Amended in Senate May 27, 2014

Amended in Senate April 8, 2014

Senate Bill No. 1090

Introduced by Senator Fuller

February 19, 2014

An act to amend Section 745 of the Public Utilities Code, relating to electricity.

LEGISLATIVE COUNSEL’S DIGEST

SB 1090, as amended, Fuller. Electricity: rates: default time-of-use pricing.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as defined. Existing law permits the commission to authorize an electrical corporation to offer residential customers the option of receiving service pursuant to time-variant pricing, as defined, and to participate in other demand reduction response programs, but prohibits the commission from authorizing an electrical corporation to employ mandatory or default time-variant pricing for any residential customer, except that beginning January 1, 2018, the commission may require or authorize an electrical corporation to employ default time-of-use pricing for residential customers, subject to specified limitations and conditions.

This bill would require the commission to begin delete make specified findings end delete begin insert explicitly consider whether hardship will be caused to customers living in hot, inland areas, and residential customers living in areas with hot summer weather end insert before it could require or authorize an electrical corporation to employ default time-of-use pricing to residential customers and would require the commission to submit its findings to the Legislature not less than 12 months prior to requiring or authorizing an electrical corporation to employ default time-of-use pricing for residential customers.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 745 of the Public Utilities Code is
amended to read:

745.  

(a) For purposes of this section, “time-variant pricing”
includes time-of-use rates, critical peak pricing, and real-time
pricing, but does not include programs that provide customers with
discounts from standard tariff rates as an incentive to reduce
consumption at certain times, including peak time rebates.

(b) The commission may authorize an electrical corporation to
offer residential customers the option of receiving service pursuant
to time-variant pricing and to participate in other demand response
programs. The commission shall not establish a mandatory or
default time-variant pricing tariff for any residential customer
except as authorized in subdivision (c).

(c) Beginning January 1, 2018, and subject to the commission
making the findings required by subdivision (d) and reporting
those findings as required by subdivision (e), the commission may
require or authorize an electrical corporation to employ default
time-of-use pricing for residential customers subject to all of the
following:

(1) Residential customers receiving a medical baseline allowance
pursuant to subdivision (c) of Section 739, customers requesting
third-party notification pursuant to subdivision (c) of Section 779.1,
customers who the commission has ordered cannot be disconnected
from service without an in-person visit from a utility representative
(Decision 12-03-054 (March 22, 2012), Decision on Phase II
Issues: Adoption of Practices to Reduce the Number of Gas and
Electric Service Disconnections, Order 2 (b) at page 55), and other
customers designated by the commission in its discretion shall not
be subject to default time-of-use pricing without their affirmative
consent.

(2) The commission shall ensure that any time-of-use rate
schedule does not cause unreasonable hardship for senior citizens
or economically vulnerable customers in hot climate zones.

(3) The commission shall strive for time-of-use rate schedules
that utilize time periods that are appropriate for at least the
following five years.

(4) A residential customer shall not be subject to a default
time-of-use rate schedule unless that residential customer has been
provided with not less than one year of interval usage data from
an advanced meter and associated customer education and,
following the passage of this period, is provided with no less than
one year of bill protection during which the total amount paid by
the residential customer for electric service shall not exceed the
amount that would have been payable by the residential customer
under that customer’s previous rate schedule.

(5) Each electrical corporation shall provide each residential
customer, not less than once per year, using a reasonable delivery
method of the customer’s choosing, a summary of available tariff
options with a calculation of expected annual bill impacts under
each available tariff. The summary shall not be provided to
customers who notify the utility that they choose not to receive
the summary. The reasonable costs of providing this service shall
be recovered in rates.

(6) Residential customers have the option to not receive service
pursuant to a time-of-use rate schedule and incur no additional
charges as a result of the exercise of that option. Prohibited charges
include, but are not limited to, administrative fees for switching
away from time-of-use pricing, hedging premiums that exceed any
actual costs of hedging, and more than a proportional share of any
discounts or other incentives paid to customers to increase
participation in time-of-use pricing. This prohibition on additional
charges is not intended to ensure that a customer will necessarily
experience a lower total bill as a result of the exercise of the option
to not receive service pursuant to a time-of-use rate schedule.

(d) The commission shall not require or authorize an electrical
corporation to employ default time-of-use pricing for residential
customers unless it has begin delete made both of the following findings relative
to any proposed time-of-use rates: end delete begin insert explicitly considered whether
hardship will be caused on either of the following: end insert

(1) Customers located in hot, inland begin delete areas will not experience
unreasonable summertime bills, end delete begin insert areas, end insert assuming no changes in
overall usage by those customers during peak periods.

(2)  begin delete Seasonal bill volatility will not cause hardship for residential end delete
begin insert Residential end insert customers living in areas with hot summer weather,
begin insert as a result of seasonal bill volatility, end insert assuming no change in
summertime usage or in usage during peak periods.

(e) The commission shall submit its findings made pursuant to
subdivision (d) to the Legislature not less than 12 months prior to
requiring or authorizing an electrical corporation to employ default
time-of-use pricing for residential customers.