LEGISLATIVE COUNSEL'S DIGEST


SB 695, as amended, Kehoe. Energy: rates.
(1) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations and gas corporations, as defined. Existing law
authorizes the commission to fix the rates and charges for every
public utility, and requires that those rates and charges be just and
reasonable.
This bill would prohibit the commission from requiring or
permitting an electrical corporation to employ mandatory or
default time-variant pricing, as defined, for residential customers
prior to January 1, 2016, but do any of the following:
(A) employ mandatory or default time-variant pricing, as defined,
with or without bill protection, as defined, for residential
customers prior to January 1, 2013, (B) employ mandatory
or default t ime-variant pricing, without bill protection,
for residential customers prior to January 1, 2014, or (C) employ
mandatory or default real-time pricing, without bill protection, for
residential customers prior to January 1, 2020. The bill would
authorize the commission to 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 bill would require the commission to only approve an
electrical corporation's use of default time-variant
pricing for residential customers, beginning January 1, 2016
2014 , if those residential customers have the
option to not receive service pursuant to time-variant pricing and
incur no additional charges, as specified, as a result of the
exercise of that option. The bill would exempt certain customers
from being subject to default time-variant pricing.
(2) Existing law requires the commission to establish a program of
assistance to low-income electric and gas customers, referred to as
the California Alternate Rates for Energy or CARE program, and
prohibits the cost to be borne solely by any single class of
customer.
This bill would require the commission to establish the CARE
program to provide assistance to low-income electric and gas
customers with annual household incomes that are no greater than 200%
of the federal poverty guideline levels, and require that the cost
of the program, with respect to electrical corporations, be recovered
on an equal cents-per-kilowatthour basis from all classes of
customers that were subject to the surcharge that funded the CARE
program on January 1, 2008. For a public utility that is both an
electrical corporation and a gas corporation, the bill would require
that the cost of the program be recovered on an equal
cents-per-kilowatthour or per-therm basis from all classes of
customers that were subject to the surcharge that funded the CARE
program on January 1, 2008.
(3) Existing law relative to electrical restructuring requires
that the electrical corporations and gas corporations that
participate in the CARE program administer low-income energy
efficiency and rate assistance programs described in specified
statutes, and undertake certain actions in administering specified
energy efficiency and weatherization programs.
This bill would require that electrical corporations, in
administering the specified energy efficiency and weatherization
programs, to target energy efficiency and solar
programs to upper-tier and multifamily customers in a manner that
will result in long-term permanent reductions in electricity usage at
the dwelling units and develop programs that specifically target
nonprofit affordable housing providers, including programs that
promote weatherization of existing dwelling units and replacement of
inefficient appliances. The bill would require the commission, by not
later than December 31, 2020, to ensure that all eligible low-income
electricity and gas customers are given the opportunity to
participate in low-income energy efficiency programs, including
customers occupying apartment houses or similar multiunit residential
structures, and would require the commission and electrical
corporations and gas corporations to expend all reasonable efforts to
coordinate ratepayer-funded programs with other energy conservation
and efficiency programs and to obtain additional federal funding to
support actions undertaken pursuant to this requirement.
(4) Existing law relative to electrical restructuring requires the
commission to authorize and facilitate direct transactions between
electricity suppliers and retail end-use customers.
Existing law requires the commission to designate a baseline
quantity of electricity and gas necessary for a significant portion
of the reasonable energy needs of the average residential customer,
and requires that electrical and gas corporations file rates and
charges, to be approved by the commission, providing baseline rates
and requires the commission, in establishing baseline rates, to avoid
excessive rate increases for residential customers.
Existing law, enacted during the energy crisis of 2000-01,
authorized the Department of Water Resources, until January 1, 2003,
to enter into contracts for the purchase of electricity, and to sell
electricity to retail end-use customers and, with specified
exceptions, local publicly owned electric utilities, at not more than
the department's acquisition costs and to recover those costs
through the issuance of bonds to be repaid by ratepayers. That law
provides that the department is entitled to recover certain expenses
resulting from its purchases and sales of electricity and authorizes
the commission to enter into an agreement with the department
relative to cost recovery. That law prohibits the commission from
increasing the electricity charges in effect on February 1, 2001, for
residential customers for existing baseline quantities or usage by
those customers of up to 130% of then existing baseline quantities,
until the department has recovered the costs of electricity it
procured for electrical corporation retail end-use customers. That
law also suspends the right of retail end-use customers, other than
community choice aggregators and a qualifying direct transaction
customer, to acquire service through a direct transaction until the
Department of Water Resources no longer supplies electricity under
that law.
This bill would delete the prohibition that the commission not
increase the electricity charges in effect on February 1, 2001, for
residential customers for existing baseline quantities or usage by
those customers of up to 130% of then existing baseline quantities.
The bill would authorize the commission to increase the rates charged
residential customers for electricity usage up to 130% of the
baseline quantities by the annual percentage change in the Consumer
Price Index from the prior year plus 1%, but not less than 3% and not
more than 5% per year. This authorization would be subject to the
limitation that rates charged residential customers for electricity
usage up to the baseline quantities, including any customer charge
revenues, not exceed 90% of the system average rate, as defined. The
bill would authorize the commission to increase the rates for
participants in the CARE program, subject to certain limitations. The
bill would delete the existing suspension of direct transactions in
the Water Code that was adopted during the energy crisis of 2000-01,
and would instead require the commission to authorize direct
transactions subject to a phase-in schedule
reopening schedule that commences immediately and will phase in over
a period of not less than 3 years and not more than 5 years,
and subject to an annual maximum allowable total
kilowatthours annual kilowatthour limit
established, as specified, for each electrical corporation. The bill
would continue the suspension of direct transactions except as
expressly authorized, until the Legislature, by statute, repeals the
suspension or otherwise authorizes direct transactions.
(5) Existing law requires the commission to prepare and submit to
the Governor and the Legislature a written report on an annual basis
before February 1 of each year on the costs of programs and
activities conducted by an electrical corporation or gas corporation
that has more than a specified number of customers in California.
This bill would change the reporting date to April 1 of each year
and also require the report to contain the commission's
. The bill would require that by May 1,
2010, and by May 1 of each year thereafter, the commission also
report to the Governor and Legislature with its recommendations
for actions that can be undertaken during the upcoming year to limit
utility cost and rate increases, consistent with the
state's energy and environmental goals, including the state's goals
for reducing emissions of greenhouse gases. The bill would require
the commission to annually require electrical and gas corporations to
study and report to the commission on measures that they recommend
be undertaken to limit cost costs and rate
increases.
(6) Under existing law, a violation of the Public Utilities Act or
any order, decision, rule, direction, demand, or requirement of the
commission is a crime.
Because certain of the provisions of this bill would be a part of
the act and because a violation of an order or decision of the
commission implementing its requirements would be a crime, the bill
would impose a state-mandated local program by creating a new crime.
(7) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
(8) This bill would declare that it is to take effect immediately
as an urgency statute.

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