BILL ANALYSIS
AB 3 X1
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Date of Hearing: February 28, 2001
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Carole Migden, Chairwoman
AB 3 X1 (Wright) - As Amended: February 27, 2001
Policy Committee: E.C.&A.Vote:17-0
Urgency: Yes State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires several actions to increase participation in
the California Alternate Rates for Energy (CARE) program, which
provides discounted electric and gas service to qualified
low-income utility customers. Specifically this bill:
1)Requires the Public Utilities Commission (PUC) to:
a) Adopt regulations deeming any customer enrolled in the
CARE program before August 2001 to be enrolled retroactive
to date this measure takes effect.
b) Conduct a targeted outreach program using census block
data.
2)Requires the electric and gas utilities to:
a) Provide information about CARE during customer phone
calls and in customer bills.
b) Attempt to qualify customers for CARE prior to
disconnecting service for nonpayment of bills in full and
inform customers of a program to level their payments over
12 months. (This provision is in effect until April 2002.)
3)Prohibits disconnection of electric or gas service for
nonpayment of bills in full if specific payment arrangements
are made. (This provision is also in effect until April
2002.)
FISCAL EFFECT
AB 3 X1
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1)The PUC estimates one-time special fund costs of about $1
million for five staff and for public relations costs to
perform the required outreach.
2)Potential increase in the CARE program surcharge to utility
customers. (The current charge is $0.00042 per kilowatt-hour,
or about 9 cents for 200 kwh of usage.)
COMMENTS
1)Background . The CARE program provides discounted electric and
gas service to qualified low-income households and is funded
by a rate surcharge on energy bills. The current discount is
15%, but CARE customers were exempted from the PUC's January
2001 rate increase, so CARE rates are effectively about 23%
lower than other residential rates. The current program
provides for administrative cost recovery for all utilities
participating in the program, but provides for no unified,
specific outreach. Census data indicate that 19-22% of all
households have incomes that would qualify for CARE program
rates. The program currently encompasses only about 6% of
residential electric and gas service customers.
2)Purpose . This bill addresses the problem of low participation
in the CARE program by requiring outreach measures by the PUC
and the utilities. The bill also provides a means to keep low
income customers from having their service disconnected due to
affordability problems associated with steep energy rate
increases.
Analysis Prepared by : Chuck Nicol / APPR. / (916)319-2081