BILL ANALYSIS
Appropriations Committee Fiscal Summary
69 (Wright)
Hearing Date: 8/30/01 Amended: 7/17/01 and
proposed to
be amended
Consultant: Lisa Matocq Policy Vote: E, U & C
6-0
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BILL SUMMARY: AB 69, an urgency bill, allows the County
of Los Angeles, L.A. Unified School District, L.A.
Community College District, L.A. County Metropolitan
Transportation Authority, and L.A. County Office of
Education, all of which are served by Southern California
Edison (SCE), to obtain power from Los Angeles Department
of Water and Power (LADWP), subject to payment of the
Department of Water Resources (DWR) uncollected costs of
providing electrical service to the entity.
Fiscal Impact (in thousands)
Major Provisions 2001-02 2002-03
2003-04 Fund
DWR Potential unknown loss of revenue, to be
Special*
recovered by "exit fee"
PUC Potential minor costs, offset by fee
Special**
revenues
*Electric Power Fund
**Public Utilities' Reimbursement Account
STAFF COMMENTS: Existing law prohibits a municipal
utility from providing service to customers of
investor-owned utilities (IOUs) unless the customer pays a
specified charge. Current law also prohibits a utility
from selling to the customers of another utility unless it
is a reciprocal arrangement. This bill waives the
reciprocity requirement for the five governmental entities
mentioned above. Prior to enactment of AB 1x (Keeley, Ch.
4, St. of 2001) customers of IOUs otherwise had the right
to obtain power from alternate providers. AB 1x provided
that, after a period of time to be determined by the Public
Utilities Commission (PUC), that right would be suspended
until DWR no longer supplied power, in order to ensure a
sufficient revenue stream to satisfy DWR's costs.
The "uncollected costs" are the difference between DWR's
total actual procurement costs attributable to the
customer, including financing costs, and the the revenues
collected from that customer. (DWR's procurement costs are
higher than the revenues that can be generated from current
rates.) The bill authorizes the PUC to restrict a
customer's ability to receive service from LADWP, if
necessary, in order to ensure satisfaction of any power
purchase or bond obligation incurred by DWR.
According to the Senate Energy, Utilities, and
Communications Committee's analysis, LADWP has become
popular in recent months because it has surplus power and
relatively low rates. To the extent that large numbers of
customers choose to receive service from a non-DWR provider
in order to obtain lower rates, it is unknown what impact
that would have on power costs for remaining ratepayers
(depends on a number of variables such as usage, power
costs, date of election, etc.) The estimated load shift
resulting from this bill is about 125 megawatts.
Presumably, DWR would establish a fee sufficient to cover
its costs and if unable to do so, would direct the PUC to
restrict the customer's ability to receive service from
LADWP.
SB 1172 (Kuehl), pending in the Assembly, allows a customer
whose property straddles the service areas of LADWP and SCE
and who receives service from both providers, to elect to
receive service only from one provider, presumably LADWP,
subject to payment of DWR's uncollected costs.
SB 27 xx (Bowen), pending in the Senate, allows customers
of electrical corporations also being served by DWR to use
an alternate provider, subject to payment of DWR's
uncollected costs.
AB 11xx (Wright), pending in the Senate, contains
provisions similar to this bill.