BILL ANALYSIS
AB 5 X2
Page 1
ASSEMBLY THIRD READING
AB 5 X2 (Kelley)
As Amended July 16, 2001
2/3 vote. Urgency
ENERGY 18-1 APPROPRIATIONS 21-0
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|Ayes:|Wright, Pescetti, Briggs, |Ayes:|Migden, Bates, Alquist, |
| | | |Aroner, Ashburn, Cedillo, |
| |Bill Campbell, | |Corbett, Correa, Daucher, |
| |Canciamilla, Diaz, | |Goldberg, Maldonado, |
| |Dickerson, Dutra, Florez, | |Robert Pacheco, Oropeza, |
| |Jackson, Keeley, Leonard, | |Pavley, Runner, Simitian, |
| |Oropeza, Reyes, Richman, | |Thomson, Wesson, Wiggins, |
| |Steinberg, Vargas, Zettel | |Wright, Zettel |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|John Campbell | | |
| | | | |
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SUMMARY :
1)Requires that the California Public Utilities Commission
(CPUC) recalculate the summer baseline quantity of electricity
for all climatic zones in the state, based on 70% of the
average usage of each of these zones for the months of April
to September, inclusive, using five years of historical data.
2)Provides that CPUC shall adjust baseline quantities for these
areas not later than 30 days from the effective date of this
section.
3)Prohibits CPUC from adjusting any baseline quantity downward
for winter or summer months for any climatic zone in the state
prior to July 1, 2003.
EXISTING LAW establishes:
1)Five tiers of rates for customers throughout California for
electricity and gas usage based on baseline quantities.
Higher rates are charged at usage above 130% of baseline and
the highest rates occur at levels above 200% of baseline.
AB 5 X2
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2)Baseline quantities for electricity and gas consumption for 19
specific zones in California, with the baseline amounts
adjustable annually based on average usage in the area.
FISCAL EFFECT : Unknown
COMMENTS : The author of this bill draws attention to the manner
in which and the timing of calculation of baseline quantities
for electricity for all climatic zones in the state. Some
regions experience extreme temperatures in the summer, and
overall the temperatures in California have increased in the
past five years over any previous period. The requirement in
this bill that CPUC recalculate summer baseline quantities based
on 70% of average usage accommodates both a better consideration
of summer versus winter usage of electricity and of the need to
provide the most recent, seasonally specific data into the
calculation.
A survey of the 19 unique climatic zones identified for the
three investor owned utilities (IOUs) demonstrates a range of
baselines quantities for the summer months from a low for
combined gas/electric service in Pacific Gas and Electric (PG&E)
service Zone Z of 192 kilowatt hours (kWh) to a high in Southern
California Edison climatic Zone 15 for either combined
gas/electric or all electric service of 1281 kWh. It is
understandable that customers in regions which suffer from
extreme heat are concerned about the allowable baseline usage
levels in their area, especially where the use of air
conditioning is more a health and safety than a comfort factor.
The baseline quantities reflect an average level of usage for
each specified area, and as illustrated by the difference
between the low summer baseline in PG&E service Zone Z and the
high baseline in SCE climatic Zone 15, climatic differences are
taken into account. Baseline represents 60 to 70% of average
residential consumption for all electric customers for each
area, and rates for customers at or below baseline and up to
130% of baseline (90% of average usage) are not subject to the
large rate increases recently imposed by CPUC.
CPUC is required to review and revise baseline quantities as
average consumption patterns change in order to maintain the
ratios established for baseline quantities. Since rates for
consumption above 130% of baseline are significantly higher than
rates below that level, the signal from this rate structure is
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for conservation. The downside to the sort of conservation this
rate structure necessarily imposes on most customers, is that
usage patterns assume a downward trend and baseline gets
adjusted down to an even lower than existing level of
consumption.
This bill's prohibition against downward adjustment to baseline
prior to July 1, 2003, will help mitigate against any adverse
impacts of reduced consumption on customer rates. The specific
guidelines for recalculation of baseline should also help
minimize harsh rate impacts if existing baseline quantities are
unreasonably low.
Analysis Prepared by : Kelly Boyd / E. C. & A. / (916)
319-2083
FN: 0002018