BILL ANALYSIS
Appropriations Committee Fiscal Summary
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| |3(Wright) |
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|Hearing Date: 5/7/01 |Amended: 4/26/01 |
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|Consultant: Lisa Matocq |Policy Vote: E, U & C 8-3 |
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BILL SUMMARY:
AB 3x, an urgency bill, (1) provides for a one-time
retroactive discount for certain natural gas customers
participating in the California Alternate Rates for Energy
(CARE) Program, (2) requires public outreach efforts on the
part of the Public Utilities Commission (PUC) and the
utilities, and (3) makes related changes.
Fiscal Impact (in thousands)
Major Provisions 2001-02 2002-03
2003-04 Fund
PUC administration/ $70 $ 70 $
70 Special*
oversight
PUC outreach effort No state costs
*Public Utilities' Reimbursement Account
STAFF COMMENTS: Current law establishes the CARE program,
a low-income energy assistance program for qualifying
electric and natural gas customers. The program is funded
by a surcharge on energy bills. For example, in 1999, the
surcharge was about $0.20 per month for San Diego Gas and
Electric gas customers, and $0.30/mo. for electric
customers, and about $0.42/mo. for Southern California
Edison customers. It is estimated that the surcharge will
generate about $160 million in 2001. SB 5x (Sher, Ch. 7,
St. of 2001) appropriated another $100 million to increase
participation and discounts in the CARE program. An
estimated one million households participate in the CARE
program although more than five million are apparently
eligible. Participation is based on self-certification of
eligibility.
This bill provides that, except as otherwise specified, any
person who enrolls in CARE prior to October 1, 2001 shall
receive a retroactive discount for the months between
effective date of this bill and the date the customer
enrolls, up to October 1, 2001. The discount is to be
based on each gas corporation's average CARE customer
discount applied for a specified time period. The bill
also specifies that CARE program funds shall be used for
this purpose. The total cost of this retroactive discount
is unknown and depends on the number of persons who enroll,
but it is potentially in the hundreds of thousands;
ultimately, these costs are passed on to customers.The bill
also:
requires the PUC to annually adjust the income eligiblity
for inflation,
requires the PUC to conduct a public outreach campaign
for the CARE program, and provides that CARE program
funds, up to $500,000, are to be used for this purpose,
requires the PUC to require participating utilities to
enhance CARE program public outreach efforts, as
specified, and provides that CARE program funds are to be
used to cover the utilities' costs,
requires the PUC to require participating utilities to
offer payment arrangements of up to 12 months to CARE
customers,
requires the PUC to prohibit participating utilities from
disconnecting service in certain circumstances,
specifies that the utilities may recover all reasonable
costs of implementing this section.
STAFF RECOMMENDS that the bill be amended (1) on page 3,
line 19 to clarify that the discount is available only to
gas customers, and (2) on page 5, lines 9-11 to clarify
that the utilities may recover all reasonable costs from
the CARE program funds. Also, the author and committee may
wish to consider putting a cost cap in this section.
The revenues generated by the surcharge are held by each of
the participating utilities and are not deposited in any
state account, therefore, there should be no fiscal impact
to the state other than PUC administration and oversight.
SB 2x (Alarcon), pending in the Senate Energy, Utilities
and Communications Committee, makes changes to the CARE
program.