BILL ANALYSIS
SB 43 X1
Page 1
( Without Reference to File )
SENATE THIRD READING
SB 43 X1 (Alpert)
As Amended April 4, 2001
2/3 vote. Urgency
SENATE VOTE :33-3
ENERGY 15-0 APPROPRIATIONS 14-0
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|Ayes:|Wright, John Campbell, |Ayes:|Migden, Daucher, Aroner, |
| |Canciamilla, Diaz, | |Ashburn, Keeley, Correa, |
| |Dickerson, Dutra, | |Maldonado, Robert |
| |Jackson, Keeley, Leonard, | |Pacheco, Papan, Shelley, |
| |Migden, Goldberg, | |Simitian, Thomson, |
| |Steinberg, Vargas, | |Wiggins, Wright |
| |Wesson, Zettel | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Reduces rates for large industrial customers of San
Diego Gas and Electric Company (SDG&E). Specifically, this
bill:
1)Requires the California Public Utilities Commission (CPUC) to
establish an initial frozen rate of $.065 per kilowatt hour
(kWh) for all customers SDG&E not subject to Public Utilities
Code Section 332.1 (b).
2)Requires CPUC to consider the comparable energy components of
rates for comparable customer classes by Pacific Gas and
Electric (PG&E) and Southern California Edison (SCE), if it
determines it to be in the public interest and to increase
rates to a statewide average level if it deems necessary. Any
such rate increase would be retroactive to the date rate
increases ordered in the March 27, 2001 CPUC decision become
effective.
3)Prohibits any retroactive recovery of undercollections by any
investor-owned utilities (IOUs).
EXISTING LAW establishes a rate ceiling on the energy component
of electric bills by residential, small commercial and lighting
SB 43 X1
Page 2
customers of SDG&E.
FISCAL EFFECT : Unknown
COMMENTS : This bill removes large industrial customers of SDG&E
from the peril of market rates. Large industrial customers are
the only remaining customer class of SDG&E subject to market
rates for electricity after enactment of SB 265. This bill
provides for a rate freeze for this remaining customer class
retroactive to the date the Department of Water Resources (DWR)
began to purchase electricity for California. The retroactive
provision is dated back to February 7, 2001, and any
undercollection resulting from the new rate will be provided 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
this bill will be net of the rate adjustment, but no amount
shall flow from DWR to SDG&E.
Section 332.2 of this bill specifically mandates that no IOU
shall receive any retroactive recovery of undercollections
associated with the rate freeze. This should encourage CPUC to
develop an appropriate energy rate component going forward to
minimize any undercollection to DWR.
This bill modifies the payment provisions of SDG&E to DWR with
regard to pass through and undercollection associated with the
rate freeze. This is necessary because the energy rate
component of these payments will change with the effectiveness
of the new rate and will be net of amounts already overpaid by
customers. This bill does not modify the electric procurement
obligations of DWR pursuant to any contract or agreement in
accordance with the Water Code provisions.
Analysis Prepared by : Kelly Boyd / E. C. & A. / (916)
319-2083
FN: 0000268