BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 41XX| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 41XX Author: Speier (D) Amended: 7/20/01 Vote: 27 - Urgency SENATE ENERGY, U.&C. COMMITTEE : 6-2, 5/24/01 AYES: Morrow, Alarcon, Battin, Poochigian, Speier, Vincent NOES: Bowen, Dunn SENATE APPROPRIATIONS COMMITTEE : 10-1, 7/9/01 AYES: Alpert, Battin, Burton, Johannessen, Johnson, Karnette, Murray, Perata, Poochigian, Speier NOES: Bowen SUBJECT : Public Utilities Commission: gas and electricity: baseline quantities SOURCE : Author DIGEST : This bill requires the Public Utilities Commission to establish a standard adjustment relative to baseline quantities and requires each electrical and gas corporation to adjust the quantities for a residential customer whose household includes the presence of a dependent child under the age of 18 years, regardless of the number of children. ANALYSIS : Current law requires the California Public Utilities Commission (CPUC) to establish a baseline quantity of electricity and gas which is necessary to CONTINUED SB 41XX Page 2 supply a significant portion of the reasonable energy needs of the "average residential customer." All residential customers receive a baseline allotment - an allotment that isn't based on a person's income level or individual family size. The per-kilowatt-hour (kwh) cost of energy under the baseline allowance is less than the per-kwh cost of energy in excess of the baseline allotment. In determining the baseline quantities, the CPUC is required to take into account differentials in energy needs between all-electric customers and customers supplied with both electricity and natural gas. The CPUC is also required to account for differentials in energy use by climatic zone and season. Current law defines "baseline quantity" as the amount of electricity or natural gas for residential customers based on 50%-60% of average residential consumption, except that for all-electric customers the baseline quantity shall be from 60%-70% of average residential consumption during the winter heating season. Current law requires the CPUC to review and revise baseline quantities as average consumption patterns change in order to maintain the above-noted ratios. Current law requires a customer dependent on life-support equipment to be given an additional allocation of baseline energy. AB 1X (Keeley) Chapter 4, Statutes of 2001, barred the CPUC from raising rates for the first 130% of baseline residential usage. The CPUC is planning on opening an investigation into baseline allowances this month to look at, among other things, whether the baseline quantities need to be revised and whether other criteria should be used in determining baseline allowances. History . The notion of a baseline rate for electricity and natural gas customers was first created in 1975 and was known at the time as a "lifeline rate." The original statute, which has been amended numerous times over the years, required the CPUC to designate a lifeline volume of gas and a lifeline quantity of electricity necessary to supply the "minimum energy needs of the average residential user for the following end uses: space and water heating, lighting, cooking and food refrigerating . . ." SB 41XX Page 3 In 1982, the "lifeline rate" was replaced with "baseline rate" to provide for a basic quantity of service priced at a discount from the system average rate specified in the statute. The current structure of defining the "baseline quantity" as the amount of electricity or natural gas for residential customers based on 50%-60% of average residential consumption, except that for all-electric customers the baseline quantity shall be from 60%-70% of average residential consumption during the winter heating season, was added to the codes in late 1980's or early 1990's. The Senate Energy, Utilities and Communications Committee states, "the author envisions this additional baseline allowance will be modeled after the existing medical baseline allowance, wherein a customer obtains an additional increment of baseline usage on top of the standard baseline amount for that customer's particular circumstance. The additional allotment wouldn't vary by climate zone or time of year." FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 7/21/01) Utility Reform Network Latino Issues Forum California Catholic Conference OPPOSITION : (Verified 7/21/01) Southern California Edison DLW:sl 7/21/01 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****