BILL ANALYSIS
AB 1235
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Date of Hearing: May 9, 2001
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Carole Migden, Chairwoman
AB 1235 (Pescetti) - As Amended: April 17, 2001
Policy Committee:
UtilitiesVote:16-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill establishes parameters on gas utility customers'
ability to switch from non-core to core service. Specifically,
this bill:
1)Prohibits non-core gas customers from switching to core gas
service unless they agree to remain on core service for at
least five years. Also requires notice to the gas corporation
at least six months prior to switching.
2)Prohibits non-core gas customers from switching to core gas
service during the months of November through March.
3)Prohibits a customer that receive non-core or core gas
transportation service from switching to core bundled service
unless the customer agrees, in writing, to remain on core
bundled service for a minimum period of one year.
FISCAL EFFECT
Minor absorbable special fund costs to the PUC to establish and
enforce the above rules.
COMMENTS
Background and Purpose . There are two basic types of customers
of natural gas. Core customers are those provided basic gas
service as defined in the Public Utilities Code, including
residential and small commercial customers with average monthly
gas usage of less than 20,800 therms. The class also includes
non-electric generation customers with average monthly gas use
AB 1235
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equal to or greater than 20,800 therms who require the highest
level of service reliability and have not elected the non-core
service.
Non-core gas service includes customers that meet the usage
requirements specified under filed tariffs of the gas
corporation, and are restricted from purchasing gas from gas
corporations. Core bundled service includes transportation and
utility gas procurement, while core gas transportation service
does not include utility gas procurement.
Non-core customers, in times of uncertain supply, may wish to
switch to core bundled service, to provide them with the
certainty that a gas corporation will be procuring the gas for
them and that there will be sufficient natural gas supply to be
transported to the customer as needed. AB 1235 is intended to
ensure that if such customers seek the security of obtaining
core bundled natural gas service, that they must commit to
continue on such service for at least a year, to allow gas
corporations to accurately forecast demand and adequately supply
all classes of natural gas customers. Similarly, AB 1235
protects core and core bundled customers from any supply
constraints or curtailments which might occur if non-core
customers opted to switch to core bundled status and have their
gas delivered and procured by a gas corporation
during peak demand months.
Natural gas is purchased ahead of time. Adding large non-core
customers during peak months could create a supply constraint,
which could impact all customers adversely both with regard to
the likelihood of curtailments-since not enough gas was
purchased in advance to meet significantly higher than
forecasted demand-and with regard to rate increases to meet the
demands of purchasing larger quantities of gas in real time at
spot prices.
Analysis Prepared by : Chuck Nicol / APPR. / (916)319-2081