BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 176|
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THIRD READING
Bill No: SB 176
Author: Simitian (D)
Amended: 5/12/09
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE : 10-0, 5/5/09
AYES: Padilla, Benoit, Corbett, Cox, Kehoe, Lowenthal,
Simitian, Strickland, Wiggins, Wright
NO VOTE RECORDED: Calderon
SUBJECT : Electricity: charges: charitable
organizations
SOURCE : Author
DIGEST : This bill extends the sunset five years on the
law allowing nonprofits to receive free electricity, as
specified.
ANALYSIS : Existing law requires the Public Utilities
Commission to suspend the right of investor-owned utility
(IOU) customers to acquire direct access electricity
service until the Department of Water Resources no longer
supplies power to IOU customers.
Existing law authorizes a nonprofit to acquire electric
commodity service through a direct transaction with an
electric service provider, until January 1, 2010, if
electric commodity service is donated free of charge
without compensation.
CONTINUED
SB 176
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This bill extends the sunset from January 1, 2010, until
January 1, 2015.
Background
SB 423 (Simitian), Chapter 749, Statutes of 2006, allows an
electricity generator to donate free electricity to
nonprofit organizations despite the ban on new "direct
access" service arrangements. Houston, Texas has a similar
program, however, in California suppliers have not provided
the opportunity to nonprofits to accept free electricity
services.
The Public Utilities Commission rules require current
direct-access customers (those that have maintained direct
access service since before the suspension) to provide a
six-month notification to the IOU before returning to IOU
service. If the customer fails to provide the six-month
return notification, the customer must pay the higher of
spot market electricity costs or the IOU's prevailing rate
(to shield the IOU's other customers from the cost of the
customer's experiment with the market). Once returned, the
customer must stay with IOU service for three years (to
give the IOU a reasonable basis to plan for serving them).
After that three-year period, the customer retains its
direct-access eligibility and must provide the IOU with a
six-month notice if it plans to return to direct-access
service. These "coming and going" rules would apply to
service permitted by this bill.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/12/09)
Food Bank of Monterey County
HIP Housing
Salud Para La Gente
OPPOSITION : (Verified >)
>
SB 176
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ARGUMENTS IN SUPPORT : The author is seeking to allow
energy service providers to donate free electricity to a
nonprofit in lieu of a cash donation. Due to the
moratorium on direct access arrangements, nonprofits cannot
take advantage of the donations that energy service
providers could provide, unless the sunset is extended or
deleted.
ARGUMENTS IN OPPOSITION : >
RJG:mw 5/12/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
SUPPORT/OPPOSITION: NONE RECEIVED
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