BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 43 X1
                                                                  Page  1

          Date of Hearing:   April 3, 2001

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Carole Migden, Chairwoman

            SB 43 X1 (Alpert) - As Proposed to be Amended:  April 3, 2001 

          Policy Committee:                              E.C.&A.Vote:15-0

          Urgency:     Yes                  State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill:

          1)Extends the existing rate freeze of 6.5 cents per kilowatt  
            hour that applies to residential, small and medium commercial  
            (less than 100 kwh), and street lighting customers, to all  
            other customers for the portion of electric bills related to  
            the energy sold by the San Diego Gas and Electric (SDG&E)  
            Company.

          2)Applies this rate freeze, retroactively from February 7, 2001,  
            and only until the rate freeze for Southern California Edison  
            (SCE) and Pacific Gas and Electric (PG&E) Company ends.

          3)Requires the Public Utilities Commission (PUC) to consider  
            comparable energy components of rates for comparable customer  
            classes by PG&E and SCE.

          4)Requires that any PUC-ordered rate increases for SDG&E  
            customers shall be retroactive to the date that rate increases  
            take effect for SCE and PG&E customers pursuant to the PUC's  
            March 27, 2001 decision.

          5)Requires that any undercollection resulting from the  
            retroactive rate reductions shall accrue to the Department of  
            Water Resources (DWR) and not to SDG&E.
            
           FISCAL EFFECT  

          Minor absorbable special fund costs to the PUC to extend and  
          potentially adjust the electricity rate ceiling applicable to  
          all commercial customers of SDG&E.








                                                                  SB 43 X1
                                                                  Page  2


           COMMENTS  

           1)Purpose  .  Large industrial customers are the only remaining  
            customer class of SDG&E subject to market rates for  
            electricity after enactment last year of AB 265 (Davis).  SB  
            43X provides for a rate freeze to this customer class  
            retroactive to February 7, 2001-the date that the DWR began  
            purchasing electricity for California consumers.  

            Any undercollection resulting from the new rate will be  
            accounted for by bill credit from SDG&E to its customers going  
            forward.  The payments forwarded from SDG&E to DWR from the  
            effective date of the measure will be net of the rate  
            adjustment, but no amount shall flow from DWR to SDG&E.  Any  
            undercollection resulting from the rate decrease shall be an  
            obligation of the DWR.  (An undercollection would occur if the  
            previous energy rates were significantly higher than 6.5 cents  
            and bill credits going forward exceeded current billings.) 

           2)Rate Increases  .  The measure requires the PUC to review the  
            energy components of PG&E and SCE's rates and provides  
            authority for the PUC to increase SDG&E rates up to a  
            statewide average.  Any such rate increases shall be  
            retroactive to the date that PG&E and SDE's rates were  
            increased by the PUC pursuant to its March 27th decision.



           Analysis Prepared by  :    Chuck Nicol / APPR. / (916)319-2081