to the service account
after entering into a bill payment plan.
This bill requires that if a customer has established credit as
a customer of the IOU, it shall not require that customer to pay
credit deposits as a result of late payments or nonpayment of
bills, or following a termination of service unless a low-income
customer's service has been terminated for nonpayment.
This bill requires the CPUC to establish a benchmark for
termination of gas and electrical service and to require IOUs to
conduct a biennial affordability survey.
BACKGROUND
A Division of Ratepayer Advocate's (DRA) report entitled,
"Status Report on Energy Utility Service Disconnections," which
evaluated service disconnections and reconnections from January
2006 through August 2009. The findings included a 19% increase
in the PG&E territory over a 12 month period from 2008 to 2009
from the prior 12 month cycle. The reported highlighted the
current economic situation in California and corresponding
increase in utility service disconnections. Subsequently the
CPUC began to reexamine utility disconnection rules and
practices.
The CPUC worked with the IOUs and reached agreement for a
temporary moratorium of service disconnections over the winter
holiday season. This year the CPUC held workshops and opened a
rulemaking to review the critical issue of service
disconnections and how they can be reduced. In the interim the
IOUs each implemented programs on outreach and education to
reduce the number of unnecessary disconnections; however, there
has been no consistency or uniformity in those practices.
Additionally the CPUC directed the IOUs to implement practices
which closely track the requirements of this bill.
A proposed decision on this proceeding was issued June 17th and
it maintains the interim measures coupled with several new
requirements that further address disconnection rates. The
proposed decision states that further evaluation on the
effectiveness of all these requirements will be monitored by the
CPUC until the effective dates for each utility's general rate
case.
COMMENTS
1) Author's Purpose . In order to mitigate the relatively
high utility disconnection rates noted in a 2009 study
published by the DRA, AB 2207 would create uniform customer
protections for IOU customers with respect to payment plans
and re-establishment of credit-deposits for low-income
customers. In addition, in order to try and avoid a future
increase in disconnections the bill would require the CPUC
to establish a benchmark to monitor disconnection rates and
to conduct biennial affordability surveys.
2) CPUC Rulemaking . The provisions of this bill largely
track the CPUC's proposed decision and other interim
practices. However the possibility does exist that the
CPUC could chart a new path in that proceeding. Any
conflict would force the CPUC to reopen those proceedings
after this bill takes effect.
3) Benchmarking . The significant difference between this
bill and the CPUC's proposed decision is the requirement in
this bill that the CPUC establish a benchmark for
termination of gas and electrical service. Because of all
the externalities associated with disconnection rates many
argue that instituting benchmarks for termination of gas
and electrical service is highly subjective. It is also
not clear what purpose is served by a benchmark. Is it a
cap on disconnections? Would the benchmarks reflect the
impacts of a recession? Would the benchmarks be variable
in order to reflect different unemployment and
socio-economic levels on a county by county level? Would
benchmarks result in a cap on disconnections resulting in
an increased shift of costs to other ratepayers? In
addition, does a benchmark imply that the Legislature
condones some disconnections but not too many? The author
and committee may wish to consider eliminating the
requirement that a benchmark for disconnections be
established.
ASSEMBLY VOTES
Assembly Utilities & Commerce 10-4
Assembly Appropriations 12-5
Assembly Floor 48-28
POSITIONS
Sponsor:
Greenlining Institute
Support:
Division of Ratepayer Advocates
County Welfare Directors Association of California
Oppose:
Bear Valley Electric Service
California Public Utilities Commission (unless amended)
Mountain Utilities
Pacific Power
Pacific Gas & Electric Company
Southern California Edison
Sierra Pacific
Maurice Pitesky
AB 2207 Analysis
Hearing Date: June 29, 2010