BILL ANALYSIS
AB 2523
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Date of Hearing: April 24, 2002
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Darrell Steinberg, Chair
AB 2523 (Canciamilla) - As Introduced: February 21, 2002
Policy Committee: Utilities and
Commerce Vote: 16-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires that any refunds to electrical corporation
ratepayers-stemming from litigation regarding excessive power
supply charges-or any electricity rate reductions be allocated
among customer classes in proportion to last year's rate
increases. Specifically, this bill:
1)Requires the Public Utilities Commission (PUC) to establish a
Ratepayer Benefit Account with a separate subaccount for each
electrical corporation serving more than 100,000 customers.
2)Requires crediting to a subaccount of all funds recovered by
an electrical corporation from any litigation or regulatory
agreement concerning excessive electricity or gas prices
charged by power generators, suppliers, and marketers through
January 18, 2001.
3)Directs the PUC to require an electrical corporation to refund
moneys credited to its subaccount to ratepayers as a rate
refund when the subaccount exceeds $10 million.
4)Requires refunds to be allocated among retail customer classes
in proportion to each class's rate increase as approved by the
PUC for Pacific Gas & Electric Co. (PG&E) and Southern
California Edison (Edison) in May 2001.
5)Provides that if PUC determines that the revenue requirement
of an electrical corporation should be reduced, the PUC shall
impose a corresponding rate reduction in proportion to the
class percentage electric rate increases adopted by PUC in May
2001.
AB 2523
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FISCAL EFFECT
Absorbable special fund costs to the PUC. [Public Utilities
Reimbursement Account]
COMMENTS
1)Background . In May 2001, the PUC approved a 3.5-cent/kWh rate
increase to provide revenue for covering costs incurred by the
Department of Water Resources since assuming the net power
purchases responsibility of the investor-owned utilities
effective January 18, 2001. The PUC's decision, and statutory
provisions of AB X1 1 (Keeley) prohibit PUC from imposing
electric rate increases for residential consumption below 130
percent of the customer's baseline level, medical baseline
customer usage, and for the California Alternate Rates for
Energy (CARE) customers.
2)Purpose . The author notes the exemptions to last year's rate
increase shifted the burden of the increase to some
residential users (those consuming above 130% of baseline),
but mostly to commercial and industrial users-particularly
large users, who experienced increases of 40% to more than
70%. This bill is intended to provide policy guidance to PUC
that refunds stemming from litigation regarding excessive
power charges or rate reductions as a result of reduced
revenue requirements should be allocated to affected customers
in proportion to the manner in which the burden was assumed.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081