Bill Text: CA AB327 | 2013-2014 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Electricity: natural gas: rates: net energy metering:

Spectrum: Partisan Bill (Democrat 9-0)

Status: (Passed) 2013-10-07 - Chaptered by Secretary of State - Chapter 611, Statutes of 2013. [AB327 Detail]

Download: California-2013-AB327-Introduced.html

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BILL NUMBER: AB 327	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Perea

                        FEBRUARY 13, 2013

   An act to amend Section 739.1 of, and to repeal and add Section
739.9 of, the Public Utilities Code, relating to energy utility
rates.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 327, as introduced, Perea. Electricity: natural gas: rates.
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including electrical 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. Existing law
requires the commission to designate a baseline quantity of
electricity and gas necessary to supply 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. Existing
law requires the commission, in establishing the baseline rates, to
avoid excessive rate increases for residential customers. Existing
law requires the commission to establish a program of assistance to
specified low-income electric and gas customers, referred to as the
California Alternate Rates for Energy (CARE) program.
   Existing law revises certain prohibitions upon raising residential
electrical rates adopted during the energy crisis of 2000-01, to
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. Existing law additionally authorizes the commission to increase
the rates in effect for CARE program participants for electricity
usage up to 130% of baseline quantities by the annual percentage
increase in benefits under the CalWORKs program, as defined, not to
exceed 3%, and subject to the limitation that the CARE rates not
exceed 80% of the corresponding rates charged to residential
customers not participating in the CARE program. Existing law states
the intent of the Legislature that CARE program participants be
afforded the lowest possible electric and gas rates and, to the
extent possible, be exempt from additional surcharges attributable to
the energy crisis of 2000-01.
   This bill would repeal the limitations upon increasing the
electric service rates of residential customers, including the rate
increase limitations applicable to electric service provided to CARE
customers. When the commission approves changes to electric service
rates charged to residential customers, the bill would require the
commission to determine that the changes are reasonable, including
that the changes are necessary in order to ensure that the rates paid
by residential customers are fair, equitable, and reflect the costs
to serve those customers. The bill would require the commission to
consider specified principles in approving any changes to electric
service rates. The bill would require the commission to report to the
Legislature its findings and recommendations relating to tiered
residential electric service rates in a specified rulemaking by
January 31, 2014. The bill would delete the statement of Legislative
intent that CARE program participants be afforded the lowest possible
electric and gas rates and, to the extent possible, be exempt from
additional surcharges attributable to the energy crisis of 2000-01.
   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 739.1 of the Public Utilities Code is amended
to read: 
   739.1.  (a) As used in this section, the following terms have the
following meanings:
   (1) "Baseline quantity" has the same meaning as defined in Section
739.
   (2) "California Solar Initiative" means the program providing
ratepayer funded incentives for eligible solar energy systems adopted
by the commission in Decision 05-12-044 and Decision 06-01-024, as
modified by Article 1 (commencing with Section 2851) of Chapter 9 of
Part 2 and Chapter 8.8 (commencing with Section 25780) of Division 15
of the Public Resources Code.
   (3) "CalWORKs program" means the program established pursuant to
the California Work Opportunity and Responsibility to Kids Act
(Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of
the Welfare and Institutions Code).
   (4) "Public goods charge" means the nonbypassable separate rate
component imposed pursuant to Article 7 (commencing with Section 381)
of Chapter 2.3 and the nonbypassable system benefits charge imposed
pursuant to the Reliable Electric Service Investments Act (Article 15
(commencing with Section 399) of Chapter 2.3).
   (b) (1) 
    739.1.    (a)    The commission shall
 establish   continue  a program of
assistance to low-income electric and gas customers with annual
household incomes that are no greater than 200 percent of the federal
poverty guideline levels, the cost of which shall not be borne
solely by any single class of customer. The program shall be referred
to as the California Alternate Rates for Energy or CARE program. The
commission shall ensure that the level of discount for low-income
electric and gas customers correctly reflects the level of need.

   (2) The commission may, subject to the limitation in paragraph
(4), increase the rates in effect for CARE program participants for
electricity usage up to 130 percent of baseline quantities by the
annual percentage increase in benefits under the CalWORKs program as
authorized by the Legislature for the fiscal year in which the rate
increase would take effect, but not to exceed 3 percent per year.
 
   (3) Beginning January 1, 2019, the commission may, subject to the
limitation in paragraph (4), establish rates for CARE program
participants pursuant to this section and Sections 739 and 739.9,
subject to both of the following:  
   (A) The requirements of subdivision (b) of Section 382 that the
commission ensure that low-income ratepayers are not jeopardized or
overburdened by monthly energy expenditures.  
   (B) The requirement that the level of the discount for low-income
electricity and gas ratepayers correctly reflects the level of need
as determined by the needs assessment conducted pursuant to
subdivision (d) of Section 382.  
   (4) Tier 1, tier 2, and tier 3 CARE rates shall not exceed 80
percent of the corresponding tier 1, tier 2, and tier 3 rates charged
to residential customers not participating in the CARE program,
excluding any Department of Water Resources bond charge imposed
pursuant to Division 27 (commencing with Section 80000) of the Water
Code, the CARE surcharge portion of the public goods charge, any
charge imposed pursuant to the California Solar Initiative, and any
charge imposed to fund any other program that exempts CARE
participants from paying the charge.  
   (5) Rates charged to CARE program participants shall not have more
than three tiers. An electrical corporation that does not have a
tier 3 CARE rate may introduce a tier 3 CARE rate that, in order to
moderate the impact on program participants whose usage exceeds 130
percent of baseline quantities, shall be phased in to 80 percent of
the corresponding rates charged to residential customers not
participating in the CARE program, excluding any Department of Water
Resources bond charge imposed pursuant to Division 27 (commencing
with Section 80000) of the Water Code, the CARE surcharge portion of
the public goods charge, any charge imposed pursuant to the
California Solar Initiative, and any other charge imposed to fund a
program that exempts CARE participants from paying the charge. For an
electrical corporation that does not have a tier 3 CARE rate that
introduces a tier 3 CARE rate, the initial rate shall be no more than
150 percent of the CARE baseline rate. Any additional revenues
collected by an electrical corporation resulting from the adoption of
a tier 3 CARE rate shall, until the utility's next periodic general
rate case review of cost allocation and rate design, be credited to
reduce rates of residential ratepayers not participating in the CARE
program with usage above 130 percent of baseline quantities.
 
   (c) 
    (b)  The commission shall work with electrical and gas
corporations to establish penetration goals. The commission shall
authorize recovery of all administrative costs associated with the
implementation of the CARE program that the commission determines to
be reasonable, through a balancing account mechanism. Administrative
costs shall include, but are not limited to, outreach, marketing,
regulatory compliance, certification and verification, billing,
measurement and evaluation, and capital improvements and upgrades to
communications and processing equipment. 
   (d) 
    (c)  The commission shall examine methods to improve
CARE enrollment and participation. This examination shall include,
but need not be limited to, comparing information from CARE and the
Universal Lifeline Telephone Service (ULTS) to determine the most
effective means of utilizing that information to increase CARE
enrollment, automatic enrollment of ULTS customers who are eligible
for the CARE program, customer privacy issues, and alternative
mechanisms for outreach to potential enrollees. The commission shall
ensure that a customer consents prior to enrollment. The commission
shall consult with interested parties, including ULTS providers, to
develop the best methods of informing ULTS customers about other
available low-income programs, as well as the best mechanism for
telephone providers to recover reasonable costs incurred pursuant to
this section. 
   (e) 
    (d)  (1) The commission shall improve the CARE
application process by cooperating with other entities and
representatives of California government, including the California
Health and Human Services Agency and the Secretary of California
Health and Human Services, to ensure that all gas and electric
customers eligible for public assistance programs in California that
reside within the service territory of an electrical corporation or
gas corporation, are enrolled in the CARE program. To the extent
practicable, the commission shall develop a CARE application process
using the existing ULTS application process as a model. The
commission shall work with public utility electrical and gas
corporations and the Low-Income Oversight Board established in
Section 382.1 to meet the low-income objectives in this section.
   (2) The commission shall ensure that an electrical corporation or
gas corporation with a commission-approved program to provide
discounts based upon economic need in addition to the CARE program,
including a Family Electric Rate Assistance program, utilize a single
application form, to enable an applicant to alternatively apply for
any assistance program for which the applicant may be eligible. It is
the intent of the Legislature to allow applicants under one program,
that may not be eligible under that program, but that may be
eligible under an alternative assistance program based upon economic
need, to complete a single application for any commission-approved
assistance program offered by the public utility. 
   (f) 
    (e)  The commission's program of assistance to
low-income electric and gas customers shall, as soon as practicable,
include nonprofit group living facilities specified by the
commission, if the commission finds that the residents in these
facilities substantially meet the commission's low-income eligibility
requirements and there is a feasible process for certifying that the
assistance shall be used for the direct benefit, such as improved
quality of care or improved food service, of the low-income residents
in the facilities. The commission shall authorize utilities to offer
discounts to eligible facilities licensed or permitted by
appropriate state or local agencies, and to facilities, including
women's shelters, hospices, and homeless shelters, that may not have
a license or permit but provide other proof satisfactory to the
utility that they are eligible to participate in the program.

   (g) It is the intent of the Legislature that the commission ensure
CARE program participants are afforded the lowest possible electric
and gas rates and, to the extent possible, are exempt from additional
surcharges attributable to the energy crisis of 2000-01. 

   (h) 
    (f)  (1) In addition to existing assessments of
eligibility, an electrical corporation may require proof of income
eligibility for those CARE program participants whose electricity
usage, in any monthly or other billing period, exceeds 400 percent of
baseline usage. The authority of an electrical corporation to
require proof of income eligibility is not limited by the means by
which the CARE program participant enrolled in the program, including
if the participant was automatically enrolled in the CARE program
because of participation in a governmental assistance program. If a
CARE program participant's electricity usage exceeds 400 percent of
baseline usage, the electrical corporation may require the CARE
program participant to participate in the Energy Savings Assistance
Program (ESAP), which includes a residential energy assessment, in
order to provide the CARE program participant with information and
assistance in reducing his or her energy usage. Continued
participation in the CARE program may be conditioned upon the CARE
program participant agreeing to participate in ESAP within 45 days of
notice being given by the electrical corporation pursuant to this
paragraph. The electrical corporation may require the CARE program
participant to notify the utility of whether the residence is rented,
and if so, a means by which to contact the landlord, and the
electrical corporation may share any evaluation and recommendation
relative to the residential structure that is made as part of an
energy assessment, with the landlord of the CARE program participant.
Requirements imposed pursuant to this paragraph shall be consistent
with procedures adopted by the commission.
   (2) If a CARE program participant's electricity usage exceeds 600
percent of baseline usage, the electrical corporation shall require
the CARE program participant to participate in ESAP, which includes a
residential energy assessment, in order to provide the CARE program
participant with information and assistance in reducing his or her
energy usage. Continued participation in the CARE program shall be
conditioned upon the CARE program participant agreeing to participate
in ESAP within 45 days of a notice made by the electrical
corporation pursuant to this paragraph. The electrical corporation
may require the CARE program participant to notify the utility of
whether the residence is rented, and if so, a means by which to
contact the landlord, and the electrical corporation may share any
evaluation and recommendation relative to the residential structure
that is made as part of an energy assessment, with the landlord of
the CARE program participant. Following the completion of the energy
assessment, if the CARE program participant's electricity usage
continues to exceed 600 percent of baseline usage, the electrical
corporation may remove the CARE program participant from the program
if the removal is consistent with procedures adopted by the
commission. Nothing in this paragraph shall prevent a CARE program
participant with electricity usage exceeding 600 percent of baseline
usage from participating in an appeals process with the electrical
corporation to determine whether the participant's usage levels are
legitimate.
   (3) A CARE program participant in a rental residence shall not be
removed from the program in situations where the landlord is
nonresponsive when contacted by the electrical corporation or does
not provide for ESAP participation.
  SEC. 2.  Section 739.9 of the Public Utilities Code is repealed.

   739.9.  (a) The commission may, subject to the limitation in
subdivision (b), increase the rates charged residential customers for
electricity usage up to 130 percent of the baseline quantities, as
defined in Section 739, by the annual percentage change in the
Consumer Price Index from the prior year plus 1 percent, but not less
than 3 percent and not more than 5 percent per year. For purposes of
this subdivision, the annual percentage change in the Consumer Price
Index shall be calculated using the same formula that was used to
determine the annual Social Security Cost of Living Adjustment on
January 1, 2008. This subdivision shall become inoperative on January
1, 2019, unless a later enacted statute deletes or extends that
date.
   (b) The rates charged residential customers for electricity usage
up to the baseline quantities, including any customer charge
revenues, shall not exceed 90 percent of the system average rate
prior to January 1, 2019, and may not exceed 92.5 percent after that
date. For purposes of this subdivision, the system average rate shall
be determined by dividing the electrical corporation's total revenue
requirements for bundled service customers by the adopted forecast
of total bundled service sales.
   (c) This section does not require the commission to increase any
residential rate or place any restriction upon, or otherwise limit,
the authority of the commission to reduce any residential rate.

  SEC. 3.  Section 739.9 is added to the Public Utilities Code, to
read:
   739.9.  (a) In approving changes to the rates and charges to
residential customers for electricity usage pursuant to this part,
the commission shall determine that the changes are reasonable,
including determining that the changes are necessary in order to
ensure that the rates and charges paid by residential customers are
fair, equitable, and reflect the costs to serve those customers.
   (b) In approving any changes to the rates and charges to
residential customers for electricity usage pursuant to this part,
the commission shall consider the following principles:
   (1) Low income and medical baseline customers should have access
to a supply of electricity that is sufficient to ensure basic needs
at an affordable cost, including a reasonable implementation schedule
for changes in rates to ensure that the implementation of rate
changes to residential customers do not unfairly burden low income
customers and that sufficient outreach and education is provided to
the customers affected by the changes.
   (2) Rates should be based on marginal cost and cost causation.
   (3) Rates should encourage conservation and energy efficiency,
including reduction of both coincident and noncoincident peak demand.

   (4) Rates should be understandable to consumers and provide
stability, simplicity, and customer choice.
   (5) Rates should avoid cross-subsidies, unless the cross-subsidies
are reasonable, transparent to customers, and support explicit state
residential electricity policy goals.
   (c) By no later than January 31, 2014, the commission shall report
to the Legislature its findings and recommendations relating to
tiered residential electric service rates pursuant to its Order
Instituting Rulemaking in Rulemaking 12-06-013.