BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
SB 68XX - Battin Hearing Date:
May 22, 2001 S
As Introduced: May 17, 2001 FISCAL B
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DESCRIPTION
Current law requires the California Public Utilities Commission
(CPUC) to establish priorities among the types of customers of
every electric and gas corporation, and among the uses of
electricity or gas by such customers. The CPUC must determine
which customers and uses provide the most important public
benefit and serve the greatest public need, and categorize those
customers and uses in descending priority.
Current law requires the CPUC, when establishing those
priorities, to include at a minimum a determination of:
q the customers and uses of electricity and gas which
provide the most important public benefits and serve the
greatest public need;
q the economic, social, and other effects of a temporary
discontinuance in electricity and gas service to those
customers and uses.
This bill requires the CPUC to consider as a priority the effect
on the health and safety of people in regions of the state that
exceed a temperature of 105 degrees.
This bill requires the California Independent System Operator
(ISO) to consider the effects on the health and safety of people
in areas where the temperature reaches or exceeds 105 degrees
before ordering rolling blackouts in those areas.
This bill finds that a number of illnesses and deaths result
from overexposure to heat, and that without electricity, people
in hot climates will be potentially exposed to dangerous
circumstances that could lead to illness or death.
BACKGROUND
California's electricity crisis manifests itself in at least two
ways: extraordinarily high prices and supply shortages. Supply
shortages may be due to withholding of supply by generators and
marketers, drought conditions in the Northwest which vastly
reduce available imports, and inadequate generation capacity.
The consequence of these shortages is blackouts. The ISO has
estimated there will be 55 hours of outages in California this
summer, but a report by the North American Electric Reliability
Council, a non-profit electric industry trade group, estimates
that number to be 260 hours.
As the committee heard at its May 10 hearing on blackout
protocols and procedures, the CPUC recently issued a decision
revising the list of essential customers who are exempt from
blackouts. That list is a long one, including essential public
services such as police, fire, prisons, and national defense
installations, hospitals, specified customers who agree to
reduce their usage during blackouts, and more. With the
exception of that last group, blackout exemptions are limited to
those circumstances where the public health and safety are at
risk - exemptions for economic hardship aren't permitted.
The electric distribution grid is comprised of circuits which
generally serve several thousand customers. When a planned
rolling blackout is instituted, power is cut to the entire
circuit, so exempting an "essential customer" from blackouts
also exempts every other customer on that circuit. For example,
Pacific Gas & Electric (PG&E) has about 1,700 essential
customers, but because the entire circuit serving the essential
customer is exempt from blackout, about 2 million customers are
exempted from blackouts. The result is that 43% of the load
served by PG&E is exempt from blackouts, meaning when a rolling
blackout is called, the remaining 57% of the load has to bear
the inconvenience. The numbers are somewhat inverted for
Southern California Edison (SCE) and San Diego Gas & Electric
(SDG&E), since statewide, about 50% of the load is exempt from
being blacked out.
Adding more people or businesses to the blackout exemption list
will concentrate the inconvenience on fewer customers for longer
periods of time. Historic and current utility practice is to
limit rotating blackouts to one to two hours. The utility shuts
down a particular circuit for a maximum of one hour, but at the
customer end, that shutdown means the power is actually out for
1.5 to 2 hours.
The CPUC has asked the utilities for suggestions to reduce the
number of "free riders" (non-essential customers who are
exempted from blackouts solely because they happen to be located
on the same circuit as an essential customer) so blackouts can
be more equitably spread. Those reports are due on June 1. The
CPUC is also opening a proceeding to allow customers to ask to
be added to the essential customer list.
PG&E recently stated it may be able to do some amount of circuit
shifting (which doesn't require any capital outlay) that could
add up to 300 megawatts worth of load to the "eligible to be
blacked out" list by June 15. However, according to PG&E, any
reconstruction of circuits to completely eliminate "free riders"
could take six to eight months.
COMMENTS
1.Exposure To Extreme Heat Raises Health and Safety Concerns .
Overexposure to heat can cause illness and death. A 1996
report by the National Oceanic and Atmospheric Administration
noted that in a normal year, 175 Americans die from
overexposure.
A 1995 heat wave in Chicago killed 465 people and the year
before, a Coachella Valley resident died from heat exposure.
However, it must be noted that these deaths occurred from
prolonged exposure to heat. In the Coachella Valley case, the
women died because SCE disconnected her service, not because
she was forced to endure a planned rolling blackout. Since
then, SCE has revised its service disconnection procedures and
the Legislature has passed AB 3X (Wright), which is pending on
the Governor's desk, to make it more difficult for utilities
to disconnect electric customers.
2.What Areas Of California Are Covered? The bill refers to
people living in zones or regions where the temperature
exceeds 105 degrees. On a given summer day, this could
encompass the entire Sacramento and San Joaquin Valley, from
Redding to Fresno and Vacaville to Folsom, as well as San
Bernardino, Riverside, and Imperial counties. At times,
parts of the San Francisco Bay Area, greater Los Angeles, and
San Diego County may also hit 105 degrees. Should the CPUC
opt to exempt these people and businesses (which, in some
areas, could mean exempting the entire city and/or county)
from blackouts, that would leave even fewer customers in the
rest of the state to bear the brunt of blackouts.
3.When And Where Does The Blackout Exemption Begin And End?
Unclear is whether the 105 degree figure in the bill is
intended to apply to an annual average temperature, a seasonal
average temperature, a daily average temperature, or a moment
in time. Assuming it's the latter, does that mean the ISO (if
the CPUC acted under this bill to exempt people in these areas
from blackouts) is permitted to begin a rolling blackout in an
area where the temperature is up to 104 degrees, yet must
terminate it if the temperature hits 105? Conversely, if the
temperature is over 105 degrees and then dips to 104 degrees
or lower, is the ISO free to begin a rotating blackout in the
area? Or does hitting 105 degrees exempt an area from
blackouts for the remainder of the summer?
Also, just as air pollution doesn't obey city boundary lines,
warm weather doesn't abide by utility circuit configurations.
So, while it may be 105 where the official city temperature
reading is taken, it may be cooler (or warmer) in other parts
of a particular city or region. Exempting everyone on a given
circuit where the temperature is 105 degrees results in more
"free rider" exemptions, thus increasing the frequency and/or
duration of blackouts in other parts of the state.
4.Why 105 Degrees? While 105 degrees is undeniably hot, it's
unclear why it's an appropriate benchmark instead of 100
degrees or 110 degrees. More importantly is the question of
shifting the health and safety impacts of rolling blackouts,
because no matter where the temperature line is drawn, those
people under the line will be adversely affected by more
blackouts and/or longer blackouts.
As noted in the "Background" section, the historical and
current practice of the utilities is to limit blackouts to 1.5
to 2 hours. If the CPUC opts to exempt people in areas over
105 degrees from blackouts as a result of this bill, it means
the utilities have fewer customers to rotate blackouts among,
so either the duration or the number of blackouts has to
increase. If it's the duration, the question arises as to
whether a person in 103 degree weather suffering through a
four-hour blackout isn't significantly worse off that a person
in 105 degree weather who is subject to a two-hour blackout
(as, absent the CPUC acting as a result of this bill, could
occur).
5.Another Benefit For Warm Weather Ratepayers . The existing
baseline program adjusts a customer's baseline - and, by
extension, the amount of money a customer spends on
electricity - by climate zone. Those people in the warm areas
of the state have a higher baseline, meaning they have access
to more low-priced electricity than people and businesses in
temperate areas, and the people in the temperate areas are, to
a certain extent, subsidizing that benefit. This bill, by
encouraging the CPUC to exempt many of those same warm weather
customers from blackouts, creates an additional subsidy for
those areas.
6.Additional ISO Responsibilities . The ISO is responsible for
the overall integrity of the electrical grid. When it calls
for a rotating blackout, it notifies the utilities of the
duration and the amount of electrical load that must be shed.
The utilities, using the criteria established by the CPUC,
then implements the blackout, but the ISO doesn't identify
specific areas to be blacked out, except where transmission
constraints dictate.
To require the ISO to factor in health and safety effects in
particular areas is a new duty which will complicate the ISO's
already substantial responsibility. Furthermore, the ISO
isn't a public entity and therefore has no public process for
rendering the judgments it would be required to make under
this bill (i.e. what areas of the state have temperatures over
105 and what is the potential harm to customers in hot areas
from a power outage). To the extent there's a desire to
factor in the health and safety effects of a blackout, that
process should occur at the CPUC. Therefore, the author and
committee may wish to consider deleting this section of the
bill.
7.CPUC Programs & Responsibilities . Ensuring the public's
health and safety has consistently been the driving force
behind the CPUC's outage exemption program, but all of those
exemptions are weighed against the impact they would have on
non-exempt customers.
The CPUC also requires Participating Transmission Owners and
Utility Distribution Companies to have 40% of their load
available for rotating outages. Right now, only about 50% of
the total statewide load is available for rotating outages.
Any increase in the number of people or groups that are exempt
from outages - and the free riders that come with those
exemptions - will drop the amount of load available for
rotating outages.
Rather than decide the issue in this bill without sufficient
evidence to quantify the health and safety impacts, if any, of
a rolling blackout, and without knowing the impact of more
blackout exemptions on all the other electric customers in the
state, the author and committee may wish to consider simply
instructing the CPUC to consider the effect of rolling
blackouts on the health and safety of customers living in
areas of extreme temperatures, balancing that impact against
the potential detriments of additional and longer blackouts to
other customers.
8.Related Legislation . AB 30XX (Dutra), formerly AB 57X
(Durtra), proposes to put oil refineries and pipelines "last
in line" on the rotating blackout list.
POSITIONS
Sponsor:
Author
Support:
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|Ace Printing Company |Ageless Reflection, Inc. |
|------------------------------+------------------------------|
|American Leak Detection |Best, Best & Krieger LLP |
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|Burtronics Business Systems |CB Richard Ellis |
|------------------------------+------------------------------|
|California State University |Castello Cities Internet |
| |Network, Inc. |
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|Support (continued): | |
| | |
|------------------------------+------------------------------|
|City of Blythe |City of Palm Springs |
|------------------------------+------------------------------|
|City of Rancho Mirage |CLK, Inc./CLK New-Star |
|------------------------------+------------------------------|
|Coachella Valley Economic |Coachella Valley Water |
|Partnership |District |
|------------------------------+------------------------------|
|Coldwell Banker: Sandpiper |County of Riverside |
|Realty | |
|------------------------------+------------------------------|
|Del Webb's Sun City Palm |Desert Business Machines |
|Desert | |
|------------------------------+------------------------------|
|Desert Challenge |Desert Healthcare District |
|Merchandising Company | |
|------------------------------+------------------------------|
|Desert Springs Marriott |Digital Internet Services |
| |Corporation |
|------------------------------+------------------------------|
|Eisenhower Memorial Hospital |First Community Bank |
|------------------------------+------------------------------|
|Guy Evans, Inc. |Korek Land Company, Inc. |
|------------------------------+------------------------------|
|KMIR 6 |Lyle Commercial |
|------------------------------+------------------------------|
|Martin Communications |Mission Springs Water |
| |District |
|------------------------------+------------------------------|
|Mizell Senior Center |O'Connor Realty |
|------------------------------+------------------------------|
|Oliphant Enterprises, Inc. |Palm Springs View Estates |
|------------------------------+------------------------------|
|Prorealty & Investments |RBF Consulting |
|------------------------------+------------------------------|
|Rancho Las Palmas Marriott |Selzer, Ealy, Hemphill & |
| |Blasdel, LLP |
|------------------------------+------------------------------|
|Shelter from the Storm |Spherion |
|------------------------------+------------------------------|
|Tenet Health System |Time Warner Cable |
|------------------------------+------------------------------|
|Wilson Johnson Desert Empire |Waste Management |
|Specialists | |
|------------------------------+------------------------------|
|Over 300 Individuals | |
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Oppose:
None on file
Randy Chinn
SB 68XX Analysis
Hearing Date: May 22, 2001