BILL ANALYSIS
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THIRD READING
Bill No: AB 3X
Author: Wright (D), et al
Amended: 5/8/01 in Senate
Vote: 27 - Urgency
SENATE ENERGY, U.&C. COMMITTEE : 10-0, 5/1/01
AYES: Bowen, Morrow, Alarcon, Battin, Dunn, Murray,
Poochigian, Sher, Speier, Vincent
SENATE APPROPRIATIONS COMMITTEE : 11-0, 5/7/01
AYES: Alpert, Battin, Bowen, Escutia, Johannessen,
Johnson, Karnette, McPherson, Murray, Poochigian, Speier
ASSEMBLY FLOOR : 75-0, 3/12/01 - See last page for vote
SUBJECT : California Alternate Rates for Energy or CARE
program
SOURCE : Author
DIGEST : This bill makes several changes to increase
participation in the California Alternate Rates for Energy
program to help minimize the impacts of energy rate
increases on low-income and senior households.
ANALYSIS : Current law establishes a low-income energy
assistance program for electric and natural gas service
customers of the investor-owned utilities (IOUs), known as
California Alternate Rates for Energy (CARE), which is
funded by a surcharge on energy bills. The CARE program
includes both discounts of 15 percent on electric and
CONTINUED
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natural gas bills, as well as a residential weatherization
program.
This bill makes findings regarding high energy prices and
the burden of such prices on low-income consumers, and
articulates legislative intent to protect low-income and
senior customers from skyrocketing energy rates.
This bill permits any existing natural gas customer who
enrolls in the CARE program before October 1, 2001, to be
deemed to have enrolled in the program as of the effective
date of this bill. As a consequence, the customer will
receive a discount equal to the pro-rated average monthly
CARE discount for that gas corporation from October 2000 to
March 2001.
This bill requires the California Public Utilities
Commission (PUC) to annually adjust the income eligibility
level for CARE customers to account for inflation.
This bill requires the utilities to offer payment
arrangements to customers having trouble paying their
bills, with payments spread over not more than 12 months.
This bill prohibits the IOUs from disconnecting CARE
customers if the customer is in compliance with the payment
arrangements or if the IOU has been provided with
notification that an energy assistance provider is
forwarding payment sufficient to prevent disconnection.
This bill provides for expanded notification of the
availability of the CARE program and requires the PUC to
conduct targeted outreach to low-income and senior
households, and limits associated expenditures to $500,000.
Background
Current regulations limit CARE eligibility to those
households earning less than 175 percent of the federal
poverty level, which is an annual income of $25,800 for a
family of four. The CARE discount, which is established by
the CPUC, is 15 percent of a family's monthly electric or
natural gas bill. CARE costs are recovered through a
surcharge on energy bills and the cost to ratepayers for
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the CARE program is about $195 million annually.
The percentage of eligible customers who participate in the
CARE program varies widely throughout the state. In
Pacific Gas & Electric's service area, 44 percent of the
eligible customers participate, while in Southern
California Edison's service area, 68 percent of those
eligible are participating. Statewide, roughly one in five
residential customers is eligible for CARE, but only about
60 percent of eligible CARE customers' participate.
CARE program eligibility is based on self-certification.
If the CARE customer certifies that he or she meets the
program eligibility requirements, then he or she is
eligible to receive the discounts provided by the program.
Related Legislation
SB 5X (Sher), Chapter 7, Statutes of 2001, provided $100
million in General Fund money to "increase and supplement
CARE discounts and to increase enrollment in the CARE
program."
SB 2X (Alarcon) provides some revisions to the CARE program
including expanded outreach, periodic adjustments to the
discount level, and a rate rollback and freeze for CARE
customers.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
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.
SUPPORT : (Verified 5/8/01)
Advisory Council of the Los Angeles County Area Agency on
Aging
American Association of Retired Persons
California HIV Advocacy Coalition/Southern California
Region
Los Angeles County Board of Supervisors
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Western Center on Law and Poverty
ASSEMBLY FLOOR :
AYES: Aanestad, Alquist, Aroner, Ashburn, Bates, Briggs,
Calderon, Bill Campbell, John Campbell, Canciamilla,
Cardenas, Cardoza, Cedillo, Chan, Chavez, Cogdill, Cohn,
Corbett, Correa, Cox, Daucher, Diaz, Dickerson, Dutra,
Firebaugh, Florez, Goldberg, Harman, Havice,
Hollingsworth, Horton, Jackson, Keeley, Kehoe, Kelley,
Koretz, La Suer, Leonard, Liu, Longville, Lowenthal,
Maddox, Maldonado, Matthews, Migden, Mountjoy, Nakano,
Nation, Negrete McLeod, Oropeza, Robert Pacheco, Rod
Pacheco, Papan, Pavley, Pescetti, Reyes, Richman, Runner,
Salinas, Shelley, Simitian, Steinberg, Strickland,
Strom-Martin, Thomson, Vargas, Washington, Wayne, Wesson,
Wiggins, Wright, Wyland, Wyman, Zettel, Hertzberg
NC:cm 5/8/01 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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