BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 2218 (Bradford) - Electricity and natural gas rates.
Amended: April 24, 2014 Policy Vote: EU&C 9-1
Urgency: No Mandate: Yes (see staff comment)
Hearing Date: August 4, 2014 Consultant:
Marie Liu
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 2218 would require that electrical and gas
corporations develop and implement a program of rate assistance
to eligible food banks.
Fiscal Impact:
Onetime costs of $150,000 for one year from the Public
Utilities Reimbursement Account (special) for the creation
of a rate assistance program.
Ongoing costs of approximately $115,000 to provide program
oversight and implementation.
Potential and unknown costs to the General Fund and various
special funds to the state as an electricity and gas
ratepayer.
Background: The California Public Utilities Commission (CPUC) is
required under current law to establish a program to discount
rates for low-income gas and electric customers. This program is
known as the California Alternative Rates for Energy, or CARE,
program. The state and federal governments have over the decades
had many programs to assist low income customers with discounts
on their utility bills and energy efficiency assistance.
Proposed Law: This bill would require an electrical and gas
corporation to develop and implement a program for rate
assistance to food banks that participate in The Emergency Food
Assistance Program administered by the United States Department
of Agriculture.
The CPUC would be permitted to identify the funding source for
the rate assistance program and would be allowed to direct and
supervise the electrical and gas corporations' programs.
AB 2218 (Bradford)
Page 1
Staff Comments: The CPUC would incur additional onetime workload
of approximately $150,000 to develop and provide guidance to the
electrical and gas corporations on the required program and
identify funding. Ongoing costs of approximately $115,000 would
be needed to provide oversight and to assist with rebalancing
rates for other customer classes to create funding for food bank
discounts.
This bill allows the CPUC to determine the funding source for
rate assistance. Staff notes that many of the rate assistance
programs are paid by ratepayers. Should ratepayer funds be
chosen as the funding source for these programs, the state as a
gas and electricity customer will be responsible for a
proportionate share of the program costs. Staff notes that the
state accounts for approximately 1% of the state's electricity
usage and 3.8% of the state's natural gas usage. If the rate
assistance provided in the programs developed pursuant to this
bill result in millions of dollars in ratepayer costs, the state
would see increased costs in the tens of thousands of dollars.
This bill is a state-mandated local program as the bill would
add a requirement under the Public Utilities Act and violations
of that act are crimes. However, under the state California
Constitution, this mandate is not reimbursable.