Bill Text: CA AB1999 | 2023-2024 | Regular Session | Amended
Bill Title: Electricity: fixed charges.
Spectrum: Partisan Bill (Democrat 20-0)
Status: (Introduced) 2024-05-09 - (Pending re-refer to Com. on APPR.) [AB1999 Detail]
Download: California-2023-AB1999-Amended.html
|
Amended
IN
Assembly
May 08, 2024 |
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 1999
| Introduced by Assembly Members Irwin, Addis, Berman, Connolly, Muratsuchi, Papan, Pellerin, Quirk-Silva, Ting, Ward, and Weber (Principal coauthor: Assembly Member Bauer-Kahan) (Principal coauthor: Senator Wiener) (Coauthors: Assembly Members Boerner, Bonta, Friedman, Lee, Low, and Maienschein) (Coauthor: Senator Blakespear) |
January 30, 2024 |
An act to amend amend, repeal, and add Section 739.9 of of, and to add and repeal Section 913.7 of, the Public Utilities Code, relating to electricity.
LEGISLATIVE COUNSEL'S DIGEST
AB 1999, as amended, Irwin.
Electricity: fixed charges.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law authorizes the commission to adopt new, or expand existing, fixed charges, as defined, for the purpose of collecting a reasonable portion of the fixed costs of providing electrical service to residential customers.
Under existing law, the commission may authorize fixed charges for any rate schedule applicable to a residential customer account. Existing law requires the commission, no later than July 1, 2024, to authorize a fixed charge for default residential rates. Existing law requires these fixed charges to be established on an income-graduated basis, with no fewer than 3 income thresholds, so that low-income ratepayers in each baseline territory would realize a lower average monthly bill
without making any changes in usage.
This bill would repeal the provisions described in the preceding paragraph. The bill prohibit modifications to the amount of the income-graduated fixed charge from exceeding changes in inflation, as provided. The bill would make the provisions authorizing the income-graduated fixed charge inoperative on July 1, 2028. The bill, commencing July 1, 2028, would instead permit the commission to authorize fixed charges that, as of January 1, 2015, do not exceed $5 per residential customer account per month for low-income customers enrolled in the California Alternate Rates for Energy (CARE) program and that do not exceed $10 per residential customer account per month for customers not enrolled in the CARE program. The bill would authorize these
maximum allowable fixed charges to be adjusted by no more than the annual percentage increase in the Consumer Price Index for the prior calendar year, beginning January 1, 2016.
The bill would require the commission to adopt any modification to an existing fixed charge for the collection of a reasonable portion of the fixed costs of providing electrical service to residential customers in a stand-alone proceeding. The bill would prohibit a fixed charge from resulting in an increase to an electrical corporation’s revenue requirement. The bill would require the commission, on or before July 1, 2027, but no sooner than 2 years after the adoption of the income-graduated fixed charge, to submit a public report to the relevant policy committees of both houses of the Legislature on the electrical corporations’ implementation of the income-graduated fixed charge and other cost-saving options,
as specified.
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 the provisions of this bill would be a part of the act and therefore a violation of the bill’s requirements or of a commission action implementing its requirements would be a crime, the bill would impose a state-mandated local program.
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.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 739.9 of the Public Utilities Code is amended to read:739.9.
(a) “Fixed charge” means any fixed customer charge, basic service fee, demand differentiated basic service fee, demand charge, or other charge not based on the volume of electricity consumed.(b) Increases to electrical rates and charges in rate design proceedings, including any reduction in the California Alternate Rates for Energy (CARE) program discount, shall be reasonable and subject to a reasonable phase-in schedule relative to the rates and charges in effect before January 1, 2014.
(c) Consistent with the requirements of Section 739, the commission may modify the seasonal definitions
and applicable percentage of average consumption for one or more climatic zones.
(d) The commission may adopt new, or expand existing, fixed charges for the purpose of collecting a reasonable portion of the fixed costs of providing electrical service to residential customers. The commission shall adopt any modification to an existing fixed charge in a stand-alone proceeding, separate from electrical corporations’ general rate cases. The commission shall ensure that any approved charges do all of the following:
(1) Reasonably reflect an appropriate portion of the different costs of serving small and large customers.
(2) Not unreasonably impair incentives for conservation, energy efficiency, and beneficial electrification and greenhouse gas emissions reduction.
(3) Are set at levels that do not overburden low-income customers.
(4) Not result in an increase to an electrical corporation’s revenue requirement as compared to what the revenue requirement would be if compensated solely through volumetric charges.
(e) (1) For the purposes of this section and Section 739.1, the commission may authorize fixed charges for any rate schedule applicable to a residential customer account. The fixed charge shall be
established on an income-graduated basis with no fewer than three income thresholds so that a low-income ratepayer in each baseline territory would realize a lower average monthly bill without making any changes in usage. The commission shall, no later than July 1, 2024, authorize a fixed charge for default residential rates.
(2) Modifications to the amount of a fixed charge authorized pursuant to this subdivision shall not exceed the change in inflation during the intervening period, as measured by the Consumer Price Index published by the United States Bureau of Labor Statistics.
(2)
(3) For purposes of this subdivision, “income-graduated” means that low-income customers pay a smaller fixed charge than high-income customers.
(f) Notwithstanding the requirements of subdivision (d) of Section 739 and Section 739.7, the commission shall not apply the composite tier method to the treatment of any revenues resulting from any fixed charge adopted pursuant to this section.
(g) This section shall become inoperative on July 1, 2028, and, as of January 1, 2029, is repealed.
SEC. 2.
Section 739.9 is added to the Public Utilities Code, to read:739.9.
(a) “Fixed charge” means any fixed customer charge, basic service fee, demand differentiated basic service fee, demand charge, or other charge not based on the volume of electricity consumed.(b) Increases to electrical rates and charges in rate design proceedings, including any reduction in the California Alternate Rates for Energy (CARE) program discount, shall be reasonable and subject to a reasonable phase-in schedule relative to the rates and charges in effect before January 1, 2014.
(c) Consistent with the requirements of Section 739, the commission may modify the seasonal definitions and applicable percentage of average consumption for one or more climatic zones.
(d) The commission may adopt new, or expand existing, fixed charges for the purpose of collecting a reasonable portion of the fixed costs of providing electrical service to residential customers. The commission shall adopt any modification to an existing fixed charge in a standalone proceeding, separate from electrical corporations’ general rate cases. The commission shall ensure that any approved charges do all of the following:
(1) Reasonably reflect an appropriate portion of the different costs of serving small and large customers.
(2) Not unreasonably impair incentives for conservation, energy efficiency, and beneficial electrification and greenhouse gas emissions reduction.
(3) Are set at levels that do not overburden low-income customers.
(4) Not result in an increase to an electrical corporation’s revenue requirement as compared to what the revenue requirement would be if compensated solely through volumetric charges.
(e) For purposes of this section and Section 739.1, the commission may, beginning January 1, 2015, authorize fixed charges that do not exceed ten dollars ($10) per residential customer account per month for customers not enrolled in the CARE program and five dollars ($5) per residential customer account per month for customers enrolled in the CARE program. Beginning January 1, 2016, the maximum allowable fixed charge may be adjusted by no more than the annual percentage increase in the Consumer Price Index for the prior calendar year. This subdivision applies to any default rate schedule, at least one optional tiered rate schedule, and at least one optional time-variant rate schedule.
(f) Notwithstanding the requirements of subdivision (d) of Section 739 and Section 739.7, the commission shall not apply the composite tier method to the treatment of any revenues resulting from any fixed charge adopted pursuant to this section.
(g) This section shall become operative on July 1, 2028.
SEC. 3.
Section 913.7 is added to the Public Utilities Code, to read:913.7.
(a) The commission, on or before July 1, 2027, but no sooner than two years after the adoption of the fixed charge for default residential rates pursuant to subdivision (e) of Section 739.9, shall submit a public report to the relevant policy committees of both houses of the Legislature on electrical corporations’ implementation of the fixed charge and other cost-saving options. The report shall include all of the following information:(1) The costs recovered through the fixed charge for residential customers.
(2) The impacts to customers participating in the California Alternative Rates for Energy (CARE) program or Family Electric Rate Assistance (FERA) program and to
customers at or below the California median income, and whether their bills increased or decreased.
(3) The impacts to all other residential customers on each residential rate schedule, and whether their bills increased or decreased.
(4) The extent to which the fixed charge had any effect on any of the following:
(A) The rate of building electrification by residential customers, in new or existing residential dwelling units, including the deployment of air-source or ground-source heat pumps and heat pump water heaters.
(B) The rate of installation of residential air conditioning.
(C) Existing programs designed to encourage customers to conserve electricity.
(D) Electric vehicle charging patterns by customers, including customer use of time-of-use rate incentives for electric vehicle charging at optimal times.
(E) The rate of installation of distributed solar systems by residential customers.
(F) The rate of installation of distributed battery storage systems by residential customers.
(5) Potential alternatives considered by the commission other than fixed charges for the purpose of collecting a just and reasonable portion of the fixed costs of providing electrical service to residential customers.
(6) Steps taken by the commission to reduce the revenue requirement recoverable from residential ratepayers, including, but not limited to, all of the
following:
(A) Changes to depreciation and amortization charges.
(B) Reduction in the cost of capital.
(C) Reductions in management, overhead, and salary costs.
(D) Reductions in the cost of energy.
(b) (1) The report to be submitted to the relevant policy committees of both houses of the Legislature pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.
(2) Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2029.
SEC. 4.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.(a)“Fixed charge” means any fixed customer charge, basic service fee, demand differentiated basic service fee, demand charge, or other charge not based on the volume of electricity consumed.
(b)Increases to electrical rates and charges in rate design proceedings, including any reduction in the California Alternate Rates for Energy (CARE) program discount, shall be reasonable and subject to a reasonable phase-in schedule relative to the rates and charges in effect before January 1, 2014.
(c)Consistent with the requirements of Section 739, the commission may modify the seasonal definitions and
applicable percentage of average consumption for one or more climatic zones.
(d)The commission may adopt new, or expand existing, fixed charges for the purpose of collecting a reasonable portion of the fixed costs of providing electrical service to residential customers. The commission shall ensure that any approved charges do all of the following:
(1)Reasonably reflect an appropriate portion of the different costs of serving small and large customers.
(2)Not unreasonably impair incentives for conservation, energy efficiency, and beneficial electrification and greenhouse gas emissions reduction.
(3)Are set at levels that do not overburden low-income customers.
(e)For purposes of this section and Section 739.1, the commission may, beginning January 1, 2015, authorize fixed charges that do not exceed ten dollars ($10) per residential customer account per month for customers not enrolled in the CARE program and five dollars ($5) per residential customer account per month for customers enrolled in the CARE program. Beginning January 1, 2016, the maximum allowable fixed charge may be adjusted by no more than the annual percentage increase in the Consumer Price Index for the prior calendar year. This subdivision applies to any default rate schedule, at least one optional tiered rate schedule, and at least one optional time-variant rate schedule.
(f)Notwithstanding the requirements of subdivision (d) of Section 739 and Section 739.7, the commission shall not apply the composite tier method to the treatment of any
revenues resulting from any fixed charge adopted pursuant to this section.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
