BILL ANALYSIS �
AB 2218
Page 1
Date of Hearing: April 21, 2014
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 2218 (Bradford) - As Amended: April 10, 2014
SUBJECT : Electricity and natural gas rates.
SUMMARY : Requires electrical and gas corporations to develop
and implement a program of rate assistance to eligible food
banks, subject to discretion and supervision by the California
Public Utilities Commission (PUC).
EXISTING LAW :
1)States the PUC has regulatory authority over public utilities,
including electrical corporations and gas corporations.
(Public Utilities Code �701)
2)Grants the PUC authority to fix rates charged by public
utilities under its jurisdiction. (Article XII, Section 6,
California Constitution).
3)Requires the PUC to establish a program of rate assistance to
low-income electric and gas customers, referred to as the
California Alternative Rates Energy Program (CARE). (Public
Utilities Code �739.1)
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, "California's food banks
stabilize our most underserved and economically challenged
families from all across the state. However, many find it costly
to maintain their refrigeration units to house perishables such
as fruits, vegetables, and dairy products. Electricity costs are
a common concern for food banks across the state. Currently,
the Fresno Community Food Bank, which serves four counties, sees
a summer cost of approximately $9,000 - $11,000 per month and a
winter cost of approximately $5,000-$6,000 per month to provide
assistance to the most in need in the Central Valley."
1)Background : The Department of Social Services operates the
Emergency Food Assistance Program (EFAP), which contracts with
48 food banks servicing 58 counties in California and
approximately 2,300 distribution sites. Some food banks
operate in more than one county, while others have more than
one food bank. Each contracted food bank distributes
commodities received from United States Department of
AB 2218
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Agriculture (USDA). These food banks must follow USDA and EFAP
guidelines. These food banks may also distribute non-EFAP food
that was donated or purchased. EFAP has contracted with these
48 food banks for a number of years and this number has not
grown.
Each of the EFAP-contracted food banks are required to submit
a performance plan which demonstrates its capability and
capacity to distribute the USDA commodities in accordance with
the federal rules and EFAP policies. These food banks also
service food pantries for distribution. These pantries must
adhere to the USDA federal regulations and EFAP policies for
distributing EFAP food products.
2)California ratepayer assistance programs : For decades, the
state and federal governments have overseen low income
programs to provide low income customers discounts on their
utility bills to the extent the customer meets the program
eligibility requirements. The following is a breakdown of
select programs:
The California Alternative Rates for Energy (CARE)
Program offers eligible customers a 20% discount on their
electricity and natural gas bill.
The Family Electric Rate Assistance (FERA) Families
offers assistance to families whose household income
slightly exceeds the low-income energy program allowances
by billing some of their electricity usage at a lower
rate.
The Energy Savings Assistance Program (ESAP)
provides no-cost weatherization services to low-income
households who meet the CARE income guidelines. Services
provided include attic insulation, energy efficient
refrigerators, energy efficient furnaces, weather
stripping, caulking, low-flow showerheads, water heater
blankets, and door and building envelope repairs which
reduce air infiltration.
The Department of Community Services and Development
administers Federal low-income home energy assistance,
energy crisis intervention, and low-income weatherization
programs (LIHEAP). These programs are funded by federal
grants to provide weatherization services and financial
assistance to help low-income customers pay their energy
bills.
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1)Rising electricity and natural gas costs impact food banks :
This bill directs the electrical and gas corporations to
develop and implement a program of rate assistance to
EFAP-certified foods banks subject to the direction and
supervision by the PUC. According to the author, in recent
years, food banks have steadily experienced an increase in
families seeking out assistance due to the economic crisis and
the subsequent home foreclosure. With no end in sight to
California's drought crisis, this will only further constrain
existing resources.
The need to house more perishable foods to distribute to needy
families has drawn more concern about energy costs for food
banks. Average utility bill costs for these food banks vary
by county. Smaller operations, such as Trinity County average
approximately $150 per month, while San Francisco County
estimates $12,000 per month. Mendocino County, for instance,
found that their costs increased exponentially around the
holiday months when they generally have more meat to store in
the freezer. Seven food banks reported they were using some
form of renewable technology to offset their electricity
bills.
2)How will this program be funded : The bill is silent on the
funding mechanism for the proposed new program. Currently
most, if not all, of California's ratepayer assistance
programs are included in the rate base of the regulated
utility companies. It is the author's intention to allow the
PUC to determine how this program will be funded. Therefore,
the author and this committee may wish to add the following
amendment:
739.3. Subject to direction and supervision by the commission,
electrical corporations and gas corporations shall develop and
implement a program of rate assistance to eligible food banks.
" The funding source for this rate assistance program is
subject to the approval of the California Public Utilities
Commission ." For purposes of this section, "eligible food
bank" means a public or charitable institution that
participates in The Emergency Food Assistance Program
administered by the Food and Nutrition Service of the United
States Department of Agriculture.
AB 2218
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REGISTERED SUPPORT / OPPOSITION :
Support
Food Bank of El Dorado County
FoodLink
Food Share, Inc.
Independent Energy Producers (IEP)
Opposition
None on file
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083