BILL ANALYSIS
AB 2523
Page 1
ASSEMBLY THIRD READING
AB 2523 (Canciamilla)
As Amended May 16, 2002
Majority vote
UTILITIES AND COMMERCE 16-0 APPROPRIATIONS 20-2
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|Ayes:|Wright, Pescetti, |Ayes:|Steinberg, Bates, |
| |Calderon, Bill Campbell, | |Alquist, |
| |John Campbell, | |Ashburn, Cohn, Correa, |
| |Canciamilla, Cardenas, | |Daucher, Diaz, Firebaugh, |
| |Diaz, Horton, Kelley, La | |Maldonado, |
| |Suer, Maddox, Nation, | |Negrete McLeod, Robert |
| |Papan, Reyes, Simitian | |Pacheco, Papan, Runner, |
| | | |Simitian, Keeley, |
| | | |Wiggins, Wright, Zettel, |
| | | |Chan |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Aroner, Goldberg |
| | | | |
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SUMMARY : Requires the California Public Utilities Commission
(PUC), if it determines that electric rate increases adopted in
May 2001 should be reduced, to ensure that the rate reduction
occurs in the same proportion as the percentage increases it
adopted in the rate increase order. Specifically, this bill :
1)Refers to a PUC decision that was adopted in May 2001 that
increased retail electric rates to recover the electricity
procurement costs incurred by the electrical corporations and
the Department of Water Resources (DWR).
2)Requires PUC, should it determine that rates authorized by
that decision should be reduced for any reason consistent with
the law, to ensure that the rate reduction occurs in the same
proportion as the percentage rate increases by customer class,
rate schedule, and rate option that it adopted in the
decision.
3)Sunsets on January 1, 2006.
EXISTING LAW authorizes PUC to establish rates for electrical
AB 2523
Page 2
corporations.
FISCAL EFFECT : Absorbable special fund costs to PUC. [Public
Utilities Reimbursement Account]
COMMENTS : In May 2001 PUC approved a 3.5-cent/kWh rate increase
to provide revenue to cover the costs incurred by DWR in
assuming net power purchase costs of the IOUs. PUC decision,
and statutory provisions of AB X1 1 (Keeley), Chapter 4,
Statutes of 2001, 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.
Income eligibility level for the CARE program is 175% of the
federal poverty guidelines, and the rate discount for CARE
customers is 20%. On April 9, 2002, PUC adjusted baseline
levels for most of PG&E's 4.5 millions residential customers.
Beginning May 1, 2002, baseline usage quantities increased for
the summer season up to 16%.
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 the PUC that refunds
should be allocated to affected customers in proportion to the
manner in which the burden was assumed.
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083
FN: 0005161